The stag constant

Let's suggest we cut the great depression in two pieces
The contraction and the mid term aftermath

Thesis part two started in the summer of '33
And the system found ways to move unemployment back down near to
10% not far north of where we are now in the great recession
Of course without a robust transfer system /safety net
The new deal had to sop up huge numbers of the unemployed with wpa ops to move
The system to this socially tolerable unemployment rate range
Where it hung fire
more or less
till the second po.icy induced contraction of '37
Which itself was goosed ...now by more like Keynesian methods back up to the 10%
tolerable range again
Until the toal game changerafter september39
Kicked us into the full bore arsenal of democracy gig



Conclusion the acceptable range has remarkably changed little in the present era from what it was in the prior era
We can tolerate around one out of ten candidates for a job to languish protractedly
In a jobless state

Ricardo Reis

Today's "Dinheiro Vivo" supplemento to Jornal de Noticias e Diario de Noticias had an essay by me on fiscal devaluations. (It is here, but a better version is here.)

There are some pros and cons to this measure, but many of the arguments that have dominated the public debate in the last month are, in my view, not valid. In particular:

1) Fiscal devaluations have nothing to add to our deficit target, positive or negative. They are budget neutral. They are a growth measure.

2) Devaluations are not some funky idea by esoteric or disreputable economists or crazy wonks. They are part of almost every IMF plan, including those in Portugal in the early 80s.

3) The price of Portuguese non-tradables does not change with the measure. The price of imports rises, the price of exports falls, and that is it.

4) Profits are likewise unchanged.



















5) Fiscal devaluation is not the same as lowering payroll taxes. Raising VAT is as important as lowering the payroll tax in the measure


6) One feature that hasn't been given its due attention is that you have to raise the consumption tax on sectors exempt from VAT, especially real estate.





7) According to the study put out by the Bank of Portugal and several Ministries, lowering payroll taxes by 3.7% as part of a fiscal devaluation leads to a fall in the real exchange rate of about 2.2%. That is a lot. The measure has a lot of bite on competitiveness, in spite of what a naive look at the labor content of exports may show.

8) Contrary to what the press reported, that official study, in my view, supports the use of a fiscal devaluation. The study spent (too) much of its time talking about lowering payroll taxes, which is not the same as a fiscal devaluation (point 5 above). Also, its more reliable estimates show a positive impact of 0.5% of GDP to a 3.7% lower TSU plus 2.2% higher VAT combination. That's a big impact. Extrapolating, it says that if you doubled or quadrupled the measure (like I have defended, and the IMF has supported) you could get a huge impact, likely well above 1% of GDP. Show me any other measure that has that short-run impact on output.

DPI

Ricardo reis created the index SS oughta shift to with a back dating
Dynamic price index
Specifically includes the full impact of rising housing costs


"In the four years to 2004, the average annual rate of inflation according to the DPI was 7.4%, compared with an average increase of only 2.3% in the CPI. This was largely due to the rising price of homes. The true rate of increase in workers' cost of living is calculated to be just as high"

Portugal's swap

Transfer the revenueburdenfrom payroll taxes to value added taxes
I agree completely
Recall 100% vat credits are legal on exports

Result might be like a currency de Val
Which Portugal strung up with too high a wage structure and no way to cut loose given it's inability todevalas a pig in the euro poke

Question is the swap big eb
Nough to close the job gap by surging intra zonal national exports

Ie a parallel shift in the import export balance ?
Say. You get. A bump to GDP of 1% by a 7% cut in the payroll tax
--- here all of the employee side of SS tax --- and recapture the revenue with a 5 % vat

Knock out both sides employee and employer you get a 2% bump



Euro vat rule:

"For the purpose of exports between the Community and non-member countries, no VAT is charged on the transaction and the VAT already paid on the inputs of the good for export is deducted - this is an exemption with the right to deduct the input VAT, sometimes called 'zero-rating'. There is thus no residual VAT contained in the export price.
However, as far as imports are concerned, VAT must be paid at the moment the goods are imported so they are immediately placed on the same footing as equivalent goods produced in the Community. "
"VAT on goods moving between Member States
No frontier controls exist between Member States and therefore VAT on goods traded between EU Member States is not collected at the internal frontier between tax jurisdictions.
Goods supplied between taxable persons (or VAT registered traders) are exempted with a right to deduct the input VAT (zero-rated) on despatch if they are sent to another Member States to a person who can give his VAT number in another Member State. This is known as an "intra-Community supply". The VAT number can be checked using the VAT Information Exchange System (VIES).
The VAT due on the transaction is payable on acquisition of the goods by the taxable customer in the Member State where the goods arrive. This is known as "intra-Community acquisition". The customer accounts for any VAT due in his normal VAT return at the rate in force in the country of destination."


Looking at this
Then we can answer the how ?
That is the how
despite the balanced budget shift we can stimulate domestic output ?

By reducing imports thru both the income and substitution effect
And by raising exports thru the vat credit recoup

Of course all this requires heroic assumptions about reactive corporate price decisions

Upshot conducted by a corporate dominated state suspect this is simply a Scam-Bo move

Gain sekers as a generalization that captures angels and devils both

We may need to accept the gain seekers will be with us not for always but for a protracted interval

With us thru many more acts of the framing human drama

Faust in motion Faust as the negation of the negation is an angel inspire of himself

Idespise the crass worship of pecuniary incentives aa much as any trot in a hair shirt

But ...


Clio has her demands to place on us finite players
After all we are her playthings as well as her agents

Investor confidence .....the devils due versus waiting for uncle sucker

But it's pure superstition now
A superfluity as well as a class sin for job classers
Its like nite prayers to satan by an atheist
But made into answered prayers because we jobsters
Continue to believe in the necessity of them


And fail to see their social necessity is no longer there

The state can act in ways no private investor class would ever want to act
Ie in a state where the social necessity is to cut the return on investment
Is socially optimal
Vigorously take the cut

Own all the mortgages and cut their real value in half say
To relieve an undo burden on the auto no ous economic players/agents

State dependent regs

The ace state dependent patent protection is a beautiful example of
Dynamic regulations and algorithmic mechanism design

Markets become highly structured but contingently structure
The richness of required specific info grows as the erg state of market interactions
becomes more complex

Ie it cries out for artificial superimpositions the spontaneous market development
ever more precisely
Refabricated as it evolves

The ace strikes meme gold the real kind counterintuitive meme gold

"Acemoglu Yes, it is sort of a counterintuitive result—and not what we were expecting when we started working on this. In fact, our intuition was the opposite, so it’s one of the places where you sort of are surprised.
We started with a model that is very traditional, in some sense, for this set of questions. It has two companies within each sector that compete, and they’re trying to improve over each other. We thought that it would be a great idea to cut the leads of companies that are farther ahead of others. If Microsoft, or Apple, is very far ahead of its rivals, that will discourage the rivals. They’ll think,
“Well, we’re never going to catch up with Apple; we might as well give up.” And Apple itself reduces research because part of the reason it was doing R&D was to rise above its rivals and be able to charge higher prices than its rivals. Well, if the rivals aren’t doing R&D, then they’re not much of a threat to Apple, so then they don’t do as much.
So we thought, “Ah, well, then it would be a great thing to say, ‘If Apple is so far ahead of its rivals, let’s get rid of its IPR protection, so it brings them closer, and then once they are closer, they’ll all start running faster.’” So that was our intuition.
And it turns out, that intuition is not correct. And the reason it’s not correct is because if you do that—if you get rid of the IPR protection—the cost is not so much that you discourage Apple today, but you discourage companies that were trying really hard to build a lead over their rivals in order to become like Apple.
So instead, it remains true that full IPR is not generally optimal, because full IPR:
(a) Slows down how successfully some ideas that have been invented are used by others, which you want to encourage. You know, once Apple comes up with a great device, you don’t want it to be the only company that does so, leaving me in my corner trying to work with a bad technology. You want me to use that good technology as well.
(b) This effect that I mentioned is still there, that if you can bring us closer, we both run faster and we’re both more innovative.
But it turns out in such models—and in a robust way—the optimal policy is to relax IPR protection when you and I are a few steps apart, but dangle the carrot that if you increase the gap between you and your rival to a sufficiently high level, then you’ll be given better patent protection.
Then in some sense, you’ll have your cake and eat it too. You can benefit from this effect that by letting me use your technology, you’re encouraging both of us to run faster, but at the same time not creating this very strong discouragement effect that people are going to put off doing R&D because they’re not going to be rewarded for that effort. On the contrary, they’ll be rewarded even more, because they’re going to escape not only their competitor, but they’re going to also escape the regime where their IPR is not very well protected. So that’s sort of the twisted logic of it all."

Krugman on the rentier lobby in triumph mode

"Betting on Ben S. Bernanke has been the most profitable trade for government bond investors in 16 years, defying lawmakers in the U.S. and abroad who said the Federal Reserve chairman’s policies would lead to runaway inflation and the dollar’s debasement.

Treasuries due in 10 or more years have returned 28 percent in 2011, exceeding the 24.4 percent gain in all of 2008 during worst financial crisis since the Great Depression, according to Bank of America Merrill Lynch indexes. Not since 1995, when the securities soared 30.7 percent, have investors done so well owning longer-dated U.S. government debt."

Homage quotation 113

Mr Shandy on the auxiliary verbs

I am convinced, Yorick, continued my father, half reading and half discoursing, that there is a North-west passage to the intellectual world; and that the soul of man has shorter ways of going to work, in furnishing itself with knowledge and instruction, than we generally take with it....

--The whole entirely depends, added my father, in a low voice, upon the auxiliary verbs, Mr. Yorick.

Had Yorick trod upon Virgil's snake, he could not have looked more surprised.--I am surprised too, cried my father, observing it,--and I reckon it as one of the greatest calamities which ever befel the republic of letters, That those who have been entrusted with the education of our children, and whose business it was to open their minds, and stock them early with ideas, in order to set the imagination loose upon them, have made so little use of the auxiliary verbs in doing it, as they have done--So that, except Raymond Lullius, and the elder Pelegrini, the last of which arrived to such perfection in the use of 'em, with his topics, that, in a few lessons, he could teach a young gentleman to discourse with plausibility upon any subject, pro and con, and to say and write all that could be spoken or written concerning it, without blotting a word, to the admiration of all who beheld him.--I should be glad, said Yorick, interrupting my father, to be made to comprehend this matter. You shall, said my father.

The highest stretch of improvement a single word is capable of, is a high metaphor,--for which, in my opinion, the idea is generally the worse, and not the better;--but be that as it may,--when the mind has done that with it--there is an end,--the mind and the idea are at rest,--until a second idea enters;--and so on.

Now the use of the Auxiliaries is, at once to set the soul a-going by herself upon the materials as they are brought her; and by the versability of this great engine, round which they are twisted, to open new tracts of enquiry, and make every idea engender millions.

You excite my curiosity greatly, said Yorick.

For my own part, quoth my uncle Toby, I have given it up.--The Danes, an' please your honour, quoth the corporal, who were on the left at the siege of Limerick, were all auxiliaries.--And very good ones, said my uncle Toby.--But the auxiliaries, Trim, my brother is talking about,--I conceive to be different things.--

--You do? said my father, rising up.

My father took a single turn across the room, then sat down, and finished the chapter.

The verbs auxiliary we are concerned in here, continued my father, are, am; was; have; had; do; did; make; made; suffer; shall; should; will; would; can; could; owe; ought; used; or is wont.--And these varied with tenses, present, past, future, and conjugated with the verb see,--or with these questions added to them;--Is it? Was it? Will it be? Would it be? May it be? Might it be? And these again put negatively, Is it not? Was it not? Ought it not?--Or affirmatively,--It is; It was; It ought to be. Or chronologically,--Has it been always? Lately? How long ago?--Or hypothetically,--If it was? If it was not? What would follow?--If the French should beat the English? If the Sun go out of the Zodiac?

Now, by the right use and application of these, continued my father, in which a child's memory should be exercised, there is no one idea can enter his brain, how barren soever, but a magazine of conceptions and conclusions may be drawn forth from it.--Didst thou ever see a white bear? cried my father, turning his head round to Trim, who stood at the back of his chair:--No, an' please your honour, replied the corporal.--But thou couldst discourse about one, Trim, said my father, in case of need?--How is it possible, brother, quoth my uncle Toby, if the corporal never saw one?--'Tis the fact I want, replied my father,--and the possibility of it is as follows.

A White Bear! Very well. Have I ever seen one? Might I ever have seen one? Am I ever to see one? Ought I ever to have seen one? Or can I ever see one?

Would I had seen a white bear! (for how can I imagine it?)

If I should see a white bear, what should I say? If I should never see a white bear, what then?

If I never have, can, must, or shall see a white bear alive; have I ever seen the skin of one? Did I ever see one painted?--described? Have I never dreamed of one?

Did my father, mother, uncle, aunt, brothers or sisters, ever see a white bear? What would they give? How would they behave? How would the white bear have behaved? Is he wild? Tame? Terrible? Rough? Smooth?

--Is the white bear worth seeing?--

--Is there no sin in it?--

Is it better than a Black One?

The dual fallacy : cost min profit max

Thesis:
These two agent missions cost min versus profit max
in "real" production firms
operating in "real" marketplaces
Result in different behaviors

Maximizing logic

Is that a goal or a result
Or neither ?


Is it a tendency
A higher collective realization of the as if
From trial and error
reward and punishment
struggle and adaptation

To find tha maximum or optimal is a short cut that may st n
Best substitute a to do will be done for an ever thru the glass Carly search for
ought to do now
That as viceroy in his meta static
Cs conciselysuggests wouldn't 't be our oughta if we all could read each others minds


The game doesn't use discrete your turn moves and limitless time between each and all players moves with a consistent boardosition and a ready accurate forecast of everyones next move
With all the twisting of the possible into the pre determined that produces

Ie reducing history to a vast causalcjain beyond much more then post hoc rationalizations
And providential faith


Not happy with this
Just some thought throw up

Three steps

Pigou
Lipsey Lancaster
Greenwald stigiitz

What ?


1920
1955
1985


It's as if on a parallel track with the walrasian Panglossian enterprise

Question:
what have the formal refinements of walras produced ?

Their own refutation as models of anything like market systems

Over the past 20 years, more than 80 percent of the capital gains income realized in the United States has gone to 5 percent of the people; about half of all the capital gains have gone to the wealthiest 0.1 percent.

Raise the cap gains tax to work income rates

The 1% solution

Raise effective tax rates on the top one per centers from the current 30% to 40%

Oh and clap a price control mechanism on the health sector

Tale of two deficits

The asshole sanctimonious German public has it's 40 million pair of eyes
Fixed right on the large fiscal deficits in club med

Shame shame you moorish pigs

Well that's
A clear case of media misdirection

It's not the fiscal deficits stupid !!!!

The key deficit is club med's
trade deficit !!!!

In particular club med's trade deficit
with their northern co common marketeers
Both inside and outside the euro zone

See it's simple
Sharing The euro
freezes the poor med club even their honors class moors
Price levels

This leads
To slow strangulation
Because the med club members can't use the best method of rebalancing trade

adjusting their various national price levels
By
Deval
Ala non zone common market ops like
sweden and Britain

Of course
The German price level in euros is just dandy so .....
They don't need no stinking
And they run the euro bank along with the French
But as is obvious to anyone bothering to look past
The " they're havin a party down there " bull shit line

the pigs really really do ....Need
A deval
And without one

The only way they can adjust
is by deflation of their national price level

The effect of the common euro has been a silent appreciation of the club med price level
Against the teutonic price level

Absolute price level lowering however
Ia
a remedy no advanced production system
based on
Liberal marketplaces can tolerate
That is ....without convulsive reactions as wages and operating margins alike
get squoozen while euro based debt value in terms of club med output prices
Goes higher

Nasty medicine even Germans might rebel against
Though the wage class of Germany has seen some serious constructions lately
Notice
Harts mountain bird seed rations


Of course Germany could go on a binge now
run huge fiscal deficits
boom gimutlick
while imports and German prices soar


That would be the carrot answer
But trans nats
prefer the stick applied to Dago asses
To carrots for Hanzel and Gretel

They say growing inequality we say growing exploitation

The two great predicates of amerplebproles

The job ethic and home ownership

These two kulak/hard hat values are constraints on pwog agit-prop

Overshooting model
From Wikipedia, the free encyclopedia


The Overshooting Model or Exchange rate overshooting, first developed by economist Rudi Dornbusch, aims to explain why exchange rates have a high variance. A key element of the model is that expectations of exchange rate changes are "consistent" — that is, rational — rather than static.



The most important insight of the model is that adjustment lags in some parts of the economy can induce compensating volatility in other


specifically, when an exogenous variable changes, the short-run affect on the exchange rate can be greater than the long-run effect, so that in the short run the exchange rate overshoots
its new long-run


Dornbusch argued that volatility is in fact a ...fundamental property ...His model assumes prices of goods are stick..... the exchange rate adjusts instantaneously to any change in current financial market conditions.


model

Assumption 1: Aggregate demand is determined by the standard open economy IS-LM mechanism
That is to say, the position of the IS curve is determined by the volume of injections into the flow of income and by the competitiveness of Home country output measured by the real exchange rate.
The first assumption is essentially saying that the IS curve (demand for goods) position is in some way dependent on the real effective exchange rate Q.
That is [ IS = C + I + G +Nx(Q)] -> In this case, net exports is dependent on Q (as Q goes up, foreign countries goods are relatively more expensive, and home countries goods are cheaper, therefore there is higher net exports).
Assumption 2: Financial Markets are able to adjust to shocks instantaneously, and investors are risk neutral.
If financial markets can adjust instantaneously and investors are risk neutral, we can say the uncovered interest rate parity (UIRP) holds at all times. That is, the equation r = r* + Δse holds at all times (explanation of this formula is below).
It is clear, then, that an expected depreciation/appreciation offsets any current difference in the exchange rate. If r > r*, the exchange rate (domestic price of one unit of foreign currency) is expected to increase. That is, the domestic currency depreciates relative to the foreign currency.
Assumption 3: In the short run, goods prices are 'sticky'. That is, aggregate supply is horizontal in the short run, though it is positively sloped in the long run.
In the long run, the exchange rate (s) will equal the long run equilibrium exchange rate,(ŝ).
r: interest rate in home country r*:interest rate in foreign country s: exchange rate
Δse: expected change in exchange rate θ: coefficient reflecting the sensitivity of market participant to the (proportionate) overvaluation/undervaluation of the currency relative to equilibrium. ŝ: long-run expected exchange rate
m: money supply/demand p: price index k: constant term
l: constant term yd: demand for home country output h: constant
q: real exchange rate þ: change in prices with respect to time π: prices
ŷ: long-run demand for home country output (constant)
Formal Notation
[1] r = r* +Δse (uncovered interest rate parity - approximation)
[2] Δse = θ(ŝ – s) (Expectations of market participants)
[3] m - p = ky-lr (Demand/Supply on money)
[4] yd = h(s-p) = h(q) (demand for the home country output)
[5] þ = π(yd- ŷ)(proportional change in prices with respect to time) dP/dTime
from the above we can derive the following (using algebraic substitution)
[6] p = a - lθ(ŝ - s)
[7] þ = π[h(s-p) - ŷ]
In equilibrium
yd = ŷ (demand for output equals the long run demand for output)
from this we substitute getting [8] ŷ/h = ŝ - p_hat That is in the long run, the only variable that affects the real exchange rate is growth in capacity output)
Also, Δse = 0 (that is, in the long run the expected change of inflection is equal to zero)
when we substitute into [2], we get r = r* sub that into [6] and we get
[9] p_hat = m -kŷ + l r*
taking [8] & [9] together, we get:
[10] ŝ = ŷ(h-1 - k) + m +lr*
comparing [9] & [10], we can see that the only difference between them is the intercept (that is the slope of both is the same). This tells us that given a rise in money stock pushes up the long run values of both in equally proportional measures, the real exchange rate (q) must remain at he same value as it was before the market shock. Therefore, the properties of the model at the beginning are preserved in long run equilibrium, the original equilibrium we had was stable.
Short run disequilibrium
The standard approach is to rewrite the basic equations [6] & [7] in terms of the deviation from the long run equilibrium). In equilibrium [7] implies 0 = π[h(ŝ-p_hat) - ŷ] If we subtract this from [7] we get
[11] þ = π[h(q-q_hat) The rate of exchange is positive whenever the real exchange rate is above its equilibrium level, also it is moving towards the equilibrium level] - This gives us the direction and movement of the exchange rate
In equilibrium, [9] hold, that is [6] - [9] is the difference from equilibrium.
[12] p - p_hat = -lθ(s-ŝ) This gives us the line upon which the exchange rate must be moving (the line with slope -lθ.
Both [11] & [12] together allow us to demonstrate that the exchange rate will be moving towards the long run equilibrium exchange rate, whilst being in a position that implies that it was initially overshot. From the assumptions above, it is possible to derive the following situation. This demonstrated the overshooting and subsequent readjustment. In the graph on the top left, So is the initial long run equilibrium, S1 is the long run equilibrium after the injection of extra money and S2 is where the exchange rate initially jumps to (thus overshooting). When this overshoot takes place, it begins to move back to the new long run equilibrium S1.



Rudiger Dornbusch (1976). "Expectations and Exchange Rate Dynamics". Journal of Political Economy 84 (6): 1161–1176. doi:10.1086/260506.

" Inflation hawks, including Paul Volcker in today’s NYT, often invoke the supposed lessons of history, to the effect that inflation is always harmful and always gets out of control.
..........
why didn't the US relapse into the Great Depression after World war II .....


The big rise in prices during and after WWII arguably did a lot to eliminate the debt overhang, making it possible for the economy to enter a sustained, non-inflationary boom."

P krug

Quit ....me?

Back in the Clinton miracle every month about 3 million job bled beefs up and quit

Today?

Try about .....two million


A year of that difference amounts to 12 million souls
hung up just a bit longer
Right where they don't want to be
Then back during those easy listenin' days
When the boy man from dog patch
rubber assed his way into the history books

Just to further belabor the obvious

Why is a stag policy all about corporate wage suppression here ?

If that is a basis for a national stag policy now when is it not a preferred policy ?

The trade rebalance provides a context
And suggests a cause and a plausibly preferred remedy absorption suppression
Versus devaluation

The wage suppression line looks like a twenty four seven rule

Limited use of meta statics

The prior two posts suggest what a meta static model of an essentially dynamic process can lead to
Belief in the supernatural

The irony of calling this derived phantasm natural this or that gives away the sales mans puffery here

Obviously a real production system is changing al the time
I suppose one could look back and detect a center point pathway
Using what happened really and what bestride structuring of that path way might look like

Sort of like knowing the future and making it happen byricing daemons
I'm not sure this makes sense since the optimal rice sets would lead thru a different path

Oh my head wobbles

More Delong run

"In the long run persistent and anticipated increases and decreases in the rate of nominal spending growth show up as increases or decreases in the rate of inflation and not as increases in real GDP growth.

In the long run rates of job finding, job quitting, and firing return to their normal equilibrium values.

When the quit rate gets back to its standard 2.2% per month; when the hire rate gets back to its standard 4% per month, when positive shocks to the rate of growth of nominal aggregate demand show up overwhelmingly as increases in the rate of inflation and negative shocks as decreases in the rate of inflation--then it will be time to say that it is primarily a structural problem, not aggregate demand."

Delong run phantasmics

"In the long run the actual rate of unemployment is the natural rate of unemployment--the rate "that would be ground out by the Walrasian system of general equilibrium equations, provided there is embedded in them the actual characteristics of the labor and commodity markets…'"

Autonomic hysterics

The site has a great name plate automatic earth

The site itself has abundant self confidence

The self confidence seems to be that of a one big thought lunatic cult


Thesis:

The commanding heights are a corporate self induced death by debt trap

That is corporations as we wage surfs have come to know and loathe them


The morph

The next form of exploitation

Seems a bit like Gulags a go go

But I'm still discerning

It's like entering a darkened movie theatre in mid flick
In a foreign country where the flick's construction seems either unaware or heedless
Of the universals we call
The Hollywood rules
and trying to explain the audience reactions
to certain faces words and actions on screen

The fear of tax holidays

We need by my extremely careful calculation using doctor eve abel's 60 equation macronic model

In addition to the present federal deficit on plus 1.3 trillion dollars of annual deficit
At least another 1.8 trillion or 12% of GDP


-------Figure 4 % increae in employment given more hours per and productivity slack
requires as much as 3 times that in increased GDP-----

The tax holiday that requires will need to wipe out the first 3% of state sales taxes
And all Medicare premiums and 50 % rebates on private premiums and and

The fear

How do you re impose these extractions ?

Slowly very very slowly
Example say half the rate of wage increases

How obvious is this ?

The household spending rate has stabilized
The corporate investment in software and equipment has stabilized

So the effective demand we need is what a boom in construction


Forget
Any serious reduced trade gap by bigger exports
So ....


Of course
1 ) households could collectively go back to zero savings from 5%
and
2) we could have an equipment and software boom


But I suspect imports would bite a goodly chunk out of (1)
And (2 ) faces the big "for what ?"

Uncle pays property taxes

Poll this to discover what seems fair

The f twins oughta......?

Just offer better rates and amounts in re fi

Capture all home owner mortgages that way

Of course the federal house lot Bank needs institioning

Homeowner
Debt relief needs to be indirect

take a form open to everyone that owns a home

Lower carrying costs/ better repay terms

Detroit Sets Its Future on a Foundation of Two-Tier
Wages
By BILL VLASIC

DETROIT -- They are a cornerstone of Chrysler's
unlikely comeback: 900 employees turning out a Jeep
Grand Cherokee sport utility vehicle every 48 seconds
of the working day at an assembly plant here.

Nothing distinguishes them from other workers at the
Jefferson North plant, except their paychecks. The
newest workers earn about $14 an hour; longtime
employees earn double that.

With the economy slumping and job creation once again a
pressing issue in the White House and Congress,
advent of a two-tier wage system in Detroit is spiking
employment for one of the country's most important
manufacturing industries. The new jobs, which are seen
as long term, are being watched closely by economists,
executives in other industries and Washington policy
makers eager to increase employment in manufacturing
and other areas.

For many, the opportunity for steady employment is
welcome, even at a lower wage and with no certainty
when it might

What was once seen as a desperate move to prop up the
struggling auto industry is now considered an integral
part of its future. The demand for $14-an-hour
manufacturing jobs is providing Detroit's Big Three
automakers with a ready pool of eager new employees.
Last year, Chrysler was flooded with inquiries about
the jobs here. It froze the list after receiving 10,000
applications.

The companies say the two-tier wages are paying off.
Despite the disparity, there is no appreciable
difference in the Grand Cherokees produced on the shift
dominated since last fall by the lower-paid workers,
the plant manager says. At General Motors, savings from
its two-tier workers are crucial to production that
began last month of an inexpensive, subcompact car in
suburban Detroit.

Two-tier wage systems have been tried in the airline
industry and others with spotty success. Usually the
lower wages disappear rather quickly when the economy
picks up. But the arrival of vastly different wage
rates in auto factories is a seminal event in an
industry long influenced by a powerful union devoted to
equal pay






____________________________________________

Firm prices into market prices

The boundary of a certain product market and the moment toward price unity among
Market participating firms is a problematic assumed away incrucialcontexts
Where single market prices never emerge

The firm cost price and production price is heterogeneous operating margins vary prices are dispersed

Regular corporate debt is it like household debt or hi fi outfit debt

Obviously bank and other hi fi sector debt is special

But what about the debt of actual production companies ?

To the extent they are tied to their own hi fi balloons the tangle
Often becomes nearly impenetrable

One thinks of the Japanese system of hifi nucleated production and marketing groups

To scale back household debt ratios is an obvious part of restructuring
But regular corporations debt burden needs a look see too eh?

As for the hi ifs themselves it's a hall of mirrors not worth a Boston fart

The effort to preserve the fine structure here is a sick joke

They need resolutions of the renditioning variety en mass

Bubbles and radical uncertainty

NME vs MMT

Both suck baby biscuits
More later

Pk declares : "my silly toonish gold trick model has no Oily Counterpart" ....errr....yet

Why?
Well there are extraction costs and new discoveries

And history suggests oil was never hoteling hoarded

Really pk

The guy really resists the commodity market specdom thesis

Though he suggests oil maybe now possibly about to be on the vege of being
Hoteling hoarded


At least he now realizes hoarding oil means not pumping at max rate

He's blinded by his desire for peak oil pricing to act as a de facto green pig tax

Boarders reeping wind falls profits
A case of doing good by doing well

A solid majority of economists is now of the opinion that, even in a capitalist system, full employment may be secured by a government spending programme, provided there is in existence adequate plan to employ all existing labour power, and provided adequate supplies of necessary foreign raw-materials may be obtained in exchange for exports.

Imagine
That was written nearly 70 years ago by MK

a greater discovery then antibiotics perhaps
But it's as if we decided control of infections
Would bring on us
a plague greater then the plague itself

Solitary poor short nasty and brutish

Five aces in the corporate states
dealer's deck
And played into the the great market world game
where useful or necessary

The five cardinal miseries and channels of control

Job rations kept short
credit conditions kept nasty
Jobblers bargaining kept solitary
Wages kept poor
And on site conditions kept brutish

Pk uses hoteling to clever if problematic effect

It involves the use of the freighted assumption any commodity has a price that rends it too expensive to use

Take gold as he does
But beter oil

Gold has value as a store of wealthnin a way that oil doesn't

So I'll use oil

The planet has n extractable units of oil it is exhaustible
The optimal price path exhausts this total stock and at least equals
the string of short term
Carying charges
That famously include the return on cash investment

Liquidate your supply at less then maximum rate if tomorrows price is not high enough to at least equal the return on a cash investment selling it could effectuate

You get the shadow of looming complexity here one needs to rapidly avert the eye from eh ?

But it's enough to suggest such a commodity when faced with lower returns on cash investments leads to higher rational storage rates of the commodity
And thus higher spot prices and if demand has any elasticity

And it better have

Then the time frame to exhaustion is extended

Arundhati Roy speaks !

By Dinyar Godrej
New Internationalist
Issue 445


- Your writings have grappled with ruthless state
violence which is often at the behest of corporate
interests. Much of the corporate-owned media in India
shies away from covering the civil war-like conditions
in many parts of the country. The establishment tends
to brand anyone who attempts to present the other
side's points of view as having seditious intent. Where
is the democratic space?

You've partially answered your own question
newspapers and television channels do not make their
money from subscriptions or viewership; in fact,
corporate advertisements actually subsidize TV
viewership and newspaper and magazine readership, so in
effect, the mass media is run with corporate money.
Some media houses are directly owned by corporations,
some indirectly by majority share-holdings. Some media
houses in, say, Central India, have a direct interest
in mining and infrastructure projects, so they have a
vested interest in the push to displace people in the
huge, ongoing land-grab in which land and resources are
forcibly taken from the poor and given to the rich - a
process which goes by the name of `development'. It
would be foolish to expect objective reporting: not
because the journalists are bad people, but because of
the economic structure of the organizations they work
for. In fact, what is surprising is that despite all of
this, occasionally there is some very good reporting.
But overall we either have silence, or a completely
distorted picture, in which those resisting their
impoverishment are being labelled `terrorists' - and
these are not just the Maoist rebels who have taken to
arms, but others who are involved in unarmed, but
militant, struggles against the government. A climate
has been created which criminalizes dissent of all
kinds.

There are hundreds, maybe even thousands of the poorest
people in jails across the country under charges of
sedition and waging war against the state. Many others
are just charged under the common criminal penal code.
There are the other `seditionists' too, of course -
those who have been fighting for self-determination
after being inducted into the Union of India without
their consent, when the British left in 1947. I refer
to Kashmir, Manipur, Nagaland. in these places, tens of
thousands have been killed, hundreds of thousands
tortured in the nightmarish interrogation centres and
army camps all around the country. And now, the Indian
army is migrating to the heart of the country - to
fight the adivasi people whose lands the corporations
covet. They say Pakistan is a military dictatorship,
but I don't think the Pakistani army has been actively
deployed against its `own' people the way the Indian
army has been: Kashmir, Manipur, Nagaland, Hyderabad,
Goa, Telengana, Punjab and now, Chhattisgarh,
Jharkhand, Orissa.

- Anti-corruption campaigning has been at the forefront
of media-reported news in India. Meanwhile, the
relative silence on civil war conditions continues. How
does one explain this gap in what makes the news?

I have mixed feelings about the anti-corruption
campaign. It gathered momentum after a series of huge
scams hit the headlines. The most scandalous of them
was what has come to be known as the `2G scam' in which
the government sold telecom spectrum for mobile phones
(a public asset) to private companies at ridiculously
low prices. The companies went on to sell them at huge
profits to other companies, robbing the public
exchequer of billions of rupees. Leaked phone taps
showed how everybody, from the judiciary to politicians
to high profile journalists and low profit hit-men,
were in on the manoeuvring. The transcripts were like
an MRI scan that confirmed a diagnosis that had been
made years ago by many of us.

The 2G scam enraged the Indian middle classes, who saw
it as a betrayal, as a moral problem, not a systemic or
a structural one. Somehow, the fact that the government
has signed hundreds of secret Memorandums of
Understanding (MOUs) privatizing water, minerals and
infrastructure, and signing over forests, mountains and
rivers to private corporations, does not seem to
generate the same outrage. Unlike in the 2G scam, these
secret MOUs do not have just a monetary cost, but human
and environmental costs that are devastating. They
displace millions of people and wreck whole ecosystems.
The mining corporations pay the government just a tiny
royalty and rake in huge profits. Yet the people who
are fighting these battles are being called terrorists
and terrorist sympathizers. Even if there were no
corruption and everything were above board on these
deals, it would be daylight robbery on an unimaginable
scale.

On the whole, when a political movement is mobilized
using the language of `anti-corruption', it has an
apolitical `catch-all' appeal which could result in a
hugely unfair system being strengthened by a sort of
moral police force which has authoritarian instincts.
So you have `Team Anna': a sort of oligarchy of
`concerned citizens' - some of them very fine people -
led by the old Gandhian Anna Hazare, who talks about
amputating the limbs of thieves and hanging people and
who has praised Gujarat's Chief Minister Narendra Modi,
who presided over the public massacre of thousands of
Muslims in broad daylight. On the other hand, to shun
the anti-corruption movement and set your eyes on a
long-term political goal lets the corporate looters and
their henchmen in the media, parliament and judiciary
off the hook. So it's a bit of a dilemma.

- Recent Indian government legislation permits web
content to be shut down for a variety of reasons. Film
censorship is still widely used. Why does the state
take such a paternalistic role towards what its
citizens have to say?

I think overt censorship is slated to become a big
problem in the near future. Internet censorship,
surveillance, the project of the electronic UID (Unique
Identity card). ominous. Imagine a government that
cannot provide food or water to its people, a
government whose policies have created a population of
800 million people who live on less than 20 rupees
[about 45 US cents] a day, a country which has the
largest number of malnourished children in the world,
which has, as a major priority, the desire to
distribute UID cards to all of its citizens.

The UID is a corporate scam which funnels billions of
dollars into the IT sector. To me, it is one of the
most serious transgressions that is on the cards. It is
nothing more than an administrative tool in the hands
of a police state. But coming back to censorship: since
the US government has pissed on its Holy Cow (Free
Speech - or whatever little was left of it) with its
vituperative reaction to Wikileaks, now everybody will
jump on the bandwagon. (Just like every country had its
own version of the `war on terror' to settle scores.)
Having said this, India is certainly not the worst
place in the world on the Free Speech issue: the
anarchy of different kinds of media, the fact that it's
such an unmanageable country and, though institutions
of democracy have been eroded, there is a militant
spirit of democracy among the people. it will be hard
to shut us all up. Impossible, I'd say.

- You have pointed out that nonviolent positions are
difficult to hold on to when there is no audience to
witness them, and when the opposing force does not
blink at the moral challenge and responds with murder.
Why do you think pointing that out caused such an
uproar?

I have written at some length about this. I do not say
that nonviolent satyagraha is an obsolete tool of
resistance, not at all. It can be extremely effective;
but has to be carried out in the public eye, in front
of TV cameras, and for demands - like `anti-
corruption'- which appeal to the sympathies of the
middle class. However, I do believe that preaching
`nonviolence at any cost' from a safe distance to
adivasi people who live in remote forest villages and
have watched hundreds of security forces arrive,
surround their villages, burn their homes and kill and
rape their people, can also be pretty immoral. If the
middle class were to join the battle, then of course
nonviolent satyagraha would be an option. But of course
it won't. It can't. That would be a political oxymoron.

Why does pointing this out cause an uproar, you ask? I
think because of the fear that once those millions of
people who have been so cruelly dispossessed of all
they have in order to fire India's `growth' suddenly
unshackle their imaginations and realize that they are
not so defenceless after all, the Beautiful People know
that no power on earth will be able to protect them.
Sure, there may not be a perfect, synchronized
revolution in which the masses will overthrow the
ruling classes. Instead, there will be a messy
insurrection, when all manner of brutality will occur.
The poor may not win, but the rich will certainly lose.
The feast will end. That's why the uproar.

- Are we talking about the narratives we like to make up
and then believe in, regardless of the reality of the
situation? What is your take on the narratives,
especially those of the Western media, around the Arab
uprisings?

Well, when the mainstream media begins to report
enthusiastically about a series of uprisings - when
they described the Arab uprisings as the Arab `spring'
- and when you know how loaded the reporting around the
Israeli Occupation of Palestine is, then if you have
your wits about you, you have to be on your guard, a
little wary of swallowing the reports hook, line and
sinker. If you follow what happened over the last three
summers in Kashmir, for example, when tens of thousands
of unarmed people faced down Indian security forces
with as much courage and determination as the people of
Egypt, Tunisia, Syria and Yemen, you can't help but
wonder why the Western media switches on the lights to
cover some uprisings, and blacks out others. I found it
a little disconcerting how enthusiastically the 19-day
`revolution' in Tahrir Square was being reported, how
excited [New York Times foreign affairs columnist]
Thomas Friedman was about it - but only a few months
ago reports seemed to suggest that Hosni Mubarak was
sick and dying. Then you had headlines like `Egypt
free, army takes charge' and you know that the army is
intricately entwined with the US. I worry that the
anger and energy of people who have been repressed for
years by puppet dictators is being siphoned off,
carefully defused, while the West jockeys to retain the
status quo one way or another and replace the old
despots with a more streamlined, less obvious form of
despotism. The last I heard, people were beginning to
gather in Tahrir Square again.

- Surges of people power, as in Tunisia and Egypt, and
earlier in the Philippines, are capable of forcing
climactic moments and sudden change. But the aftermath
often sees a return to old systems and old corruptions.
Why is human social organization so resistant to the
change we yearn for?

While people in these countries lived under repressive
regimes and yearned for democracy, perhaps they didn't
know that real democracy has been taken into the
workshop and replaced by the market-friendly version,
which is a far more sophisticated form of despotism,
not easy for beginners to decode. It might take a
little time for people to realize they've been sold the
wrong model. But meanwhile they have fought heroic
street battles, faced down tanks, celebrated victory.
They've been applauded all the way, while they let off
steam. For them to build up that head of steam again
isn't easy. It'll take years. Human society isn't
resistant to change: it wants change; but sometimes it
isn't smart enough to get what it wants.

- Another world is possible. What are the ways in which
we can make it likely?

To work out the complex ways in which we are being
conned and corralled into being `good'. To realize
we're on our own. Help won't come. We have to conserve
energy, know how and where and when to deploy it. We
have to fight our own battles. Ask the Sri Lankan
Tamils what it feels like when the chips are down and
the `international community' slinks away while your
people are slaughtered and then returns to cluck and
commiserate in

Universal health provision by the state

Removes the charity aspect of a hospital or doctors office

So why not go to the more dynamic
Cost cutting profit model for hospitals
Coupled with sectoral mark up cap and trade markets
and unit quality regulation boards

Thesis cost consciousness is intensified as you move beyond budget constraints to profit max

But of course transparent universal unit pricing most obtain

Lots of the present norms in practice stem from the charity mentality long since abandoned

Another convergence thesis

As organized production units get bigger and more interconnected

is there a convergence between for and not for profit outfits
In the same "business"

The secret of unforced exploitation

Any producer working in concert with other producers that produces more or better outputs and or with less cost in resources etc
Then if producing in isolation
Can be paid their independent value maybe more
and still leave a surplus of value
Over time production in co operation can lead to specializations that make independent production by the specialist essentially skill less common labor capacity
They are trapped into exploitation

Co operatives as a social counter follow easily from this fact see Owen
But like an organ trans plant co ops rarely thrive inside a capitalistic surrounding system

But by itself co ops hardly challenge the capitalist system anymore then trade unions
Challenge the capitalist system

In fact seems most mcjobblers enjoy the high take home and conditions control
achieved by collective bargaining at least as much as co ownership rights
The question becomes
Are profit seeking outfits more dynamic and innovative and Cost cutting then co ops
Maybe
No analytic answer to this question eh ?

Dixit stig revisited

How about the production system here

We have a product space of limitless extent on either side of a n dimensional product and between any two n dimensional products

The production system has a nut plus a level labor cost related output capacity
The nut might be the cost of market entry position consolidation product r and d
Ie no fixed cost in production itself
But the form looks like

Q = sunk costs plus fixed costs plus wage costs where the first two are lumps to be serviced and depreciated where appropriate

No economies of scope
But obviously variable unit cost is constant and equal to some parametric value x labor hours and the unit Cost is linearly falling thru out the production q
by the spread of the fixed and sunk costs over more units

The final demand side here holds tricks too
Including the famous preference for variety

Question have these shadow referents in the oz economy been fully enough detailed
To expose any and all sleight of hands that betray oz is not in any sense
an analogy to Kansas

A useful application

To match the formal model's analytic completeness

Analytical tightness is only secondary to the desire for analytical results ie truths about market and production systems that can serve in the war between the various economic class based idoelogians

Pk on the unfilled hole of 2009

"the financial crisis, and in particular the popping of the housing bubble, had two big effects on spending. One was that housing investment plunged from well-above-normal to well-below-normal levels. The other was that consumers suddenly increased their savings.

Put these together and you have a negative shock on the order of 6 percent of GDP.

Against this you had a stimulus bill of $800 billion — except $100 billion of that was AMT extension that was going to happen anyway, another $200 billion was other tax cuts of dubious effectiveness, so you were left with $500 billion of spending, spread over more than 2 years — maybe 1.5 percent of GDP or less.

It just wasn’t big enough to do the job."

I'll settle for that:

A four fold two small stim-u-less

Thanx Barry Tim and Larry

The distinctions need distinct labels

To suggest a federal deficit is dis saving
Like household dis saving

To suggest corporate income is income like household income

We need to use different terms unloaded terms
To suggest nation's save just like households or firms save just like households
Obvious enormity emerges here just by the false analogy freighted into the identical term

The non oil uncle hedge trade deficit is at 1% of GDP

The combo of dollar depreciation effects on relative x/m prices
and stag effects on absorption are working

The problem is the near zero price elasticity of oil imports

Obviously energy green and independent
Is a sensible battle cry for citizens of operation uncle
The drill baby drill division not withstanding




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