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kaleberg
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Isn't the Trump campaign about creating a safe place for racists, misogynists and anti-semites.
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As seen in my browser(s): "Önancial crisis" I assume that o with the umlaut is supposed to be an 'fi' ligature, but it's still funny in an immature way.
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Flying airplanes isn't a very good example. There are a huge number of jobs where the employers want the humans to act like computers, not humans. These are in diverse fields: sales, banking, manufacturing, HR, fast food and so on. In these fields individual initiative is generally punished, even if it was the right thing to do. Look at the Wells Fargo scandal or the pre-2008 bubble where workers who worked like machines and did just what the boss told them to do were rewarded while workers who tried to play hero, like Captain Sully, were fired and likely blacklisted. It is rather obvious that AI could replace a large number of these people and provide better and cheaper service to their corporate masters than actual humans.
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"Females who can pick their partners tend to pick males whom they've witnessed winning fights ..." That's a male fantasy.
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One of the big problems of economics is how little of our society it explains. Exactly how many people of either sex actually sit down and decide to have children based on a return on investment calculation? How many people spend time with their friends and families based on some kind of maximization function? When you visit a dying friend or family member at the hospital is this the result of some gift exchange calculus? What about the time one spends listening to music, watching a baseball game or browsing Facebook? It might help to start with anthropology and think about human societies and their organization. Start with something like the Lynds' Middletown books to get away from the implicit exoticism that the term anthropology invokes. Societies have certain basic functions: raising children, caring for those who cannot care for themselves, earning a living, spending free time, recognizing one's place in the universe, participating in civil society and so on. Economics only looks at a tiny piece of this, just part of the earning a living section. It's as if chemists never studied anything except hydrogen molecules. Economics really does need some new thinking. Starting with Pareto optimality is simply the argument that we live in the best of all possible worlds. It is so transparently bogus that it is hard to believe that anyone ever took it seriously. Oil lamps were hard on torch makers and the automobile destroyed the buggy whip business. We need an economic system to regulate the production and allocation of goods and services, but we also need child custody laws and burial customs. I'm a capitalist at heart, but I view capitalism as I view fire. There is nothing quite like fire for cooking food, lighting the dark, scaring wild animals, firing pottery and so on, but fire also needs to be carefully controlled, constantly monitored and subject to societal sanction.
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We don't need productivity gains. Labor is cheap. Whenever labor starts getting more expensive, the Federal Reserve will jump in and clobber the economy until labor gets cheap again. Demand is limited, so we can produce all the goods that anyone can pay for with the labor and productivity we have. If labor were getting more expensive, then that would raise demand, but there is no way that the Fed is going to let that happen. Flat labor + limited demand means flat productivity growth. There's no puzzle. [For a management viewpoint, consider which is the most effective investment: (a) a new technology (b) worker training (c) process redesign (d) firing workers who might for raises The answer has been rather obvious since 1975.]
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The Caribbean is not an area noted for its growth or growth potential. e.g. Compare GDP per capita in Cuba and Jamaica: https://fred.stlouisfed.org/graph/?g=79pd Neither looks particularly good. Jamaica took a hit in '72 (or so) and Cuba took a hit when the USSR collapsed. I doubt that magic free market sauce would have helped either.
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I seriously doubt it was one horse. There is a lot more variability than one might expect even in relatively small gene pools. This single Y group haplotype might reflect happenstance, an earlier linkage or even a later replacement. Look at how few generations it takes to produce domesticated foxes. The experiment has been repeated a number of times, and researchers usually get a pet fox breeding fairly true in three or four generations. Interestingly the genetic changes are not all that different from those in other domesticated animals. Wild populations carry these "domestication genes" just fine. There are always all sorts of outliers. In humans we call them personalities. There was a mountain goat near a local trail that was never afraid of humans. Eventually he killed someone. How rare was he? Most of the goats live far from any trail. How many mountain goats are nearly domesticated? Some of them I've seen are curious about us humans. Some are calm near people. Others are skittish. I'm not going to try and pet one, but I doubt that there is only one kind of mountain goat outlier even in the limited and isolated local population. There's a touch of the tough-guy-with-a-spear-rules the world thinking in this discussion. Why would a stallion able to work with humans be at a reproductive disadvantage in the wild? People are more likely to keep the lovable guy around as a pet and eat the ornery guys so if proximity to human hunters is unavoidable, being friendly might have survival value. For all we know, being partly domesticated might make a stallion more popular with the mares. Mares usually share a stallion, so there is an element of choice. If you know horses, you know how easy it is for a mare to choose her sexual partners. It's hard to have sex with someone who can just step away, or worse, is your size and can kick you. No females, no species. In discussing evolution it never pays to downplay female sexual selection. Read some Sagan, Francoise, not Carl.
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One of the things that struck me about the "The Hunger Games" books was that they had nuclear powered hovercraft and hard rock coal mining. Maybe they really needed coal for energy due to some limitations in nuclear technology, but if you can build a nuclear hovercraft, odds are you can build a big coal powered drag line and do open pit mining with a lot fewer workers. Was this some alternate time line where Margaret Thatcher never existed to apply the coup de grace to hard rock coal mining? It was like this in wheat production too. During the harvest, agricultural workers worked overtime using night vision goggles to bring in the sheaves, likely cut by hand with a scythe. Surely, a society that can produce night vision goggles and has coal resources could produce some kind tractor and harvester. Was this like some Asian countries where the rice had to be harvested one plant at a time because women do that work and it is important to remind them that their time is not valuable? I suppose there is something honorable about the hard work of mining coal, having a broken body and black lungs, that provides a certain narrative satisfaction with one's life that is lacking in the lives of Dilbert and his office mates. Is there really a cry to turn coal country into some kind of District 12 with its privations and inefficiencies? To be honest, I have no idea of what to do. The last thing that people in dying communities that once had a purpose and now longer have one want is for someone to help them. They really hate that. They loathe that. Loathe is too weak a word. I live in a dying timber town. Another paper mill in town just closed rather recently. Apparently, the market for phone book paper just isn't what it used to be. The town actually subsidized a plywood mill for a while, but modern homes don't use plywood the way they used to, so even if the housing market were booming, demand wouldn't be there. Most of us knew that this was a cargo cult exercise, not an ongoing business. Some years back an acquaintance of mine bought a pachinko machine. This is sort of a mechanical pinball machine popular in post-war Japan. The story he told is that pachinko parlors in Japan were actually a way for the government to provide welfare benefits without the stigma of welfare. The idea was that one could gamble in a pachinko parlor and honorably win money rather than accepting a handout. I have no idea if this story is true. The only reason coal mining ever produced anything resembling a decent living was that the government leaned on the coal mine owners so they'd deal with the powerful unions. Through most of the history of coal, coal miners lived at the edge of poverty and fell through when their health started to fade. In my own town, the timber industry was nationalized during World War I, and the government imposed what we would now call family wages. Before then lumberjack life was for young men who would blow their paychecks in town on booze and whores. Only after the government intervened could they settle down, marry, have kids and take up less exciting hobbies. Of course, the last thing people who yearn for the good old days ask for was help from the government. I guess this is a kind of pointless comment. I really don't have a good answer. Even infrastructure could only help so much. So much of construction is highly mechanized these days. When the Soviet Union collapsed an entire cohort of men drank itself to death. Is that what we are seeing here in the US? I can't imagine Putin has any particularly good advice to give us on this score. Maybe, just maybe, we could have the government take over sports betting and set up various betting pools which mysteriously produce winners just in time for the next truck payment. A friend of mine got through law school on low end lottery winnings; "living on jacks and queens" as the Maverick theme song put it. I'm not sure how those betting pools would work since, unlike most businesses, gambling requires a fair bit of transparency. Maybe the government could just set the thing up and pretend it was a stupid mistake, the kind of thing the government always does, so everyone might as well make a few bucks off of it. Somehow or another government stupidity usually works out very well for the wealthy. It would be nice to harness that stupidity to help some others as well.
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There are two reasons to be worried about the gap between labor productivity and labor compensation: 1) If there is too big and too persistent a gap, then society devolves into a "They pretend to pay us, and we pretend to work." mentality. This long hurt the UK during its imperial years, and it destroyed the USSR. It has been nearly 40 years since the last real period of rising incomes, so an entire generation has worked without ever seeing any reason to believe that their work will be rewarded. 2) More importantly, demand has to come from somewhere. If more goods and services are being produced than there is demand for them, then they will stop being produced leading to the downward spiral we have been seeing since the 1980s. Inequality exacerbates this since the wealthy are more likely to buy goods that require little or no labor to produce such as real estate, corporate ownership, artwork by dead people and so on.
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One of the problems is that we don't always call them robots. For example: We don't have robot lawyers, but we have eliminated thousands of lawyers and paralegals using advanced search algorithms, information retrieval and text processing. We don't have robot receptionists, but we do have voice mail systems, caller id management systems and customized ring tones. We don't have robot HR staff, but we do have automatic payroll, resume screening and 401k compliance systems. This was predictable: We don't have Rosie the Robot standing over a sink washing dishes with a brush and drying them with a towel. We have dishwashers. A big factor in the Great Depression of the 1930s was the immense success of robots in manufacturing, mining and agriculture. By 1920, the US was only half rural thanks to farming robots. Manufacturing saw productivity improvements of two or three orders of magnitude between the late 19th century and the late 1920s. I think that when we look back, we will see that information technology has been having a similar effect on a broad variety of jobs. Remember, it took nearly 30 years before text processing finally meant using less paper rather than more. I bought my first CD ROM phone directory in the mid-80s, but they just closed the phone paper plant in town a few months ago. The collapse in retail, the restructuring of banks and clerical work, the replacement of low end IT people by cloud system monitoring software are all about replacing people with robots. They just don't look like robots, and the wholesale replacement is not always visible until we see its second order effects. This wouldn't matter if wages had been rising to keep up demand, but wages haven't been rising for decades. We got out of the Great Depression only by dint of massive government spending. At one point the government effectively commandeered the entire economy. We aren't going to get out of this depression without something similar, though perhaps without the tens of millions dead.
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Could a fanatical devotion to fighting inflation have something to do with this? Rising prices are one way our economy reallocates resources, but whenever we are in a period of economic growth and the Fed sees the slightest sign of inflation, it slams on the brakes. Since inflation these days is defined by the Fed as the price of labor, this means that there are large areas of the economy that have been spared the need to use labor more efficiently. As soon as the cost of labor rises, business slows down eliminating the need for reorganization or investment. There is something to that long range view. The historic European price cycles of labor and labor related goods as opposed to ownership and ownership related goods show that rising population works against the value of labor. If the population does stabilize in 2050 or so, it is possible for growth to continue rising, but it will require eliminating any long range cap on wages and governments willing to spend a lot on public goods.
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I saw that in our local paper. We live on the Strait, not the Pacific, so we usually see river otters. We've seen sea otters a few times though. We assume they are young males out exploring.
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We've already been through this before at least once, though probably numerous times. If nothing else, the 1930s were all about obsolete labor and slack demand. In the short run it was addressed by increasing the demand for public goods like infrastructure and armed forces. In the long run it was addressed by increasing labor's power in the marketplace. (This involved unionization, education and kicking women out of the work force.) There's no reason we cannot apply the same solution and increase the supply of public goods and the power of labor. We don't have to do it exactly the same way, as long as the changes increase demand for labor and its negotiating power. This is necessarily inefficient. The most economically efficient population is one, something libertarians have recognized, though only Ray Kurzweil and his ilk have grappled with the implications.
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It isn't about racism, it's about economic development. Economic development requires industrial policy and protectionism. That's simple history. It isn't just tariffs either. It includes preferences for local firms, cross subsidies, special rules for foreigners operating in country and so on. In the late 19th century, the US was notorious for this. In the 1950s, Japan was notorious for this. Now it's China, Korea and Taiwan. (In the 18th century, of course, England was notorious for this, so notorious that thirteen north American colonies rebelled over it.) Replacing a $20 an hour job in one country with a $5 an hour job in another country decreases global demand in the short run. In theory, it is possible for all parties to benefit from tearing down trade walls, but that requires some mechanism for generating consumer demand. In the 1950s and 1960s, the US had massive subsidies to white middle class men. It ran a deficit and built all sorts of infrastructure including the suburbs. As long as the US saw itself as growing and improving, it could subsidize US and overseas development (e.g. in Europe). As soon as the reactionaries managed to create enough fear about the future, such forward looking policies came to an end. Unfortunately, this ideological victory about the future came at the same time as the ideological victory about trade. That meant we got the worst of both worlds. We had decreased global demand and no mechanism for increasing local demand. The 1930s were all about demand side economics. The 1980s were all about supply side. Given our abandoning of the policies that increased national demand, our adoption of policies that decreased global demand were a mistake. P.S. Sorry, this is not a lump of labor argument. Even if wages were the same everywhere, new factories tend to be more efficient in their use of labor which means they produce less demand.
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Before Uber and Lyft, getting a taxi in Seattle, except right in front of the Sheraton, was a serious challenge. I don't know how many times I'd call the dispatcher and be told "15 minutes" for the next hour. Now, the taxi often did arrive within 15 minutes, but there was massive uncertainty. The taxi could arrive in 15 minutes or an hour and 15 minutes. This, amazingly, was even after they started having GPS equipped taxis so that the dispatcher actually knew where the cab was physically located. Uber and Lyft can give me an arrival time that is rarely more than two or three minutes off. Once I had to wait an extra five minutes up in Ballard, but this was unusual, and it was often next to impossible to get a cab up in Ballard. I'm not 100% sure of what accounts for the difference, but I get the impression that there are more Uber and Lyft drivers than taxi drivers buying shifts from any particular taxi company. If there were N empty, or soon to be empty, taxis in my area, I eliminated 90 of them by choosing to call a particular taxi company. It hasn't been all smooth sailing. The city government does regulate Uber and Lyft, and there is a drivers' association that could, in theory, develop some political and economic power to push back. If nothing else, drivers play off Uber and Lyft. I often see both Uber and Lyft paraphernalia in the cars that take me from place to place. This may or may not last. On the other hand, if Uber and Lyft squeeze the drivers too hard, their technologies are no longer as advanced and exclusive as they once were. It might have cost $100M five years ago, but it would probably cost only $10M to build the same dispatch software today. Right now, it isn't worth anyone's while, but that is a wild card one has to consider when thinking about disruption.
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The real weakness in investment is the lack of wage growth which has limited consumer demand. Flat, or even shrinking, consumer demand means flat or shrinking demand for investment. When there is nothing to invest in, your best bet is the stock market.
Toggle Commented Jul 16, 2016 on Paul Krugman: Bull Market Blues at Economist's View
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It is interesting to compare the pre-antitrust trial and post-antitrust trial Microsoft operating systems. The anti-trust case made a major difference. Microsoft made a point of suborning industry standards. I knew a guy at Microsoft working on a Java system and specifically told not to look at the available standard so that Microsoft would create its own. Since the trial, Microsoft has been a lot more accepting of industry standards. They still provide the preferred operating system, but don't have the market power they used to. The current monopolists include players like Google, Facebook and Apple. They control large marketplaces and impose a lot of closed standards. It will be interesting to see if there will be any anti-trust action against them in the future.
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Sounds right to me. You don't hear the phrase 'natural monopoly' very much any more, but the concept is still important.
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And the problem with nationalism is ... ? I've been waiting for a good answer. So far, it has been a very successful system, far more successful than its alternatives. In fact, no nation has developed its economy without it. Nationalism is not the opposite of international cooperation. In fact, nationalism is necessary to get the benefits of international cooperation. It's hard to have win-win solutions when the interested parties are excluded from the negotiations.
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Leaving the EU implies the creation of a gradient where none existed before. That creates opportunities for arbitrage. If anything, I think the UK will do quite well out of leaving the EU.
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I think Blissex has the right of it. There really is no "interest rate" since access to credit depends on so many things besides credit-worthiness. If you were a woman in 1965, you couldn't get credit in your own name no matter what your income, assets and prospects were. Pretending that there is AN interest rate or even a set of rates based on any form of rational reasoning is, at best, silly. Since the economic crisis, I've made a number of loans outside of the general financial system. Many of these have involved being paid in kind. I financed new restaurants by buying gift cards at a discounted rate. I finance several local farmers by buying food credits at a discounted rate. I back projects on Kickstarter and at other sites. Why is there this preponderance of alternate credit schemes? It isn't the internet. One of the restaurant loans and all of the agricultural loans have been face to face with no internet involved at all. The answer is simpler than that. There has been a general seizure of the credit system in this country for all but the connected classes. Sovereign governments, large corporations and wealthy speculators can borrow through the banking system at delightfully low rates, while actual businesses and consumers, for that matter, pay at much higher rates or go around standard credit channels. If I were writing a PhD thesis in economics today, I'd strongly consider trying to estimate the size of this informal economy and its relative economic impact. There is a reason that micro-credit, for all its failures, struck a chord with the public. Our banking system has become more or less irrelevant to our economy.
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Have you considered Hackett-Fisher's 'The Great Wave' for the graduate European history course? The Europeans have done a lot of work on prices. The great wave of the title is the 200 year cycle of pricing stability and instability. The book covers the late Middle Ages to the late 20th century. It's rather interesting to connect economic history to political, military and intellectual history. Have you considered Berle & Means 'The Modern Corporation ...' for the American or 20th century history class? It provides a good history of the modern corporation as it developed along with American economic power. It raises all sorts of interesting questions about ownership, control and regulation. It was the manifesto for the laws that gave the US and its middle class decades of economic growth. I can appreciate why you are focusing on modern books, especially since you are trying to get your students to recognize blind spots, over-generalizations and biases. Still, you might consider some older sources. If nothing else, the blind spots, over-generalizations and biases will be more obvious. Even better, it is possible to find out just what happened next, something more difficult with recent works.
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This whole "accounted for in its equity and debt prices" is basically garbage. It lacks rigor and goes against the empirical evidence. Equity prices are determined by fashion and the relative returns of alternative investments. They are not priced in by individual entity, but by general category. This has always been the case, but modern financial technology, like sector analysis and mutual fund structuring, has further weakened individual equity pricing. Anyone investing in equities over the last 30 years realizes this. Debt prices are all about conventional wisdom and who is paying for the rating. Anyone actually following the business thinks those Road Runner cartoons where the coyote runs off the cliff and doesn't fall until he looks down are completely realistic. Skin color of the borrower probably makes more of difference than anything on the balance sheet or knowledge of the business. I think the big investment houses pay economists to spout nonsense like "accounted for in its equity and debt prices" as a ruse to increase their own profits at the expense of unsophisticated investors. Maybe I'm wrong. Maybe it's just the massive capital glut, but "accounted for in its equity and debt prices" just isn't how finance works.
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People tend to distrust the experts when their share of the pie keeps shrinking. People will put up with fairly corrupt experts if some of the graft trickles down to them. Whole cities, even nations, were run on that principle. Corruption, of course, is one of the charges made when the experts fail, but it is only part of the story. Look at Europe in the 14th century. The whole area was run by an international elite, an aristocracy divorced from location and a church similarly without roots. When the plagues, famines and political instability started, that international elite lost its credibility and we saw nationalism, rooted in location, language and ethnicity, on the rise in Scotland, Switzerland and Flanders. By the 16th century, Europeans were ruled by local elites and international religious authority much weakened.
Toggle Commented Jun 30, 2016 on The Real Lesson From Brexit at Economist's View
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