Slashdot Mirror
Mathematician Predicts Wave of Violence In 2020
ananyo writes "In a feature that recalls Asimov's Foundation series and 'psychohistory', Nature profiles mathematician Peter Turchin, who says he can see meaningful cycles in history. Worryingly, Turchin predicts a wave of violence in the United States in 2020. Quoting from the piece: 'To Peter Turchin, who studies population dynamics at the University of Connecticut in Storrs, the appearance of three peaks of political instability at roughly 50-year intervals is not a coincidence. For the past 15 years, Turchin has been taking the mathematical techniques that once allowed him to track predator-prey cycles in forest ecosystems, and applying them to human history. He has analyzed historical records on economic activity, demographic trends and outbursts of violence in the United States, and has come to the conclusion that a new wave of internal strife is already on its way. The peak should occur in about 2020, he says, and will probably be at least as high as the one in around 1970. 'I hope it won't be as bad as 1870,' he adds."
We recently discussed similar research into predicting violence in the short term.
We already know the world ends on December 21, 2012, so why is he speculating about a future that won't even happen?
Obligatory xkcd.
This is the stupidest made up bullshit I've ever heard. At 50 year intervals, the sample size is like 3 or something. That's well within the range of coincidence! Since people going totally apeshit doesn't happen for no reason, I'd say it's more reason based than some natural recurring phenomenon based on time.
It will happen.
If you're vague enough about your predictions... you won't be wrong often.
Let's see:
1. "Extrajudicial" killing of US citizens
2. Use of drones against US citizens
3. Cameras recording activities
4. Government snooping into private conversations
Good damn thing there is a 2nd Amendment.
And if I flipped ten heads in a row the next one must surely be tails right? Right?
The soylentnews experiment has been a dismal failure.
While I agree that the sample size is small, there is certainly reason to think that if the political discourse continues as it is now, in eight years we could be in for that talk to start manifesting itself physically.
The world moves for love. It kneels before it in awe.
Uh duh, the Aztecs already did this, the world is ending in 2012.
determines the likelihood of violent crime. There's probably a peak (a baby boom) in that statistic in 2020.
Easy, no mathematician required.
I wonder if this cycle follows the wave of economic depressions? It would make sense that people with less to lose who are hit by the recession and see others making more money from it might become restless
FTA: "For example, it seems that indicators of corruption increase and political cooperation unravels when a period of instability or violence is imminent."
Why do articles like this act as though "violent acts" were the essential force, and "corruption" some kind of indicator symptom? I submit that the latter is the cause and the former the resulting symptom.
The article includes this viewpoint, but you have to get all the way to the very last paragraph to see it -- "But perhaps revolution is the best, if not the only, remedy for severe social stresses. Gintis points out that he is old enough to have taken part in the most recent period of turbulence in the United States, which helped to secure civil rights for women and black people. Elites have been known to give power back to the majority, he says, but only under duress, to help restore order after a period of turmoil. “I'm not afraid of uprisings,” he says. “That's why we are where we are.”"
We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes
The peak will reach that of the 1860s before it begins to calm down a bit. We only do violence for 'humanitarian' reasons.
“He’s not deformed, he’s just drunk!”
Politics and divisions between people are not the cause of war. (Politics is how we operate as a society and it can be good or bad. If politics turns from good to bad and then to war, the cause of war is what caused the change from good to bad politics).
Similarly, the differences between groups, say Sunni and Shi'ite to let Americans off the hook, does not _cause_ the fighting between them. They live together side by side in other countries and they live together side by side in the same country before and after the fighting.
The root cause of war is having fewer resources per person this year than last year. How we move from less money to war is done politically and part of the politics is finding a group to place blame on, but the underlying cause is not politics or divisions between groups.
(For folks who think divisions between people should go away, consider there are 950 different Christian religions and 700 different Islamic ones. None of them, not a single one, was created by non-believers or dis-believers. All 1600 religions were created by true believers. Belief is not a solution).
I don't care. I live in a mountainous region of Europe, where tanks and helicopters are useless. I've got enough ammo for two zombie apocalypses. Worst case is no Slashdot.
You are full of shit and hatred. There are over 2 million muslims in the USA who have been here for over 2 decades who haven't been "biding their time" to do anything. I have over a dozen muslim friends, their families came over here to get away from the B.S. at home and to live a happy non-violent life in a prosperous country. they excel in business and academics, asian people tend to be funny that way (there is a racial stereotype for you, and it's a useful generalization)
You mean all those Muslims who, much like the Minutemen and colonists, have risen up and overthrown oppressive regimes in many middle eastern countries?
"Thinks he sees"? Doesn't that strongly suggest that we're dealing with a lunatic here?
Of course, psychohistory doesn't work if you publish the results -- so all of this is bullshit. This implies that the psychohistorical result is actually not violence in 2020, but something else that they're trying to steer us towards. Maybe this is also why we're not supposed to be aware that psychohistory exists.
Back to the Prime Radiant, guys.
Get off my lawn.
Why those Mayors discuss feeding their city's poor but are silent on starvation in Africa. Come off it people, you fight battles you can win. I'm sure they'd love to spread tolerance throughout the world, but their Mayors, not God-Kings.
Speaking of religion, have you ever actually read the Christian Bible? You can do all sorts of things to people you don't like and it's A-OK. And don't forget, blacks weren't people until the last 1970, so says Mitt Romney (or at least his religion). Every religion that's existed for any length of time has terrible things in it's dogma.
We're not pretending Islam is just fine. But we're rationalists. Give people enough food, shelter and some discretionary income for hobbies and they mellow out. Ever wonder why terrorists don't send deep cover moles over here? It's because give them a taste of good life and they stop being psychotic extremists. The challenge is giving that life to everybody. Not just the vague promise that you might have a chance at it that economic conservatives and 'libertarians' favor, but the real thing.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
People who have options don't get violent. Not in mass anyway (yes, chemical imbalances will result in the occasional horror story like that Batman shooting). That's why Canadians are so well behaved. They feel secure in their well being thanks to an extensive safety net and healthcare system. Systemic violence is an outgrowth of poverty. The single most enlightening moment of my life was when I realized that every war ever fought was over money in one form or another.
e.g. the American South wasn't fighting to defend slavery, but to defend the right to oppress blacks. Blacks were oppressed not for the economic benefit (immigrants where cheaper and disposable) but because it gave poor white southerns someone to look down on and kept them from asking questions like, how come I barely make it through the winter while that guy sips mint juleps? Don't take my word for it, google Karl Rove and the Southern Strategy.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
No. Now get back in the kitchens, I don't want my friends to see me talking to the help.
You mean all those Muslims who, much like the Minutemen and colonists, have risen up and overthrown oppressive regimes in many middle eastern countries?
Ha ha ha .. tell that to the non-Muslims in those countries. They were actually a lot better off under the "oppressive regimes"
If the current trend of inequal distribution of wealth continues then yes, we will see increased violence. It's a formula that's a old as civilzation itself. Poverty is and always has been the root cause of most crime, including violent crime. (Some of it is due to crazy. You will always have jealousy, rich people shoplifting for thrills, adultery, etc)
Whatever your political creed or economic philosophy, you must recognize that gross wealth inequality /always/ leads to bad things. It's a common theme of all civilizations world wide throughout all recorded history. It's the destroyer of nations. It's the murder of kings. It's the ruin of the most mighty military forces. It's the trigger of violent, bloody revolution where the innocent and the guilty both suffer alike.
Our country used to recognize this function but in the last few decades it's been ignored wholesale. The rich are getting very very rich and have somehow convinced everyone that they "deserve" it while our nation stumbles with infective public programs and crumbling infrastructure. Wealth redistribution used to be a clear, stated goal of our government and now, somehow that idea is taboo and evil.
Linear time is useless to predict cyclic anything where modern human society is involved. Ten years of innovation today (and its effects on society) is greater than thirty years of innovation two hundred years ago. The scale just isn't linear. Nothing has a significant long term stable frequency.
If you are a cicada, you have reasonable grounds to disagree. Sadly, you can't talk and aren't real big in the innovation space.
Moreover, it was a unique peak in US history.
This guy's model needs an overhaul -- either that or its intend use is useless for phenomena that are really interesting.
Seastead this.
And what makes you an authority on the matter? Fuck, you don't even have the balls to post with an account.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Let me break it down for you. Christians are white therefore it is perfectly politically correct to demonize them. Contrast this with muslims. I'm not trying to conflate your viewpoint with racism and I wish there were a better explanation because I do not consider myself a racist but that's the explanation occam's razor leads me to.
Well, that can't be right. My family is Baptist and Negro.
As a historian with a lot of statistical study under my belt, call me skeptical. I don't see how we're able to make the leap from his observations to cycles at work in wildly variant institutions and cultures. This sounds an awful lot like the wide-eyed promise of cliometrics to revolutionize history starting in the 1950s.
In the mid-twentieth century, cliometrics (ah, look how much it reads like cliodynamics!) was going to save us all from the loosey-goosey styles of history that just weren't as good as honest-to-gosh social science. (This is why many mid-twentieth century universities placed history in their social science faculties rather than humanities where it was categorized in older university systems.) Certainly, learning how to handle large data sets and tackle questions of change over time with accurate analysis has been good, but stats wasn't the smoking gun to solve historical debates. Look how hard some of the great works of cliometrics crashed and burned when they tried to assert a grand rule of human behaviour: just two examples off of the top of my head, the Tilly's "The Rebellious Century, 1830-1930" which tried to unify the study of European revolutions over a century or Theda Skocpol's "States and Social Revolution: A Comparative Analysis of France, Russia, and China" which claimed that you could come up with a universalizing analysis of authoritarian state collapse. Both are interesting and ambitious books but ultimately unconvincing as they attempted to assert a general rule-set for history.
Now we're told that cliodynamics is going to solve the problem. Again, as the original article notes, most trained historians are skeptical. It's not just that we like futzing around with old documents, it's that we're aware of the weaknesses in ongoing research, holes in observations and the biases in the data. You want to point to huge amounts of populist violence in the U.S. circa 1920 as proof that it was a high in a fifty year cycle? I and other historians can point to stunning outbreaks a decade earlier related to the anarchist movements and a decade later with the unrest regarding the Great Depression. It's not so much cherry-picking counter examples: it's the wrongheaded concept of seeing people as pawns of historical forces. Asimov was fun to read, I'll grant you, but I'd hope that people can see that human agency has an awful lot more to do with historical change than the rules of psychohistory.
Stop looking for general rules of what's going to come next and consider, instead, clear-sighted analysis of how we've come to where we are and what that tells us about problems we've had and continue to experience.
ancarett, historian and zombie gamer
Im not sure if I should laugh at this or what? You start your sycophantic rant with "Asperger little faggot" and then end it with "Homosexuals are being legally harassed.....some people have a conscience..." Did I really just read this?
http://en.wikipedia.org/wiki/Peter_Turchin
1888: Jack the Ripper active
1913: The eve of the First World War
1938: Hitler annexes Austria
1963: Kennedy assassinated
1988: The Lockerbie bombing
It's 2013 we need to worry about, sheeple!
systemd is Roko's Basilisk.
The publication of this article by some way reminds me of the Terminator: the publication of some possible future events make that events happen, or alter them in some way
Slashdot ya no es que lo era!
We were hardly any better 100 years ago, and there are no lack of Westerners who wouldn't mind seeing homosexuals shoved back in the closet.
And what is with these Aspergers accusations?
The world's burning. Moped Jesus spotted on I50. Details at 11.
The guy isn't a mathematician, he's an ecologist. And I find it hard to believe that by 2020, social acceptance of domestic violence (say) rises again to mid-20th century levels. The reporter's suggestion that the precise moment in time of the Egyptian revolution was predictable is likely based on a misunderstanding of Turchin's work.
By the way, the field isn't as new as the article suggests. Steven Pinker's recent book, The Better Angels of Our Nature, collects quite a bit of quantitative research in this area, most of which does not support the existence of stable cycles.
The muslims in the west are just biding their time until they are strong enough to act like muslims in the middle east.
Heh.
One wonders why the Mayors of Chicago and Boston go off on fundamentalist Christian Chick-Fil-A, which voices opposition to gay marriage, but are silent against fundamentalist Islam extermination of gays themselves.
Probably because the Christians won't kill 'em.
Just ask Theo Van Gogh.
Oh, wait. You can't. Muzzies actually KILLED him.
Wonder if the Piss Christ artist has the balls to do a Shit Koran?
Yeah, we know the answer to that, don't we.
Very true. The thing that gets me is that everyone knows that Islam is evil and violent, they know that they cannot criticism them for opposing gay marriage and so on, but they all pretend that Islam is just fine because they are sheep following the "PC" herd.
Let me rephrase that to make ti a bit more on-topic:
Very true. The thing that gets me is that everyone knows that humans are evil and violent, they know that they cannot criticize them for opposing gay marriage and so on, but they all pretend that humanity is just fine because they are sheep following the "PC" herd.
Point being: people are greedy and violent and abuse power structures. The degree to which this happens in a given society seems to go in cyclic 2-generational waves, and this mathematician has found a way to model it. The rhetoric in this thread ascribing human faults to specific people groups (faith based or ethic based) and pointing out specific failings inside these groups is totally beside the point. If there were no non-white muslims living in the US, there'd be someone else, and the rhetoric would be almost identical. Eventually, the overall level of societal dissatisfaction with the way these issues are resolved by "peaceable" means will come to a head, and people will look to physical solutions. This will carry on until there is a majority formed who share strong core societal values that they then shove down the throats of everyone else, at which point "peace" returns and "everyone" is happy.
They say history repeats itself, and in this case they (and this mathematician) appear to be spot-on.
What these models don't factor in especially well though, is population density. I'd like to see this guy do a slightly more complex model that ties in the affects of density on the level and duration of the violence.
Bring back the murder and assault! Down with funny money crimes!
With the slowly churning unrest in lower classes these days, it seems quite possible that it will end up going somewhere.
It's too bad it's unlikely that a revolution could come of it, in the us at least. It's equally too bad that I would probably disagree with whomever would end up in charge, were that to happen.
Cliodynamics is viewed with deep scepticism by most academic historians, who tend to see history as a complex stew of chance, individual foibles and one-of-a-kind situations that no broad-brush 'science of history' will ever capture.....Most think that phenomena such as political instability should be understood by constructing detailed narratives of what actually happened — always looking for patterns and regularities, but never forgetting that each outbreak emerged from a particular time and place.
"First they came for the slanderers and i said nothing."
You basically slander a billion people and when cornered on it try to shut up your opponents with being autistic homosexuals, before explaining how bad it is for homosexuals. You're a loud mouthed halfwit
The world's burning. Moped Jesus spotted on I50. Details at 11.
Frankly you're showing more signs of Aspergers than anyone else here.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Take your meds.
Dear Coward: you don't consider yourself a racist yet you claim "Christians are white"? I _suspect_ you are a racist, but I _know_ you are an ignorant SOB.
you don't have to steal from them, you just never let them have anything in the first place. I guess you can call that 'stealing', but it's not stealing in the traditional sense, so it's too difficult an idea for people to understand. This is why R Money and Billy G have billions and 46% of the rest of us don't make enough money to be worth taxing...
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
meanwhile there are people down south without them. People who depend on a medical outreach program Modeled after Iran.
Yes, I know I have it relatively good. But I also know there is virtually no safety net for me and I can slip into third world poverty. I know that kind of poverty exists and is tolerated in America. Did you?
But another way, just because things could be worse doesn't mean they SHOULDN'T be better.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Cliodynamics seems to be the new, trending name for... Cliology [see the afterward of the hard cover edition of "In the Country of the Blind" by Michael Flynn which originally appeared as a two part article 'Introduction to Psychohistory' in Analog magazine in 1988] and "Cycles Research" founded by economist Edward R. Dewey http://www.cyclesresearchinstitute.org/ Also a book by Dewey "Cycles, The Mysterious Forces that Trigger Events..." and some of the papers presented in the Journal of World Systems Research archives such as this one from 1995: "The Next World War: World-System Cycles and Trends" http://jwsr.ucr.edu/archive/vol1/v1_n6.php
Dewey was of the belief that the cycles he uncovered had a 'rational cause'...
Good thing that there is a second amendment, but remember the pre-emptive police and FEMA tactics during Katrina in New Orleans against honest, gun owning households.
Knock, knock. Hello we're FEMA/police [1/2 minute of polite conversation] "Do you have guns" as if making sure you're adequately prepared for self defense. Dumb, honest homeowner: "Yes"
CRAAAASH, armed invasion and personal injury follows. No sh|t.
It would still be a good idea to get guns off the street. There's a number of ways to do that:
-turn the underground drug market into an above-board, regulated market (with broad social programs to help people off their addictions).
-take a serious look at just what sort of weapons *are* constitutionally supported.
It's not likely for such measures to *increase* drug/gun related violence.
PS: I don't reply to ACs.
Because as things get closer to home they become more important.
For example, my child cutting himself on some broken glass is more important to me than an African child starving to death. In fact it's more important to me than hundreds of African children starving to death. Sure that sounds terrible (and probably is). But I will drop everything and take my kid to the hospital/doctor to get some stitches, I won't drop everything when I see something on TV about someone overseas starving.
To be even more extreme, my kid going to the swimming pool is more important to me than a thousand African kids starving to death. After all I spend more of my time and money taking him there, than I do on helping starving Africans.
Similarly mayors of chicago and boston are more likely to care about statement from a company that operates in their jurisdictions than actions of foreigners who do not.
Only 10 years ago they were so gung-ho and there were books about the New Roman Empire: Pax Americana.
GW Shrub and his cronies were talking about staying in Iraq for hundreds of years.
It is very sobering to see how fast their downfall was and how they dragged the world economy with them.
Can't we skip the "BRANG IT ON!" stage and go straight to the "Mission Accomplished!" endgame?
Seems like doing so would save a lot of time (among other valuable resources).
This PKDick's short story plays with the paradoxes of going to the future (and coming back) instead of going the past. Politics wanted to know if what they choose would be for good, send a time traveler to the future to know that and something that wouldnt ever happen happens because of doing that travel. There was about physical things, but with just information things can become weird fast.
Both being able to change the future and knowing it is a not a good thing, could end being not able to change it or what you knew was wrong (because you changed your own future actions based on that knowledge). In the story, something totally out of the map could happen to fix that conflict. Thats why in Foundation people of Terminus shouldnt don't know about psychohistory.
Long answer : back in 1942 there was such things as an official war against germany. No matter how your governement , there is no such a things as a recognized war against a *word* (war agaisnt drug, war agaisnt terrorism) just like the made up "illegal fighter". The simple truth is that terrorism is a judicial problem (aka non military) but your governement saw the occasion to use new toy in real theater instead of training zone/firing range.
So we are speaking of assassination(the correct word in absence of due process) of citizen from your (or other) country.
*Shrug* . I don't expect that to change any time soon. Your military right now is probably creaming in their pants just as the amount of data they got about their toy used and potential advance.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
Here's the basic story of the Great Depression, which is very similar to the story of the more recent financial crisis.
1. Times were good in the 1920's on Wall St. People could and did make good money trading stocks.
2. A bubble began to form, with financial companies willing to extend credit in order to buy stocks. For instance, you could buy a $1 stock for 10 cents and owe your banker for the other 90 cents. They were willing to do this because the stocks were constantly going up, so this was a good investment.
3. Of course, the stocks were going up because people were entering the market with only 10% of the value of the stock in hand, which meant they could pay 10 times what they previously could.
4. Eventually, somebody discovered that the underlying assets were worth, at most, 10% of what they were priced at in the market. When this became public knowledge, everyone tried to get out at the same time.
5. End result: Crash. And when one business crashes, their stock, which was considered good, is now worthless, so businesses holding their stock also crash, so it cascades through the system leaving things worse than if the Crimson Permanent Assurance had hit them.
Replace "stocks" with "mortgage backed securities", fast forward 70 years or so, and the same thing happened. It happens any time that a con man can successfully make worthless pieces of paper look like representations of valuable property. And yes, it could conceivably happen that the pieces of paper that say "One Dollar" on them will also become worthless - if it does, you want to have land and a team of people who will help you defend it.
I am officially gone from
I dont really see anything at that page other than the city of Derborn not liking out-of-town asshats stirring up trouble and dealing fairly heavy handed with them. Really, what do you think the news would be if a group of Arab teens got sick of these people committing blaspheme against their religion on the street and beat them up?
I read The Fourth Turning back in the '90s. This book by two historians also espouses a cyclical view of history. Their hypothesis is that these cycles are driven by the given generational makeup of a country at any given time.
What I find interesting about this mathematician's predictions is that they pretty closely match Strauss and Howe's.
Your fantasies contain the seeds of important concepts.
Replace "stocks" with "mortgage backed securities", fast forward 70 years or so, and the same thing happened. It happens any time that a con man can successfully make worthless pieces of paper look like representations of valuable property. And yes, it could conceivably happen that the pieces of paper that say "One Dollar" on them will also become worthless - if it does, you want to have land and a team of people who will help you defend it.
The key step as usual is step 2, leverage. You always have con men. But you don't always have people investing mostly borrowed money. I'd say that the levels of leverage reached during the recent real estate bubble, roughly 50 to 1 are high enough that even investing in US treasuries, would eventually lead to an oopsie.
This only leads to the crash not to the depression. One instead has to look to what attempts were made to get out from under. During the Great Depression a bigger oops was the Smoot-Hawley act of 1930, which created large tariffs on goods coming into the US and led to retaliatory tariffs by every other country. Employment plunged and eventually FDR got elected in 1932. FDR's terms consist of bad idea after bad idea, from making labor unions overly powerful and creating oligopolies in many industries to trying to stack the Supreme Court so he could pass unconstitutional law more easily.
This only straightened out when the US had to gear up for the Second World War. The myth of war being good for the economy comes from this particular war, when the FDR administration had to reverse, rather quickly, most of the bad policies that they had created, particularly ending the oligopolies and trimming back the powerful labor unions.
I think it's interesting how Obama has attempted to follow FDR's efforts but with much less legislative success. Due to the uncertainty, the bad law, and just the nasty anti-business attitude coming from the White House, businesses have been putting off investment and hiring for quite some time. But I imagine that will improve greatly in 2013, if Obama should be voted out.
people get pissed enough to do something about it.
Can't wait.
Be seeing you...
I think it's interesting how Obama has attempted to follow FDR's efforts but with much less legislative success. Due to the uncertainty, the bad law, and just the nasty anti-business attitude coming from the White House, businesses have been putting off investment and hiring for quite some time. But I imagine that will improve greatly in 2013, if Obama should be voted out.
Ridiculous! Businesses are putting off hiring because there is no demand. If these businesses had demand they'd be hiring, uncertainty, law, and the White House's attitude be damned. Your assertion to the contrary is clearly politically motivated.
The US populace is majority christian nation and they caused hundreds of thousands of dead Iraqi civilizans, and their president said "God told me to invade Iraq". Truly a bloody religion.
From TFA
This same mathematical pattern occurs when you look at earthquakes (and many, many other things). It doesn't help you predict them one little bit, so has no practical value.
Its all well and good spotting cycles. A few years ago, someone claimed to have found a 26 million year cycle in mass extinctions, and attributed it to an invisible stellar companion of the Sun disturbing the Oort cloud when it past perihelion (he called it 'Nemesis', because if you are proposing a hypothesis which is going to be greeted with scepticism by the scientific community, its always best to give it a needlessly melodramatic name...). It turns out, there is no statistically significant pattern in mass extinctions, and despite numerous infrared surveys of the sky, no death star lurking at the edge of our solar system.
Well, yes, and we all know what to think about religious texts in general as well.
http://www.rootstrikers.org/
Businesses are putting off hiring because there is no demand.
My view is that uncertainty generates a lot of negative effects including reduction in demand.
If you're afraid you're going to lose your job, do you go buy a new house or car? Maybe, but it's a pretty dumb thing to do. Similarly, if a company is worried that it'll take on a lot of future obligations if it expands and hires people, then it's less likely to do so. That shows up in reduced demand for capital and various sorts of business and industrial goods. This sort of thing is how uncertainty kills demand.
If these businesses had demand they'd be hiring, uncertainty, law, and the White House's attitude be damned.
Right. Because they don't mind getting losing their business because they gambled wrong.
Your assertion to the contrary is clearly politically motivated.
Of course, my assertion is. But why isn't all that stimulus that the US and the rest of the world burned, doing much? That's supposedly a huge spur to demand, but it's fallen pretty flat. Seems to me more likely that demand wasn't the problem in the first place.
Second, if you look at the excuses for why businesses are holding back, it's basically two things right now: the upcoming US election and what the EU will do about Greece.
Hence, why I asserted what I did. Uncertainty is a powerful demotivator. People want to know what's going on before they take big risks.
Well, I guess that even if Obama does win the election, there probably will be some business activity and some increase in demand. There might even be some reduction in uncertainty. One can't sit on one's haunches forever and still remain a viable business. But that will be a poor recovery compared to what happens if Romney gets elected.
New products are one of the prime motivators of demand. Apple excepted, most large US businesses are not developing new products and most rich people are not funding new development because of 2 reasons: Obama is properly seen as a kleptocrat who will steal the profits of new developments, and regulatory attacks on those without political pull will derail new products. The rich are holding onto their money until the election: if Romney is elected, it will become safer to do business in the US, and they will do so. If Obama is re-elected, they'll put their money to work in a safer place (like Poland?) as the US enters the dark ages.
Contribute to civilization: ari.aynrand.org/donate
I am gon' pop a cap in yo azz!
Stupid insults do not enhance your argument.
The current economic mess is primarily the fault of Barney Frank with an assist from Chris Dodd. Sarbanes-Oxley drove in another stake, and Obama has been busy strangling entrepreneurs. To blame G.H.Bush the proper target is the prescription drug benefit. The Iraq war was/is a partial bungle, but it was not avoidable without very bad consequences.
Contribute to civilization: ari.aynrand.org/donate
Of course, my assertion is. But why isn't all that stimulus that the US and the rest of the world burned, doing much? That's supposedly a huge spur to demand, but it's fallen pretty flat.
There are two things to keep in mind here. First of all, there wasn't that much stimulus happening in the first place. All those huge sounding numbers that the Fed throws around with various QE activities does almost exactly zero to stimulate the demand, and economists who focus on how the financial sector works have been able to predict that quite accurately.
Second, the Obama stimulus has in fact helped soften the recession according to most simulations, including those of the CBO. The stimulus simply wasn't very big compared to the overall size of the problem. (Yes, the problem was that huge.)
As for the whole uncertainty thing, look: Of course this is largely a chicken-and-egg problem. You are of course right that uncertainty leads to individuals spending less. But then this reduction in demand causes uncertainty in the first place. So the non-partisan question here is how to best break that cycle. It is obvious that if you inject more demand into the system, this eliminates many reasons for uncertainty for individual spending decisions.
Outside of neoclassical economic models, expectations follow reality more than the other way around.
He's got all of three datapoints, and completely glosses over the problem that 1820 is inside his measuring range, without any such peak. It's right there inside his diagram.
Next: Civil war, great war, Vietnam/cold war. There are completely different primary causes for each of the points he describes, and they're only tenuously linked to each other. While you can probably plot the chain of events linking WW1 to WW2 and thence to the cold war culminating in the civil rights movement and Vietnam, that involves some heavy cherrypicking of dates. And as for civil war and WW1, those were in completely separate theaters.
Now consider the likelihood of three similar events making a pattern by chance. Texas sharpshooter fallacy. Look at the degrees of freedom: A pattern isn't established by the first or second events, but by one single third event that happens to be as many years from the second as the second from the first. Three is the bare minimum to even define a pattern. And that's exactly how many data points he has.
You're oversimplifying slightly. Non-Muslims are often better off under westernist (muslim) governments, but they're often so much better off that you can see why islamists hate them. I think of Islamists as equivalent to the uneducated racist masses who support nationalist parties in the west - they see foreigners as the source of their problems. Islamists have much more justification for thinking this, though, and not just because of the carpet bombing and military occupation a lot of them have been subjected to, but because most of these West friendly governments were instated by the West (US) and are working against the interests of either half their own people or all of them. "Muslims" are not all the same, either. In the mid East there are Sunnis and Shias, two main tribes who hate each other, and when regimes change, generally it's not just non-Muslims up against the wall, the Shia government and population get it in the neck too. I'm not condoning any of it, but don't portray all Muslims /Islamists as unreasonable savages just because you can't be bothered to learn the nuances of their history and politics.
First of all, there wasn't that much stimulus happening in the first place. All those huge sounding numbers that the Fed throws around with various QE activities does almost exactly zero to stimulate the demand
It gave a tremendous amount of wealth to anyone who owed money. Bond and loan yields dropped as a result. There probably was a bit of inflation as well. That should have spurred collective demand in theory just due to the massive number of people who hold loans out there and suddenly had a lot less risk in their portfolio. In practice, I see it as confirmation of my assertion.
And then we need to consider actual stimulus spending by all governments not just the US. The EU, Japan, and China all have burned a lot of money on stimulus as well.
Second, the Obama stimulus has in fact helped soften the recession according to most simulations, including those of the CBO. The stimulus simply wasn't very big compared to the overall size of the problem. (Yes, the problem was that huge.)
The "it was bigger than we thought" argument is countered easily by the "It wouldn't have fixed the problem in the first place" argument. Japan has spent vast sums on stimulus since their really bad 1990-1991 recession. It hasn't helped them regain their former strength and economic momentum, but it did help weaken their recovery. TARP and the many other stimulus efforts are just more of the same with as we see, the same outcomes.
And the CBO claims TARP actually worked? That's what propaganda organs of US Congress do. But let's consider how much money was spent for result, say like the infamous "jobs created or saved" metric (something like $200k spent per job "created or saved")?
The argument that it's all about demand is just a transparent excuse to increase public spending. It hasn't worked so far because the model doesn't fit reality. Unless a US business sees a vast opportunity right now, there's little reason to invest large sums or hire lots of people before the outcome of the US presidential election is known in November.
Similarly, many European businesses risk a lot if they make big investments now. They could get burned by some consequence of the Greek thing. That's just how it is. People are unwilling to buy lots of stuff, if they don't have confidence in the future.
As for the whole uncertainty thing, look: Of course this is largely a chicken-and-egg problem. You are of course right that uncertainty leads to individuals spending less. But then this reduction in demand causes uncertainty in the first place. So the non-partisan question here is how to best break that cycle. It is obvious that if you inject more demand into the system, this eliminates many reasons for uncertainty for individual spending decisions.
That hasn't worked so far. Even in a do nothing scenario, eventually the uncertainty goes away. Everyone who could have gone bankrupt has done so. Every market or sector that could fall did so. Everyone who was going to be fired, got fired. Then it's "Well, I got money and the price of that house, that used industrial equipment, or that really cheap unemployed skilled worker isn't going to get any cheaper." And demand returns.
The problem here is that various governments, particularly the US, have done much to greatly increase uncertainty about the future. How much is hiring an employee really going to cost? We won't know until after the presidential election. You can be sure that it's going to be more expensive under Obama than under Romney.
Will the feds be trying to block expansion of my business after I already have spent the money for expansion? Who knows? But Obama has already blocked a lot of such things (particularly, fossil fuel related industries and infrastructure) and is likely to continue that practice should he get reelected.
Will the next president try doing some crazy shit like creating national oligopolies, tariff wars, greatly increasing labor union power, massive social engineering (like trying to force people back into urban centers), etc. Well, Romney isn't likely to do that. But an Obama administration just might try something.
Outside of neoclassical economic models, expectations follow reality more than the other way around.
Everyone agrees on that. But what is reality here? I just don't buy that our current problems are because we didn't try stimulus hard enough.
I don't think it's fair to tie a lack of ethics or morality to 'unconditional love / loyalty." You can certainly be ethical and moral and just in your relationships without being forced to accept someone being an ass-hat simply because they're related to you, or because you've known them for a certain, arbitrary amount of time.
Later generations have learned not to take shit. If this means that the older generations who, for example, raised their children under a false assumption that they'd be there for them later in life 'no matter what' are sadly disappointed and lonely in their elder years -- guess what? TOUGH.
You get what you give. Nothing more and nothing less. I don't think there's anything wrong with that principle at all. If you do, then you probably take more than you give, and I can't have any sympathy for you.
You're oversimplifying slightly. Non-Muslims are often better off under westernist (muslim) governments, but they're often so much better off that you can see why islamists hate them. I think of Islamists as equivalent to the uneducated racist masses who support nationalist parties in the west - they see foreigners as the source of their problems. Islamists have much more justification for thinking this, though, and not just because of the carpet bombing and military occupation a lot of them have been subjected to, but because most of these West friendly governments were instated by the West (US) and are working against the interests of either half their own people or all of them. "Muslims" are not all the same, either. In the mid East there are Sunnis and Shias, two main tribes who hate each other, and when regimes change, generally it's not just non-Muslims up against the wall, the Shia government and population get it in the neck too. I'm not condoning any of it, but don't portray all Muslims /Islamists as unreasonable savages just because you can't be bothered to learn the nuances of their history and politics.
Your theory (Muslims cannot be blamed because they were oppressed previously and naturally are going to be violent) breaks down on several grounds. First of all there are great examples of people being oppressed and not seeking revenge. Gandhi, Martin Luther King, and Nelson Mandela spring to mind - the latter's "truth and reconciliation" showing the extent to which forgiveness can go. I expect you will argue that Muslims are culturally inferior to all of these - follow their own reasoning that they cannot be held to the same standards as the rest of humanity: "they made us do it by burning the Quran", or "she made us kill her by marrying a non Muslim", or "they wore a non-Muslim religious symbol in the open". Personally I don't think appeasing their lack of control will improve it in any way.
Secondly you totally ignore the facts that Muslims oppress the minorities in countries where they have not been ruled by others - and have done so historically. Look at Saudi Arabia or Pakistan. The latter was ruled by Britain before, but this was a brief window on non-Oppression for Hindus in Pakistan, which occurred before and still does today. Maybe again you might feel that we cannot expect Muslims to "get over" British rule in the same way that India, South Africa, and many other countries have without lashing out at others. My feeling is that since they oppress elsewhere and have done s through history, they would still be ding so in India now if they were not overthrown by the British, or someone else.
Name one place where Muslims have the upper hand where they don't oppress or restrict non-Muslims.
that by 2050 things would go back up again then, too bad that's just a little too late for me unless i get some serious mods into my corpse
Free speech was meant to be free for all... how can anyone grow up in a nanny state ?
I'm not saying none of them can be blamed, I'm saying don't tar them all with the same brush. Islam is diverse. Yes, there are a lot of regimes, organisations and individuals that are mad if not downright evil, but in the same countries there are often a lot of normal people who are just trying to live their lives. Just because someone is a Muslim doesn't mean they'll be stoning people to death every five minutes - you hear about the worst stuff in the news because it's the worst stuff. The Muslims living in the West are not all plotting to destroy it... again, a lot of them are just trying to get on with their lives and be nice to people (as the Qu'ran tells them to be).
What I was saying about the Sunnis and Shia are that these guys are oppressing the shit out of each other, they're not just picking on non-Muslims. That said, I'm with you in thinking that on the whole Islam is a shitty, messed up, medieval religion that's horribly sexist, partisan, xenophobic and frighteningly expansionist and has next to zero respect for human life, particularly that of non-Muslims. You're dead right, I can't give you an example of a Muslim government who hasn't oppressed and murdered non-Muslims. I would say the current Turkish government, but they're not there yet in terms of equal rights, and the Armenian genocide wasn't all that long ago. I was just having a knee-jerk reaction against what I perceived to be unreasonable prejudice against all Muslims in your comment and others I've read on Slashdot, and trying to get you to see it from the point of view of some Middle Eastern states, which is seeing non-Muslims and Westerners as the enemy because that's all they've ever been to them.
I can't argue against the facts of it, cos factually you're 100% right.
Here's the basic story of the Great Depression, which is very similar to the story of the more recent financial crisis. 1. Times were good in the 1920's on Wall St. People could and did make good money trading stocks. [..] 5. End result: Crash. And when one business crashes, their stock, which was considered good, is now worthless, so businesses holding their stock also crash, so it cascades through the system leaving things worse than if the Crimson Permanent Assurance had hit them.
Replace "stocks" with "mortgage backed securities", fast forward 70 years or so, and the same thing happened. It happens any time that a con man can successfully make worthless pieces of paper look like representations of valuable property. And yes, it could conceivably happen that the pieces of paper that say "One Dollar" on them will also become worthless - if it does, you want to have land and a team of people who will help you defend it.
It happens more frequently ! dot.com bubble of 2000, LTCM collapse, 1980s collapse, etc. Roughly every 5-7 years, with some collapses being larger than others.
This is really just our economy's analog of Chinese ghost cities.
Perhaps the author has read Cosmos and Psyche by Richard Tarnas but does not want to reveal the real source of his theory.
But I predict that nobody will consider that. Everyone knows that Astology is incompatable with the mechanist materialist paradigm, and is therefore bunk.
Nobody will consider astrology.
What more unbiased site could there be than libertarian answers? Who wants to read the views of those moronic bozo apart from super stupid here.?
Poor old kendall just doesn't get the whole reality has a liberal bias thing, he should move to Somalia where he can truly see his libertarian society in action!
The article to which you link mentions nothing about stock market speculation.
Allow me to recommend something which does, Galbraith's "The Great Crash, 1929".
In it you'll find things like companies whose sole asset was stock in another company whose sole asset was stock in yet another company whose sole asset was...until you get to the bottom of the pyramid and find that there's nothing of value there.
I see even classic Slashdot is now pretty much unusable on dial up anymore.
You are attempting to use logic to explain things to a supply-sider. Good luck with that one.
I see even classic Slashdot is now pretty much unusable on dial up anymore.
What more unbiased site could there be than libertarian answers?
What more expert location could you go to find such an answer?
Also noted, you lack the intelligence to even provide a link responding to the article.
Therefore the article stands as correct and you simply a tool.
Who wants to read the views of those moronic bozo..?
Well I have to admit I'm really not sure who reads your posts. "Those moronic bozo"... You are sure making a great case for why humanity should listen to your random output!
Poor old kendall just doesn't get the whole reality has a liberal bias thing
You misspelled Libertarian.
Like all liberals, you cannot see that which history teaches you - repeatedly.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
2012 plus two terms of a Republican president...
Yeah, that ought to just about do it.
I see even classic Slashdot is now pretty much unusable on dial up anymore.
First of all, there wasn't that much stimulus happening in the first place. All those huge sounding numbers that the Fed throws around with various QE activities does almost exactly zero to stimulate the demand
It gave a tremendous amount of wealth to anyone who owed money. Bond and loan yields dropped as a result. There probably was a bit of inflation as well. That should have spurred collective demand in theory just due to the massive number of people who hold loans out there and suddenly had a lot less risk in their portfolio. In practice, I see it as confirmation of my assertion.
It didn't help those on the lower end of wealth spectrum as much though, like all those people whose mortgages were under water. Rate of savings matter a lot.
The argument that it's all about demand is just a transparent excuse to increase public spending.
That's where you're letting your politics cloud your judgement. Demand-side economists can almost as easily be used to justify tax cuts, and many demand-side economists indeed argue for income tax and tax roll cuts for lower-income brackets.
The subtle issue here is that tax cuts are only really effective when they affect low-wealth/income households, as those are the ones that are most likely to go out and spend the additional available income on real goods and services.
Similarly, many European businesses risk a lot if they make big investments now. They could get burned by some consequence of the Greek thing. That's just how it is. People are unwilling to buy lots of stuff, if they don't have confidence in the future.
But what kind of confidence are we talking about here? Mostly, we are talking about confidence in future income streams. If, as an employee, I worry about being laid off in the next few months, then naturally I am going to save more - if possible - to have some savings as buffer. Similarly, as an employer, if I worry about landing enough contracts over the next months, I am not going to employ more people. It's all about income streams.
Even in a do nothing scenario, eventually the uncertainty goes away.
You're missing the point.
To paint an obviously exaggerated picture, if a prolonged global depression causes so much social unrest that the global supply chain disintegrates, then what good does it do if uncertainty goes away afterwards? When living standards declined after the fall of Rome, do you really think people thought that was just fine, since after all, uncertainty eventually went away?
Now of course nobody expects anything quite so stark, except perhaps limited to countries like Greece and Spain. But the point still stands: prolonged recessions can decrease the long-term trajectory of an economy. It's called hysteresis.
Will the feds be trying to block expansion of my business after I already have spent the money for expansion? Who knows? But Obama has already blocked a lot of such things (particularly, fossil fuel related industries and infrastructure) and is likely to continue that practice should he get reelected.
Frankly, you're letting your politics cloud sound judgement (bringing suspicions about future behaviour of one specific politician into the discussion is a sure sign of that). It is a pity that I cannot find the link right now, but a survey among small businesses around 2010-2011 clearly indicated that what they were most worried about was finding customers for their products and services.
Regulation can be troublesome, I give you that, but individual pieces of regulation are mostly confined to a very narrow segment of the economy, and the problem we're talking about here is obviously at a macro level.
Everyone agrees on that. But what is reality here? I just don't buy that our current problems are because we didn't try stimulus hard enough.
I recommend that you go through publicly available data sets, and just look at the scale of the accumulated private debt that collapsed due to the GFC. All that debt recorded previous "stimulus" by private households spending more than their income, and all this "stimulus" then stopped abruptly. We can throw numbers around here, but I think the best approach is for you to just take a look yourself. A lot is available from the St. Louis Fed's FRED database, for other, aggregated data, you might want to look at some of the things that Richard Koo and Steve Keen have collected.
In any case, the scale of the problem was truly mind boggling, and you really have to take a rational thinker's approach to judging how big those numbers are in relation to each other.
It didn't help those on the lower end of wealth spectrum as much though, like all those people whose mortgages were under water. Rate of savings matter a lot.
Why in the world do you think it's a better idea for those people to demand more? This is another problem with focusing on demand rather than the actual problems that exist out there. There are a lot of people who really should be cutting back on their demand for a long time. We should encourage them and find other ways to solve our problems.
The argument that it's all about demand is just a transparent excuse to increase public spending.
That's where you're letting your politics cloud your judgement. Demand-side economists can almost as easily be used to justify tax cuts, and many demand-side economists indeed argue for income tax and tax roll cuts for lower-income brackets.
The subtle issue here is that tax cuts are only really effective when they affect low-wealth/income households, as those are the ones that are most likely to go out and spend the additional available income on real goods and services.
So many untested assumptions in that last paragraph. The key two are current economic activity does not correlate to future economic activity and that economic activity is a full metric for health of an economy.
And we see that with current stimulus spending. It has no long term effect. One needs to keep spending in order to keep getting the boost in demand and economic activity. A permanent redistribution of wealth and drain on society merely to boost economic activity. It doesn't make sense.
Seriously, you claim that the way to help an economy is to give money to the dumbest and most spendthrift people in our society. That indicates to me a remarkably unsound and irrational approach.
But what kind of confidence are we talking about here? Mostly, we are talking about confidence in future income streams. If, as an employee, I worry about being laid off in the next few months, then naturally I am going to save more - if possible - to have some savings as buffer. Similarly, as an employer, if I worry about landing enough contracts over the next months, I am not going to employ more people. It's all about income streams.
So you're choosing not to agree with me why? The above is not some deep insight, but merely a slightly different model.
The most idiotic thing I've heard today.
I wouldn't consider this proof. I followed the link & read..."George Bush has claimed he was on a mission from God when he launched the invasions of Afghanistan and Iraq, according to a senior Palestinian politician"
Problems I see...
1) This is hearsay. Typically not valid for a proof.
2) Possible or likely hidden agenda. Remember, politicians, Palestinian or otherwise, can and will lie to achieve their goals.
sr
His ignorance covered the whole earth like a blanket, and there was hardly a hole in it anywhere. - Mark Twain
But the point still stands: prolonged recessions can decrease the long-term trajectory of an economy. It's called hysteresis.
And what makes you think we're doing anything to shorten this recession or not enable future recessions? To be blunt here, I don't see that past stimulus activities were any better than just doing nothing.
Frankly, you're letting your politics cloud sound judgement (bringing suspicions about future behaviour of one specific politician into the discussion is a sure sign of that). It is a pity that I cannot find the link right now, but a survey among small businesses around 2010-2011 clearly indicated that what they were most worried about was finding customers for their products and services.
That poll would already be a year or more out of date. And Obama is a good sized roadblock to global economic recovery, much as Hoover made the equivalent Great Depression worst worldwide by allowing Smoot-Hawley to pass.
Regulation can be troublesome, I give you that, but individual pieces of regulation are mostly confined to a very narrow segment of the economy, and the problem we're talking about here is obviously at a macro level.
In a storm, an individual raindrop gets only a minute area wet where it lands. But you can still get macroscopic disasters, ie, floods, on a large scale from enough of those raindrops. One cannot dismiss regulation on the basis that individual pieces cover small areas when the collective effect of that regulation can be far more damaging than a single piece.
For example, there are roughly 160,000 pages of federal regulation and that appears to have doubled in size in the past third of a century.
The other part of the "uncertainty" explanation: It's nonsense. It always has been: to get profits, you have to take on risk, and risk by definition involves uncertainty about the outcome.
I am officially gone from
New products are one of the prime motivators of demand.
That's quite simply nonsense. Standard micro explains exactly what creates demand, namely that the product offers utility to the buyer. In other words, it solves (or appears to solve) their problem. I'm hungry, so I'm now motivated to buy hamburger and eat it so I'm not hungry anymore. I don't like the color of my curtains, so I'm now in the market for new curtains. My car has a dent, so I'm now part of the demand for auto body repair services. I'd like to walk around with all my digital music, so I'm now going to consider buying an iPod.
And on the macro scale, we also know how to create demand: Give more cash to the people who are broke, because they will spend it right away on services and goods they've been putting off buying because they were broke.
I am officially gone from
The difficultly with predicting human history using math is even if you are able to model the various variables with any accuracy, modeling to what rate and how humans will adapt to the pressure that those changes bring, I would suggest is exponentatioally even more difficult. In Azimov's tale, they sort of get away with it by using a gigantic sample size of human civilization. Today, we haven't been around much longer than barely 3000 years, and have nothing like accurate records for anything but maybe 100 years. Which in caluclating these sorts of things is pretty slim.
I mean you can take some pretty basic principles of what causes war, strife, and violence and find a window as it relates to current values, but if Humans change those values as a result of those impending situations, well the calculation changes.
Things like: Increased population prediction is pretty easy to do, and frankly difficult for humans to change in a short term, The saturation of arable land by said population, land productivity and for production, Oil depletion, you could even get into religious propagation, and things like that. However I think the big 3 are: Land, Food, Oil.
Sooner or later population pressures are going to be an issue, closely assoicated with that the production of food on limited land, for an ever growing population is not sustainable and eventually a threshold will be reached, but it will cause conflict. Closely assoicated with that, is Oil, which is the cheap energy we use to have the farm production we currently enjoy, also the fertilizer that is used. Fresh water is the other piece of the puzzle, where population pressures and food production pressures are going to come into play. If you ascribe to climate change, this is the biggest problem, the reduction of freshwater, and the result that will have on food production, specifically in irrigation which has already destroyed sensitive areas.
So there is all that. Which really is already enough of a hughe shitstorm to try and deal with all at once, however there is another more political issue with Oil. Global trade is pretty much run on cheap oil. You might be able to power personal cars and things with solar etc... however things like super carriers, tankers, places, etc... cannot realistically be powered in this way, and nothing in the near future is going to change that (unless you are proliferating nuclear powered ships). Most predictions I think would have oil running out before a solution for this I think. Also other than the riches that global trade has brough certain contries (China, USA, etc...), the other thing that does not run on renewable fuels are armies. Tanks, planes, ships, etc... all run on oil. Do you see this changing before Oil runs out? Which means those "stratigic reserves" that countries have will become every more valuable.
I guess what I am getting at here, at somepoint a large powerful country is going to do the math and figure out, if they are going to expand, and aquire more resources for any forseeable future, there will never be a better time to do it, because once the oil is scarce, it will be MUCH harder to do. If you have a huge army that runs on oil, and that oil is about to become obsolete, so is your army, and with that your power, so you might as well use it while you can, as it isn't like anybody will be really able to retaliate after a certain point anyway.... With the exception of nukes. There you have it.
Anyway probable rantings of a lunitic, but some pretty basic presumptions. However if we are able to adapt, then we can avoid. However some of these things I believe are a mathmatically certaintly, while the adaptation is a political/cultual thing, which I think is what is going to cause the conflict in the first place. As there are going to be a LOT of people that will not want to adapt, many with religious reasons for that, which will likely make it even more volitile.
Skipping to what I think is really the crucial point.
But what kind of confidence are we talking about here? Mostly, we are talking about confidence in future income streams. If, as an employee, I worry about being laid off in the next few months, then naturally I am going to save more - if possible - to have some savings as buffer. Similarly, as an employer, if I worry about landing enough contracts over the next months, I am not going to employ more people. It's all about income streams.
So you're choosing not to agree with me why? The above is not some deep insight, but merely a slightly different model.
I'm not exactly disagreeing with you. Rather, you seem to use "it's all about confidence" as an argument to contradict me. What I am saying is that one of the most important factors in confidence is the confidence of future income streams, i.e. demand.
In other words, it is completely misguided to use confidence-related arguments as a reason to ignore the issue of aggregate demand.
Rather, you seem to use "it's all about confidence" as an argument to contradict me. What I am saying is that one of the most important factors in confidence is the confidence of future income streams, i.e. demand.
Demand is not equivalent to an income stream. You have lots of demand, but not much income (for example, grocery stores). Or you can have little demand, but lots of income (for example, a US prime contractor in a unique niche and the favorable cost plus federal contracts they're able to score). You can be losing money at any degree of demand (for example, many US airlines).
You can also lose income streams even when the demand stays or even improves. That's the power of an Obama administration. They can abort a fossil fuel project that was well underway, drive up employee benefit costs, or make it a lot more expensive to fire bad employees. This is a power to cause businesses to lose lots of money without directly harming demand. And the more risk that a company took on, the more painful the attack becomes.
In summary, demand doesn't magically translate into profit. The uncertainties in the current environment are more or less the sort that can cost a business a lot of money, maybe even kill it, no matter how the demand changes.
Confidence is an indicator that business believes it can take risks again. Merely increasing short term demand doesn't do that, because everyone knows demand will go down again once the short term incentive for the demand goes away.
Let's consider a statement of yours a bit more carefully.
What I am saying is that one of the most important factors in confidence is the confidence of future income streams, i.e. demand.
What sort of solution improves future demand? We know what doesn't, present day public spending stimulus. It improves present day demand and stops improving demand when the spending stops. So to increase future demand in this way, one needs continuous future spending.
As future economic crises happen, then there is need for more spending to increase demand to counter these continued failures. Eventually you reach the point where it no longer works in any sense (increasing current public spending decreases future public spending) and you've painted yourself into a corner with a pointless and exhausting income redistribution scheme, massive debt, and repeating economic failures.
The problem is simply that any sort of Keynesian strategy doesn't really work.
Actually, 47.28462943298517% of all statistics are just made up
What is the standard deviation of that percentage?
+/- 36.76918475928347589
With a p-value of 0.5 for the whole study.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]