tag:blogger.com,1999:blog-2222630007427380394.post8830665189886900951..comments2023-12-20T04:18:41.617-06:00Comments on The Hunting of the Snark: Big Thinkers Solve Nation's Problems!Susan of Texashttp://www.blogger.com/profile/00076915322771385454noreply@blogger.comBlogger47125tag:blogger.com,1999:blog-2222630007427380394.post-54926429107248210392011-07-25T11:29:45.887-05:002011-07-25T11:29:45.887-05:00But unlike a lot of other complex sciences
Econom...<i>But unlike a lot of other complex sciences</i><br /><br />Economics is in no way, science.fishhttps://www.blogger.com/profile/01522672049371678717noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-40538837439092866512011-07-23T00:45:12.269-05:002011-07-23T00:45:12.269-05:00For example, while Saudi Arabia doesn't really...For example, while Saudi Arabia doesn't really benefit from the regenerative effects of positive oil income shocks to the economy, North Sea oil had a <i>much</i> proportionately greater positive effect on future Y through the knock-on effects, because the institutions and infrastructure was present to allow for long-term capital expansion.<br /><br />In the Canadian case, Tim Hortons' expansion into the U.S. is actually related to the petro-shift, because with the higher Canadian dollar and more readily accessible credit it was much easier for a leading Canadian company to expand into, and start to dominate, the American market. Which is why complaints about the high loonie is generally bullshit, because the only thing it shows is that your business has no potential or competitiveness for investment-financed expansion.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-30851015586319301362011-07-23T00:37:11.656-05:002011-07-23T00:37:11.656-05:00In Canada, this has meant an inexorable shift to p...<i>In Canada, this has meant an inexorable shift to petro-sheikhdom.</i><br /><br />Really, you should actually <i>visit</i> Canada in recent times for once before moaning. Canada is doing fine, petro-sheikhdom or no. It's a great place to live, everyone's incomes are going up; frankly if this is what a petro-sheikhdom looks like, I'll have more of it, please.<br /><br />You know economics well enough to know the (in a wealthy, developed, advanced economy) self-regenerative effects of positive external shocks to Y (real income) in a small, open economy. Basically, money begets money, whatever the original source of money, as long as it is widely spread out throughout the economy, which it to some extent is in Canada. Which is another way of saying that the oil money of today is the sophisticated-services money and biotech and innovative-economy money of tomorrow. Just to take the simplest example, expansion in money available for research hopitals and institutes and so on means that Canada gets to come out ahead in terms of medical and biotechnological research, which translates into increases in future Y.<br /><br /><i>In the USA, this has meant the destruction of the working class.</i><br /><br />As I am not really American, this is strictly speaking outside of my purview.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-4816541662542142892011-07-22T21:10:10.027-05:002011-07-22T21:10:10.027-05:00Economic technocracy is well on its way to erosion...Economic technocracy is well on its way to erosion in Canada (see StatsCan), and it sows the seeds of its own demise. That is the point. Neoliberalism orthodoxy pays no attention to the larger effects of income distribution. It is through maldistributed incomes that the CEO class you rail against becomes too powerful and gains too large an influence over policy. <br /><br />*That* is the connection between economics and politics. Even if we take the ideas of neoliberal thinking to be generally correct and generally well-intention, they are self-limiting. Eventually the uncompensated losers become so weak, they lose the ability to keep the winners honest. <br /><br />That is what has happened in various ways throughout the developed world. The Grand Bargain of free trade was that the losers would be compensated <i>post hoc</i> for the movement of their lifelong jobs to cheaper jurisdictions. But from the point of view of the people actually running the show, that practically defeats the purpose FROM THEIR POINT OF VIEW of free trade (maldistributing income), so of course it never happened.<br /><br />In Canada, this has meant an inexorable shift to petro-sheikhdom. In the USA, this has meant the destruction of the working class.Mandoshttp://politblogo.typepad.com/noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-979090447648370952011-07-22T12:25:32.291-05:002011-07-22T12:25:32.291-05:00it's not exactly a new issue. GE surrendered 3...<i>it's not exactly a new issue. GE surrendered 30 years ago:</i><br /><br />Microwave ovens, being commodity items, are not profitable to produce. It's a very intelligent thing for GE to have given up producing this unprofitable item and given it to the Koreans. (And profit genuinely does matter here: HTC is about to get nuked by Apple because Apple has more cash and profits to do the nuking with, and has bought up the world supply of a key component of smartphones to fuck with them.)<br /><br />(And hey, let's not kid ourselves here: the 10x of American-educated engineers working for Samsung aren't making shit.)<br /><br />Also, US management just doesn't make all that much. Except at the very highest levels, German management makes more. And don't even get me started on the piece-of-shit expense accounts that American companies now have, even for management.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-78022900967208851432011-07-22T12:22:56.030-05:002011-07-22T12:22:56.030-05:00you know what is pretty damn unimpressive? myles&...you know what is pretty damn unimpressive? myles' choooots-pah.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-28076376232227127122011-07-22T12:16:37.686-05:002011-07-22T12:16:37.686-05:00I said executive pay, not CEO pay. I've spent ...I said executive pay, not CEO pay. I've spent a lot of time over the years digging through annual reports. US corporations are run for the benefit of management, and any nickel that leaks out to shareholders is a mistake. Manufacturers, other than high tech, aren't quite as bad as banks, but they're still ridiculous. FAS 123 slowed it down slightly, but just looking at the US income distribution should be enough to show any sane person where the money goes. <br /><br /><br />it's not exactly a new issue. GE surrendered 30 years ago:<br /><br />http://www.sjsu.edu/faculty/watkins/koreaind.htmDownpuppyhttps://www.blogger.com/profile/10312490198813632190noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-65023956750937998022011-07-22T11:02:41.981-05:002011-07-22T11:02:41.981-05:00(And once you balance out the high healthcare cost...(And once you balance out the high healthcare costs with the lower taxes and regulatory compliance costs and so on, American business still comes out ahead.<br /><br />There are plenty of successfull American businesses. It's only that the unsuccessful ones are often run by incompetents, like the kind of imbeciles who ran the Detroit automakers into the ground. Nepotism was a factor, of course, but so was groupthink, aggressive ignorance, and narrow-mindedness.)Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-71103651623331171662011-07-22T10:55:58.677-05:002011-07-22T10:55:58.677-05:00Overhead being health care costs, executive compen...<i>Overhead being health care costs, executive compensation, and the cost of overgrown military/security/prison state.</i><br /><br />That's complete nonsense. Health care costs are high, I'll grant you that. But executive compensation, no matter how high, is a drop in the bucket. It <i>doesn't matter</i> in terms of corporate financial performance. Lament high CEO compensation as much as you want, but it doesn't affect the bottom line <i>at all</i>. The military-security state is financed through taxes and borrowing. The former is lower in the States than in Germany, the latter would only be a problem for private business if there is crowding out causing higher interest rates, and <i>interest rates have generally been lower in the US than in Germany</i>, so there is no disadvantage there either.<br /><br />The reason you are looking for is "incompetence". US industrial managers are incompetent. Rick Wagoner is a blithering idiot.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-2382855745043166982011-07-22T07:15:29.243-05:002011-07-22T07:15:29.243-05:00US manufacturing is very competitive on direct cos...US manufacturing is very competitive on direct costs but suffers vs Europe & Japan due to overhead.<br /><br />Overhead being health care costs, executive compensation, and the cost of overgrown military/security/prison state. All of the overhead is due to interest group politics - the classes on the receiving end of the payments control the country.<br /><br />Nothing to do with Federalism - it's pure class politics.Downpuppyhttps://www.blogger.com/profile/10312490198813632190noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-66468161512340193592011-07-22T03:31:03.344-05:002011-07-22T03:31:03.344-05:00But then...it's so far doing a terrible job of...<i>But then...it's so far doing a terrible job of delivering on its claims, at least in terms of the well being of US citizens (if not others).</i><br /><br />As I have argued before, the U.S. has serious politically structural problems, relating a lot to federalism, that have nothing to do with economics, and in reality can't be solved with economics.<br /><br />Economic technocracy has worked absolutely brilliantly for Sweden, Australia, Canada, and a whole host of other liberal democracies. As I don't believe in the whole American exceptionalism nonsense, I am not going to treat the lack of success in the American context as some sort of separate category rather than possibly the exception that proves the rule.<br /><br />I personally think the Farrell-Yglesias debate is just really weird. OK, so you don't like neoliberalism and the way neoliberals do politics. Great. What are you going to do about it? Half the commenters start by saying that the U.S. should rescue manufacturing unions by putting up enormous tariff walls. (Yeah, like Smoot-Hawley worked great the first time, rather than massively worsening the world economy: history fail.)<br /><br />If this is the left-wing alternative to neoliberalism, it's pretty damn unimpressive. It's all right to argue whether there should be more tariffs or less, but people who think that trade restrictions would automagically cause their TV's and cellphones and household goods to be made in America again need to get out more. You start wondering whether anti-neoliberals have any awareness of how the economy actually works.<br /><br />(And let's dispense with the Midwestern manufacturing talking point once and for all: objective economic conditions for manufacturing in the U.S. were never any unfavourable than they are in Germany. Cost of credit was low, access to capital relatively easy and straightforward, costs in the context of an advance country low, and protectionist measures in fact more vigorous. That Midwestern manufacturing isn't doing well isn't the fault of the political economy, but of the manufacturers and the industrial executives who lead them. Perhaps if they didn't hire so many idiots into the executive ranks, they won't have the problems they do.)Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-90732703710687493922011-07-22T02:04:28.587-05:002011-07-22T02:04:28.587-05:00That's bizarre. Ben Bernanke is one of the mos...<i>That's bizarre. Ben Bernanke is one of the most powerful people in the world. Greg Mankiw has more authority than all but the most eminent political scientists. Larry Summers had legendarily outsized influence in the Obama administration. Mainstream, sensible economics has political power.</i><br /><br />But then...it's so far doing a terrible job of delivering on its claims, at least in terms of the well being of US citizens (if not others). So on the one hand, you're telling politicians to stay out of economics because they'll botch it up, but then when the economists botch it up...?<br /><br />If economic technocrats had such power, why is there a debt ceiling debate, even? <br /><br />Either Ben Bernanke has the power to make policy, or he does not. <br /><br />In reality he probably does---its just that his agenda is not the same as his purported agenda.Mandoshttp://politblogo.typepad.com/noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-47395708478921729362011-07-22T01:50:10.393-05:002011-07-22T01:50:10.393-05:00And what it needs most, even if we take it as well...<i>And what it needs most, even if we take it as well-intentioned on its face (I do not), is a theory of how to achieve political power...</i><br /><br />That's bizarre. Ben Bernanke is one of the most powerful people in the world. Greg Mankiw has more authority than all but the most eminent political scientists. Larry Summers had legendarily outsized influence in the Obama administration. Mainstream, sensible economics has political power.<br /><br />The basic problem is that economics has developed enormously in the postwar era and is now very complex. But unlike a lot of other complex sciences, economics has very direct application to policy. Yet politicians and businessmen, the sort of people who traditionally ran society, don't generally understand economics that well. The solution isn't some farfetched theory of politics, but a better awareness on the part of politicians and businessmen of their relative shortcomings and lack of knowledge when it comes to economics.<br /><br />(This is another way of saying that Andy Grove, former CEO of Intel, should shut the fuck up.)Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-13011866697817458642011-07-22T01:14:10.436-05:002011-07-22T01:14:10.436-05:00But your claim contains its own critique (and the ...But your claim contains its own critique (and the one raised by Henry on CT). Even if it were Special Knowledge---which again, I categorically deny as the weakness in the predictive power of mainstream neoliberal economics where it counts suggests deep conceptual flaws---its very status as Special Knowledge denies it what it needs most. And what it needs most, even if we take it as well-intentioned on its face (I do not), is a theory of how to achieve political power...Mandoshttp://politblogo.typepad.com/noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-47725201235509719622011-07-22T00:25:12.686-05:002011-07-22T00:25:12.686-05:00Weren't you just telling us that economics is ...<i>Weren't you just telling us that economics is scientifically or at least conceptually very well-grounded? Now you're saying that it's faith-based?</i><br /><br />It's conceptually well-grounded, but while a lot of it is quite intuitive, a small part of it (such as monetary policy) is intuitive only to <i>to people who study economics.</i>. Most people don't study economics. To most people, the concept of quantitive easing may as well be magic, in the same way that quarks and charms and whatever might as well be magic to them.<br /><br />Politicians, by and large, don't do economics. Thus they are wont to functionally regard unintuitive parts like monetary policy as magic. The concept that money isn't real, that money is actually only a claim on real things and that the claim can be adjusted monetarily, is not a concept that is amenable to most politicians. The ones do get it are, unfortunately, wont to see it in an instrumentalist manner: you know, how to goose the economy monetarily to produce better short-term numbers so the voters are happier at election time. Nixon/Burns are of course the classic example of this, as well as Carter/Miller. And while Burns is the classic case of political influence gone wrong, Miller is the classic case of why businessmen should not be allowed to meddle with monetary policy. (He was a corporate executive.)Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-24012033849737665322011-07-21T19:28:25.204-05:002011-07-21T19:28:25.204-05:00"magic"
Wait a minute. *scratches fore..."magic"<br /><br />Wait a minute. *scratches forehead* Weren't you just telling us that economics is scientifically or at least conceptually very well-grounded? Now you're saying that it's faith-based?Mandoshttp://politblogo.typepad.com/noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-58697191703616043612011-07-21T19:12:56.238-05:002011-07-21T19:12:56.238-05:00laugher curve?
That too.<i>laugher curve?</i><br /><br />That too.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-91950773378563654942011-07-21T11:40:21.556-05:002011-07-21T11:40:21.556-05:00"because politics + magic is not a good combi..."because politics + magic is not a good combination."<br /><br />laugher curve?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-22801886802195494912011-07-20T22:24:15.766-05:002011-07-20T22:24:15.766-05:00Why would cutting corporate taxes encourage employ...<i>Why would cutting corporate taxes encourage employment, when companies are already "sitting on enormous piles of cash"?</i><br /><br />That's actually quite an important point. Individuals might not react rationally to higher inflation, but you can bet that firms will. Start lighting a fire under all the cash that they are sitting on right now by engaging in aggressive monetary policy, and they'll spend it before the day's out.<br /><br /><i>They don't want that. They prefer most human beings and other life forms live in a basic subsistence existence while They, "The Few" live like Gods.</i><br /><br />That seems to attribute way too much agency to actions that I consider to have been largely made without conscious recognition of their effects.<br /><br /><i>Myles, we've had 30 years of Chicago School monetarism. It's worked well...for the select few.</i><br /><br />IIRC Paul Volcker was, and is, a Democrat. Look: at the end of the day, you can't fix the economy without aggressive movements in monetary policy. One of the Roosevelt's first acts as president is to pull the U.S. off the gold standard, which is about the most aggressive kind of monetary policy imaginable. All that stuff about wise investments is just pure gravy, because they are actually much less effective in terms of plugging the short-term output gap in the economy.<br /><br />Many on the left are as uncomfortable with this as those on the right, but ultimately money is just a number that represents a claim on future good and services. Rejigging this seems like magic, and is in fact is in a sense magic, but it's pretty good magic. Which is why we generally try to keep politics and monetary policy separate, because politics + magic is not a good combination.Mylesnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-4813738822023051652011-07-20T20:01:27.305-05:002011-07-20T20:01:27.305-05:00Our leading politicians (the ones who aren't c...Our leading politicians (the ones who aren't crazy idiots) and MOTUs know exactly how to <i>fix</i> the economy, but they don't want to. They created the current situation and are working diligently to make it even worse for 99.9% of Humanity. They're worse than any Super-Villan who ever wanted to Rule The World, because they are willing, even eager, to destroy the Planet and the Future of Humanity just so <i>They</i> can Rule.<br /><br />Investment in our infrastructure, in Green Tech., in a quality Education for everyone, in NASA and other country's exploring (and mining) the Solar System and learning to live successful in extremely hostile environments: they know very well that these efforts -even the unsuccessful ones- would all contribute to the General Good of <i>all</i> Human Beings and all Life on Earth.<br /><br />They don't want that. They prefer most human beings and other life forms live in a basic subsistence existence while They, "The Few" live like Gods.Kathyhttps://www.blogger.com/profile/03176801494652946278noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-50732960528556908942011-07-20T19:59:36.991-05:002011-07-20T19:59:36.991-05:00Lurking Canadian, there is also the effect of high...Lurking Canadian, there is also the effect of high unemployment on people who still have jobs: careful, because you could be next.<br /><br />Myles, we've had 30 years of Chicago School monetarism. It's worked well...for the select few.<br />~ifthethunderdontgetya™³²®©https://www.blogger.com/profile/06252371815131259831noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-54815376811675697222011-07-20T19:57:25.777-05:002011-07-20T19:57:25.777-05:00Why would cutting corporate taxes encourage employ...Why would cutting corporate taxes encourage employment, when companies are already "sitting on enormous piles of cash"?<br /><br />How do "conservatives" (scare quotes, because they're fake conservatives, and are scary) imagine that anything that benefits corporations, is going to lead to sales? Especially in a consumer-driven economy (where labor is increasingly offshored and outsourced)?<br /><br />I understand how Republican elites truly couldn't care less if the middle and lower classes' standards of living devolved into squalor-plus-cable tv (talk about "China's China"), but do they really think their constituents will think that that's just fine, as long as someone somewhere is condemning gays? Do they really think they'll be able to keep a lid on the resentment of the next decade's teenagers? <br /><br />We know they're proudly, professedly greedy. But are they really that self-destructively, blindly greedy?Mr. Wonderfulnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-14599980326110195742011-07-20T17:31:25.499-05:002011-07-20T17:31:25.499-05:00As far as employment tax credits -
Government ret...As far as employment tax credits -<br /><br /><i>Government retraining programs have a dismal record. So do tax credits for hiring workers, which are notoriously easy to game</i><br /><br />http://www.theatlantic.com/business/archive/2010/03/what-to-do-about-long-term-unemployment/36845/Downpuppyhttps://www.blogger.com/profile/10312490198813632190noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-65367487102170533052011-07-20T16:41:20.789-05:002011-07-20T16:41:20.789-05:00Ryan Avent is half-right. Getting more money to co...Ryan Avent is half-right. Getting more money to consumers is the key, not QE, which affects the price of money. I support direct Federal spending on meaningful projects, such as R&D (alternative energy anyone?), infrastructure repair (I believe I read the American Society of Civil Engineers gives our infrastructure a C-), and other such measures to put money in the hands of those who spend it, because, as noted, we have a demand, not supply, problem. Avent is right about inflation, too.Brianhttps://www.blogger.com/profile/04015145870685939519noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-45709451179460730222011-07-20T16:17:12.955-05:002011-07-20T16:17:12.955-05:00(By the way, to give a sense of how screwed up the...(By the way, to give a sense of how screwed up the monetary policy is, the theoretical interest rate right now (well, from a while ago) should be <i>negative seven (7) per cent.</i>Mylesnoreply@blogger.com