Herbert Hoover, the first New Dealer?

Apparently not, according to Brad Delong.

Or at least he finds some contrary evidence.

Readings for today

Krugman and others deconstructing Barro's anti-Keynesianism (it isn't "regular economics").  But IMO they're all too kind on Barro; though Krugman makes the best case he also defends microeconomics as a useful if limited tool.  Barro is one of the leading freshwater economists of our time.

Psychologists take a look at people who prefer utilitarian solutions and, surprise surpise, they score higher on antisocial personality traits.  But funny, "regular economics" presumes or even preaches that or worse, that we should be out for our own selfish gain (but it's supposed to work out for the best of all, the invisible hand and all, given a whole litany of bad assumptions that Krugman just touches upon).

Healthcare Reform Disingenuity

A bit of history.

Firedoglake reported while Obama was speaking out in favor of public option (in September speech to Congress, I remember that one, it was inspiring) his administration was simultaneously turning the screws on the progressive caucus (including Dennis Kucinich) to kill the public option so the administration could honor a deal with hospitals to fill Democratic campaign coffers for 2010.

There's no business like show business.

New name for human species

Homo Sapiens?   The wise?  I've even heard it said the technical name is even Homo Sapiens Sapiens (the wisest of the wise).  I think a more accurate name would be:

Homo Insapiens Plerumque

Unwise mostly.

Other choice for Insapiens is Insipiens (foolish).

Not really having Latin training, I'm being pretty foolish myself to try to do this.  I'm using:

English-to-Latin Translator.

Latin-to-English Translator.

Chomsky gets it again

Chomsky on America in Decline.

Chomsky video on union busting and economic polarization in USA.

IS-LM model

I don't particularly like the politics of this one, by Nouriel Robini, but it is an excellent description of the IS-LM model by Hicks which even Krugman admires.  (Hicks himself somewhat moved away from it in his later years, and said it didn't really capture the essence of Keynesian economics, which is really about instability rather than equilibrium.)  The Wikipedia dscriptions of LM is terrible, this one gets very detailed.

http://pages.stern.nyu.edu/~nroubini/NOTES/CHAP9.HTM

From a failed growth economy to a Steady-State Economy

This is one great analysis of what we need as our new economic model and why, by Herman Daly.  Packed with interesting analysis, very radical recommendations, politically unimaginable, and yet, maybe not even radical enough (it's still capitalism after all, but very different from our current market liberalism model).

http://www.theoildrum.com/node/5464

Social Democracy Strategies and Realities

This one is very long, about political realities and strategies for social democracy (if we can keep it, and expand on it again).  I'm currently only half way through the comments at #140.  Lots of different and interesting perspectives, including many foes of social democracy.

http://crookedtimber.org/2011/07/25/where-the-money-is/#comments

Here's one comment I found kind interesting (#106)

Ok John Quiggin, I’m going to make a radical suggestion to you for progressive strategy to go after the 1%, if you are up to it, I’ll come back and really make my case with you.

Please give it some real serious thought.

Here it is: ADMIT YOUR TEAM IS JUST THE “C” POWER.

If you are familiar with bipolar theory of during the Cold War, great. If not here it goes:

The A power was the US.
The B power was the USSR.
The C power was China.

Basically as in a two party Democracy, the sides all split up into two teams, and the third power the C power, they go their own way – and the best strategy is to PLAY BOTH SIDESagainst each other.———-

Ok, now for the radical part. Forget Republican / Democrat. Instead, there are three self interested parties in America:

1. The” A” power are all us citizens who during part of their earning life are part of the top 90-99%. This is a GIANT group of citizens. They look like the Tea Party. Lots of SMBowners. Lots of big fish in small ponds. They are all “likely voters.” There are tens of millions of these pretty comfortable people.

2. The “B” power are the top 1%.

3. The “C” power are the folks who never spend anytime in the top 90%. In fact, there are some who get up into just the 80%+ who also identify as A, a smaller amount of 70%+, etc. So it isn’t exact, but the demos hold very well.

This is why we have so many elites in the 1% who skew liberal. Some are born with it. Some are in industries that skew that way (lawyers). And some are Fortune 100 management types who like lawyers get part of their income from the government.———
OK, here’s my point: Your side has no $, and without $, your numbers aren’t great enough to be A or B.

The mistake you’ve been making , and the cause of this economic crisis, AND THE GIANT DISPARITY we now have is that for FAR TOO LONG you have been partnering with a B power the top 1% to get political donations.

To serve your “Big DC” urges the technocracy has partnered with the corporatists, to try and topple those 30-40MILLION republicans who NEVER make it to the top 1%.

And Tea Party, the natural A power, they like the asshole of the body are in shutdown mode.———-

There is a real strategy here. As the C power, what you want to do is CRAFT POLICY that takes directly from the B power (the top 1%) and gives it ALL to the A power.

Keep nothing for yourself.

Think of this as a series of broad tax changes that make SMB owners far richer and more nimble and make investors and Fortune 1000 far less comfortable.

Imagine the kind of tax policy where the best and brightest ALL WANT TO START THEIR OWN BUSINESS. Nobody goes to Wall Street, because investor / bankers pay real taxes, and SMB owners have it easy.

Like a flat tax of 25% on corporations AFTER say $10M in profits with NO EXEMPTIONS.

And it is easily attainable, and you could pull it off immediately. The A power has $ and votes, you have votes – all it takes is you ACTUALLY JUST FUCKING THE TOP 1%.

The problem is you don’t REALLY want to get the 1% if the money doesn’t go directly to you. That’s bad strategy.

This is called distributism.

http://en.wikipedia.org/wiki/Distributism
———-

The truth is, during the past 30 years, the B power (top 1%) have made huge gains.

But the 90-99% haven’t lost a dime. They are powerful because they are far more than than just 9% – they have MORE $ then the B power, and they have 35M+ more votes than the A power.

Meanwhile the C power – they have lost it all to the B power.

Anyway, you asked for a way out. And I’m sure at first blush, this won’t convince you. but rather than write me off, please ask questions – see if I can answer them.

Yes, this will entail a different approach to regulation, but it isn’t nearly what you think it is.

And yes, there are some negatives that comes from a broader swath of well monied SMBowners who are suddenly less afraid of government.

But I do think I can convince you that this strategy WILL net out the C power MORE real gains, not everything you are after, but more than you got now.

Robot Cars

Some of my friends believe that improving technology will solve all our problems, or at least most of them.

One of the technological fixes that many of these friends believe in is automobiles that save energy, and allow greater use of existing transportation infrastructure, by self-driving.

It is true that self-driving technology has improved considerably in recent years.  Though it seemed like one of the tasks that would be solved quickly in the 1950's, and it still seems it has a way to go.  (Basic operations of perception proved far more difficult than computer theorists of the 1950's ever imagined.  We still have a long way to go in understanding language, for example.)

One of my problems with robot cars is what I perceive as a misunderstanding of the problem.  Driving is not merely a technical problem like finding one of the better routes in between points.  Driving is a task that involves constantly judging the assertiveness of of other drivers.  Thus it is more like poker than chess.

Another problem is the liability problem.  I am liable for my own actions, but who is liable for the performance of a robot car?  Well, the robot maker of course, or at least you would think.  But have you ever seen those disclaimers that come with all software?

I suspect that robot cars will only work when all the cars are driven by robots.  And that is pretty hard to imagine.  And when you get there, by the way, what you have is highly computerized segmented train.

Finally, like most technical solutions, robot cars ultimately create the same problems faced with wider roads.  Wider roads don't become less congested, they encourage more people to drive and therefore ultimately cause MORE congestion.

Articles toward a sustainable economy

From this one:

http://www.theoildrum.com/node/8185#more


Steven Balogh and Hannes Kunz
Revisting the Fake Fire Brigade
Joules Burn
American Physical Society Report on Energy Efficiency
Herman Daly
From a Failed Growth Economy to a Steady State Economy
Towards a Steady State Economy
Nate Hagens
A Net Energy Parable: Why is ERoEI Important?
Dear Candidate: What Will You Do if Growth is Over?
Euan Mearns
The energy efficiency of cars
The energy efficiency of energy procurement systems
The financial return on energy invested

Related articles (automatically generated)

• Galactic-scale energy: Part 1 (July 22, 2011)
• Beyond Food Miles (March 11, 2011)
• Can We Redefine Prosperity? - Herman Daly - Towards a Steady State Economy (December 17, 2009)
• Herman Daly: Towards A Steady-State Economy (May 5, 2008)
• From a Failed Growth Economy to a Steady-State Economy (June 6, 2009)

Inequality is the cause, not the effect, of our problems

And it's not new.

“An imbalance between rich and poor is the oldest and most fatal ailment of all republics.” –Plutarch (c. 46 – 120 CE)

Ignore the weasels fed by Wall Street

A friend asks if Krugman has written about the S&P downgrade yet.  Krugman has written a few blog entries on or related to the subject; I'll just like some of the more recent ones.  I'm not sure if he's mentioned the S&P downgrade or the threats to do so (which started a few weeks ago) in any OpEds.

The basic story is that S&P are just some guys paid by Wall Street investment banks to rate their stuff.  So if an investment bank is selling a security, the investment bank pays S&P to give the security a rating, and in spite of the obvious conflict of interest, we're supposed to believe S&P, because they are putting their name on the line.  Well, we saw how well that worked out in the mortgage meltdown, S&P and all the others had given top ratings, sometimes even AAA, to mortgage backed securities which turned into toxic waste and the bonds of firms like Lehman Bros which went poof.

So who should believe these guys anymore?  Answer: Nobody.

Now, who pays S&P to rate US bonds?  Well, certainly not the US government itself, which is not an investment bank.  Largely it's S&P just doing it for their friends in Wall Street, saying what those friends want to be said.  Thus, such ratings are just bogus, and motivated by the desire of S&P to please its friends, and those friends to influence US policy.  Some would call this Political but I'd rather not besmirch the word Political.

Now there's an extra twist that in the last few months the US Securities and Exchange Commission (SEC) has been going after the ratings agencies, including and perhaps especially S&P, for the obviously invalid ratings they were giving to mortgage backed securities before the mortgage meltdown.  The defense of S&P is that it's ratings are simply a matter of "speech".  S&P says they should be free to say whatever they want for whatever reason.  As this was going on, barely reported, S&P started issuing threats about US bonds.  I'm not sure if the correct term for this is extortion, but it's something like that.

Anyway, I think I've read about most of this on other blogs, such as Naked Capitalism and Angry Bear (shown in the sidebar on the right of my blogsite) which are not afraid of angering advertisers.  Krugman, who publishes through the NY Times, hasn't spent as much time on S&P, he's more interested in real stuff like unemployment, but he has written a few posts about it (and be sure to click on his further links for more background).

http://krugman.blogs.nytimes.com/2011/08/05/sp-and-the-usa/

http://krugman.blogs.nytimes.com/2011/08/06/the-best-summary-of-the-sp-downgrade/

http://krugman.blogs.nytimes.com/2011/08/06/the-arithmetic-of-near-term-deficits-and-debt/

http://krugman.blogs.nytimes.com/2011/08/06/things-i-didnt-say-2/

Economy is 77% good will (aka trust), and movement conservatives destroy that

Great post at Naked Capitalism about trust, movement conservatism, and Obama (who is best seen as part of movement conservatism).  One of many great quotations:

"The republicans/blue dogs, and those helping them by lending their "professionalism", think they are only effecting a political strategy. In truth, they are destroying the very basis for the wealth they desire. Their entire campaign for decades to discredit, to instill mistrust in the primary institution we have, the US (We the People) government, has been the primary cause to our economic decline. To increase the level of distrust is to decrease the available “intangible capital” which is 77% of our wealth generating power. "

I added this comment (with a few edits):

This post like all others by DB is brilliant.

Obama the Steamroller gets what he wants, and what he has always wanted is to serve his hedge fund masters by abolishing actual government programs that work for people, replacing them with predatory programs that serve the wealthy.

Two of his tactics are to use only right wing ideas, and the other is to keep the microphone out of the mouths of actual left-of-center types.  Both tactics were on continuous display during the phony deficit ceiling crisis.  And the real coup was making a deal before Bernie or any Democrats could actually speak in the Senate.

Healthcare Reform is not primarily a government program, it's a private insurance mandate with subsidies.
 Yes, the hedge fund pyramids grow ever higher, even as base on which they rest ever rots away to make them grow. 

Salus populi suprema lex esto

Translation: the good of the people is the highest law.

Also, FWIW, on the state seal of the Seal of Missouri.  And as many conservative cranks invoke it as otherwise.  But at least it doesn't say protection of private wealth is the highest law.

Found that tidbit along with much more interesting discussion of restoring social democracy in the USA on this blog post and comments initiated by John Quiggin.

Same commeter (StevenAtewell #37) invoked the latin:

sic utere tuo  (use yours without harming others).