guy claims he's got a perfect fit function that co incides with recessions…
i can't help but find this sort of elaborate

number milling

jejune if it only can generate …coincident indicators

thanx a pant load pal

“danger danger will robinson ..you are crashing

you are crashing …danger danger

Posted by pinky at 07:39 PM

“Gorbachev delivered Russia into the hands of a kleptocracy”

not fair
yeltsin did that

gorby was the merit class simpleton
that delivered the russian people

inadvertently into the hands

of our boy boris

i'm still convinced

the so called coup was an intentional farce

a cia/kgb joint operation

kgb??

i note

they're still around

even as the party
wrinkled into a gnome

after the coup

and mad boris post tank topping

became king of the wide open spaces

the joe boxer of
slavic kleptomanis

bite sized

“In the case of China, the Washington consensus was mostly right on target”

i'm impressed…
an authority on thirty years

of red-han politbureau policy trends

who knew ???

liberalized and trans nat open …
err except for “the fire “sector

that's coming right up though…

“The power of the brand is something the Chinese are beginning to understand.”
u thrust this all at us with an idiot's self assurance

thanx bite

Reply Oct 31, 2009 at 06:12 AM

paine said in reply to paine…
“Of the above, the Washington Consensus was “wrong' only on trade liberalization and liberalization of inward foreign direct investment.”

too bad
since those two

plus open gates for hot money

were as bruce points out

the principal payload of the trans nat bomber flee

——-

long quote coming…

“…. Politicians are in the business of selling the service of resolving conflicts between groups of different interests, when those different interests have differences in belief, status, class, and ambition, and each of whom wishes to use the violence of government, which is it's only means of action, to serve one group or another. Compromises are not universally available.

…..people, in a vast cacophony of differences, each try to improve their status and status of their group when those groups have different interests and priorities.

.. there is voluntary creativity, such as entrepreneurship and trade, and involuntary creativity, which is to use the state's violence to forcibly interfere in that creative process to put to alternate ends. As well as cooperative creativity, which provides incentives to apply one's efforts and investments to alternate ends.

You imply a threat of revolution. In all revolutions, wether violent, economic, or democratic, one power class simply replaces the next, establishes itself as a new power class that attempts to preserve it's privilege and power. How can this be changed?

Of course, you also suggest that the proletariat will rise up against this lose lose scenario, but there are two problems with this fantasy: First, that middle class revolutions tend to increase general prosperity, but proletariate revolutions tend to produce total destruction of the economy, or over time, drive everyone into greater poverty. The second is that those with 'something' happily pay a chosen few to conquer and enslave the remainder, thus producing the opposite effect.

Capitalism can refer to either functions or biases, functoins or ideologies.

Capitalism as a set of institutions, incentives and methods of calculation are with us to stay. The world is adopting them precisely because managed economies lack incentives, information schemes, and calculative tools for quickly utilizing people in an increasingly diverse mix of knowledge and labor, and where that diversity increases the value of people's productive differences dramatically. Religions and 'common beliefs' are for slaves and farmers whose land is more marginally different than that of their human workers.

Capitalism as an ideology, or bias, of Laissez Faire that exports knowledge, resource, human and intellectual capital as a means of politically converting the rest of teh world is dead. Not because of opinion, but because the need to convert the world has been soundly demonstrated and the institutions adopted.

But social democracy's policies and devices which burden future generations, rely upon constant aggressive economic expansion, rely upon credit money to fuel consumption rather than productive innovation, and apply disincentive to savings, is just as dead, although not quite yet as in evidence.

THe west takes too much credit for it's political programs, and too little for the gift of profiting from the filling of a continent with risk takers. There is no more magic to the western miracle than there is to the california miracle, and the two philosophies were advantageous, if temporary.

Capitalism as a set of institutions works in increasing populations because it is a means of managing and rewarding people where no human or set of humans can understand the vast complexity in time and productivity. Capitalism as a bias is simply a foolish failure to understand that capitalism isn't a bias or philosophy but a set of mechanitcal tools that assist us in working together in increasing numbers.

The question is: why don't more governments create positive incentives (credit and profit sharing) for private sector profit applied to public ends rather than negative incentives (class warfare and taxes) that make private activities less rewarding and pit the private sector against the state?

HUmans exist in diverse beliefs, classes, abilities. All prosperity comes from risk taking by people with specialized knowledge. and who can coordinate capital from numbers of others toward a common end. The state can become 'creative' by investing (not spending, but investing) in those things that private capital cannot coordinate: infrastructure.

But if class war continues it will not be the leftist panacea, or even the european socialist model that prevails. It cannot be. An aging minority population has no means of preserving its productive status. And if the loss of that status appeals to you, in fulfillment of your sense of unfairness - a biological but not rational bias, then you might consider visiting the third world. Because you will soon be living there.

We need to alter government so that each class serves the other, while recognizing that we will always have status and classes. It turns out it's possible. ANd it's not even that hard.

While we can redistribute our excesses, what we can redistribute is only what it is possible to do, without the inter-temporal loss of incentives, and without such interference in calculation of the use of property (objects one has understanding of possible utilities) that the groups (state's) productivity provides it less purchasing power than competitive groups.

One difference between group preferences is in the capitalization or consumption of behavioral discipline (saving or learning), and therefore some desire to consume cultural discipline and offload responsibility onto future generations. This has turned out to be very common under democracy.

Another issue is status, which we tend to think of as economic, but it is largely a function of mating ritual, and as such will be eternally with us.

So we will have capitalism, in the sense that we wil have calculative institutions and status differences. We will have redistribution, because it is simply easier to get along if we do so. But we will not have agreement on that as long as government can profit and increase in size by profiting from class warfare. The only way to fix this is not by ideology but by increasing the calculability and record of causality in the finance, tax and credit system that will make political deceptions, errors, and philosophical differences, either commensurable or impossible. And secondly by using the private sector for public good rather than the private sector trying to keep the state at bay.

India is doing the best at this today I think.

Entrepreneurs will just as happily serve common interests as interests that are opportunistic, if they are able to profit from it.”

——————————

the above comment
is the bouvard and pecuchet award winner

of…. the decade

time capsule material for sure

gosh….i feel like i've just taken

a definitive string of loopy twilight zone

chamber of commerce inspired

amusement rides

….at the senile-superstructure of market america

shriners' new tot branding and potentiating

carnival of the jobbled mind mash

such a fair ground full
of conjugating huckstering

main street commercial banality

i sing your praise even unto the alps !!!!

and wonder of wonders
all couched in basic english yet

its as if
the folks that cooked up

that chain of breakfast spots…

'cracker barrel'..went into

the capitalist agit prop biz

thank you for your efforts at friendly persuasion

ps
india rocks !!!

“!Entrepreneurs are just as happily serving common interests as interests that are opportunistic,

if they are able to profit from altruism they will “

curt 69 bumstead

…

“Capitalism as a bias is simply a foolish failure to understand that capitalism isn't a bias “

don't tread on me
i eat my own tail

—-

more of bumstead curt

“Christian universalism ….nihilism is part of Byzantine civilization “

odd synthetic terms in this dismal science context

very agitational ..i like that

but corruption requires some surgical analysis

i recall that delightfully gay-prim
android in aliens II

dissecting with wonder

the intricacies of

that face sucking embryo implanting

stage of the aliens' reproduction cycle

Reply Oct 31, 2009 at 07:31 AM

paine said…
“I don't agree with everything he says '

is that a fudge line

if not what don't you agree with
its a very common stew

and made mostly out of the usual

merit class cosmopolite prunes

its so eclectic what's not to agree with ??

…errr..if you happen to be
a well meaning cautious but enlightened

american liberal academic

gorby is not in the loop cynthia and has not been…ever

he's the greatestiron curtain spawned
useful idiot

of the entire kold war era…. obviously

a piebald don quixote of the kremlin

but precisely for that reason
now useless to the trans nat PTB

except as

a touring

one world for all dribbler

he's like sitting bull
in the wild west show

a seriously dimmed show pony

Posted by pinky at 07:28 PM

“I believe the EITC was expanded, but just giving people money doesn't work because it brings unwanted incentives into play”

ya like the added incentive to hold a job

btw you shrewd apologists
the pay roll tax targets job holding incentives

cut payroll taxes not income taxes if you want more “productive activity”

incentivizing voluntary personal savings
is a ghoulish farce in a credit money based economy

with a good tax and transfer system in place

household savings don't even need to exist …at all

chew thru that please
before suggesting

we the jobbled masses vote to

incentivize social investment

by cutting high savers taxes

“the rich are paying .. their fair share.”

sky hook anyone ???

the rich (honest rich)
pay only the taxes

our electoral majority insist they pay

right now my guess
their tax bill/tax share

is headed up

Reply Oct 31, 2009 at 05:23 AM

paine said…
to shift the tax burden onto jobblers

so rich high savers

can lend it back to these job class geefs

in the nasty form of consumer credit

has zero DIRECT investment impact …eh ??

this tax reducting consumer credit increasing loop
increases household effective demand

and indirectly corporate investment

but no more …and likely less

then our present tax and transfer system

and certainly less then deficit financed

targeted social spending and investments

particularly

where the fed monetizes the T financing paper

at least until the production system hits full tilt output

Reply Oct 31, 2009 at 05:32 AM

paine said…
it would really help

if folks tried to learn how our econommy

actually operates

before mooing about their deeply held values

and/or

agressively thrusting

mobius strip policy options our way

Posted by pinky at 07:26 PM

fdr :
the guy who's party made us into

a middle class nation

What worries me more is the corrupt, corporate centrists, who seem incapable of articulating a genuine principle, or even a coherent argument.”

you should worry they run things and have with only near miraculous exceptions
since 1937

yes indeed the ever re-membering

center aisle party

the true party of corporate “special” interests

the morbid center

Reply Oct 30, 2009 at 10:54 AM

paine said…
“vast, determined, powerful political interest in the dysfunction of the current system “

your waste is my reward

Reply Oct 30, 2009 at 10:55 AM

paine said…
bruce

i find too little attention paid
to the loss of certain fdr base elements

in particular the Dems unlike the republicans
have never really demonstrated

a party wide commitment to job class economic policies

where those policies clearly cut into corporate hegemony

their response to corporate attacks

has been

only meliorative economics

“if they want power, have to find a way to take away the tea baggers and Lou Dobbs (nee Reagan) Democrats.”

i agree about the target
the white kulacks

mission split away those among the baggers and nativists
that are primarily reacting

to their job and status insecurity

but might be converted by a party program

that in fact produced job security or at least

created a land of job plenty and wage growth

it is prcecisely that need to “hold the nose”
or at least preach up lift …that thwarts em

not telling u anything mr w

as you know
the progressives of old were

largely repubs

until say 1910-1914

when

certain pragmatic dems blossomed forth

as prog baiters st woody as numero uno

the pwogs began to find a second home
unlike the crushing blows delivered to the populists

by first a smothering co optation

combined in tandem and subsequently

with a vicious inside politics type

sharp elbowing

then of course thanx to the new deal synthesis
the pwogs en masse became dems

henry wallace is iconic

one thinks of the republican liberals
of the kold war era as a second blooming of gop progressivism

this time openly corporate and internationalist

long since traded away

for the far more virile and solid

dixiecrat trans-migrants

lots of moving parts eh ???

we may be entering another time of great movement

Posted by pinky at 07:22 PM

so if it costs it costs
or are you in favor of the present systtem cause you free ride some

or is it that others will free ride some off you in the new system ??

cost control of the system has not even been addressed here
this is phase one

get everyone possible directly paying in or thru the state

its called increasing the premium pools

greater participation will mean increased total sector revenue
how much ??

and how much more quantity of services and how much change of prices

well be sure we're headed for serious

cost containment measures

they are unavoidable no matter which path we take

the system is over priced now and getting more so spontaneously
so this plan not only transfers costs but increaes total sector revenue

over the existing system

in ten years the difference will have shrunk to insignifigance

now if this is deficit permahawk hysteria
what can i say

that's just a phoney rationalized alibi
like i'm not anti immigrant i'm pro american

“unless the government suddenly becomes more competent and less political than it has been for the last 7 or 8 decades”

kool aide levels are dangerously high here rusty

the national plans that work better then our's
ARE socialized plans

no need trying to hide this under

a cloak of banality about the comparative performance

in abstracto

between corporate administraion thru markets and state administration thru tax and transfer

that's a badger game at best

and the facts here are overwhelmimg

if you are prepared to stick with a corporate solution for values beyond efficiency fine
but state em

libertarians make their stance plain
then try to find a purely voluntary

marketoidal solution

that in the event usually fails

to convince most folks eh ??

first off we need to make comparative prices and fees transparent

the ability to publicly address costs requires a full discolsure of the present system
i suspect even u would be amazed at the blizzard of signifigantly different prices paid for identical services in the present system's

utterly by design opacity

cost control must come thru a state sunshine system
all payers that are ” exchange members”

must become glass houses

all health care outfits open book operations

the anesthetic effect produced on the citizenry
must end

the IV infusing nothing but ignorance

must be removed

Reply Oct 30, 2009 at 08:38 AM

paine said in reply to paine…
the uwe rheinhardt solution:

a one price for everyone system
like most nations now have

ie public pricing

uniform for all

in our case given
the hugeness of the nation

and diversity of our local cost structures

we'd need region by region

adiministered health prices like canada

ultimately of course
i'd prefer a mark up cap and trade system

but public admin pricing seems like
a fine expedient for now

the day of implementing
fancy mechanism designs

will come but only later

———-

candidly you over egged the cake pal

by jumping in with non monetary costing
i agree looking at premature death and wider suffering

any reduction comes at a worthwhile price

the cost becomes just a bundle of ugly detail

but
the monetary cost will indeed be more

even after the shifting and adjusting

and repricing settles down

all this injected outside money will not be off set by reduuctions in flows from other existing sources

by how much ??

ask the wonks

but the net will still be signifigant
even if considerably less then

the wrong heaed exercise

of simply adding up

uncle sam's new injections

never sure how many folks understand how
much of the present system's “free care”

is just cost shifted care

and how a universal transparent

public price administration

could enforce

a reshift to elimimate

no longer necessary “over charge “compensations

to other users and payers of the system

Posted by pinky at 07:13 PM

anne the cruel fact of the fist two terms of prez R
he could only bring the economy to a full boil by turning the production system into an arsenal

the wp was a substitute for keynesian deficits
the new deal (term one)

took the job market from hell to the purgatory

where ours will get to next year

and then faultered in term two and fell back

then in something much more like keynesianism

pulled it back by 39 to where it had been

at the end of term one

ahh but cometh war in europe and asia
and FDR could put aside goo-goo-nomics

and build the productive system

needed to pour out weapons of war

why ??

well my guess the system recovered in peace time about as far as saving it required and then ..
well much like today

we waver and shuffle forward

maybe even coquette with a second recession

cynthia i think your on to the gestalt here

in 37 a cross aisle double cross essentially stymied

the new deal

okay the bastards allowed policy to pull us out of the second recesion dive of 37-38

and i suspect FDR may have figured out around then

the new macro of keynes a bit more clearly

Posted by pinky at 07:06 PM

if all debt holding was “socialized”
the adjustments between payment streams

and income streams could be made effortlessly

no need to time stamp money if no private creditors
only fee paid originators

subject to credit limits formulas regulations

escrows and claw backs

thanx spence and anne
it gives a bench mark

we were not at war….yet

but with those rates we could get back below 5%

kinda swiftly eh ???

like under 6 quarters maybe

we just
replicate those uncle sam deficits

why don't we ??

by declaring war on pollution

energy dependence and homelessness

crash programs are not ordained

by god to be wasted building weapons of war

note in particular

the climbing job rate

in 40 51 66

all phoney war

type

guns and butter years

why nothing like that since ??

the johnson and truman booms
both certainly had better spontaneous drivers

housing and corporate investment etc

but not 40 that uncle did pretty much all by himself

okay arms were sold overseas

but that required an uncle effort much like green tech exports will require

if we try vickrey type warp speed

these numbers matter

1941 (11.2)
1942 (18.3)

1943 (11.3)

imagine that eh !!!!!

implement
a corporate sector

gross margin cap and trade system ??

we'd definitely
want to start talkng educating and planning for it

form :

a second NIRA

the GIRA
the green industrial recovery administration

slogan
this time we know how to do it …right

…
to me the raw employment rate 14-70

—maybe slightly modified by total hours rate —

is the only useful gauge of job market performance

the job pop /total non institutionalized pop

in that age range

with take one take all
do gooders' wpa

for various flavors of conscientious

“exploitation” objectors

our system oughta be about
maximum mobilization plain and simple

i share sandy's
desire to increase

the non job share of total waking adult time

so regular job week hours need to restart

their interupted secular decline

till we approach the gates of eden
everyone oughta contribute that can

i'd recommend a idlers tax
to torment petty rentiers like myself

—between 25-65—-

(three more years and i'm safe )

i'd also like to reduce those poor innocent souls
forcibly institutionalized

in schools for body detention

and brain taming

of one vicious variety or other

better a mcjob then a mcschool

larry

do you doubt we can macro up to 4% unemployment in a year or so ??

why ??

stop pretending there's some technical barrier to full fast recovery
other than preference by the ptb policy queens

nothing prevents us not the reywaning of our trade gap

not stagnating investment in structures or equipment by our pri=prof outfits

not state and local gub squeeze

not household diffidence job scare and credit straps

certainly not a burst of uncontroled inflation

inflation ??
an outcome

“devoutly to be wished”

you have to call the present path what it is

a very well understood path maintained
by folks like summers and bernanke

because their “sponsors ” want just such

a job stag petty credit crunched limping “consumer” recovery

btw
folks round here of suggested

an sba lending blitz many times

Posted by pinky at 07:05 PM

“I also hope that we don't forget about labor markets which are likely to lag far behind the recovery for output”

screw job markets that's just people
the product markets are comin' back baby

and the asset markets already have

its time to pay for our play:

i say we start taxing the uber rich now
to close that deficit gap

slap a ten year surtax of 50%

on unearned income over a million

and over 5 million of “earned”

pop off the SSI cap while neutralizing its effect on
the 200k and less crowd by rebates equal to

the delta for those falling under obama's tax increase exemption ceiling

ie the above cap below 200k range

ie 5.3 % of earned income between cap and 200k

with a gobble back for those thru a higher rate on payroll income above 200k to recover the lost revenue for the exemption window

—————

robot production:


thought experiment

what is the exchange value
of any product of a fully automated

limitlessly expandable production system

once it's reach all round social satiety

ie where the return on

the next unit of any unit of commodity production

is exactly zero

like air

ole frank ramsey is more use here
then kurzwell

to him the real rate of interest

a dynamic rationer

has served its purpose

and

a purely dynamic phenomenon

a definite historic interval

is over

btw as you know
marx dealt with the production of commodities

by means of commodities

not the production

of arts and inventions

ala kurzwell

by implication
you postulate a completely post commodity

exchange system

where exchange value

exists only at the innovative

product/process frontier

ie all economic exploitation of man by man

will have ceased

and

the geist of marx at that point

will gladly retire to his elysian cell

to sleep comfortably

till earth's day of doom

——-

one off creations…??

what is the scarce factor
needing a price ration

who
this is whodoo economics

“I simply postulate…income distribution becomes problematic.”

exactly

if this has any
relationship worth noticing

with today's market economy

or even next centuries

please point it out

sky hooked analogizing
like the above operates

at about the level of

thomian angelic economy

Posted by pinky at 06:57 PM

hal 9000
“The distributable surplus-product is the total product minus that portion that is consumed in the course of its production”

fair enough ricardo sraffa useage

but still
one might want to use net product here

not surplus product eh??

ie value of wages plus surplus equals
value of net product

why be unconventional when it isn't necessary

“rents do not exist, except that they are engaged by some system of production”

maybe hard to get arms around this phrase

indeed actual rent flows
are a result of

the wilderian institutional specifics

of a production for exchange type system

not simply the givens of mother nature

but the givens of mother clio as well

i also don't really
follow your sraffian excursus

where relative prices including “the price”
of simple labor power

run afoul aggregate product price “levels “

presumably uniquely measured with the synthetic system specific standard commodity

why however get into this side duel ???

seems gordon's point is simple enough
use a common deflator to make a comparison

in general i find these number wars
of little import

if ones marching orders are
wage rate max

job rate max

one only needs to know which macro buttons to push eh ??

Reply Oct 29, 2009 at 09:49 AM

paine said in reply to john c. halasz…
one needs also to make something simple clear

gross product to net product ratios change too

specifically i believe
there has been

an increase over the past 30 years

in the notional depreciation rate

of non labor

productive factors

which changes the gross /net ratio

without necessarily changing
the ratio of the value of the stock

of non labor productive factors

to

the value of gross output

shades of bugginess creep near

bugz

too too much frantic chatter
hit your marks

site gordy
excise a few summary passages

then

put down your conclusions

and announce your policy Rxs

this is like blowing goose feathers
to seperate em

into successive bins

buggy

what's your fuckin point

alls well in the job markets
so pipe down …or what ???

let's focus on how to increase hourly rates

increases the employment rate

and lower the weekly hours rate

by using macro levels

after all the reality is what ever it is

why are we side liners debating the measurings
to determine our course of action ???

its clear to me the gordo numbers change my cpouse not a bit

i guess it's like
the starvation rate in eastern kentucy

if its high

pwogr croak for relief

if it's low they'll stfu

so idealogues of the board room persuasion

frig the numbers one way

and the poverty pims frig em the other

i ask again what's your point ??

or don't you have a point

beyond showing off

a pedants dull wares

is your point
keep the collective shirt on jobsters

yes its basically raining on your parade
and has been for 30 years or so

but mostly a drizzle

and never was it or is it now

torrential

never a biblical down pour

never

a noah's flood for job nation

nope no one err that much more then before
is drowning

so relax you hysterical oafs
the sun will come out… someday

all by itself

btw i adore
your absurd mock homeric

credential check at the outset

of this

silly high hat smug

final display of tail feathers

imagine
proof by vouching

the gordy paper authorities

shit it only underlines
what a craggy scholiastic

batch of foolery

u've whipped up here

Posted by pinky at 06:51 PM

market populism
what a vision:

dissolve both the rentiers and the wage class into one big rambuncious multitude and deploy us out
onto a level commercial playing field

where

we all go into business…for our selves

err with a shrewdly incentivizing

skill building

tax and transfer system

that hones us to marketable perfection

and maintains a robust safety net

to catches us when we fail

and fling us back into the market arena

refreshed retooled and roarin for more transaction

Posted by pinky at 06:49 PM

caught between the demands of the high dollar
boys and the defict perma hawks on one side

and the 'more jobs now 'masses on the other

so far

ob's has tilted toward ..wall street and port street

not main street or maple street

of course with a few overplayed gestures

toward back street

i agree the evidence for any specific output capacity number

much like the nairu

is an implication of an implication

and obviously

most easy to manipulate

of course the output gap scepticism

has one set of boosters

and the nairu another eh ??

never the twain shall meet
and agree

i for one consider the nairu
a dismal fraud

like big foot

a hoaks set loose in this case

not to titilate the child in us

but to cow

all us credulous hoi polloi into

suffering quietly

policy induced protracted job market stagnations

i suspect you on the other hand
may grump about the gap calc

because you want it to effectively

“not exist”

putting us on the verge of explosive inflation

so uncle can pre emptively clamp down on the

fiscal deficit and the papered over big BOP hole

if i were you ii'd switch to nairu
its easier to defend and if carefully redesigned

to take in the latest most up to date modeling

NAIRU has the superior virtue

” to apply ” even as chronic gaps yawn wider

and domestic wage depressing

imports and migrations

dance up a storm

“How long can the USG spend the money that it needs to borrow “

indefinitely

“.. what would happen when the stimulus, no matter how big, is cut off? “

why cut it off we get feed back on firm investment exports etc
watch em to see how their expanding

if not fast enough then keep up the fiscal stim

if this job gap of ours
isn't closed its only because

the PTB choose not to close it

Elections are coming

so vote republican rusty ??

why not just cut your feet off
it's quicker its under your own control

it looks more decisive

and hey its personal

we don't need to inflict more suffering on ourselves along with you

or are you thinking of voting green ???
“through the clinton years ”

anne found herself

transported bit by bit

in silver cups

to rock candy mountain

then came Bush….

growl snarl gurrr

anneeee and the wolf
“.. there is really no such thing as insuring financial assets. It's circular, using financial assets to insure financial assets”

when the moment of panic comes
the system in toto gets “called”

enter uncle ouroboros or else….

AIG in effect was like thor
trying to lift

the serpent ocean

“Only the government, as risk-bearer of last resort, can provide such “insurance”
because of its limitless self produced credit line the unmoved mover

systemic insurance and final market maker and lender are indentical in the end
like the unifying point for electro weak and qcd

a fundemental crisis to the system itself
requires

an on behalf of the whole people action

a /public/state action

the final principal as own agent

must step up to the plate

the state in such moments really is

god standing in the middle

of the financial marketplace

Posted by pinky at 06:37 PM

$37 billion ..$55 billion ???
peanuts

arms in fact are nothing but a peanuts trade sector

out of global trade of $ 10 trillion

our trade gap was what 700-750 billion last year
400- 500 this year

get out your numbers girl

jokes are only cut sharply
when they gouge out the bulls eye

“the protests of many leading businessmen of the day, who were increasingly internationalist in outlook'

eagles of global hegemony
summers stateless elites

in essence in peace time
men with out countries

but each with a bundle too rapacious ever to be filled

only wars and pending wars get
these lubbers to chooose sides

patriotism is elastic

Reply Oct 25, 2009 at 11:38 AM

paine said…
bruce as you know well

repubs as the protectionism party
goes back to the origins in the 1850's

ecce
their industrial wing

inherited out of the whig fissioning

of itself into thin air

the american party never got its act together on this front

nativism was to in love with its one sexy issue

the ripponians had a more robust agenda nice display of 90's if not 50's politics

McK hideous double crushing
of suuny mr bryan's people's crusade

always reminds me of one of my bete noirs

midget snot h adams
who mockingly slurs the 90's populists

much as he slurs the 30's jacksonians

powered by precisely the mix of merit class generated motives

that gave us in the next decade

his naked genteel hyper vigorous opposites

the bumptuous bloody minded myopic teddy R
and

that embodiment of latent merit class brutality

the flying wedge

Posted by pinky at 05:41 PM

looking for macro policy tips
among the trade rubble

of the thirties

is a hazardous business

what isn't made clear by the reporter :

the devals obviously created trade drops too
in the context of quotas and tariffs and capital controls

only the keynes path ie rapid increase
in gub borrow transfer and spend programs

was good for international trade

but even the combo of deval and fiscal thrust

is a full balanced result win win

only if de/reval adjustments are co ordinated globally

but how do you get all nations play by the same “correct” rules when cheating is a gainer ???

expulsion

yikes

as with the various de facto pegs today
lots of state players don't play it win win

do they

so how can we use forex adjustmentsin a globally beneficial manner ??

given that the earths stateless corporate elites thrive on this chronic forex tilt
built on the systemic asymmetry

that players can always force

down a rival currency

but not up

cause ulitmo
in a system of pure credit money

no golden harness exists on local money creation

the currency chips in the stack of one's own currency
are unlimited

question if you have a peg that oughta pop and send your currency soaring and your creating hot money to forestall the soar
how do you then thwart

an acceleration of

domestic product and wage inflation ???

sterilization
freeze the hot money

trap and quarantine the hot money inside

the depository system

sustainable ??

for years folks consoled themselves sterilization ultimately must burst
but ultimate time is quite a bit too long

as germany japan and now china have shown

one can of course expand ones production capacity and given the point of low ball forex

rapid export expansion

that's a virtuous cycle

so long as you aren't border blocked ..

by tariffs and quotas

one of course can also of course
create un manageable pseudo price bubbles in domestic asset markets

ie if the hot money isn't frozen

force it to flow into certain immobile asset markets

like land

or issues by domestically controled outfits

of paper like equities and bonds

the best outfit being of course the state itself

and its agencies

of course all these moves have repurcussions
feed backs

that must also be managed

take nominal interest rates or price earnings

or purchase price to rental flow etc etc

and of course

out flow

that is job one
capital controls on ciurrency outflow

keep the hot money domestic

whatever and i've barely scratched the what evers
china proves r the game can still be played and won

seemingly for decades

and if you're big enough in that time frame

you can plow over

a lot of foreign industrial sectors

Is it a forex peg to the dollar

yes

and to cripple macro choices thru monetary policy
further

PTB want a dollar for capital export/product import purposes

w and its in their interests

to thus have the dollar and other affiliated north currencies as a group

remain north /south “strong

the world is full of rims and i might add rim jobs

indeed the ost-market policy
has induced so much diddling

and dandling of the loco currencies

forex makes go west young migrant incentives …”over rich”
corrected for approval:

“(devaluing) ….a currency is ..
a more efficent way of practicing protectionism”

euro vs dollar adjustments happen constantly
and i doubt the tariff wto equivalents

will rise in the EU against the US

..if they even rise at all

ps
drop debase please

you sound like a talking
brass statue

like that equestrian statue of andy jackson

in new orleans

i know andy jackson
i believe in the spirit of andy jackson

and i doubt you're

policy quiver has many other arrows in it

like andy jackson's amazingly

sharp tipped shafts

honest money has a different meaning today

devotion to a hard commodity money
even then was nothing but one of two

paths

both of which were little more

then fronteer barbarisms

Posted by pinky at 05:39 PM

richard milhouse nixon


let us all now praise this gruesome titan of boob tude statesmanship 



http://www.historyplace.com/speeches/speechgfx/nixon-8-8-74.jpg

though he'd rather fence with red giants like Mao and helen gahagan douglas  and he'd readily admit he found ordinary market place economics “boring as hell”  never the less that was one POLTUS who could strike and strike decisively when a consummate opportunity for a moment of “crisis ” arose


say what you will ..the man had balls and when it fitted into his “agenda “

5 o'clock shadow Dick could take bold measures and swallow bold risks ….



lets travel back to the “nixon shock” of august of '71…



the nambo - war pumped domestic economy after years of flabby macro steerage faced a perilous cross roads …

a “too mild ” fed induced recession back in ' 69 had turned itself spontaneously into a nasty grossly imbalanced recovery… trade and payment gaps yawned wide… everyone who knew anything knew a frightful return to dismal policy choices lay ahead 



in fact this coming cataract was but the latest and by far the worst installment of a 16 year long drama

that stretched back past the very early days of the kennedy camelot  to the era of grey feelings aka the ike 50's

and it was a drama that had become  ever more pseudo climactic in moments of high uncertainty

and of course needless to say a very public mortification for THE Metropole of all earthly freedoms



at its heart the crisis had one big shameful horror ….uncle samson's de facto imperial currency 

couldn't play financial atlas anymore …see it was pretty obvious Uncle couldn't continue to be

the lynch pin of global commerce and investment undr bretton woods rules at any rate

ie uncle couldn't sustain by brute force alone the  golden post war handshake

between 35  dollars america and a troy ounce of gold



now yes the wobbling under the load at least at first in the last years of ike had seemed only a matter for “future concern “

but by 71 america's gold reserve ratio had long since become a bitter clownish joke…. and to all parties inside and outside

it was clear ” something's gotta give here”

so we come to august 71 and dick's moment of decider choice : 
obviuosly he could play it safe and once more like his predecessors pull the same old same old stunt

—but of course it would need to be “more so 'and thus “worse that's for sure”

what ??

well induce another recession or better yet a protracted stagnation and let the rest of the trading world

use america's time in the brake down lane to  catch up  ie close the trade gap**

OR ….OR

Nixon “ahh ..could be brazen ” yes brazen take the devil's option suddenly and preferably without warning

announce “ahh there's gonna be a change to the rules gang”( yes the great money game itself !!!)



uncle' indeed if a man with heavy stones could unilaterally bust up the post war system

perfidiuosly cut the dollar loose from its golden harness close the gold window and there by welch on its auric promises

and by doing so  trigger first and foremost  a gold soar against all currencies ane a concomitant earth wide inflation surge of biblical proportions

including of course ultimately both a dollar devaluation against our trading partners' money
and a wave of domestic asset price convulsions  able to leap tall buildings in a single bound 

but dick had more in mind then just doing the bold thing here .
dick wanted to get re elected after all so in addition he brashly defied

“ahh ..all those  blue suit republican verities …ahh … fuck em “

nope he'd go pinko if it was necessary…and it was

so

bango !!

simultaneously with slaming the gold window shut He clamped on a wage and price freeze and slapped an emergency import surcharge of 10% on all imports



“ahh not even harold wilson dared pull moves this big ..bob …ahh yes ahh i guess we're ALL keynesian pixies now “



and did the great satan of loma linda  bother to consult the congress or uncle's major trade partners or the IMF ??…

hell no madame he did not

wall street ?? prolly a rockefeller or two but that's another story



god bless him prez nosferatu jr

simply and quickly got his program ready and acted… decisively radically massively

and in prime time on the idiot box

using that hoaky punch bowl mix of pre emptive petty spite and doomsday gravitas

that had a tang brothers and sisters when drunk live that has seen no equal since ….



—i recall rolling on the floor of the tele-communications center of the  marborough street soviet ….. in ecstatic delight—-



let me brake of here and conclude with a question …



why can't obama be our nixon 

***how to stag??
well prolly by a vicious fed chop to credit flows sending the real rate of interest thru the roof … yup the old tried and true eisenhower /martin turkey rope way 

Posted by pinky at 04:16 PM

hasz bruce cm solid stuff
better then krug

who's so far behind on this he's breathing hard

trying to play catch up

my favorite passage:

“The biggest victims, by the way, are probably workers in other poor countries. In normal times, I’d be among the first to reject claims that China is stealing other peoples’ jobs, but right now it’s the simple truth. “

“The biggest victims, by the way, are probably workers in other poor countries….”

the great cosmopolite

“In normal times, I’d be among the first to reject claims that China is stealing other peoples’ jobs, but right now it’s the simple truth”

in other words if unemployment weren't so high
i'd say

shit the amerikan wage class can afford to take a hit

to provide progress to long toiling asia

and hyper profits

to trans nat corporate elites

what an either or ??

when the reconfiguation of the global system

with free technical transfer open migration and trade balancing forex would be better for toilers EVERYWHERE

but hey it would be worse for trans nats
in fact they might …have to earn slim profits

and only on… innovation not arbitrage

sure

i want what made us great

the lady liberty policy

listen i'm not a nativist in any way shape or form
i'm as much a one worlder as anne

but

i want the global job class to get the shake it deserves on it's markets
since the GJC produces everything

(nature and our ancestors

didn't provide ) on our goods and services markets

i thinkk the “unmodeled”
trans nat corporations

the great barers of organization and

horders of know how

the masters of both credit and markets

need to face a job force that ccan move

as fast as their “real investment patterns

nativist fears have two sources

one:
grotesquely brutal macro policy

that gives them periodic artificial policy induced job famines

two:
fear of competition

the first is obviously unconditionally horrible

but

the second one needs analysis

into

fair or unfair ??

forex fiddles ?? unfair

working harder longer better ??
fair

talent ??

maybe unfair but our fate if so

the problem ??
if after ppp adjustments

the migrants can still build their skills cheaper over there ??

it's unfair

but we have to figure out how to rectify that fact

by public policy

not barriers

if by capital you mean machines yes
if by capital you mean funds particularly credit funds…. basically no

“What if the inequality in mobility of capital compared to workers is inherent”

then slow capital flow down
or ban it at least

the hot money portfolio

even the sincere anne rentier investor type

its all nasty rent suck arbitrage

“What can you salvage of your dream in a world where citizens refuse open borders”

i'm talking about only the us
america returning to its root values

lady liberty

other nations must determine

their border conditions in and out

by and for themselves

without marine and cruise missle help

“sell only …a new 50 year, zero coupon bond “

they'd be liquid any way
rising and falling

like everything else

“How about wildly increasing short term interest rates, which is what limiting the sales of short term Treasuries would immediately amount to”

are u sure
the increase in the liquidity premium would be that great ??

“no particular long term effect trade effect that I can tell “
totally wrong miss leading

and ridiculous

anne and you know it

long term means as long as the policy was in place

not if it was reversed

no natturally process led to the return of the strong dollar

so long as it was in place

the weak dollar caused a major slow down in american manufacturing job loss and even trade gap effects

part of the clinton miracle you crow about

somewhere back then
krugman wrote about the revival of manufacturing

even as rubin's strong dollar policy was setting the stage for the second de industrialization wave

the yuan was pegged to the ddollar at a savagely under weight rate
that riding the up down waves barely effected

though indeed ubncle rectified against mark and yen

not so the yuan

even as the industrial rebound was gathering steam

the killer forex was being wheeled into place

anne
this is beneath you

Reply Oct 23, 2009 at 05:24 PM

paine said in reply to paine…
“the weakening resulted in all sorts of international economic disruptions that would lead in time to a relative strengthening of dollar”

my typos get worse
the more my appetite for debate increases

let me be clearer anne:

nothing about plaza or the disruptions

plaza entrained

required a return to a strong dollar

and least of all strong vis a vis china

and the gaggle of other emerging market currencies tied by competitive necessity

to the rmb fiddle

one has to seperate the struggle of north currencies against each other

and the tilt between north currencies and south

note the barry E post below

Reply Oct 23, 2009 at 05:35 PM

paine said in reply to paine…
“for the dollar to depreciate further, it will have to depreciate against the currencies of China and other emerging markets. Their intervention in recent weeks shows a reluctance to let this happen”

barry e

qed

Reply Oct 23, 2009 at 05:36 PM

paine said in reply to paine…
“the Japanese bubble economy has been considered by several Asian economists to have been driven by the strengthening of the Yen against the dollar from 1985, and Chinese economists are well aware of the problems Japan experienced after 1985.”

very true

one hopes the chinese leadership doesn't plan to hide behind that weak batch of reeds

the japanese were as foolish as wall street
in that period

land prices were fantastically absurd
and p/e 's almost as bad

the chinese are showing signs of similar
“fools gold rush ” fever

btw
i think bruce might be wrong about a major han recession

that economy in fact this past year performed a macro action worthy of the greatest any westerner has done in 250 years

even better then the younger pitt
anne

you are absolutely right

we could have 5 % unemployment now if the proper macro policy had been followed since december 07

the point about rebuilding our industrial base has to do with types of jobs wage rates
green production lots of stuff

we should have a trade in balance and fair comeptition one not necessarily the result of the other

but both requiring a ppp forex system

the fact china must give
our trans nat corporations huge profits

thru a phoney exchange rate

to induce technical transfer

and open american markets

is a disgrace

u knoow i point the finger at out multi national corporations

not the chinese people or their amazing self development these past 60 years

at the point where MP in agriculture begins to rise

the CB can simply allow yuan prices there to rise

faster then dollar prices here on trade goods

this will happen sponraneously if not controled

by removing yuan from the system as the CB does now

this financial over lay may obscure the underlying point

that selling products at a 50% discount may be dynamically beneficial

where tech transfer and learner within an economy

are governed by the expansion rate

and confined to the export sectors of the developing production system

Reply Oct 24, 2009 at 04:45 AM

paine said in reply to Norman…
sorry i missed your question

the “cost” is in even lower pricing of exports

and higher pricing of imports

but the technical progress each “sale” manifests and facilitates is worth it

why ?

because the marginal cost of the engaged and embodied labor is zero in a system

with a lewis sector

a traditional sector with surplus labor

ie

a sector that can produce as much with less labor

china prolly has 300 million of these souls left to transfer

even summers some where covers this

the locus classicus

is a paper by three hacks actually

but many cover it

say one guesses to be cautious

the mp of a peasant paddy job

is 300 dollars a year (ppp 600 )

—not zero —

and an export job mg is 3000 (ppp 6000)

so the forex fiddle is like a 50% off sale

to foreign markets but worth the labor transfer

“One of the reasons workers don't like free trade is because they see it as procedurally unfair. Why should workers living in democratic countries who have the right to assembly, protection under the law, and the ability to negotiate a decent wage be forced into competition with those workers in countries who don't.”

good point
if it's valid ..one could quantify it

convert it into cost reduction per hour of toil

and

add in a production process oppression/coercion premium

to the ppp fair trade tariff equalizer

like a pollution diffrential gets added

as to migration
like trade the net flow of labor will be one way

from china to here

in fact more like single products the trade in each might be totally one way

and for most labor skill products te flow will be this way

note inflows of labor will reduce

inflows of other corporate controled products eh ??

Reply Oct 24, 2009 at 06:44 AM

paine said…
if freedom is so precious to you why not be generous and open the gates

i recall deng offered us 60 million migrants

Reply Oct 24, 2009 at 06:46 AM

paine said…
wjd123

i must admit i can only stand so much red white and blue crowing

you must be very lucky

or not of minority background

now you're reaching for effect

i suspect you personal liberty and privileges
are safe

oddly strident under tone

i hope you aren't the sort of arm chair fredom fighter
that backed the iraqathon

as an escapade in”national liberation

so the fact rebuilding our production platform on an automated green basis would take to long ???

i sense a great deal of ill tutored exasperation
in your passages

they end up a mass of fragmented trains of thought

perhaps you ought to choose a set of objectives

before rumbling around in the policy choice area

a policy regime requires a target vision
what's yours

mine is simple our production platform
providing us the ability to earn our way

in the global market place for products

the over lay of financial markets
the underlying movements of labor

and technology gain focus with this object foremost in mind

ours is a civic nation not and ethnic nation

its optimal share of global population??

20% if our consumption share is 20%

on that basis we ought to have a population size like china
either that or decline to 10% share and expect to settle at 600 million residents

obviously any green industrial project

requires a very long view industrial policy

but one of its foundations is obviously

a rectification of the forex distortions

fair trade forex algorithms are not too difficult to design any of your righteous objections can be incorporated

if i've not addressed your points
which have i missed??

“Most excess capacity in the production of durable goods is in China and not the United States.”

true but its the new green production capacity we could build to replace imports
i'm interested in so its a virtue

” … we have neither excess capacity nor plants on the ground”

” just how is this transition to take place?

Just how many jobs can a weaker dollar reclaim from a country with excess labor, excess capacity, and excess ability to subsidize manufactures to stay put.”

there is no limit to the correction of the dollar /yuan exchage ratio

at some rate or pathway of rates
our ability to manitain a viable green production platform able to pay our way in the world

is feasible

and along with our ag and resource sectors

if we build the right instutions and proceedures

that ae inthe end converted into an automatic self regulating concationation of algorithms

we're clear sailing

btw
are if you impatient to restore

domestic employment

or generate higher domestic wages

before we close the trade gap

then as anne god bless her

never tires in telling us

hyper employment and rising real wages
is a macro policy target

reached with the necessary level of federal deficit spending and transfering

i suggest you consult the last papers of the late william vickrey

i repeat the forex rectification is a key part
of any long run objective to restore fair competition and balanced product trade

one might add sustainable
and self sufficient energy production

for north america as a sub goal

free migration of labor is hardly open trade

you are really too excited here
i must say

i share your apparent admiration of the brain of dani R

but reacting like a know nothing because you have a gut fear..

come on

run thru the process

what are you afraid of

a cultural submersion of your ethnic values or your civic values if the civic one
show me how job immigrants subvert our democracy

they can't even vote

Reply Oct 24, 2009 at 09:09 AM

paine said…
“the EU has the right ideal: you're not a democracy you can't belong,”

so what ?? membership in a common market

is one thing

standards for extra community trade another

the euro zone the core of the eu
has an even more overvalued currency

and is crunching its industrial base also

do u feel your not being understood ??

u want to throw non democratic states out of the international market at least the one the US is part of
not for fair competition alone*

but to impell the spread of democracy

as the eu membership lure may have impelled spain greece portugal slovakia slovenia croatis latvia etc etc and some day turkey to morph from dictatorshipprone states

to solid multi party democracies

reason:
the system of ddemocracy can not long co exist with dictatorships strengthened by trade with the ddemocracies

its a chestnut as old as the kold war… at least

u also want to preclude migration for the same reason

* because of course that can be effected by targeted border charges restrictions and adjustments

Reply Oct 24, 2009 at 10:42 AM

paine said in reply to paine…
your concern is silly to me

obviously the open democratic system wins these contests

look at the record

i recall a similar pat mynihan reacctionary social democrat line

that saw democracy endangered by the hordes of non democratic states

bullying us in the UN

utter nonsense

12 years later the “socialist camp” collapsed

hey

i get the features of the eu

but migration should be open to all

here in the us of a

now to make it orderly and legal

u start with an amnesty

and a quota system that is co ordinated

thru the set of macro policy instruments

with the programed job absorption rate

of the system

housing ??

obviously yes also

and the rest of the infrastructure
for a densely urban system of initial settlement

etc etc

ramp up to this lady liberty paradigm ??
of course

the vision is a goal

like the vision in say 1951

for your beloved EU

favor the eu formation ??
on balance yes

but the eu is not a united states of europe in the sense we are a united states of north america

but that's a legacy not an advocacy

i agreed with the french no
on that neoliberal giscardist community constitution or whatever they call

that paper cyclops

..and of course speaking of cyclops
how about this one

and its got boots on the ground already as you say

that absurdly destructive procrustean bed
the euro central bank

oh

and the spreading teutonic plague

…inflation phobia

and and

the silly deficit perma-hawking

and and and …

a serious critique would have to examine
the new centers ability to substitute

for the former policy flex

each nation retained

with internal independent credit and forex policies

Posted by pinky at 04:26 AM

task rapidly raise effective demand without setting off
an import explosion

answer emergency trade measures
globally waving the tariff rules

to allow temporary ppp tariffs

leading to a targeted norte amigo-westeuropa forex rates

group adjustment

vis a vis

gulf oilers latin amigo

south asian and pacific trading currencies

fast and nasty
beats

slow and miserable

but slow and miserable is prefered
by trans nat corporations

the north south tilt amps up the profits

mark i hope u'll suggest something potent
like the above

or at least a vickrey type deficit regime

that even if it blows out the amigo BOP

still might rapidly restore humane job levels

alas

mark i suspect prefers prudent measures

they read nicely and reflect nicely on their ganteel advocates

restore gubmint spending at all levels

add to the safety net with extended unemployment doling
more medicaid maybe slip the retireds

a nice SSI bonus etc etc

oh ya

plus a green electric grid

more parks and university buildings

the green-hoover pwa approach

admirable fair minded
but inadequate

and a non challenge
to the corporate controled system

that produced this dilemma

even the next step up move
a WPA 2.0

is only a system relief measure

not a structural reform

“overproduction crisis “

total victorian horse feathers

we can create jobs if uncle creates effective demand
what jobs ??

hey that's what markets are for
to translate demand into supply

give folks the money ..enough money and credit

and they'll spend it

and don't give me this can't borrow our way out causes borrowing brought us here crap
its absurdly ignorant

uncle is not like you borrowing

and plentiful jobs

and good wages can service generous credit loads

the top 10% that buy the better half of what's bought
are the only one's in a position to “save more”

the rest of us or most of the rest of us are either day to day sea gulls
or sicko silas marners

“It'd be nice to see an inclusion of the effect of illegals”

see or isolate ???

why ???

btw raise the peso seriously enough agin the buck
add flow in enough outside gringo credit

to the mexican production system

and watch the spontaneous reflux

“In the old days cyclical unemployment was dominated by heavy industry where the physical plant still existed and the typical steel or auto worker realistically expected to soon return to their old job'

the last of those was the ford recession of 74-75

and it was also the foirst of the manu-shrink recessions too

ie the recalls were
not so much..or not so perm

by the next convulsion
the carter reagan two hump

the post layoff binge

perma-contraction

that became the great industrial dismantling

was too obvious to avoid

since then its been

recession service econ style

a brisk output twister'followed by
a protracted job wring out

this edition numero trois
has megamash potential

Posted by pinky at 04:22 AM

whatever its level of realizability
more pointedly

this proposal is a pro corporate phoney

note the conflict
between this line ..not so really bad *

“Who could quibble with methods so long as China commits to reducing its current account surplus and succeeds in putting its economy on a trajectory…”

international balance is the objective
the macro poloci means to achieve that balance

is not ” the imf's problem”

but before this line
the bum gives away the real intent

by violating his rule

“… government budget deficits and current account balances (deficits or surpluses) should be kept below ..”

note “government budget deficits”
bingo bull shit …why add in that ??

hey if we're going to prescribe ratios
for trade drivers —which indeed

budget deficits can be—

ie quibble about means

not benchmark results

why not ratio ” actual to trade balancing forex ” too ??

the noble line
'no quibbling about means'

when ends are all that ought to be our business

means nothing

the real line is

no proscribing forex fiddles

only deficit financed fiscal budgeteering

get the bias ???
by now i hope so

the rat reveals the bias in its heart
because it's cheese comes from the dark tower types

* i suggest any algorithm of reward and punishment

should be set with quarterly milestones

and based on a certain range

of closing speeds not some date final regardless of path

this should not be a work out team operation
but a cybernetic process uniformly applied

also though i'd take this as a partial reform
however

after all these comment cages have roared about the unfair fiddles

it is still obvious to us

even balanced trade can be unfair trade

if other then ppp guides forex dynamics

trade doesn't need to be extensive only balanced
so what if china restricts its imports

commodities like fuel ore fiber and feed

or are you suggesting we might be able to force them to pay us royalities ???

trade is never a source of friction if its fair and balanced
international finance with its cross border debts forex fiddles hot money etc

that's where the conflict originates

the notion we oughta prevent a china resource grab

has no economic signifigance in and of itself as far as i can see

unless you're part of a resource outfit competiting with them

which most americans…aren't

doc

balanced trade means each player has neither a surplus nor a deficit over the trading period

maybe each player has nothing but a deficit or a surplus with each other player but when the plus and minus of all bilateral trades by that player are added up the sum is zero

you're fear for the emerging nations is touching but miss placed

the source of their un-necessary misery
is in the controling web of financial relations

Posted by pinky at 04:13 AM

“he didn't say anything about the exchange rate”

awefully smmall notice that

fot god's sake

a non wall street persepective

would focus on rebalancing international trade

and concurrent BOPs

by exchange rates not odd patterns nation by nation homlies

on “belt tightening here and belt loosening there”

in particular norte amigo forex

vis a vis emerging asia

any one (like the nyt reporter here)
oughta give chief consideration

to why this is absent from gentle ben's sermon

the dollar prejectory is the key
deep south down

not fiscal deficit reductions here and increases there

that was the old fixed exchange rate policy of the 50-60's

vary rates of national real growth to adjust imbalances

a bad bet no better then gold standard
deflation bias really

so why practice this barbaric medicine ??

the imperial dollar must remain strong if not vis a vis the north hemi
at least against the south hemi

interestingly
in the era of fixed exchange japan and germany early on were “permitted ” undervalued ratios

i guess as part of the yankees reward

for triggering what amounted to

the war of american hegemonic succession

Reply Oct 19, 2009 at 12:10 PM

paine said…
to think

we must have job market doldrums

and underwater households

with disappearing card lines

because capital exporters and product importers

can play a forex fiddle

not for the starving coolies of china no

for the wall street bull vultures
and their

weasil like

limited liability

trans national hooligans

tighten your belt amigos

ohh and

send in the marines

“Hamilton at Econobrowser has ruled out an L, most of you must have read. Can we U without a W, or it is just V or W?

If we V then the trade imbalances of the past seem less ominous”

matt
you out due your self

how about a < even if its only ~ < not exactly a <

< ??

a split economy where from this point on
some go up and others keep going down

mark

you are saying more balance less shocks from imbalance

very insightful

why the imbalances grow and persist long enough to become capable of big shocks
is the real question

the answer

not ben's of course

tactics

rapid exchange rate adjustments

to produce rapid rebalancing of trade flows

identification of persistent price anomlies

and a strategic plan to drive prics

toward their intrinsic ppp ratios

a global policy to level prices
and move toward one universal set

of barter rations

short take
to reach and maintain trade balance

use relative prices

ie substitution effects

not realitive income growth

ie income effects

ben is acting as if the global economy
had no serious price level anomolies

of course he knows better

but since trade is not open

and is mediated overwhelmingly

by multinational outfits

that operate thru a system of open and shut doors for every product inside every boundary…

it gets complex

simple price discrimination by location

becomes childs play

tax arbitrage wage arbitrage

hey these borders exist to be used as fungible entitlements and effective barriers

the inter outfit game would leave

the world citizen types like anne agape

if even partly aware of the fixed nature of trade and finance

i often suggest the trans nat corporations waant to range freely
but among hedgerowed regions where anomlies can be exploited not removed

the common market
was progress but it was progress for two reasons

to allow american corporations in

and keep soviet corporations out

now it like a far smaller artifact of yankee empire

israel

of course has taken on

its own set of determinations

bake i agree
though the regulator ought to prevent bubbles not pop em

if they're allowed to reach pop able size

its already a regulatory failure

if we hear pops

some agent team

didn't do their job

i think the price of house lots and commercial lots oughta be strictly regulated

by algorithms

cooked up by imprisoned (for fraud )

shrewd financial engineers

you know wicked sharp mechanism nerds

with a taste for larceny

”..issues I have been railing about to no apparent effect for some time on this site”

ahh a voice crying in the wilderness

well you're still there
ben and paul are lip servicing and punch pulling here

the speech that paul mocks is in gibberish because ben plans to do absolutely nothing about it

the real headline as hapa points out

was “no big fiscal deficits for you

job slob”

why no brake thru
first off ben said all this in china

a way back

second

paul's making a very contextual argument for

encouraging the b of c to diversify its reserves

out of dollar denominated paper

to help the dollar against the euro and pound

not the rupee and peso

in other words paul is not on the same hunt as u don
his is a noble hunt but it ain't exploicitly yours

and i suspect he shares the dani rodrik

pro emerger bias

yes the trans nats play a game where pwogs can chooose but only a lesser evil
either north workers lose or south workers

no win win

because that would knock the trans nats out of the game

ask yourself this

is ben saying we need to promote china to the north side of the ledger ??
maybe so

its prolly about time

china is now where germany and japan were

trade share wise in the 70's

when we began to urge they correct their undervaluations

culminating in plaza

fine china welcome to the big league currency game

but are we talking a 20 year up trek
or 5 ??

recall the yen soared up in jerks and fits and faults
from the mid 70's to the mid 90's

a 20 year transit

and in particular touched off

a domestic asset bubble of catastrophic proportions doing so

and that's just the side show
even if china's currency rises

the problem with asia will just shift from china to maybe india don't matter really

just some where or group of somewheres

and the forex fiddle will go on

maybe ben and paul want the blokes to curb their enthusiasm for a spell
but the game as played

with dastardly cheating fiddles at the core

makes trans nats too rich

not to continue

the argument is this..i think

the flood of demand for safe securities
forced the riskless rate down to levels that made leverage games more tempting and

concurrently they more easily funded

given fed policy

fault??
simple regulators ie washington

a crime wave is the cops fault

Posted by pinky at 01:44 AM

the ourboros
a fine beast to study

if you happen to be a “rigorous”
market model builder

utterly bankrupt gibber by st paul here

first he suggests but for capital constraints
the “banks would be lending to green field plant euipment and structure projects

nonsense there's no effective demand

second he whines about the small business credit famine

does he really think that is NOT state dependent
ie the small firms wanting money are of serious default risk potential

again given the state of effective product demand

the focuse as he rightly suggests needs to be on
effective demand

i'm talking mucho federal add on stimulus here

in fact the bail paart deux the obama bail was itself a horrific waste
better triple the stimulus

and up the SBA loans

wanna nationalize something paul

try the visa mastercard and amex networks

inject uncle type e-zee credit directly into
the householders' magic card economy

i hate pundits that need to prove how right they've been all along
especially when they ….haven't

” place a punitive tax on excess reserves”

what if they loan it to traders and other paper shufflers in the hi fi superstructure ???

and why only the TBTFs ???

there comes a point where the process leads to
take over or rools all the way back to laissez allez

again vide sweden

when did you stop thinking
critically about banks

i bet it wasn't just yesterday

krug is not talking about viability
or at least he shouldn't be

he's talking about the credit drought

in the real economy

“household deleveraging “
oddly abstract rendering

of unconscionable misery

as u imply

“effective loan demand”

is “both and” gated

both
credit worthy

and

credit wanty

credit needy cuts zero ice
“it is still not too late for some version of mortgage cram down “

exactly

big picture
when it comes to balance sheet shuffles

why not have uncle nationalize the mortgage industry

uncle pull a forced buy in

of every mortgage in america

then

a )reduce the balance on each

by x amount

and if x exceeds what is owed

then b) send the household

a check for y%

of the difference over z years

if you rent

then c) the x amount can be drawn down

to pay rent over the next z years too

or if you buy converted to system b

etc etc

would this have distributional as well as absolute effects ??

will those effectts have real economy path effects ???

realpc

you're right on here

of course obama could have stopped the bail part deux

he could have declared a state of emergency instead
siezed the depository system

started direct real economy lending

commandeered the composite private

mortgage portfolio

declared a mortgage payment rebate

on the first x dollars owed each month

etc etc

but noooo
he had to play

save that banker

after all folks he's our brother
bankrupcy in an era of credit money is

not a useful term

outfits can be kept going indefinitely

on credit infusions

in fact long enough to recover 100%

given eventual restoration

of the general up surge of market demand

btw the reason banks have artificial credit shut offs
is simple

micro they can't cherry pick good enough

and in bad times the general blind lender odds stink
“I don't know why he imposes this limitation on “

morty is a developer by trade

the typical “successful” developer
is a credit shark

he eats and eats

builds and buys

till he's cut off

morty dreams of …no cut off

Reply Oct 19, 2009 at 06:47 AM

paine said in reply to gordon…
“..capitalising a Govt. bank”

what ?? why bother just start borrowing on uncle's credit line

the size of the line is what counts

sit back and watch
the giant crony-cap stampede

as the window opens

a small biz bank with say loan limits per borrower of 2 million
makes better sense

a zillion little fish

Reply Oct 19, 2009 at 06:51 AM i tend to agree
but bucko

the “people” are already on the hook

these TBTF outfits

have an ironclad uncle guarantee already

siezing the banks
wiping out the voluntary “private equi-teers”

and all debt holders

even up to “senior” debt holders

would perhaps teach a lesson

the problem is re privatizing
ala sweden

why bother

i note the re privatized

swedish beauties all got themselves in deep shit again this cycle

bruce

i hope in retrospect you're cursing billy clinkton

though i suspect generalizing the critique
to the party core itself

as in it's effectively

corporate amerika dominated

ala ralph N circa '00

might cause major reshufflings

in yee ole attic lumber room

team sport indeed

but the path to a team of the sort you crave ???

some chopped and channeled Democratic party ??

my vote is disruption
civil disruption

by the preterite class of the profligate class

realpc

this sounds like yankees vs red sox nonsense

stop being a fan
the duopoly is a shared scam

like our beloved MLB

” If anything, he's doing his damnedest to throw progressives under the bus”

there you transgress
he regrets this “necessity “

that is the essence of being the lesser evil

and maybe some honest pwogs can dine out on that difference

don't mitigate

if ob's had turned as boldly to the american people as reagan did in 81

he could have moved

mind set mountains in hours

or got shot in the process
or

if as lucky as reagan…both

the fact no real economy net credit is flowing into the producytion system

then any net flow has to be churning

ie trading paper creating paper gains and

paper rewards

a credit tornado

able to lifted paper

but not lastingly or sustainably

anything real

“Banks don't lend because “the economy is strong”, they lend because the risk is appropriate “

you miss or choose to ignore
the huge causal linkage

that palpably exists

between default risk

and the state of effective demand

if the economy surges back it lifts all boats including many that in the doldrums look

and are dicey

balance sheets are passive reflections
adaptive expectations fail to see turn arounds

that are merely the function

of a return of robust sales

macro drivers like a huge federal deficit
produce the conditions where credit begins to spontaneously flow…eh??

its not just capacity expansion its faster cash flows

to pay down or back loans

ironically even as the net flow of loans increases

and debt extensions and roll overs again become easy

Posted by pinky at 10:42 PM