Wednesday, February 29, 2012

Replacing Electricity With Light

The history of technological development can be grossly oversimplified as humanity developing its ability to control energy along the electromagnetic spectrum. We have managed to move from containing the combustion of a pile of wood so it doesn't burn down the whole house or the whole forest, to containing the combustion of hydrocarbons in big metal containers we call "internal combustion engines." Now we're working on controlling light.

Thinking about debt and money

New monetary discussions are beyond necessary.  But, I have been waiting for someone else to bring up the subject because even though my chapter on monetary theory is by far the most downloaded of any in Elegant Technology, there is so much bad information out there and so many crazy people pushing crazy theories (a return to the Gold Standard, anyone?) I wasn't about to emphasize my own monetary discoveries until some more mainstream types got on board.  This has taken far longer than I expected. There is plenty of source material from especially the 1870s through the 1890s when money was the hottest political topic in the land.  So serious scholars should have been able to build their cases quickly.  But anyway, I am NOT about to bitch about the new blood now that they finally shown up.

Here's what we know.  The monetary progressives won a significant victory.  Money has evolved even beyond paper.  It is now as flexible as any time in history.

Unfortunately, we are still stuck with the myths from the old gold days.  Can we destroy those myths before they kill us?  Time will tell.  But folks are now working on it.

Tuesday, February 28, 2012

Neoliberalism and the decline of Sweden's real economy

One of highlights of my first trip to Sweden in 1970 was a visit with a cousin in Kalmar who was an engineer working on a new Volvo factory.  His specialty was the design of compressed air systems.  The Volvo job was extra big because management had decided that even in assembly areas, the noise level was not to exceed 78 db.  In 1970, that was quieter than the interior of an expensive passenger car at highway speeds.  Air tools are widely used in automobile assembly and air tools can be VERY loud—not to mention annoying.  So my cousin's job was to design systems that could muffle the racket produced by scores of air tools running all the time.

Reducing the noise levels of an automobile factory was damn expensive so this decision had been approved by the most senior management.  In this case, it was the new young CEO of Volvo—a guy by the name of Pehr G. Gyllenhammar.  A little cultural note here—when a Swede has a name like Gyllenhammar, this is no peasant like a Larsson would be.  This guy is royalty—yes the Swedes have not abolished hereditary nobility—and he has a Viking name so he is the real deal.

The main reason why the Social Democrats didn't rid Sweden of their royalty is because the royals had found ways to make themselves useful.  This is probably a Lutheran influence.  Lutherans are taught that it is not the job you hold but how well you do it that counts—so even royalty is expected to contribute to the social good.  And over the years, Swedish royalty has made serious contributions.  For example, there was the Count of Wisborg Folke Bernadotte, a man murdered in 1948 by the Irgun gang for the "crime" of trying the make peace in Palestine.  There was Dag Hammarskjöld, the Secretary-General of the United Nations who died in 1961 trying to bring peace to the Congo.  (There is some dispute over Hammarskjöld's royal status but with with a Viking name and a family that had served the court since the 17th century, it is an unimportant quibble.  The point here is that royalty itself was expected to serve the nation.)

Even though plans for the Kalmar factory were well advanced when he took over Volvo, Gyllenhammar would put his stamp of royal noblesse oblige on the final outcome.  For example, he believed that worker's health problems were his problems—no one should have to sacrifice their health to simply build cars.  This meant no working over one's head, no stooping, mechanical assist for heavy lifting, etc.  (He actually wrote a book about his goals for the ideal factory published in 1977 called People at Work.  See also an amazing interview from 1986.)  And of course, building cars shouldn't ruin your hearing, and so my cousin got to design a complex system of muffled air tools.

Many things astonished me on my first trip to Sweden.  But at the top of the list was a royal who went to work every day trying to create an environment where people could do their best work without hurting themselves.  The most enlightened automobile executive in the world was a man who didn't have to work at all.  Of course, he caught flak for "coddling" his workforce.  Some accused him of doing this for the cynical purposes of marketing an "ethical" car.  My take is that he was culturally caught up in some Lutheran version of noblesse oblige.  Whatever.  For all of history's attempts to create a worker's paradise, the Kalmar Volvo factory probably came as close as any to this ideal.  And it was accomplished without beheading the nobility.

Unfortunately, this is not the end of the story.  Not long after I had read People at Work, I began to hear about another Swedish royal making an international splash.  We were told he was a prodigy—a man with photographic memory with the best education a family like his could buy.  But there was something odd—stories of bright Swedes are very rare yet as I read one puff piece, something occurred to me—there is nothing remotely unusual about smart Swedes.  My family is full of them—I have a niece who was reading at 21 months.  Furthermore as I have discovered in life, a high IQ is a vastly over-rated skill set.  High IQ people can have some extremely goofy ideas—their intelligence merely makes it possible to know more details and become more fanatic about them.  They are just smart enough to be dangerous.

We are talking about Carl Bildt—the current Swedish foreign minister and someone currently in the crosshairs of Julian Assange of Wikileaks.  Bildt was not getting puff pieces written about him in the international press because he was some great genius.  He is not exactly Linnaeus, after all.  Rather, Bildt was considered valuable to the forces of reaction because he was a reasonably articulate critic of the social welfare state as largely invented in Sweden and then spread to the rest of Western Europe.  Bildt would become a pet of the neoliberals because he could spread their nonsense in the home of the best-constructed alternative.

This right-wing assault on Sweden's carefully constructed "worker's paradise" was amazingly successful.  When I visited Sweden in 1995, Bildt's vision had triumphed.  The Social Democratic Party was in ruins—they had accepted the principles of neoliberalism and so were reduced to satisfying their cranky loyalists who sought only to expand the definitions of political correctness.  Young Swedish economists weren't out to follow the examples of Gunnar Myrdal—they were too busy selling Russian privatization bonds.  And they were encouraged by a Swedish establishment that stopped awarding the Riksbank Prize (Nobel for economics) to guys like Myrdal (1974).

It is probably unlikely that a Carl Bildt would have been nearly as successful at some other point in Swedish history (like the 1950s).  But the global zeitgeist in the 1980s was towards neoliberalism and Bildt merely brought that destruction to Sweden.  As the old Populists used to say—any jackass can kick down the barn.

Monday, February 27, 2012

"Moneyball" didn't win any Oscars

And NO, I didn't expect it to.  The Hollywood community loves its history—real or made up.  So there it was—a silent movie in black and white about absolutely nothing except the traditions of show biz.  It was even called the Artist.  This was a movie designed to win awards and last night, it won a fistful of them—even if it is a movie that no one but film students will actually pay money to see.

On the other hand, my favorite entrant of the night was Moneyball.  I loved Moneyball: The Art of Winning an Unfair Game and read it when the book first came out in 2003.  I like author Michael Lewis for his ability to make complex topics entertainingly clear.  And Moneyball is about statistical analysis—complex enough?  Considering the topic, it is amazing that such a book could ever be made into a movie.  Moneyball is out in Blu-ray and in the extras, there is Lewis expressing amazement that his book on novel uses for applied statistics got the film treatment.  That the movie got made was miraculous.  That it got nominated for some Oscars was even more miraculous.  But could it beat something like Artist in that crowd?  Not a chance.

Statistics was easily my favorite subject in college.  Because I took the University of Minnesota's stats sequence, I was able to play around with an IBM 360 for a lab fee of $8 a quarter.  Nice, big, expensive, toy!  The UM thought itself a world leader in using stats in the social sciences.  The Psychology department had invented an evaluation scheme in 1939 called the Minnesota Multiphasic Personality Inventory that they were amazingly proud of—in part because they had performed its regression analysis with slide rules.  Needless to say, these folks were VERY excited about offloading their scut math onto a computer—an excitement that was still in the air when I showed up in 1972.  (Regression analysis is now built into Excel so there is a whole generation of students who cannot imagine what we were so excited about.)

I took four quarters of statistics and I went through four distinct stages in my appreciation of the subject.
  • Stage One: Holy ****, do you see what you can do with these tools?
  • Stage Two: Did you know that stats can be easily manipulated to fool people?
  • Stage Three: What can I do to protect myself from the statistical con artists?
  • Stage Four: Assume you really want to know something and you are generating these stats for your own purposes, how do you ask the right questions to get the best answers?
I found Stage Four so interesting, I have been returning to this question ever since.  Since high powered statistical analysis now ships with every Microsoft Office, there are no competitive edges to be had with the toolset.  The ONLY advantage comes from asking better questions.  Moneyball is a portrayal about the search for good statistical questions because the guys generating the information dearly want to be right.

Moneyball is about something!

And yet, while statistical analysis applied to baseball was the subject of the book, it was superseded by the humanist elements necessary to turn this fascinating subject into a visual telling.  Ya gotta have pictures to make a movie and there aren't many pictures in regression analysis.  The screenwriters are to be congratulated.

To make the film, they chose the theme of the struggle to bring change.  In old baseball, scouts would actually evaluate talent with criteria such as how good looking the player's girlfriend was.  An ugly girlfriend meant he lacked self-confidence, apparently.  Even badly done statistical analysis is better than THAT!  So here was Billy Beane, the GM of Oakland Athletics, with the problem that he had to compete with teams that had three times his resources.  So he tries a better form of player evaluation through a better understanding of stats and everyone cries bloody murder.  The scouts hated it because it made them look bad.  The manager hated it because his new players didn't match the picture in his head of what a player should look like, the players resisted learning new methods of playing the game, and the sportswriters went ballistic because it meant they would have to learn new cliches.

Now you have conflict.  Now you have pictures.  Now you can make a movie.  The whole project is utterly brilliant.  One of the themes of this blog is my outrage at the malicious destruction of the economic progress made through a century of Progressive activism.  I am amazed at how easy it is to ruin millions of man-years of work.  This movie is about those same sort of reactionary forces that in this case caused a 25-year lag between the development in the applications of statistical analysis as applied to baseball and their actual trials in the real world.

I found Moneyball interesting mostly because I am puzzled over why EVERYONE doesn't want progress.  C'mon folks—isn't it OBVIOUS that statistical analysis is better than judging a baseball player on his girlfriend's looks?  Isn't it obvious that the people of the nation will prosper if they don't have to ship so much money out of their local economy and overseas to pay their fuel bills?  Isn't it obvious that any meaningful solution to Peak Oil will only come with engineers and construction workers performing at Peak Efficiency with Peak Resources?  Huh?

One of the main messages of Moneyball is that the VAST majority of people don't want change even if that change means living a better life.  I'm not sure that the scriptwriters are absolutely right about this, but they DO have a point.  Even better, they made their point with pictures.

This movie is a phenomenal accomplishment whose importance will be remembered long after The Academy's joke best movie is long forgotten.  Apparently, these bizarre choices are a tradition on Oscar night.  So I really expected "my" movie to be shut out.  To say that I do not share the taste of the Motion Picture Academy is perhaps the biggest understatement I can manage.

Anyway, Moneyball is out on Blu-ray and has some excellent extras.  The book is available in paperback and on Kindle.

And Moneyball was easily the best movie of the year—perhaps the last ten years.

Sunday, February 26, 2012

American exceptionalism

Pride goeth before destruction, and an haughty spirit before a fall. 
Proverbs 16:18

There is absolutely NOTHING that is more destructive to USA or causes more people around the world to hate us than the attitude "We're #1—and everyone else is just dying to be like us."  This notion would cause a world of hurt even if it were true but it is especially devastating when it is not.

But these days it is pretty easy to find people who are desperate to believe in our universal #1 status.  In fact, the less evidence that it is true, the more people want to cling to it.  To judge from the candidates in the Republican debates, a belief in the unquestioned superiority of USA is a necessary prerequisite to becoming President.

In my mind, the biggest flaw in #1 thinking is that is pretty much prevents future progress.  Why get better if you are already the best?  Why learn from others when they are just trying to imitate us? Of course, there are other problems that come from such hubris as Mr. Sato points out in this gem from the Japan Times.

Saturday, February 25, 2012

Saturday toons 25 FEBRUARY 12

This week we even have pundit retraining to go with the absurdity of the Republicans casting lots over the remains of Christianity.

Friday, February 24, 2012

Iran—a warmongering update

There is damn good question when contemplating an attack on Iran.  Is this merely an insane idea or is it the worst idea in human history?

The prospects of war in Iran infuriates me on so many levels, I hardly know where to start.  I am so damn tired of someone telling me who to hate and why.  Thankfully, there are others who see the utter absurdity of it all.  Maybe, just maybe, for once we can slow down the warmongers with some volume level 11 ridicule.

Thursday, February 23, 2012

The continuing saga of Greece vs. the banksters

An Argentine decides to hand out some advice learned the hard way—don't play with the banksters, stand up to them, and run their collaborators out of your government.  I only have a third of this thing posted here—the rest is clearly worth reading.

What really scares the banksters

There is something irredeemably precious about the conservative world's concern about government debt.  Why?  Because the scolds are the biggest debtors of all.  (Ah yes, the old mote and beam problem.) Here we have our old friend Ellen Brown discussing the fact that there are $32 TRILLION worth of credit default swaps out there without a penny's worth of backing.  A Greek default brings all this down.

Wednesday, February 22, 2012

Robbing the children of their futures

The tragedy of all this youth unemployment is that there is so MUCH necessary work that needs doing.  It's bad enough that we do nothing about peak oil and climate change.  It is so much worse that the people who should have good jobs fixing these problems are sitting in their parent's basements wondering when the recession is going to be over so they can get on with their lives.  That the kids haven't been reduced to roving violent gangs is mostly a tribute to the optimism and ignorance of youth (of course, if you include such things as soccer hooliganism, this has already happened).

Tuesday, February 21, 2012

War with Iran? What an insane idea

I try to stay on the topic of the real economy.  It's not that I am uninterested in other facets of public policy, but once I wander off into the deep weeds, what's to distinguish this blog from all the others with a political / public policy bent.

The topic of war and peace, however, becomes an economic topic when it involves the unprovoked attack on a country that exports oil and has the power to remove a LOT of crude from the market.  To say that an attack on Iran will trigger a global economic meltdown is probably the easiest prediction I can think of.  Just TALK about attacking Iran is already leading to speculation of $6-7 / gallon gasoline in a USA economy that is just staggering along now.  I am sure that the folks who have exhausted the last of their unemployment benefits with be thrilled to pay more for energy.

But none of that seems to matter to the warmongers.  When it comes to that crowd, they are already set to go with canned propaganda that only requires them to change one letter on the name of new official enemy.  Iran—Iraq?  Who cares?  There are wars to start, civilians to kill, and vital infrastructure to destroy. So if you think you have heard all these lies before, it's probably because you have.

Monday, February 20, 2012

Austerity (not surprisingly) doesn't accomplish a damn thing

When I was still taking economics back in the early 1970s, all my professors assured me that the sort of people who believed in belt-tightening during a recession were fortunately all dead or at least, thoroughly discredited.  Well, they were NOT all dead but thanks to their latest round of madness, they are about to be discredited again.

Daydreaming of Paris

No, I've never been there. I doubt if I'll ever be able to afford it. But thanks to the tubes, I can visit virtually for a few minutes. And so can you....

Gas is getting (more) expensive again

Yup.  I am up on my old pulpit again on the subject of oil and the economy.  But seriously folks, if the price of oil goes up, the demand for everything else goes down.  Inflation and recession at the same time—or what we old-timers used to call stagflation.

Sunday, February 19, 2012

This could be an interesting spring

It's only February and the various #OWS organizations are still pretty quiet but that doesn't mean that nothing is happening.  For example, turning out 100-300 thousand protestors in a country with less than 11 million people is a remarkable feat.  Not that this will necessarily change anything—the Greeks have been getting people out into the streets for a long time now and the country is far worse off than when their protests started.

Saturday, February 18, 2012

Saturday toons 18 FEBRUARY 12

A neoliberal understanding of economics is unfortunately widespread among governors.  This is The Miami Herald's take on their boneheaded governor.

Friday, February 17, 2012

The gold standard? really?

In 1971 as commanded by Local Draft Board #25, I began a two-year stint as an orderly in the surgical suites of the University of Minnesota hospital.  6 orderlies, 14 operating rooms, and a hospital that sprawled over three city blocks meant WAY too much work.  To make it even more hellish, we had a battle-ax of a supervisor who had been in the army during WW II and loathed us conscientious objectors.  She would regularly remind us that one bad word from her and our asses would be in Vietnam.

One of my jobs was to fill the mop buckets each morning with this industrial grade disinfectant.  These buckets were stored in an area near the surgical scrub sinks.  The surgeons would have to scrub for ten minutes before they gowned and gloved.  Needless to say, this was not a mentally taxing job so they would chatter—loud enough to be clearly heard.  If it was a major case, the chatter was serious while they discussed the day's plan of action.  But most of the time, the conversation was about cars and sports and current events.

Some of those doctors were world-class.  The UM hospital can legitimately claim to be one of the places where open heart surgery was invented in the 1950s.  One would expect that there would be some elevated conversations around those scrub sinks.  One would be wrong.  Whenever the conversation strayed outside the realm of surgery, the levels of competence just plummeted.  Unfortunately, these docs also had world-class arrogance so they never seemed to notice that excellence in cardiac surgery did not translate into excellence in understanding opera, fast cars, or the disaster in SE Asia.  I could scare my friends by reporting the insanities I heard around scrub sinks.

As the evidence mounted over time, I became convinced that medical doctors should probably be prohibited from elective office by constitutional amendment.  The fact that doctors make some terrible politicians includes examples Bill Frist, Tom Coburn, and Rand Paul.  Yet in spite of all that, I find the Ron Paul phenomenon quite fascinating even though he is an MD with all the baggage that entails.  He finished second in the Minnesota Republican caucuses and I have NO problem understanding why.  This state has a lot of people making their way (or at least trying) as Producers.  Lots of medical and other high-tech equipment comes from our long dark winters, so along with the industries associated with food production, we still do have some good Producer jobs.  And for an assortment of pretty good reasons including his love of science, his willingness to learn a difficult profession, and his tendency to blurt out his version of the facts without resorting to political niceties, Producers like Ron Paul.

As regular readers have figured out, I am utterly fascinated by the culture of Producers.  Having a front-row seat to this amazing phenomenon has been quite helpful in understanding the complexity of their worlds.  For example, I thoroughly enjoy Producers that are so dedicated to their worldviews, they even have Producer hobbies.  Tony sells books to them and I have joined him at gatherings of people who restore 19th century steam engines—see video above.  I'm telling you, these are MY people.  But bless their hearts, they can be dumb as stumps when it comes to politics and economics.

And nothing so clearly demonstrates a politically naive Producer than support for a return to the Gold Standard—which Dr. Ron Paul unfortunately does.  Having grown up in the heart of "damn the gold standard" territory, I can assure you that from the foundation of this nation, Producers have organized to abolish the rule of the goldsmiths.  Here in the Midwest, there were two events that triggered at least a century of anti-gold animus—the Panic of 1873 and England's botched return to the Gold Standard in 1925 which my grandfather was absolutely convinced was the real cause of the Great Depression, while John Kenneth Galbraith claimed "The 1925 return to the gold standard was perhaps the most decisively damaging action involving money in modern time."  Both were caused when the banksters decided to soak up emergency money supplies created to fight wars with a mandatory exchange for gold.  Both actions caused horrendous hardships for the Producing Classes.  The Panic of 1873 triggered a political debate on monetary policy that was still alive and well in the Midwest when I was a child in the 1950s and 60s.

Thursday, February 16, 2012

Some insight on Greece's economy

Talos at the European Tribune has a good summary: Debts, promises and the erosion of democracy. Highlights include the fact that taxes are going uncollected in Greece simply because the population's income has been smashed by half the past two years. 60,000 small firms and family businesses have gone bankrupt in the last nine months. In USA, the equivalent number would be 1.8 million small firms and family businesses gone. Another highlight is a quote from Joseph Stiglitz on the utter ineptitude of IMF missions:
When the IMF decides to assist a country, it dispatches a "mission" of economists. These economists frequently lack extensive experience in the country; they are more likely to have firsthand knowledge of its five-star hotels than of the villages that dot its countryside. They work hard, poring over numbers deep into the night. But their task is impossible. In a period of days or, at most, weeks, they are charged with developing a coherent program sensitive to the needs of the country. Needless to say, a little number-crunching rarely provides adequate insights into the development strategy for an entire nation. Even worse, the number-crunching isn't always that good. The mathematical models the IMF uses are frequently flawed or out-of-date. Critics accuse the institution of taking a cookie-cutter approach to economics, and they're right. Country teams have been known to compose draft reports before visiting. I heard stories of one unfortunate incident when team members copied large parts of the text for one country's report and transferred them wholesale to another. They might have gotten away with it, except the "search and replace" function on the word processor didn't work properly, leaving the original country's name in a few places. Oops.
Ian Welsh has his usual blunt assessment, and points back to something worth reading a number of times: Greece can be fixed, if the Greeks are willing to do what it takes.

... The only reason “all the debts” must be paid off is because the rich demand it. They don’t want to take their losses.... countries could simply slap on currency controls, which experience shows (most recently and clearly in the Asian currency crisis of the 90s), works....

There are economic tools for dealing with these issues. Capital and currency controls are one of them, the distinction between default (we’ll pay you eventually, as opposed to we’ll never pay you) is another. The question of who is being bailed out (private investors, in large part) is another. And bailing out those investors is a political act, their money is their political power. The current political class, who is complicit with the current monied class, of course wants to bail them out.

All of this is before we even get to the horribly anti-democratic nature of all of this: the repeated refusal of the political class to allow referendums, the complicity of all major political parties in the process (notice there is no party to vote for if you want to default), and so on.

There is no actual democracy in any part of the world which is attached to the Wall Street centered financial system. Calls can run up to 1000:1 against TARP and it will pass. Strong majorities can be for or against particular policies and if the elite disagrees, that’s all that matters. There are no parties to vote for if you are against the current system.

One hopeful sign in USA: the angry reaction to Secretary of Housing and Urban Development Shaun Donovan and Attorney General Eric Holder, who wrote a little piece arguing that the recent deal on mortgage documentation fraud is actually "Holding Banks Accountable." That was their actual title. They posted it on the two most read progressive and liberal blogs, Huffington Post and on DailyKos, and ran into an absolute buzzsaw of criticism and remonstrance - check out the comments. On DailyKos, it received so few recommends that it quickly sailed off into oblivion. There appears to be no love left for Obama among progressives and liberals if this cold reception is any indication. It has to be causing some sleepless nights as Obama and his advisers ponder what the ramifications are for active popular support of the reelection campaign.

Iceland shows the world what to do. Nationalize the banks, arrest the bankers, tell the bond holders to shove it. And they are recovering.

Who's bankrolling Mitt Romney

Once you get past Alex Jones, these clips are a wonderful explanation by Greg Palast of the sort of greedy vultures that have backed Mitt Romney over the years. Palast has recently published a book called Vulture's Picnic.
(3 video clips each about 15 minutes long)

Romney's Billionaire Vulture Paul Singer: The GOP's Baddie Sugar Daddie 1/3

Taking it to the 1%

In 1970, I had the amazing experience of seeing the farm in Sweden where my grandfather grew up.  He came to USA in 1899.  By 1970, Sweden had become very prosperous and this wealth was quite evenly distributed so this was a country without slums.  The old home place was in the southeastern province of Småland, the area of Sweden now best known as the headquarters of IKEA.  As I looked around this graceful countryside where people who looked a lot like me had built one of the most advanced societies in human history, I was overwhelmed with the question, "Grandfather, WHY did you leave THIS?"

Turns out the Sweden he left was dramatically different from the one I visited 71 years later.  Not surprisingly, the politics that I learned from my politically active forebears was actually much more successful in a country where there was a majority of folks who thought like they did.  Also unsurprising—the society my people were able to build has been vilified by the rich and powerful in USA since the Social Democrats came to power in the 1930s.

What follows is hardly the history of the struggle to build a modern economy in Scandinavia that I was taught.  For example, it is difficult to explain the rise of Social Democracy without recognizing the contributions of Hjalmar Branting, the giant of the Swedish Social Democratic Party whose theoretical musings on the differences between Socialism (which he approved of) and Communism (which he thought a terrible idea) was instrumental in the development of the truly mixed economy.  But it's not bad and makes a good point about how long the struggles for economic justice tend to be.

Tuesday, February 14, 2012

It's crazy they want their own facts - and you can't compromise with crazy

It took a few weeks after the Republicans took the country to the brink of default over the farcical debt ceiling issue, but a welcome strain of thought appeared to be taking hold among Democratic elites, including President Obama: You can't compromise with crazy. Well, OK, since I really don't know any Democratic elites beyond my local county Party chair and board, it was a gelling of thought I detected on the blogs I read. This past Sunday, Mark Sumner at DailyKos really laid out some zingers in Republicans undiscover fire: arguing that we've passed the point where it is safe to continued deluding ourselves that the political debate and competition in USA is between two competing philosophies that have equal claim to being judged on their merits by the voters:
... what's now coming from the right consists of 100% emotional, fear-based appeals without a factual basis. In 2012, a campaign of suggestive fear-mongering seems almost quaint.

...the Republicans have staked out a position that requires that they lie, 24/7, 365. Not shade the facts their way. Not put their own spin on the situation. Lie. Big, sloppy, and constantly.

The lies go beyond instantly dismissible claims like President Obama being the "food stamp president" (why you have to go back one whole administration to discover that more people joined the food stamp ranks under Bush than Obama, but then the Republicans don't seem to remember Bush in any case). The blatant lies extend through every aspect of the Republican platform, such as it is. The simple reason is that the Republicans have no ideas left, at least no ideas that have not been tested and proven to be failures again, and again, and again.

The economy didn't just crash under a Republican president, it crashed under Republican policies. It crashed with low taxes. It crashed with deregulated markets. It crashed with huge restrictions on union activity. It crashed with massive cuts in environmental regulations. It crashed with lowered trade barriers. It crashed with big fat Pentagon spending.

They got what they wanted. They got CEOs with no limits on their wealth. They got banks with no limits on their "creativity." They got trade agreements that guaranteed manufacturing could be moved to the dirtiest, cheapest, most desperate source available. They got massive cuts in capital gains taxes and equally large boosts in the wealth they could pass along in estates. They got everything they said would make us all wealthy. They got record oil and gas drilling. They got record giveaways of public land. They got everything they said would create jobs. They got the middle class to shoulder more, more, more of the burden so that those beautiful job creators would be free to work their magic.

Running against Goldman Sachs

Not long ago in the xxxxth version of "if voting actually changed anything, it would be illegal" Chris Hedges noted that it is actually impossible in USA to cast a ballot against Goldman Sachs on the national level.  In fact, it could be argued that Mr. "Hope and Change" Obama has more GS alums in his administration than any other in history.

So it is highly interesting to speculate on what might happen if a politician in a big economy actually decides to take on the banksters.  First of all, we can assume that such a pol will be wildly popular and will likely be elected.  But we can also assume that the threats by the banksters against such a pol will keep escalating to the point where the promised changes will be mostly cosmetic by the time that person is actually in office.  Yes, there have been politicians who have stood up to the banksters but outside of Latin America, I cannot think of an example.

So now we see that the Socialist candidate for prime minister of France has suggested the budgetary deficits can best be addressed by raising the taxes on the rich.  This is a LONG way from suggesting that the banksters be sent to jail or that compound interest might be be a hazard to the planet.  But to read the folks at the Guardian, François Hollande is a revolutionary getting his troops ready to storm the bankster Bastille and the folks at Le Figaro compare him to Saint-Just, Robespierre's Karl Rove.  A more rational assessment by the conservative opposition was provided by Dominique de Villepin, the former prime minister who is running on the right against Sarkozy "The Socialist programme is not sustainable," he told reporters. "I would expect that within months it will be corrected by the very same markets that he has denounced."

As much as I love the French, I am afraid that de Villepin is probably right.  Rhetorically beating up on the banksters will probably get Hollande a landslide victory but the possibility of him actually changing much is damn slim.  The banksters have been running France for a long time now.  Her elite schools churn out folks well equipped to get senior jobs at places like IMF.  And Hollande is a LONG way from being either as intellectually innovative or courageous as Nestor Kirchner.  But we ARE talking about France here.  This is the country that invented dirigisme, after all.  Let's not get ahead of ourselves, but if European Socialism is ever to recover from being anything other than utterly useless, why not in France?

Monday, February 13, 2012

Simple Numbers of the Neo-Liberal Destruction of Greece

Naked Capitalism picked up a brief post by Australian blogger Delusional Economics:
What makes the situation completely surreal are the numbers. Greek debt in 2008 was approximately 260bn Euro. The first bailout was 110bn, the current one, that appears to be tearing the country apart, is 130bn. Add in the PSI+ haircut of approximately 100bn ( after sweetener deduction ) and you realized that Europe could have simply paid the entire bill in 2008 and saved itself 80bn Euro. Ok, that is an oversimplification of the problem but you can see my point.

However now, after 340bn Euros, Greece is still has an unmanageable debt, is in a far worse position than it was 3 years ago and it appears the country itself is coming apart at the seams.

So basically the Greek politicians and the other Eurocrats took a quarter of a billion euro problem and turned it into a existential trillion Euro one.

Sunday, February 12, 2012

Greek Parliament Votes Austerity, Athens Explodes in Flames

A general strike in Greece ended this weekend, but it failed to sway the Greek parliamentarians from their appalling surrender to the "murder by spreadsheet" austerity ghouls of the EU, IMF, and World Bank. Widespread violence has reportedly begun. From Occupied London:

Sunday, Feb 12

From The Guardian: "Martial law has to be imposed for these measures to be implemented"
Unlike two years ago, when the angry graffiti demanded that the "IMF go home" and "reject austerity" it now exhorts protesters to "murder bankers" and "rise in rebellion" and "never be slaves". The spirit of resistance shows no sign of abating. With support for the left, including the militant Communist party (KKE), growing by the day, opposition to any cost-cutting reforms is bound only to increase. "Martial law has to be imposed for these measures to be implemented," said Kyrtsos.
The European Tribune pointed to the above; and has an excellent summary of the economic ruin Greece has been thrust into by the banksters:
Two years of the most grinding austerity, has caused a destruction of the Greek economy that has no precedent, in peacetime, as official nominal wages dropped 15%, unemployment passed the 20% mark and, according to polling company VPRC, the bottom 90% of Greek households, suffered in 2011 alone loss of income on average ~45% of their incomes.

Calvinism vs Christianity

There are good reasons why the back row of a chess setup contains a bishop on either side of the king and queen.  It's been historically hard to exercise royal power without bringing religion into the mix.  The founding fathers tried to make USA a nation without kings, so queens and bishops had to go too.  Generally speaking, this plan has worked out pretty well.

But that hasn't stopped the would-be royal bishops from wanting to elbow their way into the back row.  Think about it—what in heaven's name takes four years to learn that makes that the standard time-frame for the education of a clergyman?  It wouldn't require a lot of effort to carefully read the Bible and other foundation books of Christianity about a dozen times in four years, so there are obviously other lessons needed to fill all that time.  The paramount lesson, of course, is how to make moral pronouncements that others actually believe.

Institutionally, what happened is that for much of recorded human history, the clergy made up the main element of the educated class in society and as such, became useful to the folks who would grab power.  And what made the clergy especially useful was the ability to translate the wishes of the powerful into the language of moral authority.

The MAIN reason the founding fathers decided to eliminate the possibility of a state religion was that most of them had come to the hard-won conclusion that democracy was literally impossible with religiously-trained people meddling in the public's business.  Ironically, stripped of it's legal and formal connection to the state, religion has flourished.

As the economic side of USA society becomes increasingly undemocratic and bizarrely unequal, however, the old usefulness of religion to protect the power-grabbers becomes more attractive.  So in the new USA chess set, the king and queen have been replaced by banksters and hedge-fund operators.  And protecting their corrupt ethical flanks are our old friends, the Calvinists.

It's a perfect match because John Calvin invented his upside-down version of Christianity so he could declare that the uber-greedy were actually God's pets.  To this day, I have no idea how this absurdity could ever be confused with Christianity, (see Matthew 19:21-24) but I have NO problem understanding why rich folks have funded Calvinist divines over the years.  Cheap investment, actually, because the Calvinist message that "Jesus wants you to be rich" has spilled over into virtually all faiths in USA to the point where Calvinism has become de facto the state religion.

Saturday, February 11, 2012

YEAH! New York City building Second Avenue Subway

New York’s Metropolitan Transportation Authority awarded a $261.9 million contract for the next phase of the Second Avenue Subway project in New York City. This contract
includes the installation of track, train signals, communications systems, and traction power between 105th Street and the existing subway station at 63rd Street. Additional project work includes modification of existing facilities and systems to ensure connectivity with the Second Avenue Subway system. The joint venture will also construct three rail crossovers along this route, allowing trains to switch tracks and therefore increasing line flexibility.
The Second Avenue Subway was first approved in 1929 - between the two World Wars. The line was based on a city-wide transit plan released in 1919. The First Great Depression led the City to postpone actual construction. A 1967 Transportation Bond Issue of $2.5 billion got construction going again, but NYC's fiscal crisis in the 1970s caused construction to cease again after three tunnel segments had been completed. New York voters passed another transportation bond issue in November 2005, and ceremonial groundbreaking for the Second Avenue Subway was conducted on April 12, 2007.

Saturday toons 11 FEBRUARY 12

"Go ahead, make my day!"  (Dirty Harry)

Walt Kowalski, Mitt Gekko, and Republican Jesus are all here to make your day brighter.

Friday, February 10, 2012

John Galt as a Producer?

Producers vs Predators is the class analysis that informs my book Elegant Technology.  Chapter One covers the history of this struggle, Chapter Three is devoted to class analysis, Chapter Four describes the cultural manifestations of the Producers, Chapter Six is devoted to Producer Class monetary theory, etc.  I HAVE covered this subject in depth and detail and nowhere can I find any example where a banker can be mistaken for a Producer.  In fact, if Predation has an archetype these days, it is most certainly the bankster.

What is especially ironic is that John Galt in Rand's Atlas Shrugged is an engineer—the highest status occupation of the Producers.  And the fictional Galt really IS a Producer (including negatives like the unfortunate tendency to make facile social and political judgements.)  But Producers do have a unifying complaint. From the humble truck driver to the most arrogant research scientist, they all agree with the sentiment that their work is far more difficult and important than they are given credit for, they hate idiots meddling in their jobs, and once in a while they just want to stop working to see if maybe THEN they will be properly appreciated. Rand calls this last sentiment "going Galt."

And of course it IS possible, even likely, that bankers are feeling a bit under-appreciated these days.  After all, most of them work pretty hard at whatever they do and even though only about .00001% of what they do has any social utility whatsoever, apparently this is enough to allow them to appropriate one more thing from the Producers—their main complaint!  From the perspective of those who must do the community's necessary work, this cultural theft borders on blasphemy.  As they see it, the trouble with banksters is that the harder they "work," the worse it is for the rest of us.  How can it be otherwise when 99.99999% of what they do, by volume, is nothing more than a slick version of larceny.

Thursday, February 9, 2012

Would $7,500 extra for 100 million workers have any effect?

Why isn't this guy on Obama's advisory council for job creation? Progressive billionaire tells Yahoo Finance: "If it was true that the rich and business were the job creators, we'd be drowning in jobs today.... if you took corporate profits from the high that they are now and dropped them to a "normal" rate, you would cut loose about $750 billion. If you spread that $750 billion among 100,000,000 middle-income workers, that's $7,500 a worker. Imagine how robust our economy would be."
Nick Hanauer is a very rich, wildly successful business man. His company, aQuantive, was purchased by Microsoft in 2007 for $6.4 billion. He founded, which merged with, and he was one of the first investors in in the 1990s. Hanauer knows opportunity.

Hanauer also, it seems, both understands and is willing to articulate what most of our country's wealthiest citizens refuse to acknowledge: that it is the middle class which creates jobs through demand, and that our country's richest members of society need to be paying more in taxes so as not to undercut and destroy those Americans who ultimately determine our nation's economic health.

Hanauer was interviewed recently by Henry Blodget of Yahoo! Finance, and it is an interview I highly recommend be viewed in its entirety. (I've embedded it below.)
Read more.

Cold snap triggers a renewables milestone

Yesterday, while we had an almost spring-like day with a high of 45°F (7°C) here in Minnesota, Europe was staggering under a nasty cold snap with temperatures as low as -25°F (-32°C).  Obviously, someone else got our winter.  While the hardest hit was the Ukraine, many countries have been blasted as the jet stream wobbles eastward spilling Arctic air into places like Spain.

The most instructive problems happened in France.  France has a lot of poorly-built housing stock that relies on electric space heaters to ward off an occasional winter chill.  They are not equipped to handle real cold.  And here is where the story gets interesting.

(From a German version of Der Spiegel—Google machine translation—my grammar cleanup)
Winter's Chill
The French need German electricity
German green power is helping France out of trouble. Despite the nuclear phaseout, German power plants are still producing more electricity than is consumed within the country—France is lucky, because her consumption is rising due to the record level cold, it is dependent on German support—which will be supplied with solar power.
Hamburg:  Germany has eight nuclear power plants, France produces most of its electricity in 59 reactors—and yet the French are dependent on German power assistance.  The reason: According to information provided by the power grid operator, by 7:00 pm on Tuesday evening, the consumption in France had climbed to more than 100 gigawatts.
This power consumption is the equivalent of more than 80 nuclear power plants and is currently almost twice as high as in Germany. In this country there are 15 million more people, yet Tuesday night  consumption was just 51 gigawatts. The main reason for this is that in France there are a lot of electric heaters.
Some of France has recently reported that is has to import more than 7,000 megawatts (MW) of electricity per hour to maintain supply.  At times German net export was more than 3000 MW per hour. 
Federal Environment Minister Norbert Röttgen (CDU) claimed the predictions of serious blackouts in the winter as a result of the energy transition had now been refuted. "The current days of bitter cold show that renewable energy contributes to security of supply and network stability."
It is interesting, said the federal environment minister, that Germany, especially in these days with a very high demand, can even export power—thanks to photovoltaic and wind energy. "We had in the last days a capacity of up to 10,000 megawatts of solar power, which corresponds to the output of ten nuclear power plants, and up to 11,000 megawatts of wind power," said Röttgen.

Energy experts warn, however, that the failure of multiple power plants because of high demand such as in France could lead to significant problems. "France with its nuclear-heavy electricity supply threatens European energy security," says the Green Party politician Hans-Josef Fell. more
I am not so sure I would be as cocky as Norbert Röttgen, but this really IS a milestone in renewable energy.  There is a LONG way to go before even the Germans can claim to be running on solar power, but in February of 2012, solar power bailed out nuclear power during a record cold snap.  And that folks, is an achievement to celebrate.

The Germans build another solar park.  This was assembled on an old military airfield.  Swords into plowshares indeed.

Wednesday, February 8, 2012

Making solar work

With the possible exception of wind sites in North Dakota, it is almost impossible to imagine any place on earth that has fewer residents to object to the building of solar infrastructure than a desert.  And yet, try building some large solar collectors in southern California and you get NIMBYs—even if they have to drive several hours to get to the neighborhood in question.

Hands down, the hardest part about the potential development for renewables is that there is hardly any place left on earth where there are so few people and so little existing infrastructure to displace that large-scale projects are hassle-free.  Just look at the headline for this article.
Sacrificing the desert to save the Earth
Environmentalists are torn over the high cost of breaking reliance on fossil fuels. Public comment has been sought, but insiders are calling the shots.
By Julie Cart, Los Angeles Times

February 5, 2012

Reporting from Ivanpah Valley, Calif.— Construction cranes rise like storks 40 stories above the Mojave Desert. In their midst, the "power tower" emerges, wrapped in scaffolding and looking like a multistage rocket.

Clustered nearby are hangar-sized assembly buildings, looming berms of sand and a chain mail of fencing that will enclose more than 3,500 acres of public land. Moorings for 173,500 mirrors — each the size of a garage door — are spiked into the desert floor. Before the end of the year, they will become six square miles of gleaming reflectors, sweeping from Interstate 15 to the Clark Mountains along California's eastern border.

BrightSource Energy's Ivanpah solar power project will soon be a humming city with 24-hour lighting, a wastewater processing facility and a gas-fired power plant. To make room, BrightSource has mowed down a swath of desert plants, displaced dozens of animal species and relocated scores of imperiled desert tortoises, a move that some experts say could kill up to a third of them.

Despite its behemoth footprint, the Ivanpah project has slipped easily into place, unencumbered by lasting legal opposition or public outcry from California's boisterous environmental community.

The public got its chance to comment at scores of open houses, but the real political horse trading took place in meetings involving solar developers, federal regulators and leaders of some of the nation's top environmental organizations.

Away from public scrutiny, they crafted a united front in favor of utility-scale solar development, often making difficult compromises.

"I have spent my entire career thinking of myself as an advocate on behalf of public lands and acting for their protection," said Johanna Wald, a veteran environmental attorney with the Natural Resources Defense Council. "I am now helping facilitate an activity on public lands that will have very significant environmental impacts. We are doing it because of the threat of climate change. It's not an accommodation; it's a change I had to make to respond to climate." more

Halftime in America (update)

Two days after the Super Bowl, we have feedback on the big Clint Eastwood ad.  Because it is such a classically done Producer Class piece, it has seriously confused the Leisure Class political commentators.  Many are calling it the first Obama ad of the next election.  Republicans are furious and wonder why Eastwood, a long-time Republican, agreed to do it.  Karl Rove was beside himself yesterday.

In 2008, Eastwood did a surprisingly thoughtful piece shot in Detroit called Gran Torino.  It is about an autoworker who is DEEP into the tool culture.  He can hardly fit his pristine Gran Torino into his garage for all the tools.  He despises his Hmong neighbors because the are not part of his tool culture.  Then he discovers the young man next door is more interested in his tools than any of his sons ever were.  Suddenly, race is pretty irrelevant.  See the movie.

Eastwood played his role as if he really understood it.  I am certain his Walt Kowalski will live long in Detroit lore.  So Eastwood was an obvious choice to do this year's big Chrysler ad.  But the confusion over this ad proves yet once again, the difference between Producers and Predators is MUCH more interesting than between Democrats and Republicans.

Obviously, an ad this good will generate tributes and spoofs.  Here's the first one I have seen.

Tuesday, February 7, 2012

The bliss of ignorance

The following clip from RT makes the point that the clowns running for president are doing grave harm to the country because they want to be the top officer in an empire they cannot describe.  I know this is hard for the American Exceptionalists to grasp, but turning your country into a series of crude jokes is not good for long-term international relations.  I know you folks don't actually CARE what those furriners think about our lack of international awareness, but remember, you are but 5% of the world's population so it actually matters.

And YES!  I AM embarrassed about the nearly universal geographical illiteracy of my fellow citizens.  Of course, I am willing to believe this is a feature, not a bug, of mass control.  If the only time they mention geography on the teevee is when some faction in government is ginning up a war somewhere for some reason, then it is good for the warmongers that the public is a blank slate on which to project their lies.  The crack that a non-American city is only mentioned if we are bombing them is unfortunately all too true.  There are exceptions—but outside of the PBS infatuation with costume dramas about the English upper classes and the "royals" and the goings-on in Palestine, I would be hard-pressed to think of any.  I mean, even the weather maps lose all detail in the terra incognita that is Mexico or Canada.

The ugly "secret" is that these same politicians are just as ignorant about history, economics, industrial competitiveness, energy policy, and host of other serious issues but our so-called "journalists" don't know enough about any of these subjects to even ask a decent question.  They wouldn't even ask about geography if they could, but the subject comes up as an attachment to questions about how willing are the candidates to murder perfect strangers in places like Afghanistan.

Bringing the MOTU down to earth

The following is from a long and fascinating article from the New York magazine speculating on what the Masters of the Universe (MOTU) are going to do now that they have become perhaps the single most hated group on the planet.  It is clear that they know they are in trouble but it is not at all clear they know how MUCH trouble.

Ideally, the useful functions of banking would be hived off and become like a regulated utility.  The rest of the casino would be left without taxpayer protections.  But this is a LAST option being considered because most of the banksters didn't go into banking to be socially useful OR work as a civil servant pulling down $250k a year.  Especially not the civil servant pay scale.

In the Bible's most famous discussion of rich guys, Jesus cuts off a bullshit artist who thinks he would make a good follower by telling him to sell his goods and give the money to the poor.  Suddenly, the would-be follower wasn't interested anymore.  Those of us who aren't rich tend to forget that the rich are rich precisely because money means more to them than anything else.

The money quote.
[Matthew 19:21] Jesus said unto him, If thou wilt be perfect, go and sell that thou hast, and give to the poor, and thou shalt have treasure in heaven: and come and follow me.
[22] But when the young man heard that saying, he went away sorrowful: for he had great possessions.
[23] Then said Jesus unto his disciples, Verily I say unto you, That a rich man shall hardly enter into the kingdom of heaven.
[24] And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.
The New York on the diminished condition of the MOTUs.  This is less than 1/5 of the whole thing.

Monday, February 6, 2012

Halftime in America?

Kind of hard for a Producer type like me not to celebrate the Industrial Class virtues in the best of this year's Super Bowl commercials.  Not that I would actually want to own a Jeep, understand, but I sure do like their commercials. This one, narrated by Clint Eastwood, is about economic recovery through manufacturing excellence.

And I especially like the idea of our current economic disasters as "halftime."  It was one of the themes of Elegant Technology.  From Chapter Four, page 51.
Shutting down industry is not the solution. Whether people believe the industrial revolution was a good idea or not; it happened. With the industrial revolution came an enormous population rise. If industry is indiscriminately closed, the dense populations that are the result of industrialization are in great peril of their very survival.

A better way to view the industrial revolution is to see the current industrial class crises as the halfway point. If the world turns back to an early stage of industrialization, there will be a massive reduction in the human population. If the present confusion of industrialization and its values is not clarified, there will be also a massive mortality of humans.

The solution is clear, the world must build its way out of the current problems using an environmental blueprint. Industrial values must be environmentally purified. Hope stems from the realization that this value purification process, while still in its infancy, has already appeared in the sophisticated industrial economies of northern Europe.

Sunday, February 5, 2012

Corporations are people . . .

Dear Mitt-wipe:

Corporations are people?

Well, so are governments.

And I get to vote on the people at the top of the government.

Got no such vote on the people at the top of corporations.

So, guess which I prefer? Corporations or government?

Here's a hint, Mitt-wipe: I think democracy is a really, really neat arrangement.

If this country actually elects a complete ass-wipe like Mitt Romney, who cannot make the intellectual, moral, and spiritual differentiation between a human being made in the Creator's image, and a effing corporation, then this country deserves the Biblical plagues and the full wrath of God.

And that concludes our Sunday service. Go in peace.

Worse than the Riksbank Prize?

As regular readers of this blog know, I am NOT a big fan of the "Nobel" Prize for Economics.  It wasn't in the original will, it is funded and awarded by the Swedish Central Bank (Riksbank), it has only been awarded since 1968, and the overwhelming majority of the winners have been economic crackpots.  In fact, Merton and Scholes, the winners of the 1997 prize, took their "Nobel"-approved theories and founded a hedge fund they laughingly named Long Term Capital Management.  When it crashed, it almost took down the global financial system with it.  In fact, were the Nobel Committee located in USA, I am certain that someone would have sued them for giving legitimacy and approval to crazy people.

The Peace Prize, on the other hand, is everything Alfred Nobel wanted of his prize.  It is, in many ways, the crown jewel.  But this legitimacy has not translated into serious winners.  In perhaps the only time in my life I will ever agree with George Will, our reaction to the announcement that Barack Obama had won the Peace Prize made us say almost in unison, "For WHAT?"

Now it turns out the Swedes are going to launch an official inquiry into what has gone wrong with the selection process for the Peace Prize.  One can only hope they will do the same for the economics prize—and soon.

Saturday, February 4, 2012

Saturday toons 04 FEBRUARY 12

Lots of Komenfreude this week as a nest of fund-raising charlatans were outed.  It was remarkable to see an organization built on approved Leisure Class illusions destroy its "brand" in 48 hours.  Oh well, if you live by illusions, you die by them too.

Friday, February 3, 2012

Infrastructure in decline

The idea that USA infrastructure has deteriorated to the point of collapse is actually getting to be old news.  Because if you look at the problems closely enough, it becomes pretty obvious that even the parts of the infrastructure that are in pretty good shape are hopelessly mismatched to the conditions we face.

For example, USA has a vast road system that is designed to support the traffic of gasoline-powered cars.  In an era of post-Peak Oil decline, it should be obvious that most of these roads will need replacing with something that provides transportation but without the need for this ultra-premium fuel.

Even so, the infrastructure problems point to a bigger cultural issue—the lack of a maintenance ethic.  I don't even want to imagine how much it costs the economy because people do not know how to take care of their possessions—or will not do it because they cannot be bothered.

Anyway, the following article is especially well-written and has lots of charts to illustrate the death of the maintenance ethic.

Thursday, February 2, 2012

Ripping off the kids

When I wrote Elegant Technology in the 1980s, it was already becoming clear just how lousy a future lay in store for young people in a society that was obviously trashing its real economy in the pursuit of some short-term speculative killing in finance.  But this message was lost on young people full of energy and optimism who in spite of overwhelming evidence, want to believe their lives will be fulfilling—soon.  Especially in USA.

Anyway, I argued that when the young got tired of living the futility of economic decline, they could always go to work solving the problem caused by the end of the age of petroleum and other resource limitations—and other mega-projects.  Folks weren't buying back then.  Now that it has become completely obvious to the young that they are screwed, will we see demands for full employment economics?

Here's what I wrote in 1987.  Not much has changed—except for the fact that someone who was 10 in 1987 is now 35.  This person is approaching middle age and has NO conception of the USA that once solved big problems.  This might be the ultimate tragedy for nothing cripples the ability to solve problems as effectively as not being able to see how it is done—and that it CAN be done.

Wednesday, February 1, 2012

Oh, the wisdom of the Fed

One of the "truths" that we all are expected to absorb in our youth is that the most important thing for an economy is that its central bank must be "independent."  Any suggestions or criticisms from any outsider, even if that person is the President or Prime Minister, is brushed aside as nearly illegal intrusions from the great unwashed.

Unfortunately, we now are getting a glimpse at the conversations that go on in the august chambers where Fed policy is hatched.  And quite honestly, I have heard better monetary discussions in church basements and small-town barber shops than what is being reported here.  Of course, what is their downside for getting it wrong?  Even so, this is pathetic!

Bankers NOT banksters

It pretty easy to become furious with the moneychangers these days.  The damage they are causing to the real economy is crippling.  Yet to hear guys like Jamie Dimon talk, they are performing a necessary social service.  And he has a point—even if we were to eliminate all the hopelessly corrupt banking institutions like IMF, we would soon discover that we needed something very much like them.

The problem isn't that banking is fundamentally necessary, its that for those necessary services it provides, it charges WAY too much.  So I am especially pleased that Michael Hudson has decided to answer the question—what would a good banking system look like.