Corporations are better at saving and investing than individuals. The investments made today is what is going to raise a worker’s productivity tomorrow. A worker’s productivity is one of the prime factors in determining their pay.
Or maybe consumers will take their pay increase and use that to pay down their debt – which is what people have been doing since the housing market blew up.
How can we have won it all if we are facing a new problem with a whole new paradigm? How can we foster democracy in China? And what is predatory capitalism and how are we doing it? Is it anything worse then what China is doing in Africa today?
China is coming into its own and they want a military that corresponds to being an international heavyweight. However, there is a fine line between confidence and arrogance, and I personally think China today has a prickly pride and is acting like a bully.
Or to put it a different way, is the glass half empty or half full? Personally I see great opportunity in the future for both sides and I hope that it occurs. I know that there are things we can do to bring disaster – such as fear mongering from either side. However, I fear appeasement will also bring disaster.
What I want to say is that the world is going to face a tricky path with China over the next 20 to 50 years.
(And a bit off topic, but I think you are wrong about China’s one child policy. There are aspects of the execution which I really dislike but the policy has produced a demographic dividend that China has used well.)
They are not that far behind if you focus on their military objectives of excluding the American navy which currently provides the security umbrella for South Korea, Japan, Taiwan, Philippines, etc.
I am not the only person who sees parallels between China / America and Germany / Britton during the dreadnought arms race that preceded WWI.
A zero rate of inflation – or even a constant rate of inflation – is theoretically impossible. Those who have implemented it have destroyed their economies.
High inflation has a positive feedback which leads to higher even higher inflation. Variable inflation make planning, and thus longer term investing, harder. Deflation transfers wealth of future investments to the wealthy.
Process of elimination leaves us with one obvious choice – target inflation to be in a low, narrow range.
Fortunately I live in the US, which like most developed countries, where nobody has “first access to money”, so I don’t have to contend with that issue. And by money I assume you mean currency which, of course, is very different then money.
LIBOR is the average number form 18 banks with the top and low ends dropped. The LIBOR scandal was about 1. Bankers pushing LIBOR a fraction of a percentage one way or another because they had placed big bets or 2. Or outright lying to make themselves look better. (A higher than average LIBOR implies you bank is higher risk, which can trigger higher funding costs or a bank run.). In this case they are not intending to game LIBOR – just a side effect.
I think you missed a point. Deflation favors financial assets (cash, bonds, gold) over real assets (real estate, stocks, human capital, etc.). So the economic scales are tipper towards those who have financial assets (wealthy, banks, retired people who hold lots of bonds) and away from long term risk (or at least risker then cash) assets and investments.
First there are the hard money types. Rare among economist today, but common in the Gold Bug and BitCoin world. Mostly it is philosophical or based on the assumption that the disadvantages of hard money outweigh the risks of fiat money – the primary risk is that the government will turn on the printing press like Germany did in the 1920s.
Then there are the inflation hawks, which I belong to. Here the question is on getting out of quantitative easing, which has to be stopped at some time.
The threat of stopping triggers a contraction in economic activity because it is addictive to cheap credit.
Quantitative easing tends to lower interest rates, which encourages greater leverage, which promotes asset bubbles.
Inflation begets more inflation. Once it starts it takes harsh medicine to stop – namely much higher real interest rates.
When the fed pours money into the economy it takes about 6 to 18 months for that money to cause inflation and another 6 to 18 months to show up in the official numbers. So by the we know that there is inflation it is too late.
And FYI, inflation is not running at record low levels. Low levels – yes. Dangerously low – I think so. (I fear long term deflation, and have posted on this before.)
Odd, I had exactly the opposite though – that this would bring more computer power to the masses. Watson is basically a human / computer interface using natural languages. Kind of like the shift from the command line to the GUI. While the command line may be reserved for the elite, the GUI did open up computers to the masses.
To be fair, there is talk about scaling them up to run electric cars.
No, the issue today with large ultracapacitors is that 1. tend to be experimental and 2. very expensive.
The advantage of doing something city size is you don't need to spend the extra cash on what ultracacitors are good at - small size and rapid discharge.
Take a look at the space program between JFK announcement that we were going to the moon to landing on the moon. There was a clear goal. Each step of the program was a clear, logical, step to expand our abilities to meet that goal. An excellent example of project management.
You can’t say that about the ISS. Is what they are doing helping us to Mars or a asteroid? Maybe yes, maybe no – one can’t tell until you have set the goal. For example, if we just wanted to do a flyby of Mars with humans (IIRC there is a great window coming up to do just that) we have the science (biological, et. al.) to do that. Now, it seems rudderless. It would be a whole another story If we had a concert goal to go to Mars, which I would support.
FYI, I have read and enjoyed Mary Roach’s book but have not read this one.
Why would a commercial venture buy a chunk of the ISS? I have a hard time thinking anything commercial coming out of it. It is set up to do basic science.
Government is the customer. Yes, they can contract out to the private sector for things, such as ferrying stuff, but they are the ones ultimately footing the bill.
I have a serious question – what science is the ISS doing that can be done better with humans and not by remotely? Grew up in Houston, big Sci-Fi fan, love science. It seems to me that the ISS is a highly capable piece of equipment in search of a mission.
Most of the science that I hear about is about studying the effect of long term space flight so we can go to the Moon, Mars, etc. Which would be all fine and dandy if there were a real program to go to the Moon, Mars, etc.
2 points. First, while there is no human “in the loop”, there is a human “on the loop”. They have discretion here. Second, it is basically a defensive system to shoot incoming cruise missiles – it’s range of targets is pretty limited. This would be very different than an offensive autonomous system that hunts and kills on it’s own.
The willingness to spend on R&D gives some idea on where the country will be in 10 years. Yes, some of it is spent reverse engineering things that have been built, but some of it is being spent on the industries of tomorrow. Take almost any small northern European country (Finland, Norway, Denmark) as a counter example. They are small countries1 so the absolute dollar amount spent on R&D is small, yet the high percentage spent on R&D has bought a respectable level of income.
As for poverty, it depends if you are have a glass half full or half empty type of person. IIRC, China over the past 25 years has moved 250 million people from extreme poverty (Less then $2.00 a day) to middle income ($8,000 a year).
In the past 25 years do you think that the net employment has gone up or down? I am guessing it is about the same, but this is based on my observation of the local telcom. If you have hard evidence let me know.
People where building and maintaining copper lines and building switches for telephones. Now they are laying fiber and building routers for data. More demand for infrastructure, but the infrastructure is getting cheaper and easier to maintain. I think it is a wash.
Pull the company apart and it looks more like Dow of 3M then Maytag or RCA. Lots of specialty plants, R&D, etc. If they shut down operations they would have higher stranded costs. IIRC Kodak did have a specialty chemical division that was still profitable at the very end.
No, you did not need 20/20 hindsight. It took over 20 years for it to kill the film business. They lost market after market in a fairly logical order, first photojournalist (for fast turnaround time), then the casual point and shoot market, and then the high end “artistic” market.
And Kodak new this. The would repeatable make announcements that they were going to do this or that. The problem is that Kodak was not a photo company, it was a chemical company. I am overstating my case a bit but it is to make a point. Kodak had lots of fixed assets such as plants and lots of union employees. Shutting those things down would hurt and it would not have ensured success. However it is what should have been done.
I think he is trying to make a different point, but maybe not very well articulated.
In this case there was a slow decline from traditional photography to digital photography. Kodak and 1 hour photomarts steady lost ground while makes of chip makers and “photo quality” printers gained ground. So some workers lost their jobs while others gained. Maybe not the same people nor the same region, but the decline was steady. (Except for the very end but everybody knew it was coming).
Overall a modest loss of middle income jobs spread over 20 years. Society can handle that. The trickery question is where will the new jobs come from.
I think a better compassion is between Ford and Istagram. Ford (and Kodak) needed thousands of moderately trained (and hence middle class) employees to execute their brilliant transformative ideas. Instagram (or Facebook, or whatever) only had to hire 10s or 100s of people. Technology let a few people leverage their abilities. When there are brilliant new companies, they are not minting thousands of middle class ideas like the days of old.
So maybe the new jobs won’t be coming down the same route as before, which is a uncertain thing which creates anxiety.
It is not that we know that the studies are wrong; it is that we know models are incomplete. Climate change is a young science so there are holes and gaps. One answer might be that the oceans have more ability to absorb CO2 then the models predict and we are reaching a new equilibrium point. Or maybe this is just a pause for something really nasty to pop up.
http://www.cbo.gov/publication/42729 Bottom 20% up by 18% from 1979. Another era of high unemployment. As for doctors, today we call them registered nurses. Maybe Pas. But they did not have computers. Car, telephone, air-conditioning, home, and T.V. ownerships rates have risen.
As for you moral position that the current generation is debase and materialistic – well – that is your opinion of what is valuable. Society as a whole disagrees with you. While I might agree with you (and I kind of do) it is kind of arrogant to say that the progress that has been made does not count because you don’t value it.
I have a slightly different experience. It is not about buying a representative; it is about renting them for a specific issue. Let me try to illustrate my point with the tax code. We would be better off with a simpler tax system. However, special interest groups carve out special rules for their causes. I am sure justification could be found for each carve out and expectation, but taken together they are a mess.
I put a good chunk of the blame on the primary system, which in recent years have been delivering more extreme candidates who are less willing to negotiate to a centralist position. I kind of like the system with an open primary and then the top 2 candidates progress to the top. In the initial phase you get less negative advertising and more coalition building.
What are you trying to say? All class are more prosperous than in the 50s. – even the bottom 20%. And I could make a decent argument that corporation where more powerful back then – buying congressmen outright instead of renting them via campaign contributes.
Why pin this on corporations when we can pin this on:
The great wage compression of the 50s, a unique event brought about by the massive destruction of capital during the 20s and 30s and the post war surge in productivity.
Technology that leverages the cleverest, ripping the middle class to shreds. Same as during the time of luddites.
Slowing productivity growth, which historically shifted power to capital over labor.
It is o.k. to be mad. It is not o.k. to blindly strike out.
For that I see the root issue as the rise of the special interest groups and the importance of money in politics. Corporations are only one of many special interest groups. Neutering them won’t increase the say of the common man. It’s not a question of corporations but how the political system is structured.
First, I want to ask what you mean by declining democracy. That is a very broad claim – what specifically do you mean? I suspect that I would lay the blame for these defects on other causes.
I will point out that under Classically Liberal / Western democracy, the whole point is to reduce sovereign control over people.
I will also point out that for the past 200 years, in particular the last 50 years, there has been a strong correlation between economic linearism leading to higher growth, and higher growth leading to greater freedom. I will point to South Korea as a shining example among many.
Slashdot Mirror
Maybe. Here are 2 counter arguments.
Corporations are better at saving and investing than individuals. The investments made today is what is going to raise a worker’s productivity tomorrow. A worker’s productivity is one of the prime factors in determining their pay.
Or maybe consumers will take their pay increase and use that to pay down their debt – which is what people have been doing since the housing market blew up.
Lots of variables in play.
Cloning increases the repeatability and eliminates the variances in animal research, and thus increases the efficiency of the research being done.
If you are looking for eating animals – that is a pig of a different color.
How can we have won it all if we are facing a new problem with a whole new paradigm? How can we foster democracy in China? And what is predatory capitalism and how are we doing it? Is it anything worse then what China is doing in Africa today?
China is coming into its own and they want a military that corresponds to being an international heavyweight. However, there is a fine line between confidence and arrogance, and I personally think China today has a prickly pride and is acting like a bully.
Or to put it a different way, is the glass half empty or half full? Personally I see great opportunity in the future for both sides and I hope that it occurs. I know that there are things we can do to bring disaster – such as fear mongering from either side. However, I fear appeasement will also bring disaster.
What I want to say is that the world is going to face a tricky path with China over the next 20 to 50 years.
(And a bit off topic, but I think you are wrong about China’s one child policy. There are aspects of the execution which I really dislike but the policy has produced a demographic dividend that China has used well.)
They are not that far behind if you focus on their military objectives of excluding the American navy which currently provides the security umbrella for South Korea, Japan, Taiwan, Philippines, etc.
I am not the only person who sees parallels between China / America and Germany / Britton during the dreadnought arms race that preceded WWI.
http://en.wikipedia.org/wiki/Anglo-German_naval_arms_race
A zero rate of inflation – or even a constant rate of inflation – is theoretically impossible. Those who have implemented it have destroyed their economies.
High inflation has a positive feedback which leads to higher even higher inflation. Variable inflation make planning, and thus longer term investing, harder. Deflation transfers wealth of future investments to the wealthy.
Process of elimination leaves us with one obvious choice – target inflation to be in a low, narrow range.
Fortunately I live in the US, which like most developed countries, where nobody has “first access to money”, so I don’t have to contend with that issue. And by money I assume you mean currency which, of course, is very different then money.
LIBOR is the average number form 18 banks with the top and low ends dropped. The LIBOR scandal was about 1. Bankers pushing LIBOR a fraction of a percentage one way or another because they had placed big bets or 2. Or outright lying to make themselves look better. (A higher than average LIBOR implies you bank is higher risk, which can trigger higher funding costs or a bank run.). In this case they are not intending to game LIBOR – just a side effect.
I think you missed a point. Deflation favors financial assets (cash, bonds, gold) over real assets (real estate, stocks, human capital, etc.). So the economic scales are tipper towards those who have financial assets (wealthy, banks, retired people who hold lots of bonds) and away from long term risk (or at least risker then cash) assets and investments.
First there are the hard money types. Rare among economist today, but common in the Gold Bug and BitCoin world. Mostly it is philosophical or based on the assumption that the disadvantages of hard money outweigh the risks of fiat money – the primary risk is that the government will turn on the printing press like Germany did in the 1920s.
Then there are the inflation hawks, which I belong to. Here the question is on getting out of quantitative easing, which has to be stopped at some time.
The threat of stopping triggers a contraction in economic activity because it is addictive to cheap credit.
Quantitative easing tends to lower interest rates, which encourages greater leverage, which promotes asset bubbles.
Inflation begets more inflation. Once it starts it takes harsh medicine to stop – namely much higher real interest rates.
When the fed pours money into the economy it takes about 6 to 18 months for that money to cause inflation and another 6 to 18 months to show up in the official numbers. So by the we know that there is inflation it is too late.
And FYI, inflation is not running at record low levels. Low levels – yes. Dangerously low – I think so. (I fear long term deflation, and have posted on this before.)
Odd, I had exactly the opposite though – that this would bring more computer power to the masses. Watson is basically a human / computer interface using natural languages. Kind of like the shift from the command line to the GUI. While the command line may be reserved for the elite, the GUI did open up computers to the masses.
To be fair, there is talk about scaling them up to run electric cars.
No, the issue today with large ultracapacitors is that 1. tend to be experimental and 2. very expensive.
The advantage of doing something city size is you don't need to spend the extra cash on what ultracacitors are good at - small size and rapid discharge.
You see that does not cut it for me.
Take a look at the space program between JFK announcement that we were going to the moon to landing on the moon. There was a clear goal. Each step of the program was a clear, logical, step to expand our abilities to meet that goal. An excellent example of project management.
You can’t say that about the ISS. Is what they are doing helping us to Mars or a asteroid? Maybe yes, maybe no – one can’t tell until you have set the goal. For example, if we just wanted to do a flyby of Mars with humans (IIRC there is a great window coming up to do just that) we have the science (biological, et. al.) to do that. Now, it seems rudderless. It would be a whole another story If we had a concert goal to go to Mars, which I would support.
FYI, I have read and enjoyed Mary Roach’s book but have not read this one.
Why would a commercial venture buy a chunk of the ISS? I have a hard time thinking anything commercial coming out of it. It is set up to do basic science.
Government is the customer. Yes, they can contract out to the private sector for things, such as ferrying stuff, but they are the ones ultimately footing the bill.
I have a serious question – what science is the ISS doing that can be done better with humans and not by remotely? Grew up in Houston, big Sci-Fi fan, love science. It seems to me that the ISS is a highly capable piece of equipment in search of a mission.
Most of the science that I hear about is about studying the effect of long term space flight so we can go to the Moon, Mars, etc. Which would be all fine and dandy if there were a real program to go to the Moon, Mars, etc.
Where should I be looking?
2 points. First, while there is no human “in the loop”, there is a human “on the loop”. They have discretion here. Second, it is basically a defensive system to shoot incoming cruise missiles – it’s range of targets is pretty limited. This would be very different than an offensive autonomous system that hunts and kills on it’s own.
Well, 2 things.
The willingness to spend on R&D gives some idea on where the country will be in 10 years. Yes, some of it is spent reverse engineering things that have been built, but some of it is being spent on the industries of tomorrow. Take almost any small northern European country (Finland, Norway, Denmark) as a counter example. They are small countries1 so the absolute dollar amount spent on R&D is small, yet the high percentage spent on R&D has bought a respectable level of income.
As for poverty, it depends if you are have a glass half full or half empty type of person. IIRC, China over the past 25 years has moved 250 million people from extreme poverty (Less then $2.00 a day) to middle income ($8,000 a year).
In the past 25 years do you think that the net employment has gone up or down? I am guessing it is about the same, but this is based on my observation of the local telcom. If you have hard evidence let me know.
People where building and maintaining copper lines and building switches for telephones. Now they are laying fiber and building routers for data. More demand for infrastructure, but the infrastructure is getting cheaper and easier to maintain. I think it is a wash.
Pull the company apart and it looks more like Dow of 3M then Maytag or RCA. Lots of specialty plants, R&D, etc. If they shut down operations they would have higher stranded costs. IIRC Kodak did have a specialty chemical division that was still profitable at the very end.
No, you did not need 20/20 hindsight. It took over 20 years for it to kill the film business. They lost market after market in a fairly logical order, first photojournalist (for fast turnaround time), then the casual point and shoot market, and then the high end “artistic” market.
And Kodak new this. The would repeatable make announcements that they were going to do this or that. The problem is that Kodak was not a photo company, it was a chemical company. I am overstating my case a bit but it is to make a point. Kodak had lots of fixed assets such as plants and lots of union employees. Shutting those things down would hurt and it would not have ensured success. However it is what should have been done.
Same can be said for GM .
I think he is trying to make a different point, but maybe not very well articulated.
In this case there was a slow decline from traditional photography to digital photography. Kodak and 1 hour photomarts steady lost ground while makes of chip makers and “photo quality” printers gained ground. So some workers lost their jobs while others gained. Maybe not the same people nor the same region, but the decline was steady. (Except for the very end but everybody knew it was coming).
Overall a modest loss of middle income jobs spread over 20 years. Society can handle that. The trickery question is where will the new jobs come from.
I think a better compassion is between Ford and Istagram. Ford (and Kodak) needed thousands of moderately trained (and hence middle class) employees to execute their brilliant transformative ideas. Instagram (or Facebook, or whatever) only had to hire 10s or 100s of people. Technology let a few people leverage their abilities. When there are brilliant new companies, they are not minting thousands of middle class ideas like the days of old.
So maybe the new jobs won’t be coming down the same route as before, which is a uncertain thing which creates anxiety.
I am not sure about the GP, but I can point to a study where the issue is not selection basis.
http://www.economist.com/news/science-and-technology/21574461-climate-may-be-heating-up-less-response-greenhouse-gas-emissions
It is not that we know that the studies are wrong; it is that we know models are incomplete. Climate change is a young science so there are holes and gaps. One answer might be that the oceans have more ability to absorb CO2 then the models predict and we are reaching a new equilibrium point. Or maybe this is just a pause for something really nasty to pop up.
http://en.wikipedia.org/wiki/Shutdown_of_thermohaline_circulation
http://www.cbo.gov/publication/42729
Bottom 20% up by 18% from 1979. Another era of high unemployment.
As for doctors, today we call them registered nurses. Maybe Pas. But they did not have computers. Car, telephone, air-conditioning, home, and T.V. ownerships rates have risen.
As for you moral position that the current generation is debase and materialistic – well – that is your opinion of what is valuable. Society as a whole disagrees with you. While I might agree with you (and I kind of do) it is kind of arrogant to say that the progress that has been made does not count because you don’t value it.
I have a slightly different experience. It is not about buying a representative; it is about renting them for a specific issue. Let me try to illustrate my point with the tax code. We would be better off with a simpler tax system. However, special interest groups carve out special rules for their causes. I am sure justification could be found for each carve out and expectation, but taken together they are a mess.
I put a good chunk of the blame on the primary system, which in recent years have been delivering more extreme candidates who are less willing to negotiate to a centralist position. I kind of like the system with an open primary and then the top 2 candidates progress to the top. In the initial phase you get less negative advertising and more coalition building.
What are you trying to say? All class are more prosperous than in the 50s. – even the bottom 20%. And I could make a decent argument that corporation where more powerful back then – buying congressmen outright instead of renting them via campaign contributes.
Why pin this on corporations when we can pin this on:
The great wage compression of the 50s, a unique event brought about by the massive destruction of capital during the 20s and 30s and the post war surge in productivity.
Technology that leverages the cleverest, ripping the middle class to shreds. Same as during the time of luddites.
Slowing productivity growth, which historically shifted power to capital over labor.
It is o.k. to be mad. It is not o.k. to blindly strike out.
For that I see the root issue as the rise of the special interest groups and the importance of money in politics. Corporations are only one of many special interest groups. Neutering them won’t increase the say of the common man. It’s not a question of corporations but how the political system is structured.
First, I want to ask what you mean by declining democracy. That is a very broad claim – what specifically do you mean? I suspect that I would lay the blame for these defects on other causes.
I will point out that under Classically Liberal / Western democracy, the whole point is to reduce sovereign control over people.
I will also point out that for the past 200 years, in particular the last 50 years, there has been a strong correlation between economic linearism leading to higher growth, and higher growth leading to greater freedom. I will point to South Korea as a shining example among many.