Tuesday, March 17, 2009
Get it right, at least.
Funny the hue and cry of socialism: we go towards fascism, the partnership (not merger) of corporation and government.
Wednesday, March 11, 2009
Human Action
Humans are induced to act by dissatisfaction. If someone is fully satisfied, they lack incentive to attempt to change their state. Dissatisified individuals will rank their discontents according to their severity modified by ease of elimination. Once ranking has occurred, the individual will act to eliminate their distress according to their means. Perfect fullment is impossible, so humans will continue to act.
What is money?
First, we try to define medium of exchange. Let us travel to a village right before the time money existed. Specialization has previously occurred, due to it's higher productivity becoming apparent to the villagers. Each person trades the excess of what they produce for things they don't produce. Sam is the new cobbler in our village, he makes and repairs shoes. He repairs peoples' shoes, and they repay him with vegetables, from the gardener; eggs, from the chicken farmer; clothes from the seamstress; etc. Now, let's say, Sam is allergic to eggs. He is unwilling to accept eggs for work performed, because he has no value for eggs. Sally, the chicken farmer, needs new shoes, but has no means of obtaining the nice, dry ones Sam makes. But suppose, Sally had an idea. She went to the wheat farmer, and traded eggs for wheat. Now Sally of course does this every week, trading eggs with Joe for wheat in return. But this time, she trades twice as many eggs, to get a double ration of wheat. Sally drops off her normal ration at her house, and takes the extra ration to Sam the cobbler. She offers it in trade for new shoes. Sam likes wheat, so accepts the trade. In our simple little barter village, this is the first instance of a commodity being used for something other than consumption. The commodity has acquired the characteristic of indirect exchange.
Now let us suppose Juan noticed that Sally traded wheat to the cobbler. Now, he grows rhubarb, which Sam hates, so poor Juan has been barefoot since Sam came to town. Juan then races over to Joes to trade his rhubarb for wheat, to get himself some shoes. Wheat has begun to take on the characteristic of a medium of exchange. The problem with barter is you must have a dual coincidence of desire. Both parties must want what the other has, and have what thee other wants. But a medium of exchange, since it is useful beyond immediate consumption, eliminates the necessity of a duality: as long as one party has a medium of exchange, then the trade can be executed.
So, as times passes, varios commodities may be used for indirect exchange, according to the preferences of the individuals at the specific time. This produces uncertainity, which humans try to eliminate. One commodity, perhaps jewelry or untoolable but workable rare metals, became commonly accepted, and tradition would follow. Now the medium of exchange is worth more than just the barter value. Now it is money.
Now let us suppose Juan noticed that Sally traded wheat to the cobbler. Now, he grows rhubarb, which Sam hates, so poor Juan has been barefoot since Sam came to town. Juan then races over to Joes to trade his rhubarb for wheat, to get himself some shoes. Wheat has begun to take on the characteristic of a medium of exchange. The problem with barter is you must have a dual coincidence of desire. Both parties must want what the other has, and have what thee other wants. But a medium of exchange, since it is useful beyond immediate consumption, eliminates the necessity of a duality: as long as one party has a medium of exchange, then the trade can be executed.
So, as times passes, varios commodities may be used for indirect exchange, according to the preferences of the individuals at the specific time. This produces uncertainity, which humans try to eliminate. One commodity, perhaps jewelry or untoolable but workable rare metals, became commonly accepted, and tradition would follow. Now the medium of exchange is worth more than just the barter value. Now it is money.
Monday, March 9, 2009
Fact is...
Many organizations that represent businesses, especially those that are anti-union, oppose aspects of majority sign-up (card check) legislation.[16] For instance, the National Restaurant Association cites three tenets of card check that it opposes.[17] The employers claim that such laws could result in employees being subjected to coercion by unions, employers, or other co-workers. Union supporters counter that a study by the HR Policy Association, a pro-business organization, identified just 113 cases since the inception of the National Labor Relations Act as involving fraud and coercion in connection with card collection. Upon review, however, only 42 of those cases actually found misconduct in the signing of union authorization cards since 1935, or about one case every two years.
The market is dumb and i'm smart.
“This notion that the economy is self-stabilising is usually right but it is wrong a few times a century. And this is one of those times . . . there’s a need for extraordinary public action at those times.”
LarrySummers
LarrySummers
Misdirection of resources
Distorted money (vs. sound or hard money) produces malinvestment of resources, tending to emphasize capital goods over consumer goods. This is because the capital producers misinterpret the distorted money as representing real savings. (Real savings represent a time shift of preference of consumption. Can't eat your cake and have it, too.) Once the distorted money has been invested into capital goods production (representing an increased ability to produce goods), there is no market for those goods, since the market did not accumulate capital (by deferring consumption) to pay for those goods. Additionally, the market is burdened by the debt incurred to produce the fiat capital to malinvest in unneeded production.
Sunday, March 8, 2009
Public Good = Public Utlity?
If banks are too important too fail, then they should be regulated and controlled like other public utilities; e.g., power and water.
I got an angle, charlie...
"...something crucial in the AIG bailout: Derivatives claims are not stayed in bankruptcy. (Yet another brilliant innovation from the 2005 bankruptcy reform legislation.)
If AIG were to go down, derivatives counterparties would be able to seize cash/collateral while other creditors and claimants would have to stand by and wait. Depending on how aggressive the insurance regulators in the hundreds of jurisdictions AIG operates have been, the subsidiaries might or might not have enough cash to stay afloat. If policyholders at AIG and other insurance companies started to cancel/cash in policies, there would definitely not be enough cash to pay them. Insurers would be forced to liquidate portfolios of equities and bonds into a collapsing market. "
TPM Reader GG
If AIG were to go down, derivatives counterparties would be able to seize cash/collateral while other creditors and claimants would have to stand by and wait. Depending on how aggressive the insurance regulators in the hundreds of jurisdictions AIG operates have been, the subsidiaries might or might not have enough cash to stay afloat. If policyholders at AIG and other insurance companies started to cancel/cash in policies, there would definitely not be enough cash to pay them. Insurers would be forced to liquidate portfolios of equities and bonds into a collapsing market. "
TPM Reader GG
http://hplusmagazine.com/digitaledition/2009-spring/
The economy we live in is a rigged game, established around the time of the Renaissance in order to promote the welfare of early chartered corporations and the monarchs who gave them license to monopolize world business. Until that time, there were many kinds of money in use simultaneously. People used centralized currency to conduct long-distance transactions, and local currency to transact on a more day-to-day basis.
Most people, in fact, never used centralized currency at all. They simply brought their season’s harvest to a grain store, then got a receipt for the amount of grain they had deposited. This receipt was currency, redeemable at the grain store for something everyone knew had real value. but since a certain amount of grain went bad or was lost to rats, and since the grain store had some expenses, this money lost value over time. Since the money would be worth less the following year than it was worth that day, the bias of the money was towards spending and reinvestment. That’s why medieval towns built cathedrals: as a way of investing in the future with excess money from the present. They were that wealthy. Women were taller in medieval england — a sign of their good health and diet — than at any other time before the last two decades.
Local currencies allowed towns to create value and reinvest it in their own affairs. This was intolerable to an aristocracy already waning in power and influence. So European monarchs began to outlaw local currencies, and force everyone to use “coin of the realm.” These centralized currencies had the opposite bias. They were borrowed into existence by businesses, and then paid back to the central bank, with interest. Like most innovations of the Colonial era, centralized currency is a way to extract value from the periphery and bring it back to the center. People’s labor no longer contributes to their own wealth, but to the lender’s. eventually, the lending economy — central banks and banks — becomes bigger than the “real” economy of people doing stuff. Today, in fact, over 95% of currency transactions are made between speculators. our money is used less for real transactions than betting.
Most people, in fact, never used centralized currency at all. They simply brought their season’s harvest to a grain store, then got a receipt for the amount of grain they had deposited. This receipt was currency, redeemable at the grain store for something everyone knew had real value. but since a certain amount of grain went bad or was lost to rats, and since the grain store had some expenses, this money lost value over time. Since the money would be worth less the following year than it was worth that day, the bias of the money was towards spending and reinvestment. That’s why medieval towns built cathedrals: as a way of investing in the future with excess money from the present. They were that wealthy. Women were taller in medieval england — a sign of their good health and diet — than at any other time before the last two decades.
Local currencies allowed towns to create value and reinvest it in their own affairs. This was intolerable to an aristocracy already waning in power and influence. So European monarchs began to outlaw local currencies, and force everyone to use “coin of the realm.” These centralized currencies had the opposite bias. They were borrowed into existence by businesses, and then paid back to the central bank, with interest. Like most innovations of the Colonial era, centralized currency is a way to extract value from the periphery and bring it back to the center. People’s labor no longer contributes to their own wealth, but to the lender’s. eventually, the lending economy — central banks and banks — becomes bigger than the “real” economy of people doing stuff. Today, in fact, over 95% of currency transactions are made between speculators. our money is used less for real transactions than betting.
Saturday, March 7, 2009
But in addition to Berkeley and the University of Texas, professors at a number of departments including those at the University of Chicago, Harvard, Yale and Stanford, say they are unaware of any plans to reassess their curriculums and reading lists, or to rethink the way introductory courses are organized.
Thursday, March 5, 2009
Wealth.
Wealth is real capital, the result of real work. You dig gold out of the ground (primary production). The goldsmith makes the lump more desirable (added value). The teamster hauls it (transport). The store owner markets it to those who want and can afford it (distribution).
Writing down some numbers on a piece of paper, and saying that's how much wealth you have, this will only work if you can convince other people that your paper is worth something (fraud).
Writing down some numbers on a piece of paper, and saying that's how much wealth you have, this will only work if you can convince other people that your paper is worth something (fraud).
Sound Money
No more 'good bank-bad bank' fraud. Fractional reserve banking is a fraudulent system that inflates the money supply. The Federal Reserve prints 2-5% more money than they destroy, every year, thus inflating the money supply. An increasing money supply will result in rising prices for those who do not create the fiat money. Only counterfeiters benefit from fiat money.
We need 2 banks. One, a depository bank, backed by 100% assets. Essentially, they will be warehouses, wear you can store your money. Two, investment banks, modelled on the joint-stock venture. Risk capital can be concentrated and employed, at no further liability to the individual other than the money ventured. 100% asset backed, again.
We need 2 banks. One, a depository bank, backed by 100% assets. Essentially, they will be warehouses, wear you can store your money. Two, investment banks, modelled on the joint-stock venture. Risk capital can be concentrated and employed, at no further liability to the individual other than the money ventured. 100% asset backed, again.
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