Stop Me Before I Vote Again

We talking monkeys have tried Gosplan 1.0. We've also tried nationalizing the laggard enterprises.

My question is why do we need a Gosplan?

Why don't we use public enterprise to compete against the most egregiously terrible private endeavors?

The answer seems to me to 99 percent politics and less than one percent economics.

"My question is why do we need a Gosplan?"

We don't necessarily need one. Like my talk of "vanguards" and "inner circles" I just threw that in there to titillate Owen, authoritarian Maoist that he is.

"Why don't we use public enterprise to compete against the most egregiously terrible private endeavors?"

What do you have in mind here?

"The answer seems to me to 99 percent politics and less than one percent economics."

I have to disagree on that one. Maybe in your case that is true, since you are aware of Vickrey and have a very good understanding of economics already, but that's just not the case for everyone else.

Most people just don't realize that there is a radically better way of doing things, a non-zero-sum solution. I think that getting them to understand the economic issues is a necessary precursor to political action.

I'm a Dengist at heart. I'm not interested in pauper socialism, and I don't think that the vast majority of working people are either. If we want to motivate people, we have to demonstrate that our system would outperform neo-liberalism in every way, on every measure, not just equality or fairness. Economic arguments are how we prove that.

godley
is a levy institute guy

and indeed a white hat
but hardly an obscure maverick
anymore then hy minsky

more a spot light maverick i'd say
no punching bag however
but as i say

a white hat ....size ten gallon

yep

The second duplicate link in there was supposed to lead to the Levy Institute, but the gremlins sabotaged it along with the link to his book site.

in the SMBIVA tradition of over-analyzing appearances:

Anybody notice this old rake's spezzatura?

84 years old and still fresh to death... what a ledge

that typo was pure meta

levy paper of 08'
co authored by godley

"We also argued that it
would not be possible to save the situation by applying another
fiscal stimulus .. because that would increase the budget deficit to about 8 percent of GDP (sic)... implying that the public debt would then be hurtling toward 100 percent of GDP,
with more to come.
It is a central contention of this report that the virtual collapse of private
spending will make it impossible for U.S. authorities to apply fiscal and monetary stimuli large enough to return output
and unemployment to tolerable levels within the next two years....based on the assumption that fiscal stimuli are
immediately applied equal to an increase in government outlays ..in the extreme case, $760 billion... even with the application of almost inconceivably large fiscal stimuli, output
will not increase enough to prevent unemployment from continuing
to rise through the next two years
..."

"...It seems to us unlikely that, purely for political reasons, U.S.
budget deficits on the order of 8–10 percent through the next two
years could be tolerated, given the widespread belief that the
budget should normally be balanced. "

this confuses alibi with cui bono cause
however

" looking at the matter
more rationally,we are bound to accept that nothing like the configuration
of balances and other variables ..could possibly be sustained over any long period of time."

money quote

"Fiscal policy alone cannot, therefore, resolve the current
crisis"

note the language throughout

leading to gloom without protest

fiscal stimuli can't go high enough
to pop us into recovery quickly
it's just "impossible"
given "existing configurations "
and the unsustainable effects of a fast recovery fiscal deficit run
on balances --in particular sovereign debt build up--

hardly mmt that...eh ??
in fact

very conservative
i note
the original lady romer stim pak draft
1.25 trillion in stim
not levy-godley's maximum
--and ultimately
summer's choice --- of 750 billion

note the 100% of gdp barrier sky hooked into the report ..like that's a danger zone ...
to me the correct analysis here
and it is remarkeably accurate
is used to forecast pessimistically
without going into the practical constraints
on remedy size assumed by the levy ites
--correctly --
to apply here
but here comes the punch line:

"A large enough stimulus ... will bring
back a large and growing external imbalance, which will keep
world growth on an unsustainable path"

dead on right that.. eh ??

now comes the forex fix part held back till now

"Since this series of reports began in 1999, we have emphasized
that, in the United States, sustained growth with full
employment would eventually require both fiscal expansion
and a rapid acceleration in net export demand. "
right on !!!!

".. Nine years ago, it seemed possible
that a dollar devaluation of 25 percent would do the trick.
But a significantly larger adjustment is needed now."

agreed
but it is right here the report should have started

and immediately followed by what a rebalancing sized dollar deval
would lead to MNC wise

finally we get the reason
why an adequate recovery policy
is non sustainible

"... if the United States were to attempt to restore full employment by fiscal
and monetary means alone, the balance of payments deficit
would rise over the next, say, three to four years, to 6 percent of
GDP or more
—that is, to a level that could not possibly be sustained
for a long period, let alone indefinitely. "

again this ought to be up top
as the pre amble to a paper showing the MNC policy lock on both global and local american development rates

a fetter on the productive forces if u will

"trade to begin expanding sufficiently would require exports to grow...in three
to four years .. 25 percent higher
than .. with no adjustments."
the portico is here
but not the mansion
comes this brief and sickeningly vague sketch on the mansion's interior

"It is inconceivable that such a large rebalancing could
occur without a drastic change in the institutions responsible for running the world economy"
ie the destruction of the MNC controled world market system

cryptic hint

"a change that would involve
placing far less than total reliance on market forces."

i know "the levy "
has to co exist with the system's
herd of corporare cyclops

but we don't
lets get at calling a spade a spade here
the point is to change things

why do we need gosplan 2.0 ???

now that IS a subject for a whole host of posts

let's here at least stick to the cutting edge
question

why yellow flags fly over the white house

If we want to motivate people, we have to demonstrate that our system would outperform neo-liberalism in every way, on every measure, not just equality or fairness. Economic arguments are how we prove that.

1) Could you define "outperform" in context?

2) The economic arguments won't prove anything to me. They may be useful to arguments related to statistics-battles and Laffer Curve Championships, however.

Speaking only for my dirt-eating, disbeliever-in-"economics" self, I don't see the point of debating "performance" among systems premised on an ever-increasing populace using resources which are finite. For those "economists" wishing to convince people like me, arguments that proceed from a very basic level are needed.

Such as:

* Why should I be required to "work" in a "job" whose only purpose is the enrichment of another(s)?

* Why should I be required to pay for an education that aligns me only for such wage-enslaving "work"?

* What duty do I owe to "the state" and its polite coachman, the "economy"?

"Speaking only for my dirt-eating, disbeliever-in-"economics" self, I don't see the point of debating "performance" among systems premised on an ever-increasing populace using resources which are finite. "

Well, as much as most of what goes under the banner of economics these days is just fraud, you can't really disbelieve in the entire concept of economics. Any argument you make against it, whether you like it or not, is probably going to be an economic argument of one form or another.

Case in point: your refutation of modern economics is based on 19th century economics, and in particular, the work of one economist: Thomas Malthus. It's really not a good argument. Since the advent of birth control, higher living standards actually tend to result in lower birth rates, and gains in efficiency mean that we can support more people with fewer resources. We broke out of the Malthusian trap a long time ago.

"Why should I be required to "work" in a "job" whose only purpose is the enrichment of another(s)?"

That's not an essential feature of all economic systems. Obviously Marx is the most pertinent example here.

"Why should I be required to pay for an education that aligns me only for such wage-enslaving "work"?"

There are good economic arguments for providing free, universal education, and possible economic systems where you wouldn't need to jump through all those hoops just to make a decent, dignified living.

"What duty do I owe to "the state" and its polite coachman, the "economy"?"

Not sure what you mean by this.

"1) Could you define "outperform" in context?"

Potential outcomes:
-lower unemployment
-higher efficiency
-higher real wages
-universal education and healthcare
-increased leisure time, reduced work time
-fairness, autonomy & dignity for workers, less exploitation
-less poverty
-less environmental destruction
-less reason to resort to violence and war
etc etc.

Just think about being a worker in the Gilded Age vs. being a worker in 1960's America, and imagine a similar increase in living standards taking place now, instead of another 40 years of stagnant real wages.

Things can be made better in just about every way by organizing our society in a more rational way that maximizes our productive capacity and divides the fruits of our labor more equitably.

What Paine's "yellow flag" meme refers to is that unemployment is being kept high and the current economy is being kept stagnant ON PURPOSE.

It's an especially clear instance of a free lunch being thrown away while people starve, just to preserve the status quo.

Case in point: your refutation of modern economics is based on 19th century economics, and in particular, the work of one economist: Thomas Malthus.

Really? I can't remember making that argument, here or anywhere else. Maybe you can show me how this image isn't applicable here:

http://loveforlife.com.au/files/strawman2.jpg

Potential outcomes:
-lower unemployment
-higher efficiency
-higher real wages
-universal education and healthcare
-increased leisure time, reduced work time
-fairness, autonomy & dignity for workers, less exploitation
-less poverty
-less environmental destruction
-less reason to resort to violence and war

Good thing the word "potential" is in there to rescue the notion of "outperforming" from the notion of "perhaps this could happen, perhaps it could not, and who's to say what "perhaps" means in this instance."

Given that most of the problems of inequitable systems of work are based on human foibles like greed, acquisitiveness, envy, oppression, disdain, hate, et cetera, how will "economics" address these? How will it change basic human nature?

FB: I think you mistake a factual problem (finite resources + expanding population) for a Malthusian economic theory. I'm not talking about Malthusian economics. I'm talking about a real problem of finite resources, a problem that no "economic" or other theory can get around.

I guess that's where you're misunderstanding me as being an armchair "economist," as I'm nothing of the sort. I want nothing to do with the games played by "economists" and their resemblance to "pro sports" fans who love to argue over statistics as if the numbers are the thing, rather than the thing itself being the thing.

Nifty work on triangulating a resource constraint into a problem of 19th Century Economics, though.

"Really? I can't remember making that argument, here or anywhere else. "

Right. I sort of assumed that that's what you were getting at with this: " I don't see the point of debating "performance" among systems premised on an ever-increasing populace using resources which are finite."
Which seems to imply a Malthusian critique, but you don't actually go there. Sorry. I am just trying to work with you here.

I'm not sure why you have any issue with the use of "potential" there. I already said that proving those benefits is a goal, not something that I had achieved, so why would I say that I was certain? All you asked for was a description of what outperforming could mean, and that's what I gave

re: your last point: I would put the question back to you: how did feudalism ever end? slavery? Do you think that there has been no improvement in the state of society ever? or conversely, has human nature been improving in the last few centuries? I don't really get what point you could possibly be trying to make here.

We tried improving human nature in China. It was called the Cultural Revolution and it was a complete fucking disaster. I'm happy to take human nature as a given and design around it.

Ox, I think you're being terribly unfair to FB. He's agreed wholeheartedly with your major points: that most of what is passed off as economics is fraud, pure and simple, that economics as portrayed by most of its practitioners consists of misanthropic rationales for exploitation.

There have been enough behaviors accepted as rational, normal, essential, or natural by different cultures at different times that I find it hard to accept that there's any one human nature. If there is a human nature, it's surely at least in part changeable, and I don't think one has to be Mao to believe that.

FB: Any relation to Norman Bethune? What would be a good introduction to economics for me to read if I wanted some of this stuff to stop being over my head but didn't want to wind up believing, e.g., exactly what Larry Summers believes? Because at present what I find is myself just reacting to my own prejudices in this discussion—rich men steal our money: BAD; people can get food: GOOD—all without a real understanding of how full employment should be possible or what these arguments are based on.

peak malthus hasn't yet struck oxy yet i guess

let me suggest trying to compress economics into engineering of any sort
tends to miss the point of the exercise

finite resources are always
the natural base for a market economy
that natural resources are limited
and non renewable creates an economic task
that existing mzarket systems may or may not
address successfully
but no set of natural econditions
checkmates economics
not even market economics

the scads of goo goo pessimists
that think they've disposed of economics by
churping peak x or y or z
or all three plus n more
are wrong

in fact i've never read a peak argument that even began to establish itself
as beyond economics

human nature arguments are of course
another fraudulent check mate move
but i suspect oxy knows that
and is just being troublesome
'cause it's fun
its his ....nature

btw
fb...good show

thanks OP

Maybe you can help me out with this one, 'cause I'm actually drawing a blank right now:

"What would be a good introduction to economics for me to read if I wanted some of this stuff to stop being over my head but didn't want to wind up believing, e.g., exactly what Larry Summers believes? "

StO:

No, no relation, just the inspiration for my nom de plume.

re: human nature. It's not really my field of expertise, but I tend to distinguish human nature from human behavior. We haven't evolved in any meaningful way since the beginning of written history, but our behavior can change quite radically. Maybe that's a spurious reductionist distinction at the end of the day, but it works well enough for me.

"What would be a good introduction to economics for me to read if I wanted some of this stuff to stop being over my head "

well for policy purposes on issues of the whole economy
like employment and inflation
fiscal policy and monetary policy
trade and exchange rates

yikes !!!

i don't teach myself
so i never looked into it
i suspect
the text book legion must have a macro book

i like joseph stiglitz
principles of macro economics
first edition 1993
maybe up dated maybe out of print
must be one availible on amazon

if you buy it and strat reading it
and have questions
i'd be glad to answer them
at
kapshow@hotmail.com
just write stigilitz in the subject field

but didn't want to wind up believing, e.g., exactly what Larry Summers believes? "

"... wind up believing, e.g., exactly what Larry Summers believes? "

what larry ziffle believes only the devil knows
as to what he might want YOU to believe
stig can navigate u thru a lot of the shallow reefs
but only your innate rsistance to bull shit will
keep you going

i try not to use the word 'economics' anymore, for clarity, because nobody's econ includes all the variables. no wait i should start with my bastardized ecological econ thumbnail:

ECONOMIC LAYERS (IN 3-D!)

the PLANET. here is the raw event of life: the physical exchange of stored energy, through eating or cooperation.

the WORLD. the blend of the physical and metaphysical, where higher-order critters visualize PLANET through the lens of their capacities. they're not the same metaphor but to me the cheetah's 'gazelle,' the human's 'influence,' and the particular bee's 'particular orchid' are all macro events (resting on recent ecosystem configurations) and a local shorthand for the whole.

the GLOBE. peculiar AFAIK to homo sapiens is artificial abstraction, that a meta event like 'price' (based on supply, which is based on influence and technique) can be used to talk about PLANET.

ok.

i guess the point is to say that the closed system is bounded by the top of the troposphere (beyond that, ecosystems absolutely cost more than they produce, by any likely set of techniques) and the bottom, the effective limit of digging, diving, or oozing below us (let's call that 'mineral space'). that's the closed system. anything you declare closed inside of that, you're using GLOBE math.

(ps. unless you want to try arguing that your favorite imaginary construct is best compared to an ancient undersea volcano neighborhood.)

New field of endeavor: 'physical metaphysics'

the day will come when hapa is worshipeed like madonna was in 1986

i got $1,000,000 sez we're all dead, that day

hmm. i kinda left out niches, in fact, that comment was a wreck, i guess maybe it gets a little better if i say, given this configuration of planetary services and its components' comfort zones, if our accounting doesn't tell us it's an incalculable risk to starve, poison, or cook nature, busting its resilience, then our accounting is jingoistic.

eh what now?

op, you might get a kick out of this:

http://krugman.blogs.nytimes.com/2009/07/15/deficits-saved-the-world/

Krugman trying to reverse engineer Godley from yet another Hatzius report that he drooled over. It's too bad that he's so arrogant and disdainful of real Keynesians. He'd rather fart around with his stupid stick diagrams than actually learn something from his superiors.

He actually spoke at the Levy conference yesterday, but somehow I doubt that he stuck around to do much listening.

http://www.levyinstitute.org/conferences/minsky2010/

kicking sand in peakers' faces is pretty easy work.

hapa, was that directed at me? do you consider yourself a peaker?

I don't mean any offense, I'm just finding it difficult to understand where you are coming from.

If you are talking about the fact that economics doesn't necessarily put a price on say a global warming induced catastrophe, that's true, and you definitely do have a point there.

Economists call it an "externality". You can devise a system to remedy this though (capntrade or carbon tax), so long as natural scientists can give economists the info to input.

If on the other hand the risk really is incalculable, then economists can't do anything about it, but that doesn't have anything to do with economics really. That would be due to natural scientists not being able to understand/calculate the risk.

If science can calculate it, then economics can account for it.

actually, Vickrey was the master of devising just those kinds of solutions

externalities… things outside the deal, outside the closed interaction

pretty harsh to say the scientists need to get solid numbers, tho. this situation is unprecedented. a real live hand-crafted extinction event, however long it ends up taking, and we don't even have first-hand data on the starts and finishes of glacial periods, not for betting on.

hapa
i wish you'd take a few licks at this peak biz
i don't trust my robot loving
doom time dreaming
moving sofa on wheels lassitude
to do the pending gubberdammerung justice

i agree with senator bethune as i know you do
---fb he is keenly clear on markets for externalities etc ---
we could account for all our cost impositions on each other
and the rest of planet brown out
and that we won't in anything like a timely fashion

the desire to get every unindustrialized corner of the global economy
to a far higher level of work hourly productivity ... as fast as possible
vs
project green our dung colored terra
reminds me
of the 1860-70's intraprog debate
over which oughta get movement priority

black male voting
or
white female voting

i'm too vicious to suggest"
a both " pathway
has a chance here
both a planetary
hapa green revival/revolution
and
a universal south hemi
bethune china growth model

i tend to figure the trans nat corporates
will try to play one off against the other
and keep us on the neither pathway

moral:

lets not kick sand at each other

practical throw weight of moral:

a nat's eye lash

There's some irony in that industrialization, done right, is a pretty good solution to both global warming and global poverty. But you're never going to convince the export-driven sweatshop vultures, goo-goo and wingut alike, that done right means done by people other than them.

The final curtain will feature Jeffrey Sachs howling from the ruins of the Earth Institute, after his goo-goo externalities run out of places to crush.

krugman :

http://krugman.blogs.nytimes.com/2010/04/13/growth-and-greenhouse-gases/

"there’s a tendency for some environmentalists to adopt a sort of mechanistic view of the economy, in which there’s a one-to-one correspondence between real GDP and carbon emissions (oddly, people on the right tend to assert the same equivalence, using it to argue that we can’t afford to deal with climate change).

In fact, there’s much more choice and flexibility involved.....given the right incentives, we can do this."

"given the right incentives"
of course that's so
if uncle creates
the proper array of profit motives
the corporates will become barry commoner-ites

http://emilymorash07.tripod.com/id12.html
------

seems
krug has a very simple solution formula

green equals electrification
plus incentives

yes incentives not soviets

clean bright incentives
worthy of humans of all shapes

incentives
full of dignity and discretion

convert the corporations into foundations
and we can move the planet
out of its present economic orbit

"you're never going to convince the export-driven sweatshop vultures, goo-goo and wingut alike, that done right means done by people other than them."

allah bless your crops
super al

that sez it all baby

seems
krug has a very simple solution formula

green equals electrification
plus incentives
http://www.uggbootsale-uk.org/ugg-classic-short-boots.html
yes incentives not soviets

clean bright incentives
worthy of humans of all shapes

incentives
full of dignity and discretion

convert the corporations into foundations
and we can move the planet