Tuesday, January 31, 2012

Upper (red) line = (Net Domestic Product) ÷ (Employment)
Lower (blue) line = (Average Non-Supervisory Compensation per Hour) x (Average # of hours worked)

class analysis....goldn age industrialists... ron paul eat your heart out

"While the Tories, the Whigs, the Peelites — in fact, all the parties we have hitherto commented upon — belong more or less to the past, the Free Traders (the men of the Manchester School, the Parliamentary and Financial Reformers) are the official representatives of modern English society, the representatives of that England which rules the market of the world. They represent the party of the self-conscious Bourgeoisie, of industrial capital striving to make available its social power as a political power as well, and to eradicate the last arrogant remnants of feudal society. This party is led on by the most active and most energetic portion of the English Bourgeoisie — the manufacturers. What they demand is the complete and undisguised ascendancy of the Bourgeoisie, the open, official subjection of society at large under the laws of modern, Bourgeois production, and under the rule of those men who are the directors of that production. By Free Trade they mean the unfettered movement of capital, freed from all political, national and religious shackles. The soil is to be a marketable commodity’ and the exploitation of the soil is to be carried on according to the common commercial laws. There are to be manufacturers of food as well as manufacturers of twist and cottons, but no longer any lords of the land. There are, in short, not to be tolerated any political or social restrictions, regulations or monopolies, unless they proceed from “the eternal laws of political economy,” that is, from the conditions under which Capital produces and distributes. The struggle of this party against the old English institutions, products of a superannuated, an evanescent stage of social development, is resumed in the watchword:
Produce as cheap as you can, and do away with all the faux frais of production

And this watchword is addressed not only to the private individual
, but to the nation at large principally.

Royalty, with its “barbarous splendors,” its court, its civil list and its flunkeys — what else does it belong to but to the faux frais of production?

 The nation can produce and exchange without royalty; away with the crown

. The sinecures of the nobility, the House of Lords?
 faux frais of production.

The large standing army?
 faux frais of production.

The Colonies?
 faux frais of production.

 The State Church, with its riches, the spoils of plunder or of mendicity?
 faux frais of production.

 Let parsons compete freely with each other, and everyone pay them according to his own wants.

The whole circumstantial routine of English Law,
with its Court of Chancery?

faux frais of production.

 National wars?
 faux frais of production.

England can exploit foreign nations more cheaply while at peace with them.

You see, to these champions of the British Bourgeoisie, to the men of the Manchester School, every institution of Old England appears in the light of a piece of machinery as costly as it is useless, and which fulfils no other purpose than to prevent the nation from producing the greatest possible quantity at the least possible expense, and to exchange its products in freedom.

 Necessarily, their last word is the Bourgeois Republic, in which free competition rules supreme in all spheres of life;
 in which there remains altogether that minimum only of government which is indispensable for the administration, internally and externally, of the common class interest and business of the Bourgeoisie;

 and where this minimum of government is as soberly, as economically organized as possible.

 Such a party, in other countries, would be called democratic.

 But it is necessarily revolutionary, and the complete annihilation of Old England as an aristocratic country is the end which it follows up with more or less consciousness.

 Its nearest object, however, is the attainment of a Parliamentary reform
which should transfer to its hands the legislative power necessary for such a revolution.

But the British Bourgeois are not excitable Frenchmen.
When they intend to carry a Parliamentary reform they will not make a Revolution of February.

 On the contrary. Having obtained, in 1846, a grand victory over the landed aristocracy by the repeal of the Corn Laws, they were satisfied with following up the material advantages of this victory, while they neglected to draw the necessary political and economical conclusions from it, and thus enabled the Whigs to reinstate themselves into their hereditary monopoly of government.

During all the time, from 1846 to 1852, they exposed themselves to ridicule by their battle-cry: Broad principles and practical (read small) measures.

And why all this?

Because in every violent movement they are obliged to appeal to the working class.

 And if the aristocracy is their vanishing opponent the working class is their arising enemy.

They prefer to compromise with the vanishing opponent rather than to strengthen the arising enemy, to whom the future belongs, by concessions of a more than apparent importance.

Therefore, they strive to avoid every forcible collision’ with the aristocracy; but historical necessity and the Tories press them onwards.

They cannot avoid fulfilling their mission, battering to pieces Old England, the England of the Past; and the very moment when they will have conquered exclusive political dominion, when political dominion and economical supremacy will be united in the same hands, when, therefore, the struggle against capital will no longer be distinct from the struggle against the existing Government — from that very moment will date the social revolution of England."

is this a repeat ? ..so what

The whole game of macronautics is about comparative dynamics

The target is often far less problematic then the closing speed

Here in the states we all want to get to nairu as well as retain a tame price level

But the acceptable time to target for arrival at nairu
 and the acceptable time to retstore the fetish 2% inflation rate
Seems oddly asymmetric

If we are below nairu..er actually we pre empt that outcome

If we are above nairu we seem to accept a slow clopping pace back down
vide now !

If we are below 2% ...yikes we don't do anything to get back to target
 let alone do it at flank speed

If above target inflation ?

There and only there
do we seem to have a reasonable acceptable time to closing on target

Now I admit since the volckerdammerung
We have had very little volatility in the inflation core rate
And a bit more in the UE flux

But let's get some explicit time frames here
for the four different deviations


whats the welfare loss from one percent off target on inflation versus one percent off target on employment

on the up side ?

on the down side ?

we have four determinations
and each one is expressed as a function of both  distance and side of target eh ?

is the welfare loss linear in both or either dimension ??

if bent
 how bent ?

gets kinda interesting

NK from the inside


nick the nugget's nexus the c d howe institute

"the embrace of continental free trade by successive federal governments; elimination of federal and provincial deficits; lowering of inflation and establishment of inflation targets; reform of the Canada and Quebec Pension Plans; implementation of lower and more competitive business taxes; and innovation and reform of social programs."

nuff said eh ??

as i commented at his site

if you want to see nicks noetic iv bag
go here :


an outfit as wickedly prudent and old school
as our heritage foundation

a brit in love with lerner attacks rowe v wages pomp trot

rowe  waves the distortion wand
over  G tax and spend
 and the equity wand
over  G borrow and spend

ralph musgave brit beaver chews into this hollow log of a brain:

"why nike isn't monetary policy alone  distortionarytoo
 assuming that by “monetary policy” one means interest rate adjustment.
 Such adjustments work only via entities that are significantly reliant loans
versus those  not reliant on lending at all
. You might as well boost an economy only via people with red or blonde hair."


ralph  you abba nut one

rowe lives inside his model
like buster brown lived inside his shoe

he has no stinking need for heterogenous thises and thats hes and hers etc etc

distortion is waved around in the marginalia
where the single agent can only f   his future self
by getting the HOLY G  (he elected ?)
to borrow now from himself
to buy a candy bar
to burn and reduce his consumption now
instead of using the funds himself
to lend to himself to hire himself with the candy bar
to build a machine to make candy bars out of candy bars

the x ray projection of a anti G spirit

does a gotcha for goo goos :

"I notice a correlation between people who want to use fiscal policy to escape the ZLB and people who would like G to be bigger permanently."

of course

the  increase G  move
the lower   tax to borrow ratio

gets at this point too
and  right within the fisc forward "community"

at any rate

" Am I being a little bit cynical here?"
ankle biters chortle

" I don't ever remember hearing anyone advocate
 a cut in future G as a way to escape the ZLB,
based on good NK modelling. "

chortle chortle hee hee hee..... heh heh

i see a spring pop out of rowes head here
he's so pleased with himself

NK the cyclops macro model

here's a toon version of NK  by our old friend butt plug rowe
the shame-less indestructable nit wit neo liberal

"Let's assume that New Keynesian macroeconomics is 100% correct.
 What role is there for fiscal policy?"

"....in normal times there is no role for fiscal policy as a tool to control Aggregate Demand. Monetary policy can handle AD all by itself."

 "The New Keynesian case for fiscal policy as a tool to influence AD only applies at the Zero Lower Bound, when monetary policy is supposedly incapable of doing the job by itself. Let's concentrate on that ZLB case."

" New Keynesian macroeconomists recognise that a commitment to future monetary policy can still be effective at the ZLB. The central bank promises that in future it will leave interest rates "too low for too long". So, why can't we say that monetary policy still works, even at the ZLB? "

" is that such a promise might not be credible."

" OK. Let's grant them that assumption. Promises about future monetary policy are assumed not credible."

"  First consider a permanent increase in government spending in a New Keynesian model. "

"The result is no change in the natural rate of interest. "

"For a given time-path of Y 
a permanent increase of G and a permanent decrease of C
 by an equal amount
will leave the consumption-Euler equation still satisfied
at the original time-path of real interest rates."

 " Intuitively, a permanent increase in G means an equivalent reduction in permanent disposable income and an equivalent reduction in desired consumption."

what ? u cry what ?

" If the government takes part of national income and spends it ..
in  New Keynesian models G does not appear in the representative agent's utility function "

lets stop right there

why would this assumption strike anyone
as  anything but  a trick move eh ??

G in this comes off  like a welfare drain
but what if G is a transfer system ?
you know payments to paul  out of taxes to peter ?

well there is no possible  transfer system


there is no peter and paul

just as there is no defaults
and no real role for money

but i get ahead of myself

preview of next post on death to  NK


"... a temporary increase in G? "

" It's all in the framing. There is no reality in these matters."

" These are all social constructions of reality"

" We theorists shouldn't be suckered into believing that our conceptual schemes are out there in the real world. Except, the conceptual schemes of real people out there in the real world are part of the reality of that world, for a social scientist."

" And the Neo-Wicksellian social construction of reality, in which "monetary policy" is defined as "setting interest rates", is a damned bad reality to construct. Especially when we hit the ZLB."

wow that last passage is a real peach eh ?

"Neo-Wicksellian social construction of reality"

glass house credit goes smash...death to the NK paradigm ... the credit con macronautics has run aground

to maintain acceptable average levels of unemployment over the cycle

new keynesian models are used to cover
what in reality is a credit flow rate adjustment to households
yes usury macro

the trick is to tilt toward housing loans
without relying on  rising lot values as part of the collateral

that maxim got violated over the two last cycles


when the lot bubble poped
we got not just foreclosures
we got bank loses and a huge back up of inventory

the  new housing production rate collapsed
and feed forwards kicked in
that were arrested by deficit spending increases but
not replaced by renewed household spending

because the household credit window narrowed
 as collateral crumbled
not to recovery let alone surpass earlier peaks

the only solution is to push up nominal wages

that has only happened once in the  last 32 years
during the second term of clinton
when we were in an investment boom domestically
as well as the end time of a trade gap hiatus
besides the usual consumer durable/housing credit goose
to think we can return to the new keynesian model
that supported a  credit only macronautics
is nonsense

"As a minister, I experienced the power of industrialists and bankers to get their way by use of the crudest form of economic pressure, even blackmail, against a Labour Government. Compared to this, the pressure brought to bear in industrial disputes is minuscule. This power was revealed even more clearly in 1976 when the IMF secured cuts in our public expenditure. These lessons led me to the conclusion that the UK is only superficially governed by MPs and the voters who elect them. Parliamentary democracy is, in truth, little more than a means of securing a periodical change in the management team, which is then allowed to preside over a system that remains in essence intact. If the British people were ever to ask themselves what power they truly enjoyed under our political system they would be amazed to discover how little it is, and some new Chartist agitation might be born and might quickly gather momentum."

Death to new Keynesian models

assume the nk model is reality ?

why not assume hicks hansen is reality ?
one is closer then the other to ..real reality ??

that's like saying a ten foot bound across a twenty foot gap
over a chasm a mile deep
is better then a four foot bound

no its worse then saying that
A longer leap that still fals short at least suggests progress is linear here
Just lay out more of the same all the way to twenty one feet

there is no reason a priori to assume reality modeled would produce model results
closer to NK then hicks hansen

come on admit it nick
you don't want kalecki to be correct


it would make practical policy solutions to the macro problems we face
to policy makers and public alike
that for you personally
for reasons too deeply embedded and intricate and adventitious
to adequately excavate
must remain wedged up in the fudge factory for ever and a day

transfer system based optimal path employment
such a straight forward model
but the damn gadget
must be prevented by all hebephrenic   logic chopping
 and  snake charmer casuistry
 time and circumstances permit

what a mandate from corporate heaven

Monday, January 30, 2012

Dead weight loss is a dead weight calculation

Ever instructive negative example
Nick the knack Rowe

Suggests u wouldn't want to use the tax to borrow ratio to maintain adequate net job growth
And adequately tight job markets


1)Dead weight loss thru shifting tax hits


2) inter generational inequities

The second reason we can save for a lter post

But dead weight loss thru the ever shifting rate of extraction on various revenue sources

So we use Ramsey rule to raise and arrange rates
and Ramsey rule to lower and rearrange rates ?

The net fow change is a equity question

The loss is in fairness not efficiency

Oddly the second point
Looks like it's about efficiency and not equity eh ?

Nice going Nick
A clean reversal
from the real concerns
To their opposites

path independence

Sunday, January 29, 2012

from the "you see this sort of passage everywhere" collection

"The Federal Reserve appears committed to a 2% target under any circumstances, with even a temporary increase considered unacceptable"

ya its a real dick pull that one

imagine this rewrite :
"The Federal Reserve appears committed to a 4% unemployment target under any circumstances, with even a temporary increase considered unacceptable"
wild eh ??
so why is above target inflation so much more intolerable
to the fed then above target unemployment ?

do i  have to answer that for any of you kids ??

father S toys with zionian reflux

it's still the down slope for rentiers......but baby look at deposits !!!!!!!

: Pcd

The Weimar golden age 1924-1929

After the hyper inflation climax to the reparations nonsense

Germany took off

So much for the deep and lasting devestations of run away inflation

Clearing the nostrils of debt might have been a Phillip eh ?

Lovely transfer union

" In terms of economic contribution to their respective monetary unions, both Wales and Greece are roughly equal, packing a fairly weak punch of about 3 percent. Both are heavily dependent on public spending. Wales is even poorer than Greece, generating a gross domestic product equal to $23,100 per person, compared with Greece’s G.D.P. of $26,900 per person.

Despite the similar economic profiles, Britain is far more generous with Wales than the European Union is with Greece. Compared with the nearly $23 billion in funds London sends to Wales every year, which is used to bolster local tax revenue and pay for services like health care and education, Greece receives on average about 2.9 billion euros a year in structural funds, or $3.7 billion, devoted mostly at specific development projects "

Now I'd like a net number here
But the points made


If we were made aware of every states plus minus would tensions arise

The stock effects

Talk about even GE based impacts on various agents
Of any flow rate changes

Needs to look at the one time stock reval effects involved

They may well swamp the flow effects
Suddenly to go over from a progressive income tax to a progressive consumption tax

Would lead to a huge burst in value to existing security holders
without even any change in returns to new buyers of securities
Facing higher prices off setting higher yields

Hence the needed implementation
of a one time wind fall tax

Hep on levels maybe one way street

Sure now the real line has fallen below the 2% trend line
The pwogs want
level targets not rate targets

How about if after we go to level targets
we have a surge above the trend line like the late 70's ?

My guess the rate option would be re entertained

The answers cap and trade mark ups obviously
With two way indexed contracts

"When the ability to achieve important goals depends on relative consumption, all bets on the efficacy of Smith’s invisible hand are off. As Darwin saw, many important aspects of life are graded on the curve, and in such cases, individual incentives often lead to mutually offsetting efforts. "

R frank

great D v great R ...two nations


Saturday, January 28, 2012

Socially destructive inflation

Just read some blog doc from ox
That used that expression apparently without any irony

Socially destructive ?

He was referencing the 70's but obviously armed with only the most connive tonal of congenital wisdom

The trail of the levels is indeed a tale to tell
About the product price Structure AND the concomitant wage rate structure

But to hang inflation of productrices from a sky hook and call it socially destructive
Requires a fairly heavy bag of assumptions and equally partial point of view taking

Simple question which decade standing alone w better for the Anglo American job class

The 70's or the 00's ?
Or to give the new moderationaries their best decade
The 70's versus the 90's ?

Not sure the bottom 2/3's of the wage structure would pick the 90's
If both sets of numbers were laid against each other

So what was socially destructive about the 70's

Well the post war advanced economy macronautic system discovered it's limitations

Limitations that threatened the fabric of corporate domination of national policy

The climax in Britain was far more dramatic
With Bennism losing out to Thatcherism

One can speculate about the what it's of a triumphant Bennism
The declaration of a state of siege so to speak
And the state taking measures toward far greater interventionism
And the class tilt that would both reveal and necessitate

Macronautic closing speeds

Thursday, January 26, 2012

"What kind of manufacturing do we need in order to get full value out of our innovation strengths"

toleration wiith off target outcomes

if its inflation

to the high side zero  toleration

if its unemployment

to  the high side toleration

no symmetry here at all

in fact no explicit UE rate target

or explicit time path to completion

NAIRU changes over time the experts claim
so opitmal UE rates change

well opitmal  inflation targets change too

now with zero bound and huge pri sec debt load
the inflation target oughta be 5% at least
not 2%
in fact the nairu and inflation rates oughta be closely yoked

7 % UE with 7% core inflation

why not ?


2% inflation 2%  UE rate

targets must be set

first come the targets then the means to reach the targets

the goal is the thing not the required remedy

sell recovery of job markets in n quarters
with interim mile stones

create the goals and use an  open loop
funding mechanism

models and mechanics

keynesian multipliers
are the various  dash board settings critica ?


do macronauts need to consider the trade off between speed and efficiency ?


the now infamous ziffle memo of december 08

got the answers to  this pair of questions
exactly  wrong

speed of arrival atthe target  and target selection itself
were the essential tasks

state a pathway back given several sets of "other" spending patterns
---spending of course on just now produced products---

"other" ?

corporate household and foreign

plus all levels of gub spending
and gub taxing

set a time line
choose a middle varient and inject thru the transfer system
payments and tax rebates

but only the first 4 quarters
with a 2 quarter out adjustment  node

and no additional gub spending

the health system the  payroll system the retirement system
the unemployment and low income systems can all be engaged immediately

the revenues from any taxing system at all levels can be replaced
with federal borrowed funds

each state getting say
cola corrected per capita payment
ie equal real purchasing power

Tuesday, January 24, 2012

Monday, January 23, 2012


we can use this notion to explain repurposed institutions in class society

one wonders in the case of the "state party " whether it gets itself repurposed precisely because the demands on the state require this nasty
qualitative trans mogrification of the revolutionary party

the bray of the fool

"If the profit system is retained
then it can be expected to reassert its dominance
over human needs."

the chrome steel chains on kong

" The empirical evidence for this is

we'll let that stand ...but not this :

" From a Marxist theoretical perspective
 the answer is:

 completely remove the profit system

 and produce solely and directly
 for human and environmental needs."

its as if  profiteers  were like fleas
and this goop has a  workable flea collar

show me the "empirical evidence " such a collar exists


we must find ways to sublate profiteers into higher  forms
 of  collectivized social surplus
and until we have
           whether we see em or not
                   like fleas the  clever little suckers
                          will always be some where
among  the hairs of our dingy  dog of a society

on balance peter diamond's OLG paper is a pro creditor class pile of shit

but hey that's what gets the big rewards

hows it goin'

exchange with pucker butt

"There's also the micro question of how costly it is to postpone/prepone government projects."
exactly why you don't alter discretionary spending you use the tax /borrow trad off and the transfer system
the transfer system is faster cleaner less targeted more neutral and popularly prefered
posted by paine

Sunday, January 22, 2012

mgi tale of two structures

to sector total debt to gdp now :

US non fi corps  72 %

SPAIN non fi corps 134%

--nearly double--

(note comparative changes  2000-08  versus change since 2008)

households close
US 87%


US 80%

spain has a  non fi corporate debt problem.... if any

but in addition note the opposite directions of  hi fi since crisis 08

US - 17 points

SPAIN + 8 points

  and  yet its the gub and the household sectors
 that are getting the squeeze in spain and US

gubs  since crisis have both  seen debt ratio rise

 Spain saw a  16 point  decline 2000-08
 US increase in same period of 16 points

total move 2000 to now
Spain gub up 8 points
US gub up 35 points !
however neither has absolute gub debt ratio
                                that signals anthing like "trouble "

role of america in a multi national european revolution

according the bertie R
circa 1920

we yankees would have a decisive role

by starving them out

a blockade
an anti hoovering

seems bertie had a very crude form of ruthless ness in mind

again look at hooverian humanism at that very time
was not soft power a better weapon ??

could we actually starve a continental "gone red " system back into  white ???

yes it was a long abused privillege of the brit fleet
to starve recalcitrant peoples and states in to a more docile and trackable "mood"
including most recently germany and austria
ie not just backward colored people

so why not us yankees give it a whirl ??

of course in league with our junior partner from  that industrial island eden
  real admiral  blimp
the state of all european states that had a people fit to be starved by naval blockade

and yet thr brits did a good deal of pre emptive starving too
one might notice ireland was starved simply by the workings of the market place

and of course bengal ...several times and and and ..

lesson ?

beware the christian saxons on either side of the great pond ...eh ??

if they have navy --air force -- enough that is

my little 'rooni '

first draft of a compact popular outline of the marxist conception of human history

men and women  day in and day out
produce their  necessities of existence
and of course they produce  these necessities thru their existing social organization

in the midst of their  production process
come  consequences altrerations discoveries
in a word they produce changes

over cycle after cycle of reproduction come  not only
changes in the production of these necessities but in  the necessities themselves

changes that in time
change the forms of social organization itself
and of course
thru those changed social forms
 in  turn
  men and women find they are changing  themselves

serious confusion

type one party
long run mission to make a national revolution

type two party
long run mission to exploit a national revolution

type two parties
might be guided by leninism marxism maoism
without the coming revolution they  will work to lead
necessarily being the final conflict
..when and if a national revolution "happens " upon them ...

 the final conflict ??

                               a revolutionary occurance
in which  a triumphant mass of     proles
self organize  and proceed to  build
in a continuous forward motion

 the socialist structural sublation of capitalism


type two parties can lead any social revolution possible in that national context
what is ossible need less the say
is only discovered by taking action to push the frontier of institutional design and construction

lots of  two setps forward one step back  in the line of march 


type one parties  ??

 simply " the bunk "

fidel :

"political revolutions are the result of social hurricanes "

social hurricanes  are not made they happen

social hurricanes are an opprtunity
for more or less revolutionary social change
more or less social reconstruction

   but that is all about ...apres the political revolution
not a priori


type two revolutionary parties
obviously vigorously  participate
 in mass progressive social movements
within the confines of the old state
for as  long as the old state holds together

the bourgeois struggle over chattel slavery

that history now complete makes a compact exemplar of the progressive side
of bouregois society and its definite limits


"The desire for some form of superiority is common to almost all energetic men.

 No social system which attempts to thwart the emergence of superiority  can be stable, since the lazy majority will never be a match for the energetic minority "

"In the conquests of modern industrialism,
 the four  secondary passions have been almost wholly dominant,
 since those who directed them had no need to fear hunger or thirst.

 It is the potency of vanity and love of power
that gives hope for the industrial future of Soviet Russia,

 since it enables the Communist State
to enlist in its service men whose abilities might give them
                                                                 vast wealth in a capitalistic society"

basing your theory of the motives behind class history on just one of the four social passions leaves you with an open system

"Of the four passions we have enumerated, only one, namely
acquisitiveness, is concerned at all directly with men's relations to
their material conditions."

 The other three--vanity, rivalry, and love of power

are concerned with social relations."

 I think this is the source of what is erroneous in the Marxian interpretation of history

marxism  tacitly assumes that acquisitiveness is the source of all political actions."

"I am compelled to reject Bolshevism for two reasons.." BR fall 1920


 because the price mankind must pay to achieve Communism by Bolshevik methods is too terrible;

and secondly

because, even after paying the price, I do not believe the result would be what the Bolsheviks profess to desire."

"The larger events in the political life of the world are determined by
the interaction of material conditions and human passions"

human passions ??

"We may begin with desires for the necessaries of life: food, drink,
sex, and (in cold climates) clothing and housing. When these are
threatened, there is no limit to the activity and violence that men
will display"

"Planted upon these primitive desires are a number of secondary

" Love of property, of which the fundamental political
importance is obvious, may be derived historically and psychologically
from the hoarding instinct.

 Love of the good opinion of others (which we may call vanity) is a desire which man shares with many animals; it is perhaps derivable from courtship, but has great survival value,among gregarious animals, in regard to others besides possible mates.

Rivalry and love of power
 perhaps developments of jealousy; they are akin, but not identical.

These four passions--
love of power

 after the basic instincts,
these four are the prime movers of almost all that happens in politics.

 Their operation is intensified and regularized by herd instinct.

But herd instinct, by its very nature,cannot be a prime mover,

 it merely causes the herd to act in unison, without determining
what the united action is to be.

Among men, as among other gregarious animals,

 the united action,
in any  given circumstances, is determined
 by the common passions of the herd,
 by imitation of leaders.

The art of politics consists in causing the latter to prevail over the former."


setting the real rate

nominal interets rate minus inflation rate

truman era clowning involved pins to the nominal rate

of course the pin rate caused huge wave motion in the real rate

point then ??

never admit negative real returns need noticing

only cap gain / cap loss on existing pile of outstanding nominally denumerated obligations
hold the nominal rate steady and you reduce the pro inflation rate flux
in nominal market value of players  debt holdings

the fed buys up or sells off
 enough of the fluxing supply of debt
 to hold the nominal rate steady
that was truman policy

in paine policy
you counter changes in the inflation rate
to retain a stable (negative ) real rate

i'm spoofing here soul mates

moral hazard nick rowe wants a fiscal rule to twin a monetary rule

wow nick
actually has a practical post not a chin scratcher

 bravo mr micro sphincter

the rule v action distinction is fine
in model world
we now have the autostablizers
the system ought to move to a meade -lerner full auto stablizer
algorithmic complex
for get G spending flux
use the tax/borrow and transfer systems
set them all to counter changes in household demand trade balance
and corporate net spending
design and implement a sort of automaton macronautic
fiscal budget great helmsman

yes the accumulated deficits to gdp ratio
would need a price level rate of change policy mechanism too
and trade deficits suggest a forex mechanism agreeed on by our major trading partners
but you start where you can eh ??

world historical class tasks chapter 53

the guardians of multi national free range corporate
 limited liability and maximal long run profit
are melding nicely into a single cosmo corporate elite

a class "fraction"  of course and a not so invisible class faction
in national affairs everywhere

this class of course will split over a disputed opportunity
and as great powers begin to re equalize the playing field
options viable options  other then Uncle Hedge will allow
much contradictory matter to spoil down or boil up into potential
  use of the ultimate policy tool international great power wars

Clio has a good deal of weaving and tearing to do before that stage however
till then we can watch the future for all citizens of republic earth
 toonishly and grotesquely  pre figured
 in the aquisitive antics
    of the planet's  corporate cosmo class

Saturday, January 21, 2012

Big footing pk

"debt, both public and private, can be a problem. "

"Debt is a particular way of allocating risks,
and it can be (and has been) pushed too far when people
underestimate those risks.
That realization is what a Minsky moment is all about"

Pk on financial sector debt raises questions

"money that banks owe to each other is more a reflection of the structure of the financial system than of the degree of overborrowing more broadly."

that structure changed radically in the last 30 years
What would a consolidated hi fi sector look like ?

Yes hi fi structure is not so much aBout burden as about fragility
an added elaboration of it's circuitry makes it more prone to cascading

Notice however it's hugely greater share of a hugely greater total corporate net earnings
What up with dat ?
What was it doing to earn that ?

Production corporations give away extracted surplus

only where absolutely necessary

Once again the cloud above the production platform
Reflects as much the size of the asset system ie itself
As the size of the production system with it's attendant and surrounding
distribution and market systems

more p-kackle

"compare two banking systems, one in which banks directly lend deposits out to customers, another in which many deposits are lent out through the interbank wholesale market, and then lent on to nonfinancial customers."

" The second system will show much higher financial-sector debt, and it is in some real sense more risky than the first "

that sez it so far as i can tell about real economy burdens

but what  of the hi fi cloud itself
what if its creating credit within itself for highly leveraged securities  purchases 
the hi fio system can make itself not just risky but capable of an implosion
all by itself if underlying asset values convulse

" the real economy isn’t more highly indebted than in the first case.financial-sector debt is about the internal organization of intermediation, and it’s not the same kind of thing as when households or business run up a lot of debt""

but big deal   professor  P  kettle

 the hell fire from a hi fi panic ala fall 08
leaves a hi fi sector open to gashes like that cruise ship suffered

enter the giant fed bailors

A death penalty for corporations that obstruct employee self organization

The NLRB should have not only inquisitorial powers but a capital punishment option
For capital crimes

The federal gubmint would take over the outfit fire the board and management
and seize

All insiders and power brokers shares and clawback bonuses

Efectively killing the outfit by lethal injection

Gentle ben : Why not buy a couple trillion in treasury debt

When do you know you're out of a liquidity trap ?

When prices of products start rising faster
because wage rates are rising faster

So start buying till you see the wage acceleration
No don't pre empt
Don't stop when your rigged up models tell u
Wage acceleration is just around the next quarter

Wait till the accelerations are among us

Co lateral advantage

The wage to household debt ratio needs some quick improvement

much of the hype about rising han production costs forgets a certain off set

the inland vastneses of the han republic

there are hundreds of millions of souls yet to be released from labor intensive farming
and millions of square miles of land
 yet to be assimilated into the modern production platform

this will signifigantly moderate the rise of coastal nominal wages

 even as the rising  rmb relative to  euro-american currencies
will  reduce export cost advantages
over domestic competitors
it will increase  real wages everywhere in han land
Further reducing rising wage rate pressures

2010 top 10

that's 20% of the job force

here's the break out :

become a nurse

or form a union

Friday, January 20, 2012

a bureaucratic aristocracy

Selling credit rates on commission leads to ....

"from 2004 to 2008, only 6.2 percent of white borrowers with good  credit scores( of 660 and above)
 ended up with higher-rate mortgages.

 Latinos and blacks with good credit scores were at least three times as likely to end up with higher-rate loans"

Two front war

Many pwogs want a living wage
But we need a living combo

Mini max Wage rate And
An earned income social dividend
That together add up to a living income for job holders

This is of course not a stand alone two part system

We still need hours and premium pay laws

Most important macro nautically contrived and
Maintained hyper employment levels

The great petty rip !

"A survey of over 4000 low wage
workers in Chicago, Los Angeles and New York conducted by
university and non-profit researchers found: 26 percent of
the workers were paid less than the minimum wage in the
previous week, a majority were underpaid by more than $1 an
hour; a significant number worked overtime the previous week
and were not paid the legally required overtime; many were
required to come early or stay late and work "off the clock"
and were not paid for it; almost a third of the tipped
workers were not paid the minimum wage and more than 1 in 10
tipped workers had some of their money stolen by their
employer or supervisor."

You prolly know this more or less but...

10% of wage earners earn between 7.50 and 8.50 per hour

If they could get 2 k hours at that rate
They'd earn 15 to 17 k per year ...that is if they could get 2k hours
Ie 50 40 hour weeks

An eraned social dividend that equaled a doubling of the minimum wage
Might make that palatable

150 million workers times 15k ?

2.25 trillion

Progresive Wealth tax plus a progressive consumption tax
to pay for this ?

Easily Feasible and sustainable

Ifwecouldx ray all the books at one moment in time

Would operating statements and compensation totals suggest social labor proportions ?

Obviously not

Would a correlation between hourly rate weighted " employee hours"
And market prices look closely enough to support empirically
The law of value

Or is it only thru
a panel of prices and related labor hours
That the law of value emerges from the numbers at the surface

is it a dynamic law a law of motion

Related. Law

The law of wages

Is this also a dynamic law

Relative wage rates
Reflecting the relative price of production for different types of labor power

water world for 15 million houses

Thursday, January 19, 2012

there are markets and there are markets

how might a market materialize out of some related set of exchanges

the origin is of course a physical location like a flea market or shopping center
or  stock exchange

but take the residential ral estate "market "
where is that ??

the extesion from location to function opens as much reification and ambiguity as
generalizing power

how might corporations pareto improve a modified greenwald stigilitz system ??

do we need to add labor income houses to the GS model
b4 we can see this all clearly ??

in the game of capitalism
the key sharpener is to substitute exploitation rate
for  the wage workers
   savings rate no ?

capping lancaster with godwin
hewre with  GS  model we want to establish the various rent pockets
drained off by ceratin plausible social institutions like ...capitalist firms
 that get  "above " simple direct producer market exchange etc

GS explicitly point to state actions
but surely state power is not most often let alone always necessary
to tap a rent pocket

Can the wage class work with the free class ?

Ilwu -occ friction has not abated as yet
To my surprise

The local( 19 )facing the Longview scab op
is of course not the ilwu as a whole
But clearly
minds must meet across the class divide

taylor having fun

" Like the one-time rebate of 2001, the temporary tax cut of 2008, the cash-for-clunkers and stimulus payments of 2009, or similar policies tried back in the 1970s, these temporary policies consistently fail to stimulate sustainable recoveries"

note "sustainable recoveries
of course not these are stop gaps   that oughta kick in when investment crashes or other spending slips
like household spending slipped in 09  till  household spending  recovers
the fiscal injections have to continue in a cross taper

here another taylor cute one

the zoom from 20 to 24 has multiple causes
including the taylor backed bush tax cuts

this in fact suggests to taylor what spending cuts ??
god knows where his high line comes from

all marginal expenditures are funded by credit

this simple reality has implications not usually investigated very far

one word leverage is a grand example here

" I have never met a personage so destitute of self importance "

that's BR on VIL

"an embodied theory."

"Bolshevism combines the characteristics of the French Revolution with those of the rise of Islam"

bertie russell  September, 1920

Wednesday, January 18, 2012

still hung up on the supply of investable funds

christ jesus

there is no stinking nee for investable funds generated internally by the various agents of the economy

credit is limitless

we can control price level movements and by tax and subsidy tweek activity

given a transparent  full info system
the view will be adequate to steer us ahead
and reduce the  socially necessary  labor  time quotas
step by step as technical advances allow

and first of all forget about any private investor class
either the barren rentier variety or the clever angel

sticky wages

this is still the  spinal element in most macro interventionists models

and its wrong

there is much more sub maxima unstable forces at work

capitalism ...corporate capitalism is systemically irrational
the performance less then a better arrangement of production could achieve

however only comparative dynamics can establish this

not comparative statics

its dynamic performance that institutional arrangements  impact

corporate set prices both at the list level and the transaction level
do what they do
and produced quantities are what they are

 because that set of choices looks most profitable and is also ....feasible
 at the moment of decision

wages ??
they trail along for the ride these days

none of these dynamics are  yet  modeled of course or simulated

and feasibility has a great deal  to do with credit flows and equity holder scrutiny

the capital gains tax

gosmart as sophrosyne in political economy

in certain moods this strikes me :

the original 5 year plan
 once my paradigm
now strikes me as

 romantic  party folly ..at best

the class war launched by the party  on the peasants
 a betrayal of the alliance

the gulag solution to surplus population
 beyond a human tragedy

the heavy industry --- basic industry -- surge was a profligate sacrifice

the building of a modern military production platform an un necessary dissastor

this pretty well ads up to an indictment of the stalin model

but it isn't ..nothing about that model seems contingent

the first 5 year plan went forward with accelerating prodigality much like the great leap

nothing could prevent it

Tuesday, January 17, 2012

pk till 1998 " I thought the liquidity trap was a myth".....tells a bigger tale then pk thinks :

"by and large, ad hoc models like IS-LM are actually more useful, in my judgment. But you probably do want to double-check your logic using fancier optimization models."

" Case in point: when I first got worried about the liquidity trap, I thought it was a myth, and set out to show that it was a myth using a simple NK model; what I actually found out was that my verbal logic was wrong, and it can indeed happen"

till 1998 he'd used verbal logic to push keyes fiscalist macronautics aside ..

My take on Marx when a lesser light will due

I note a certain ruffling over at smug wood gulch

The topic
Has davey graeberunched a hole inmarx

Subject the historical emergence of money and the history of barter

I submit throwing a harpoon at Karl is a tell tale act of hubris
Why not dig up some big got willing to play historic straw man

Davey wants to demonstrate a barter stage of exchange never existed

Now of course once you see how it's tricked out
Who could disagree

Any more then there was a stage one could call simple commodity production
In fact that's a far more controversial assertion eh ?

The upshot of the back and forth over at smugville

The placement of Karl on the opposite side of Davy and the historical record
Is not emphatically precise

-----such that there is a historical record
In as much as these are pre historical societies we're talking about--

My take
Then why drag Karl in ?

Obviously to win great fame as the killer of the great red whale

What exists has a necessity in it

"building a new world in the shell of the old."

This isn't restricted to prescient pre figurations

Sure we see thru the glass darkly
Hell as "building a new world in the shell of the old."
that's what is going on always everywhere around and inside us

The cautiously partial sense in the phrase
"all that is real is rational"
Seems lost on certain anarcho fantasticals

Assembly versus soviet

Consensus as a decision rule
Open mass Participation
Direct democracy

Assemblies can exist and self sustain in real time but could they govern ?

soviets from day one used majority rule
Ie voting to make collective decisions

All power to the assemblies ?

Let is think that one thru

Monday, January 16, 2012

decision-making structures and a vanguard party

consider this dynamic form
for a  party like org
ie pragmatic action involved real time confronting political organization

punctuated paradigmatic homeostasis
the moments of seriously new discourse
where a break up or break thru causes all existing paradigms to scramble into new forms  interupt extended periods of majority/ minority paradigm
thus there's a whole lot of administration for every burst of deliberation

in the next stage processing of intermediate commodities by means of intermediate commodities there is always there is the possibility of producting a value subtraction

"Labour always transfers the value of the means of production to the product"

caveat gosplan IIers !

" in so far as (labor)  really consumes (the value of the means of production)
 in a suitable manner  as means of production"

exploring how tight is "suitable " becomes of interest
at some point unsuitable amounts to value subtracted

king and lincoln our chosen pairing for American icons

why are   the many  discarded and the very fewest  chosen

the chosen radiate a perfectly pitched ambiguity

Sunday, January 15, 2012

all about games and program sims

where we oughta be at in poli econ con

for now

push vickrey macro policy  reforms generally

we have open trade borders

plus  a sovereign currency and a forex rate
both potentially under congressional control

we can control the  trade deficit and the debt to gdp ratio with these tools

 restrict talk of the CL mark up cap and trade system
to our health sector alone
 possibly CL can be discussed
wrt  the euro zone's various national pricing systems
--- no national forex instrument and restricted control of market interest rate---

can we find insight

the lancaster -godwin differential  "capitalism games "

do they show us any  features of todays capitalism
 systemically essential and fetterish ??

if in toon form ???

i think so

now the usual two class partition is fine ..fine inded
but we oughta consider a rate of exploitation not of producer class  "savings "

producer class is a "foward" label of workers

the exploiter class has the same mission
"investment " both consume too 
the worker might well save or dois save at the household by household  level

and exploiters might play usery games instead of investing
all of this is consumption of course

these are easy to manipulate models
once we label correctly

i suggest land and money exist
and buying land and holding money are non productive activities per se


a keen fantasy

finding and outlining the systemic fetters

that is the task of any critique of capitalism....in practice

comparative long term dynamics
comparative short term dynamics

right now for agitprop
outlining the institutional and class whats and whys
of our short term fetters is  obviously paramount

then of course we suggest we can build a better governor

even modest steps like this :

watts governor

gibbs governor

call it the 20/30 for 40/40 demand

job system extraction norm today

40 hours a week for 40 years

george jetson update

20 hours a week for 30 years

why 65 ??

well at the time of draughting (early 30's )
the systems guardian class figured  by 65
 --for members of the broad job class--
 your raw  labor power was pretty much scrap

add in obsolescent skill sets .....

point ???

age for scraps subject to  serious upward revisions

consider this
the system had a tacit life time  average
 ("job life time share "   "quota")
of 40 years
(some high school to 65 )

figure that quota  the reduction in physical demands in aggregate job tasking
  and new up to date  actuarial charts and  of course increased "schooling years "
and what becomes the optimal  systemic water line ???

70 ??? ...72 ??

saving out of income a national cult ...substitute job hours

the ultimate measure of virtue oughta be
 the social sacrfice of  your total life time job hours

at any quarterly interval the ratio of  total post 16 job hours to waking hours
oughta determine your earned social  dividend

Saturday, January 14, 2012


no fiscal cages imposed by the eurobanks


"True wealth is the fruit of human labour. By their mobilization, European workers can put an end to the financial orgies"


Address to the European Workers

by Jean-Luc Melenchon and Oskar Lafontaine :

With the current leaders of the European Union, we are heading for disaster.
For years now they have been conceding more and more power to high finance. The outcome is catastrophic. The environment has been sacrificed and unemployment has literally exploded. Wage earners are being pressurized and impoverished. The real economy has become hostage to the banks.
And now, pretexting the crises that they themselves have created, European governments intend to pursue and tighten austerity measures. Under pressure from Angela Merkel and Nicolas Sarkozy, they have decided to concoct a new treaty which will deny the European people their right to freely decide their budgets and impose tighter regulations throughout Europe. Not one of them plans on asking the people for their opinion on such a fundamental text. This is a headlong rush into a Europe of austerity. Since Europe cannot exist without or against the will of the people, we therefore demand that a referendum be called throughout our different countries concerning this future treaty
Sarkozy and Merkel want to extend the disastrous 2010 programme, a programme which has severely deteriorated the situation of German workers, to all of Europe. Their aim is to heighten competition between European wage earners and to level down the rights which have made Europe one of the world’s most socially advanced regions. This strategy deliberately pits European citizens against each other. In fact, Sarkozy and Merkel have not hesitated an instant in fanning the flames of nationalism and xenophobia, at the risk of reopening old wounds. Merkel's entourage speaks of forcing the Greeks to sell their islands. Sarkozy speaks of the new arrivals in the euro zone as poisoned pills. These provocative remarks are aimed at diverting the anger of the people away from the real culprits, the banks, high finance and the political leaders who have relinquished their power to them We call upon you to resist with all your might against the decline of our European civilisation.
We urge you not to fall into this trap, a trap that threatens peace across Europe. Together, let us preserve the friendship between our two peoples, the Germans and the French, because sustaining peace throughout Europe depends on it.
How can we guarantee peace in Europe? Peace cannot be decreed. It is cultivated through cooperation between peoples, its purpose is to serve all. It is incompatible with the domination of two arrogant heads of government over the rest. It must rely on politics that serve the general European interest. The time has come to take control in order to meet the needs and aspirations of the great mass of the population and therefore of the workers of Europe: the sharing of wealth, the protection and enlargement of the right to a decent retirement, the recovery of public services, the eradication of insecurity, the relentless struggle against poverty and inequality, and ecological transition.
We urge the European workers not to give up! Finance can do nothing against a determined people. True wealth is the fruit of human labour. By their mobilization, European workers can  put an end to the financial orgies. And start building, at last, a world which is finally human.