gorgon's link yields gemstone passage:

“In particular, changes made in CPI methodology during the Clinton Administration understated inflation significantly, and, through a cumulative effect with earlier changes that began in the late-Carter and early Reagan Administrations….”

wait for it you old bastards…

“… reduced current social security payments by roughly…”

keep waitin'

” half …”

half !!!!!

“….from where they would have been otherwise”

that's right you rubes …half !!!!!

” .. Social Security checks today
would be about double

had the various changes not been made”

can you live with it ?????

boy oh boy those pointy headed bastards
whoopin and fudgin' it up

along the potomac

really ..by jingo - ed us …eh ???

Posted by js paine at 02:58 AM

rents are nicely called
brainless profits

arbitrage games like the peg punk

that has dicked our industrial platform

just requires you show up be there to buy low sell high

similarly

there's the kill the boom feed the bust goons

that periodically

use ” really ” better then free

credit flows

saves corporate america from itself

social progressive incremental in this rent stream ???

zero

—————————

puting aside the spectral hocus pocus of expectations
i like this narrative fragment

” The key contention of the monetarists was not about the need for money supply targets, as technocrats assumed, but that monetary policy rather than direct intervention in wage or price setting was the right method of tackling inflation.”

this was the path wrong taken by us

the answer known to us marxicocals
as

gross tuning

of the reserve army of the unemployed

leads to dismal sub optimal …secular as well as cyclical performance

lerner noted this in the 1940's

the problem could have been solved with
a mark up market for galbraith's admin price sector

why verboten ??

well the system would sharpen the class struggle folks
the profiteers could neither flee the field of battle by raising prices

or get rescued by a credit crunch induced job market crash leading to a protracted low grade

chronic under employment system backed by sky hook notions

like fragile expectations momentum

or repackaged dismal science

thru the niaru nuts

the great reagan era taming
of the wage struggle

gets blob ed up

together

with off shoring claims

on the trade gap we can lay the de industrialization

but its on the post 70's macro policy trends we can
lay the crime of gross tuning the reserve army

the alibi for this zoo-do macro

wage price spirals

but its hidden agenda its grinch hearted soul

insure proper big corporation profit margins

” Their opponents believed that this could only work by creating a slump in which millions would lose their jobs. The more thoughtful monetarists did not deny that there was a transitional cost in squeezing inflation out of the system.”

and a perminent limp along wage structure to boot

Posted by: paine | Link to comment | August 14, 2008 at 05:45 PM

paine says…
i suspect beyond symbolics

the policy rate is about bank lending margins

they astards would like to lower the rate to increase the banks “earnings”
but they've jibbered so much about sending

wrong messages thru that rate drop

out into the market place

where price setting committees of corporate america

will go into mark up overdrive …

dubiously snared by their own persiflage

hence the “wow are expectations inert or what “
chatter

a way to open the door to another
—if necessary —

rate el dropo ????

Posted by: paine | Link to comment | August 14, 2008 at 05:52 PM

paine says…
anon

“Real interest rates are negative”

as well they damn well oughta be

got a bond portfolio ????

Posted by: paine | Link to comment | August 14, 2008 at 05:54 PM

paine says…
this obscene notion

that rentiers are

not only entitled to a positive real return

but more importantly

growth requires it

is total bunk
profits of enterprise are the part of social

producer surplus we incentize

our agents thru

by a large negative rate of real interest
thru inflation

to make

“entrepreneurs “do it now

that much more attractive

is pure good sense

in a time of slumping productive investment

Posted by js paine at 02:26 AM

you comment on this :
and it helps to ensure that labor is rewarded according to its productivity

with this :

” I'm not sure this is necessarily a good idea, and it is certainly a bad idea if you take the standard left wing “inequality is bad” viewpoint. The inequality in productivity between people is huge, often much larger than the inequality on wages. One example: I spent a month recently building an OCR system, which replaced some data entry people. My productivity is about 216x that of the data entry guys: a system I built in one month does the work that 18 people do in a year, and 18*12=216. My wages are only about 7x the wage of a data entry guy. This is quite typical for the software industry, I'm not unusual in this regard. We should be clear: the people who are making productivity gains are high skill workers. If wages track productivity better, they will reap the benefits, not low skill workers. ”

my comment on your comment

relative productivity except among those doing the same set of tasks …. data entry ….putting soles on shoes

answering phones…at best

to make cross evaluations between those doing different tasks requires market mediation or implicit market mediation

and at both ends

ie

both all inputs as well as all outputs

to evaluate anyone's value added

without this value data most large scale operations

are forced back on cost accounting

a real world process

which is of course a tautology

they're cost not their worth

being whatever we pay em…

in general the value added per hour

by a jobholder in an intra firm co operative production system

is inseper-able from joint value added

consider an assembly line
many tasks but what is the value added by each different task ??? 

of course all this is irrelevent in your case …..
in one month u replaced the work of 18 data dummy types

whats that labor cost savings worth

to the firm per month (apples to apples here ) ??

the potentially infinite stream
of cost reduction

discounted by the firms investment discount rate

(polly best proxy the earnings to stock price ratio )

that's what you did for the company
that's what they might pay someone to build it on contract for em

might …if they're idios
…is it really gonna be worth the full discounted capital value of the cost savings ???

maybe

but if the competition —-like the savage competition in the text books exists

say thru the looking glass in wonderland

if the comp has a guy doing or already had he do or soon will
get her to do for heir system pretty much the same thing you did for your's …then given the market place out there

the whole benefit might end up pissed away in lower prices

but at any rate
your comp as with the key pad monkeys is actually

no more then what it costs your employer to replace you on the job market ..and in wonderland that amounts to what it cost to make one of you

amortized over a career ….

i submit in india your brain is prolly worth about what your data entry dopes make state side 

the welfare point of any raw labor minimum wage
is to raise the entire strcture of job holders

above that wage too

the rate of compensation per hour for various skill types
has a certain necessary inequality based on their relative cost of production as implicitly capitalized by those folks aquiring the skills

implicit discount rate and all

among job holders below the top 5% this inequality
though too large and full of culture specific aborations

is none the less not going haywire in north america

you need to meditate on the nature of exploitation of one human by anotherthru the hired producer systemexample of exploitationyour contribution to higher social productivity however evaluatedat least by constructing your labor saving systemunder our system of exploitation is your employers gainhe /they/she owns your work productnot you

okay so an incentive plan
might let you share crop

your innovation but the formula

to evaluate your crops worth

let alone your share of it

is in their hands not yours

Posted by js paine at 11:57 PM

..it helps to ensure that labor is rewarded according to its productivity
I'm not sure this is necessarily a good idea, ….The inequality in productivity between people is huge, often much larger than the inequality in wages.

One example:

I spent a month recently building an OCR system, which replaced some data entry people. My productivity is about 216x that of the data entry guys: a system I built in one month does the work that 18 people do in a year, and 18*12=216. My wages are only about 7x the wage of a data entry guy.

This is quite typical for the software industry, I'm not unusual in this regard.

We should be clear: the people who are making productivity gains are high skill workers. If wages track productivity better, they will reap the benefits, not low skill workers. ” ninja zombie



i just read this confident piece of under a toad stool ubermench nonsense  over at mark thoma's economists view



its a comment on a nice guy smart market advocation by doctor mark thoma hiz-seff

…gist of mark's post :

its a poosible win win if we repair these free range markets

build in some regs and refs and optimize the inter firm scrap for profits …level field wise and all …..more efficiency AND more equality

ending with this line that creating smart competitive markets

.. helps to ensure that labor is rewarded according to its productivity 

what's not to like eh ??


enter  one ninja zombie ….with his pay according to value produced fetish

with its implied conclusion

“i ougha get about 216 times the pay

of some fat chick in data entry …not just 7 times”



his cubical farm unappreciated  arrogance 

nicely blocks out the basic  contradiction

among our job classers

a contradiction lovingly cultivated
by the tower trolls since

reagan bobble headed his way

to the atomic button end of pennsylvania ave



at its core arguments like this one

by our asbergerish gimp here reflect a social vision

one might call after

the enlightenment notions

that inspire it …rights of hu-mans

the right of merit pay 

iethe right to pay according to worth of work

whether by effort or talent achieved

—obviously here its talent 

that seems to be the implict self preening focus—-

  it all fits together so well..eh ?

given the vast and presistent attempt in the media to mis direct
any discussion of our fast and furiously polarizing

household incomes gap

away from property income versus work income shares

—which have gone berzerk these last28 years—-

and toward the in fact modestly  growing differences

in the rewards to different levels of skill talent effort training etc..

  now add to this a further obfuscation and alibi
the academy alleged

“iron law of technical progress”

to wit

our hapless scientifically

tortured 

economic numbers

confess to

” a long term innovational tilt ”

—a tilt that is itself a tilt -

a tilt away from an earlier long term tilt the otherway —-

toward creating lesser shares of skill free jobs

and toward a higher share of skill more jobs ….

yup innovation itself
in this latest stage of our progress toward secular eden

requires ever more skill intensive employments

hence our global path forward also
implies …. magnified differences between various jobblers

the raw unskilled multitude the proles share sinketh

while th scarce hu caps florisheth

at least that is in “the market value “

of their hours of hired out toil …..

you got a problem with that paine ???

yup ….no such iron law exists

in fact i'll conjecture

if the total system cold be agglomerated

we'd discover the net is prolly running the other way

or how else could profits keep are born

i mean its crushing out old expensive skills and replacing them with

cheap no skills that is what cap enterprise is all about

and even if there were such a tilt
it won't govern job compensation

if the cost of skill aquisition itself falls

and falls faster then demand rises







brief analytics:



lets use herr zombie 's anecdote :



because his retelling of his own story

displays not only a lack of  empathetics

but an even bigger lack of sound  economics

here's the econ con bit…


rule one in a market system

(exposed to even the most imperfect

of  competitive winds):

the reward to the inventor of any productivity enhancement
is not necessarily the full surplus value

of her innovation's incremental  welfare impact

on her product or process's

ultimate benefactors ….its users



all master zombie's innovation might do

—- in fact in the long run

WILL do —-is lower the RELATIVE product price

commensurate with the total reduced labor costs….

but thats only one take….

that's if the inventor or innovator
actually owns the rights to his innovation

in this present corporation dominated regime
where even innovatve brains like ninja's here

are hired out to the tower trolls

what the market place ..smart or dumb as it may be ultimately

rewards the owning  corporation for innovations

——- thru said corporation's various rent traps

and other market bending methods ——

ie

whatever rents the corpration is able to retain

in the form of higher margins

and isn't forced to piss away in lower prices

goes to the corporations owners and top managers

not…not …not

to the jobbled geeks who imagineered it up

not to hired pus heads

like undead office toon ninja  here



what's he worth ..ultimately ???? …..what else

he's worth

only as much as the services of his replacement

—- fresh out of programming school over at torpedo tech

in bangalore —

might cost his corporation to hire directly

or to aquire by out sourcing 

Posted by js paine at 07:50 PM

causation and non benefit clauses

“the increasing desire of investors to look beyond their national borders for higher returns and diversification, as well as the increasing asymmetry in cross-border trade flows, necessitating corresponding financing flows….It is very hard to conclude from the available studies that financial openness has a robust positive association with, let alone a causal effect on, the growth of non-industrial countries….”

simple take

1) trans nats want in
whether the emergers want em in

or benefit from em being in

or not

2)trans nats want emergers to build
” national institutions”

that will facilitate trans nat

global reach

free fly zones across borders
for freer capital flows in and ….out

3) the trans nat hyper profits
that follow from hyper extended imbalances

in trade

only makes the prospect ever more trans nat enticing

4) once u get the flow of causations right

trans nats benefits drive

these “progressive ” calls

for global emerger “institutiona reform”

and it all makes perfect sense

“open wide south hemi” hi fi
is the limited liability inc

trans nat north hemi investors'

” final solution”

“intellectual capital and training, not money “

wording aside..exactly correct

know how in the sinister blood suckng form
of

private intellectual property

emergers can't expect technical “transfers”
without

corporate trans nat capital

receiving

massive “earnings” participation

…

“the LDCs responded to the crises

by deciding to build reserves”

added feature of same:

the emergers thru bountiful
wall street hi fi engineering

succeeded in some seriously filthy peg tricks

which nicely pinned
the dollar

to a semi perm

north/ south

over valued

capital export friendly

condition

which in turn
put the finishing touches

on the —- pro tem——

post industrial transformation

of the domestic amrican economy

Posted by js paine at 05:36 PM

“Modern business enterprise is organized around rent-seeking, not profit-maximization…”

not sure i can agree ….can't a firm seek rents
and maximize profit at the same time??

both these names for possibly different kinds
of producer surplus

look to be filled with internal contradictions

once one watches the broad use of them in public discourse

both demotic and scientific

” the availability of a source of rents to finance the structured incentives of a bureaucracy is a sine-qua-non”

it gets dangerous to call supply regulating revenues ..rents

perhaps
the various forms of producer surplus

require a more detailed parsing

so these habitual snares

of course a vast and mind numbing conflation

serves the purposes of those seeking to creat or preserve

any ultimately anti progressive

antisocial chunk of surplus

————————-

prof max is a seeking to up earnings
by any means availible

not an optimization

in that demotic sense our beloved trns nats indeed seek highest possible profits
long run if private

short run if publicly traded

top management
more properly and particularly

sees to max

the capitalized value

of the firm's earnings path

as alchian long ago restated
the prof max objective

of corporations

is cap value max

my system guide called it

max the rate of the firm's capital growth

profits i use for the good surplus
rents for bad surplus

the good surplus regulate supply
but more crucially motivates innovations

etc

good surplus
is what the loon george gilder rhapsodized

in the reagan charged high 80-90s…

pre dot bomb

lot plop

…
“residual returns..”

a wording worthy of
a rich guy's hidden ball trick

…
“distinguishing between what the factor actually earns, and the minimum the factor would have to earn, to stay in that particular employment “

or enter another employment

again with the magic trick lingo
use of the monsterously ambiguous word

“factor”

at least when

wicksteed and clark bent poor euler over a cannon

they used factor

for tangible means of production…

since that was unsustainable
and now a factor can be anything

accountants
trap it as good will

i prefer to keep it all geisty
and use the aggregatingly mystic word

capital here

study its complex scheinvert filled or vacated
flows and stocks

human skill heads hands and muscles
plus stuff like assembly lines and turbines

are factors to me

physical means of production

viewable away from their particular institutional setting

even if its ahistorical…. mayhaps unimaginable

without those settings

“If an enterprise is to build a large organization, it has to have that kind of risk-bearing capacity, in order to offer the kind of labor contracts a bureaucracy requires”

nice passage i like this notion
of risk

even if firms of th corporate capital kind

are also about

risk transfering and thus “morally “hazardous

the broad lower reaches
of the corporate hierarchy indeed

have to face no direct substantial income loss

from company red ink …

risk oughta be

part of the stock holders game

just holding on to your position

— let lone career path— at the firm

is quite enough personal risk baring

for the marginal lower to middle biznet bureaucrat

and at the top of the hierarchy ????

well
there's a far greater compensation

then just tranfered risk when you have

the chance to play with other folks chips

lots of other folks chips ….

its called proceed skimming ….

..if you're into…capitalist apologetics
you can call the ass hole innocent stockholders

risk takers…

cause indeed

the full socialization of risk

comes that much closer

with this approximation

ie

when society does its producing

thru ” firms “

owned by an impersonal anonymous hord

of risk barers holding maket fungible shares

and …but and

they be residual rent absorbers too

and windfall catchers

and other gains gotten by shrewdness or luck

at least those

not prior snatched

by insider tower trolls

obviously
the actual process of surplus extraction

is only of concern

to these zillions of partial

risk barers 

and consumption forebares

when it adds up to real serious

profit and rent streams

ie earnings

well above risk and interests charges

whether explicit or implicit …eh ??

…
bruce

now i shall babble :

again my guide ..my virgil in these matters

suggests at least three stages and forms

of organization of social production

that arise in particular forms

during the historic process of subsumption

of social production by private capitals

the first and most basic
is your darling …. co operation

larger scale organization

you very keenly lay out
its requirements and advances and advantages

-would that the libertarians of both right and left
heeded this —

by paradox cooperation leads to
the follow on stage division of labor

viewed and loved

—out of context—-

by both smith

and the libertarians

both work it too hard ….

division of labor
in one case smith's

is properly all about

its the proto capitalist form

ie intra firm divisons of tasks among “employees “

unlike in the other the libster

implicit paradigm

with its the older artisanal market mediated

forms of division of L

(which needless to note
exposes the pre capitalist roots

of L-tarians'fantasy vision)

co operation as already in place
under private capital

sets up the necessary

pre-conditions

for an accelerated development

of infra firm d of l

then of course there's the final stage
the final and ultimately

self sublating stage

mechanization automation technification etc
ie the makings of the modern auto plant

DBA the industrial revolution

or the post invention

of continuous invention stage

where the full force of true sunk costs
not just fixed ut fungible assets

require faustian drive to discover over and over

new

alas ultimately vanishing sources

of profit

above and beyond

the crass returns

required to cover

the specific risks of enterprise

and borrowed cap costs

ie

“earning a substantial quasi-rent “

and here is where the red sea parts

the historic mission of private capital
is to push ever onward and upward

the forces of social production

thru pro tem surplus capture

as profits of enterprise

not the rent sink holes and traps
that prevent the surplus to flow away

ultimately to its final and proper destination

the ultimate user/consumer

ie

thru passed thru

ever lower relative output prices

in a phrase

the difference the big difference

is between quasi rent and say …

ground rent or more controversally IT rent



it is

at this point

where i enterd the hread

making the distinction

in types of surplus

between

rents as socially bad surplus earnings

and profits as socially good surplus earnings

a distinction

contained in confusing amalgam

among the flows of

corporate earnings

marshall's quasi rents do to innovation

among stuff called rents

are the only rents worthy of a better name

ie profits of enterprise

..rewards for progressive acts

of enhancing the social production system

having squared the circle
i leave it here…

…
“Those rent-earning assets are, in effect, its real equity,”

as the source of its bumptuous credit lines
and market value true

but this conflates cash on hand

and other reserves of funds

availible to management

without recourse to markets or bankers …

…
more on factors and their rents

when they co operate in production
often

its analytically impossible

to parse out each factor type's contribution

to total value added ..eh ??

back on profit max
its a very keen notion

notice the intellectual collapse

of alternative ike era heuristic notions

like corporate guidance

by satisfice and market share sales max



i agree

one can't construct

the optimal/maximal profit stream

of a firm to contrast with its actual stream

but one can observe tower trolls trying

to find higher returning paths ..eh ??

if its not what the agents play the game for

it is the principals' score card

and not one of the tower trolls

would admit to investors

they really aim

for other targets

than

long run maximal earnings

——————-

in the end
doesn't the existing org theory of capitalism

comes down

to

weber vs marx

Posted by js paine at 03:23 PM

“There is a big problem — a discontinuity in macroeconomic outcomes — when large financial institutions are at the margin between solvency and insolvency. The formal declaration that an important financial institution is insolvent could threaten the whole economy…”

ie
systemic changes

in a crisis

require a comprehensive ” insurance system”

not clear if
even bright lights like shiller here

know his analysis carried out to it's

full set of implications

are short hand

for an end to private equity only

(at risk ) style hi fi capitalism

——

“Glass-Steagall “

yes it grew irrelevent
but throwing it away and letting he free winds blow

was the precisey wrong

move

from a society wide perspective

the G-S system needed to be vastly extended

to all the new free fire zone “hi fi markets

and organizations ” not scrap piled

at a barely tolerable minimum
reg down the pri-equity crowd

put heavy equity leg irons on em

btw

this is an analogue

to a corporate induced “national preference”

for universal mandated health

with a fangled inefficient

pub/pri provisioned

set up

over

clean lean and ….a dream

single payer

…
ex worker

i like your take on the donkey team

the problem with the big Fs
the tiny pri sec equity tail

got to waggin'

the giant pub sec debt dog

…

our task

(us dilleantes of the ultra left)

draft up a nest of notions

one might call

competitive socialism

case in point

how to efficiently incentivize
agents of a pub sec provided

universal security insurance

setting up n competiting

independent pub sec security insurance funds

that pay their agents

on long run peformance …

pretty hollow frame work eh ???

…
“It could be that it is just an end to American ownership”

well thats a start
tthe sooner we the weebles

learn to alienize our capitalist benefactors

the better

but then again
i recall the nasty fool's gold substitution

of an international jewish conspiracy

for rapidly emerging

cross border hi fi capitalism

a hundred years ago

maybe this is a worth while

general heuristic

pri sec capital is groping toward its own sublation

lets remember not …not …to throw out
the ugly duckling baby

( “institutional innovations “)

with the pri profit drive

polluted bath water

dunc

i agree f and f
went up and …..off

pretty much as their archetects and helmsmen

intended

or based on feed back

re intended

Posted by js paine at 03:17 PM