Wrap Up for May 2016

More than anything else this month, I've thought about missed production potential. In spite of the efforts of governments and private donors to support a time and knowledge based marketplace, there's no getting around the fact that asymmetric compensation - whether public or private - can only create a secondary (or beta) market. Until knowledge use is approached more directly, it will be difficult for nominal income to maintain a strong link with other forms of capital, in an age of automation.

Even though one could easily argue that time/knowledge based product is not "necessary" (in today's survivalist framework), time based product remains the most important contributor to longevity and experiential reality. Just the same, it has not been easy to categorize time based product. Unfortunately, when time based product is not considered separately from tradable product, experiential components become more difficult to quantity. This is when "results based" programs become all about taking care of public and private budgets, rather than coordinating the marketplace for actual human preferences in production and consumption of time based product.

Russ Roberts talks with Arnold Kling about his latest book, "Specialization and Trade: a Reintroduction to Economics"  http://www.econtalk.org/archives/2016/05/arnold_kling_on_1.html

"Ramos Leite says that while other countries also suffered from depopulation, in Portugal it started later, with the bulk occurring after hefty investment in road, power and water networks in the past two decades." (emphasis mine) I'm still trying to sort out how best to think about this occurrence, which is vastly different from rural circumstance in the U.S. However, given lower population densities in U.S. cities, it seems mobility issues might be more pronounced for U.S. citizens in general.
http://www.reuters.com/article/us-portugal-villages-widerimage-idUSKCN0XP1HC

"Trump is an extinction level event", claims this NY Magazine article, "Democracies end when they are too democratic". Regular readers know how I feel about this. With better understood separation between the coordination of time based product and other forms of product, direct democracy could coordinate economic options for time based product at local levels. Whereas representative democracy should be able to provide economic options to coordinate capital intensive infrastructure for tradable sector support, at national levels.

Timothy Taylor takes a look at U.S. healthcare spending in an international context.

City Hall's impact fees are one of the primary reasons, why builders aren't particularly inclined to build homes in a starter range.  http://blogs.wsj.com/economics/2016/05/05/how-city-hall-exacerbates-the-entry-level-housing-squeeze/?mod=WSJBlog

From an AEI article, "Increasing the employability of poor people must accompany job creation efforts", Angela Rachidi writes:

...a difficult reality is that in poor communities is that most most non-workers give reasons for not working that have little to do with the availability of jobs. In fact, less than 10% of poor non-workers (18-64 years old) report that they are not working because they "could not find work". Instead, most report being ill or disabled (32%) or not working because of home or family responsibilities (25%). 

In response to Rachidi, I also believe that incentive to return to the workplace means reestablishing the worth of time value, for those who might participate. When health is involved, one has to be careful that work commitments don't lead to extensive health setbacks, once again. Creating a mutual self support workplace would mean a process of exploration for all involved, as to what time based product might even consist of.

"Embracing Radical Localism", from Brookings

Time and again - and in nation after nation - central governments have failed to confront difficult social and economic problems, causing responsibility to informally devolve downward to cities and metropolitan areas. Yet official power has remained vested in central and state governments, primarily in siloed, anachronistic bureaucracies...which national political parties will willingly devolve official power to their rising cities so that the design and delivery (and even the financing) of solutions can happen closer to ground?

In 1900 Georg Simmel published "The Philosophy of Money". As noted in "The Mind and the Market":

In this and other works, Simmel explained how the development of the market economy made for new possibilities of individuality...Simmel reminded his readers that money allowed for the cooperation of individuals who would otherwise have nothing to do with one another...Unlike the guild, a "living community" that "included the entire person, socially, politically, and legally," modern life was based upon looser, more temporary associations, and demanding of the individual only a small part of himself"...As a result, the modern individual can belong to a greater range of groups, but groups that are looser and less encompassing. What Adam Smith had pointed out was "becoming true to a greater degree than even he had imagined: individuals were increasingly interdependent, but ever less dependent on a single group or individual. 

From Michael Bloomberg: "Here's Your Degree. Now Go Defeat Demagogues"

According to JP Koning, medieval money was a bit more complex than one might think: http://jpkoning.blogspot.com/2016/05/what-makes-medieval-money-different.html

Steve Horwitz provides a quick summary of Hayek's "Use of Knowledge in Society"

George Selgin, Monetary Policy Primer, Part 3: The price level
Part 4: stable prices or stable spending?
Part 5: the supply of money
Also, Interest on reserves and the Fed balance sheet and the recent youtube presentation

Lots of productivity tables included in this post, from Dietz Vollrath: https://growthecon.com/blog/More-Decomp/

An Econlog post from Scott Sumner, includes a link to an ebook, "Currency and Credit' by Ralph Hawtrey, and a Mercatus video which highlights Scott's rationale for his recently published book.

Lars Christensen notes the sharp slowdown in G20 money base growth, since early 2014: https://marketmonetarist.com/2016/05/15/the-verdict-from-g20-money-base-growth-money-is-tight/

David Beckworth recently presented a paper on the international impact of the Fed, at a conference on international monetary stability at Stanford's Hoover Institute.
http://macromarketmusings.blogspot.com/2016/05/the-us-as-banker-to-world.html

As Justin Fox emphasized, "Millions of Americans can't afford even the cheapest housing." http://www.bloomberg.com/view/articles/2016-04-18/what-makes-housing-too-expensive

George Selgin's productivity norm talk with David Beckworth: https://soundcloud.com/macro-musings/george-selgin

Almost all the good jobs created since the recession have gone to college graduates. http://www.theatlantic.com/business/archive/2016/01/white-working-class-poverty/424341/

From a recent post by David Glasner:"...cost is no less an equilibrium constant than price. Cost cannot be logically prior to price if both are determined simultaneously and are mutually interdependent." Glasner's reasoning also has bearing on any "presupposed" value for time in a knowledge use system setting. Indeed it is simpler to quantify time in relation to a mutual time use framework, than to determine time value in relation to otherwise random resource capacity. Even though time value needs to function as a constant in the sense of both commodity price and full participation, the length of time required to generate asset formation, would also depend on the initial description and characterization of infrastructure patterns.