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kaleberg
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I think Chlamydia is running on the Anaerobic party. I guess a lot depends on how people feel about aerobics.
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Stocks have been a good investment for the last 30 years, because there is nothing to invest in. Consumer income growth has been anemic at best and is unlikely to improve. When there is nothing to invest in, a good way to get returns is to bid up the value of some arbitrary asset. It really doesn't matter much what it is as long as enough people agree that it is likely to go up in value. Any increase in value will convince even more people with nothing to invest in that this asset is valuable and so on. It's a positive feedback loop. A number of analysts noticed this during the recession in the early 1990s. The stock market took off as interest rates plunged and everyone and his cousin had been laid off. The economic changes in the 1980s had eliminated consumer income growth resulting in a massive capital glut. If anything the glut has gotten worse as income growth has stagnated and more and more money is in fewer and fewer hands. I've been surprised P/E ratios are as LOW as they are. P.S. What is all the fuss about hedge funds? From the handful of billionaires I've seen, I gather that hedge funds are what you create for your son-in-law to support your daughter in the style to which your little girl deserves. It's like Trollopes 'Two Heroines of Plumplington', except you can limit the real damage.
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Yes, but Reagan borrowed how many hundreds of billions of dollars as part of his Keynesian stimulus. This probably swamped any differential spending effect.
Toggle Commented Feb 4, 2016 on Economics is Changing at Economist's View
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Well said. (I see you've met pgl.)
Toggle Commented Feb 4, 2016 on Economics is Changing at Economist's View
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Didn't FDR appoint Joseph Kennedy to head the newly created SEC figuring that it would take a thief to catch a thief?
Toggle Commented Jan 27, 2016 on 'Reality Check in the Factory' at Economist's View
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If you are going to industrialize using the only mechanisms that have ever worked which involve having a strong industrial policy and export favoring tariff walls, then size is a big issue. If you are a small nation, the world can easily absorb everything you export, but if you are a large nation, you'll saturate potential markets, even with free trade agreements and the like. Automation is an issue. If you use a rule of thumb arguing that 10% of the population is needed to produce all the manufactured goods required, then the world only needs 700M manufacturing workers. If you cut that to 5%, then there are only 350M such workers needed. If you are a smaller country, you can still industrialize, but the critical size gets smaller with more automation. Economists haven't worked very much on the demand side. This is partially because there was a time when the supply side problem was not yet solved, but that was over a hundred years ago. It is also partially due to politics, since fixing the demand side requires that the upper classes accept a loss of money and power. Building a consumer class that matters is hard. The agrarian US built one based on cheap land, but agriculture has been industrialized so that option is no longer available.
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Just about every US company that tries to develop a business in China quickly finds itself obligated to provide intellectual property, subcontracts and often a share of the profits, often by means of having to use required distributors. They also have to pay a variety of taxes that most local companies can avoid. Even export contracts usually have a variety of hooks. For example, a Seattle area aircraft company got a contract to refit a large number of planes for the Chinese, but part of the deal involved providing training for "maintenance" in China. This isn't exactly a partnership, but it is a definite tax on the business designed to take all future profits. This kind of thing is not unusual. Japan was notorious for this in the 1950s.
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Back when effective corporate taxes were much higher, the government could be considered a partner of the corporation. If the business did well, the government got a cut which is only reasonable given the services that corporations receive from the public trough. Now that corporate taxes are lower, these collectives have become an increasing burden on American workers and individual taxpayers. Demanding an equity position makes some sense, but there are lots of ways corporations will try to game this. Much like Roman senators in the latter days of the empire, corporations accept benefits from but owe no allegiance to anyone. I suppose the government could simply demand a certain minimum percentage of corporate revenue or deny them an operating permit. Many developing nations (e.g. China, Korea) already have requirements like this. Most corporations are surprisingly easy to replace. Competitors will come out of the woodwork once government enforced incumbency is removed.
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bane: Wow! Talk about cherry picking. I love how he glossed over Reagan's Keynesian program.
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Infrastructure can provide solid economic benefits for millennia. It's good to see people paying attention to it again.
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There are pretty straightforward ways to explore limits and attractors. Ever since the 1980s it has been pretty straightforward to dump your differential equations into a computer and let it crank through phase space. I had a friend who worked on the basic algorithms back in the 1970s, so by now this kind of stuff is pretty well understood. Is there a reason that economists don't use this software?
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It's definitely better than The Eye of Argon.
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By some measures the 1873 depression lasted into the early 20th century. It was a lot like the current depression. Most economists agree that there was GDP growth, and depending on how one measures it, there was also TFP growth. On the other hand, wages and the standard of living was stagnant even as the economy grew. There was also a lot of anti-labor violence aimed at the nascent labor movement. Some economists argue that it wasn't just a single long depression. They point out various panics and collapses during that period, but the recoveries, such as they were, were anemic. In other words, we seem to be in a very similar era. How did the that depression end? Well, there was the anti-trust movement and other progressive movements. There was even more labor related violence and a lot of organizing. History may not repeat itself, but it sure rhymes. I'm expecting exciting times ahead.
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The NATO threat was counterproductive. The Soviet Empire was in the black into the 70s. It went into the red in the middle of the decade. You'll notice that they invaded Hungary in 1956, Czechoslovakia in 1968, but did not invade Poland in 1980. Even George Kennan, who formulated the idea of the Cold War, admitted that the only thing holding the USSR together in the 1980s was the US military build up. The latter leaders of the USSR were in a bind. They couldn't afford the political risks of raising living standards, so they spent on their military and scientific establishments. When Gorbachev finally loosened the reins a bit, the whole empire fell apart.
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I'm in favor of much better anti-trust enforcement, but I also think we need better regulation of what used to be called "natural monopolies". There are two approaches to getting what we want out of government chartered collectives. We can keep them from getting too big or, if we allow them to get big, we can regulate them tightly. Sometimes we have to do both. Lately we've been doing neither, and we've been paying the price.
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I know a lot of old farts who use them to follow sporting teams, keep up with friends, coordinate family activities, read books, watch movies, manage shopping and to do lists as well as making a phone call now and then.
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Apple wasn't the first with its extra large phones. Samsung among others was selling them, but not selling an awful lot of them. Critics were often whining that Apple needed to sell bigger phones. Apple did, and a lot of people think they were the first. What Apple does is put the imprimatur on things. USB was a skanky, speculative standard. Apple declared it its standard and the world followed. IEEE 1394, IEEE 801.11b and a host of other technical standards got the Apple imprimatur and became real things. Apple made a computer with a translucent case and suddenly you could buy translucent computers, staplers, pencil cases, copiers and so on. It was weird watching a marginal, dying tech company calling the dance moves for a much larger industry. It only makes sense if one accepts just how LITTLE decision making power there is out there.
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Actually, the government is best dealing with rapidly evolving systems. Who built the first long distance telegraph line? Who filled in the nation's power grid? Who created the internet? Who subsidized and cajoled the air craft makers and airlines? Who built the nation's roads? The private sector can't handle this kind of thing. Too much capital needs to be invested too speculatively for any private enterprise to manage the risk.
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It is no lazier than arguing that the private sector can do a better job than the public sector. The private sector only works if you lean on it to make it work. Lately we've been seeing a lot of "free enterprise fairy" thinking and a lot of disasters as a result of it.
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If the past is any guide, the federal government has a pretty good record. Before the Republican party went insane, there was usually a lot of political brokering and a number of compromises, but we were able to build big things like our road and interstate system. Tightly regulated monopolies rolled our original telephone and electric power systems under federal guidance and often with federal subsidies. The heavily subsidized and regulated airlines, steamship lines and railroads were run by licensed oligopolies. Remember, the federal government would need a lot less cell phone infrastructure than a cell phone oligopoly, alternatively it could provide much better service for the same prices. Given the god awful track record of the private sector it is a wonder that anyone would prefer it to the public sector in delivering any important service.
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"A reasonable strategy would have been to buy time with credit expansion and infrastructure spending while reforming the economy in ways that put more purchasing power into families’ hands." Getting more purchasing power into consumer hands is the trick. If you read Todd's 'The Final Fall' that was what killed the Soviet Union. It wasn't politically palatable to raise living standards, so the money went to military and prestige projects. (He was actually predicting the fall back in the mid-70s. He gave the USSR 10-20 years.) We have a similar problem. It just isn't considered politically palatable to "put more purchasing power into families’ hands". Government spending gets spent on the military and the rest goes to a narrow pool of wealthy individuals who use it to drive up the price of symbolic goods. It isn't surprising that China has a similar problem. Their government is not all that different from that of the USSR, though the Chinese are less cynical and fatalistic than the Russians. Granted our system of government is a fair bit different as is our underlying ideology, but there seems to be general world-wide agreement that spending power must not devolve to the typical family. Now and then living standards may rise, but not to the level where they will be politically challenging. It is a rather fascinating dilemma.
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Thinking about it a bit more, you are probably right. Dialogs definitely have their place in presenting ideas. Douglas Hofstadter's 'Godel, Escher and Bach', borrowing from Lewis Carrol, did a very effective presentation of some serious mathematics using dialog. In some ways dialogs are like epistolary novels. They aren't always the best way of presenting things, but they have advantages in offering various points of view.
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Explicit dialogs aren't very useful except for illuminating arguments since a dialog provides a structure for juxtaposing points, pro and con. There's a good solid reason for avoiding them otherwise. If nothing else, as you note, they are hard to read. A good lecture, of course, is designed with an implicit dialog in mind, the idea being to explain something while pushing the reader towards a particular question which can then be answered in the next piece of explanation. If it helps the writer to imagine the discourse as a dialog as part of the scaffolding, then it is a great technique to get through the first draft or two, but at some point the scaffolding needs to be removed. No one likes to live in a perpetual construction site.
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I think phishing for phools is less of a problem these days. Most of the phools were phished out in the last big bubble. The typical phool these days has no assets and no access to credit, despite the ridiculously low rates. It's like the 1930s where everyone was terrified that the billions sitting in low yield treasury notes would somehow lead to another market bubble. Yes, there was even more loose money in the 1930s than in the 1920s, but there was no mechanism for moving it into the market.
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Who are these people? Are they undergraduates? Do they have dorm rooms? Do the dorms lack WiFi? Are they not allowed to brew espresso in dormitories? Do they all have obnoxious roommates, including the obnoxious roommates? If they are graduate students, then I understand. Hayek predicted something like this in his Road to Serfdom.
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