Wednesday, July 31, 2013

Some Musings On Nominal "What Could Have Beens"

Notes for today's post kept going into different directions, so I finally erased it all to provide at least a summary of my thoughts. Initially I wanted to tell a story about greater density levels in small town and rural areas that existed prior to the rise of two automobile households. Certainly I'm not the only Baby Boomer with fond memories of neighbors who once lived in closer proximity, before both parents owned cars. Even though some would like to recreate communities which resemble that earlier reality, it may well be a slow process, getting there. Hopefully in the next decade, the Internet will make it possible for like minded people with similar goals for their lives to come together to form more affordable common interest communities...defined once again by people and what they actually want, rather than what is just convenient or profitable for local developers.

However, a major emphasis of those earlier notes was on the redefinition of lifestyle expectations, for populations from the sixties forward. Looking back, I really find myself wishing that nominal targeting had been a part of those years so that economic growth could have happened more incrementally. As it was, those earlier gains of the post war era were quickly captured and consequently expressed in hard and fast rules that everyone was expected to live by, even when personal income didn't match the realities. Over time, the finance capture that resulted from those regulatory definitions, slowly began to exacerbate actual differences in income levels, as well.

Had nominal targeting existed all along, more efficient, affordable and innovative housing options for both lower and upper incomes might have been just one of the positive results. Potential suppliers, knowing full well that income realities needed to be taken into consideration in overall context, might have been more inclined to build for the markets which actually existed, instead of being unrealistic by competing, building and zoning for the subsets they preferred. All too often, the kind of low tech construction which should have served primarily as "I don't have to be practical" signaling devices for relative wealth, instead came to define even the buildings that lower classes were expected to commit and sacrifice for.

To a considerable degree, inflation prior to the Great Moderation was created and maintained in terms of non tradable product (construction and services) not well matched to consumers at lower income levels. While neither of these product definitions have yet to experience any real reform, inflation has nonetheless been cancelled out by higher unemployment levels now called for to moderate aggregate demand. For instance, people who should have been able to experience ownership in more flexible and innovative terms, instead were expected to either maintain overwhelming definitions of ownership, or suffer the social stigma in the U.S. that was a result of renter status. Hard and fast definitions of economic gains from the mid twentieth century, also translated into high levels of inflation right up until the Great Moderation.

While there's no guarantee things could have been different, I like to think how it all might have played out, had consumers not been held hostage to what local economies ultimately decided to offer. There's simply no getting around the role which low efficiency lifestyle options played for inflation and subsequent limitations to hiring. In those years, municipalities chose to look past variances in income levels, and structure instead according to the market they wanted to cater to. For a long time, they were accommodated. However, a lack of accommodation now still rests on the earlier hard definitions which caused such inflationary problems in the first place.

When some worry about "runaway inflation" in the present, they miss the reality that the conditions which created this particular form of inflation are long past, for the perimeters of wealth capture - as they presented themselves in a time of economic growth - were quickly taken advantage of in non incremental ways (no consideration for nominal targeting), almost as soon as they presented themselves. In other words, real growth of the present not only needs to take place in different terms, but with different perimeters altogether. And, once it does, it will probably not be as amenable to capture by finance as it was in the past. Not only will people have a better idea what is actually possible to achieve with income, they will be more apt to consider income in a total context of economic possibilities as well.

Tuesday, July 30, 2013

Wealth - How Do We "Hold" It?

Some of the confusion re appropriate monetary policy can be traced to difficulties in deciphering what wealth actually represents. What is most important - the "action" itself or the environments where economic activity take place? Today, different strategies also reflect differing societal opinions as to the purpose of the GDP measure in this regard. Where credit, savings and their associated interest rates tend to emphasize passive aspects of the environment, the corresponding nominal targeting efforts of central banking emphasize active and ongoing components of the economy. When finance takes too much of ongoing economic activity into its own domain, the delicate balance between environment and activity of the environment becomes disrupted and nominal targeting tends to take the hardest hit.

A fortunate aspect of the (recent) twentieth century definition of money measurement (GDP) is the philosophical intent behind it, in spite of distortions in capital formation which can stand in the way of its actual dynamic purpose. In fact, a primary problem whenever economic activity becomes centralized, is the degree to which centralization takes away the experience that money measurement attempts to capture in time between economic actors. Centralization - especially where it is not actually needed for economies of scale, takes away from the processes of diffusion which are most capable of creating monetary velocity.

Mass production allowed extensive economic diffusion through a significant portion of society - until recently - in developed countries. In other words, peak forms of production created their own positive forms of decentralization, when a majority of society could participate in the most active parts of the economic experience. However, increased services associated with greater production, gradually became bogged down in static and centralized wealth formations. Unfortunately, too many knowledge based components inadvertently became "sticky" by definition.

In other words, knowledge use over time lost some of its capacity to be used as flexible and interchangeable components in dialogue, mediation and formulation settings between disciplines. What's more, knowledge use has increasingly been limited within specific disciplines themselves. By way of comparison, components of resource use in factory and other production settings were not really as limited by definitional status of use until more recently, as components gradually came to involve more knowledge use elements.  Earlier divisions of labor in factory settings were somewhat misread as not being of a free nature in terms of choice. But in a sense, it was divisions of labor in knowledge use settings which actually suffered the greatest loss of economic freedoms, a loss which has also translated into the economic gridlock of patent issues in the present.

Previous peaks - for mass production utilization in developed countries - gave us active elements of the monetary base representative of individual capacity. The problem for us now is that because of growing issues with knowledge use limitations and services definitions, diffusion has become more centralized and dependent on passive wealth holdings. Sufficient activity may appear measurable, but the lack of velocity indicates a lack of participation from the same wide range of actors on monetary terms. Because we have previously funded and purchased services primarily through more concrete forms of wealth definition, the first impulse is to continue doing so. The effect however, means we are still trying to get at greater diffusion by way of the path that created less diffusion we have already taken which had already centralized more monetary activity .

In a sense, losing our "religion" for economic dynamism in the present is a return to full circle, where present day thoughts of a gold standard are more associated with static formations of wealth holdings, and less associated with the experiential spark of daily economic activity. What, then, of the market fluctuations of Wall Street? Yes there is still an experiential element which represents ongoing and active economic activity, that continues to create new ideas of product. On Main Street, there is still of course a circumscribed quantity of retail that reflects this. In the midst of it all, people struggle to overcome regulatory hurdles for even the most basic elements of daily provisions.

Even though much of today's passive wealth holdings can be at times discouraging, at least they serve to protect the definition of measure which is really built for more active and direct forms of economic activity. One of the primary problems of these passive holdings is the fact they don't create the same kind of economic diffusion and monetary velocity into overall populations that recently existed. While these measures show up as extreme variances in income, they are also brought on to a large degree by the fact that many services cannot be tapped into efficiently and directly. Thus multiple savings devices are intended for additional services expenses at some point in the future, rather than providing additional investment for active use now.

The ways in which we think about services and skills use in the near future will also have a big effect on how we think about the definition of money itself - a definition which is by no means static. Whether or not we have access greatly depends on how we think about holding wealth as well. The definitions society attaches to economic access ultimately translate into the systems we use to accommodate and direct money use.

Economic dynamism can in fact be recaptured, but new definitions of value in use need to be incorporated, in order for that to happen. In other words we could create new highways for knowledge and skills use, with new points of economic entry and departure that are organized for maximum participation. Much about nominal targeting growth levels also depends on the degree to which services are diffused through society, and whether decentralization is allowed to once again be an important element of wealth creation.

Monday, July 29, 2013

Just Some Thoughts on a Summer's Day...

In terms of monetary policy and economic reality in general, we live in "interesting times" as it has often been termed. Of course the flip side of "stimulating" can also be - depending on the day and one's frame of mind - nerve wracking as well! At the very least, there is little about the present that could be called boring, for the challenges of the moment are numerous and at times overwhelming. That is especially true in the "dog days" of summer, when the heat can take a toll on one's ability to concentrate. Certainly if I were younger, I'd be at the beach right now, for the ocean always was the best place for a swim...Recently, Matt Yglesias said that summer vacation is a evil thing and until I read his post I thought he was kidding, but not at all as it turned out.

The argument Yglesias raised in that post of course makes sense. Low income students can really fall behind, when it comes to learning loss for three months straight. Their lack of structured time in summer months often stands in sharp contrast to over structured time on the part of other students. However there are a number of approaches communities can take in the future for lower income, who don't have access to the same kinds of learning tools as the rich. Not only can communities structure year round learning on a more flexible basis, they can do so in ways that leave plenty of time so that students would also have a "life" that goes well beyond today's formalities of schooling. Plus, flexible and voluntary arrangements on the part of community can mean that low income need not be left out when it comes to learning options, anytime.

Scott Sumner's recent paper for Mercatus is incredibly helpful for understanding what he has been able to put together in terms of futures markets - or as he indicated, what is really a potential for prediction markets. And, in his words, "The most important problem in monetary economics is stabilizing the medium of account." Indeed, while much of what the Fed did to stabilize housing prices was needed, the consequent distortions are evident, and Scott reminds us just how much has changed in a very recent timeframe: "Before 2008, when the Fed began paying interest on reserves, currency was nearly 99 percent of the monetary base."

For once, I was grateful for a solution this morning that was provided by a robot! When I realized the internet connection was down, I was dreading the call to the service provider because it took them several days the last time to get the connection straight again. This time when I called, the process was completely automated, the "robot" repaired the connection straightaway and I was back online. Of course at some point I know there'll be technical difficulties which will require talking to someone, but so far it's been great being able to post at least once a day with no interruptions.

Sunday, July 28, 2013

Paul Krugman, I'm A Bit Old To Be Building Bridges

Paul Krugman,

Have you given up on unemployed individuals such as myself? To be sure, that's what it sounds like in your observations: especially when I hear that education and infrastructure - as backed by government fiscal policies - are the rational way forward and anything else (i.e. monetary) is a distant second best. However and more importantly: even if government were to immediately commit to these understandable goals in a serious way, there's little in in that "grab bag" of focused effort which would ultimately help the long term unemployed.

Education, as great as it is and I'm possibly the biggest promoter of all - is nonetheless about wanting the promise (grade and high school), investing whatever it takes ("helping" the economy) to get the promise...making ourselves ready to participate in the promise. And infrastructure is supposedly about our transportation to the promise...but where is the promise itself, i.e. that place where we are all actually free to utilize the knowledge and resources which we and our government made such serious commitments to already? Wasn't the promise also supposed to exist just on the other side of the bridges we have endeavored to build? What exactly does that implied paradise, er, promise consist of, even after we continue spending mountains of wealth to find it? Robots certainly aren't taking the promise away from us for we're not paying them to use their minds.

For a long time I never really thought it was necessary to address you concerning this matter. After all, plenty of other individuals in recent years have done so quite eloquently, and you have seldom failed to respond. At times, I have even tried to encourage patience amongst my own, when you purposely irritated Market Monetarists who disagreed with your economic and political solutions. However now, it is my turn to be in need of patience, because - even though you know how nominal targeting could help, you're not happy about it. Like so many, a significant part of you would almost prefer no growth at all, than to admit that someone could have a more inclusive path to get there than the one you still espouse.

All talk of infrastructure aside, I think that deep down, you know a lot of us are a bit old now to be building bridges. While I do not have the education you have, let alone the level of intelligence, anyone who is in their fifties and long term unemployed such as myself has had a lot of time to think about these matters just the same. I understand your need to have government do the "heavy lifting" when it comes to unemployment and planned growth.

But it's not just the fact that these processes bogged down completely in Washington. Austerians come in many guises, as many on the left and right in recent decades now wish to limit growth to what already exists -  something the desire for continued inflation targeting all around certainly reflects. Just the same, these desires for economic sanity are not exactly playing out the way that a lot of folk actually envisioned, and as a result they are gradually playing straight into the plans of the hard right. Unfortunately the possible Fed appointment of Larry Summers would likely exacerbate resignation and a general disbelief in continued progress.

Even though these economic circumstance are far from the level of the Great Depression, consider how they are similar and yet demographically different. People didn't live as long as they do now. Plus, those the age of today's Baby Boomers with no economic access were often more likely to have familial options. Believe me, I would take the remaining hard work options if I still could, and if I had the resources to get to where I might actually be able to find said work and then support myself. But because my body failed me once when I tried to do too much hard physical labor; and because of the setback of a subsequent surgery which put me in bankruptcy, I have to be more cautious now about the jobs involving hard physical labor which I still would get "on the road" yet again, to find. And everyone knows that's what more and more people are expected to take now, especially if they did not complete their college degree.

Think back, to what so many from our time frame here in the U.S. were actually encouraged to believe, when we were young. Remember? We were convinced that if we just tried hard enough, we could have it all. In fact, we didn't have too much doubt about that expected prosperous future and pretty much took it for granted...nor did it have to measure up to someone else's definition. And in spite of the stumbles and mistakes which people such as myself made, I still didn't think I would ever have to worry all that much about having a good life into old age...let alone have to worry about survival, which has been very much the case.

Just the same, we all thought we would coast to the finish line by a method which is fizzling out sooner than expected - that is - separating too much of the work of the mind from the work of the body, and yet somehow expecting society to remain in balance. That's the way as a society we inadvertently segmented it all out, and consequently why we even have reason to be so freaking concerned about the robots now. Government was supposedly able to take care of those on the losing end. We either were fortunate enough to gain work in our lives that allowed us to utilize our minds and optimal skill levels, or we were not. In other words, we either won in the game of life, or we lost. Except, it's getting a lot harder now to segment it all out, which still means paying the carrying costs for the losers or the prisoners.

To be sure, those such as yourself who "won" in terms of being able to utilize knowledge, couldn't really know the degree that would hurt the rest of of us who were trying to make our offers around the margins...this time. Even in the Depression years, more people still worked the land, more women stayed at home. Not only were employment provisions as government considerations back then geared towards the young, they tended to be conceived in low skilled terms, so as not to compete with what already existed in the marketplace. Any work or government compensation would strive for the same low skills sets now, yet there would still be complaints of taking work away from others who "deserve" it more.

Now, with government commitments steadily growing to the older citizens of society, there is little room left for such undertakings as those of the depression years, even if society could actually agree on the projects that would provide the best benefit for all. You understandably still want government to be able to reach out to the "forgotten" ones who didn't gain that precious right to utilize knowledge in the same ways - often the same ones whose hopes were raised by their teachers. But not only has it become more difficult for government to do so, the kinds of blue collar work that once made it so easy to separate mental and physical work, are disappearing in front of our eyes.

If nothing is done: that is, if we do not take the knowledge we so highly value and find ways for all of us to access and utilize it to help one another well into our golden years, those on the hard right simply wait for their opportunity to take matters into their own hands. Should that happen, we would lose the right to keep the valuations for knowledge use that it actually holds for us, as some knowledge would simply be discarded and other portions claimed for the rich. Never forget that this is part of the common ground that every Keynesian holds with Market Monetarists, in that Market Monetarists seek to allow money to represent the individual and the capacity he or she actually holds. The more you disparage and ridicule them, the more our valuations and estimations of knowledge use will continue to be threatened for the long run.

I know that none of this is easy to hear. Having to look closely at what actually causes unemployment feels like staring into the face of the sun. On the bright side, it helps to remember that no society which utilizes knowledge directly in the course of ongoing economic activities need experience unemployment. After all, unemployment is a long thread that winds all the way back to the very ways in which we organize our economic lives. The biggest part of our inequality, economic instability and unemployment is due to extreme limitations in knowledge use amongst individuals. That in turn, is now causing us to abandon vitally needed services at collective levels. People find themselves isolated from primary knowledge use centers: not only are individual valuations short-circuited, but also the value sets of those cities and towns which also are left out of vital knowledge loops.

And yet, when people are brought up with a digital reality in which knowledge is seemingly everywhere, real life in this regard comes to feel as though a cruel joke. Knowledge use, when limited to an extractive element intended primarily for institutional profit, will never allow full employment - let alone the employment that people dream of - unless scarce resources are utilized extensively in production. And the extensive production of those often scarce resources are the very component which many on the right and left seek to cut back in the present.

So before there is any more talk about education and infrastructure, consider the people who already need - in this present lifetime - to utilize knowledge amongst themselves...who need to realistically help themselves and find new forms of economic exchange in the process. Insistence on isolating them even further with arbitrary caps on economic growth of all kinds, only makes things worse. Allow each individual to be a part of knowledge use, and allow each individual to be a part of monetary representation through nominal targeting, instead of forcing economic activity to languish on government dictates that cannot possibly take the considerations of countless isolated people into account. Just give people a chance to help themselves, and allow them the monetary means to do so.

Becky Hargrove
(Market Monetarist)

Saturday, July 27, 2013

When Does Work "Want" To Be Experiential?

There are so many aspects to what we consider vital work in the first place, and I felt it would be helpful to spend a bit of time breaking them down. For instance, we may not always need to "save" certain forms of work (for posterity) where technology can perform those functions well, and we don't actually miss those functions in any vital capacity other than the monetary reimbursement itself. Or, we enjoy the functions but don't want to have to do them at the breakneck pace that innovation in large scale agriculture, for instance, seeks to remedy. I became more grateful for large scale agriculture after the occasionally pleasant toil in gardens - which at times - mostly provided bird, mammal and insect feasts!

The work we enjoy (and also find necessary) that isn't always available in the traditional sense of salary, can not only be apportioned by equal time but it can be envisioned in ways that lets everyone participate. Of course we don't need equal time measure (arbitrage) for work that anyone is willing to do directly (i.e. without skills arbitrage) for money, that robots are not already doing. Also to consider: When does the experience element we value lead to product outside ourselves, and when does it simply affect relationship dynamics amongst ourselves? That matters, even if we don't presently think of it in terms measureable by money.

There's the work we need, the work we desire, "busy work" to keep from having to think or which helps us think, the work we are willing to do and that which we also have to do. There's the work we're happiest doing ourselves, and the work we actually benefit from doing with others, which is what this post seeks to get at today. And - of course - there's the work which in the bigger picture sometimes seems a bit silly, in that it may exist mostly to capture profit and little else!

However there's a lot to be said for capturing profits and under any circumstances, that's how we generate dynamism in the first place. It doesn't really help to "rain" on the profits parade, tempting though it may be (and "distorted' though the profits may seem), without a clear understanding how we might capture the experiential work we want through more rational means. Plus, we want to do so in ways which continue to allow profits. After all, it is the profits which generate further economic choices on our part, and continued momentum for the process itself.

Presently, people are engaged in a struggle as to whether or not many jobs might eventually "go away". To a degree, this depends on whether we're willing to get at the core of what we actually want out of work. What work is experiential, and why does it matter? The work that matters in this regard, is especially the commons of knowledge use which we want to preserve.

While we often think of commons in terms of resources outside ourselves, we are also capable of creating a knowledge use commons wherever we structure work in equal time. Value in exchange is certainly here (profit as driver of further choice), but we can structure value in use (skills arbitrage) as a prior to best capture the value in exchange dynamic. When work "wants" to be experiential that in fact benefits us, for we can think how it would be structured, recorded and measured through knowledge commons. Equal time use also allows us to take advantage locally of the wealth of knowledge now being spread through the digital realm, in real time.

In a recent post titled "Spontaneous Order is More Than Markets", Don Boudreaux of CafĂ© Hayek points to two authors with books related to this subject. If you have time, check out the "Glory of the Commons" link. And of course, I'm always glad when Elinor Ostrom gets a mention. But it was this unexpected quote from Hayek, that my recent post about families and economic dynamism seemed to echo:
Part of our present difficulty is that we must constantly adjust our lives, our thoughts, and our emotions, in order to live simultaneously within the different kinds of orders according to different rules. If we were to apply the unmodified, uncurbed, rules of the micro cosmos (i.e. the small band or troop, or say our families) to the macro-cosmos (our wider civilization) as our instincts and sentimental yearnings often make us wish to do, we would destroy it. Yet if we were always to apply the rules of the extended order to our more intimate groupings, we would crush them. So we must learn to live in two sorts of worlds at once.
...And yet those two worlds are often forgotten (or defended in the wrong terms), as people struggle for a single economic world that is rapidly falling away. Few are yet prepared to face the workplace as it has increasingly become defined. While some have spoken of spreading the ownership of capital, we no longer live in the kind of world that thought process seemed to symbolize. The real issue in this regard are separations of working classes which are no longer possible in terms held until only recently, and I will address that in my next post. Now, back to the main subject!

One of the primary things people like about work is its experiential characteristics, something which no robot even needs to have, in spite of what science fiction may continue to imagine. What we have to consider: even though people want much out of work that is not necessarily experiential, this factor makes the work feel important enough that we attach it to our identity, and consequently make room for it in our lives.

A simple way to explain this and I recall an example where someone walked away from a great salary: not everyone is capable of getting up in the morning and going through the required ritual, only to be hidden away all day long doing grunt work and having no one around to speak to. Note to progressives - no one should have to either, even if we want to continue rewarding them handsomely for doing so...out of guilt, perhaps, for the good fortune and pleasure of the lifelong knowledge job?

Even so, we have to be careful about the experiential element of work being lost to a greater degree in the present, because our reliance on a resource rich world to continue funding experiential elements in a collective sense is now being brought into question. Not addressing the issue only means even more experiential work will be lost. How do we think about this?

Part of this discussion goes back to the choices people might actually want to make with one another in a system of equal time measure, which I feel presents viable options to further knowledge based growth from the technological advances of the present. Just the same, the question of experiential work remains important in a larger sense as well, in that budget choices continue to be made now which - when people don't really think about it - they wake up one morning to find that the work they deemed meaningful has been "downgraded" in some not quite quantifiable sense. The dreaded word "efficiency" includes negating experience elements, and people may be compelled to rationalize that personal experiences are not really important.

In healthcare terms - for instance - it is often quite clear when the value in exchange paradigm that demands "results" runs headlong into the experiential element, which may not provide a concrete perimeter to shift expectation levels. What we feel about the experience in this circumstance may become separate from the experience itself. A patient with a chronic condition for instance which is worsening, reaches a point where it's hard to seek a doctor yet again, in the knowing that more expensive tests will be done, more prognosis (or not), more of the same "result" - blood test or whatever, that does not change the significance of the overall issue.

If we were going to do something different in terms of this example, what would it be? Of course a doctor or nurse with a good bedside manner always helps. But the bigger issue is that this described circumstance - which is rapidly running into diminishing returns - is bleeding money all the while at a frightening rate. What a person really needs when they reach this point is something that allows them to make peace with the process itself, rather than a frantic and expensive denial that perhaps delays the inevitable for a little while longer. Also, think about the actual measure nations do for longevity that is part of the prolonging itself. What gets left out is the time shared element which might give a person reason to live longer, in the first place.

Much of the experiential element in any circumstance is simply dialogue. What's more, there are many circumstances in the workplace when additional dialogue is not even really necessary. That's especially true when what we need is a concrete result that benefits from action to get the needed result quickly. Just the same, healthcare in many respects is a far more subjective environment than most that adhere to specific product. Yet it has increasingly put a stop to the kinds of dialogue that might help individuals outside the healthcare environment itself. When we are in reasonably good shape, we can learn how to take care of ourselves on our own, but when we reach a certain point, we need the shared space of time to validate our own concerns that only one on one time with other individuals can provide.

The degree of validation we need from others in one on one time varies, and is dependent on what we actually want to accomplish - is it a matter of understanding a broader aspect of life, or is it something as seemingly simple as some technological quirk that goes right over our head? Even the process of asking for help - when we can't find or figure out online directions - depends on whether we want to know the solution or answer for future reference. Or, is finding that tech answer what we need in just a one time situation, for instance.

For the most part we don't really think about economic activity in terms of individual to individual assistance, even though we struggle with that part of life on a consistent basis. We learned a long time ago not to think of our own person to person concerns as economic. Just the same, that's the part of our lives that we need to reclaim, and not just for the supposedly "feel-good" reasons that of course automatically suggest themselves. Plus, we shouldn't have to feel bad about that aspect anyway. We also need to reclaim person to person assistance for our economic lives for practical reasons: some days we just can't figure out the online answer when no one else is around who can help.

Fortunately, we are able to take many aspects of validation, confirmation and questioning of our own thoughts online, and this post is certainly not to diminish that tremendous benefit. The problem for us is that we also need to be able to express these vital elements of our lives both economically and with others in concrete ways, especially at local levels where arbitrary divisions have often left us unexpectedly powerless to help one another in economic terms. It really is a coordination problem, but not just in terms of coordinating what already is. We also need to coordinate what we in fact, do not want to lose from our lives.

P.S. I apologize for the extra length today! This subject was originally intended for two posts, but an important issue came up in the midst of this undertaking that I wanted to address sooner, rather than later, in the next post.

Friday, July 26, 2013

Simple Laws Needed: Economic Demand, Legal Complexity

What comes to mind in terms of unnecessary complexity? New laws layered on top of existing laws top the list. However, the fact that they often mean additional monies for the attorneys, policymakers, businesses, special interests and governments that create them, makes needless complexity an irresistible source of income for all concerned. When old laws never get "weeded out" the ability of lower income levels to comply with them is undermined: a process which has now worked its way up the income ladder to the middle classes. In a sense, excess laws are like an old car which needs multiple times the gas it once needed just to get down the road. And yet, people wonder why there is so little "gas" left over for job creation or a growing economy, when the Fed already has to print so much money.

But how to convince anyone in power that a real economic rescue requires simpler rules of operation in the first place? One major reason nominal targeting does not always gain traction, for instance: people might not really want something "simple" which would reduce the salaries, benefits, arguments and obfuscations of complexity. Plus, some in power just want to "lose" the laws that slow them down, so this not-so-pleasant aspect of simplicity is an understandable fear. Even so, multiple unnecessary laws are a flood that is lapping away at ever more doors of economic access.

In legal terms, there is a unique kind of demand which can scarcely wait any longer. Those with low income salaries have to gain better ways to make one's way through life, and the laws that slow down a middle class often stop them in their tracks.  What's more, people of all walks of life need simpler forms of legal recourse in secular terms. Or, to put it a bit more bluntly, separation of religion and state requires real economic integration of all income classes with legal backing, in order to hold up for the long run.

Today's rigid contractual arrangements in building requirements and job descriptions are not just a problem in terms of sticky wages, by any means. They also make it extremely difficult for low income individuals to commit to relationships of either the personal or financial kind. Whereas legal arrangements are still negotiable for those with greater income, lower incomes need incremental and flexible ownership provisions that allow individuals a fighting chance whenever they fail in their endeavor. Such guidelines could readily become a part of a simple legal network of which individuals could also learn the components and participate in as well.

Paradoxically, of course, people with higher income might look at a simple "rescue" legal system and find it preferable to an unnecessarily complex system...but then such a reaction probably has some real bearing as to why solutions for better economic access have not already been explored in depth. Those with higher wages simply cross their fingers and hope they too will not be undone by unnecessary complexity. What civilizations forget are the openings this approach eventually leaves, for "simpler" solutions which would never have been anyone's first choice.

If this is indeed so, it might be one reason why middle classes have not already given lower classes a means to help themselves. Even though few have time to defend low income groups now, some still have the time to chastise lower income groups for not "helping themselves" just the same. A prime reason for today's extremes in income is the fact that it's become easier to push classes apart, than to integrate them in the complexity of today's laws. Simpler laws would allow lower income to reintegrate on terms that would help not just them, but also society as a whole.

In other words, if governments could get over the audacity of the idea, citizens who are actually capable of helping themselves would also allow governments to better appropriate money for resources which are actually scarce in the first place, instead of building GDP off of legal B.S. and rewards to favored services constituencies. What's more, by sharing knowledge work with practical work, said citizens could help in the decision making processes for scarce resources and we could essentially scale back on the carnival acts of Washington hot shots who insist they want to scale back on needed services instead.

Simple laws would also acknowledge that low income folk need to be able to utilize their skills capacity for one another as a first response, and money for resource generation as a second response. While that approach starts out in basic ways, it can eventually add far more than basic economic measures in a structural sense. Over time, greater growth in GDP would be a result from coordinated activities for skills use time, instead of the somewhat backward approach of residual monies for services from resource use and redistribution in the traditional economy.

Value in use coordination at equal time points also creates a legal door for economic activity which otherwise might not have a chance for implementation, in that traditional systems of unequal skills values cancel out existing skill sets of the present. Not only is downward pressure in skills use a problem for guaranteed wage and job structures and voluntary activities, it often forces them to remain as simplistic and low skilled as possible. Equal time use creates an entirely different dynamic and incentive structure. However - in its favor - it does not directly compete with unequal time use valuations, for one can't simply "choose" services options (between systems)  if they are not actively participating on multiple levels.

What participants can do with this simple system is essentially reverse the services process, so as to show how services can be utilized in central and primary fashion, rather than as a monetary afterthought which has to "beg" for monies just to get important activities done. In other words, as the system becomes more recognizable and useful, it provides more efficient means of knowledge use in a broad sense overall. Perhaps the most important element in all this is that important aspects of real demand can be added back to the system for service needs which - as much as they are desired, have frequently been given up on in the traditional economy.

Thursday, July 25, 2013

More On Local Demand, Part II

What does it mean to have different kinds of demand, depending on one's income level? A lot depends on lifestyle sorting options in general, which have tremendous effects on economic access and entry. For instance, there are already plenty of factors why younger generations may not choose to drive a car, in terms of the expenses it adds to their lives which really add up at the margin. One apt example of access block turns up in a study which goes well beyond the marginal aspects of choice that already exists for those with low incomes. As it turns out, some insurance companies are charging people more for car insurance just because they have less income to begin with, as indicated by education levels.

For any new readers, posts along these lines are about my stubborn belief that tremendous growth continues to be possible in the future - it just needs to be envisioned in different terms. One reason society has come upon its supposed "limits to growth" is the way it has tried to define it. In many ways, recession is about the people who are expected to live by those rigid definitions and struggle to do so. Monetary policies are made all the more difficult, whenever consequent lack of belief in growth translates into struggles over monetary stability for populations just when they need it the most.

Some, of course, believe we are reaching the end of growth. It seemed to be taken as a "given" in a paper, highlighted at this recent Livio Di Matteo post at WCI, "Does the End of Growth Mean the Rise of Inequality?" The first commenter asked, "Does the rise of inequality mean the end of growth?" Indeed, the phrasing on the part of the commenter is my take on "the big picture", as well. Plenty of economic forces want growth to stop if it doesn't follow the terms by which it has already been created, and so far they are getting their way.

Therefore, the answer - as to whether growth continues - depends on us and not some abstract entity elsewhere. It all comes down to this: We have to focus more on creating economic product in both value in use and exchange terms which actually includes us, rather than excluding as many as possible just to define what wealth is supposed to be about. Also, value in use frameworks are still economic when they impart multiple sets of supply and demand side options, as opposed to voluntary services between family, friends and non profits in general. There is potential for growth everywhere, but we're not going to get it, trying to demand that it happen on the outdated terms and definitions and price ranges of the rich that have caused today's sticky wages. Unfortunately, renewed dialogue as to "effective demand" is not realistic, as it accepts the previous baseline of wealth definition as appropriate for all income levels.

While we're on the subject of demand - albeit in a somewhat unorganized fashion - here's one of the articles which started my thought processes for the last two posts (first post here). At Project Syndicate, Edward Yung ("Silicon Valley or Demand Mountain") expresses what actually applies for many local economies:
Everyone wants to know how to build the next Silicon Valley: an innovation hub that draws talent and capital, and that creates jobs, companies and whole new industries.
He goes on to argue that consumer or market driven demand is less predictable, thus riskier than state-sponsored demand, therefore governments should bear the risk since they won't go "out of business" taking on the risk. Even though governments may be able to stay in operation, cutting corners to save money can be just as devastating in terms of risk. Spain is a recent example, as added risk was shifted to the passengers of the high speed train instead of the "bottom line", when a budget decision meant using older tracks not built for the high speed train in the first place.

Seriously, how much would the cost of new track have added to the budget? When money has to be spread in so many places that even the rationale for appropriate track gets thrown out the window, it is time to look closely at what we consider to represent wealth in the first place. And before we proceed, we need to ask everyone to the decision making table, which also means that presidents really need to take a break from "saving the middle class" nonsense in their speeches. The last post I read about this issue, someone put it well in the comment thread: "We need to rebuild the economy from the bottom up."

For instance, what is still vital for low income folk which they absolutely don't want to lose? One of the few things government does which is a lifesaver for lower income access: honest to goodness printed money we can actually hold in our hands. The reason this is so is that the cost of printing is all upfront, and transactions thereafter can be freely handled by the individual. That means a lot of positive potential economic activity between individuals which otherwise would not happen. Whereas captured processing fees for no good reason other than it's possible to do so, simply mean less economic activity at the margin, for anyone. Printed money truly helps low income individuals. Keep real money - it works!  Because when money is digitized, the temptation to add on unnecessary fees is just too great on the part of financial concerns, as any small businessperson knows who adopts credit card transactions processors for retail operations.

Those with low income have to choose between even the digital parts of life that are considered basic options. Parking on a nearby beach now is no longer free, but that's not the problem, for there are no parking meters to accept change. Several beachgoers spoke to the reporters, how people will need access to smartphones, internet and credit cards, just to be there. Clearly, value in use demand sets of the future will need to create mobility that doesn't lock people out, just because of their limitations in basic digital choices. An easy way to think about it is that in any local economy, people also need - through the use of their time - to be able to create all the knowledge use options that allow them to interact with one another and rely on trust mechanisms that are group or internally generated. That way, no one need pay additional for security or trust concerns, unless they simply desire to out of time based convenience.

Some take for granted that they can either travel or live where knowledge is sufficiently utilized. Just the same, not only does this limit the communities that participate in economic life, it limits the degree of knowledge based participation overall. By allowing knowledge to operate "in place" both individual and community are empowered, no matter one's personal mobility or income level. Equal time use is the key that unlocks our own ability to participate in experiential product.

Local economies would create new forms of experiential demand, through their own unique ability to capture both experience and memory. What's more, every community would have the capacity to give validation and geographic recognition to research, the written word and literature of all kinds. While some of this knowledge abundance is presently represented by today's internet, those not published in a traditional sense often face uncertain futures for their work. The commons which seems to belong to them becomes increasingly partitioned out to special and private interests. Communities could commit to knowledge domains and give them homes for the future, along with the greater representation and the participation of their citizens.

The most basic demands are those we can recreate, through our need to imprint our own experience into recognizable forms of economic reality. We also share a need to make trust and coordination something that also happens because we want them to happen, not just because we have the appropriate "wealth" to make it so.  Local economies can overcome their own limitations and arbitrary definitions of wealth, to make the possibilities of experiential product their own.

Wednesday, July 24, 2013

Local Demand Can Be Different From Global Demand

While this is true in both specific and relative terms, there are important aspects re demand in housing supply options which are increasingly coming onto the radar. This WSJ video relates the problems of first time homes buyers finding themselves priced out of the market in some instances. What gives - don't the local economies want the first time home buyers? Yes of course, but mostly if they fit the image which many local economies have bought into, as to what wealth "supposedly" looks like.

While that particular definition could still be a reality for local older citizens, it's a bit different for younger generations who may be taking jobs at a wage "reset" in educational options, or else accepting the industry standards for more readily available retail and lower end healthcare work options. Yes older workers remain in higher pay knowledge based services, but some of these positions (in their present formation) will face further cutbacks as the job holders retire.

This aspect of supply side options can at times be confusing. While the housing market is returning, that resurgence depends on income levels which can create a disconnect in the conversation itself. Here is Cardiff Garcia in a recent "how the econ blogosphere has changed my mind" post about being convinced by Karl Smith re the housing comeback:
Karl Smith started persuading me way back in early 2011 that there were demand-side pressures building up in the U.S. housing market that would be a welcome force pushing the U.S. recovery. I had previously assumed that housing would be a drag for much longer than it ultimately was, especially given the government's consistently weak efforts to help people in foreclosure and underwater homeowners. Karl and I both turned out to be a little too optimistic regarding the likelihood that these favorable pressures would overwhelm any supply side and credit obstacles, but I think his original predictions about the direct and tangible benefits of rebounding household formation remains correct and he was earlier to make this call than anyone I'm aware of.
As for Garcia's last observation, I would add that when it comes to housing, Bill McBride of Calculated Risk has always been a reliable source in terms of being a step or two "ahead of the game". However, I wanted to point out the fact that commenters such as myself gave Karl Smith a bit of "grief" as he made those forecasts in the earlier version of the Modeled Behavior blog! Some days it felt like the realtors versus the would be first time home buyers squaring off in the comments, with some insisting recovery wouldn't necessarily happen so readily, for people such as cited in the above WSJ video.

Again it's the income dynamic that makes the difference for uneven aspects of recovery, as this recent commentary (HT The Browser) suggests. Mmm, the link would not pick up for me either at The Browser (July 17th) or the original Slate site! Hopefully this article is still accessible. Alan Durning is the author of the article, "Bring Back Flophouses, Rooming Houses and Microapartments." His new book is "Unlocking Home: Three Keys to Affordable Communities".

Certainly there is no need to go too far in terms of  traditional homeownership, beyond those who remain well situated for today's market. Recent studies have highlighted the degree to which nations and regions can suffer when homeownership goes over a certain point. Just the same, the U.S. does not have the same kinds of options for renters that are available in some nations. Often, plenty of already existing communities which are doing well economically, want to keep local ownership to rental ratios close to what already exists. That's the reality which many local economies already need to address.

What's more, discussions of adding population density can only go so far in the cities which are seen as most desirable for working and living in the U.S. Better options by far include creating new value in use settings which include knowledge based services, walkable destinations and the kinds of livable factors that younger generations seek. Certainly, NIMBY measures are not just a feature of cities in the U.S. Still, they can be more pronounced here, because of a lack of existing value in use settings which would allow lifestyle options as one might find in some parts of the world.

In the twentieth century, value in use settings were inadvertently provisioned by government infrastructure measures that eventually paid off with value in exchange endeavor. However the interstate system which is the prime example, has now become aging infrastructure. Governments lack the budgets to maintain these roads, but also face real concerns as to the changing infrastructure needs of their own populations. Increasingly, the infrastructure a citizen really needs, depends on their income level and the kind of life they are actually trying to maintain.

The fact that people now live their lives in quite different ways depending on income is a big part of the uncertainty that governments face. Thus, it makes sense for lower income individuals to become a part of decision making processes as to their actual infrastructure needs. Such organized focus would allow this group to assist in the provisions for the value in use structures they need. These in turn, once implemented in understandable ways, can assist with renewed value in exchange activity for the long run. In the next post I'll look at some of the broader aspects of these possibilities.

Monetary Policy and Other Political Realities

How much does it really matter if Larry Summers takes Ben Bernanke's place? For me, it matters quite a lot on any number of levels and something about Larry Summers feels like a backward step even in a cultural sense. On the one hand it seems reassuring to think, well at least the position is only a four year appointment. But the reality is that most appointees stay there a lot longer than four years, and consequently may exert great influence on monetary matters around the world.

But here's the interesting part: how much of that influence arises as much from the often conservative board members who have the longer appointments? Below is a quote from Vivian Darkbloom in comments at a recent post by Scott Sumner. She questions the degree of control the Fed Chairman actually has, even as she agrees that Larry Summers is likely not an ideal pick for the job:
Federal Reserve Board members are appointed for a 14 year term and, like federal judges, they are pretty difficult to remove. The Chairman might have some ability to persuade and form consensus in these collegiate bodies, but in practice, it appears that the Chairman's publicly stated views might be as much shaped by the need to be consistent with the consensus of members than are the views and votes of other members shaped by the desire to be consistent with the Chairman. 
What this suggests is the degree to which local and regional politics and economic scenarios also play in political realities of national influence. Whoever gains this vital appointment will need to contend with entrenched ideas as to a general slowdown in growth, and what that "supposedly" means for policy implications. Even though Larry Summers has a forceful personality to say the least, there is still a likelihood that he shares the same limitations to growth philosophy which many conservatives and other inflation fear mongers now hold, especially as regards his present lack of concern regarding monetary stimulus.

All the more reason to continue efforts at local levels to redefine growth well into the future. Otherwise, the trajectory by national consensus does not appear to be inclined in that direction, any time soon.  Plenty of lives and economic realities are on the line. The prospect of someone such as Larry Summers at the helm is one of the main reasons Market Monetarists such as myself blog in the first place.

Update: From a prescient speech given by Janet Yellen, in 2007. This link is also an interesting take on the idea of Larry Summers getting the job.

Tuesday, July 23, 2013

Optimal Time Use and Other Mysteries of Life

After three months of blogging I am starting to get a rhythm as to the process itself - one that is also indicative of the twists and turns my mind sometimes has to cycle through before hitting the publish button! Even though I generally complete the post that gets started, occasionally it does have to restart from scratch. Can't help but wonder - had I gone into the kind of teaching at a young age that required a daily plan (rather than teaching piano students from "backlog" memory) would thinking and writing processes be easier for me now?

Even though I know my present efforts re writing are an optimal way to spend my time, decades passed before I really became convinced, in spite of a nagging certainty underneath it all. Plus, in at least one important juncture, I wasn't the only one "on the premises" questioning the rational for writing as committed endeavor!  So like many, I mostly stayed with the practical mindset of work conditions which meant not needing to think about the larger concerns people face every day.

When our institutions work reasonably well, they do us "right" in that they save us from having to find answers for the kinds of questions which have no ready answer. They save us from having to wonder how exactly we would coordinate our time with one another, if in fact our institutions are not already attempting to coordinate our time for us. The problem comes when too many get left out of the coordination process altogether, as now. However, when my mind just feels "tired" on a hot summer day, I can't help but wish sometimes that our institutions still worked better!

Often in the course of putting together a post, I'm able to find some links that contribute to the process. But this time, some of the above musings were brought on by a link which - instead of providing something to reinforce my own thoughts, mostly presented me with more questions. Even as I encourage finding social and economic connections outside of institutions, ongoing examples from the developing world highlight how difficult that can be to accomplish. Just the same, Atul Gawande has written an excellent article for The New Yorker and it is definitely worth reading. He begins with this thought: Some ideas spread fast. How can we help the ones which don't, to spread faster? Shane Parrish at Farnam Street also references a useful video in his thoughts on Gawande's article.

It's all the more confusing that useful ideas don't readily take, in that the digital means certainly exist for people to "get the word out". But getting the word out has little to do with what actually counts inside of present day institutional processes. Often we don't know how to proceed, or societally evolve when such a need arises - because it's just not clear how to negotiate with others for desired ends which would make sense to everyone involved at an intuitive level. Sure, we often go ahead anyway with what we want for ourselves. But whether that adds to our own ultimate ability to survive - or that of anyone else - are not necessarily the same thing. Even in the midst of recovery, problems concerning Detroit - given discussions over recent bankruptcy measures - keep issues such as this uppermost in our minds. Detroit also serves as a reminder that - in some ways - the economic struggle for portions of developed countries are not really all that different from developing countries.

Again I had some suspicion from the earliest days of this project, how similarities might exist in problem solving measures that could apply to many nations. For one thing, developing nations often have to pick up at the economic level where the developed country "left off" and move forward from there. Sometimes the difference in social response shows up primarily as one of intensity: are people fighting one another in the streets? Or are they hiding away in their houses or rooms (especially youth in some countries) because they don't quite know how to come out and find ways to actually live amongst one another productively and peacefully. We have gone far too long, not giving enough thought to what happens to people who have few productive or rewarding options for their own time use.

For anyone experiencing such difficulty with time use situations in their youth, how can it possibly get easier as they age? Two elements especially matter. In an individual sense, we need to be able to utilize time in ways that don't run completely counter to our most basic desires and yet still capable of providing a "living". And in a societal sense, we need to approach time use in the long run so that society can still move forward, instead of being set back. What's more, we are discovering how hard it is to just randomly drop elements of knowledge and information into our environments, all the while expecting said elements to coalesce in the "appropriate designations" (appropriate for whom?). Expected benefits of preventative care (through broadcast efforts) as supposedly capable of helping individual and institutional "bottom lines" of value in exchange activity, is but one unnerving example.

Part of today's uncertainty re evolution in educational product, are questions as to whether true economic gains can actually be harnessed simply by reducing costs of broadcasting through digital media. Even though people can utilize such information to their advantage, the broadcast method may not provide sufficient means to socialize or personalize the experience - or for that matter - bring the further suggested activity sets which education implies, to economic fruition. In other words, even educational improvements struggle from limits to growth issues, in terms of value in exchange parameters as currently defined.

While implied limitation certainly matters at a personal level, such lack of (ultimate) fruition on the part of education is vitally important at a collective level, as long as activities are "supposed" to take place in institutions which appear as though "full". What's more, there is still a rationalization in effect that society can't afford either the individualized attention people desire from one another for problem solving, or the economic "space" for the additional product (further) education is capable of creating. Also, unfortunately, there is a lack of incentive by individuals to believe in knowledge whose gains mostly appear to accrue elsewhere. Therefore, the digital broadcast knowledge which many institutions are presently willing to allow mostly works inside the institution, if in fact it works there.

The belief that little room exists for experiential and social person to person time, makes it difficult to move knowledge forward in patterns that a majority of citizens might actually recognize and act upon. Value in exchange is forced to reason that "slow" person to person time can't be part of the equation or solution, but that in turn makes knowledge transfer superficial. What matters is the way the experiential slow time aspect reinforces and deepens the mental reality that broadcast knowledge only touches upon. Such enhancement is most significant when it happens with guidance or direction, but not determination by an outside decision making process.

Sometimes our institutions fool us in this regard. They make us think we are free in our thoughts and actions, because they prioritized sets of actions that kept us from having to think about them until we actually need them. But this has impaired our individual ability to either negotiate for our needs or connect the dots between sets of economic options. So much of the process now lies outside ourselves that it's hard to think about the individual components as the collective whole they represent. What's more, the process has continued to devalue the knowledge skills component of decision making, in favor of hard and fast rules.

The fact that every situation deserves its own consideration has been all but forgotten. Pure value in exchange methods, efficient though they seem for present day wealth aggregation, continue to take chances on the long term by disallowing multiplicity in both societal adaptation and as many knowledge based options as possible, for solutions. When we try to rely solely in the efficiency of skills as defined by value in exchange, we are not able to preserve knowledge to the degree it is actually needed for a well functioning world.

Monday, July 22, 2013

Prescription? Simply Use As Needed

...In other words, even though I advocate for a right to heal on the part of all citizens, and for fully thought out responses to fragility in healthcare systems, I generally do so in value in use terms and not from a position of anger or any desire to disrupt today's value in exchange systems. Consequently I wish to apologize for the frustration I vented in two recent posts in that regard, which stemmed partially from being reminded that patients can't always receive adequate nutrition in hospital settings when they are in fact having a difficult time eating on their own. To be sure, when a hospital runs short on nutritional supplements, lipids and other forms of intravenous assistance, that is just one more reason for a patient to remain in home environments as long as possible, when they can at least try to continue eating something which is personally prepared for them.

This post also serves to highlight an older physician who made me aware - early on in my economic studies - of the degree to which our healthcare system was in fact fragile, long before Obama ever took office. I remember the day and the setting well, for it was one of the single days of the week that he - like so many doctors - was able to set aside for patients on Medicare, Medicaid, low income veterans and others on disability. There were so many that it always meant a very full schedule in the attempt to serve them all. It was clear that those patients meant a lot to him. Certainly he mattered to them as well, for people who were waiting that day in the hall brought little gifts and baked goods, some of which were already sitting on his desk.

He basically told me, "Don't ever take healthcare as you see it now, for granted. There are many kinds of potential disruptions which could mean that Medicare and Medicaid might not even be available at some point in the near future." I know that plenty of people would disagree with his words, and the point here is by no means to dissuade anyone. What I want to do is simply provide some real options for alternate organization, structure and service product framing, just in case his words should come to pass. In other words, many of the posts I write also serve as little "open as needed" boxes in the case of emergency. What's more these suggestions tend to be along the lines of value in use, or helping people find more meaningful ways to help themselves, than would be possible in ad hoc circumstances.

More importantly, it's not just this so-called "marginal" aspect of healthcare for older populations or lower income individuals that many physicians can't really afford to take on. Hardly any one would go to medical school now without "crunching the numbers" on the kind of  work that actually pays. Even so, specialists have much more leeway in this regard for Medicare reimbursements, than the general practitioners who have to limit their time with Medicare patients to less than ten minutes.

Just the same, the places where such pay may actually be lucrative (here in the U.S.) are already experiencing some overcrowding. Thus the specialist may find himself or herself limited to options which may not in fact cover both education plus ongoing business overhead costs. The result today is fewer individuals who are inclined to go into traditional healthcare, in spite of their desire to do so - at a time when physicians continue to be needed in many places of the world without the resources to pay for their expensive educations or consequent expected overhead. Plus, with political circumstances such as those that exist in the U.S., it's not hard to see where today's efforts to maintain current healthcare structures could readily backfire.

How to think about this scenario? For one thing, the possibility of doctors ending up driving taxi cabs is always real in fragile economies of all kinds. For the rest of this post, I want to focus on those who - if they in fact had means to do so - might reach out to one another across nations to help create value in use settings for healing. By so doing, much valuable knowledge could be preserved for future generations, even when nations lose the ability to use that knowledge through optimal value in exchange. Already, physicians who struggle to practice in places economically unstable, sometime find themselves either endangered or their services in a highly compromised position. The more of us who are prepared to heal when the need arises, the less a danger this may in fact remain.

Helping people help themselves in value in use scenarios, means doing so with the understanding that equal time measure be a part of the process. This allows coordination of knowledge and skills sets, free markets in group arbitrage, and just in time knowledge use across local service settings rather than transport to larger population centers. Plus, knowledge coordination by digital means is inexpensive, whereas transport can be expensive indeed. People can elect to gain knowledge skills based on the needs they observe, along with their desire to provide what they feel to actually be of use or gain. This in turn allows for more experiential aspects of healthcare product than are currently possible.

Plus, those who would be taught to heal in informal settings would do so in the understanding that they pose no threat to the customer base for the kinds of services that physicians provide to higher income individuals, who in fact are able to support their education and subsequent overhead. Just the same, these voluntary circumstances are far preferable to the two tier healthcare system that might otherwise result over time with Medicare, if in fact it could be preserved.

Who might wish to participate in such settings? Certainly there are physicians who are retired and yet still have plenty of energy for what could be a very hopeful endeavor. Potential for coordination of activities exists along a wide spectrum, which is not always included in normal healthcare scenarios. Others who might utilize a physician's approach to training would include doctors who have left practice for financial, family related, social or political reasons, or possibly due to licensing issues. Other possibilities include physicians working in non profit settings who would see this as a way to make greater use of healing in a larger sense.

As for those who might be considered for training, clearly first on the list would be people who don't have the money or resources to go to medical school, or may otherwise have been rejected. In some countries that are short on physicians, young people with clear potential in medical skills have also been encouraged and trained at a young age, in recent years. And then there are the physicians who are frustrated - of course - that they can only take so many Medicare patients in the course of a week, who might see a day or two of training for others as a more useful alternative for the long run. These are just some of the possibilities in the ultimate sense of a physicians' skills, but opportunities for healthcare knowledge preservation go well beyond the basic set suggested here.

Sunday, July 21, 2013

Imagination and Responsibility in an Incremental World

"The whole is greater than the sum of its parts."

In both monetary terms and life in general, these words from Aristotle certainly feel basic. Yet, what lies underneath this quote in terms of how we structure our economic realities? In a sense, the very thought is complexity itself. One reason this matters for the long run: optimal nominal targeting calls for incremental growth in level terms, and yet it also accounts for the individual to the whole in larger context as well.

While incremental growth sounds like the very epitome of rationality - especially in regard to individual aspiration - little room exists for incremental steps to either survivability or growth in any practical sense. Unfortunately, the same incremental growth which has the potential to provide economic stability, is no way to "make real money" for individual actors who understandably want to go as long on bets as possible, when risk factors are actually low to place substantial bets in the first place. The large bets that municipalities prefer to place on their growth potential - when possible to do so, are reflected in what takes place both nationally and globally.

Many municipalities set their zoning expectations and regulations based on what may generally appear as low risk options for their own in good times, only to remain stuck with what turns into "outsized" restrictions on economic options and access, when recession ultimately comes. Every time a city pulls the rung a bit higher, the ones existing just under the rung only look a bit more "scary". All of which translates into a literal "my way or the highway" for the residents of the city or town which tries to "discard" them. Or, the municipality possibly finds itself in dire straits trying to pay the ultimate price of bankruptcy, when its own aspirations finally are stretched beyond the capacity of its own citizens.

And of course, the more that citizens need mobility to find the "still affordable" city or town with job prospects, the more likely one's choice turns out to be an unfortunate figment of the imagination. Consequently we find ourselves in a reality we thought no longer existed: that of economic connection to the larger society by way of access to family and fortune, or not at all. What some don't realize is that this is not a problem so much of inequality or the one percent, as what we inadvertently do to ourselves by setting the bar so high for economic entry at every turn.

However, any "irrational exuberance" as to the "whole" aspect of the Aristotle quote, points not just to potential monetary gain in good times but a false sense of security in more difficult times. While some don't think twice about putting monetary policy on an arbitrary "hold", they still take for granted the productive good that can come from the collective efforts of a civilization. What's more, we are still very much reaping the benefits of countless efforts, especially those of recent centuries. Thus, there are strong economic environments even in the midst of weak, that seem not to be threated in the same sense at all. Unfortunately of course these tend to also be where policy makers reside and develop their primary worldviews (Larry Summers particularly comes to mind right now).

Even though economic coordination has become more difficult, it's hard for some to distinguish whether this feels like an anomaly in a larger sense: as some of the discussion in this Noah Smith post aptly covers, re his having been convinced by Tyler Cowen's reasoning of economic stagnation. As for the important aspects of stagnation, however, i.e. recognizing danger thus taking purposeful action: by no means is a "rational" response guaranteed, as this excerpt from "The Examined Life" by Stephen Grosz aptly illustrates (HT The Browser).

What does it even mean to "move towards the exits" in an economic sense, where such a rationale might apply? Because the issue is complex in some important ways, I find it helpful to break down into the most simplistic terms possible: not just for this post but in a larger sense. While the detailed particulars will doubtless continue to escape me (well into the future), I can still make two suggestions which seem capable of providing both continued growth and economic stability even in the face of complexity: leave room for incremental growth which utilizes a monetary nominal level targeting rule (in spite of all that tempting risk in the good times), and leave room for both the imagination and capacity of responsibility, on the part of every individual.

In other words, give people ways to survive in which they don't have to adhere every time to rules of access well over their heads. We can actually provide one another the means to live, in terms of both skills and resources, from what we already have and utilize right now. As to imagination, allow one's creative and problem solving nature to manifest, even if only at local and individual to individual levels where we actually are. By so doing, the whole need not be threatened by the sum of its individual parts being constantly expected to live beyond their actual capacity. What's more, that "future pre-decided" which the group Rush sang of, need not be the one sided "do or die" circumstance that local economies inadvertently made life to be.

Money operates in two dimensions. Not only does it need to represent the whole but it needs to have real meaning for the individual parts as well in order to continue functioning effectively. This is why it has to have actual meaning for the components of our hourly time - because in terms of income, that is often all we really have. Even though individual income can't break down into specific components of aggregate wealth, we still need for monetary links to have strong representation with our use of time. Otherwise, we can't conceive of responsibility in time based terms. In the present, those monetary links have broken down to such a degree that too many now think the use of their own time has little if anything to do with wealth creation at all. We need to make our time relevant to larger capital creation processes as well, for it to really count.

Restrictions that local economies impose on their citizens - over time - become the sticky wages, contractual arrangements and rigidities that we all end up struggling with in recessions and depressions. Invariably, generations end up paying for what were once rational temptations by earlier generations. We can reduce overall debt loads and "after the party" austerity measures over time, by refusing to give in to oversize terms of living at every step of life. It is the complexity of the parts of the whole, that make it impossible to know where to draw the line in terms of risk. That is why respectable "lower risk" choices always need to be an option, in as many parts of the world as possible.

Incremental growth in terms of knowledge and skills use, as well as resource requirements, are what we can offer one another to overcome the seeming limitations of austerity in the future. Our imaginations are always there for us to provide step by step patterns of building, creating, healing and maintaining by which we can help one another. By offering our services in the simple terms of the moment, there is less sacrifice of the kind that so often compels people to sue one another, in trying to live by contractual arrangements that are often so much larger than our own individual capacity.

The paradox is that when we create places where more people can actually coordinate their lives with one another, other places spring up which offer something similar...but then, that's a positive paradox. In such an environment everyone would also consume more and save less. But in service based terms? Nothing wrong with that at all, for services are meant to be utilized in the here and now.

Saturday, July 20, 2013

Labels Only Go So Far...

There have been several interesting posts as of late, re how people refer to themselves. In particular George Selgin's recent explanation as to why he doesn't call himself a libertarian, is worth reading...and serves as yet another reminder that the term libertarian is shorthand which only goes so far, if indeed it is even "useful" in my circumstance! (At the very least it's closer to an appropriate label for me, than Austrian) Early on in the process of discovering blogs some years back, I quickly learned that the more hardcore libertarian blog sites were not really "safe" to visit, given my viewpoints! The term "bleeding heart libertarian" didn't seem to fit, either. But by the same token, I have to be careful how I word arguments in comments on some of the more progressive sites which I visit - if indeed I'm capable of leaving a reasonably sympathetic comment at all - well at least I try.

So, how to categorize myself? Deep down I mostly feel like a liberal  - after all I started out that way and only felt "left behind" after I lost access to office work. That in turn prompted me to take a belated plunge into self employment, after which I chastised myself for not doing so much earlier in life when the opportunities for what I wanted to do would have been far more substantial. At any rate, the (resulting) bookstore saw its share of both conservative and liberal visitors, all of course welcome.

Certainly, I share the desire of any liberal (U.S. definition or otherwise) to have a world where knowledge use is a central aspect of wealth creation and organization. But just as I believe the conservative takes concrete forms of wealth too much for granted, I also have concerns that the progressive (Lars Christensen's preferred description and recent reference) takes knowledge wealth too much for granted in its present formation. I like Lars' reasoning as to using liberal by the older designation, and thus need to use the term "progressive" more often.

One area where I "part company" with liberal/progressives so to speak: their interpretation as to how a knowledge based job scenario might be maintained in society. One might find two arguments, the first that we just need government to "save" jobs and that robots should just be scaled back. Here my primary disagreement is that government can't save jobs just because it may "want" to do so. It's people at local levels who have to save respectable working arrangements for all concerned,  because they in fact want to.

Also I have issues with progressive interpretations as to efficiency, and in particular Noah Smith recently mused that economic scenarios as currently structured are relatively efficient. While I wildly disagree with that assertion, my reasoning might not make immediate sense to either conservatives or progressives. Again, this is not easy to explain in a single blog post, and is something I probably need to focus on more often. Inefficiencies have a lot to do with structural ideas of how our lives could - or should be organized. Consequently they involve definition of experiential product as well as value in use structures for societal organization, which affect the bigger picture. In other words, what appears as "ultimate" efficiencies we are supposedly utilizing in the present are often mostly static interpretations of how people actually want to live.

Part of what also makes me different from a traditional progressive: I no longer believe redistributive taxation can get us to either the desired state of services which Democrats believe in, or a "survivable" standard for low income. As to the latter, I believe this issue needs to be addressed through active and ongoing redefinition of product on multiple levels. What might I call myself with such an odd belief?? Who knows. I'm not sure if a bleg would help...mmm, probably shouldn't go there! Just the same, when we try to arbitrarily define product by completely obstructing potential innovation, the relevance of experience, and those deemed not "worthy" of participation, we aren't just holding back our minds: we are also holding back our destinies.

Suffice to say, the fact that I don't easily fit into a label requires a fair amount of explanation that doesn't come across in a blog post or two! For me, it's also a reminder of the years of playing music professionally, when there was never really an apt way to describe one's personal preference for categories, or the music an audience might expect to hear at any given moment.

In spite of their talk of freedom, some of the hardcore libertarians believe in concepts which strike me as profoundly unfree, in that they see little role for any societal coordination for common purposes. Often I come across wealth defined in static terms which don't seem a good fit for the lives of the younger generations in particular. My last post is a fairly good example why I am somewhat hard to categorize, in that my arguments for redefinition of services are - as far as I can tell - mostly my own. In particular, I wish to demean no one when I say that things need to be done differently, and perhaps that's when the "impartial economist" part of my nature really comes out - when I see something as profoundly inefficient or just simply not sustainable in its present form.

Whatever labels might be attached, I continue to hope that people can be freed by - and for - the marketplace of ideas. There seems to be an entire value in use economic realm just under the surface that people want to be able to tap into, which is discouraged and sometimes even outlawed altogether. On the other hand, there is much in the squabbles over the "real" values in exchange political models that go right over my head, and Scott Sumner's recent post as to having hippies for friends is no exception!

By the same token I am of course sympathetic to the neoliberal label, even if I have not personally spent enough time to consider the neoliberal concept in the historical or social context which it deserves. In the U.S. one doesn't really suffer the consequences of leaning neoliberal in the manner they might elsewhere, for instance. Also, even though I advocate for change, much of what concerns me in this regard is not so much in a complaining or agitating sense, but simply out of concern that we could lose some aspects of life which are very important to us.

Aaaaand, in the course of seeking out labels in the grouping I use to apply to the bottom of posts, there was only one which seemed to apply: Market Monetarist...till the next time!

Friday, July 19, 2013

Direct Democracy as a "Tool" For Healthcare Reform

Yes I can imagine readers shaking their heads already! This post is mostly about more "daydreams", but I really need them right now as anyone who read the last post might gather, given my present frustrations with the limitations of hospital systems. (I've also been in the somewhat odd position of having observed them up close regularly in the past decade, all the while knowing I don't really have the means to access them myself). In some capacity, whatever work we would choose for our lives, we still need to take some active part in healthcare provisions in and for the places we live, if we can ever expect to receive the health related assistance and support we actually need for ourselves (here in the U.S.). And that doesn't mean the inadvertent or default help we find ourselves trying to provide for one another as a last ditch effort as we get older.

What's more, when we are artificially separated from both illness and aging in general by our institutions, these normal parts of life tend to hit us like a ton of bricks when we get older, and can eventually isolate us all the more by the process. If the people who are around us when we falter are the same as other times of life, such transitions do not have to be so jarring. However, in order for economic and social integration to be possible, we have to recreate both our environments and our work obligations to place the most vital elements of our lives into closer proximity to one another. To do so requires direct democracy in services, where we would be free to choose and to use skills sets that we learn in the course of our lifetimes.

In the present it's all but impossible to even imagine what direct democracy for services might look like, or how it could function in practical terms, even though we already have the digital capacity for it. Just the same, we need to take many services, especially healthcare, out of the endless struggles of the representative democracy where they are only getting reduced over time in our present institutions. By equalizing our time coordination with health practices of every variety imaginable - both traditional and alternative - we can fully integrate healthcare knowledge at local levels that include our participation for the full course of our lives. That way, we are invested in community to a degree where municipal bankruptcies might be less of a problem, for one thing. Perhaps our elected officials can concentrate on something else for a change that they're better equipped to deal with (whatever that is).

Unfortunately, representative democracy has become mostly a bad joke in service based terms, as government increasingly uses the limitations of money in services to arbitrarily divide people of all walks of life from one another. In recent decades, it has only become more difficult for government to force the resource sets of limited groups, institutions and suppliers into the demand sets of entire populations. What's more, most of those resource sets are shifting to the most economically successful parts of the country, which only continues to slow mobility and economic dynamism elsewhere. The result is entire populations and municipalities being left out of the process of wealth creation, altogether. That is a situation which can't be reversed until knowledge use becomes a more central part of wealth creation processes in general.

Until that happens, we struggle to use knowledge as a sort of wealth based "backwater" in a larger societal sense. In other words, the knowledge we think we can "afford" is highly rationed through its attachment to domains of capital use formations which are supposedly primary. Or, knowledge is held hostage to the supposed "makers" of "true" wealth, in spite of their lack of any organized focus in any growth based terms for the larger society. In that backwater, we get various pools and eddies of knowledge use in the cities which often amount to highly specialized afterthoughts that don't coordinate with much of anything else.

Our fragmented bits of knowledge get served up with laws, to "make up" for what we have increasingly come to believe we can't pay people to accomplish with their minds. I suppose all we need now is the humanoid robots (pardon the snark). But if we don't start making much better use of people and far less use of the actual outdated laws still on the books, any potential coordination and marshaling of the actual scarce resources of this earth will only make less sense over time. Detroit is but an early example for the U.S. in particular.

What is it in particular about healthcare, that currently distorts monetary valuation of other knowledge so as to appear semi-worthless? As services have become the most important component of the economy, the primary service default for all of us is critical care, if and when our lives are endangered. And, it just so happens we've defined that default setting as necessarily tended to most every time, by a highly selective group of individuals with highly paid skill sets.

What's more, we expect those skills to take place in environments that are extremely limited in the world by their very nature. Over time this combined set of factors has usurped many other aspects of life that money and human imagination might actually be allotted to. Not only has this left individuals and governments unable to tend to the growing imbalances, it increasingly causes people to question the value of large sets of educational possibilities that supposedly don't "contribute" to anything. It's time for these economic and social imbalances to be addressed by reform that makes us all a part of healthcare itself, before we all become convinced that nothing in the world is affordable but healthcare. Not to mention the limitations of population access the current system still implies even with the sacrifice of other wealth based educational values and goals.

For healthcare needs, we could start anew by reclaiming the areas of healthcare options which our institutions have little room for, through entrepreneurial terms in coordinated local markets. We would use freedom of speech to make certain that alternative options once derided and then silently reclaimed through pharmaceuticals would be brought back to light. That also means freedom in knowledge use and participation, and education both formal and informal. What's more, we need to be able to tap into knowledge sets by way of interchangeable means in both larger and smaller economic settings, for the most efficient outcomes possible.

Rather than individual specialization (in less populated areas particularly), our primary choices for healthcare participation (alongside other areas of learning), could likely come from several areas that are of interest to us when we are young. In other words we can actually put our high school "classes"  - however they might be structured, to good use. Over time we would be able to utilize skills at different levels of engagement and priority, so as to coordinate with the multiple skills sets of other locals to perform many of the functions now associated with decades of learning. Plus, no more "down" time necessary (unless desired) just because of an arbitrary graduation point.

Intensive care of any kind especially needs to be approached in terms that allow community coordination with other ongoing economic activities. When entire communities are able to plan for healthcare in as many of its important aspects as possible, no one need bear too much of the burden, either financially or in terms of societal expectations. There are aspects of healthcare that are intuitive and ongoing, and there are other aspects that are needed in specific timeframes and careful specifications. This last designation is the one that could benefit immensely from both just in time knowledge use and careful evaluation of aptitude and potential on the part of all community participants.

Each of us has a unique capacity that is helpful in health based terms, and our actual possibilities for participation go much further than anything that exists in the health based options of the present. When we can all provide through our own unique capacity; time or resource cost, complexity and always greater choice are organic and implicit to the system itself. Whereas, under the current system, growth is perceived as a negative and choices have to be constantly pared back. The choice for a way forward is clear.