Wednesday, April 27, 2011

What to think about Quantitative Easing (QE2, etc)

I disagree with this analysis by Marshall Auerbach crossposted at naked capitalism.  I posted this reply:

I’m not sure I understand QE, but it seems like many of my favorite progressive economists such as Paul Krugman and Brad DeLong favor it (though might have favored expansionary fiscal policy even more), and would in fact have favored far more aggressive QE. OTOH, it seems most who oppose it are deficit hawks, inflation hawks, and goldbugs, the very people who care far more about inflation or the remote possibility of inflation rather than the 20% underemployment we now suffer from most. On tribal basis, I go with the progressives, and I think left populists are mostly confused
I think it was well intended but largely ineffective. My solution to the Great Recession is huge new public investment in the development of renewable energy and transportation based on it. The macroeconomic part of that would be even more deficit in the short term. But the cure is not simply in the numbers, but in the DIRECTION. We’ve been leaving the ultimate direction of our economy to the wall street casino for the last 30 years, and it has done no good for most, only for the super rich, and to the long term destruction of everyone. A people’s government needs to set the direction, which ought to be as I just described, toward a renewable energy based sustainable society. Unfortunately, the people are woefully misinformed about peak everything and global warming, the true natures of our present reality. And the government mostly operates in coin operated mode nowadays, which works to make the rich ever richer, everything else be damned.

Tuesday, April 26, 2011

What are we, anyway

Very interesting discussion at Naked Capitalism:

And, within that discussion, a great quotation from the book How Darwin's Theory Can Change the Way We Think About Our Lives by David Sloan Wilson:

Instead of minimalistic assumptions such as the utility maximization of rational choice theory or the blank slate of behaviorism and social constructivism, we need to discover a complex psychological architecture that evolved by genetic evolution and that causes small groups to self-organize into coordinated units. Alexis de Tocqueville got it right in 1835 when he wrote, “The village or township is the only association that is so perfectly natural that…it seems to constitute itself,” but modern science has yet to even remotely take his conjecture seriously. Conscious intentional thought is just the tip of an iceberg. The rest of the iceberg operates beneath conscious awareness and must be discovered scientifically, like vision, despite the fact that it takes place within us every moment of the day. Even more strangely, it takes place without us, in our social intercourse in addition to our neuronal interactions. The idea that we play a role in group-level mental processes without any conscious awareness will take some getting used to, especially against the background of individualism, which has dominated the intellectual landscape for the last half century.
As if these layers of ignorance aren’t enough, there is another layer that involves culture rather than genes. Our genetic architecture enables us to create, transmit, and select behavior in roughly the same way that the immune system creates, transmits, and selects antibodies. Part of this process is conscious and intentional. To some extent, we are aware of our problems and actively seek solutions, as I just showed in the previous chapter. To a larger extent, however, the creation, retention, and selection of behaviors take place beneath conscious awareness. We learn the ways of our culture at a very young age, in the same spongelike fashion in which we learn language. As adults we adopt new behaviors and mannerisms unconsciously at least as much as consciously. Many of our current behaviors exist not because someone decided they were useful but because they outsurvived competing behaviors. Human life consists of many inadvertent social experiments. Even when we try to steer the course of events, our efforts interact with those of others in unpredictable ways that might as well have been random. A few social experiments hang together, while the others crumble into the dust.
Also mentioned in the discussion are the great debates (on video!) between Chomsky and Foucault.  I believe the poster is correct when he says that the Structuralist critique is invaluable, but Foucault is too pessimistic.  Chomsky, another structuralist, has a more nuanced and optimistic view that does not destroy all hope of finding our way out of the wilderness.

It can be seen Part 1 here and Part 2 here.

Not entirely related, but just so I don't forget, here is a 5 part critique of Kuhn published in NYTimes.  Apparently it was written by the Photography editor, and spends a lot of time on entertaining personal sillyness, but nevertheless looks worth reading.

Wednesday, April 20, 2011

Media falls silent as more Fukushima details emerge

Libertarianism in one Lesson

Professor Quiggin nicely deconstructs an extemely popular right wing tract, "Economics in One Lesson," by Henry Hazlitt.

In the ensuing discusson, this comment was made by Ikonoclast (one of my favorite commenters) echoing Jack Strocchi (likewise):

Libertarianism is about legitimising self-interest, aggrandising all wealth and power to specific advantaged individuals whilst allowing all others to be exploited without hindrance. Libertarianism might deny this but it is the inherent truth in the attempt to minimise the legitimacy of democratic government. In practice libertarianism equals oligarchy

the central unscientific claim of Economics

Peter Dorman really nails it at EconoSpeak:

"is consistent with" is a phrase which really means "we must accept this hypothesis or accept some degree of Type 2 error" and does nothing about the Type 1 error which most science deals with.

This is only the beginning, however.  To this unsound methodology, you need to add:

1.  Obviously wrong assumptions and re-definitions of common words.
2.  Special servile relationship with wealth and power for which typical economics serves as propaganda tool, delivering this underlying but usually covert message: accept only the crumbs that fall from the great tables of the great system, since your taking more than that would destroy the greater good which includes you.  The special relationship arises because people of wealth and power take great interest in the dogmas that advance their privileges, and have ways to fund them, thus letting alternative visions such as Marxism or Minskyism or even Keynesianism wither on the vine.
3.  Physics envy.

(1) generally follows (2), and (3) is the magic glue that makes it all seem scientific and respectible.  This is not a new idea, Keynes said essentially the same thing in General Theory.

Tuesday, April 19, 2011

Interesting Happenings at Bretton Woods

Steve Clement's The Washington Note is one of the nicer political blogs to read.  The political arc of Steve's life is similar to mine, starting as a Nixon republican and heading further left than "serious" Democrats nowadays.

He gives good coverage of INET's Bretton Woods Forum this year.  There are lots of interesting videos there to watch, including Soros, and Lord Adair Turner, who Steve praises as the Lord Keynes of our time.
Turner discusses what an economy should achieve, and that it must be concerned with quality of life and full employment.

Actually much of the conference can be watched online from INET's site.

Wednesday, April 13, 2011

The high price of nukes compared with efficiency and renewables

One of the most excellent websites, Climate Progress, reports today about a nonsense filled pro-nuke Op-Ed.

The claim was made that it would take half the area of Japan to replace nuclear with wind power.  It turns out that claim is wrong in many ways, starting with the erroneous change from millions to billions.  So it's wrong by a factor of something like 1000x.

And that's counting the total area over which wind is captured.  Most of an actual wind farm is empty land space, and farming and ranching can continue as before.  The actual land required for siting the turbines is a mere 19,000 acres, or 30 square miles.  And the cost would be lower than a comparable construction of new nuclear plants.

A fascinating thing about nuclear power is the negative learning curve in cost efficiency.  Most technologies show a positive learning curve, in which the more some product is produced the more cheaply it can be produced.  But very curiously, nuclear has gone in the opposite direction since the very beginning.  And regardless of what you have heard about the nuclear experience in France, it is actually similar to what has gone elsewhere if you look at the numbers: their costs have gone up too.  And operations costs continue to rise.  Why is this so?  Read the linked article.  It's clear that humanity is not ready for nuclear power.  As someone said recently, we should study nuclear power for another 12,000 years or so.

Tuesday, April 5, 2011

The horror, and the beautiful gifts

On the one hand, we have the horror.  The planned destruction of Medicare, the guarantee of health insurance to the most uninsureable, who may have spent their lives paying into the program, by Paul Ryan.  And a budget filled with similar destructions of the social democratic common good, with the fantasyland market fairy solving our problems instead (this is sort of like trickle down economics, except even more implausible).  And, of course, doing nothing positive about the deficit anyway (except perhaps making the deficit larger for the next ten years).

On the other hand, an ever increasing wealth of free movies and books, showing how and why a culture based on greed and selfishness cannot work, and exploring alternatives.  These look good, though I haven't had time to view or read them yet.  I discovered a few more of these reading a great thread on Naked Capitalism, a blog I need to read more often.  For example:

Zeitgeist moving forward, a 2 hour movie, free to download.

(Actually, Zeitgeist Moving Forward is a child of The Venus Project, which has lots of interesting ideas.)

The Ascent of Humanity, a free book about the past and future of humanity.

The Story of Stuff, a short movie about how stuff is made and used, and why more "stuff" won't solve our problems either.

The Living Dead, a movie about how politicians distort our memory.

One commenter at Naked Capitalism who points to these great features wrote a very perceptive comment that inspired me to get them:

While we have hierarchy we’ve got to have an ‘elite’ at the top, by definition. And though democratic processes have redirected the power-flow somewhat–sporadically and only a little–the gravity of a hierarchical distribution of power and wealth must be ever upwards. This seems to me to be a logical condition of hierarchies generally. The degree to which we can redress this upward momentum via, say, progressive taxes and representative democracy, can only be minimal in my opinion, since the underlying dynamic of the process is not altered therefrom; we just knock off a few crumbs and hand them over to the poorer 80% or so. This isn’t bad, it just isn’t enough. Not any more.
A further problem is the increasing complexity of the system as it expands outwards, exploiting more of the planet’s ‘idle’ resources in its insatiable hunger for more wealth. Staying ‘in control’ gets harder and harder as the system becomes more cumbersome and perverse. Meanwhile, technologies like the printing press, the scientific method, and the Internet, free up information to those the upper 1% would rather keep in the dark. The deceptions and lies (public relations) used to justify the obscene social divisions become more divorced from reality and harder to defend. Then comes revolution or collapse, both probably.
Now, for the first time in our history, we have a global system, and it is as insatiable as ever. It seems the best science humans can muster strongly suggests we, directly due to our growth-addiction, are causing a 6th extinction event. This means we have progressively less to exploit, which adds spice to the problem of complexity I touched on above.
I see no healthy way out of this other than the careful and deliberate introduction of egalitarianism, or autarky, or anarchy, along with a globally-aware and coordinated prioritizing of environment above all monies, the latter being the more important element. People and environment first, money a distant second. This would require the total redesign of almost everything we do, from money, to education, to economics, to politics, to nations, energy, ‘profit,’ and so on. A tall order indeed, but the challenges we face are unprecedented. Old ideas cannot yield the solutions.

OK, I've looked over The Venus Project a little.  I still like it.  Yes, I am very much skeptical wrt the ability of computers to "solve" our problems, which is one of their assumptions.  But I like their ideas wrt  making a better zeitgeist.  But I think one of their problems, like many New Age'ers, is that they tend to downplay the ultimate Marxian conflict between people and the power of Capital.  Somehow technology will make this easy.  No, sorry, it won't.  It will be harder than hard.

But I don't take futurist projects to be futile either.  Like science fiction, they are full of good ideas, good ideas that that are worth thinking about right now.  Just not worth believing in as a historical inevitability.

Here are my comments to a blog:

The Venus Project concept looks like it has good ideas in it, and I intend to watch the movie.  But it also sounds to me like it makes the classic New Age mistake.  It promises a future free of conflict (in contrast to where we are now, almost the reverse).  But to get to such a future would obviously require an enormous conflict, the conflict to unseat the power of Capital as described by Marx and others, the need for which is denied or elided by the New Age'ers.  Instead, they promise that something (something usually like technology, or mental change) will make this virtually impossible to conceive Ultimate Conflict unnecessary.

That's a critical point, and I don't believe it.  Technology will not kill selfishness or unseat the power of Capital.

It will take another human social force, and not merely lack-of-selfishness.  That other force is the force of solidarity.  The people I respect more design societies around human ideas of solidarity and fairness.  Those people like Robin Hahnel and Michael Albert have proposed an economic system called Participatory Economics, which proposes that people have input to a decision making process based on how much it affects them.  And another core idea is that social dividends (salary, credits, etc, I still think we need something like that) be distributed on the basis of effort.  That fits the non-capitalist left notion of fairness.  I'm not sure if enough people can accept that.  But it would be far easier for most to accept that than accept free-for-all (especially amidst the rising levels of scarecity of water, etc., everywhere).

Marx had the word for groups like The Venus Project: Utopian Socialist.  Problem is, I agree it's true that he was one of them also, for he had a vision ultimately based on cornucopian view of material possibility.

Of course, most of the current new age'ers won't identify with old-age words such as socialism or communism.  That would no doubt offend many of their donors (can't build a free society that way, sorry).

But what they propose is actually far more unrealistic than old-world socialism or communism.

I take the opposite tack.  I do not denounce Marx.  I call myself a socialist and a leftist.  I am not afraid of the word communism either.  This is because, as Howard Zinn advised, we have to choose sides, and I have chosen the side of the majority of people, and against those who now have most of the power and "wealth" (a more unquestioned form of power), regardless of whether that makes some people think they must be my enemy.

If people don't choose sides, they aren't really serious.  They're just playing a tune for your money.

Finally, there really is a kind of socialism that is still making life far better for most than it might be, in this world today.  That is Social Democracy.  Even as official dogma denounces it, it can't really be erased, only further corrupted.  This is where the battle lines are now, and if you live in the real world, you should be there too, fighting to hold on to what we already won.

My political blog is

Friday, April 1, 2011

Great article! I agree. Except I think a tight moneyist would put the onus not on the creation of debt, but the nearly simultaneous crreation of money. What gives govt the right to print money in the first place, they might argue? I would say the government has a role to create the infrastructure for commerce, employment, the division of labor, and wealth. A most essential part of that infrastructure is money, and it must expand as the economy expands, mainly toward the production of full employment. Inflation results from improper investment, another story. Of course tight-moneyism is long-term self-defeating protectionism for the rentier class. The concern and direction of the government should be for the good of all. Thus money should be printed to meet an employment target. But I'd say best have the government create useful jobs in education and infrastructure broadly defined, and spend the money on salaries. Now economies have been expanding (or collapsing) for a long time, now we have the global economy, is it immune from collapse? And further, can growth continue forever? My guess is probably not, we will need possible a different kind of economy in a resource collapsing world. Fortunately, we are not in full collapse just yet. Meanwhile, the ruling class seems intent on creating a phony collapse, or actually one following another, stealing the silverware while they still can is the way I see it. Right now, we need to expand government money/debt enormously and build the renewable energy economy. If we don't (and it's hard to imagine we will) we will be toast before long. The path to Zimbabwe is failing to build the infrastructure we will need in the future, and sticking with the destructive carbon fossil system instead. Capitalist energy provision like we have now doesn't work, it steals from the future. That's the story of the past 250 years in a nutshell. Public energy systems are superior, and that is true in many other sectors including heathcare (should be fully nationalized, not merely single-payed). Capitalism's failure to deliver the goods to most has been diguised by "growth" based on depleting and corrupting the environment. In the no-growth environment of the future, the choices are slavery or universal equity. We must choose the latter, or the former will be imposed on us.