"It is easy to confuse what is with what ought to be, especially when what is has worked out in your favor."
- Tyrion Lannister
"Lannister. Baratheon. Stark. Tyrell. They're all just spokes on a wheel. This one's on top, then that's ones on top and on and on it spins, crushing those on the ground. I'm not going to stop the wheel. I'm going to break the wheel."
- Daenerys Targaryen
"The Lord of Light wants his enemies burned. The Drowned God wants them drowned. Why are all the gods such vicious cunts? Where's the God of Tits and Wine?"
- Tyrion Lannister
"The common people pray for rain, healthy children, and a summer that never ends. It is no matter to them if the high lords play their game of thrones, so long as they are left in peace. They never are."
- Jorah Mormont
"These bad people are what I'm good at. Out talking them. Out thinking them."
- Tyrion Lannister
"What happened? I think fundamentals were trumped by mechanics and, to a lesser extent, by demographics."
- Michael Barone
"If you want to know what God thinks of money, just look at the people he gave it to."
- Dorothy Parker
Saturday, August 12, 2017
Yes, the system is rigged – and if you don’t feel like anyone in politics is doing anything to un-rig it, well, that’s how a lot of folks who should have been with us last November wound up voting for Donald Trump.
3) In terms of the behavior of the Fed at the time of the crash, there had been some preparations for it, mostly by people at the New York Fed, and indeed the various alternative entities the Fed rolled out temporarily after the hard crash were cooked up in advance by them. However, the most important thing the Fed did remains widely unknown and unadvertised, although I have posted on it previously, and it has been publicly reported on, it not on front pages anywhere ever. That would be the half a trillion dollar save the Fed did for the European Central Bank, taking a bunch of very bad assets onto the Fed balance sheet, which were then gradually and quietly rolled off over the next six months to be replaced by Mortgage Backed Securities. The euro was crashing, and the ECB was facing the threat that both BNP Paribas and Deutsche Bank were in danger of failing. This was the immediate danger that could have led to a full blown global financial crash of a 1931 level or worse. This save was probably the most important thing the Fed did to keep the crisis from bringing about another Great Depression, although it remains not well known, partly because both the Fed and the ECB did not want it advertised. A good account of this can be found in Neil Irwin’s book, _The Alchemists_.
Friday, August 11, 2017
Thursday, August 10, 2017
In 1979, a secret memo from the tobacco industry was revealed to the public. Called the Smoking and Health Proposal, and written a decade earlier by the Brown & Williamson tobacco company, it revealed many of the tactics employed by big tobacco to counter “anti-cigarette forces”.
In one of the paper’s most revealing sections, it looks at how to market cigarettes to the mass public: “Doubt is our product since it is the best means of competing with the ‘body of fact’ that exists in the mind of the general public. It is also the means of establishing a controversy.”
This revelation piqued the interest of Robert Proctor, a science historian from Stanford University, who started delving into the practices of tobacco firms and how they had spread confusion about whether smoking caused cancer.
Wednesday, August 09, 2017
Expectations are everything, especially in economics.
That’s why a distinct lack of progress in a few basic measures of economic progress, particularly relative to pre-crisis expectations, has left many Americans questioning how much they have personally benefitted from the economic recovery.
A new report from the Roosevelt Institute, a liberal think tank in Washington, highlights a number of ways in which "the recovery since 2009 is, in a sense, a statistical illusion."
The study finds the nation’s total economic output, its gross domestic product, "remains about 15% below the pre-recession trend, a larger gap than at the bottom of the recession." The first chart below shows that lag, while the second offers insights into just how badly the crisis dented expectations about the future.
Strong employment gains in recent months have brought the jobless rate down to a historically-low 4.3%. However, this decline has not been accompanied by rising incomes or consumer prices, generally associated with a sustainable economic boom. Some Federal Reserve policymakers have found this trend puzzling, while many labor economists point to underlying weaknesses in the job market, including high levels of underemployment and long-term joblessness, as drags on income.
Stagnant wages amid rising profits have meant that the wage share in US national income has fallen from 63% to 57% in the last 15 years, according to the report.
"It is impossible for the wage share to ever rise if the central bank will not allow a period of 'excessive' wage growth," writes J.W. Mason, who authored the report. "A rise in the wage share necessarily requires a period in which wages rise faster than would be consistent with longterm macroeconomic stability."
In other words, if Fed officials tighten monetary policy at the first sign of wage increases, they will never allow the imbalances that have built up, including deep income disparities, to be torn down. Average hourly earnings rose just 2.5% on a yearly basis in July, nothing to write home about and certainly not enough to begin the ground lost over the last decade and more.
Business investment, which is key to long-run economic growth, has also been dismal during the now eight-year expansion.
"There is no precedent for the weakness of investment in the current cycle. Nearly ten years later, real investment spending remains less than 10% above its 2007 peak," Mason writes.
"This is slow even relative to the anemic pace of GDP growth, and extremely low by historical standards. In the three previous [economic] cycles lasting that long, real investment spending had increased anywhere from 30% to 80%. Even shorter cycles saw substantially greater investment growth." Roosevelt 3 investment growth Roosevelt Institute
Finally, Mason looks at whether the economy is at risk of running hot, generating inflation, which central bank officials cite to justify interest rate increases. The Fed has raised interest rates three times since December 2015 to a range of 1% to 1.25%.
"On the contrary, we argue, while a myopic focus on one or another data series might support a story of binding supply constraints, the behavior of the economy as a whole is much more consistent with a situation of depressed demand—an extended recession," the report concludes.
"The overall picture also makes it unclear what actual danger is posed by overheating in the conventional sense. Most of the obvious costs of overheating — higher inflation, higher interest rates, a rising wage share — would be desirable under current circumstances."
What's the difference? 15 versus 10 percent? Suggesting we close the 15-10 percent output gap isn't promising "unicorns and rainbows." Well it is a big ask regarding the current Democratic Party. Maybe that's partly why Hillary lost to Trump.
Tuesday, August 08, 2017
Shares go into a public fund that distributes the yearly dividends as a social wage based on hours worked perhaps
Uncle gets to keep zero
A Zero gravity credit system is the lynch pin
Monday, August 07, 2017
Sunday, August 06, 2017
tight labor markets bad for profits? Goldman Sachs warnings.
Exactly. As @JWMason1 has shown, corporations are pumping cash out to shareholders, rather than sucking it in for investment.
Gavin Wright paper
Joan Robinson on labor market and productivity gains
Cambridge capital controversy
Some members of the Marxian school argue that even if the means of production "earned" a return based on their marginal product, that does not imply that their owners (i.e., the capitalists) created the marginal product and should be rewarded. In the Sraffian view, the rate of profit is not a price, and it is not clear that it is determined in a market. In particular, it only partially reflects the scarcity of the means of production relative to their demand. While the prices of different types of means of production are prices, the rate of profit can be seen in Marxian terms, as reflecting the social and economic power that owning the means of production gives this minority to exploit the majority of workers and to receive profit. But not all followers of Sraffa interpret his theory of production and capital in this Marxian way. Nor do all Marxists embrace the Sraffian model: in fact, such authors as Michael Lebowitz and Frank Roosevelt are highly critical of Sraffian interpretations, except as a narrow technical critique of the neoclassical view. There are also Marxian economists, like Michael Albert and Robin Hahnel, who consider the Sraffian theory of prices, wages and profit to be superior to Marx's own theory.
In Kalamazoo, Mich., a group of well-to-do town “elders” pay for every public school student in town to go to college. And Columbus, Ind., has become an architectural mecca thanks to the support of J. Irwin Miller, whose family made its riches manufacturing engines.