Webster Tarpley: New Pope Francis I Supports the Wall Street Sales Tax, Opposes Austerity, Globalization, and the International Monetary Fund
I don't see this getting mentioned a lot. In light of how this man's election defied prior expectations it looks like his ascent carries a special political significance.
ps. I can't fully vouch for Tarpley's accuracy and reliability in these matters.
Why Social Mobility In The United States Is A Total Myth
Whenever any statement is made about economic mobility, the yardstick that is used is always the extent to which people are able to move between the quintiles within one society. I'd like to instead see a measure of absolute income mobility. It is conceivable that a society would lose relative income mobility in the conventional statistical sense BY having certain of its members get richer, something that in isolation should rarely be a reason for complaints by anyone. A measure of absolute income mobility would avoid such pitfalls and not implicitly praise policies that distribute misery evenly among a society's members.
I'm personally inclined to think that relative mobility is almost a complete red-herring. It's a psychological abstraction of which the relevance can only be justified by the legitimization of envy. Absolute mobility tells you what a person's real prospects for living standards improvement are.
Also, things like these make me think that for anyone who isn't afraid of a little technical work, the mobility prospects in the USA are quite enviable:
DevBootCamp
App Academy
Noah Smith: John Taylor's Austerity Model
A good comprehensive post detailing how Taylor's model is a work of obfuscationary political hackery. If you're in a hurry, skip the whole post, stick to this paragraph and laugh:
5. There is no Zero Lower Bound.Note that in the monetary policy rule written above, there is nothing that says that interest rates can't go negative. In other words, Taylor assumes what most New Keynesian models assume, which is that there is no Zero Lower Bound (or that we're always far from it). Any of you who are familiar with the New Keynesian DSGE literature will recognize that Taylor's result is a very common result in this literature: Away from the ZLB, fiscal policy is not very effective. The "New Old Keynesians" such as Paul Krugman and Gauti Eggertsson, who advocate fiscal stimulus, explicitly make reference to the ZLB as the reason stimulus works. Taylor just ignores that idea in this paper.
Top REPUBLICAN Leaders Say Iraq War Was Really about Oil
Wars are rarely fought for one reason only. If the war wasn't fought "for" oil it would sure still have been one hell of a nice convenience. Whether oil was a (or the) main reason or more of a side-concern is really a matter of cosmetics.
The gold standard is ultimately just a promise to exchange paper liabilities for gold at some distant point in the future. While that "point" is being pushed further and further away through financial layering, it turns into more and more of an empty formality that is peripheral rather than central to the system as a whole. The evolution from gold standard to paper standard is a gradual one. Even during this "clasical gold standard era" the creep towards a transformation of the system was well underway.
Barry Ritholtz: WTF Were They Thinking?
Ritholz questions whether a locality as small and insignificant as Cyprus can set off a crisis on a Eurozone-wide scale. My thoughts coincide with those of commenter GMS777:
Barry, you ask if economic malfunctions in a country with a GDP of $23 billion pose a risk to the global economy.
Could the assassination of an obscure Austrian archduke touch off a World War?
Ritholtz' reaction doesn't do much to temper my "fears"; there's plenty of ominous context to this development to go around.
Food for Thought; March 17 2013: Budgets, Balances and Bamboozlement
chicagosean: Cliffs Notes: Jack Schwager’s “Hedge Fund Market Wizards” in Two Paragraphs
I think I'll just stick to index funds, get a decent fraction of these market wizards' returns at no risk, no fee and no effort and spend my time productively mocking things on an internet blog.
ekathimerini.com: Cyprus depositors face up to 10% haircut as part of bailout deal agreed at Eurogroup
This reminds me of a certain ant-deflationist Gary North post in which he brought forth the argument that if banks see no profit in lending out deposits, they will also refuse to take them on and/or pay interest on them anymore. I don't know if it's quite a simple for them to do that, so maybe this is instead the means by which losses from deposits are avoided; after all periodic haircuts are equivalent to a fee on deposits. Score one for deflationism? Several people I respect cry outrage at this deal, saying it will lead to bank runs.
See also:
Zero Hedge: Germany And IMF's Initial Deposit Haircut Demand: 40% Of Total
JPMorgan Asks "Has Europe Bazookaed Itself In The Foot", Answers "Yes"
Is Euro-geddon Nigh?
Steve Keen: Solving the Paradox of Monetary Profits
Show this paper to people who bring up the fallacious story that when banks lend out 100$ at 10% interest, there is 110$ to be repaid, which is purportedly impossible from the money that is floating around in the system. Long story short: the payment is made from transactions that make existing money change hands, i.e. circulation of money rather than the money itself. These videos show Keen's modeling approach to the same issue: Keen Crash Course
David I. Stern & Kerstin Enflo: Causality Between Energy and Output in the Long Run
Stephan B. Bruns, Christian Gross, David I. Stern: Is There Really Granger Casualty between Energy Use and Output?
I had to look up what exactly Granger Causality means and much of the analysis in these papers goes way over my head, but it seems to lend support to the notion that energy availability induces economic growth rather than the reverse. This would corroborate my views on the halting of the steep rise in energy use per capita in the 70s being a major turning point in monetary history and a primary cause of much of the financial malaise in the decades that followed (by which I mean, first high inflation, then a steeply expanding credit market in proportion to GDP, and a wedge driven between productivity and compensation pervading both developments).
Econbrowser: The Cyclically Adjusted Budget Balance: Shrinking Rapidly
A cyclically adjusted budget balance doesn't make much sense when the business cycle relative to which it is calculated was one built on top of a massive toxic credit bubble. Returning to the Great Moderation incorporates a return of the vertical trajectory of the credit market size relative to GDP. I'm more inclined to think that the reason why the US treasury is not under interest rate stress is because the Fed is poised to engage in debt monetization. This does not cause net inflation in as far as doing so counteracts the deflationary pressure of the debt-overhang that is thus neutralized. I'll write a post to address these issues specifically in the near future.
Econbrowser: What's going to happen to the Fed's balance sheet?
This discussion is interesting enough, but I'm pretty sure it is incompatible with Steve Keen's Monetary Circuit Theory's account of the workings of debt in an economy. A return to the Great Moderation can only happen in two ways: either the private sector needs to generate a massive amount of debt that it believes will be repaid in aggregate in natural ways, or the Fed needs to start monetizing such debts (i.e. become the repayer of last resort by buying up debt and ripping it up or doing something equivalent) or implicitly commit to doing so in the future. Since the former is positively implausible, the second is what a bull market and "recovery" imply will happen. This means the Fed has no credible exit strategy. It is the source and the engine of the credit boom that sends the market higher. It will be injecting not just liquidity into the market but capital, redistributed from holders of the Dollar and fixed income assets denominated in Dollars by means of monetary rent-extraction. Strangely enough this is something Steve Keen himself does not talk about. He talks about how a debt-jubilee would "fix" the situation, but pays no attention to the fact that a debt-jubilee via the public debt market is being engineered by the Fed already.
Social Democracy for the 21st Century: Woods on “Sound Money” and Deflation: A Critique
Another great two-sided perspective on an important monetary issue.
CNN: The Internet is a Surveillance State
The internet is just a double-edged sword in this regard. Take some freedom, give some freedom. I don't see particularly strong reason for alarmism except in proclaiming that the good old days of the internet during which many of the good bits without the bad aren't in the same ways around anymore. And it's still possible to derive great anonymity from internet activity if you handle yourself with care.
Ritholtz: 12 Cognitive Biases That Endanger Investors
I'm missing loss aversion on this list. It seems to me that like many other people speaking on this subject, Ritholtz overvalues humility in decision making. Perhaps a lack of humility is the main respect in which most people need to be corrected, but that doesn't make it the only direction in which one stray the wrong way. To invest well, in the sense of minimizing regret (in the sense of not missing a better deal than the one you made) rather than minimizing losses, you need to not just guard yourself from overestimating your insight but from underestimating it as well. This also annoys me about it when people drive the "confirmation bias" warning to to far an extreme: it is perfectly natural to be suspicious of information that conflicts with existing beliefs. If you formed those beliefs on the basis of rational analysis and proper data gathering, you should defend them from the assault of the noisy influx of inputs impinging on your senses. Confirmation bias is an error of the extent to which this process is given weight, not its application proper.
Steve Keen: Debunking Macroeceonomics
Great comprehensive Keen article on the broad critique of macroeconomics.
Paul Krugman: Conservatives and Sewers
Krugman digs up a hilarious skeleton in the closet of the US conservative movement.
Unlearning Economics: Falsification in Economics
the record as a whole is not good. Theories from over a century ago look, and are taught, the same way as they were when they were initially adopted. New ideas that are not even disputed by economists, such as behavioral economics, are slow to be adopted, and when they are adopted are presented as a ‘special case’ and in a way amenable to the core framework, which is, of course, still taught alongside them. As far as I’m aware, there is no clear cut case of a neoclassical theory being completely thrown out and never mentioned again. This alone should be an indicator that the scientific method is not at work in economics.
For those who after all this time still needed to be clued in.
Social Democracy For The 21st Century: Murphy on Keynesianism and Great Recession
Recommended for both the video and the blogger's commentary. Posts like these are helpful for getting a broad view of all facets to the issue, but the crucial market monetarist angle is left out of view. The dichotomy between liquidationism and laissez-faire induced collapse on one hand and politically opportunistic fiscal interventionism on the other is a false one.
Sydney Morning Herald: Rise of the warlords
Sobering, but unsurprising account of the failure to introduce basic rule of law in Afghanistan. I'm reminded of various remarks from Johan Galtung, whose cultural analysis of the situation verdicts the involvement of the West in that area in its current form to be an abject absurdity. That massive sums of money, not to mention the lives of men and women in their prime, are being sunk into these adventures is a compounded farce.
Fear Index Says This Stock Market Reminiscent of October 2007
VIX Index sinks to an unusual low of 11.30, hopelessly failing to even register the recent volatility in US GDP growth, not to mention a host of risk factors that require no explicit mention here. I issue an ominous warning: this will end in tears.
Daily Mail: Trump warns Republicans they are on a 'suicide mission' if they give citizenship to 11m immigrants - because they'll all vote Democrat
Which he is probably right about, for a change. The comical thing about this headline is not just that Trump makes it, but the implication that the decline of US conservatism is reversible dynamic, or, for that matter, one that should be lamented.
IO9: How Much Longer Until Humanity Becomes A Hive Mind?
I'm inclined to view this as a gradual process. Humans have always to a certain extent been interconnected and technological change only accelerates the pace of the interactions between individuals, its scale and the distances concerned. Mental interfaces are a cosmetic and marginal link in the chain of events towards more and more possibility* for cooperative integration, probably of smaller impact than the invention of writing and the internet to name just two things. My curiosity goes out to the issue of how individuality is preserved under these mental interface set-ups. I incline to viewing it as a crucial aspect to human thinking that can not be skimped on. Have developments up to this point led to decreased individual autonomy? In certain ways, probably, but my sense is that people also have vastly greater means available to them to develop their identities in keeping with personal idiosyncrasies. I see no basis on which to divine in which direction there will be divergence from this trend.
* I stress that this is optional if handled properly.
Neil Wilson: The Tri-party Government Sector
Reminded me of Miles Kimball's idea for a sovereign wealth fund that manages countercyclical asset purchases during crises, taking the political heat off the central bank so it can properly focus on its mandates. See: Miles Kimball: Why the US needs its own sovereign wealth fund
Gordon T. Long: An Orwellian America
Lots of fun graphs in this one, even if the message is childishly one dimensional and pitches the silly complacent notion that libertarianism is the Jesus of political philosophy, or a coherent ideological framework to begin with. The fact escapes the author that there are quite a few dimensions in which individual freedom is at a historical extreme right now. The fact I can read his work from thousands of miles distance and comment on it here for the entire world to read is testament to that.
China Is Engineering Genius Babies
I wouldn't be too surprised if certain of it's olympic prodigies were also the result of eugenic engineering programs of some variety.
Some youtube vids I am and will be watching; looks promising so far:
Airelon: The Greatest Depression: So Much To Learn
Airelon: The Greatest Depression: Faux Academia
1) The Ultimate History Lesson: A Weekend with John Taylor Gatto
"Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan 'Press On' has solved and always will solve the problems of the human race." - Calvin Coolidge
The big issue with this of course being: persistence towards what? This is why we need contemplation, philosophy, why it's imperative to always reflect. Persistence is powerful, but it is morally indifferent. An unguided projectile if not handled with care.
Scott Sumner: Monetary, Not Real Shocks Cause Business Cycles
1987 crash and Japanese Fukushima disaster had no effect on the business cycle. I'm sympathetic to the argument but are two "misses" sufficient to eliminate the thesis that real shocks can induce business cycle events?
