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kaleberg
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To be honest, most of the book reviews I read are those at Amazon, Goodreads or some other site, so they are, for the most part, written by amateurs, though often experts in the relevant field. All sorts of bloggers review books, and I read all sorts of bloggers. I do read the book reviews in Science, because they tend to have good reviews of science oriented books, but it I gave up on professional reviewers in The New York Times some time in the 1980s, well before the rise of the internet. I think Spy, the magazine, captured the log rolling problem in the New York Times' book review section all too well. George Orwell was extremely insightful and seems to have understood the literary business all too well.
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My reference is Fortune June 1933, Off the Record, page 18. Granted, this is anecdotal. The short article is a discussion about living off the land until the depression ends, but the quote goes: You know the old tale about marginal land going out of cultivation during depression. Well, it doesnt. The best land goes out, hereabouts anyway. You can (or could) mortgage good land, but not the poor sort. So the owner of the good land has had his mortgage foreclosed while the other fellow, who couldnt get into debt, still has his place even if he doesnt pay his taxes, because no one will buy it in a tax sale, and he goes on raising sweet potatoes, and a hog and a chicken or two, while the expropriated owner of the good land gets a job beautifying the state roads, as long as the state can borrow money. What fraction of the land did this involve in the aggregate? I have no idea, and most likely the author had no idea either. Still, agriculture was still dominated by small farms back then, and the better off farmers took out loans during the easy credit of the 1920s. Holing up for the duration on a hard scrabble family holding might not have been fun, but for many people, it was a reasonable option. - Kaleberg P.S. In anticipation of the real estate bust, I bought a whole pile of old Fortune magazines from the 1930s. They offer pretty good analysis, especially given the comparative lack of available statistics. The first issue of Fortune was February 1930, so they caught most of the Great Depression and all of the world war following.
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In the 1930s, a lot of people thought that the Depression would cause less productive farmland to be abandoned, but the real result was that the more productive farmland was more likely to be abandoned, because it was more likely to have been encumbered with a loan during the 1920s. That might be part of another reason that there is a tradeoff between growth in finance and growth in the economy.
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It is nice to see an economist who doesn't assume that economic systems are magically stable. That assumption always puzzled me. It seemed rather Panglossian. Let's face it, stable systems are surprisingly rare in the real world. His "clumping theory" makes a sense from a cognitive sciences point of view. People use Bayesian logic when making economic decisions (along with most other decisions). They watch other people's decisions and their outcomes and update their own priors. If you see enough people eating tomatoes and not getting sick, you might try one yourself. Similarly for buying stocks, houses, false teeth, iPhones and so on.
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I almost thought this was a serious article until I read: "Moreover, capital markets provide the opportunity for lower-income households ..." Is someone confusing 'payday lenders' with 'capital markets'? No one that out of touch should be taken even slightly seriously. It takes a certain kind of imagination to even pretend that someone with a minimum wage job could go to the 'capital markets' to get the $200 it takes to repair their car so they don't lose their job. Granted, I think that giving low income households access to capital markets would be a good idea, but I can't imagine a bank or investment firm that would touch that line of business, save at 200%-300% interest rates. Granted, this is a good argument for the Federal Reserve opening a retail window.
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It's really time for economists to start pointing out the simple fact that private property is a valuable government service and rather than simply letting people grab as much of that service as they want, there should be a fee based on how much private property you want. The libertarian approach would be to allow people to opt out. If you don't want access to the court system to sue people who defraud you and you don't want the police to come when you are robbed and you don't care if people uphold their end of the contract, then you can avoid paying the fee. We have inequality, because we have a communist attitude for private property and don't charge for it. It's like bread in the early days of Lenin's Soviet Union.
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Bring back the 90% marginal tax rate on high incomes. Right now, CEOs work hard and spend hours to issue themselves huge pay checks. High taxes would discourage this hard work and leave more money for everyone else.
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They sell do it yourself kits for minor surgery at Walmart. Europeans are always amazed to see this. I wonder if the ACA and eventual Medicaid expansion will change this?
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"No banks, no business"? That's not actually true. People will make their own bank-like institutions if they need them and they'll do so surprisingly quickly. I live near a Lauridsen Boulevard. Lauridsen was famous for responding to the 1907 financial crisis by issuing his own currency and serving as the local banking reserve. Needless to say, this was illegal and he was slapped down when the crisis was over, but some local folks still have a few of his bills. The 1933 Bank Holiday led to an increased use of checks as IOUs and increased use of store credit instrument exchanges. It only lasted a week, so there was no need for a long run solution, but you could see alternate institutions developing. As one economists of the day noted, "Did they expect people to climb trees and shy coconuts at one another?"
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This raises all sorts of interesting questions. Would you rather have a defined benefits pension with an automatic cost of living increase or a 38% higher chance of surviving a heart attack? Would you rather have some level of job tenure and ability to negotiate salary, benefits and working conditions with your boss or a smartphone? Would you rather graduate from college debt free or a 53" flat screen television? I'll be honest. These are tough questions. There is also the issue of whether they are actually addressing trade offs or just historical accidents. Most of the technological trends were in place by the 1960s. The economic changes started in force in the 1980s. Was there some connection, or are we just seeing historical accident. If it is the latter case, we could a 38% chance of surviving a heart attack and some way of fighting for better working conditions.
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Online education is nothing new. In the 1930s, the big new thing was correspondence courses. They used to advertise in matchbooks and magazines. The student would receive the written course materials and would send back a filled in test, an essay or a drawing. A variety of graders would then send back the graded test or whatever along with the next set of course notes. I think the drop out rate was 80% or so, and if you haven't been paying attention, correspondence courses haven't replaced live courses. Despite the official blather, videos are no substitute for a live lecture. I don't know how many times a lecturer has slowed down and gone over something again when the class seemed baffled. I don't know how many times a lecturer riffed on an interesting tangent in response to an enthusiastic class. A lot of lecturers opened lectures with a question about the recent homework, and built the lecture from there. That does not happen with canned videos. Besides, learning from a video is a learned skill. It isn't any easier than learning from a book or a live lecture, it is just less familiar. Also don't get me started on automatic grading systems. They are currently absolutely god awful. They are like antique punched card data entry systems where you need to get the format exactly right. I've tutored high school and college students using these systems and banging on them until they accept the right answer often takes more time than coming up with the right answer. More seriously, they cannot look at your work to give partial credit, or more importantly, to see where you slipped up and build the next lecture around that. I'm sure there are valid uses for online courses. They are perfect for simple technical subjects, like qualifying for a food handling license, but are rather awful for anything more complex. I learned how to use a dual timebase oscilloscope from a video back in the early 70s, and it's a skill I have today. More seriously, online courses are perfect for scams, both by those operating the course and by those taking the course. Besides, you now what is going to happen. Online courses are going to be used as a weapon to cut teaching costs, freeing up money for more buildings and higher administrator salaries. That is just what our kids need.
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His view was that the atomic bomb was the ultimate berserker weapon in a berserker war.
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The best explanation I have for how World War II escalated and ended was in http://www.leesandlin.com/articles/LosingTheWar.htm
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Kagan was better than Chaucer. Chaucer thought Alcibiades was a woman.
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Re: Hipsters http://catandgirl.com/?p=2061
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Even I, a yankee, have heard of Pickett's charge. Yes, it was suicidal, but there is a long tradition of lauding jackass suicidal military actions if they are suitably valiant. Did it start with Alexander assaulting the defensive walls beyond the Indus and dying of his wounds? The British, especially, seem to be love this kind of story. I had a friend taking Anglo-Saxon and translating a poem about the Battle of Brunanburh in which the defenders of an invincible fortification came out one at a time to be slaughtered, but, hey, they were valiant. She was sure she had totally misunderstood the account as it made no military sense, but she got an A on her translation. Then there was the Charge of the Light Brigade, gallant, valiant, and an excellent demonstration of the effect of artillery on cavalry. Then there was the Miracle of Dunkirk which was as much a miracle of PR as on the field. If you look at British military literature, it is full of such stories. Somehow, despite this military ethos, they did manage to conquer a fair bit of turf. In other words, don't underestimate these goons.
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In general the education thing is a red herring. More advanced technologies are just as likely to be easier to use than harder. I remember a late 19th century article on the future of the Erie Canal. Mule power just wasn't competitive against steam powered railroads. They considered reviving the canal using steam powered tow tractors, but discarded the idea claiming it would require a more educated work force. I know steam power can be tricky, but have you ever worked with a mule? Besides, nowadays there are maybe 200,000,000 people who could operate whatever tow vehicle was used. Otto cycle engines and their descendents are even easier to use than steam. If you are old enough to have been taught how to use a typewriter in school, you know what I mean. As for Grandpa Bill, it's not surprising he was able to build a successful construction company back in the 1960s. The US was still using demand-side economic policies back then, so there were rising wages, low interest loans, industrial planning, road building, neighborhood planning and so on which provided all sorts of opportunities for people in the construction trades. Nowadays, the government policy is supply-side, so the government is more concerned with maintaining company profit ratios, providing cheap credit for speculation, offering sweetheart contracts, preventing competition and so on to help incumbent suppliers maintain their incumbency. Breaking in is that much harder than when the pie is growing.
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There might be problems, but look at the Washington-Idaho border. The low Idaho minimum wage hurts Idaho employers since the work force prefers to work in Washington and they prefer to spend their money where they work. There was a NYTimes article on this some years back. Exactly how this would play out in LA is uncertain, but people tend to shop where they work.
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I never could take Heinlein in more than small doses. Some of his short stories were charming, but his longer works often had elements that grated. I read The Moon is a Harsh Mistress as a Marxist parable full of libertarian argument. It was dissonant. Farmer in the Sky was similar, a tale of pawns in a government run space farming initiative spouting individualist platitudes. I tried Stranger in a Strange Land and was bored as well as annoyed. It wandered and maundered and didn't seem to have a plot or a point.
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We should learn from history. The Soviet Union was done in by low wages. They used to say: "They pretend to pay us, and we pretend to work." You hear that at places like Walmart, just not in the public relations releases.
Toggle Commented Jun 11, 2015 on Walmart and Wages at Economist's View
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The problem with the guessing game is that in the real world it takes time to reach a consensus, so every investor learns to think a bit ahead, but not too far ahead. Even if you think a company is worthless in the long run and that someday everyone will realize this, you can still make money on it, since, for the time being, it still is accepted as having some value. (I remember doing this with Kodak in the 90s, for example.) If you accept the popular theory that human decision making is fundamentally Bayesian, you recognize that different parties update their priors at different speeds. Why not? It is often possible to do quite well by delaying updates rather than following every trend as it first appears. Let's face it. We don't go to the supermarket and not buy groceries because some day we are going to be dead and not need to eat. Keynes's insight on the beauty game is excellent advice for investors. Since most money is the hands of a small group of people, the primary source of value is following their combined opinion. Since their basic needs were met and flat wages limit investment opportunities, they had no choice but to bid up the prices of a small group of items in pursuit of returns, that is, the ability to sell them to someone else at a higher price. So, things like Manhattan real estate, certain gallery approved art works, and S&P 500 stocks have soared in value. This effect was obvious by the early 90s by which time wage stagnation was fully realized as policy.
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If you see interest rates as reflecting belief in a nation's future, it would appear that the US gave up on its future in the 1980s.
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The discount rate in this discussion is being used to make decisions about what to do and when to do it. Almost every last number is going to be bogus, and if you are talking about 100 to 200 years out, you need a new metric for the cardinality of the bogosity required. That said, talking about discount rates can be useful, but really only for comparing break even points. In fact, it probably makes some sense to run a variety of scenarios and see what the break even return rates are given the level of uncertainty. Trying to come up with a single number is really overreaching, even if you are often stuck having to make a single decision.
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Disney has the line jumping thing down to a science with long lines for the hoi polloi, shorter lines for those with a few extra bucks and private entrances for the VIPs. Granted, the last time I was at a Disney park, Steve Jobs had rented it for an evening so the NCC attendees could celebrate Apple going public. I got to ride every last roller coaster. Steve Jobs really shared the line jumping joy. Cowen seems to be retelling the old joke about the [famous impressario or theater owner] whose show wasn't doing too well, so he hired a horribly slow ticket booth person who soon had the line running around the block. Needless to say, the line served as its own advertisement for the production which went from the red into the black. As with many jokes, there is some wisdom there, just really not enough to sustain a whole column.
Toggle Commented Feb 20, 2015 on 'The Upside of Waiting in Line' at Economist's View
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That was also the period that the US started its big fail in ship building. The US never really managed the shift from sail and wood to steam and steel. US ship building costs were way too high. The only US built ships were either military or built for the protected US port to US port market. ---- I think 1870 is about right. Most historians place the start of the move to modernity around then with many of them focusing on the 1876 Philadelphia Exhibition with its telephone, Corliss engine and countless new inventions. (It also introduced the idea of having a decorative fireplace in one's living room, a room which soon replaced the parlor.) You could argue for the big changes wrought by the telegraph, steamship, railroad and the industrialization of agriculture that took place before the Civil War, but that system didn't really start clocking until the post-war era. There were too many gaps. The transcontinental railroad was finished in 1869, so that's another point that fits. The Civil War spending in the north, and the removal of southern obstructionists in Congress for the duration, set the stage for the advent of our modern civilization in the US. (e.g. There was no way Dixie was going to stand for a transcontinental railroad or for shipping subsidies, except maybe for cotton.)
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