Just as royalty/government/oligarchs have been patrons of the arts and "bread and circuses" throughout the ages, companies like Facebook, Apple, Google, and Amazon can highly subsidize the development of games. So game development would be paid for by a lump sum "commisioning" by one of these large firms, in exchange for platform exclusivity.
This, plus the check-in person records the overall condition of the equipment when they sign it out and when they return it to try to reduce "excessive handling." Even if you don't make the interdepartmental charges a function of the condition, the peer pressure of knowing it's being recorded can be pretty effective, and if you are hiring someone to keep the log, you might as well have them look at the equipment too. Maybe even a couple of polite signs that remind people to return equipment in the same condition that they want to receive it in next time they use it.
It depends on the definition of "you." In the second person plural sense, where "you" includes every taxpayer (in scenario 1) or includes every user of the currency (in scenario 2), then yes, "you" are just made whole with "your" own money. But in almost any normal usage of "you," there are certainly different winners and losers, depending on who had money in the failed institution and depends on receiving money for goods and services from those people (the winners) or who gets hit by the increased taxes, or has assets that get hurt by inflation (losers). The set of individuals for which those two effects are large but cancel each other out is infinitesimally small, so realistically no one is being made whole by their own money.
One of two things: Congress bows to public pressure and raises taxes to fill FDIC's coffers, or the Fed bows to public pressure and prints money and gives it to the FDIC.
Surely there are winners and losers in that kind of situation, but in general, the "regular folk" who have less than $250K in the bank will be made whole, and the burden will fall on whoever has insufficient political power. But in my mind it is a much better social result than taxation based on one's inability to select a good business with which to store your money, which is both idiosyncratic and acute.
What I'm saying is that your local S&L and credit union is as dependent on Wall Street finance as any large multinational bank. That's why it gives different mortgage rates for "conforming" and "non-conforming" - a conforming loan is just going to get sold and enter the gigantic world of finance. That's what "conforming" means - it meets Wall Street criteria to be accepted and sold.
As for the housing crash, if person A buys a house from person B, gives person B a ton of money borrowed from bank C, and then later person A finds out that person B ripped them off and the house isn't worth nearly what they paid for it, then why is the bank to blame? While the bank surely skimmed a lot off the top, person B has all the money. Shouldn't we be blaming him?
Now I don't doubt that there is a limit as to how much a financial industry can add to the economy. If finance was 50% of the economy I would surely question its utility ("hmmm this recipe tastes pretty good with a dash of salt...If I get rid of the meat and replace it with a ton of salt it will surely taste great!"). And so it's fair to argue whether a smaller financial sector would be better for the economy than the current size, or if more smaller players would be better than the small number of large banks that we actually have. However, given that the modern economy is hugely dependent on the large centralized financial centers in NYC and London in order to work at all, it seems to me that not having them at all would surely be a net negative.
Unless you paid for your house and car in cash, Wall Street contributed something of value (yes even the credit union sold your loan to the GSEs who funded it with bonds floated on Wall St). Most of the companies whose products you love (maybe even your employer) raised funds from Wall Street. So maybe your paycheck comes from Wall Street. If you are saving for retirement, Wall Street is contributing something of value.
I'm curious as to what you think that they stole from you
That is GDP per capita, where the east coast still wins in any comparison. It was addressed in my second paragraph, but I'll repeat it here:
Comparing GDP per capita, Washington DC is number 1, just barely beating out SF, and Boston beats out Seattle. NYC rounds out the top 5, and the next West Coast city, LA, is barely in the top 10, with less GDP per capita than Philly.
Actually, most GDP is produced on the East Coast. New York rules the roost, producing almost as much GDP as LA, SF, and Seattle combined. And the high-tech cities of SF, Seattle, and San Jose combined don't even add up to 60% of NYC's GDP.
Comparing GDP per capita, Washington DC is number 1, just barely beating out SF, and Boston beats out Seattle. NYC rounds out the top 5, and the next West Coast city, LA, is barely in the top 10, with less GDP per capita than Philly.
Because when someone invests their time, energy, and money in the institutions that make the political and cultural environment in their geographic locale a more efficient place to build a business than competing areas, they do it with the implicit understanding that they will be for the primary benefit of others who are also making sacrifices to those same institutions. Everything from a reliable power grid to sound courts of law are not at all natural, and without these artificially built institutions we would all suffer.
It might not be "my" courthouse in the same way that this is "my" water bottle, but there is definitely some kind of ownership there that should be recognized in some way. And in the same way that nobody ever washed a rented car, to break that cultural norm risks people deciding not to contribute to make good institutions, which in the long run would be a bad thing.
I agree that ultimately the person responsible for your own safety is you, but in my parenthetical the examples are things that only the local government can do. I can keep my kid home from school, but I can't cancel classes. You and I can't put more police on the streets or tell firefighters to be ready for gas main breaks. Like it or not, local governments have a lot of power, and with that power comes responsibility to use it correctly. Even if all of those functions (schools, firefighters, even police) were all privatized then whoever is in charge of them had better manage them effectively or else expect to take the heat, regardless of the (ir)responsibility of the customers of that service.
Isn't part of being responsible for your own safely (in the long run) the responsibility to hold screw ups like this accountable?
Exactly. maybe every three years is too infrequent to have 500 snowplows ready, but that's a false dichotomy. The choice isn't between having 500 snowplows and turning into a disaster move every 3 years; surely there is a middle ground where you have an action plan that takes into effect when snow *might* hit the area (e.g. position resources so they can react quickly, and get you DPW personnel in their trucks and pay them overtime), and an action plan that goes into effect once the snow starts falling (do schools shut down? send kids home? shelter in place? What about police? Firefighters? What do you ask private business to do? And most importantly, what's the plan with the DPW?). Proper planning and intelligent deployment of resources is cheap (relatively speaking) but requires local authorities to think about more than just, "how do I get my brother in law a six figure do-nothing job" or "How do I accept that cheap mortgage as a gift without running afoul of bribery and corruption laws." But to claim that this is to be expected in a first world nation every 1000 days because you don't want to staff up like they do in the northeast is irresponsible
The following is taken to the very extreme so please take it with a grain of salt. With that caveat, think of how one does not, and in my worldview, should not, have the "freedom" to sell oneself into slavery. This is one example of how sometimes having more choices reduces freedom.
In the case of open source licensing, a developer might choose a BSD style open source license instead of the GPL in the hopes of having their code adopted more widely. However, even if someone is willing to give away the fruits of their labor for free, it might not be in society's interest to allow it, without some sort of precautions to ensure the the person isn't effectively "selling themselves into slavery" by letting someone else profit from it. At least with the GPL, the community as a whole benefits from every part that goes into the most advanced product. But with licenses that give developers more choices, one of those choices is to allow others to take advantage of that work, with little if any benefit accruing to the original authors.
Whether you agree or not, the position is entirely understandable
I don't know if Facebook really want to promote the idea that numerical analytics are suspect. Isn't their whole business plan that advertising with them is so effective because they are able to target ads to people who are most receptive to them, based on proprietary models of behavior? Even if they win the argument, they lose.
This. I write a lot of modeling algorithms in c++ but to make it useful to the team where I work I wanted to develop a front-end/gui. I learned python/django and now I can get a basic front-end working in about a day. Add javascript/jquery/a commercially available javascript UI library or two for "spreadsheet-like" tables and twisties and such and you can have a very complex system with a nice UI that you understand from front to back.
I don't mean to disparage an entire agency, but there are bureaucratic screw-ups there as well. I think Feynman's appendix to the Challenger disaster report should be required reading for anybody who supervises people who work in a technical capacity.
Standard Deviation is the square root of the second moment about the mean, an important fundamental concept to probability distributions. Looking at moments of probability distributions gives us lots of tools that have been developed over the years and in many cases we can apply closed form solutions with reasonably lenient assumptions. Then we apply the square root in order to put it in the same units as the original list of observations and get some of the heuristic advantages that he attributes to the mean absolute deviation.
But it is a balance, and any data set should be looked at from multiple angles, with multiple summary statistics. To say MAD is better that standard deviation is a reasonable point (with which I would disagree), but to say we should stop using standard deviation (the point made in TFA) is totally incorrect.
Actually I had originally written something like "control their income and wield sufficient political power" but took out the part about political power because the ability to control their (US) income is so much more important. Even if tax law was changed that increased taxes on wealth, I doubt it would generate much revenue to pay for stuff because the truly rich have the ability to manipulate their income such that it still would avoid taxation. For example, they might move it to Swiss bank accounts, or into whatever politically favored (and therefore tax-free) investments are allowed, or simply leave US jurisdiction entirely and move to Hong Kong or Singapore.
So IMHO merely limiting political power after someone has already accumulated great wealth wouldn't do much to increase tax revenue; I think the massive accumulation of wealth needs to be prevented in the first place (e.g. through reductions in the acuteness of benefits received through state-granted monopolies such as copyright) so that a greater portion of the nation's wealth is held by middle-income individuals, which would allow them to bear the tax burden more easily.
This makes sense once you realize that it isn't about what they are claiming it is about. Tech businessmen want cheap labor - everyone here on slashdot gets that. But the other half is more about transferring wealth from the middle and upper middle class (in this case, through the lowered wages of developers, a moderately well paying profession in America) to the poor by providing funding for inner city schools.
We can't tax the rich since they have the ability to control their income, and the poor can't provide funding for their own schools or else they wouldn't be poor. So the funding for programs for the poor has to come from the middle class and those with high incomes in high cost of living areas who have relatively little wealth and therefore can be easily taxed either explicitly or implicitly.
I totally agree with GEB, but would add that the book is not really about understanding Godel's proof, although that it the part that most people dwell on because it is the hardest part for most people to get and therefore the part they spend the most time on. To really get the most out of the book, I recommend Nagel and Newman's Godel's Proof first so that you understand the basics and can simply enjoy Hofstader's artistry.
The F-150 is the best selling vehicle (car, truck, or suv) in North America,and has been for almost 20 years. This isn't some niche manufacturer that is going to sell 50,000 units and be happy with it. Ford is expecting to sell millions of these before then can do another redesign, so if it isn't successful it's a serious problem, and therefore it's a huge risk.
Furthermore, losing 700 lbs on every one of the millions of these that are going to be sold over the next few years will do more to reduce dependency on foreign oil and co2 emissions than all of the zero emission vehicles put together. So as cool as the technology behind electric and hybrid cars is, if you want to burn less gas, you have to root for advances in truck technology such as this.
The argument was that currency inflation incents people to make investments (even low-risk investments) which appear to be profitable, but are actually below average and reduce economic output rather than contributing to growth.
What do you mean by "below average?" Under any economic condition, about half of investments will be below average. If that average level does not provide the level of real growth that people would like, the problem is not with monetary policy, it is, as I mentioned before, a problem with the quality of investable options.
And for purely financial investments, remember, for every buyer, there is a seller and one of them is wrong. That's a joke of course, but when the investment is real, say, to build a factory or not, the actual return is in the widgets that come out of the completed factory - it doesn't actually print dollars. And the real value of those widgets, and therefore the real return on the factory and the real contribution to economic growth and standards of living, is independent of the monetary expansion or contraction that has occurred and is entirely dependent on the relative value of those widgets to other widgets in the economy (including the ability of people to pay for them) at the time they hit the market.
That's never the best deal you can get, because in the absence of price inflation or deflation you can stuff your money in a mattress and get a guaranteed 0% real return
You and I can do that, but Bill Gross, Calpers, and Temasek can't, and those are the marginal investors that set the order book, not you and me.
The really interesting case doesn't even involve negative returns; that's the one where price inflation and currency inflation are not at the same rate. For example, if technological progress and/or improvements in economic efficiency would naturally lower prices by 2%, but there is a 5% increase in the currency supply over the same period. The net result is 3% price inflation, but an investment with a 5% nominal return, while higher than price inflation, is really a malinvestment because it's not producing any real improvement on the resources consumed—the 5% is entirely due to currency inflation—in a time where the average investment is giving 2% real returns. The 2% increase in purchasing power is due to other investments which led to a general improvement in the state of the economy, not that particular investment, which is dragging down the average.
This is where you really have to take care about what kind of investment you are talking about. If this is a financial transaction, where I invest $100 and get $105 next year, it's not malinvestment because no real resources are being consumed. Trader A wins and trader B loses, with a second order effect that trader A probably gets to risk more money on his positive supply shock bet and trader B gets less money to risk on his low real return bet.
But if you are referring to a real investment in capital or labor, then I disagree with your premise that you get a nominal return on those. A capital investment, or a worker, can't make you $105 worth of cash; they can only make you goods or services which you then sell for, say, $105 cash. Note that this $105 isn't because of the 5% increase in the currency supply (unless this widget is the only thing in the economy), it's because someone is actually willing and able to spend $105 to get what you are offering, as opposed to spending that money on some other good or service that someone else is offering. So this wasn't a malinvestment - it truly is something that people want more than the 3% overall inflation rate, otherwise it wouldn't have been a $105 price.
The market only factors in price inflation. You're still left with malinvestments which looked profitable on paper, even after factoring in price inflation, but are actually net losses because they are below the average real rate of return and draw resources away from other, more profitable ventures. Yes, investors should be looking to get the highest possible return for their money, but not everyone can find above-average investments, and for those who can't, inflation leads them to invest somewhere to avoid the inflationary loss even if the economy would be better off with them simply holding on to their money.
This is a common misperception - that inflation can lead to malinvestment because it incents people to take more risk than they otherwise would have, just in order to preserve capital. But that is not a result of inflation, that is entirely a result of the available investment opportunities and the available *real* rates of interest. There is no "right" to an expected return of 10% on stocks, or to a guaranteed 5% return on bonds. More importantly, there is not even a right to a guaranteed 0% return (real or nominal) on even the safest risk-free investment. (Technically for small investors who have so little money that they can literally stuff cash under their mattress, a 0% nominal return is guaranteed, but that is not the marginal investor).
Imagine a world with no monetary expansion and zero inflation as far as the eye can see. If the market says you must pay me $101 today in order for me to give you $100 tomorrow, and that is the best deal you can get, then the real rate of return is -1%. Clearly this person is in the same situation as the person who can only earn a -1% real rate of return by investing 2% risk-free in a world with 3% inflation. If these investors choose to reach for yield to get a higher than -1% real rate of return, that is the market pushing them in both cases (most likely due to an excess of investable funds versus good ideas to invest in), not inflation. If inflation dropped to 1% in the second scenario (cetiris paribus), then the person offering a 2% rate of return asset wouldn't still be offering a 2% nominal rate of return - they would offer 0% nominal return. The market doesn't care if it would be "better" for an investor to earn 0% real return; it simply settles at a real rate of return that clears buyers and sellers. Sometimes that will be higher than 0%, sometimes less.
There are three reasons why that's not as big a deal as that analysis implies. First, intertemporal comparisons may be of academic use, but economic actors can only decide between good a and good b contemporaneously; you can't choose between buying good a today and buying it last year. And the relative efficiencies of all of the inputs get rolled into that one dimensional price - that's the whole point of a market.
It does matter when it is possible to choose between a good today and a good tomorrow, such as deciding whether to make a particular investment. But for low risk goods, where the rate of inflation will meaningfully affect real returns, they are typically liquid enough that the market appropriately prices in the expected inflation (yes it leaves inflation risk but even that can be indexed away if there is enough demand to deal with that problem. E.g. High inflation countries like Brazil where payouts on fixed income securities typically are adjusted for inflation). And for high risk ventures, whether the payoff is 50% or -50% is going to be determined by the success or failure of the risk, not the movement of the medium of account.
Lastly, a little money illusion can be a good thing for an economy populated by real people with all of the anchoring heuristics and biases that are not in simplistic theoretical models. The best example is unemployment. It is generally better for ten people to take a 10% real paycut than for 1 out of 10 to lose a job while the others keep their original pay. But employers are loathe to cut nominal wages, and employees are loathe to take them. Some inflation allows for real pay cuts in response to real supply shocks while mitigating the baseline anchoring bias.
Slashdot Mirror
Just as royalty/government/oligarchs have been patrons of the arts and "bread and circuses" throughout the ages, companies like Facebook, Apple, Google, and Amazon can highly subsidize the development of games. So game development would be paid for by a lump sum "commisioning" by one of these large firms, in exchange for platform exclusivity.
This, plus the check-in person records the overall condition of the equipment when they sign it out and when they return it to try to reduce "excessive handling." Even if you don't make the interdepartmental charges a function of the condition, the peer pressure of knowing it's being recorded can be pretty effective, and if you are hiring someone to keep the log, you might as well have them look at the equipment too. Maybe even a couple of polite signs that remind people to return equipment in the same condition that they want to receive it in next time they use it.
It depends on the definition of "you." In the second person plural sense, where "you" includes every taxpayer (in scenario 1) or includes every user of the currency (in scenario 2), then yes, "you" are just made whole with "your" own money. But in almost any normal usage of "you," there are certainly different winners and losers, depending on who had money in the failed institution and depends on receiving money for goods and services from those people (the winners) or who gets hit by the increased taxes, or has assets that get hurt by inflation (losers). The set of individuals for which those two effects are large but cancel each other out is infinitesimally small, so realistically no one is being made whole by their own money.
And what happens if FDIC goes bust too?
One of two things: Congress bows to public pressure and raises taxes to fill FDIC's coffers, or the Fed bows to public pressure and prints money and gives it to the FDIC.
Surely there are winners and losers in that kind of situation, but in general, the "regular folk" who have less than $250K in the bank will be made whole, and the burden will fall on whoever has insufficient political power. But in my mind it is a much better social result than taxation based on one's inability to select a good business with which to store your money, which is both idiosyncratic and acute.
What I'm saying is that your local S&L and credit union is as dependent on Wall Street finance as any large multinational bank. That's why it gives different mortgage rates for "conforming" and "non-conforming" - a conforming loan is just going to get sold and enter the gigantic world of finance. That's what "conforming" means - it meets Wall Street criteria to be accepted and sold.
As for the housing crash, if person A buys a house from person B, gives person B a ton of money borrowed from bank C, and then later person A finds out that person B ripped them off and the house isn't worth nearly what they paid for it, then why is the bank to blame? While the bank surely skimmed a lot off the top, person B has all the money. Shouldn't we be blaming him?
Now I don't doubt that there is a limit as to how much a financial industry can add to the economy. If finance was 50% of the economy I would surely question its utility ("hmmm this recipe tastes pretty good with a dash of salt...If I get rid of the meat and replace it with a ton of salt it will surely taste great!"). And so it's fair to argue whether a smaller financial sector would be better for the economy than the current size, or if more smaller players would be better than the small number of large banks that we actually have. However, given that the modern economy is hugely dependent on the large centralized financial centers in NYC and London in order to work at all, it seems to me that not having them at all would surely be a net negative.
Unless you paid for your house and car in cash, Wall Street contributed something of value (yes even the credit union sold your loan to the GSEs who funded it with bonds floated on Wall St). Most of the companies whose products you love (maybe even your employer) raised funds from Wall Street. So maybe your paycheck comes from Wall Street. If you are saving for retirement, Wall Street is contributing something of value.
I'm curious as to what you think that they stole from you
That is GDP per capita, where the east coast still wins in any comparison. It was addressed in my second paragraph, but I'll repeat it here:
Comparing GDP per capita, Washington DC is number 1, just barely beating out SF, and Boston beats out Seattle. NYC rounds out the top 5, and the next West Coast city, LA, is barely in the top 10, with less GDP per capita than Philly.
Actually, most GDP is produced on the East Coast. New York rules the roost, producing almost as much GDP as LA, SF, and Seattle combined. And the high-tech cities of SF, Seattle, and San Jose combined don't even add up to 60% of NYC's GDP.
Comparing GDP per capita, Washington DC is number 1, just barely beating out SF, and Boston beats out Seattle. NYC rounds out the top 5, and the next West Coast city, LA, is barely in the top 10, with less GDP per capita than Philly.
Because when someone invests their time, energy, and money in the institutions that make the political and cultural environment in their geographic locale a more efficient place to build a business than competing areas, they do it with the implicit understanding that they will be for the primary benefit of others who are also making sacrifices to those same institutions. Everything from a reliable power grid to sound courts of law are not at all natural, and without these artificially built institutions we would all suffer.
It might not be "my" courthouse in the same way that this is "my" water bottle, but there is definitely some kind of ownership there that should be recognized in some way. And in the same way that nobody ever washed a rented car, to break that cultural norm risks people deciding not to contribute to make good institutions, which in the long run would be a bad thing.
From the root "mat" = kill. Like "checkmate" which comes from "shah mat" as in "kill the shah (Persian king)". Or if you speak Spanish, "matar"
If I can do half the things I could with my N900, I might buy two.
Is that so you can do 100% of the things that you want to do?
/ducks
I agree that ultimately the person responsible for your own safety is you, but in my parenthetical the examples are things that only the local government can do. I can keep my kid home from school, but I can't cancel classes. You and I can't put more police on the streets or tell firefighters to be ready for gas main breaks. Like it or not, local governments have a lot of power, and with that power comes responsibility to use it correctly. Even if all of those functions (schools, firefighters, even police) were all privatized then whoever is in charge of them had better manage them effectively or else expect to take the heat, regardless of the (ir)responsibility of the customers of that service.
Isn't part of being responsible for your own safely (in the long run) the responsibility to hold screw ups like this accountable?
Exactly. maybe every three years is too infrequent to have 500 snowplows ready, but that's a false dichotomy. The choice isn't between having 500 snowplows and turning into a disaster move every 3 years; surely there is a middle ground where you have an action plan that takes into effect when snow *might* hit the area (e.g. position resources so they can react quickly, and get you DPW personnel in their trucks and pay them overtime), and an action plan that goes into effect once the snow starts falling (do schools shut down? send kids home? shelter in place? What about police? Firefighters? What do you ask private business to do? And most importantly, what's the plan with the DPW?). Proper planning and intelligent deployment of resources is cheap (relatively speaking) but requires local authorities to think about more than just, "how do I get my brother in law a six figure do-nothing job" or "How do I accept that cheap mortgage as a gift without running afoul of bribery and corruption laws." But to claim that this is to be expected in a first world nation every 1000 days because you don't want to staff up like they do in the northeast is irresponsible
The following is taken to the very extreme so please take it with a grain of salt. With that caveat, think of how one does not, and in my worldview, should not, have the "freedom" to sell oneself into slavery. This is one example of how sometimes having more choices reduces freedom.
In the case of open source licensing, a developer might choose a BSD style open source license instead of the GPL in the hopes of having their code adopted more widely. However, even if someone is willing to give away the fruits of their labor for free, it might not be in society's interest to allow it, without some sort of precautions to ensure the the person isn't effectively "selling themselves into slavery" by letting someone else profit from it. At least with the GPL, the community as a whole benefits from every part that goes into the most advanced product. But with licenses that give developers more choices, one of those choices is to allow others to take advantage of that work, with little if any benefit accruing to the original authors.
Whether you agree or not, the position is entirely understandable
I don't know if Facebook really want to promote the idea that numerical analytics are suspect. Isn't their whole business plan that advertising with them is so effective because they are able to target ads to people who are most receptive to them, based on proprietary models of behavior? Even if they win the argument, they lose.
This. I write a lot of modeling algorithms in c++ but to make it useful to the team where I work I wanted to develop a front-end/gui. I learned python/django and now I can get a basic front-end working in about a day. Add javascript/jquery/a commercially available javascript UI library or two for "spreadsheet-like" tables and twisties and such and you can have a very complex system with a nice UI that you understand from front to back.
The government can do great things. Look at NASA.
I don't mean to disparage an entire agency, but there are bureaucratic screw-ups there as well. I think Feynman's appendix to the Challenger disaster report should be required reading for anybody who supervises people who work in a technical capacity.
Standard Deviation is the square root of the second moment about the mean, an important fundamental concept to probability distributions. Looking at moments of probability distributions gives us lots of tools that have been developed over the years and in many cases we can apply closed form solutions with reasonably lenient assumptions. Then we apply the square root in order to put it in the same units as the original list of observations and get some of the heuristic advantages that he attributes to the mean absolute deviation.
But it is a balance, and any data set should be looked at from multiple angles, with multiple summary statistics. To say MAD is better that standard deviation is a reasonable point (with which I would disagree), but to say we should stop using standard deviation (the point made in TFA) is totally incorrect.
Actually I had originally written something like "control their income and wield sufficient political power" but took out the part about political power because the ability to control their (US) income is so much more important. Even if tax law was changed that increased taxes on wealth, I doubt it would generate much revenue to pay for stuff because the truly rich have the ability to manipulate their income such that it still would avoid taxation. For example, they might move it to Swiss bank accounts, or into whatever politically favored (and therefore tax-free) investments are allowed, or simply leave US jurisdiction entirely and move to Hong Kong or Singapore.
So IMHO merely limiting political power after someone has already accumulated great wealth wouldn't do much to increase tax revenue; I think the massive accumulation of wealth needs to be prevented in the first place (e.g. through reductions in the acuteness of benefits received through state-granted monopolies such as copyright) so that a greater portion of the nation's wealth is held by middle-income individuals, which would allow them to bear the tax burden more easily.
This makes sense once you realize that it isn't about what they are claiming it is about. Tech businessmen want cheap labor - everyone here on slashdot gets that. But the other half is more about transferring wealth from the middle and upper middle class (in this case, through the lowered wages of developers, a moderately well paying profession in America) to the poor by providing funding for inner city schools.
We can't tax the rich since they have the ability to control their income, and the poor can't provide funding for their own schools or else they wouldn't be poor. So the funding for programs for the poor has to come from the middle class and those with high incomes in high cost of living areas who have relatively little wealth and therefore can be easily taxed either explicitly or implicitly.
I totally agree with GEB, but would add that the book is not really about understanding Godel's proof, although that it the part that most people dwell on because it is the hardest part for most people to get and therefore the part they spend the most time on. To really get the most out of the book, I recommend Nagel and Newman's Godel's Proof first so that you understand the basics and can simply enjoy Hofstader's artistry.
The F-150 is the best selling vehicle (car, truck, or suv) in North America,and has been for almost 20 years. This isn't some niche manufacturer that is going to sell 50,000 units and be happy with it. Ford is expecting to sell millions of these before then can do another redesign, so if it isn't successful it's a serious problem, and therefore it's a huge risk.
Furthermore, losing 700 lbs on every one of the millions of these that are going to be sold over the next few years will do more to reduce dependency on foreign oil and co2 emissions than all of the zero emission vehicles put together. So as cool as the technology behind electric and hybrid cars is, if you want to burn less gas, you have to root for advances in truck technology such as this.
The argument was that currency inflation incents people to make investments (even low-risk investments) which appear to be profitable, but are actually below average and reduce economic output rather than contributing to growth.
What do you mean by "below average?" Under any economic condition, about half of investments will be below average. If that average level does not provide the level of real growth that people would like, the problem is not with monetary policy, it is, as I mentioned before, a problem with the quality of investable options.
And for purely financial investments, remember, for every buyer, there is a seller and one of them is wrong. That's a joke of course, but when the investment is real, say, to build a factory or not, the actual return is in the widgets that come out of the completed factory - it doesn't actually print dollars. And the real value of those widgets, and therefore the real return on the factory and the real contribution to economic growth and standards of living, is independent of the monetary expansion or contraction that has occurred and is entirely dependent on the relative value of those widgets to other widgets in the economy (including the ability of people to pay for them) at the time they hit the market.
That's never the best deal you can get, because in the absence of price inflation or deflation you can stuff your money in a mattress and get a guaranteed 0% real return
You and I can do that, but Bill Gross, Calpers, and Temasek can't, and those are the marginal investors that set the order book, not you and me.
The really interesting case doesn't even involve negative returns; that's the one where price inflation and currency inflation are not at the same rate. For example, if technological progress and/or improvements in economic efficiency would naturally lower prices by 2%, but there is a 5% increase in the currency supply over the same period. The net result is 3% price inflation, but an investment with a 5% nominal return, while higher than price inflation, is really a malinvestment because it's not producing any real improvement on the resources consumed—the 5% is entirely due to currency inflation—in a time where the average investment is giving 2% real returns. The 2% increase in purchasing power is due to other investments which led to a general improvement in the state of the economy, not that particular investment, which is dragging down the average.
This is where you really have to take care about what kind of investment you are talking about. If this is a financial transaction, where I invest $100 and get $105 next year, it's not malinvestment because no real resources are being consumed. Trader A wins and trader B loses, with a second order effect that trader A probably gets to risk more money on his positive supply shock bet and trader B gets less money to risk on his low real return bet.
But if you are referring to a real investment in capital or labor, then I disagree with your premise that you get a nominal return on those. A capital investment, or a worker, can't make you $105 worth of cash; they can only make you goods or services which you then sell for, say, $105 cash. Note that this $105 isn't because of the 5% increase in the currency supply (unless this widget is the only thing in the economy), it's because someone is actually willing and able to spend $105 to get what you are offering, as opposed to spending that money on some other good or service that someone else is offering. So this wasn't a malinvestment - it truly is something that people want more than the 3% overall inflation rate, otherwise it wouldn't have been a $105 price.
The market only factors in price inflation. You're still left with malinvestments which looked profitable on paper, even after factoring in price inflation, but are actually net losses because they are below the average real rate of return and draw resources away from other, more profitable ventures. Yes, investors should be looking to get the highest possible return for their money, but not everyone can find above-average investments, and for those who can't, inflation leads them to invest somewhere to avoid the inflationary loss even if the economy would be better off with them simply holding on to their money.
This is a common misperception - that inflation can lead to malinvestment because it incents people to take more risk than they otherwise would have, just in order to preserve capital. But that is not a result of inflation, that is entirely a result of the available investment opportunities and the available *real* rates of interest. There is no "right" to an expected return of 10% on stocks, or to a guaranteed 5% return on bonds. More importantly, there is not even a right to a guaranteed 0% return (real or nominal) on even the safest risk-free investment. (Technically for small investors who have so little money that they can literally stuff cash under their mattress, a 0% nominal return is guaranteed, but that is not the marginal investor).
Imagine a world with no monetary expansion and zero inflation as far as the eye can see. If the market says you must pay me $101 today in order for me to give you $100 tomorrow, and that is the best deal you can get, then the real rate of return is -1%. Clearly this person is in the same situation as the person who can only earn a -1% real rate of return by investing 2% risk-free in a world with 3% inflation. If these investors choose to reach for yield to get a higher than -1% real rate of return, that is the market pushing them in both cases (most likely due to an excess of investable funds versus good ideas to invest in), not inflation. If inflation dropped to 1% in the second scenario (cetiris paribus), then the person offering a 2% rate of return asset wouldn't still be offering a 2% nominal rate of return - they would offer 0% nominal return. The market doesn't care if it would be "better" for an investor to earn 0% real return; it simply settles at a real rate of return that clears buyers and sellers. Sometimes that will be higher than 0%, sometimes less.
There are three reasons why that's not as big a deal as that analysis implies. First, intertemporal comparisons may be of academic use, but economic actors can only decide between good a and good b contemporaneously; you can't choose between buying good a today and buying it last year. And the relative efficiencies of all of the inputs get rolled into that one dimensional price - that's the whole point of a market.
It does matter when it is possible to choose between a good today and a good tomorrow, such as deciding whether to make a particular investment. But for low risk goods, where the rate of inflation will meaningfully affect real returns, they are typically liquid enough that the market appropriately prices in the expected inflation (yes it leaves inflation risk but even that can be indexed away if there is enough demand to deal with that problem. E.g. High inflation countries like Brazil where payouts on fixed income securities typically are adjusted for inflation). And for high risk ventures, whether the payoff is 50% or -50% is going to be determined by the success or failure of the risk, not the movement of the medium of account.
Lastly, a little money illusion can be a good thing for an economy populated by real people with all of the anchoring heuristics and biases that are not in simplistic theoretical models. The best example is unemployment. It is generally better for ten people to take a 10% real paycut than for 1 out of 10 to lose a job while the others keep their original pay. But employers are loathe to cut nominal wages, and employees are loathe to take them. Some inflation allows for real pay cuts in response to real supply shocks while mitigating the baseline anchoring bias.