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.

---

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)

---

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).

---

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?

---

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).

---

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

2nd December

Moral: Wherein we mimic the look at a couple of 4ths: 'Oops, etc. and truth.

---

We've been at it enough to have two last posts for a year. It might be interesting to look at these with some commentary, starting with the one for 2009.

• 2009 (11 posts) -- Year-end recap -- Yes, those who do not suffer innumeracy ran amock, as if this was their right due to their higher-order insights. Yet, many with innumeracy have better ethical, and practical, sense. How is this, that mathematics (that old queen) has been so mis-abused? Well, it is our task, in part, to talk this issue. The trouble? Those who are so smart have no conception of undecidability (oh, they have learned work-arounds) or of entanglement (ah, this I do not understand as they cry over humankind's non-particle-ness - but, then, Godel gives them inconsistency as an out).
• 2010 (4 posts) -- What is truth? -- Somehow, the monied players have misused notions from biology (to wit, evolutionary theory) as their chief argument for being a**es. Then, Adam has been abused, to boot. Now, do we hear that they do not want any ethical overlays or concerns? Ah, that would un-fun the games, would it not? Yet, we have the right to want to know if someone is pushing us toward perdition-laden paths. Actually, the daily clamor of business covers a whole bunch of mischief. How did this come to be?

--

Dismal? Oh, let us count the ways.

Remarks:

12/29/2012 -- Summary - 2012.

02/26/2011 -- Added links to each month's archive.

02/08/2011 -- A topic of a year ago: there was a report today concerning a study on the SUA problem that has been going on quietly. More news will be coming later when the report is technically analyzed.

01/27/2011 -- Added post counts by month by year. Also, the chimera shines. How did I miss Grandsons of Samuelson?

01/24/2011 -- Here are a couple of related items.

• Turn the clock, and score, back by destroying the evidence.
• Chaos engineering is the ultimate Quant dream, in terms of conquering complexity (SOS and application -- we'll look at this closely).

01/02/2011 -- One basic problem is that systems are in place, and in development, whose consequences are not scrutinized beyond their ability to fill certain pockets. Oh, let the boys play. Is that the attitude? While, all around, our butts, and those of our progeny for generations, are sliding further into the mud. Way to go, smart guys and gals.

Modified: 12/29/2012

Recap of sorts

Moral: Wherein we pause to reflect a little since the blog's first year passed without comment.

Well, we're three months behind on that aspect. But, then things are different now than they were just a mere two weeks ago.

In parts of the country, there were very small blue islands within a vast sea of red. Gosh, what does all that mean? In terms of the viewpoint being expressed here, not much.

Let's, for now, just look at a few themes that will continue further.

----

We can use some of the categories as a means to organize the material.

• Ca-pital-sino -- it is obvious that some have taken Adam Smith's ideas too far. This we want to discuss further, as that tendency to the right has no stronger foundational basis than does any of the others. As already said, the gaming aspect needs some conditional limitations imposed. They are not going to be mathematical but will be social in flavor. How can this be?
• Ideology -- it is quite visible that ideological gaming spawned ca-pital-sino. Why? Our intent is to lay out a framework with which to condition the gaming. To date, we have brought forth the reminder that we all have drives which are, for the most part, toward individuation and maturity. That latter means that we don't want meddling in our lives. Yet, we ought not meddle in others' lives either. As well, that the related decisions need to be knowledge based is obvious. Again, how is this to be?
• Numeracy -- it is unfortunate that those who follow, to the limit, what we might learn by mathematization and algorithmization have imposed on the rest a type of bestial system. That this idiocy has gathered such strength is that fat cats have had their pockets filled to the detriment of the commonweal. How was this allowed to happen?
• Underdetermination -- it is the fact that we are serious lapse in what we can and do know. Now, our maturity provides the basis for decisioning under the resulting uncertainty. That the computer has become a major player raises a whole bunch of issues. The main one is that the underlying framework is undecidable. Plenty have danced around this subject, but linear logic allows us to look at the problem more realistically.
• Big Ben -- it is to our consternation that we see real-time, and less than insightful, experimentation with our selves and our monies by a handful of the best and brightest. There is only one thing to say. Sheesh!!! Well, we'll continue to discuss this problem and its potential resolution.
• Jobs -- it is the case that the best and brightest, and the fat cats, have exported work, via out-housing and colonization, to cheaper areas (read, easier to be exploited); the American worker has been short-changed; too, initiatives, such as six sigma (a form of Quant'ification), have resulted in the degradation of the work experience so that everyone is on the proverbial treadmill without any relief in sight. And, those not on the treadmill envy the state of those who are. How did all of this come to be?
• Consumption -- it is seen that without jobs that pay and without means for purchasing the populace must sink into a pit of debt with an unfathomable bottom. Yet, those who model the economy place the role of the consumer as primary, in size and importance. How can we see such continued inconsistency from the best and brightest?

---

The intent is to continue with the analysis and discussion of things dismal (meaning, of course, economic).

Remarks:

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

11/26/2010 -- On the Greenspan Put (Rolling Stone).

11/24/2010 -- We need to list trading types that would not be possible without computational support for the associated markets, permissive legal structures, unaware populace, and more: gaming by options, ...

11/22/2010 -- Tranching, under the guise of securitization? Silly games.

11/18/2010 -- We'll be taking a closer look at the numer-ants (my terminology for those who think that numeracy is it, which is about most of the best and brightest in the western world and those of the eastern who are coming over here and eating our lunch) this next year. Why? That the quasi-empirical framework is without due attention is why. Now, numer-ants like systems. What is wrong with the systems view will take a whole lot of attention. How about some convoluted system, such as this one. Ever consider why these come about? It's easier to hide book cooking and its ilk.

Modified: 12/05/2010

Harvard, ..., II

Moral: Wherein we consider that even the best-and-brightest (big endowments) can get lured into playing the games offered by the sirens of technologically driven business; there are many of these games, but the big chimera (many faceted demon of our own design - Rick, of course) is a huge one. That shell games get out of control, now and then, is a lesson that does not seem to stick (no, the little people suffer and pay, always). No wonder the backbone of the economy breaks under such nonsense.

--

There is much to look at. However, we will review this paper, at some point: Educational Endowments and the Financial Crisis: Social Costs and Systemic Risks in the Shadow Banking System 2010 (PDF at tellus.org). In the meantime, a few thoughts are collected.

In terms of disclosure, all this will lead to the following: discussions of near zero and its necessity.

The biggest brains are no better than the lowliest worker. That emphasis has gone so heavily into out-housing (use of this does not imply the inability to see the reality of our inter-connected and global world) results, in part, from a seemingly endless set of new exploitees always around the bend.

Too, talents not related to numeracy are essential to the planet's future; yes, techies, innumeracy is not idiocy. How can the numerant (those with numeracy) be allowed to innovate financially without oversight?

The Gulf spill might be a perfect metaphor. We can exploit only so far; at some point, real costs have to be considered. Oh yes, the current state of affairs shows just how easy it is to fall into a debt, and enslave the future, pattern.

Was it Harvard that led us on the path of short-vision'd and, ravage the landscape, business (Cat and mouse)? Well, can it dig back into its roots, those prior to the ingestion of the secularist potion, and develop a coherent non-secular stance that is so sorely needed by the world for a peaceful and productive future?

Suggestion: where is the notion of ethics ever brought into the minds of those who are going to lead the future? Ought not this be more prominent, period by period, throughout the educational experience? Can ethics even be absorbed by one who is reinforced in elitist thinking?

Divine right of the endowed (pun, of course, for best-and-brightest)?

Earlier posts that are related to the theme under development. Not picking on Harvard. BUT, you Crimson guys and gals, you were the first on this side of the pond which, then, brings especial responsibility.

• Harvard, value and quality I -- from whence will come the multi-faceted minds that we need and the training that will raise the worldview?
• Gravy train -- that is, will raise above the notion of massive taking?
• Gray areas -- and, will not try to exploit situations or potential exploitees?

• Win and lose -- success breed hubris; failure causes whining.
• Hedge Funds -- they say that money talks or that money has it privileges. Evidently, one of these is to make your own rules.
• Lessons to be learned -- gosh, the problem? Who's the daddy!
• Oops and more oops -- stumbling going on everywhere, almost densely.

• Cars and quality -- wonderful metaphor for the current economic mess.
• Roles for schools -- more than merely funneling out takers on a massive scale.
• Swarm proof -- even the brightest are under the laws of nature (more full use than normal).

Remarks:

01/23/2013 -- Things are looking up: Read free or die.

10/16/2011 -- Harvard is 375 this year. That, one might say, will precipitate a closer look, soon.

05/17/2011 -- Hedge funds need some of our attention.

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

04/12/2011 -- Now, we hear that Harvard wants Bernie to teach ethics to the best and brightest! It is obvious that he ought to be a case study and a specimen of what not to do. That is, analyze him to the core. His motivations would be included. The biggest lesson? How we have dumbed down ourselves in order to make the system, and its artifacts (see comments on hive mentality), work.

04/04/2011 -- Boston U's opinion.

02/24/2011 -- People matter.

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

07/02/2010 -- Anyone at Harvard with the sense of justice like Perelman's?

06/01/2010 -- Some young MBAs want to get their reputation, or that of their discipline, out of the crapper. Nice. An oath is one theme.

Modified: 05/08/2014

Money and value

Moral: Wherein we consider some of the consequences of using fiat money.

--- Foreword:

These consequences are strange, indeed. But, first, why is our money fiat? Well, consider that we have a system that is based on hot-air; that is, it looks to one guy's words as having meaning whose value considered by some as coming from an oracle. Talk about irrationality. So, what we see is that this gab standard leads to strangeness, a mindless form of gaming.

And, the notion of casino capitalism came about to depict the current state of affairs where daily a lot of energy, and money, goes into playing the 'market' game, for the most part for no real consequence, except the visceral reactions of the participants, whether as a winner or loser. We know that there are winners and losers since near zero is the actual situational outcome, folks.

--- Word:

Since we're after the year's cusp, let's look at three stories, of the past year.

• Mr. Woods allows us some data to consider. It is reported that shareholders of his sponsors have lost $12B (thereabouts) in the past month or so.
• Marilyn and Investopedia, and probably others, tried to explain to people where the value went that was absent from the markets, as they are defined currently, at the bottom which was the March, 2009 timeframe. Ah, it vanished, they claim. Well, if they are right, the hot air came back quickly.
• The AP reports that 150 (thereabouts) schemes (Made-off type) were uncovered in 2009 which is about four times the usual. Ah, why are these so easy to pull off?

Taking the first and second stories, we have to know that there is value behind those trades. That $12B did not disappear but went over to over assets. How does that movement, with those few (comparatively, that is, not across the board), differ from other downturns?

One thing missing is any type of accounting that would tie trades to something real which is due to the nature of the system. That is problems of a systemic nature.

We'll be going into this further later.

Now, that third story tells us about schemes which only reflect the large problems of the financial system (happy talking and its ilk).

Only part of the problem can be attributed to options, and similar, trading (CBOE can be partly justified), as there can be a basis determined for some speculation. That is, the type related to the originator of a commodity (the producer) has real value (as long as it isn't done by a jerk).

Also, some of the problem can be attributed to people who want the quick bucks, the greedy and the perpetual marks. But, just as we saw with the old guy, now in jail, it is more than that. As, computation, and accounting, allow these easy manipulations which ought to tell us something.

One thing to consider is Markov's contribution, though he is not to blame. Andrey showed us how we can ditch the past. That is, we can apply a pseudo-Now framework, yet it's not Zen. Andrey didn't show us that we can ignore value (especially the inherent and intrinsic (traditional connotations, mostly) as only that which someone will pay.

We'll go into this further, too. It's nice that the Quants ran after their attempt at taming stochastic (or supposed) entities. As said earlier: That the quants have run off after their stochastic taming attempts we'll be looking at further. That CAE folks have broken the rules of map/territory differentiation is another variation of mis-handling of that which this sequence denotes.

--- Afterword:

Error'd ways can be found on all sides as we'll continue to see. Who is without error?

Actually, we mainly, it seems, can just minimize pain since these issues rest on an undecidable foundation which means that the best that we can due is be quasi-empirical.

But, that is no excuse to allow the 'fat cats' and 'greedy' of each generation to run rampant over the innumerant, the sickly, and the frail.

Remarks:

01/26/2013 -- Updated stale pointers. Too, the subject is still of interest.

02/01/2011 -- The chimera shines.

05/03/2010 -- NYT article on the subject. Paper on wealth and savings.

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

Modified: 01/26/2013

Year-end recap

Moral: Wherein we look at the year using a worldview that started in August and reiterate the theme that the Marines could run finance better than any that we've seen so far. Sorry, Ben.

--- Foreword

As the Time article said, "There aren't easy solutions" when extolling the virtues of Big Ben. Did we ask for it to be easy? One thing to consider is the influence of technology and computation. Ben's study of what went down in the 1930s is admirable, from an academic sense. But, does his view look at the major differences?

No. He does not seem to allow that common sense can say a lot about the economy or how we expect it to be. That is, being labeled as a 'nerd' implies several things that are not common sense. For instance, he says that he is outraged; where is there any argument about ethics which seems to be a topic antithetical to 'fat cat' thinking?

--- Word

Let's look at a little tale that offers some message to the theme.

Ever notice how some who have taken to the technology of the cell phone have given it a ubiquitous role? That is, we see people all over chatting to someone other than those in the immediate surrounds. In fact, much of this behavior can be consider extremely rude under an older (and more likely more etiquette'd) framework.

Then, once the thumbs got into their punching mode as technology developed, we saw people with their eyes glued to some little screen while they conversed with others, again outside of where they are physically, or while they played games or while they did any number of other apps whose cardinality is increasing rapidly.

And, many of the zombies attached to the one-eyed monster have taken to doing their thumbing thing while being propelled through space in a vehicle (weapon) and in doing so have lost sight of a major principle, defensive driving. Wrecks, with the suffering of many innocent victims, have resulted.

Now, what does that mean for the economy? Well, is it not in the crapper after a wreck? You see, the advent of mathematics, modeling, and computational prowess which was brought forth into the economy by the Sons of Samuelson have created some type of mirage that deflects from seeing properly. Focus on this mirage (house of cards or any other metaphor can work here) as the principal key to control is so problematic that it's very disconcerting to the aware observer. To boot, it was the best and brightest who were taken in; except, their focus on self-gratification was probably reinforced early. We sort of do that in the modern culture.

Any who might have urged caution stood the chance of being labeled as being short-sighted via innumeracy. Ah, the model is the reality according to the brains (map-territory problem, folks). It seems that the Fed, for one, must be laboring under such type of delusion. Yes, Ben, you.

Need we remind them that they put us on the hook, as taxpayers, for toxic instruments of unknown quantity and potential harm?

We all know that talking to those who drive and text about their risky behavior falls on deaf ears, as they have all sorts of arguments, including some diatribe about being more intellectual and forward (progressive). Same goes for those who are caught up in the pandora's box that has been unleashed with modeling and computation. You see, it has lined a bunch of pockets (thanks, quants); is not that what the economy is for?

Now, the need is not to step back and actually be like the world in 1930. And, Ben re-playing those dynamics is short-sighted. No, we must keep going forward. Yet, one has to think that taking over the banks in late 2008 would have been better than feeding our money to the fat cats. These are the people who screwed up the world with their machinations. They really have not been making it any better this year.

But, questions arise, such as, who would be doing the taking over? Well, consider this. That suggestion is no more silly than expecting Ben and his buddies know how to moderate things with their few parameters and instruments created on the fly. Pushing string, indeed.

--- Afterword

Well, plenty of words have been expressed this year, in all types of media, about these issues. In all that, some of the arguments have made a whole lot of sense. Trouble is that Ben is on the hot seat, undergoing pressures that prevent proper reasoning. Yes, any incessant hot-seat experience has reactions, physically, psychically, and more.

Of course, the strain on Ben is nothing compared to that on those who were sucked into the game in which they ended up indentured for now and into the far future. So, not only have savers been sacked, and mocked, the whole economy has been hollowed out (thanks, America Prospect). And, this in 2009?

Ben, you need to consider the advances that have come about in the past 20 years that have allowed an one-sided state of affairs. You buy off the shelf. Ever compare your couture with those with the Milan'd, and other, suits? Do you somehow feel superior to those who have to exhibit such demonstrations of excess and conspicuous consumption?

Or, do you not notice? If that is true, then there's hope!

But, as said before, monks, and marines, could do a better job of running finance and the economy. Except, we must remember what lead to the atrocious conditions at Walter Reed, and other facilities, due to the officer, and political, class letting deterioration run rampant for so long while they lived in the lap of luxury.

Remarks:

12/29/2012 -- Summary - 2012.

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

01/01/2011 -- We have two last posts of December under our belt.

01/02/2010 -- More states now have laws prohibiting (or limiting) driving while texting (dwt). Why did it require legal action? Common sense ought to have been enough, yet the appeal of the abstract and computation (sirens abound in the domains) are very strong.

Modified: 12/29/2012

Economic sandbox

Moral: Wherein we consider a sandbox. In several posts (see below list), 'sandbox' has been used to either characterize gaming that is risky (sandboxy) for more than just the players or to denote a better process, using as an analog the role that labs play for the test engineer. That is, filter out the toxic from the secure instruments.

---

Think of it this way. A new plane is seriously tested before people fly the thing. Even the test pilots don't just jump in and take off. Where is there some correspondence to this notion in economics?

What we've seen is creative spawning of instruments as if by necessity. Then, in the past year, we've seen 'shooting from the hip' by some cowboys (right and left, there have been processes changed and adopted, seemingly without caution); too, those in the position to rake in the dough are doing just that; the taxpayers, and savers, are being sacked.

One motivation: describe and establish a mechanism to put the game players where their impact is limited. We do not need this supposed 'creativity' of the best-and-brightest that seems to persist in creating dire consequences for the majority.

So, for starters, let's look at the posts that used 'sandbox' and start this necessary discussion. The following are three groups of links to post with some comment about how it relates to the sandbox imperative. The post are listed from latest to earliest in time.

• Educational Institutions (Sep 09) -- As with engineering and science, these institutions ought to be where sandboxes evolve, not in the for-profit side of business.
• Computation, finance and engineering (Sep 09) -- Even Nobel winners were amiss, big time.
• Spitting in the wind (Sep 09) -- The sandbox would isolate effects until something is proven.

• Roles for schools (Sep 09) -- As mentioned earlier, labs are an accepted fact in institutes of higher learning.
• Modern finance (Oct 08) -- Where did the notion arise that people could play games with other people's money using what are essentially untested processes? Does fiduciary duty mean anything?
• Easy steps (Oct 08) -- Definitely derivatives (other usage) ought to be wrapped with some type of testing constraint. Minsky's notion of speculation leading to ponzi applies here.
• Swarm proof (Sep 08) -- This type of proof, applying the wisdom of the crowd concept, would be interesting in several contexts.
• The times (Sep 08) -- We need to accept our quasi-empirical limits as we apply some notion of testing. How do we agree on these is something to discuss.
• Loops and truth (Feb 08) -- Getting an agreement on limits would help us to try to resolve issues related to the thrill of gaming where consequences go far beyond the player's own health and wealth.

• Cult of me (Jul 09) -- We may already have some sandboxes that are being misused by the 300 lb bullies.
• New type of colonialism (Sep 08) -- Sandboxes could help reduce the large influxes to some pockets, albeit that some of these come about from making bets that pay off (note, near zero allows us to know that the pay off was from pockets that diminish correspondingly).
• Oops as poop (Sep 08) -- Not handling moral hazards leads to an increase in sandboxy ways (where the whole economy is seen as someone's sandbox).
• Oops and more oops (Sep 08) -- We could show that hedging and speculation are natural control mechanisms to some point beyond which the game then is sandboxy and ought to be handled as such.
• Miscellany (Jul 08) -- The sandbox notion applies to control of risky behavior, except that there has not appeared to be an easy way to resolve the issues. However, has any tried the sandbox? Oh yes! Engineering!
• People matters (Mar 08) -- This was the first mention of the sandbox needed to control use of methods that have more potential than their current role of moving monies into a few pockets. After all, how people use their monies can be a type of voting. Allowing such a thing to evolve can be thwarted by the massive flows from the giants (un-level field).

Note: these posts paralleled the unfolding of the madness with several reactions, including from incredulity.

Note: 'sandbox' has found usage in computer security and software development. This usage is apropos to the discussion of an economic sandbox.

Remarks:

01/15/2015 -- This week, this post is getting read. Great! Nice little piece of work (kidding, in part) so many years ago. ... At last, a series that will establish the basis and extensions, as required. We are going to go back to some simple and come forward to the modern, complicated economy. Why? My long chain of ancestors (inherited via Prof. Lucio Arteaga) is one motivation.

12/22/2014 -- Nice to see the WSJ article use "sandboxed" in relation to the absence of "predict or control" within the context of computation (in a sense, we are already out of control). The issues raised in the article are central to truth engineering's core focus.

10/30/2014 -- Where are we?

10/16/2014 -- Need to get back to this, as the days of the downturn loom. No matter how much the Fed feeds the panhandlers, they will succumb to health issues at some point (when?, how long?, actually, for me, it does not matter, as I am an observer, only, who is one of those interested in building a better pie). The tragedy to all of this? Oodles of hapless folk will be drawn down with the players as their ca-pital-sino sinks. ... Does not have to be. There are better ways.

01/20/2013 -- Perhaps, the sandbox ought to be for play, dirty and otherwise. Which means, of course, outside of the mainstreams that handles things for the folks who care about their economic well-being.

09/14/2012 -- Ben just gave them, the runner amok'ers, the store. 

05/28/2011 -- Lemons problem, dark pools, ... Oh, so much to look at! Avatars, too.

04/03/2011 -- Need to look at some background issues. Sandbox, again.

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

01/27/2011 -- The chimera shines.

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

12/24/2009 -- What would Samuelson think of the concept?

11/29/2009 -- Rick is now with the SEC. Who will engineer (verb)?

10/05/2009 -- Ah, yes, on the behalf of.

09/13/2009 -- Need to pause for a bit, to look at Bookstaber's work.

Modified: 01/15/2015

Alan's reign

Moral: Wherein we look at King Alan, as he did reign for many years, probably too many. Everyone seemed to hang off of his words, as they do now with Ben, the saver sacker.

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Alan comes up now since he was holding the rein for so long, and he appears to be unapologetic. Except, he did admit that his worldview was shaken (in particular, his belief in banks doing their own self-policing); that was earlier this year. Now, he's back with his message (see Tech Ticker).

So, before any discussion, let's start by reviewing the references that we have made to Alan. We thought of him early on as this mess unfolded.

• Time goes on (Jan 08) -- At this time, the analysts were trying to describe all the types of financial instruments that had been spawned in the Greenspan era. It was quite a bucket of acronyms, many of which turned out to be toxic, and still are of concern. Oh yes, Alan was consulting with the quants.
• What can we know (Jan 08) -- Gosh, Ben renewed our suspicions that the Greenspan put was still alive and kicking. Sheesh. Yes, finance as fiction through gaming (later known as casino capitalism).
• Economic groundwork (Aug 08) -- Going back to the foundations would allow us to tell Alan and Ben that it's crap that we cannot see bubbles when they are there. Much of the opaqueness comes from efforts to keep the playing field unlevel.
• Savers sacked (Oct 08) -- Yes, Ben did us in by going even lower than Alan.
• Fairy dust (Oct 08) -- One affect of the gab standard is that the FED's aerating words cause market reactions. One thing to analyze, did Alan's dust impact his own view?
• Who's to blame for the economy (Dec 08) -- Alan is on the list.
• More on culprits (Mar 09) -- Alan said, don't blame me.
• Minsky anew (Apr 09) -- Can this gaming be controlled? Essentially, yes. We need to get a better handle on the computational issues. They have run a muck, essentially.

Well, as Alan is saying, it's true that capitalism's take on the market does allow human characteristics to emerge, some of which may not be desirable. Near zero, when shown, will suggest that there are better ways for us to go.

Note: That finance could be run by those who do not salivate when money is passed beneath their noses is still to be considered. Of course, with the devaluation of the dollar, thanks Ben, we might get to the stage where our beloved buck is only play money in the US. All sorts of things to consider here, with Alan's reign as one factor.

Remarks:

10/21/2013 -- Alan has a book coming out. Ben still slaps savers silly; a new day is coming.

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

02/01/2011 -- The chimera shines.

11/26/2010 -- On the Greenspan Put (Rolling Stone).

11/02/2010 -- Over a year later, the message is the same, except some changes have occurred. But Big Ben continues in his ways. Of real note is that the jobless rate is high; out-housing really set up for that. Also, we need to re-look at that learned from the 'vons' guys, Ludwig and Friedrich. See Near Zero.

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

01/03/2010 -- More news on Goldman Sachs as the uber example of 'not on the behalf' comes to fore regularly. It'll need to be a separate subject at some point. Thanks to McClatchy: Nov 1, 2009 & Jan 3, 2010 (update). Goldman has to respond, of course.

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.

12/09/2009 -- The Street loves Ben who loves 'em back: The Street utterly loves the Fed's largess, earning massive profits from trading unstable currencies, the carry trade (borrow short-term dollars near zero, buy longer-term assets abroad), and the high-margin process of transferring America's capital abroad.

11/20/2009 -- To quote: Abjuration and Recantation. Yet, Alan and Ben, at best, can just spit in the wind, as long as the standard is gab. Our trust? We want to put those inclined to malefaction in a sandbox.

10/06/2009 -- Ah, yes, on the behalf of. It is clear that Alan and Ben act on our behalf, though one has to wonder what 'our' means as it sure is not the little guy. Finance, people, can be (probably ought to be) run as a non-profit affair. AND, the CEO (or whatever the titles at the top) would not make $1M! That is absurd. We have people who put their lives on the line for this country and its ideals for pittance. As said before, we really need a national service (Remarks 09/03/09) experience for the young'uns, especially for those of the privileged classes.

09/15/2009 -- Lessons, one year after Lehman. Also, Time on culprits. Ben is happy-talking, again.

09/10/2009 -- We'll tell this tale further. The trader guy on firstbusinessx says that it's hard for a trader to make money in this market. Yes, indeed. There is a whole industry that rakes off the fat from the labors of others. It's like this, folks, a gallon of milk (the cow did the labor) has only so much fat that is easy to skim off (cream - ah, that's the role of golden sacks). Then, with a little more labor (secondary), fat can be extracted through modern technology. Eventually, the residue is colored water which may even need some boost by added nutrients to be considered food. Well, the economy is a lot like that. We've had a generation or two of the best and brightest go apply their brains to gaming, essentially. Some of this was encouraged by Alan and the FED. That will be part of the analysis. What's left is the watchword; not much of value, under the current scheme of things, is the answer.

Modified: 10/21/2013