what i wish i wrote
grusilag
chicago
"John Maynard Keynes was still a practicing economist in those days, and his central insight about depressions — that governments need to spend when the private sector isn’t — was not widely understood."
This still isn't understood. His insight really isn't that governments need to spend. Its that governments need to borrow when the private sector isn't borrowing. The interest bearing debt based economy needs to "grow" constantly. If someone isn't willing to create a larger layer of interest bearing debt to support the previous layer of interest bearing debt then the pyramid will begin to collapse. Today the private sector refuses to go into debt to create this larger layer so governments have to. But now it seems that governments too are refusing to go into debt to create the larger base layer of debt. If no one steps up then the previous layers of the pyramid will collapse - i.e. previous loans will start to default and what will ensue is joblessness, foreclosures and shrinking corporate profits - all of which depend on a constantly growing pyramid of interest bearing debt.
BTW, the reason I keep mentioning interest is because it is the satisfaction of the desire for interest that necessitates a "growing pyramid" - without interest we would have a flatter debt structure and it would debt would be much more sustainable.
Andrew
Colesville, MD
The tragedy of monopoly financial capitalism is that it grabs most surplus of the real economy and contributes almost no economic surplus to society. Its high non-productiveness monopolizes the societal economic activity and renders the low productiveness of the real economy even lower everyday. Enormous over-production hence over-capacity in the real economy make accumulation of profits emaciated whereas monopoly financial capital accumulation outshines its real economy junior partner.
To solve these tragic internal contradictions, the most basic approach is to reduce the over-production and capacity that resulted from competitions on the global market. In good times, the well-employed and –expending middle class of the world would have briskly made the over-produced economy well in hand. Now the heavily indebted and demoralized middle class as a result of the financial crisis wants to buy but finds themselves shy of funds. Are there other ways to break up the siege? Well, war is the most notoriously wasteful and cruel way to do the job of massive consumption of the over-produced goods and then to lift employment by expansion in production. The other way to waste off surplus goods is to buy them from the market and physically destroy or burn them. Both had been adopted during the Hoover Great Depression. The Second World War did indeed solve the problem of severe unemployment due to deflation.
Would a short-term deficit spending and stimulating program extricate the over-production-deflation debacle from the Bush Great Recession and now Obama Depression? Yes, for a short time of period when government spending replaces an anemic private spending but no, for long term. It is not a cure-all strategy but only a temporary relief tactics.
In connection with the deficit-reduction and austerity program, on the other hand, there is the tendency to aggravate bankruptcies and foreclosures, both to so much higher levels, that would serve the purpose of destroying not only surplus goods on the market but also, more importantly, means of production of the capitalists. As a consequence, drastically reduced inventories as well as destroyed capital surplus eventually would emerge over the world, renewed investment and production would start in earnest. The economy would reach its recovery stage, if every unfavorable condition would be made harmless and all conditions propitious to accumulation of capital. The petite and less profitable capital assets, however, would be auctioned off to the big and monopolistic capital, making the capitalist system further monopolized and away from democracy. Thus this deflationary approach would break out the debacle at great social costs of declining working class dignity and status, unemployment, bankruptcy, misery, destitution, and fierce class warfare. A protracted struggle between the two dominant classes would almost certainly engender the Second World Revolution after the first one that broke out in early 20th century. The First World Revolution retreated from the world’s political arena after holding power for almost half a century in the periphery of the capitalist world system. It was incomplete and not without mistakes due to its confinement to only the less developed areas. The Second one will occur most likely in the center because the crisis-prone area is now concentrated in the advanced capitalist countries rather than the peripheral areas as before.
In summary, both the inflationary and deflationary tactics are subpar. They may relieve severity to some extent and temporarily but can never eradicate the poisons of private profits and expropriations of the society-oriented means of production.
Its solutions will have to be sought elsewhere in the radical political economies.
chicago
"John Maynard Keynes was still a practicing economist in those days, and his central insight about depressions — that governments need to spend when the private sector isn’t — was not widely understood."
This still isn't understood. His insight really isn't that governments need to spend. Its that governments need to borrow when the private sector isn't borrowing. The interest bearing debt based economy needs to "grow" constantly. If someone isn't willing to create a larger layer of interest bearing debt to support the previous layer of interest bearing debt then the pyramid will begin to collapse. Today the private sector refuses to go into debt to create this larger layer so governments have to. But now it seems that governments too are refusing to go into debt to create the larger base layer of debt. If no one steps up then the previous layers of the pyramid will collapse - i.e. previous loans will start to default and what will ensue is joblessness, foreclosures and shrinking corporate profits - all of which depend on a constantly growing pyramid of interest bearing debt.
BTW, the reason I keep mentioning interest is because it is the satisfaction of the desire for interest that necessitates a "growing pyramid" - without interest we would have a flatter debt structure and it would debt would be much more sustainable.
Andrew
Colesville, MD
The tragedy of monopoly financial capitalism is that it grabs most surplus of the real economy and contributes almost no economic surplus to society. Its high non-productiveness monopolizes the societal economic activity and renders the low productiveness of the real economy even lower everyday. Enormous over-production hence over-capacity in the real economy make accumulation of profits emaciated whereas monopoly financial capital accumulation outshines its real economy junior partner.
To solve these tragic internal contradictions, the most basic approach is to reduce the over-production and capacity that resulted from competitions on the global market. In good times, the well-employed and –expending middle class of the world would have briskly made the over-produced economy well in hand. Now the heavily indebted and demoralized middle class as a result of the financial crisis wants to buy but finds themselves shy of funds. Are there other ways to break up the siege? Well, war is the most notoriously wasteful and cruel way to do the job of massive consumption of the over-produced goods and then to lift employment by expansion in production. The other way to waste off surplus goods is to buy them from the market and physically destroy or burn them. Both had been adopted during the Hoover Great Depression. The Second World War did indeed solve the problem of severe unemployment due to deflation.
Would a short-term deficit spending and stimulating program extricate the over-production-deflation debacle from the Bush Great Recession and now Obama Depression? Yes, for a short time of period when government spending replaces an anemic private spending but no, for long term. It is not a cure-all strategy but only a temporary relief tactics.
In connection with the deficit-reduction and austerity program, on the other hand, there is the tendency to aggravate bankruptcies and foreclosures, both to so much higher levels, that would serve the purpose of destroying not only surplus goods on the market but also, more importantly, means of production of the capitalists. As a consequence, drastically reduced inventories as well as destroyed capital surplus eventually would emerge over the world, renewed investment and production would start in earnest. The economy would reach its recovery stage, if every unfavorable condition would be made harmless and all conditions propitious to accumulation of capital. The petite and less profitable capital assets, however, would be auctioned off to the big and monopolistic capital, making the capitalist system further monopolized and away from democracy. Thus this deflationary approach would break out the debacle at great social costs of declining working class dignity and status, unemployment, bankruptcy, misery, destitution, and fierce class warfare. A protracted struggle between the two dominant classes would almost certainly engender the Second World Revolution after the first one that broke out in early 20th century. The First World Revolution retreated from the world’s political arena after holding power for almost half a century in the periphery of the capitalist world system. It was incomplete and not without mistakes due to its confinement to only the less developed areas. The Second one will occur most likely in the center because the crisis-prone area is now concentrated in the advanced capitalist countries rather than the peripheral areas as before.
In summary, both the inflationary and deflationary tactics are subpar. They may relieve severity to some extent and temporarily but can never eradicate the poisons of private profits and expropriations of the society-oriented means of production.
Its solutions will have to be sought elsewhere in the radical political economies.
condensed thoughts
The just concluded G-20, where the US was part of a minority of 3 calling for more spending, countries agreed to disagree, otherwise the default option in a quickly diverging (unraveling?) world.
On the one hand, smaller countries may be reluctant to keep spending, thus growing deficits and possibly losing some of their sovereignty--see Greece, that little economy that was used to remind some that they cannot undo 50 years of prosperity just by offering savings and trade alternatives to the dollar.
On the other hand, if the US believes in stimulus, what's there to stimulate anymore, besides deficit-growing consumption? The US move could be seen as an effort to make to world in the eyes of the bond-holders/buyers equally leveraged.
All in all, I expect that what I wrote more than 2 years ago to increasingly become part of our daily lives, protectionism. Who said that the renewal part of capitalism was fun?
Given the current strengthening of the power of the US executive branch, I wonder how prepared the system will be to cope with a downward readjustment. On paper, the government and the corporations look stronger by the day. In reality, a major diversion will be required to put all that in motion.
On the one hand, smaller countries may be reluctant to keep spending, thus growing deficits and possibly losing some of their sovereignty--see Greece, that little economy that was used to remind some that they cannot undo 50 years of prosperity just by offering savings and trade alternatives to the dollar.
On the other hand, if the US believes in stimulus, what's there to stimulate anymore, besides deficit-growing consumption? The US move could be seen as an effort to make to world in the eyes of the bond-holders/buyers equally leveraged.
All in all, I expect that what I wrote more than 2 years ago to increasingly become part of our daily lives, protectionism. Who said that the renewal part of capitalism was fun?
Given the current strengthening of the power of the US executive branch, I wonder how prepared the system will be to cope with a downward readjustment. On paper, the government and the corporations look stronger by the day. In reality, a major diversion will be required to put all that in motion.
Their main mistake was acting too late to reform the elites
Perestroika Lost
By MIKHAIL GORBACHEV
Moscow
PERESTROIKA, the series of political and economic reforms I undertook in the Soviet Union in 1985, has been the subject of heated debate ever since. Today the controversy has taken on a new urgency — not just because of the 25th anniversary, but also because Russia is again facing the challenge of change. In moments like this, it is appropriate and necessary to look back.
We introduced perestroika because our people and the country’s leaders understood that we could no longer continue as we had. The Soviet system, created on the precepts of socialism amid great efforts and sacrifices, had made our country a major power with a strong industrial base. The Soviet Union was strong in emergencies, but in more normal circumstances, our system condemned us to inferiority.
[N.B. The Chinese are about there now.]
This was clear to me and others of the new generation of leaders, as well as to members of the old guard who cared about the country’s future. I recall my conversation with Andrei Gromyko, the foreign minister, a few hours before the plenary meeting of the Central Committee that elected me as the party’s new general secretary in March 1985. Gromyko agreed that drastic change was needed, however great the risk.
[N.B. The Soviet/Russian elites must have seen some of this during the time of Brezhnev when the war in Afghanistan could not be won. Other voices indicate the decrease in oil prices as a trigger.]
I am often asked whether my fellow leaders of perestroika and I knew the full scope of what we had to do. The answer is yes and no — not fully and not immediately. What we had to abandon was quite clear: the rigid ideological, political and economic system; the confrontation with much of the rest of the world; and the unbridled arms race. In rejecting all that, we had the full support of the people; those officials who later turned out to be die-hard Stalinists had to keep silent and even acquiesce.
[N.B. Had they known would they still have undertaken the changes? How much is the US today captive to "rigid ideological, political and economic system; the confrontation with much of the rest of the world; and the unbridled arms race?"]
It is much more difficult to answer the follow-up question: What were our goals, what did we want to achieve? We came a long way in a short time — moving from trying to repair the existing system to recognizing the need to replace it. Yet I always adhered to my choice of evolutionary change — moving deliberately so that we would not break the backs of the people and the country and would avoid bloodshed.
[N.B. The goals were probably to have another go at empire.]
While the radicals pushed us to move faster, the conservatives stepped on our toes. Both groups must bear most of the blame for what happened afterward. I accept my share of responsibility as well. We, the reformers, made mistakes that cost us, and our country, dearly.
[N.B. Self-serving?]
Our main mistake was acting too late to reform the Communist Party. The party had initiated perestroika, but it soon became a hindrance to our moving forward. The party’s top bureaucracy organized the attempted coup in August 1991, which scuttled the reforms.
[N.B. This should be sent on a postcard to president Obama, possibly rested as following: Our main mistake was acting too late to reform the elites.]
We also acted too late in reforming the union of the republics, which had come a long way during their common existence. They had become real states, with their own economies and their own elites. We needed to find a way for them to exist as sovereign states within a decentralized democratic union. In a nationwide referendum of March 1991, more than 70 percent of voters supported the idea of a new union of sovereign republics. But the coup attempt that August, which weakened my position as president, made that prospect impossible. By the end of the year, the Soviet Union no longer existed.
[N.B. Let's hope that all the divisive talk (gov. Perry of Texas) is hot electoral air.]
We made other mistakes, too. In the heat of political battles we lost sight of the economy, and people never forgave us for the shortages of everyday items and the lines for essential goods.
[N.B. Maybe that postcard to president Obama should include the above as a 2nd line.]
Still, the achievements of perestroika are undeniable. It was the breakthrough to freedom and democracy. Opinion polls today confirm that even those who criticize perestroika and its leaders appreciate the gains it allowed: the rejection of the totalitarian system; freedom of speech, assembly, religion and movement; and political and economic pluralism.
After the Soviet Union was dismantled, Russian leaders opted for a more radical version of reform. Their “shock therapy” was much worse than the disease. Many people were plunged into poverty; the income gap grew tremendously. Health, education and culture took heavy blows. Russia began to lose its industrial base, its economy becoming fully dependent on exports of oil and natural gas.
By the turn of the century, the country was half destroyed and we were facing chaos. Democracy was imperiled. President Boris Yeltsin’s 1996 re-election and the transfer of power to his appointed heir, Vladimir Putin, in 2000 were democratic in form but not in substance. That was when I began to worry about the future of democracy in Russia.
I understood that in a situation where the very existence of the Russian state was at stake, it was not always possible to act “by the book.” Decisive, tough measures and even elements of authoritarianism may be needed at such times. That is why I supported the steps taken by Mr. Putin during his first term as president. I was not alone — 70 percent to 80 percent of the population supported him in those days.
[N.B. Should our deviations from the Constitution be taken on this note?]
Nevertheless, stabilizing the country cannot be the only or the final goal. Russia needs development and modernization to become a leader in an interdependent world. Our country has not moved closer to that goal in the past few years, even though for a decade we have benefited from high prices for our main exports, oil and gas. The global crisis has hit Russia harder than many other countries, and we have no one but ourselves to blame.
[N.B Alright, a 3rd line would be in order: Fighting terrorism cannot be the only or the final goal!]
Russia will progress with confidence only if it follows a democratic path. Recently, there have been a number of setbacks in this regard.
For instance, all major decisions are now taken by the executive branch, with the Parliament rubber-stamping formal approval. The independence of the courts has been thrown into question. We do not have a party system that would enable a real majority to win while also taking the minority opinion into account and allowing an active opposition. There is a growing feeling that the government is afraid of civil society and would like to control everything.
We’ve been there, done that. Do we want to go back? I don’t think anyone does, including our leaders.
I sense alarm in the words of President Dmitri Medvedev when he wondered, “Should a primitive economy based on raw materials and endemic corruption accompany us into the future?” He has also warned against complacency in a society where the government “is the biggest employer, the biggest publisher, the best producer, its own judiciary ... and ultimately a nation unto itself.”
[N.B. We can echo and ask: Should an economy based on imports and endemic corporate and political corruption accompany us into the future?” Can the financial sector remain “the top employer, running its regulatory and judiciary ... and ultimately a nation unto itself?"]
I agree with the president. I agree with his goal of modernization. But it will not happen if people are sidelined, if they are just pawns. If the people are to feel and act like citizens, there is only one prescription: democracy, including the rule of law and an open and honest dialogue between the government and the people.
What’s holding Russia back is fear. Among both the people and the authorities, there is concern that a new round of modernization might lead to instability and even chaos. In politics, fear is a bad guide; we must overcome it.
Today, Russia has many free, independently minded people who are ready to assume responsibility and uphold democracy. But a great deal depends now on how the government acts.
Translation by Pavel Palazhchenko
By MIKHAIL GORBACHEV
Moscow
PERESTROIKA, the series of political and economic reforms I undertook in the Soviet Union in 1985, has been the subject of heated debate ever since. Today the controversy has taken on a new urgency — not just because of the 25th anniversary, but also because Russia is again facing the challenge of change. In moments like this, it is appropriate and necessary to look back.
We introduced perestroika because our people and the country’s leaders understood that we could no longer continue as we had. The Soviet system, created on the precepts of socialism amid great efforts and sacrifices, had made our country a major power with a strong industrial base. The Soviet Union was strong in emergencies, but in more normal circumstances, our system condemned us to inferiority.
[N.B. The Chinese are about there now.]
This was clear to me and others of the new generation of leaders, as well as to members of the old guard who cared about the country’s future. I recall my conversation with Andrei Gromyko, the foreign minister, a few hours before the plenary meeting of the Central Committee that elected me as the party’s new general secretary in March 1985. Gromyko agreed that drastic change was needed, however great the risk.
[N.B. The Soviet/Russian elites must have seen some of this during the time of Brezhnev when the war in Afghanistan could not be won. Other voices indicate the decrease in oil prices as a trigger.]
I am often asked whether my fellow leaders of perestroika and I knew the full scope of what we had to do. The answer is yes and no — not fully and not immediately. What we had to abandon was quite clear: the rigid ideological, political and economic system; the confrontation with much of the rest of the world; and the unbridled arms race. In rejecting all that, we had the full support of the people; those officials who later turned out to be die-hard Stalinists had to keep silent and even acquiesce.
[N.B. Had they known would they still have undertaken the changes? How much is the US today captive to "rigid ideological, political and economic system; the confrontation with much of the rest of the world; and the unbridled arms race?"]
It is much more difficult to answer the follow-up question: What were our goals, what did we want to achieve? We came a long way in a short time — moving from trying to repair the existing system to recognizing the need to replace it. Yet I always adhered to my choice of evolutionary change — moving deliberately so that we would not break the backs of the people and the country and would avoid bloodshed.
[N.B. The goals were probably to have another go at empire.]
While the radicals pushed us to move faster, the conservatives stepped on our toes. Both groups must bear most of the blame for what happened afterward. I accept my share of responsibility as well. We, the reformers, made mistakes that cost us, and our country, dearly.
[N.B. Self-serving?]
Our main mistake was acting too late to reform the Communist Party. The party had initiated perestroika, but it soon became a hindrance to our moving forward. The party’s top bureaucracy organized the attempted coup in August 1991, which scuttled the reforms.
[N.B. This should be sent on a postcard to president Obama, possibly rested as following: Our main mistake was acting too late to reform the elites.]
We also acted too late in reforming the union of the republics, which had come a long way during their common existence. They had become real states, with their own economies and their own elites. We needed to find a way for them to exist as sovereign states within a decentralized democratic union. In a nationwide referendum of March 1991, more than 70 percent of voters supported the idea of a new union of sovereign republics. But the coup attempt that August, which weakened my position as president, made that prospect impossible. By the end of the year, the Soviet Union no longer existed.
[N.B. Let's hope that all the divisive talk (gov. Perry of Texas) is hot electoral air.]
We made other mistakes, too. In the heat of political battles we lost sight of the economy, and people never forgave us for the shortages of everyday items and the lines for essential goods.
[N.B. Maybe that postcard to president Obama should include the above as a 2nd line.]
Still, the achievements of perestroika are undeniable. It was the breakthrough to freedom and democracy. Opinion polls today confirm that even those who criticize perestroika and its leaders appreciate the gains it allowed: the rejection of the totalitarian system; freedom of speech, assembly, religion and movement; and political and economic pluralism.
After the Soviet Union was dismantled, Russian leaders opted for a more radical version of reform. Their “shock therapy” was much worse than the disease. Many people were plunged into poverty; the income gap grew tremendously. Health, education and culture took heavy blows. Russia began to lose its industrial base, its economy becoming fully dependent on exports of oil and natural gas.
By the turn of the century, the country was half destroyed and we were facing chaos. Democracy was imperiled. President Boris Yeltsin’s 1996 re-election and the transfer of power to his appointed heir, Vladimir Putin, in 2000 were democratic in form but not in substance. That was when I began to worry about the future of democracy in Russia.
I understood that in a situation where the very existence of the Russian state was at stake, it was not always possible to act “by the book.” Decisive, tough measures and even elements of authoritarianism may be needed at such times. That is why I supported the steps taken by Mr. Putin during his first term as president. I was not alone — 70 percent to 80 percent of the population supported him in those days.
[N.B. Should our deviations from the Constitution be taken on this note?]
Nevertheless, stabilizing the country cannot be the only or the final goal. Russia needs development and modernization to become a leader in an interdependent world. Our country has not moved closer to that goal in the past few years, even though for a decade we have benefited from high prices for our main exports, oil and gas. The global crisis has hit Russia harder than many other countries, and we have no one but ourselves to blame.
[N.B Alright, a 3rd line would be in order: Fighting terrorism cannot be the only or the final goal!]
Russia will progress with confidence only if it follows a democratic path. Recently, there have been a number of setbacks in this regard.
For instance, all major decisions are now taken by the executive branch, with the Parliament rubber-stamping formal approval. The independence of the courts has been thrown into question. We do not have a party system that would enable a real majority to win while also taking the minority opinion into account and allowing an active opposition. There is a growing feeling that the government is afraid of civil society and would like to control everything.
We’ve been there, done that. Do we want to go back? I don’t think anyone does, including our leaders.
I sense alarm in the words of President Dmitri Medvedev when he wondered, “Should a primitive economy based on raw materials and endemic corruption accompany us into the future?” He has also warned against complacency in a society where the government “is the biggest employer, the biggest publisher, the best producer, its own judiciary ... and ultimately a nation unto itself.”
[N.B. We can echo and ask: Should an economy based on imports and endemic corporate and political corruption accompany us into the future?” Can the financial sector remain “the top employer, running its regulatory and judiciary ... and ultimately a nation unto itself?"]
I agree with the president. I agree with his goal of modernization. But it will not happen if people are sidelined, if they are just pawns. If the people are to feel and act like citizens, there is only one prescription: democracy, including the rule of law and an open and honest dialogue between the government and the people.
What’s holding Russia back is fear. Among both the people and the authorities, there is concern that a new round of modernization might lead to instability and even chaos. In politics, fear is a bad guide; we must overcome it.
Today, Russia has many free, independently minded people who are ready to assume responsibility and uphold democracy. But a great deal depends now on how the government acts.
Translation by Pavel Palazhchenko
From Taleb's Twitter Feed
From Nassim Taleb's Twitter Feed:
1. In nature we never repeat the same motion. In captivity (office, gym, commute, sports), life is just repetitive stress injury. No randomness about 6 hours ago via web
2. Using, as excuse, others' failure of common sense is in itself a failure of common sense. 9:33 AM Mar 12th via web
3. Dubai borrowed to put vanity buildings on postcards; America and W. Europe need to borrow to just survive. 4:52 AM Mar 12th via web
4. We unwittingly amplify commonalities with friends, dissimilarities with strangers, & contrasts with enemies. 3:30 PM Mar 11th via web
5. The mark of a mediocre mind is the subdued and passive reaction in front of the truly exceptional. 11:32 AM Mar 11th via web
6. [Explanation: The biggest error since Socrates has been to believe that lack of clarity is the SOURCE of all our ills, not the result. ] 11:22 AM Mar 10th via web
7. Mental clarity is the child of courage, not the other way around. 11:07 AM Mar 10th via web
8. What they call play (gym, travel) looks like work;what I call work (effortless daydreaming) looks like play.They lose freedom trying harder. 3:27 AM Mar 10th via web
9. The differences between Goldman Sachs & the mafia: GS has a better legal-regulatory expertise; but the mafia understands public opinion. 7:13 AM Mar 9th via web
10. Common minds find similarities in stories (& situations), finer minds detect differences [Essay on the Universal & the Particular] 12:47 AM Mar 8th via web
11. I wish to say some day about someone "Voilà un homme!" as Napoleon said upon meeting Goethe: mixture of passion & intellect (& elegance too) 5:45 AM Mar 7th via web
12. Übermen tolerate others' small inconsistencies though not the large ones;losers tolerate others' large inconsistencies though not small ones 6:16 AM Mar 5th via web
13. If you want people to read a book, tell them it is overrated. 1:07 PM Feb 28th via web
14. Their sabbatical is to work six days and rest for one; my sabbatical is to work for (part of) a day and rest for six. 7:05 AM Feb 28th via web
15. City-states organize by tinkering; nation-states produce bureaucracies, empty suits, Bernankes, deficits, and the toobigtofail. Too obvious. 6:49 AM Feb 27th via web
16. answ:[ If you can't detect (w/out understanding) the difference betw sacred & profane you'll never know what religion means. Same with art ] 7:36 AM Feb 26th via web
17. Atheism/materialism means treating the dead as if they were unborn. I won't. By respecting the sacred you reinvent religion. 4:47 AM Feb 26th via web
18. I wonder if a lion (or a cannibal) would pay a high premium for free-range humans. [modern bondage] 8:00 AM Feb 25th via web
19. Writing is the art of repeating oneself without anyone noticing. 12:40 PM Feb 24th via web
20. You know you have influence when people start noticing your absence more than the presence of others. 3:26 PM Feb 23rd via web
1. In nature we never repeat the same motion. In captivity (office, gym, commute, sports), life is just repetitive stress injury. No randomness about 6 hours ago via web
2. Using, as excuse, others' failure of common sense is in itself a failure of common sense. 9:33 AM Mar 12th via web
3. Dubai borrowed to put vanity buildings on postcards; America and W. Europe need to borrow to just survive. 4:52 AM Mar 12th via web
4. We unwittingly amplify commonalities with friends, dissimilarities with strangers, & contrasts with enemies. 3:30 PM Mar 11th via web
5. The mark of a mediocre mind is the subdued and passive reaction in front of the truly exceptional. 11:32 AM Mar 11th via web
6. [Explanation: The biggest error since Socrates has been to believe that lack of clarity is the SOURCE of all our ills, not the result. ] 11:22 AM Mar 10th via web
7. Mental clarity is the child of courage, not the other way around. 11:07 AM Mar 10th via web
8. What they call play (gym, travel) looks like work;what I call work (effortless daydreaming) looks like play.They lose freedom trying harder. 3:27 AM Mar 10th via web
9. The differences between Goldman Sachs & the mafia: GS has a better legal-regulatory expertise; but the mafia understands public opinion. 7:13 AM Mar 9th via web
10. Common minds find similarities in stories (& situations), finer minds detect differences [Essay on the Universal & the Particular] 12:47 AM Mar 8th via web
11. I wish to say some day about someone "Voilà un homme!" as Napoleon said upon meeting Goethe: mixture of passion & intellect (& elegance too) 5:45 AM Mar 7th via web
12. Übermen tolerate others' small inconsistencies though not the large ones;losers tolerate others' large inconsistencies though not small ones 6:16 AM Mar 5th via web
13. If you want people to read a book, tell them it is overrated. 1:07 PM Feb 28th via web
14. Their sabbatical is to work six days and rest for one; my sabbatical is to work for (part of) a day and rest for six. 7:05 AM Feb 28th via web
15. City-states organize by tinkering; nation-states produce bureaucracies, empty suits, Bernankes, deficits, and the toobigtofail. Too obvious. 6:49 AM Feb 27th via web
16. answ:[ If you can't detect (w/out understanding) the difference betw sacred & profane you'll never know what religion means. Same with art ] 7:36 AM Feb 26th via web
17. Atheism/materialism means treating the dead as if they were unborn. I won't. By respecting the sacred you reinvent religion. 4:47 AM Feb 26th via web
18. I wonder if a lion (or a cannibal) would pay a high premium for free-range humans. [modern bondage] 8:00 AM Feb 25th via web
19. Writing is the art of repeating oneself without anyone noticing. 12:40 PM Feb 24th via web
20. You know you have influence when people start noticing your absence more than the presence of others. 3:26 PM Feb 23rd via web
A step closer to the core of one of our most common problems
Trading Away Productivity
By ALAN TONELSON and KEVIN L. KEARNS
FOR a quarter-century, American economic policy has assumed that the keys to durable national prosperity are deregulation, free trade and a swift transition to a post-industrial, services-dominated future.
Such policies, advocates say, drive innovation, which leads to enormous labor productivity and wage gains — more than enough, supposedly, to make up for the labor disruptions that accompany free trade and de-industrialization.
[N.B. In fact, labor productivity has been an eternal obsession of the US capitalist, shared at one point by the now-defunct comrades in the planned economies. Have a look at The Politicos vs An old man]
In reality, though, wage gains for the average worker have lagged behind productivity since the early 1980s, a situation that free-traders usually attribute to workers failing to retrain themselves after seeing their jobs outsourced.
[N.B. So what does it mean if this were indeed a failure of the workers? Too bad they could not retrain themselves to become neurosurgeons or derivative traders?]
But what if wages lag because productivity itself is being grossly overstated, especially in the nation’s manufacturing sector? Then, suddenly, a cornerstone of American economic policy would begin to crumble.
Productivity measures how many worker hours are needed for a given unit of output during a given time period; when hours fall relative to output, labor productivity increases. In 2009, the data show, Americans needed 40 percent fewer hours to produce the same unit of output as in 1980.
But there’s a problem: labor productivity figures, which are calculated by the Labor Department, count only worker hours in America, even though American-owned factories and labs have been steadily transplanted overseas, and foreign workers have contributed significantly to the final products counted in productivity measures.
The result is an apparent drop in the number of worker hours required to produce goods — and thus increased productivity. But actually, the total number of worker hours does not necessarily change.
This oversight is no secret: as Labor Department officials acknowledged at a 2004 conference, their statistical methods deem any reduction in the work that goes into creating a specific unit of output, whatever the cause, to be a productivity gain.
This continuing mismeasurement leads economists and all those who rely on them to assume that recorded productivity gains always signify greater efficiency, rather than simple offshoring-generated cost cuts — leaving the rest of us scratching our heads over stagnating wages.
[N.B. Why would few push this, where was the organized labor?]
Of course, just because productivity is mismeasured doesn’t mean that genuine innovations can’t improve living standards. It does mean, however, that Americans are flying blind when it comes to their economy’s strengths and weaknesses, and consequently drawing the wrong policy lessons.
Above all, if offshoring has been driving much of our supposed productivity gains, then the case for complete free trade begins to erode. If often such policies simply increase corporate profits at the expense of American workers, with no gains in true productivity, then they don’t necessarily strengthen the national economy.
[N.B. This seems a clear case when regulation should help protect capitalism from capitalists.]
In this regard, the case for free trade as a stimulus for innovation weakens, too. Because productivity gains in part reflect job offshoring, not just the benefits of technology or better business practices, then the American economy has been much less innovative than widely assumed.
How can we actually increase innovation and real productivity? Manufacturing, long slighted by free-market extremists, needs to be promoted, not pushed offshore, since it has historically accounted for the bulk of research and development spending and employs the bulk of American science and technology workers — who in turn spur further innovation and real productivity.
Promoting manufacturing will require major changes in tax and trade policies that currently foster offshoring, including implementing provisions to punish currency manipulation by countries like China and help American producers harmed by discriminatory foreign value-added tax systems. It also means revitalizing government and corporate research and development, which has languished since its heyday in the 1960s.
Much of government policy and business strategy rides on false assumptions about innovation, and although the Obama administration acknowledges the problem, it has done nothing to correct it. With the economy still in need of government life support and the future of American manufacturing in doubt, relying on faulty productivity data is a formula for disaster.
Alan Tonelson, a fellow at the United States Business and Industry Council, is the author of “The Race to the Bottom.” Kevin L. Kearns is the president of the council, which is an association of small manufacturers.
By ALAN TONELSON and KEVIN L. KEARNS
FOR a quarter-century, American economic policy has assumed that the keys to durable national prosperity are deregulation, free trade and a swift transition to a post-industrial, services-dominated future.
Such policies, advocates say, drive innovation, which leads to enormous labor productivity and wage gains — more than enough, supposedly, to make up for the labor disruptions that accompany free trade and de-industrialization.
[N.B. In fact, labor productivity has been an eternal obsession of the US capitalist, shared at one point by the now-defunct comrades in the planned economies. Have a look at The Politicos vs An old man]
In reality, though, wage gains for the average worker have lagged behind productivity since the early 1980s, a situation that free-traders usually attribute to workers failing to retrain themselves after seeing their jobs outsourced.
[N.B. So what does it mean if this were indeed a failure of the workers? Too bad they could not retrain themselves to become neurosurgeons or derivative traders?]
But what if wages lag because productivity itself is being grossly overstated, especially in the nation’s manufacturing sector? Then, suddenly, a cornerstone of American economic policy would begin to crumble.
Productivity measures how many worker hours are needed for a given unit of output during a given time period; when hours fall relative to output, labor productivity increases. In 2009, the data show, Americans needed 40 percent fewer hours to produce the same unit of output as in 1980.
But there’s a problem: labor productivity figures, which are calculated by the Labor Department, count only worker hours in America, even though American-owned factories and labs have been steadily transplanted overseas, and foreign workers have contributed significantly to the final products counted in productivity measures.
The result is an apparent drop in the number of worker hours required to produce goods — and thus increased productivity. But actually, the total number of worker hours does not necessarily change.
This oversight is no secret: as Labor Department officials acknowledged at a 2004 conference, their statistical methods deem any reduction in the work that goes into creating a specific unit of output, whatever the cause, to be a productivity gain.
This continuing mismeasurement leads economists and all those who rely on them to assume that recorded productivity gains always signify greater efficiency, rather than simple offshoring-generated cost cuts — leaving the rest of us scratching our heads over stagnating wages.
[N.B. Why would few push this, where was the organized labor?]
Of course, just because productivity is mismeasured doesn’t mean that genuine innovations can’t improve living standards. It does mean, however, that Americans are flying blind when it comes to their economy’s strengths and weaknesses, and consequently drawing the wrong policy lessons.
Above all, if offshoring has been driving much of our supposed productivity gains, then the case for complete free trade begins to erode. If often such policies simply increase corporate profits at the expense of American workers, with no gains in true productivity, then they don’t necessarily strengthen the national economy.
[N.B. This seems a clear case when regulation should help protect capitalism from capitalists.]
In this regard, the case for free trade as a stimulus for innovation weakens, too. Because productivity gains in part reflect job offshoring, not just the benefits of technology or better business practices, then the American economy has been much less innovative than widely assumed.
How can we actually increase innovation and real productivity? Manufacturing, long slighted by free-market extremists, needs to be promoted, not pushed offshore, since it has historically accounted for the bulk of research and development spending and employs the bulk of American science and technology workers — who in turn spur further innovation and real productivity.
Promoting manufacturing will require major changes in tax and trade policies that currently foster offshoring, including implementing provisions to punish currency manipulation by countries like China and help American producers harmed by discriminatory foreign value-added tax systems. It also means revitalizing government and corporate research and development, which has languished since its heyday in the 1960s.
Much of government policy and business strategy rides on false assumptions about innovation, and although the Obama administration acknowledges the problem, it has done nothing to correct it. With the economy still in need of government life support and the future of American manufacturing in doubt, relying on faulty productivity data is a formula for disaster.
Alan Tonelson, a fellow at the United States Business and Industry Council, is the author of “The Race to the Bottom.” Kevin L. Kearns is the president of the council, which is an association of small manufacturers.
Brecht/Eco: Unhappy the land where heroes are needed
What is your idea of perfect happiness?
A state of satisfaction that lasts a little more than five minutes.
What is your greatest fear?
To lose my sense of humor at the moment of my death.
Which historical figure do you most identify with?
Baruch Spinoza.
Which living person do you most admire?
Let me wait until they die, so to be sure of my feelings.
What is your greatest extravagance?
I quit smoking.
What is your favorite journey?
The years during which I am writing a new novel. I am wandering through a private and secret territory, nobody knows what I am doing, and I feel happy.
What do you consider the most overrated virtue?
No real virtue, if such, can be overrated.
What do you dislike most about your appearance?
Everything—I do not like my image in the mirror. However, I do not feel disturbed, because several times I discovered that a lot of nice people had a different opinion.
Which living person do you most despise?
Once again, let me wait until their death. (They must have time to change.)
What or who is the greatest love of your life?
Since four years and a half, my grandchild.
When and where were you happiest?
When I had time enough for my hobby: work.
If you could change one thing about your family, what would it be?
To have another grandchild.
What is your most treasured possession?
My collection of old rare books.
What do you regard as the lowest depth of misery?
Intolerance (but because I have enough money to live well; otherwise it would be starvation).
What is your favorite occupation?
I said it above: work. But do not forget that I am one of those happy persons who identify their work with their hobby and vice versa.
What do you most value in your friends?
The capacity to keep a secret.
Who are your favorite writers?
Dante, Nerval, Joyce, Borges.
Who is your favorite hero of fiction?
Julien Sorel. No, perhaps Mickey Mouse.
Who are your heroes in real life?
As Brecht said, “Unhappy the land where heroes are needed.”
What are your favorite names?
Aureolus Theophrastus Bombastus, and Jim.
What is your motto?
As James Joyce once said to his brother, “The music hall, not poetry, [is] a criticism of life.”
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