Friday, April 30, 2010

Backbone of the Economy II

Moral: Wherein we consider the basis upon which an economic system ought to be built, from the viewpoint that capitalism has been usurped by interlopers.


We can start by addressing the issues related to the wielding of power through accumulations, such as money, access, and a whole lot more. At some point, we'll go back and look at royal continuance and its supporting peerage. We don't have to go far: our old Mother whose hammers we threw out a couple of hundred years ago.

In that vein, the upcoming 400th celebration of New England events will provide plenty of opportunity for discussion of the whys and wherefores that we see.

Thankfully, we do have a Constitution-based framework here with which to attempt to build a more solid future, albeit that we see plenty of side-roads due to human nature's ways. Too, we do see economic mobility, somewhat, though the past couple of years have pointed out how illusory this whole notion can be.

Yet, we do have the wherewithal to do these things better. That is, the ideals from the 60s seem to keep resurrecting themselves in the public eye suggesting that there are motivating factors involved that are other than our creation.

That wherewithal does have a heavy bit of numeracy (hence mathematics) involved, yet part of the problem is that we have not learned the main lesson, innumeracy is not idiocy. Our current 'now' is just crammed full of marvels acquired by improving our knowledge of the world and by applying this knowledge. Yet, hubris seems to be the norm from observing our prowess.

For instance, the blowout in the Gulf can be used as an example of how wrong things can go. That is, we are not as much in charge as we kid ourselves into believing.

That might be how peerage keeps the royal view sustained. A situational scheme of mutual admiration that keeps the fires of the balloon lit thereby allowing ascent. To where? Sort of like the market, as currently defined, do you not think?

Everywhere, dissenters are cast out. By the way, having dissenting voices is how science is supposed to work. There is no view that does not need some scrutiny, even if attempt at such obtains the casting of labels of 'freak' or 'pseudo' upon that one brave enough to venture the contrary position.

That we are here and now, in part, results from the many on that little island across the pond who could not abide their milieu. Some of the early ones who came over here were quite astounded, or would have been had their efforts not been mostly involved with mere survival, at their new-found freedom which turned out to be a brief dream (no cynicism meant).

The third and successive waves brought more of the same over to this side. In actuality, things here, at one point, were much more deleterious than would have occurred across the pond, one has to think. Put a bunch in a new milieu without the usual social constraints and watch out (nod to William Golding, of course).

Granted, for some of this freedom we see here, we ought to be thankful (law, etc.), yet one cannot but considered 'what ifs' when reviewing what has happened the past 400 and when looking at where we are.

Guess what? Economics is full of what-ifs as if by necessity. The main trouble is that the set of what-ifs is heavily controlled by those in power. Consider, if you would, why else was the past decade mainly characterized by the deceptive movement of work to another set of bonded slaves under the guise of giving the consumer, the supposed backbone, more things (of questionable quality), and a lower price, yet, at the same time, luring the same consumer into a recursively deepening pit of indentured-ness?

At the same time, a very small number (less than 0.5%) grabbed loot of massive amounts (greater than 90%). Too, we had the manifestation of the CEO as the new King, many times with a domain that was world-wide.

Yet, at the time, the politicos were salivating with their hands out, and that includes the top guy. Oh, one might respond, that is the nature of the times. Money is needed and is how the talking is done. Ah, is that so? What exactly is money? Ask, Big Ben to give you an accounting that doesn't allow him to wave his hand.

As a final note, the recent recall of the SUV was resolved by a software fix which ought to raise some eyebrows for a couple of reasons. Firstly, earlier, there were adamant arguments that the computational framework used by the automotive industry was robust and almost considered to be faultless to the extent that no question was allowed to be raised without aspersions being thrown at the one asking. Oh, some little shift here? Secondly, there is now a fix that was hacked (okay, tested) and pushed out. People, the 'blue screen' of death is called just that since it can happen at any time and without reason many times. Have we really looked at what is required for 'safe' computing enough to allow seemingly thoughtless application of it everywhere?

Our economy is so much dependent upon the computer that the car incident could almost be the metaphoric example. Then, we allow the amoral best-and-brightest, urged by the malevolent fat cat, to monkey with the keys to the domain in an ad-hoc fashion.

It's beyond cap-ital-sino. Due to oversight, any legal casino can (has to?) tell you the odds. We have no such thing with the economy, as it's being run by the likes of the golden sacks. The Nevada guy was right when he mentioned this at the GS grilling.

Lots to talk about, later.


02/05/2015 -- Recently on the most-read list. The subject needs a little updating, as, at this time, Ben was starting his QE (we still do not know the full ramifications). The chimera flew sky high (helped by many assists, along the way). ... That illusion is sustained by debt of an almost unimaginable amount. ... See: Chimera and the dismal, Tide that floats us (will extend this to show how the house of cards comes about), ..., 80-year old manipulator is still at it.

09/21/2011 -- On Wealth and the CEO MVP.

03/17/2011 -- On the rise of the professional politician (will there ever be the citizen polico? that is, those who do not salivate when a buck is passed beneath the nose) toward robber barony. The M & Ms are apropos. As well, need to bring in Schervish's viewpoint.

07/06/2010 -- The real Founders.

05/06/2010 -- Out of control, essentially.

Modified: 02/05/2015

Thursday, April 22, 2010

Golden sacks

Moral: Wherein we consider that the ideological problems, which might be exemplified by a firm of note, must be resolved so that we can redirect Adam Smith's baby from the shell game'd playground, the unconscionable exploitation via the Ca-pital-sino, and a ponzi'ed framework to something more amenable to the health and welfare of the people, by getting beyond 'cat and mouse' thinking.


GS, in other words, who might think that it represents the epitome and who ought to know that the 'real backbone' is far removed from its heighten'd views.

We'll get more into all this, through time. Look at the cartoon on this Tech Ticker page. The Wall Street firms just don't get it.

One theme will be to look a peerage, and royalty, and observe how the 'new royals' (at least, in their own estimation, as money can have its privileges) obtained their status through milking the 'market' situations under the guise of following Adam (poor guy, he's rolling around in his grave).

How do we train our brains to get above that muck generated over the past couple of decades?

One solution, as mentioned before, might be a type of 'national service' experience (for the youngsters) that could work wonders, especially for those who are overly privileged. Mind you, it's not necessary that this be militarily oriented. No, the purpose would be to introduce those from various cultures (yes, American is full of a very many) into a framework of service that has an uplifting theme, hopefully one beyond mere nationalism.

Another aspect would be to isolate various gaming efforts by regulating such to a sandbox. Then, quants would need fencing into the sandbox. You see, numeracy (and computational support thereof) lies behind a bunch of problems (again, we'll continue to get into that).

Something for all of us to note, please: many of these instruments of finance, that purport to be advanced and necessary, are neither. They exploit modern technology and knowledge, sure. But, it's in a blind-folded way. For those that may be necessary, a sandbox would allow a test environment. For the unnecessary, a sandbox would allow ad infinitum play (without the bonuses).

The question? Who owns what and why? Wall Street owns finance? Hah!!


07/22/2015 -- Some of these are, now, poster boys.

08/24/2013 -- Why do I think of golden sacks? Well, they represent the worse of the rogues, though I know that there are some good people working there who are doing the right thing. However, I have personal knowledge of two deals in which they were prime players in the role of experts in the matter. In both cases, workers lost their economic lives, some lost their pensions, both firms struggled. One actually went bankrupt due to the debt left by those golden players as they took off with bulging pockets. The incidents were within the past decade just prior to the downturn. Of course, golden boys/girls couldn't see that things would crash. But, any reasonable stance (based upon integrity, okay?) wold have foreseen that certain types of risks were not adequately handled. But, no, the context of the gaming rushes after reward (greedy accumulation) without proper regard to things related to the reality of near-zero. ... Much more can, and will, be said, in due time. In the meantime, the golden sack'ers (search) are archetypal in the world of economic misdeeds.

06/16/2011 -- Golden sack'd scandals.

05/17/2011 -- Golden sacks (leftmost mug of the rogue table), by Rolling Stone and Daily Ticker.

05/14/2010 -- Oh yes, smartest guys in the economy.

04/27/2010 -- Goldman's young guy as hero? See remarks earlier about fat cats and quants (look, defining these financial instruments and then modeling the payback are quantitatively flavored, through computation and mathematics). Fat cats do not know what the quants are doing and thereby let the young 'uns run amok. Why? 'Conceptual bliss' and 'abstraction' as Tourre suggested. Mainly using mathematics, and its modern selves, to create a whole lot of nothing, to make money doing so, and to then not accept responsibility for the fall out.

04/25/2010 -- Cartoonists ought to be having fun: Regulate the Banks? You'll Spoil the Fun.

04/24/2010 -- If it quacks like a duck, then ... Or, is it, in this case, if it waddles like a fat cat, ...? Those who run finance ought to not love money; that which these bankers are to provide is a utility, pure and simple.

Modified: 07/22/2015

Friday, April 16, 2010

Backbone of the economy I

Moral: Wherein we consider that, despite what is the economy, the backbone is the essential friend of the economy, not those who game for the ill-begotten gain.


So, banks are making money, paying big bonuses, and screwing their depositors. What else is new?

Ah, how the fat cats love their spread!

And, Wall Street? Rotten to the core (Tech Ticker)!

And, Ben continues to sack the savers while letting those fat cats loll in their monies. Gosh, big guy, when will you awaken? We do NOT need the chimera in its current form!

Well, we'll have to do a series on the real backbone of an economy. IT IS NOT FINANCE (which is not even the heart, in its current form). Of course, many will think that the reference is to labor. Not!

Effectiveness at real solutions is the key. All of this will be addressed.

Example: an oft-overlooked Old Planter who exemplified what became the 'spirit' of the US.

The theme will continue, as the backbone has been broken down by the fat cats, who loll and do not need any bones, through, essentially, use of un-Constitutional practices, such as out-housing and exploitation.

This exploitation include the chimera which is really a giant sucking device. Some gain there; for each of those, a multitude loses. Very much, near-zero, folks.


11/04/2011 -- Tech Ticker asks a good questions about the darker side of Apple. Are any of the other tech companies any better? You know what? Workers always bear more of the load than they ought. Somehow, we've let those who can adopt the old Lord syndrome. This is not necessary to having a sustainable economy.

07/06/2010 -- The real Founders.

05/07/2010 -- Out of control, essentially, and not healthy for the backbone.

Modified: 11/04/2011

Friday, April 2, 2010

With friends like this ...

Moral: Wherein we consider that the Ca-pital-sino which arose from an unconscionable exploitation of Adam Smith, and which fosters shell games and inflationary schemes, has not done many (most?) people many favors.


As the saying goes: who needs enemies with such friends?

Let's try to concoct an answer (750 words or less) to this query: Do the wealthy have an obligation to help the poor?
  • We think that we can show that this is so in about any context. Yet, we might consider that that there are definitely some limits to what help can, or ought to, be provided.

    First, though, we need to look at the concepts of ‘wealthy’ and ‘poor’ and ‘help’ in order to have this discussion. If we take the usual sense of the concepts, where ‘wealthy’ and ‘poor’ are measured in monetary terms, then these two can be considered at the opposite end of an economic spectrum, such as bank account balance. Along that same economic line, the measurement could be other types, such as those related to employment.

    For instance, one with a very rewarding career can be considered to be more ‘wealthy’ than someone suffering a long-term period of under-employment. There are many other variations to this theme. We can even switch to other realms, such as health care, where the richer in health, and knowledge, help those who are poorer in health.

    You see, health care is a system in which one main goal is the lessening of poorness in health. Or, is it mainly an employment, and enrichment, scheme?

    So, let’s bring ‘system’ into the discussion. The concept of ‘system’ is fairly intuitive to everyone; the economy is a system. In any system, which will have members, the overall goodness of the system will be determined by the weakest of the members. If we look for a metaphor, think of a chain and its links.

    Using the chain metaphor, we can see the ‘wealthy’ as being the stronger of the links; of course, that means that being in a ‘poor’ state is being a weaker link. Links that are too strong will cause the weaker links (and the chain) to break, eventually.

    Would not that breaking then diminish what the stronger links had, or thought that they had? Let’s be economic for a moment. If we look at the state of the economy, do we not see that, for a decade or so, there was a massive accumulation that happened at one end of a spectrum while the rest lost value. That is, the chain of the economy morphed to a few very strong links with a very large set of weak links.

    In monetary terms, we got to where a very small fraction (LT 0.5%) held the majority (GT 90%) of the total economic value. That raises this question: is the current predicament partly the result of the wealthy not helping the poor?

    Consider that those who are the ‘wealthy’ make the economic decisions about jobs and pay, for instance. The ‘poor’ would be the working folks who, one might say, would include the middle class, too.

    Then, ‘help’ could be efforts and attitudes that are oriented to keeping people in the system employed. The commonly used adage from Henry Ford may apply: working people spend their wages and buy products, hence they need sufficient wages. We could easily argue that what we have seen was an opposite of ‘help’ in that the working people were entrapped into a situation of increasingly negative worth through debt accumulation.

    Somehow, the economic system warped into a mirror world where ‘helping’ someone, such as allowing too easy credit, was actually making things worse for them. In this case, would not the poor have been better off by not being ‘helped’ by the wealthier who are really only growing richer?

    In part, warping was due to the introduction of a ‘global’ system in which the more local (American economy) system was a part. Too, we had the best-and-brightest, as another type of the wealthy set (aptitude), who engineered changes (via finance) into the economic system. These so-called improvements were, in actuality, beefing up the stronger links to the detriment of the weaker links.

    The inevitable happened when things broke down. That the wealthy did not help the poor in proper ways is obvious. Perhaps, those who are looking for corrective actions might benefit from using the question of the topic as the conceptual framework.

    That is, how do we get ourselves into the proper mindset to view that what is considered the weaker links are more necessary to continued economic growth than are the stronger? One might even propose that excessive accumulation indicates a type of weakness.
See the Ideological Errors of Capitalism, for further discussion.


12/15/2012 -- Coase, on the subject.

11/01/2010 -- Adam knew the failings of 'free markets' quite well.

05/07/2010 -- Out of control, essentially, and not healthy for the backbone.

04/16/2010 -- Rotten to the core. Does not have to be!!

04/08/2010 -- From the gigantic chimera to ill-begotten gains.

Modified: 12/15/2012