Guerrilla Economics

Nail Hammer Head Hit.

I was not amazed but disgusted when John Boehner and his crew tried to justify the extremity of their position by rebranding the wealthy as "job creators." While true in a very basic sense, it obscures the fact that jobs are a cost that is voluntarily incurred only as a result of demand. Hiring has no correlation at all to profits or to income - none. Let me keep more of my money without increasing customer demand and I will do just that - keep it. Perhaps I will spend a little more of it, though probably not, but even if I do it won't help the economy very much. Here is another secret of the well-to-do: we don't really buy much more stuff than everyone else. It may be more expensive stuff, sure, but I don't buy cars, or appliances, or furniture, or anything else more frequently than the average consumer. The things I do spend more money on are services such as travel, entertainment, restaurants and landscaping, none of which generate well-paying middle class jobs. There, in a nutshell, is the sad explanation of what has happened to the American economy over the last 25 years of "trickle down" economics.

via boingboing.net

There's 'supply side' economics nailed. I don't care if it's authentic or not, it has, as we say, explanatory power.

(Yes there's probably a respectable version of supply side economics, but the Voodoo version has long since driven out of the marketplace of ideas)

A Mug's Game.

Paleofuture features "If Today Were 1965!" -- a 1955 publication of the Reading Automobile Club Magazine, published a year before the Federal Freeway Highway Act. It's an interesting mix of humility and hubris, prescience and silliness, and is as sobering a memento mori for anyone thinking of getting into the prediction game as you could want.

Says Boing Boing. From the awesome Paleofuture (amazing archives here), a record of the ways we imagined the future at time T-n. 

Prediction is of course a mug's game. You will be wrong more often than you are right. When you are right it'll most likely less be down to talent than brute dumb luck. What's interesting is what happens when the act of projection makes you see something in a different way.

 

Ouch.

  Very simply, the facts of the current environment in Europe don’t equal the conclusion that a coordinated effort will restore confidence. The fact of the matter is that European Sovereigns are massively indebted and European banks are massively under-capitalized. The proposed solution of raising capital and issuing fresh debt to solve this issue is a joke. If I walk away from a home I owe $200k on and its fair market value is $100k (a 50% haircut), does a loan to my bank for $100K from the institution overseeing it change the impairment? No. You’re shuffling the cards. Instead of taking a $100k loss, they now have an asset worth $100k and a new liability of $100k. The asset is still worth $100k. Even though their little maneuver technically gives them an asset of $100k and cash of $100k, my bank now has $100K less to lend against. Thus, their leverage increases.

via www.zerohedge.com

The Veiled Tyranny of Italy's Silvio Berlusconi | Foreign Affairs

Italian Prime Minister Silvio Berlusconi's system of power has no precedent and no equal in the history of liberal and democratic countries. The most unsavory aspects of his regime are well known. He is continually embroiled in political corruption scandals: His longtime political partner Cesare Previti has been found guilty of bribery and sentenced to six years in prison. There are allegations of his connections to organized crime: His other partner in business and politics, Marcello Dell'Utri, has been sentenced to eight years in prison for his ties to the Sicilian Mafia. Berlusconi displays an open contempt for the judiciary and the constitutional court, as he regards both as unacceptable limitations on his power. Accordingly, his cabinets have passed laws to shield him from the judiciary. The numerous sex scandals during his rule have prompted commentators to call Italy a "bordello state" that is run by a "whoreocracy."

via www.foreignaffairs.com

Foreign Affairs follows The Economist into the depths of the rabbit hole that is the Berlusconi regime. (I dispute a couple of points. At the bottom of the first page, Virolli cites Berlusconi as the end of the post war regime. Tangentopoli did that, Silvio is the result, I think. And secondly, shouldn't we officially use Pornocracy as the term for Italian government? Whoreocracy mixes anglo saxon and greek for to loosely for my taste.)

What happens next?

Brace for it. Ambiguous endings are the rule around here.

Why?

This blog is currently steaming out of Portmerion with a lorryload of "All you need is Love"

REBOOT

Hello.

As my Mac sings "Daisy, daisy", this blog reboots.

All the old stuff is on the internet archive/google cahce/somewhere. I'm not embarrassed by any of it, in case you ask, I just wished to reboot from a clean slate, as it were.

Your opinions have been noted and ignored.