This is kaleberg's Typepad Profile.
Join Typepad and start following kaleberg's activity
Join Now!
Already a member? Sign In
kaleberg
Recent Activity
The problem is that pro-business policies result in weak economies. They suck money from labor and give it to capital. They can't respond to emergencies that affect large numbers of people; they can only help selected wealthy individuals and industries. Louis Pasteur said something about luck favoring the prepared mind. In this case, anti-business policies are much better for dealing with economic problems and kindling growth. This is related to the reason wealthier individuals prefer pro-business policies, but states that prefer anti-business policies are wealthier. It's a package. There are all sorts of economic shocks, but government response and policy determine their impact. European historians have been studying this for maybe 100 years now. During a stable century, a plague or famine will be shrugged off, but during an unstable century, it would be catastrophic. (Compare the effects of the plagues in the 14th and 17th centuries in Europe. There was quite a difference.) I'm glad to see more and more "serious" economists and opinion makers are finally waking up to these contradictions in conventional wisdom. Historians have always had to deal with the facts. It's nice to see economists being forced to face reality as well.
1 reply
That New York Times article "Hold the Phone: A Big-Data Conundrum" was hilarious. The author measures the speed of his iPhone by seeing how many search hits it can find for "iphone slow". I presume he measures the speed of his car by doing a search for his license number and "too fast".
Toggle Commented 2 days ago on Links for 7-27-14 at Economist's View
1 reply
We, and those of our generation might resist, but there is a new generation who will regard certain jobs the way we regard elevator operators, ice men, hat check girls, watch repairmen or washroom attendants. The real challenge remains coming up with enough moderately well valued jobs to keep effective demand from collapsing.
1 reply
Look at the rapidly shrinking occupations - telephone operator, bank teller, paralegal - and at the massively deskilled jobs that once commanded a premium - retail shift manager, delivery dispatcher, secretary. In 1939, a man could make a good middle class living allocating phone numbers by looking through phone company wiring charts or by spraying paint on car doors on a production line. I chose these two examples, because Fortune magazine ran articles on the workers in question back in the 30s. Even by 1939, the latter job was being automated out of existence and it was only the painter's superior speed and skill that kept him employed as paint quality and painting gear improved. There is probably no such job today, just as phone numbers for land lines are allocated by computers. Look for falling wages and shrinking job counts. There are lots of them, and automation is behind a lot of it. (Hell, my local supermarket has been cutting hours now that they have an automatic checkout bank. One clerk runs six stations. We shoppers do the rest.)
1 reply
Microsoft was a sclerotic bureaucracy. It wasn't the government that kept them from releasing an operating system to follow up XP. It was their own internal problems and Steve Ballmer's failure to address them. Microsoft built its empire by controlling one very important standard, and it tried to use it as a platform to capture other standards like HTML, Java and Javascript. This strategy grew increasingly untenable as the computing world started demanding broad standardization.
1 reply
The problem with things like the "natural rate of interest" is that they cannot be measured, not even asymptotically. In fact, it may not even exist. Where is the proof that there actually is an equilibrium with the appropriate properties. Has it ever been achieved? Can it be achieved? Drawing a pair of lines and making a topological argument is confusing the map for the territory.
1 reply
A better analogy might be that rational expectations are the hidden local variables of economics. They might explain things, but they don't exist.
1 reply
The finest thing Von Neumann ever did was keep Mauchly and Eckert from patenting the digital computer. They tried, but Von Neumann beat them to the punch and published first. They could easily have delayed innovation by 20-40 years. The Wright brothers had such a broad airplane patent that innovation moved to Europe until well after WWI. Ford spent a decade fighting off a patent troll who might have crushed the automobile in its crib. Marconi was so worried about patent trolls when sound transmission radio was developed that he invented the patent pool, lest the industry be completely stifled. Patents are definitely a mixed bag. I always like to point out that Gore-tex [tm] dental floss was invented when the original Gore-tex patent ran out.
1 reply
Back in the 1980s, the idea was to listen for heartbeats using a convolution filter. They're pretty distinctive. I was involved with a conveyor belt based parking garage company that wanted to avoid having a child left in the car which would then be whisked away to its storage slot. (Autoveyer was the name, I think.)
1 reply
This is related to the difference between MA and CA tech entrepreneurs. In MA, the goal is a comfortable income, nice vacations, the ability to practice one's art, kid's soccer games, a nice retirement and so on. In CA, the goal is to make a killing, become a household name, become a mover and shaker, work all night, not know the names of your kids without checking your iPhone and so on. Obviously, the MA dream is easier to achieve than the CA dream, but people are drawn to both. An economist would pay $1,000 for a ticket in a lottery with one in a trillion odds of winning a quintillion dollars as the ticket would be worth a cool million. Why turn down a sure thing? An ordinary human would pass, spurning an obvious fortune, to the sheer amazement of the economics community.
1 reply
In the last five or ten years I have been personally involved in crowd funding restaurant development. Basically, I purchased a future gift card at a discount. I've also funded a number of business projects, primarily in publishing, through Kickstarter. This used to be a job for the banking sector, but the banking sector has been basically AWOL as far as funding actual businesses goes. There is more money to be made in finance. We made a big mistake not letting the financial sector go under a few years back. We could have easily replaced it with a Federal Reserve retail loan and deposit window like the one farmers already have. It would have eliminated a lot of overhead and probably cut the effective risk undertaken by the government, especially given that the financial sector assumes that it has "financial f---up" insurance. Even better, it would have funded actual businesses.
1 reply
I'm not sure, but I make my living either from magnetic polarity or laser cut indentations. Yeah, I'm a rentier. People do things for me and give me things because of various entries in computer databases. Yes, I know it's because of goods and services that I provided at various times in the past, but it is still very mysterious to me. Since the entire idea of values and just desserts involves a fair bit of mysticism, it makes sense to develop a mysticism that gives you what you want, even if it deprives others of what they need. The Divine Right of Kings was not a new idea. As long as you distribute enough goodies to your flunky enforcer class so that they don't depose you, you can ride this pony for millennia.
1 reply
I always loved The Candlemass Road. I thought it was one of Fraser's best. Of course, in The Reavers, he took it all back, though he borrowed the opening, insisting that the latter was truly the novel he meant to write. Fraser's Flashman was a marvelous character, a complete coward, womanizer, cad and scoundrel who managed to sleep with queens and show girls, get drunk with princes and kings, and survive nearly every major battle of the 19th century. I only hope Flashman will have a 20th century counterpart, becoming an accidental hero at Port Arthur, surviving the Somme, screwing Idi Amin's mistress, cowering through Hiroshima in the basement of a whorehouse, and the like.
1 reply
Ah yes, the famous tedium of being bombed.
1 reply
Meanwhile, in Russia, the Tsar did buy and emancipate the serfs. I gather it cost about $6M, which was raised by selling Alaska.
1 reply
Harwood is hoping to write a good "Obama wasting our hard earned taxpayer money on travel to all 50 states" article. The headline sells itself.
1 reply
Government at its heart is behind most market failures. Markets can only be optimal in stateless systems. This flows from the mathematics of markets, though it is usually glossed over. Markets can only be effective if they are reset on each round of bidding. By enforcing private property rights, the government introduces all sorts of market failures and inefficiency. Markets also fail when the government steps in and enforces intellectual property rights such as patents and copyrights. The US did much better in the 19th century when these rights were lightly enforced. The innovator rarely collects much from innovating. It is usually the more practical sorts who get rich on good ideas, so cracking down on patents and copyrights - perhaps even eliminating them - would enhance market operations. The government further screws up markets by allowing limited liability corporations which generate moral hazard. If investors were all personally liable to the extent of their assets, as opposed to being sheltered by government fiat, markets would operate much more efficiently and morally. The bulk of the industrial revolution was built without limited liability corporations, so we know they are far from essential.
1 reply
That's horrible news. I'm so sorry. My thoughts and prayers go with you.
Toggle Commented Jun 19, 2013 on The Saddest News at Economist's View
1 reply
You might have also mentioned that systems which only support upward redistribution eventually drift downhill and stagnate, unless there is some other nation that they can export to, one that does have downward redistribution. The U.S. has always been into redistribution. Even peasants could own land if they were willing to work it. Where do you think Marx got the idea for land reform?
Toggle Commented Jun 17, 2013 on The importance of redistribution at ataxingmatter
I think it was Robert Townsend, the man who turned around Avis back in the 1960s, who wrote in Up the Organization that every company needs someone who will just wander around the company until he spots corporate bullshit, then screams "bullshit" at the top of his lungs until the bullshit is removed.
1 reply
It's not homeopathy. The scientific idea is to treat them with very small, but measurably finite doses. The idea is to inure without doing more harm than necessary. The homeopathic idea would be that the less peanut in the anti-allergen, the more effective it would be. The scientist would argue that below a certain level, there would be no reaction and no desensitizing. The approaches are quite different.
1 reply
Hayek's macro is easy to understand. He said everything with his title of his book, The Road to Serfdom. It is touching faith in the free market that led to serfdom once, and is likely to lead us there again.
Toggle Commented May 26, 2013 on 'The Hangover Theory' at Economist's View
1 reply
The problem with the pendulum analogy is that it doesn't explain what actually happens. While investment and consumption are, at least as far as the equations go, symmetric, the wealthy who tend to do the investing and lobbying argue that investing is special as it is their ox that might get gored. The Austrians argue that the pendulum should be stimulated on the investment side, to the benefit of the wealthy, and damped on the consumption side, to the detriment of those less wealthy. That's the big policy stickiness that we have to deal with, and it usually takes a long, slow political and cultural change to convince government to intervene on behalf of their smaller donors.
Toggle Commented May 26, 2013 on 'The Hangover Theory' at Economist's View
1 reply
I think the argument was that the expansion and contraction of credit does have a 1 to 1 relationship with consumption PLUS investment. Keynes recognized that there is no fundamental asymmetry between consumption and investment, despite the Austrian argument that one exists.
Toggle Commented May 26, 2013 on 'The Hangover Theory' at Economist's View
1 reply