The ideological errors of capitalism, VII -- wealth

Moral: Wherein we consider that how 'wealth' is handled can be problematic, yet it will be, by necessity, a very important factor in any attempt to frame a better basis for capitalism.

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Ideological errors:

I - Casino, II - Adam Smith, III - Shell games, IV - Made-offs, V - Culture, VI - Classism,
VII - Wealth, VIII - Disingenuity, IX - ... (list does not end)

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What exactly is this 'wealth' that is referenced? Remember the train that was mentioned earlier? Some think that this mythical train carries the wealth. However, near-zero says not.

There may have been a lifting of the markets, in response to the efforts of Big Ben and others to shore up the game. As we all know, the Street was given life support by Main Street and the people (such as, the savers who were sacked, severely).

Now, the merry-go-round is brightly shining again, attracting more money. You know, that fills the pockets of those running the game. Ever heard of the advantage of the house? Somehow, the system, and the thinking, behind the chimera took on the flavor associated with Las Vegas without any peep from the populace (or those who are to be watching out for the populace).

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Everywhere one looks in the US, debt is stacked up. Except, for those who were able to grab assets. Some of these were just smart and live within their means. Others, the few, gobbled while things were good. The many? It is seriously bad, folks. However, the situation is not without some type of remedy, if proper choices are made. For one, the daily dancing on the merry-go-round needs some serious attention; that is, that which the moneyed do not want is what needs to be looked at closely. How?

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So, again, what is wealth? It might be time to tackle that subject, but, first, let's review the litany of ideological problems in reverse order of the original posting.

• Classism - There is nothing more autocratic than a large corporation's thinking about its employees (ah? detect some notion of corporate as a being? were we not told that by the Supreme Court?). You see, employees are mere labor. It's the fat cat, with the capital, who is the sum of all things in this paradigm. Of course, those who tout progressive ideas say that everyone (or, anyone), then, ought to own capital. The problem? The takeaway nature of the underlying game is heavily weighted to those who skim off the top.
• Ill cultured-ness - So, not only are workers exploited, many times it is in unconscionable ways. For instance, what cry was raised about conditions that led to I-Phone suicides (mentioned briefly in the New Yorker)? Wait, come to think of it, except for the show about the under-cover boss, who even cares about the daily toils of the multitudes who create the life of ease?
• An abundance of absconders - As mentioned above, plenty do attempt to rise out of their straits yet fail. You see, pilfering (in terms of organized 'ponzi'ed' schemes) abounds. The real grief is that the malfeasance is couched in terms that dishonor mathematics (there are many to blame for this -- essentially, those who are without innumeracy, that is, they of the best and brightest (supposedly) have superpositioned idiocy (this will be explained fully, in time) on the rest of us (let's say, a numerant can understand 'being' which innumerant, okay?) while those who ought to know sat on their hands).
• Prevalence of shell games - Street corner tactics, many of which are illegal (would have the keystone kops after there perpetrators), have been allowed under the guise of business as usual (as if that whole set of darwinian notions was strong -- who is there who is not blinded by the sirens of wealth, money, etc.?).
• Unconscionable exploitation of Adam Smith - Adam knew the failings of 'free markets' quite well. He knew a lot more than that. Ought we to think that those who argue the 'invisible hand' are in mind to simulate that via computation (controlled by themselves - with appropriate skimmings, to boot) and funny money (gab standard and all)?
• Ca-pital-sino - How is it that the guise of business, as usual, has turned to gaming as if this were the epitome of the long trek to civilization for which our ancestors labored so hard?
• Gravy train - The spoils go to those who take risks, we were told, within a framework that allowed essentially silly ideas to be cast forward as brilliant. Yes, bet the dinner, as mommy/daddy will clean up the mess. Did we learn anything from our recent exposure to downturns (bubbles popping)? Well, some things came to fore: privatization of gain/socialization of loss, ...
• ...
• A new game -- this was written on Sept 22, 2007. What was the smell then? Were there early warnings of the downturn? The focus was on using a real project, like a new airplane, to talk about issues of economic systems (those things manipulated by the cream skimmers, okay?) that turn out to be so deleterious to the common man. That type of query, naturally, leads to issues like the cyber-physical. You see, money is more cyber than physical (those bills and coins are mere artifacts, worthless without the underlying system).

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Albeit, some of the problem is that computation covers a whole lot of mischief. Made-off is our best example of this (how many years did his silly, in retrospect, bluffing win out (we need to get into the psychology of that whole bit of idiocy)?).

Guess what? Computation is the core; unfortunately, that core is more of a utility than has been realized. Right now, it's a pot of gold into which are thrust several hands (yes, goldman, your ilk) daily extracting out mountains of cream for the elite.

• Aside: From 07/31/2009 -- Wait! More exposures: "computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else's expense." To anyone who isn't at Goldman Sachs or the like, does that appeal to you as the way that we ought to be handling our beans?

The necessary functions will require the stamina of one who has taken a vow of poverty (let's, for now, use simple living) and who is not seduced by the sirens related to high living (as in all of these financial centers in the world full of those who are not to run the core system).

---

Market holidays, such as today, afford us an opportunity to look at the game for what it is.

Let's put it this way. If we built houses as we allow the market to be built (inflated by air), we would have to re-build quite often. We can attempt to put a timeframe on how long a house stood by looking at the crashes of the past 15 years.

Granted exogenous shocks were a large factor. Yet, it's like the child's story of the wolves blowing down the house.

Since we do know how to engineer, we can apply this knowledge to the economy. However, folks, it would not be 'financial engineering' (not in its current manifestation - sorry, professors, your best-and-brightest are one big problem to the rest of the populace).

Remarks:

01/08/2019 -- Added in the index of posts on this subject.

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

05/25/2011 -- Lemons problem, dark pools, ... Oh, so much to look at!

04/20/2011 -- Simple living (see Remarks 04/15/2011 - game theory), as opposed to greediness.

04/03/2011 -- Need to look at some background. Too, tranche and trash.

03/22/2011 -- It's spring, and the garble uses gambling metaphors.

03/16/2011 -- 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.

03/11/2011 -- Wired asks, ought we care?

02/24/2011 -- People matter.

01/27/2011 -- The chimera shines.

Modified: 01/08/2019

The ideological errors of capitalism, VI -- classism

Moral: Wherein we consider that the ideological problems, namely, ill cultured-ness, abounding of absconders, prevalence of shell games, unconscionable exploitation of Adam Smith, and the Ca-pital-sino are not sufficient. We need to look at its classist's basis. Image: see Carnot on Motive Power (capitalism's view of labor?).

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Ideological errors:

I - Casino, II - Adam Smith, III - Shell games, IV - Made-offs, V - Culture, VI - Classism, VII - Wealth, VIII - Disingenuity, IX - ... (list does not end)

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And, how do we address such a complicated subject? Well, let's start with a few remarks that are disjoint, yet potentially coherent, looks at themes which can then be discussed more later.

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It was almost inevitable given the framework in which the ideas developed. At the time, there was little relationships between the upper and lower classes. In fact, the middle class was always squeezed.

Oh wait, the lowers had no rights (until the Magna Carta) and were basically exploited. That continues to this day.

Too, those who might have been lucky to ascend from out of the lower realms mostly quickly forgot, by design, their origins. Looking at this might be interesting but distracting.

---

The modern conceptual frameworks, that were not available at the time of Adam Smith, can refresh the capitalistic outlook. For one, rather than class, there would be roles as the focus. That is, take labor. The current situation allows serious exploitation of those in this role, as we've seen with the colonization that outsourcing is.

Jobs? Ah, many are without. How can there be offerings of roles that would allow people to take care of themselves and their families? Consumerism, in the sense of 'c' being the largest part of the macro equation, demands this.

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'capital' itself needs to have another look. Now, it seems to be more analogous to crown jewels than not (to be discussed). Ah, how many kings can this poor world, and its miserable masses (nope, not Marxist), support?

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Private ownership? We need to look at this in a more enlightened fashion. Given the current vogue, one could very well imagine someone 'thinking' that they own the planet. Oh wait! Was not a lot of the conflict on the poor suffering earth just to show who was boss?

As well, given the advent of mutli-national firms, especially those who have a heavy footprint on the cyber part of our cyber-physical existence, we see ownership that does encompass something that is world-wide.

Ownership, in terms of roles, denotes responsibilities. Unfortunately, what we have seen has been efforts, albeit successful to some extent, to shirk responsibility.

Mind you, did we not just see, up close, privatization of gain and socialization of loss running rampant? Those dynamics still exist, and in more than just the issues related to the toxic assets that we have laying around like mines in a field.

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What is private? Ought what is a 'pubic good' (a long list, arbitrage, etc.) be put out to the private realm (whatever it is?)?

Many roles, that are not of necessity (we can drive an equitable economy with those who live a simple life and who do not succumb to piggishness), currently milk the system filling the pockets of a small set. It has to be small, as only a few can exploit the situation.

And, any glorification of the role as being the essence of capitalism really ought to wake up the the ca-pital-sino and its emergence. Yes, this was accelerated with improved computational prowess.

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Management. Ah, the lords and their royal-ness. Consider that computational frameworks could provide 90% of what is required by that role. However, that said, there would still need to be sufficient human involvement to cover undecidable issues (below).

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One almost hears rings of empiricism (realism) as a major attribute of the capitalistic heart. That is, science and capitalism go together. Somewhat.

Actually, we could probably scientifically show that 'greed' is the larger essence.

Why did evolution produce these types except to support the first wave of capitalism? Is it not time to re-address this issue?

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Too, innovation has been associated with capitalism. Yes. But, have we not seen bad effects of this along with the good? Science, and its reality, would help temper this, folks.

We could start by putting the markets on a more sound basis.

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The way that finance, and markets, exist now, there is no science. Rather, we see real-time experimentation and recovery. Oops following oops.

That undecidability is not a prevalent notion needs to be addressed. In short, this notion could be said to just denote that no one has perfect foresight. The truth? Who has perfect hindsight?

How did you answer? Well, do not forget underdetermination, please. What we see in economic affairs is that capitalism handles these issues a little better than do other ways.

Yet, there are many downfalls that we need to fix for sustainability.

Remarks:

01/08/2019 -- Added in the index of posts on this subject.

09/01/2015 -- This was written five years ago. That was before QE infinity. Back then, any one who had gone through this before was looking for an unwind. But, that did not happen. The Fed doubled down, then tripled, down, then ... So, the addicts ran things to an inflated state (yes, appropriate usage). When Ben did mention some taper, they had a tantrum. ... So, here we are, in a corner, into which we have been painted. What will be the end result? Meaning, when things finally unwind? ... What we know is that Main Street did not benefit to the extent as did the pampered of Wall Street. Too, we see that computation is being exploited by idiots. The WSJ, on Saturday, mentioned one area. But, who is talking anything about moral hazards, these days? Well, you did read it here and ought to know that we have not forgotten its meaning.

05/11/2012 -- Rick getting grief from quoting Marx.

01/13/2012 -- We'll go more into why the need for the Magna Charta, this year.

10/07/2011 -- Magna Charta, the celebration thereof.

09/27/2011 -- Recover the image.

03/16/2011 -- 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.

03/11/2011 -- Wired asks, ought we care? About I-Phone suicides

.01/03/2011 -- Ah yes, now there are demands. The question remains: what growth other than the pockets of these types

?12/05/2010 -- Raj Patel has the proper grasp on the 'financial madness' that is threatening us.

10/28/2010 -- Warning, train wreck ahead. What train, I had asked? Yes, there is already a wreck, despite the inflated market (those who lost big are still behind). Adam knew the failings of 'free markets' quite well.

10/22/2010 -- We need more Orwells and Tolstoys and Perelmans.

10/14/2010 -- Capitalism, as known now, requires an endless supply of suckers.

09/24/2010 -- Capitalism is for the good of us, let's bring that forward.

09/19/2010 -- England is in the dumper due to its assumption of the aristocratic notion that people who do are not of any use. Hah! God, how many royal pabodies are we expected to kiss what with these people who wander after abstraction (error) or who somehow think that they are the best class (and worthy? - ah, please give us a break)?

Modified: 01/08/2019

The ideological errors of capitalism, V -- culture

Moral: Wherein we consider that the ideological problems, namely absconders, shell games, unconscionable exploitation of Adam Smith, and the Ca-pital-sino are not sufficient. Culture, and the lack of a Magna Carta, need attention.

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Ideological errors:

I - Casino, II - Adam Smith, III - Shell games, IV - Made-offs, V - Culture, VI - Classism, VII - Wealth, VIII - Disingenuity, IX - ... (list does not end)

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Yes, culture has run amok. Capitalism grew up in an environment that stressed gaming since players (serfs) feed their earnings to the lords (fat cats). Then, when the computational came more to fore, machinations that are counter to a sustainable future got more reward than did reasonable considerations about issues, such as undecidability, or did honest labor.

What? We need to look at 'must and may' in this context.

Yes, it's time to bite the bullet and discuss how overlaying our realities with models, abetted by our beasts, is problematic from the get go.

We like to think in musts, as in things being true or false. Gamers bring in 'may' from one particular world view. Thinkers note that the world is more gray than black and white.

One 'must' is what drives arbitrage's necessity. This ought to be a public good, not privatized (as we see with this example).

That we have to manage the 'may' aspects, and agree on the 'musts' set, is paramount. But, under what framework is this to be done?

Where did this 'must' and 'may' come from?

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ACM published an article in its Communications that struck a chord (Intro, Article). The topic seemed to offer ways and means for discussing some of the issues related to undecidability. The concept was brought up earlier in the context of discussing the Vienna position relative to the mathematization of some markets.

Now, mind you, while reading on, consider how the issues related to programming might be considered in the small as opposed to what we as humans face daily. However, we are overlaying computation on reality and making decisions thereby. In a sense, we're limiting the larger world to what the computational model can handle. Also, if there are problems in the small world of programming of the computer, cannot these suggest that those larger world problems might, in some cases, learn from what we know of computation and, too, ought we learn how to know about the 'undecidable' analogs? It's that latter part that is some troublesome, mostly since people more easily adopt comfortably closed world views than not (case closed).

The article talks about the three main issues. Firstly, there is language. Of course, on the computer side, we still talk semantics. But, closure is easier to impose. What problems do we see from our big set of natural languages? Needless to say, right from the get-go, there is a big thing looming. Secondly, we see a bow to the notion that a duck test is about all that we can do in many cases (especially, politics - joke). But, the larger issue is that dynamic states are what we deal with more than any type of limiting static analysis. Does that not complicate things? Thirdly, we need to make decisions using our language, properties assigned to entities within the frame of reference, and some type of reasoning.

Now, for all of these, the problems in the small on the computer are much more amenable to solutions (to wit, the internet, et al - though, to be fair, you don't have to go far to see failures). In the large, things are much more complex. One benefit of computational modeling is that we can learn how to identify problems and put them into some mode for being solved. Computation, in that sense, is only a continuation of the western mind's orderly (oh, wait, not so orderly) progression along the axis of improvement (ah, arguable, too).

But, the article shows that, even in the small, things are not as easily handled as many think, especially the young (yes, you, Microsoft, for one, -- gosh, I argued with some of those young whippersnappers way back in the early 90s, ..., oh well). You can think of the 'must' and 'may' sets as depicting those things that must follow (either true or false) and then that big thing of unknowns and their may'ness (neither true nor false). Of course, the idea is to have a strong set of musts and an ordered set of mays, these latter, it is desired, being more prevalent to those almost 'must' but not quite.

The point, here, is that we'll continue to use the concepts in trying to lay out why capitalism stinks, in its current form, for everyone but those who are on the taking side (0.2% taking more than 99.9% of the income or some such inequitable, and non-sustainable, number). Too, some fields, such as those related to systems engineering and operations management, are looking at how to do things better (and Lean is a chimera, in some cases, which I intend to show). But, those fields tend toward increasing the overlay. I say, to those folks, hey wait, in the small is loaded with problems. It's to be willy-nilly imposed on us?

Ah, yes, the miracle of superposition.

Remarks:

01/08/2019 -- Added in the index of posts on this subject.

09/01/2015 -- This was written five years ago. That was before QE infinity. Back then, any one who had gone through this before was looking for an unwind. But, that did not happen. The Fed doubled down, then tripled, down, then ... So, the addicts ran things to an inflated state (yes, appropriate usage). When Ben did mention some taper, they had a tantrum. ... So, here we are, in a corner, into which we have been painted. What will be the end result? Meaning, when things finally unwind? ... What we know is that Main Street did not benefit to the extent as did the pampered of Wall Street. Too, we see that computation is being exploited by idiots. The WSJ, on Saturday, mentioned one area. But, who is talking anything about moral hazards, these days? Well, you did read it here and ought to know that we have not forgotten its meaning.

03/16/2015 -- Let them eat cake.

07/28/2011 -- Cambridge non-commoners.

03/11/2011 -- Wired asks, ought we care? About I-Phone suicides.

10/26/2010 -- Adam knew the failings of 'free markets' quite well.

10/14/2010 -- Capitalism, as known now, requires an endless supply of suckers.

09/27/2010 -- Capitalism is for the good of us, let's bring that forward.

09/16/2010 -- So, ill-cultured-ness came from the classist's basis.

Modified: 01/08/2019

New royalty

Moral: Wherein we muse about topics that are old yet always seem to have a new place at the table due to open issues, such as, only the favored (not any more royal than any of the rest) getting a fair (supposedly) deal. Image: King John signs.

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As Jim at the New Yorker says, the very, very rich (0.01%) are pulling away, in terms of accumulative multiples, from the very rich. What we need to look at is the reality of near-zero (excessive takings, of any type, are lop-sided and are really not much different in character than exorbitant taxings (used to support the leisurely life of the royal set, in many cases) - not arguing against a larger percentage tax for super earners, by the way).

This blog is about the dismal field that is so little understood in practice (yes, theory abounds, that there is a lesson) as to be comical (think Keystone cops) except that the consequences suffered by some is dire, indeed. Those in control are looking at each other wondering how to get things moving; there is real pain at the main parts; and, has anyone seen an end to the mess?

By the way, what is a 'royal' in the discussion here? Anyone with an out-sized sense of entitlement; the 'new kings' are more in the set than the lowly worker trying to make a living (usually subsistence). Again, reminder: those dealing with money, and its control, ought to have taken some equivalent of the vow of poverty (as evidenced by simple living).

Those trying to create a proper economic realm could look at what a Magna Carta for the system's role players might look like. Workers would get more respect and support, perhaps lessening the motives behind unionism.

That focus would help alleviate some of the mania attached to capitalism (yes, Adam's little system, so much mangled). Also, the artificial (as in, that basis which has been allowed to grow under the guise of interloped mathematics) would be constrained. Currently, these systems, and those who ride herd for their daily takings off the top, seem to run things, mostly in an amok manner.

Labor needs respect; those who touch matter are of far more importance than the modelers, and gamers.

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Each generation seems to try to relearn what was known before. But, were things known, or do we impose notions through historical, and other ex post facto, views?

The question ought to be pondered in the context, as an example, of how change has been the most prevalent component in computational spheres, with deleterious effect.

Ah, is there some type of slate that is wiped clean from time to time? Technology, and its progress, seems to have this type of effect.

Or, is it that we, as a kind, have never been successful, across the board, of inculcating the best into our progeny. Of course, there have been families that have excelled long periods of time. Can this be considered the norm?

Yet, the young folk, starting early, spend a significant part of their year, and each weekday, in a milieu, that does include some element of indoctrination.

What are they learning early of economic realities? How are they attaining knowledge that debt, and perpetual accumulation thereof (oh, yes, like the US currently), leads to the state not unlike that of the indentured servant, of old?

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'Nothing new under the sun' is the adage. That events of 800+ years ago are still of interest, and utility (capitalism has usurped this notion along with many), will be a continuing theme. The 400+ of those issues being brought to this side of the pond is the motivation.

Remarks:

07/25/2015 -- We're about six weeks after the June look back at 800 years ago (Magna Carta). Too, though, poster boys have popped out of the woodwork, including Zweig.

03/16/2015 -- Let them eat cake.

07/31/2013 -- Ben cannot unwind or taper down; he has too many Doves. We'll have to get back to the king thing (yes, the divine rights of the CEO, new royalty, in other words) and dampening of these types by a new outlook (Magna-Carta'ísh).

03/25/2013 -- The Atlantic had an article about King Abdullah II. Now, he is an example of a doer, from several angles. What I liked when I read it was that while being educated in Massachusetts, he bussed tables. What that means for those who don't know is clean up dirty dishes and such. When I, as a young man, was in the US Army, we had still had KP duty which included such types of things. Another task that ought to be tried once by everyone: cleaning the grease pit.

01/14/2013 -- Jamie, the banker, talked about some running around like children. Worrying about their career, when things fell out with the "whale" deal (remember that?). Well, Jamie, it's the childish stuff that pushes people to be like yourself, attention seeking, et al. How many really wise people rise to that level? Not, as it takes incompetence to even make the first step. Now, these folks are the new princes, princesses, and kings and queens. Yes, indeed. Their may be some necessity for the ilk; playing games is one of them. The more I read on the type (as epitomized in the royals of Europe -- elsewhere, to boot, but, let's just keep to one continent), I see fratricide, maniacal maneuvering, and more. Gosh, are we doomed from the get go, a cynic (which I'm not) might say.

01/13/2012 -- We'll go more into why the need for the Magna Charta, this year.

10/20/2011 -- The spawn'er of the new royals.

10/07/2011 -- Magna Carta, the celebration thereof.

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

05/25/2011 -- Lemons problem, dark pools, ... Oh, so much to look at!

05/09/2011 -- This needs to be looked at in terms of doers.

04/04/2011 -- Need to look at some background.

01/03/2011 -- Ah yes, now there are demands. The question remains: what growth other than the pockets of these types?

12/05/2010 -- Raj Patel has the proper grasp on the 'financial madness' that is threatening us.

11/01/2010 -- von Mises' thinking applies here.

09/21/2010 -- Facebook, as metaphor.

09/02/2010-- The FED just had their hoe-down.

08/31/2010 -- The chimera needs to be dismantled and rebuilt. Those running the money systems need to take a vow of poverty and simple living (period).

Modified: 07/25/2015

Fair deal

Moral: Wherein we consider that the big chimera is more shell-game than fair deal.

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We all know that the basis for an economy to be just is the imperative of the 'fair' deal. Generally, we also include that the deal is 'fair' for all concerned. Now, the reality of near-zero would suggest that those 'concerned' is a much larger set than usually considered so far. Most business deals do not have a proper accounting (to be defined).

For one, the old polluters did not bring the denizens of the earth into their thinking. Too, those at the top, fat cats essentially, play havoc with the common weal with results as we have seen of late. That is, they still got their bonuses even though the majority suffered. There are people working three jobs just to stay afloat; fat cats who think that they work hard need to wake up.

Open challenge: There is no CEO of a large corporation who could stomach the stress, endure the terror of bad managers, perform with any sort of efficacy in the tasks that have been imposed, or even bear the life and the work situation of their workers. The caveat: I have to be involved in seeing that they 'fairly' have the proper experiential event (perhaps, there would be some existential realization on their part at undergoing such -- to wit, embedded boss show of the past summer did suggest some of this) in all the angst raising detail.

For the capitalist who runs around the world trying to extend the number of potential people that he or she can exploit, the 'fair' deal would include what labor needs for survival and for future security. Henry Ford knew that 100 years ago. Consumers need to make money to spend; where the 'hell' is this supposed to come from, folks, if not from wages and earnings?

It is a truism that gains on the pseudo-markets (stock, derivatives, ...) are not 'real' in that for every gain by one (or the few) there is loss by the many (if not the most).

Today, Irving Picard, the righter of the unbalances of the Made-off affair, is quoted in the WSJ as saying that he is after those who made money at the expense of others. Oh? Irving, do you not know that American business has descended to that which is doing other than 'fair' in order to line one's pocket? And, we've allowed this! That is, we as a society have allowed this, forgetting for the moment those politicos who salivate at the thought of money and downright slobber at the touch of the buck to their hand.

And, we did it under the guise that Adam Smith was the Prophet. Give me and him a break, people. Interlopers have taken over the economy of the west (however, defined - we'll get to that). And, China now has inroads to manipulate as they may and will to do so. Perhaps, we'll all learn.

Remarks:

01/20/2013 -- The bad spirit of the thing.

12/22/2012 -- Fair and open actually used in a WSJ article.

10/07/2011 -- Magna Carta, the celebration thereof. We need one of these for business. What would it look like?

Heard, from others, that the Wall Streeters jeer: we cannot help that we are good at what we do, find a job you lazy protesters. Oh, yes, Wall Streeters, you are good at what, exactly? Oh, yes, having defined the shell game, then you keep it running so that monies are sucked out of the pockets of the hapless.

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

04/03/2011 -- Need to look at some background. Too, tranche and trash.

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.

10/14/2010 -- Capitalism, as known now, requires an endless supply of suckers.

09/27/2010 -- Capitalism is for the good of us, let's bring that forward.

08/21/2010 -- The new kings are not 'royal' by any means; they're mainly takers (exploiters) extra-ordinaire. We need a Magna Carta, for business (local and global) in which rights of the workers (how else a consumer economy?), and more, are addressed. What would this look like?

07/27/2010 -- The Boston Globe had an interesting op-ed, recently, about these types. Of course, there are several types of best and brightest, including the quants. We'll need to address this topic again using what we know of the new kings. Ah, such confidence when underdetermination reigns.

Modified: 01/20/2013

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.

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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.

Remarks:

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

Consumer II

Moral: Wherein the consumer needs resources to perform the role. From whence comes these? Wages (implies jobs), Returns, Rents, Debts, ...

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As said before, there's lot to the topic. If people didn't consume, what would drive the economy? Well, we can discuss that at another time (Todo #1). Throughout this post, other topics are identified for further attention.

In the meantime, we can recall Maslov's contribution to the subject, via his hierarchy. The most basic consumption is for health and welfare, including housing, food, and such. Then, all sorts of discretionary things stack up after that.

Which brings up this question, can a subdued consumption pattern sustain a happy life? An associated question is, can one stay within one's means and be happy? Does this not lead to a certain degree of independence? (Todo #2).

Many possible variations exist to the theme of consumption, but, a topic to cover now, since Washington is heavy into these discussions due to the large unemployment rate, concerns jobs. As, without jobs, with what do we consume?

As an aside, wage is generally the major factor for labor and can spawn interminable discussions. However, the model ought to consider, too, 'rent' as it may apply to labor, within the context of a society. Seems that the best-and-brightest have already figured this out. This needs further discussion (Todo #3).

Now, one factor in US job availability is globalization, now the new colonialistic scheme. Recently, PhilG's blog mentioned that even Sikorsky is making things abroad, and they're heavily defense oriented (mind you, paid by taxpayer dollars). That is, the US Defense has farmed out oodles of work. In particular, Sikorsky has producing plant in China.

Looking at the post, and the comments, sort of motivates this post, as the issue of outhousing is still very much open (Todo #4).

There has been a lot of talk about how US consumers have gone too far, to the point of massive debt and to thinking that their houses were ATMs. (We need to look at those who lure the consumer into debt, too -- see this piece found at Philg's.). Okay, we have more savings being reported, now over the past year, which bears some discussion (Todo #5). Yet, it is reported, too, that other countries save more, in particular we hear China and India mentioned.

Well, we must consider that China and India differ from the US in many cultural ways that are very important. For one, neither of these nations can claim a ‘dream’ for its people (no matter how tenuous this might seem in reality for most US citizens). Or, in other words, who is beating down the door to move there in droves? Too, in the case of China, the government is forcing the savings. How many trips have there been to China, on the part of the US, to talk them into letting their people spend?

Oh yes, American business people are beating down the doors. Are these not the new colonialists?

Both countries have cultural and social problems that bear attention. A Business Week article mentions a police officer in India, living under a bridge. He's quoted as saying that a swank hotel won't even let them use the toilet.

The US may not be perfect, however we do have some things going for us. Labor, those who are now without jobs, do have rights such as those mentioned in the Constitution. One problem right now is that the upper classes, supposedly those favored in the Capitalist's view, are very good at diminishing the rights of Labor and, at the same time, in arguing why their take (sometimes, outright thievery) is that which the law condones. (Todo #6).

So, as old man Ford is quoted as saying, we need to pay the workers in order to have them buy stuff. Of course, in his day, 'stuff' was not inferior, throw away, imports (Todo #7).

Remarks:

12/13/2011 -- McKinsey report shows that households hold over 40% of the world's wealth. Hence, the consumer as the major influence on the economy. Now, consider that the household wealth collection (using income in the U.S. as a proxy) is skewed to a very small bunch.

12/09/2009 -- Cannot sustain the consumer with debt.

12/04/2009 -- Frugality as a way to riches.

Modified: 12/13/2011

Consumer I

Moral: Wherein the consumer is the sink for the economy. It's an important function, release of pressure.

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Earlier, there was a post on a missing link, namely the financiers. Well, actually, even though labor was mentioned before, we have not addressed the consumer part of the macro equation (notice the 'consumption' line on the bottom of the graph).

For one thing, we'll look at the consumer as part of the GDP equation: GDP = C + Inv + G + (eX - i M) Here, we have the GDP being defined as an expenditure-based function of private consumption, business investment, government spending, and the net of exports and imports.

Before proceeding, we need to consider that the GDP has many downfalls, and other methods have been proposed, such as the Genuine Progress Indicator.

In any case, we know that there are many people (growing population) who consume which has an impact on the economy. For the US the past few years, personal consumption has been the largest part of the GDP with a side-effect of a growing debt basis per capita. It makes sense, since people are abundantly there, that the economy would have a human focus. We can say that without even referring to t-issues. Though, fat cats are antithetical to a proper economic model.

How can there be consumer expenditures without wages and rent? That latter is mentioned in the context of arguments about minimum wage. People are due rent just for being here (hey, hold the mud slinging - Marx did have one thing right -fictitious capital! Indeed!).

We'll have a lot to cover, hence this is Consumer I. Who knows how many post there'll be?

For starters, this little picture of Big Ben and his saver sacking ways is from today's Tech Ticker's talk with Howard Davidowitz. There are several things that old Howard says that are right on.

• Our debt strategy is turning the buck into toilet paper. See image and Tech Ticker discussion. What good is the buck for the consumer if it has no value?
• Davidowitz lists some current issues: houses are not there as ATMs any longer, unemployment is deep, personal bankruptcies are on the rise, and more.

We'll get to those issues and more, including jobs. For that, the issue is really rent (though, we may need another concept - due to the bias of prior use and connotation limits), more so than wage. How was that not every discussed (something to research)?

Remarks:

01/27/2012 -- Ben will continue to sack the savers; he must love the ca-pital-sino.

12/13/2011 -- McKinsey report shows that households hold over 40% of the world's wealth. Hence, the consumer as the major influence on the economy. Now, consider that the household wealth collection (using income in the U.S. as a proxy) is skewed to a very small bunch.

12/09/2009 -- Cannot sustain the consumer with debt.

12/03/2009 -- We'll have a chain of posts related to the Consumer part of the economy.

Modified: 01/27/2012

Near zero

Moral: Wherein we consider that the current times, and debates, really bring to fore the notion that someone always pays (of course, parents know this).

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That is, TANSTAAFL is a real issue, except for this sense: the universe and its energy are here, ready for our use (to answer the question of why is a t-issue that is being deferred for the moment -- also, remember that there is no perpetual motion machine -- except that which might exist in the fantasies of some CEOs).

Who pays and when can be swept under the rug using techniques that filter, supposedly extraneous, information and that determine that an economy can be a non-zero-sum game. You've heard it said before: win-win.

Lately, we've been hearing a lot about this: Heads, I win - Tails, You lose (think of this as privatization of gain, socialization of loss -- bluntly, fat cat bailouts by we the little people). Yes, the little pun refers to that stacked deck recently given a proper description of casino capitalism. But, let's not go there until much later.

What we must do, it will be argued, is to see that the concept of near zero is what we need to consider. The question is how to describe the notion so as to make it understandable and of use (ah, does that imply value as utility?).

In short, near zero is seen around the world everywhere we find those with (very small set cardinality) and those without (gigantic set, usually). So, to not get labels of Marxist, or other aspersions, thrown this way, please mind your blinders (rose-colored and otherwise) and consider the following from a viewpoint of first principles (of course, it is very much reasonable to ask whose principles).

One doesn't have to expect Egalité to know when things smell: to wit, some bank practices that essentially bleed the more poor customers with ridiculous fees (no need to belabor the point, as we all know the issues). Given that we're supportive of law and order, one still has to wonder how some ideas generate and get support, such as the notion that a Corporation enjoys rights like a citizen or that some brilliant stars (read CEOs) think that they are the essence of the human race and we're all to kiss their rings: to wit, even CEOs of non-profit organizations taking extractions worth millions yearly. What? Many times, these positions have regal (or is it royal?) benefits. Do they need their big pay, too? Whose pockets are being picked in those situations?

What does all that have to do with near zero? Well, in terms of big-buck pay, it comes from somewhere. In terms of a corporation, many pay up, including shareholders. In terms of personal wealth, this arises through various means and requires maintenance.

The recent events have everyone wondering about capital and markets. We hear of tremendous losses (not all by shenanigans) and some gains. Of course, 'gain' includes that take from run-ups of the stock markets like we've seen this summer. Is that type of gain essential to economics (ah, think back to what lies behind capital and its use - utility again)?

Business Week, of late, was kind enough to provide a graph of S&P and Treasury Bond trend lines from 1926 to now. This shows that $1 would grow to $28K on the equity side while it would only be $89 with the Treasury. Of course, we would really have to look at the corporate bonds for a better comparison. Notice, though, that since 1980 there has been a steady rise for both.

We saw this in the beginning of the graph. Then, from about 1945 to 1980, something suppressed the Treasury line (we'll look at this) while equity grew. Of course, we all know that the Treasury paper is rock solid (we, the American taxpayers, have never defaulted), hence returns will be low due to limited risk. That suppresses the Treasury line.

And, if we could account during the timeframe shown in the chart for those whose pockets bulged and those who lost hugely, what would we see? Has anyone successfully tried that? Is it, by necessity, something that has to be done as a thought experiment (quasi-empiricism)? Near zero is still constrained by our UUUN limitations (saying this does not excuse malfeasance).

Over the past year, we have been looking at reductions all around that are not equally spread. Due to the downturns, topics include a need to reduce benefits, to assess more taxes, to make people work longer, and the related.

In actually, folks, a proper accounting may show that the two sides of capital (see Modigliani) would play more closely. Remember this. The long term line says nothing about an individual's choices since we're talking about a 30-40 year timeframe in which there could have been gains or losses that are significant (that is, in the long run we all perish). We see that now with people who are close to the time for their retirement and who are without the proper means because of equity fluctuations. On the other hand, there are plenty of examples of people retiring quite well with bonds being the main investment.

What is not seen in the hype about equity is that a lot of the payout (or supposed gain) is actually coming from other investors. Yes, it's true; as some have tried to describe, our economy's ways (gab standard and all) are Ponzi, at best. Have we not seen a lot of discussion about how the future generations are being set up to pay for current choices?

How many high-flying stocks of late have had no earnings (in the classic sense, folks, as gains with casino capitalism need to have another label)? Ah, yes, we like dividends. But, does not that assume profits to share?

Note: So, how to explain the rise in the equity line and still argue near zero? That is the task here as we continue to expand the discussion about the 'near zero' notion starting, as mentioned, from the foundational considerations, like economic growth and the need for sustainable ways and means. There have been other ways proposed which we'll look at further.

Remarks:

06/11/2014 -- The old chimera is still with us, a train at 17K (DOW).

12/22/2012 -- Fair and open actually used in a WSJ article.

10/12/2012 -- Hedge fund mirage. Chimera works, too. Harvard. Its big endowment is the envy of all (but the rational). Yet, Harvard, talk to us about how you feel you deserve big earnings (what? earned?) in term of near-zero. I really need to bring this up to date.

05/04/2012 -- win-win, if it happens, always is accompanied by sacrifice (yes).

03/23/2012 -- Renewal of the idea (and related energies) via Cooper and CiE.

11/04/2011 -- Tech Ticker asks a good questions about the darker side of Apple. Are any of the other tech companies any better?

10/18/2011 -- Hopefully, the OWS will bring this type of thing to public awareness.

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

06/16/2011 -- Golden sack'd scandals. There have always been over-accumulators. However, a sustainable economy would dampen that. How? We have not seen such an economy, as of yet.

04/03/2011 -- Need to look at some background. Too, tranche and trash.

03/23/2011 -- The hopes spring, again, forgetting, of course, near-zero, all because of M&M. See the real story. But, Big Ben ought to know better.

03/22/2011 -- It's spring, and the garble uses gambling metaphors.

03/15/2011 -- The M & Ms are apropos.

01/19/2011 -- For the most, things are dire, not by necessity.

12/05/2010 -- Raj Patel has the proper grasp on the 'financial madness' that is threatening us.

09/27/2010 -- Capitalism is for the good of us, let's bring that forward.

05/25/2010 -- Who will (or can) lead out of the morass?

04/27/2010 -- Need to add the political set of truths, such as cat and mouse.

02/10/2010 -- We could probably use the auto (and recent events) as a way to characterize this concept. Of course, we have the value versus quality mis-think as part of the problem. Business Week reports that Toyota was asking suppliers for a 10% cut. Well, such scrimping would have an effect, even if it was only in looks. However, cutting into the life of a system may appear smart but, actually, relies on the same unstable basis as does a lot of economic thinking.

01/16/2010 -- Fundamentally, near-zero means that what people talk about with a win-win actually requires that some get less than they wanted. That is, the term 'sacrifice' has been applied from certain viewpoints. But, that scares us from looking at the thing correctly. The topic is simple from certain perspectives and not so from others (what isn't?). But, using 'sacrifice' is too strong. Why? That which those who take less lose, from a 'truer than not' perspective, is overwhelmed by the collective marginal, smaller gains of those who get more than they would not have gotten with zero sum (essentially, zilch). It's a foundational issue, folks. So, for now please ponder this: a financial heart, that is robust, run by those who have higher goals, and morals (oh, is that ethics?), involved in their operational viewpoint (monks, as an example, has not been used facetiously - marines, too, as disciplined and self-less).

12/29/2009 -- Thanks, Krugman, for agreeing with the concept; yes, we've just had 10 years of zero. Now, everyone ought to know why.

12/15/2009 -- Requiem for the dollar (WSJ) and responses.

12/08/2009 -- Consider current CEOs in relation to Paul. Not fair? Well, these guys/gals have set themselves upon some supposed plane that is above the rest of us.

11/30/2009 -- From 'Our basis' can grow a whole bunch.

11/08/2009 -- The gigantic chimera needs proper attention.

10/20/2009 -- Actually, we're dealing with less than zero.

10/16/2009 -- 201K <-- 401K --> 25601K, this denotes the current financial gaming.

10/13/2009 -- Always timely, a WSJ op-ed (Don't Get Hit by Crash at Finish Line) gives an appropriate message to the theme. Holding stock over time does not reduce risk of losing.

10/11/2009 -- Near-zero says that someone always has to suffer. The actuality? Fat cats only suffer monetarily and in pride. Those who lose do so viscerally (yes, as real as you can think). Business Week recently (BW) had an article that weighed in on the issue of India's progress being held back by some property matters. Recall, if you would, that Tata did not succeed in placing one plant where they wanted and then moved over 1000 miles elsewhere. BW described one of the controversies, which demonstrates near-zero. Oh yes, some involved say win-win. Now listen carefully, it's a situation where 5000 souls need to be moved off of land that they have farmed subsistence-wise for generations because it is wanted by some development for manufacturing purposes. Okay, it's estimated that 1000 souls may obtain jobs. Granted some little bit of monies is paid (remember, that it is pittance in relation to the big pockets of the developer), but who suffers here? The 4000, obviously. Too, the 1000, especially if they become enslaved which can (does) happen with industrialization. The whole story is never told. Why? Things that are considered too minor are thrown out, even though they weigh very large, comparatively, to those to whom the suffering is being imposed. Ah, the ways of capitalism cut deep. Yet, we, the people, are the ones supposedly with power (t-issue, of course). So, where is the humanistic capitalism that will show casino capitalism the door? In the US, the Constitution and Bill of Rights are supposed to afford such. Right?

10/08/2009 -- We all want win-win, says former President Clinton. Yes, but a true accounting would show that many times (probably always) that which makes these things near-zero is considered outside of the scope. That is, we push the costs to unfortunates who have no current say. And, in terms of the markets, we don't usually go around and collect the losses to see the longer term aspects. Why? Because the game is limited by time. The Quants make great use of an insight that we obtained from Markov, among other things. Yet, the longer term ramifications are exactly what an enlightened system (society) would consider. No, we forget the losers (large cardinality) and hear too much, ad nauseum (who cares what Buffett thinks), about the winners (very small cardinality).

Modified: 06/11/2014

Labor Day

Moral: Where we honor this day that the US celebrates our labor which is an important part of the economy. It's wonderful to note, today, that managers are included. That is, if they want to be, the best and brightest that they are. Oh, wait! That concept is reserved for the quants only?

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Business Week has an article that we'll look at further, after enjoying the holiday. The title says a lot (How Science Can Create Millions of New Jobs) and refers to old glories, namely innovations from US R&D. Where are those days?

Off shored (Out housed) in the name of something (some say greed). Okay, we're global, now. Yet, who looks out for the populaces (intended to be plural). Not business which is a fat cat game, folks, by definition.

Science and engineering, of many variety, can help balance things. We'll get back to that more thoroughly.

In the meantime, where would we be without labor?

Note: Sometimes it seems that the fat cats (who are always of smaller cardinality) want workers to be like the Roman legionaries who were devoted to Disciplina. Yes, "frugality, sternness, and faithfulness" for the workers while fat cats have the lap of luxury and unmitigated greed. Need we add, that some jobs are actually dangerous to health, limb and life? Oh, worker jobs, that is.

Remarks:

11/16/2010 -- That the American worker was short-changed becomes more apparent everyday.

12/08/2009 -- Consider current CEOs in relation to Paul. Not fair? Well, these guys/gals have set themselves upon some supposed plane that is above the rest of us.

12/01/2009 -- The consumer as focus.

Modified: 11/16/2010

Macro and Micro

Moral: Where we look, as said in the beginning, at both sides.

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Macro deals with issues in the large. Micro deals with the small stuff; but, guess what, in the details is where truth lies.

Economics covers a whole lot of ground. The IMF gets to play on the Macro side a whole lot as it deals with developing economies. Hence, getting a viewpoint from experiences there, as we do from Delano S. Villanueva, can make for interesting reading (see TOC). Chapter 1 is available online and is apropos to the current mess.

Please note that he goes into the influence of moral hazards which we haven't heard about of late, whereas last fall it was being dropped all over. What? Once the government opens the tide of monies, no one cares?

Well, as said before, we can run finance using non-profit techniques with people who don't salivate when a buck is passed beneath their nose.

On the Micro side, it comes back to labor/consumers and corporate decisions, assuming that Macro does not interfere with too much exogenous influence.

Both of these will figure in the discussions.

Remarks:

01/06/2010 -- Poor Ben, getting grief and criticism.

12/29/2009 -- Time calls Ben an uber-Nerd.

12/28/2009 -- Ben was named the Time Person of the Year. Nice. We can't call him 'King' as we saw with Alan's 'cult of personality' reign.

12/15/2009 -- Requiem for the dollar (WSJ) and responses.

09/04/2009 -- We still need to discuss the overarching metaphor for the economy. Quants are it!!

Modified: 01/06/2010