Tag Archives: economy

Fourth of July Quandary

Yeah,  We are going through a Big Change and I bet you cannot make it.        But I dare you.
You see, I love this country and I think we are losing it.     Here is the Quandary:
Sure, we have a little financial problem, some persistent unemployment, a wad of debt, a war or two or three, (if you don’t count the assassination drones), and a decades old political stalemate that is really mated in stale, I mean really puewy stale, but that leaves out the failure of the people to fund the press and the failure of the press to cover the important stuff when funded only by commercial interests, a supreme court that thinks money is speech, two administrations that think the constitution is meaningless words, but the Big One, that big slow moving change that we all see and don’t want to admit, and is leaving muddy boot prints all over the future of our dreams:  global climate change: climate chaosYup, you are right and I know it too.   All the Republican Presidential candidates deny climate change as a point of pride.  “How the hell can you grow your way out of a depression, if you admit that the consequences of that growth would just make things worst?”   And what does worst mean?   Migrations of people seeking higher ground and, well, food.    No, not timid people,  desperate ones, wars.

Truth is, the Democrats are not much better.  While mouthing green jobs, and I have to laugh when they call robotics green  and  jobs, they too think the only way out of our recession is to manufacture more stuff.  Ah, efficiency. Democrats can only see growth as the answer too.

OK, maybe the case can be be made that since 82% of Americans don’t have passports, they would not know nor care that Australia had a flood the size of France and Germany put together.   Or that the Russian wheat crop failed. Well, Australia’s conservatives used to deny climate change too.  No more.   Will cyclone ally, or the Mississippi flood, or hundred square mile fires wake up ours?
Back in history at a point similar to now, FDR primed the pump.  He got young men working in the CCC camps instead of inventing a life of crime.  Sending money home.  Imagine that.  Our current stimulus envisioned a giant pump priming, thinking there was just one big pump: the banks.  Truth to tell they can just deal with money when it is moving, they don’t make it move, people do, real ones with real locations… on earth.  So how do we get real people in real jobs?, and that could be doing anything since only 8% of us work growing our food.  Planting trees, cutting brush and making trails worked in the 30’s and made kids into strong men with good values.   Kids today want to manipulate stuff with their fingers, because that is all that they have seen: manipulation, money for nothin’ and ever better remotes.  But I digress.
So these parties, the Democrats and Republicans cannot seem to find a lick of common sense among ’em.  Now Will Rogers had some.  He said, “The United States had two great friends…………..  the Atlantic and Pacific Oceans.”   I dare say he is still right even though we have spent TEN years traveling half way around the planet, fighting in the place called the Graveyard of Empires: Afghanistan.We are told by both parties it is for national security. Well my goodness, look at the map. Their neighbors are China, Iran, India and Pakistan.     Talk about a rough neighborhood far away.  Are we snookered or what.  For a decade!  What is this national security?  Domination of all places anywhere on the globe?   It seems to be of the same quality as anything that is  securitized. Even if we had a booming real economy rather than one based upon insurance, financial products and speculation on house values we could not afford that.   Darn.   I was going to dare you, not wheedle bout the thicket of our tarbaby mess.  Seems like I got off my trail.

The dare comes in to design a wiki, you know, one of those computer internet gizmos that allows a lot of folks to work together and figure stuff out.  I think the ancient Chinese saying says it best: “If we don’t change direction, we are bound to end up where we are headed.”  And here I think we need to put our heads together and not expect some celebrity to fix it.  We need change that is not a slogan.

Yesterday ( June 30th)was funny day, not ha ha, when the Greek and British peoples rioted in the streets because the bankers had the legislators renege on pensions, a lifetime promise in those countries.  It is called bait and switch.  In response the US stock market gained 150 points.  What does that say? It seems crazy to one like me.  Bet, we’ll see those same kind of riots in the US within two years time.   You have heard the bankers, haven’t you, complaining about all the greedy people.  Folks get funny when you revoke a life long promise. Not ha ha.
I’ll tell you this, people don’t like to get a screwin’, and there are at least 6 million Americans that have got a good one as the banks have foreclosed them out of their home to collect upon credit default swaps and bonuses.  And the screwin’s not done.  And the politics ain’t mappin it, and the press ain’t covering it, and well, that’s why I ask you to help design this wiki.Because without some meta thinking, some big creative thinking, we are going to have a big train wreck.  Our housing has already lost more than after 1929, and the Parties, if you can call them that are, Clubs are more like it, are still having a pissing contest.  Dumping the economy into the gutter…. simply by having the firm and stupid Republicans come to loggerheads with the firm (well, not really) and stupid Democrats about the debt and create here, just what we observed happening in Greece and Britain yesterday.

So I double dog dare you to figure a way out of this fix.   Or to figure a path to a way……. out.   And don’t tell me you are waiting for Elvis to lead the way.

yours,The Old Sodbuster.

When the Economic Titans Disagree… Then What?

I have listened with attention to Paul Krugman (nobel laureate), Joe Stiglitz (nobel laureate), Nial Furgeson, historian of Empire and Simon Johnson past chief economist for the International Monetary Fund. They are all good. They all know their stuff. And; they disagree.

They disagree most vividly the need for a new stimulus, and yet agree on others items.

But before getting into the weeds of acute analysis of macro economic theory, let us look at a similar area of complexity. If you are of a certain age, you are more familiar with doctors than economics. We would never think of asking a surgeon about how to treat a rash. Nor would we ask a dermatologist as to how to treat a tummy ache. The same complexity engages the study of economics. Yet economics as most college graduates must know, are merely divided between macro, and micro economics.

Why should you listen to me: the self named carpenter economist on this subject. Aside from my university thesis, my awareness comes from working for a decade in the university textbook world over five states and I have had many, many discussions with economic professors, whom I submit, love to profess. I managed a present day anthropology of the economics profession. There are dozens and dozens of economic journals, which is to say they are as disciplined as cats. Yet in the academic world of endowed chairs, many economists have taken the bait of market fundamentalism, as George Soros has so well named. Think Tanks have called it ‘Free Markets’ and they have been impelled with tens and hundreds of millions of dollars which result in many endowed chairs. Their wind has been felt on trade policy ( laissez faire my patoot) as well as in the instruction of MBA’s and economics majors. I have seen the gears of this self generation of ‘policy’.

Back to the subject, namely that economics is as complex as medicine and to divide it into macro and micro and call it good, is as competent as to divide medicine into gastro enteritis or dermatology and consider you have mapped the territory. Knowing this, I am not at all surprised that the three luminaries named above have coherent and yet conflicting views.

These four, Krugman, Stiglitz, Ferguson and Johnson live in different timezones and scales, all of which are valid. Ferguson looks in terms of decades if not centuries, and observes the structure by which empires decline. Johnson worked with the I Stiglitz whose thesis was on the asymmetry of information, i.e. imperfect access to information, has worked internationally as chief economist at the world bank, and has a different perspective from Krugman, who is centered on US history and current macro economics.

Again I must state my bonafides in contrast to these titans, all of which I admire. I wrote my thesis in 1978 on the consequences of nature’s cost on the monetary system as advised by Gregory Bateson who had a remarkable influence on late twentieth century thought He is the one who put the Macys conference together when Weiner and Von Neuman coined the term ‘cybernetics’ which was the mother of automation, and that the mother of robots, which is the building block of what today we call: ‘production’. He was the first to apply information science (also known as system science) to living systems.

What Krugman sees as a period, a quarter, Ferguson sees as a millisecond. What Krugman sees as the way back to some pump in the economy, which is necessary to have some circulation of funds, Ferguson sees as

So I am not upset that these titans do not fit ‘global warming’ into their economic models. While in my opinion it is ignorant, their ‘science’ of economics has proven itself quite fallible of late, so from a theoretical point of view, I understand why they would prefer to keep it as simple as possible. However not attending to that variable is akin to playing cards on the tracks and not noticing the train.

YET, they have to deal with concrete political thinking, that is equally outside the science of economics to deal with all this talk of deficits, and more resembles a train than any sense of logic.

You see economics is very plastic. It is complex, and usually has enough variables to mask any shortfall. Politics is less so. The unfortunate fact is that the majority of people can be: wrong. That was proved in 1936 when FDR cut the stimulus too quickly in response to ‘common sense’ objections to deficit spending…. and re-triggered the depression. For economics works on a slow cycle, and the political topic can have changed a dozen times before economic action creates any economic result.

Thus while each of these titans covers the macro world of economics, they do it from different perspectives, and actually agree more than would a family practitioner, an acupuncturist or an ayurvedic physician, who, like our economic titans all look at the whole body of their medical field.

The debate that rages today: Cut the Deficit, or Spend more on Stimulus is an apparent conflict point among our titans. I hope a new cleavage can separate this debate into a more sensible and fruitful discussion. Stay Tuned.