(David Beckworth) Meanwhile, the Eurozone staggers on defiantly without monetary crutches: http://macromarketmusings.blogspot.com/2013/12/the-qe-block-versus-emu-block.html
Broad money growth in Japan is recovering: http://macromarketmusings.blogspot.com/2013/12/how-is-abenomics-doing.html
How many women in the U.S. stay out of the workforce because of the marriage penalty? (James Pethokoukis) http://www.aei-ideas.org/2013/12/why-slowing-us-labor-force-growth-is-bad-for-us-economic-growth/
Of Milton Friedman and the k-percent rule (Josh Hendrickson): http://everydayecon.wordpress.com/2013/12/19/yellen-optimal-control-and-dynamic-inconsistency/
David Glasner responds: http://uneasymoney.com/2013/12/20/milton-friedmans-dumb-rule/
Interest rates still tell us very little about the stance of monetary policy (Marcus Nunes): http://thefaintofheart.wordpress.com/2013/12/19/extended-insurance/
Marcus considers monetary policy reaction to oil shocks in the 70s by the U.S., Japan and Germany: http://thefaintofheart.wordpress.com/2013/12/20/the-great-inflation-is-being-revisited/
The CBO measure of potential NGDP can be misleading: http://thefaintofheart.wordpress.com/2013/12/23/not-so-fast-ed/
Some additional NGDP perspective for important Fed graphs: http://thefaintofheart.wordpress.com/2013/12/23/right-before-christmas-100-years-ago/
Benjamin Cole takes a closer look at QE3
World trade volume is still falling away from trend
Marcus considers six countries in a continuation of the previous post
Britmouse provides recent UK numbers: http://uneconomical.wordpress.com/2013/12/20/uk-2013-q3-quarterly-national-accounts/
Peter Sisko (Money Mischief) provides a brief overview of the work of the Fed, for the past 100 years: http://moneymischief.blogspot.com/2013/12/100-godina-fed-a.html (Just use Google translate)
Lars Christensen asks, how might a nation's resources be privatized? http://marketmonetarist.com/2013/12/18/some-inspiration-for-matt-zwolinski-my-suggestion-for-a-venezuelan-citizen-account/
For someone who indicated he might be too busy to post much during the holidays...(!)
(Scott Sumner)
how important is finance for RGDP or the path of NGDP?
...where we learn that even Google has "institutionalized" confirmation bias! The "stance" of monetary policy
The Fed has "edged" closer to Scott's October recommendations
The Fed wasn't quite happy with QE but didn't want to tighten...
How difficult is monetary economics? Somewhere between rocket science and quantum mechanics
Some clarification for John Carney on the monetary base
Britmouse also responds - "For reasons not clear" Krugman ignores aggregate supply
How is it useful? Krugman on the Phillips Curve
Two quick comments on taxes turned into quite a discussion.
John Cochrane could be confusing "money supply model" with monetarist model
In response to Nick's post, Nick Rowe on Cochrane and Williamson
Good post: How many economists can answer this question
Nick Rowe - "You get barter because the quantity of medium of exchange is too low"
In response to the recent finance/macro theme - Does finance need money/macrofoundations?
Nick in response to John Cochrane
and - Enough with announcing targets for nominal interest rates already
Correlations between nominal interest rates and inflation rates involve Long run, medium run and short run Fisher curves
Some helpful clarification from Bill Woolsey - How Important is Shadow Banking?
Whatever we have to worry about, Evan Soltas suggests U.S. savings rate isn't in that category
Evan wants to know - http://esoltas.blogspot.com/2013/12/how-did-we-miss-swiss.html
(Lorenzo) Central Banks fighting the threat of rising productivity?
http://skepticlawyer.com.au/2013/12/23/what-is-it-about-money/
Also of interest:
Uwe Reinhardt's healthcare viewpoints are always worth taking the time to consider: http://economix.blogs.nytimes.com/2013/12/20/the-economics-of-being-kinder-and-gentler-in-health-care/?_r=0
Bart Wilson's last post for Econlog (for now), A Literary Theoretical Treatment of Prices
Wishing all my readers the Season's Best, whether "young" or "old" - near or far!
Wednesday, December 25, 2013
Tuesday, December 24, 2013
When Competition Yearns to Breathe Free
What might be the result? Jonathan Finegold's quote of the week was sufficiently inspiring that I am compelled to start this post with these words by Armen Alchian here (from Economic Forces at Work, 1977)
This results in limitations of a physical or environment defined nature, as well as the knowledge use realm: albeit in quite different capacities. Still, both "handicaps" appeal to one's desire to either reach beyond present status or prevent others from accessing our "perch", as captured by environment requirement (regulation, zoning, strict product or service definition). This generalization goes exponential if our perch costs a lot.
Also, knowledge use limitations often stem from the fear of being taken advantage of or subjected to substandard service in some way. Of course this is something that happens in any event, thus individuals in today's special status quo can pay dearly, when the problem becomes them. Or maybe certain individuals in question weren't really the problem, but were the only ones that could be easily flogged to make up for the special privilege bestowed upon them.
Plus, it becomes tempting to tighten up the rules of the game, creating "forced stretches" on everyone's part, during times of material abundance and gain. This leads to expectations re how flows of goods and services are "supposed" to happen for the rest of infinity, even if the good times don't remain so great. Alternative flows therefore become frowned upon...
Just one aspect of the economies of scale problem, is the present challenge in food preparation by food trucks. Food trucks allow economic entry through lighter financial obligations and overhead: all of which allows nimble adaptation not really possible at the restaurant level. Certainly the restaurant owner may feel threatened. However, it's uncertain how long some cities can hold back the tide of young people who do not have jobs at the ready and are compelled of necessity to create their own. What if a city arbitrarily decides to commit to greater economic inclusiveness, over the cries of its established businesses anyway? How might it approach the matter?
Let's consider that seemingly automatic take-advantage-of-psychology aspect, re how we as a society unwittingly circle back, creating our own unhappiness. It's that legal thing we do which allows five steps forward, no steps back, and then the real possibility we lose control over our lives. By financially maxing out our aspirations and distaste of "inferior" services, every time! What's more I have a good post from Bryan Caplan for the illustration of our subsequent quandary. Here's Caplan, in his goodbye to Bart Wilson:
But...but..that's not what we've been doing! (No kidding) Well...at least we've been giving the illusion of "allowing" only the "right" decisions and perfectly respectable suitable environments. Oh my when I think of the relative freedom (in terms of overhead responsibilities) of flea market booths and the relative degree of "mistakes" they allow as compared to the inviolability of some building lease agreements. Sure, you can buy respectability just so long as you never fail. Hello legal? We would have accepted a less than perfect outcome. Sorry we didn't indicate that to you sooner...
Even so: who - with the seeming capital equivalent of a flea market booth - doesn't want a real environment to interact with the public? What we do know is that the business and financial folk will accommodate that wish much of the time, with pleasure. Except: buying "respect", whether one actually needs it or not, isn't cheap. And if respect doesn't pan out there's not much left to sell. Which leaves me with one question: Why don't we count business losses in unemployment statistics? Okay, one more question. How much of a stretch would it be to take Alchian's discrimination dig, as discrimination against ourselves? In the game of life, we and our business partners allow ourselves the right to step ever forward but not to step back even lightly - only the right (?) to fall back in the hole for what it's worth.
Another question I asked recently also seems relevant here: why can't we approach our economic environments a bit more like some of our challenging and inclusive games ? After all, most games don't say one or two strikes and you're out - they encourage us to keep playing. Whereas our legal and bureaucratic system isn't fond of economic games, thus has become quite a stick in the mud. Except, it doesn't realize how many lonely and desperate people now exist in the world - all because of short sighted arrogance.
Some time ago, the cost of entering economic games became unnecessarily high on Main Street for those who provide (relatively) marginal needs. Yet when marginal needs end up assigned to larger interests, they often lose "interest" in carrying them. There's many ways to create fun and greater choice with economic activity, and no good reason why Main Street should remain exempt from a plethora of possibility. How might occasional, or "not constant" needs and consumer desires, be reintroduced? Most importantly, how can they reside in places that don't constantly go empty in between.
For every person who wants to "beat" everyone else into submission - and whatever institutional ilk they belong to, I'd "submit" there are probably at least ten more who have much more fun keeping the game going (paging legal...paging legal...). Hmm there's bound to be some studies on that. For our purposes here, these are the people who will keep their doors open to the public until every last dime is spent in the effort to stay economically alive. Even if the hapless entrepreneur didn't have enough left over to give to all the charity drives this year. Who loves the game? Say aye!
In every society, conflicts of interest among the members of that society must be resolved. The process by which that resolution (not elimination!) occurs is known as competition. Since, by definition, there is no way to eliminate competition, the relevant question is what kind of competition shall be used in the resolution of the conflicts of interest. In more dramatic words designed to arouse emotional interest, what forms of discrimination among the members of that society shall be employed in deciding to what extent each person is able to achieve various levels of his goals? Discrimination, competition and scarcity are these inseparable concepts.Regular readers know, that I feel we don't have enough marketplace passageways to make adequate inclusion possible. To this blogger at least, that means a lot more elimination (of potential competition) happens than Alchian's words seem to suggest! What's more, arbitrary limitations for economic entry (in business starts and services) are easy for special interests to capture and define, because they appeal to some very basic psychological motives on our part. While the scarcity of space is nonetheless real in physical terms, the scarcity of mind capacity in terms of relative aggregate need, is but a discriminatory fiction.
This results in limitations of a physical or environment defined nature, as well as the knowledge use realm: albeit in quite different capacities. Still, both "handicaps" appeal to one's desire to either reach beyond present status or prevent others from accessing our "perch", as captured by environment requirement (regulation, zoning, strict product or service definition). This generalization goes exponential if our perch costs a lot.
Also, knowledge use limitations often stem from the fear of being taken advantage of or subjected to substandard service in some way. Of course this is something that happens in any event, thus individuals in today's special status quo can pay dearly, when the problem becomes them. Or maybe certain individuals in question weren't really the problem, but were the only ones that could be easily flogged to make up for the special privilege bestowed upon them.
Plus, it becomes tempting to tighten up the rules of the game, creating "forced stretches" on everyone's part, during times of material abundance and gain. This leads to expectations re how flows of goods and services are "supposed" to happen for the rest of infinity, even if the good times don't remain so great. Alternative flows therefore become frowned upon...
Just one aspect of the economies of scale problem, is the present challenge in food preparation by food trucks. Food trucks allow economic entry through lighter financial obligations and overhead: all of which allows nimble adaptation not really possible at the restaurant level. Certainly the restaurant owner may feel threatened. However, it's uncertain how long some cities can hold back the tide of young people who do not have jobs at the ready and are compelled of necessity to create their own. What if a city arbitrarily decides to commit to greater economic inclusiveness, over the cries of its established businesses anyway? How might it approach the matter?
Let's consider that seemingly automatic take-advantage-of-psychology aspect, re how we as a society unwittingly circle back, creating our own unhappiness. It's that legal thing we do which allows five steps forward, no steps back, and then the real possibility we lose control over our lives. By financially maxing out our aspirations and distaste of "inferior" services, every time! What's more I have a good post from Bryan Caplan for the illustration of our subsequent quandary. Here's Caplan, in his goodbye to Bart Wilson:
Bart points to an experimental resolution: People like being in control of their own lives - and gladly accept lower-quality outcomes to avoid being under other people's thumbs.To paraphrase a bit further from Caplan's post, even though people systematically make bad decisions, they value their right to do so.
But...but..that's not what we've been doing! (No kidding) Well...at least we've been giving the illusion of "allowing" only the "right" decisions and perfectly respectable suitable environments. Oh my when I think of the relative freedom (in terms of overhead responsibilities) of flea market booths and the relative degree of "mistakes" they allow as compared to the inviolability of some building lease agreements. Sure, you can buy respectability just so long as you never fail. Hello legal? We would have accepted a less than perfect outcome. Sorry we didn't indicate that to you sooner...
Even so: who - with the seeming capital equivalent of a flea market booth - doesn't want a real environment to interact with the public? What we do know is that the business and financial folk will accommodate that wish much of the time, with pleasure. Except: buying "respect", whether one actually needs it or not, isn't cheap. And if respect doesn't pan out there's not much left to sell. Which leaves me with one question: Why don't we count business losses in unemployment statistics? Okay, one more question. How much of a stretch would it be to take Alchian's discrimination dig, as discrimination against ourselves? In the game of life, we and our business partners allow ourselves the right to step ever forward but not to step back even lightly - only the right (?) to fall back in the hole for what it's worth.
Another question I asked recently also seems relevant here: why can't we approach our economic environments a bit more like some of our challenging and inclusive games ? After all, most games don't say one or two strikes and you're out - they encourage us to keep playing. Whereas our legal and bureaucratic system isn't fond of economic games, thus has become quite a stick in the mud. Except, it doesn't realize how many lonely and desperate people now exist in the world - all because of short sighted arrogance.
Some time ago, the cost of entering economic games became unnecessarily high on Main Street for those who provide (relatively) marginal needs. Yet when marginal needs end up assigned to larger interests, they often lose "interest" in carrying them. There's many ways to create fun and greater choice with economic activity, and no good reason why Main Street should remain exempt from a plethora of possibility. How might occasional, or "not constant" needs and consumer desires, be reintroduced? Most importantly, how can they reside in places that don't constantly go empty in between.
For every person who wants to "beat" everyone else into submission - and whatever institutional ilk they belong to, I'd "submit" there are probably at least ten more who have much more fun keeping the game going (paging legal...paging legal...). Hmm there's bound to be some studies on that. For our purposes here, these are the people who will keep their doors open to the public until every last dime is spent in the effort to stay economically alive. Even if the hapless entrepreneur didn't have enough left over to give to all the charity drives this year. Who loves the game? Say aye!
Wednesday, December 18, 2013
Where is the Starting Line?
...To a more sensible economic future, that is. I've been fighting a head cold recently, brought on perhaps by a house that got too chilly lately. My ability to concentrate has been somewhat impaired, so hopefully this post will make some sense! At least I've been able to find some interesting links to tie in with today's thoughts: finding our way to a better economic future, is a topic that weighs heavily on many minds.
The other day, Tyler Cowen asked, why is liquidity flowing through economies in such a non neutral fashion? For me, this question can be answered by the fact that special interests force many to accept product formations that are simply not appropriate for their present resource use capacity - thus the monetary disequilibrium that follows. However, the fact that both finance and governments are determined to keep hammering square pegs into round holes, makes it difficult for macroeconomic (monetary) measures to work as effectively as they otherwise could. Let alone the ongoing confusion between statistics and numbers, versus how money needs to be able to flow through economies.
What's more, it's not hard for finance to insist on center stage, when mathematical functions remain front and center in economics departments. For instance, I was of the belief that history of economic thought was poised to become a more important element of higher education requirements. But according to Gavin Kennedy it looks as though some economics departments are instead heading in the opposite direction. Think about this as a striking example, of worthy issues that never even make it to school curriculums for any number of reasons. How many communities and educational entrepreneurs would be able to provide worthy "homes" or destinations for knowledge (homes that can be shared online), whenever educational institutions cannot? That's why I believe in opening up education at all levels to educational entrepreneurs, in local economies willing to start anew.
Because of institutional limitations, many thoughtful and hard working students don't learn about important aspects of life, that could have considerable effect on the way they approach the world. For a student, great teachers mean many things. Does it matter if a teacher says I am not going to teach X (something that may seem central) if the student would do better to learn about X at a different time or even in different context? Institutions of learning haven't adapted to the subjectivity of our fixed time scarcity. Yet each student has a unique time and place for learning, and that matters.
It was an HBR post "Great Entrepreneurs Pick Great Markets" a couple of days back, which nonetheless reminded of the vast marketplace which most still assume to be off limits in the present. Institutional knowledge based wealth capture is so taken for granted that many now think of labor time as non scarce, instead of the finite scarcity it represents both for overall economic stability and the reality of our own lives. That much diminished accounting of human time is a huge mistake. After all, when we don't calculate aggregate economic time participation in direct terms, our economy is forced to make adjustments indirectly: adjustments which cannot maintain equilibrium for the long run.
Rob Go (HBR) speaks of the moats that exist in some marketplaces, acting as effective barriers to entry. For me, the problem is that they interlink with multiple "castles" which in turn rely upon one another for their strength. Those moats cannot be approached head on. Instead, they will need to be actively questioned through limited first mover measures and economic examples over time, which prove capable of removing the negative externalities of undirected personal time.
These moats are precisely why it is hard to find a starting line for economic entry in any normal sense. For instance, Kurt Schuler in this recent post, looks at the fact that nations are used to government being the monetary "go to" for educational purposes in general. He wants to know - is that really necessary? My thoughts: Some start up knowledge use systems, as they are adopted, might want to experiment with monetary printing by more direct means, for educational entrepreneurs at local levels. Such printing could still readily integrate with larger monetary systems.
At the very least, some realize that the desire for a basic income is not as simple as waving a magic wand, as this guest post by Max Sawicky at Next New Deal indicates. For one thing, conservatives are not so anxious to alleviate poverty as they are to keep special interests from benefiting at the expense of lower income levels which do not have their own adequate political representation. Just the same, special interests would not give up their mostly unnoticed gains so easily. Again, first mover problems such as this are why focused economic efforts (and experiments) at local levels could point the way to new integrated economic practices. Not only would these work to benefit lower incomes in the long run; people from all income levels can learn to play more direct roles in the broken down production and consumption functions of the present.
Understanding is key now, to keep urban and rural economies from splitting apart. A complete separation of regional economies into political factions would not help anyone. This is especially evident in ideas of peer to peer economies that revolve around sharing of resources, goods and "slow economy methods" which are intrinsically fine. Just the same, alternative economic measures can be pursued with the understanding that they need to be choices - not life crippling necessities which also translate into low income poverty. That means making the limited capacity of our own time use a central element. To do so, strong links to production efficiency alongside services coordination, need to be maintained locally in monetary terms.
With today's technology, sometimes it seems as though one could put together better functioning knowledge use systems and set them down anywhere, but that isn't really true. How prosperous is the area that is being considered for knowledge use systems? Do they still have good employment prospects and if so, of what nature? Or, has the area declined too far, for anyone to be compelled to initiate complex undertakings? There seem to be "sweet spots", where people would be willing to relocate and start over, yet still have a base to work from in terms of possible growth. What kinds of companies are in the area? Remaining traditional services? How many who live there actually work, and if they do, do they work nearby or commute elsewhere. When domestic summits are taken on, these are important considerations.
Most important here perhaps, is a link Tyler Cowen posted from a Ryan Holiday post that I find myself compelled to respond to. So I'll do a bit of a "take down" re the words that Ryan framed for his wall. Scarcity...hmmm. Now I know exactly why Tyler's latest book bothered me so much.
Yes, of course quality land and related resources are scarce. Oftentimes we can visit special places such as this, yet know that living there isn't really an option. Plus, those that do stay will make more money in relative terms because it costs more to live there - hence local wages can be an entirely different matter from national wages. Still, people have the capacity to increase wage value over time, by making places desirable to live which don't necessarily have geographic advantages. Land can be made quite attractive, when people care about it and for it. One's desire to improve land use should be just as surely a skills attribute for community, as one's pocketbook. After all, that particular initiative is too important to ignore.
Intellectual quality or "good ideas" what to produce, entirely depend on the passageways and destinations that people create, so that knowledge in all its magnificent diversity might have the chance to enjoy the accolades it deserves. What's deemed as "good", also depends on income infrastructure needs. Knowledge only appears scarce when we start to think that human worth in the aggregate is scarce, because primary value is supposedly caught by those castles and moats we'd rather call stagnation, than face up to. Being told that we can't use knowledge to help ourselves or our neighbors, is like being told we can't garden our own little plot (of scarce time), simply because our soil is not as good as the soil in the garden up the road!
In other words, our willingness to support one another in a framework for widespread and diverse knowledge use, creates value for knowledge use and innovation which otherwise would not be possible. I'm sorry but when Tyler says things like intellectual property is scarce, he aggravates me no end. Does he really want the future he portrays?
It would be one thing if institutions had roped off an inhabited area of economic potential that actually held life of its own, but they roped off wealth potential in such a way as to pretend it doesn't even exist. And yet, everyone is sick and tired of the taxation to fight off the endless demons that come out of that forgotten place. Some people now think money is worth little because it has no choice but to also represent that forgotten place! If our institutions refuse to budge now, the rift between productivity and those who can't take part in productive economic endeavor, will only grow.
Institutions of course continue to grab up the "quality" labor we like to call scarce, but that particular definition is one of defeat, in terms of knowledge use potential. Meanwhile the negative externalities of "low quality" labor continue to expand, to such a degree that the random capture of high skills use potential has finally become a false victory. All the while our institutions are forced to somehow support the rest - a responsibility they don't want. I can't say it enough, no one wants to pay for the ones that have been left out...or feels like they should be the ones "stuck" doing so.
When people get left out, there is no direct way to tend to their condition humanely and we end up with private prisons and other horrible conditions. Therefore, the only humane solution is let people help themselves through applied, recorded and measured knowledge use - through their own time use arbitration. If we face up to our "stuck in the mud" institutions on this issue, I think they will eventually get the point. It is better in the long run to let everyone prosper.
And until we do, our financial realm is going to look like one giant monstrous pretzel, trying to figure out how to financially account for the forgotten without anyone noticing, who could have just been allowed to tend to their own affairs. Safe assets are about letting everyone use resources to create wealth. Safe assets are about understanding what the potential of technology actually holds for us personally - not just about devices to hold in one's hand, to communicate with the world. That means allowing technology to create environments that don't constantly overwhelm us with needless complexity.
This is where the starting line is: the scarcity of our time use which is paramount and has to be taken care of before anything else even matters. If money is not allowed to represent the potential of our economic participation in the game of life, the use of money may not have the chance to regain normalcy again in our lifetime or indeed the generations after us. Domestic summits, now. Nominal targeting for our own, very real fixed scarcity, now. Nations can thrive again when nations learn to give their own citizens a real chance to help themselves.
The other day, Tyler Cowen asked, why is liquidity flowing through economies in such a non neutral fashion? For me, this question can be answered by the fact that special interests force many to accept product formations that are simply not appropriate for their present resource use capacity - thus the monetary disequilibrium that follows. However, the fact that both finance and governments are determined to keep hammering square pegs into round holes, makes it difficult for macroeconomic (monetary) measures to work as effectively as they otherwise could. Let alone the ongoing confusion between statistics and numbers, versus how money needs to be able to flow through economies.
What's more, it's not hard for finance to insist on center stage, when mathematical functions remain front and center in economics departments. For instance, I was of the belief that history of economic thought was poised to become a more important element of higher education requirements. But according to Gavin Kennedy it looks as though some economics departments are instead heading in the opposite direction. Think about this as a striking example, of worthy issues that never even make it to school curriculums for any number of reasons. How many communities and educational entrepreneurs would be able to provide worthy "homes" or destinations for knowledge (homes that can be shared online), whenever educational institutions cannot? That's why I believe in opening up education at all levels to educational entrepreneurs, in local economies willing to start anew.
Because of institutional limitations, many thoughtful and hard working students don't learn about important aspects of life, that could have considerable effect on the way they approach the world. For a student, great teachers mean many things. Does it matter if a teacher says I am not going to teach X (something that may seem central) if the student would do better to learn about X at a different time or even in different context? Institutions of learning haven't adapted to the subjectivity of our fixed time scarcity. Yet each student has a unique time and place for learning, and that matters.
It was an HBR post "Great Entrepreneurs Pick Great Markets" a couple of days back, which nonetheless reminded of the vast marketplace which most still assume to be off limits in the present. Institutional knowledge based wealth capture is so taken for granted that many now think of labor time as non scarce, instead of the finite scarcity it represents both for overall economic stability and the reality of our own lives. That much diminished accounting of human time is a huge mistake. After all, when we don't calculate aggregate economic time participation in direct terms, our economy is forced to make adjustments indirectly: adjustments which cannot maintain equilibrium for the long run.
Rob Go (HBR) speaks of the moats that exist in some marketplaces, acting as effective barriers to entry. For me, the problem is that they interlink with multiple "castles" which in turn rely upon one another for their strength. Those moats cannot be approached head on. Instead, they will need to be actively questioned through limited first mover measures and economic examples over time, which prove capable of removing the negative externalities of undirected personal time.
These moats are precisely why it is hard to find a starting line for economic entry in any normal sense. For instance, Kurt Schuler in this recent post, looks at the fact that nations are used to government being the monetary "go to" for educational purposes in general. He wants to know - is that really necessary? My thoughts: Some start up knowledge use systems, as they are adopted, might want to experiment with monetary printing by more direct means, for educational entrepreneurs at local levels. Such printing could still readily integrate with larger monetary systems.
At the very least, some realize that the desire for a basic income is not as simple as waving a magic wand, as this guest post by Max Sawicky at Next New Deal indicates. For one thing, conservatives are not so anxious to alleviate poverty as they are to keep special interests from benefiting at the expense of lower income levels which do not have their own adequate political representation. Just the same, special interests would not give up their mostly unnoticed gains so easily. Again, first mover problems such as this are why focused economic efforts (and experiments) at local levels could point the way to new integrated economic practices. Not only would these work to benefit lower incomes in the long run; people from all income levels can learn to play more direct roles in the broken down production and consumption functions of the present.
Understanding is key now, to keep urban and rural economies from splitting apart. A complete separation of regional economies into political factions would not help anyone. This is especially evident in ideas of peer to peer economies that revolve around sharing of resources, goods and "slow economy methods" which are intrinsically fine. Just the same, alternative economic measures can be pursued with the understanding that they need to be choices - not life crippling necessities which also translate into low income poverty. That means making the limited capacity of our own time use a central element. To do so, strong links to production efficiency alongside services coordination, need to be maintained locally in monetary terms.
With today's technology, sometimes it seems as though one could put together better functioning knowledge use systems and set them down anywhere, but that isn't really true. How prosperous is the area that is being considered for knowledge use systems? Do they still have good employment prospects and if so, of what nature? Or, has the area declined too far, for anyone to be compelled to initiate complex undertakings? There seem to be "sweet spots", where people would be willing to relocate and start over, yet still have a base to work from in terms of possible growth. What kinds of companies are in the area? Remaining traditional services? How many who live there actually work, and if they do, do they work nearby or commute elsewhere. When domestic summits are taken on, these are important considerations.
Most important here perhaps, is a link Tyler Cowen posted from a Ryan Holiday post that I find myself compelled to respond to. So I'll do a bit of a "take down" re the words that Ryan framed for his wall. Scarcity...hmmm. Now I know exactly why Tyler's latest book bothered me so much.
Yes, of course quality land and related resources are scarce. Oftentimes we can visit special places such as this, yet know that living there isn't really an option. Plus, those that do stay will make more money in relative terms because it costs more to live there - hence local wages can be an entirely different matter from national wages. Still, people have the capacity to increase wage value over time, by making places desirable to live which don't necessarily have geographic advantages. Land can be made quite attractive, when people care about it and for it. One's desire to improve land use should be just as surely a skills attribute for community, as one's pocketbook. After all, that particular initiative is too important to ignore.
Intellectual quality or "good ideas" what to produce, entirely depend on the passageways and destinations that people create, so that knowledge in all its magnificent diversity might have the chance to enjoy the accolades it deserves. What's deemed as "good", also depends on income infrastructure needs. Knowledge only appears scarce when we start to think that human worth in the aggregate is scarce, because primary value is supposedly caught by those castles and moats we'd rather call stagnation, than face up to. Being told that we can't use knowledge to help ourselves or our neighbors, is like being told we can't garden our own little plot (of scarce time), simply because our soil is not as good as the soil in the garden up the road!
In other words, our willingness to support one another in a framework for widespread and diverse knowledge use, creates value for knowledge use and innovation which otherwise would not be possible. I'm sorry but when Tyler says things like intellectual property is scarce, he aggravates me no end. Does he really want the future he portrays?
It would be one thing if institutions had roped off an inhabited area of economic potential that actually held life of its own, but they roped off wealth potential in such a way as to pretend it doesn't even exist. And yet, everyone is sick and tired of the taxation to fight off the endless demons that come out of that forgotten place. Some people now think money is worth little because it has no choice but to also represent that forgotten place! If our institutions refuse to budge now, the rift between productivity and those who can't take part in productive economic endeavor, will only grow.
Institutions of course continue to grab up the "quality" labor we like to call scarce, but that particular definition is one of defeat, in terms of knowledge use potential. Meanwhile the negative externalities of "low quality" labor continue to expand, to such a degree that the random capture of high skills use potential has finally become a false victory. All the while our institutions are forced to somehow support the rest - a responsibility they don't want. I can't say it enough, no one wants to pay for the ones that have been left out...or feels like they should be the ones "stuck" doing so.
When people get left out, there is no direct way to tend to their condition humanely and we end up with private prisons and other horrible conditions. Therefore, the only humane solution is let people help themselves through applied, recorded and measured knowledge use - through their own time use arbitration. If we face up to our "stuck in the mud" institutions on this issue, I think they will eventually get the point. It is better in the long run to let everyone prosper.
And until we do, our financial realm is going to look like one giant monstrous pretzel, trying to figure out how to financially account for the forgotten without anyone noticing, who could have just been allowed to tend to their own affairs. Safe assets are about letting everyone use resources to create wealth. Safe assets are about understanding what the potential of technology actually holds for us personally - not just about devices to hold in one's hand, to communicate with the world. That means allowing technology to create environments that don't constantly overwhelm us with needless complexity.
This is where the starting line is: the scarcity of our time use which is paramount and has to be taken care of before anything else even matters. If money is not allowed to represent the potential of our economic participation in the game of life, the use of money may not have the chance to regain normalcy again in our lifetime or indeed the generations after us. Domestic summits, now. Nominal targeting for our own, very real fixed scarcity, now. Nations can thrive again when nations learn to give their own citizens a real chance to help themselves.
Midweek Market Monetarist Links and Summaries - 12/18/13
An interesting email exchange between Miles Kimball and Scott Sumner, who grew up less than a mile from one another: http://blog.supplysideliberal.com/post/69666430753/miles-kimball-and-scott-sumner-monetary-policy-the
Scott Sumner provides a post response along with some more memories: Miles from home
Both David Beckworth and Paul Krugman agree with Scott that "helicopter drops" are not a cure-all for AD shortfalls
John Carney misrepresents Scott on QE: Pay attention to the theoretical world
Scott points out a few positives and negatives: Stanley Fischer to the Fed?
More on Fischer, and some thoughts on the Jewish ethnic group: Failure is an option
Scott receives some hopeful links: Is the Eurozone beginning to wake up to reality?
It's the ECB policy that is awesomely destructive: A note on "awesomely destructive" fiscal policies
Never mind foreign countries...what about the bizarre activities closer to home? We are the freak show
Reviewing the editor's proofs of his Depression manuscript, Scott remembers The "Lehman Moment" of 1931
Tight money causes... How to prevent an epidemic of Reckless Lending
Will growth remain low in the years ahead? It's not about inflation
Rationale for inflation has changed in recent decades: Yes, raise interest rates. But how?
And, Income is meaningless, example #388
Lars Christensen is encouraged by Stanley Fischer: http://marketmonetarist.com/2013/12/12/stanley-fischer-this-guy-can-keep-ngdp-on-a-straight-line/
Keynesians agree with Market Monetarists when it comes to weak demand: http://marketmonetarist.com/2013/12/15/christopher-pissarides-is-europe-working-the-answer-obviously-is-no/
UK labor market improves: http://marketmonetarist.com/2013/12/18/imagine-that-us-non-farm-payrolls-were-growing-by-400kmonth-that-is-how-strong-the-uk-labour-market-is/
Seriously, who would think this is a good graph? http://marketmonetarist.com/2013/12/16/european-horror-graph-of-the-day-the-greek-price-level-collapse/
Actually, someone likes this graph just fine... http://blog.supplysideliberal.com/post/70165552384/econlolcats-the-price-of-stability-is-eternal
This post continues "Turgot's land beating Samuelson's money" (Nick Rowe)
http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/we-know-the-economy-needs-a-bubble-but-how-big.html
Average unemployment of the last few years isn't necessarily the natural rate: http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/natural-rate-trend.html
Nick wants to put people back in the model: http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/microfoundations-for-peoples-sake.html
Izabella Kaminska contributes to the comments section (David Glasner)
http://uneasymoney.com/2013/12/13/does-macroeconomics-need-financial-foundations/
David provides a link for his recent paper: http://uneasymoney.com/2013/12/17/my-paper-on-hawtreys-good-and-bad-trade/
Where might Steve Williamson's model have an element of truth? (Bill Woolsey)
Does Quantitative Easing Cause Deflation?
"Suppose a single bank in a competitive banking system wanted to expand its lending": Private Money and Quantitative Easing
"You can't judge a monetary policy by nominal interest rates; you can't, you can't, you can't." (Ryan Avent) http://www.economist.com/blogs/freeexchange/2013/12/secular-stagnation
Does the deficit come down with growth? It depends (Britmouse):
http://uneconomical.wordpress.com/2013/12/12/productivity-growth-and-the-deficit/
How safe does government debt need to be? (Andy Harless)
http://blog.andyharless.com/2013/12/stochastic-dynamic-inefficiency-secular.html
An interesting take (James Pethokoukis): Maybe patriarchal labor unions are to blame for rising inequality
Mark Sadowski notes discussion by both Nick Rowe and Frances Coppola in this lengthy comments section: http://pragcap.com/stop-with-the-cutting-ioer-will-increase-lending-madness
Evan Soltas does an interview: http://esoltas.blogspot.com/2013/12/how-i-got-into-econ.html
James Hamilton tells the recent story of the Federal Reserve short term interest rate:
http://www.econbrowser.com/archives/2013/12/federal_reserve_3.html
Scott Sumner provides a post response along with some more memories: Miles from home
Both David Beckworth and Paul Krugman agree with Scott that "helicopter drops" are not a cure-all for AD shortfalls
John Carney misrepresents Scott on QE: Pay attention to the theoretical world
Scott points out a few positives and negatives: Stanley Fischer to the Fed?
More on Fischer, and some thoughts on the Jewish ethnic group: Failure is an option
Scott receives some hopeful links: Is the Eurozone beginning to wake up to reality?
It's the ECB policy that is awesomely destructive: A note on "awesomely destructive" fiscal policies
Never mind foreign countries...what about the bizarre activities closer to home? We are the freak show
Reviewing the editor's proofs of his Depression manuscript, Scott remembers The "Lehman Moment" of 1931
Tight money causes... How to prevent an epidemic of Reckless Lending
Will growth remain low in the years ahead? It's not about inflation
Rationale for inflation has changed in recent decades: Yes, raise interest rates. But how?
And, Income is meaningless, example #388
Lars Christensen is encouraged by Stanley Fischer: http://marketmonetarist.com/2013/12/12/stanley-fischer-this-guy-can-keep-ngdp-on-a-straight-line/
Keynesians agree with Market Monetarists when it comes to weak demand: http://marketmonetarist.com/2013/12/15/christopher-pissarides-is-europe-working-the-answer-obviously-is-no/
UK labor market improves: http://marketmonetarist.com/2013/12/18/imagine-that-us-non-farm-payrolls-were-growing-by-400kmonth-that-is-how-strong-the-uk-labour-market-is/
Seriously, who would think this is a good graph? http://marketmonetarist.com/2013/12/16/european-horror-graph-of-the-day-the-greek-price-level-collapse/
Actually, someone likes this graph just fine... http://blog.supplysideliberal.com/post/70165552384/econlolcats-the-price-of-stability-is-eternal
This post continues "Turgot's land beating Samuelson's money" (Nick Rowe)
http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/we-know-the-economy-needs-a-bubble-but-how-big.html
Average unemployment of the last few years isn't necessarily the natural rate: http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/natural-rate-trend.html
Nick wants to put people back in the model: http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/microfoundations-for-peoples-sake.html
Izabella Kaminska contributes to the comments section (David Glasner)
http://uneasymoney.com/2013/12/13/does-macroeconomics-need-financial-foundations/
David provides a link for his recent paper: http://uneasymoney.com/2013/12/17/my-paper-on-hawtreys-good-and-bad-trade/
Where might Steve Williamson's model have an element of truth? (Bill Woolsey)
Does Quantitative Easing Cause Deflation?
"Suppose a single bank in a competitive banking system wanted to expand its lending": Private Money and Quantitative Easing
"You can't judge a monetary policy by nominal interest rates; you can't, you can't, you can't." (Ryan Avent) http://www.economist.com/blogs/freeexchange/2013/12/secular-stagnation
Does the deficit come down with growth? It depends (Britmouse):
http://uneconomical.wordpress.com/2013/12/12/productivity-growth-and-the-deficit/
How safe does government debt need to be? (Andy Harless)
http://blog.andyharless.com/2013/12/stochastic-dynamic-inefficiency-secular.html
An interesting take (James Pethokoukis): Maybe patriarchal labor unions are to blame for rising inequality
Mark Sadowski notes discussion by both Nick Rowe and Frances Coppola in this lengthy comments section: http://pragcap.com/stop-with-the-cutting-ioer-will-increase-lending-madness
Evan Soltas does an interview: http://esoltas.blogspot.com/2013/12/how-i-got-into-econ.html
James Hamilton tells the recent story of the Federal Reserve short term interest rate:
http://www.econbrowser.com/archives/2013/12/federal_reserve_3.html
Saturday, December 14, 2013
Getting Beyond Homelessness: Property Edition
Homelessness consists of many related experiences, which go well beyond taking one's chances in the elements outdoors. Once anyone has experienced some aspect of homelessness, life never feels or looks quite the same, even if only a short stretch is involved. While I suffered from a symbolic (identity) form of homelessness in recent years, that's hardly the same magnitude as being on the street with no house to sleep in. Identity homelessness is more a result of no meaningful employment, or too little work and social related engagement with others. Even so, involuntary solitude may be reminiscent at times of the solitary confinement in a prison cell.
Indeed, the only time I experienced the somewhat scary outdoors version, was a couple of nights back in Los Angeles in the early eighties. Plus, that's an experience which people from many life circumstance have had, upon moving to that area. So long as you had a car to spend the night in, things would generally turn out alright and you could return to the demands of whatever temporary job one was able to "scratch up", the next day. (in my case, selling pots and pans and the like, from the trunk of the Volvo)
The physical aspects of homelessness are a lot more unsettling when they're not short lived. What's more, an overall social dynamic is gradually shifting towards a reluctance to allow homeless people to remain in nearby areas. Yes, people still worry about the well being of the homeless, but there is a lot of uncertainty involved. Even though homelessness statistics have been reasonably contained in recent years (partly through imprisonment and suicide, no doubt), the root problems have yet to be addressed. Plus, in order for society to be able to face up to homelessness, also means owning up to some basic aspects of societal identity, unemployment and property use dynamism in general. Ideological and political discussions don't really get at that core. Homelessness is also a lack of understanding re the diminished capacity of property utility, in general.
Look at most any element of society today and ask, how dynamic is this particular social function or environment? There is a city block nearby where one of the elementary school buildings of my youth once stood. All that remains is a tree or two, some grass and a no loitering sign. I get the no loitering sign by the train tracks but hmm, this is not someone's parking lot or driveway...What's up with the warning, especially given the fact that local property taxes easily take care of spots like this? What could have been going on, at this small unassuming piece of property which would cause anyone to say, move on?
Certainly when we pay the price for private property, we deserve privacy. But when arbitrary decisions are made to just keep people off public properties of all kinds, my radar goes up in a hurry. Expectations to "stay away" from numerous public properties had already been a sore spot with me in the last decade. Worst on that list were too many neglected forests on supposedly public lands, in poor shape from lack of any maintenance or public engagement whatsoever, on the part of anyone. Is this the best we can do, because we can't figure out how to utilize public properties in ways more agreeable to everyone involved?
When I began my studies regarding lack of economic access, something that really stood out were ill defined expectations for continued economic dynamism, regarding both public and private property most everywhere I looked. Some logic, if it could be called that, had holes that were big enough to drive a semi through. Indeed, the most egregious destruction I observed of private property, came from a place where few expect. Plus, even talking about it is apparently off limits for some elected officials: the sad results of convoluted familial laws. Some states are probably are a bit more adept at problem solving and actually useful in legal terms. But others have legal arrangements which do not give parties any true means of negotiation for property, in spite of billions spent for nothing and people going into poverty in their attempts to problem solve.
Unfortunately, the lack of ability to effectively negotiate with family members regarding property, has destroyed far more residences, landholdings, businesses and communities than the pitiful forests I observed. If one were able to measure such destruction, it would probably be greater than the destruction of many wars, but there is little impetus from the legal profession that I know of, to offer services to clients which actually help them. That is one of the reasons I believe that people need simple legal alternatives for property use, in which parties agree not to destroy one another and their jointly used properties, upon separations. Gridlocked legalities and a lack of ability to effectively negotiate with one another, diminishes both public and private property utility in multiple dimensions over time, and homelessness is just of them.
While I still don't understand appropriate taxation for land holdings, this much I do know: people need options in both public and private property dimensions that are much more dynamic than the limited purposes both serve in the present. Even though commercial private property is supposedly more limited than public property: at the very least, when it is successful, it serves many purposes and creates pathways by which many individuals can get things done.
This post is not intended in any way to be an argument against public property, but to suggest that public property be reconfigured to provide more meaning and purpose for society than much of it now serves. What's more, it could be capable of multi-purpose and local wealth generation in ways similar to private property, but for all citizens of community to access and maintain responsibly. While private property often gets needlessly caught between opposing parties, public property more than anything is simply suffering a crisis of imagination. We need more property of public designation, but even so, such designations would be pointless if they aren't capable of contributing to overall community well being. And presently, too many public designations don't really do so.
Consider why Hume believed in an unequal distribution of property. As indicated in Wikipedia, Hume felt that perfect equality would destroy the ideas of thrift and industry. He believed that perfect equality would thus lead to impoverishment. My question is why, then, do we observe steady legal impoverishment of properties in general? Once, our legal system made it easier for the marketplace to prosper, just as Hernando de Soto wrote in "The Mystery of Capital". But since the start of the Great Recession, the hopefulness expressed in his book has been diminished by a developed world which has forgotten how to continue the dynamism it once believed in.
Some of my strong feelings about property came from witnessing first hand, what turned out to be a decades long war between others over property. Those years of struggle which I could hardly extract myself from, impacted my own life with a homelessness identity which I am still learning to overcome. That experience is one of the primary reasons I strongly uphold the ideal of flexible property components and land holdings which can be separated as needed for business, individual and personal reasons.
What's more, dynamic and flexible components will only become more needed in decades ahead as crazy ants, for instance, take over the Texas countryside if this article is to be believed. Let alone global warming swallowing cities, hurricanes - argh, how many more reasons do I need for flexible snap together building components to become a reality?
And those flexible building components would do a world of good for the homeless now. Granted, I know that there are lots more issues at stake than innovative building components for the homeless. Trust issues are paramount, and this is where getting to the heart of more productive economic activity could really make a difference. These things really need to be accomplished soon, because not enough people are presently able to make the vital connections between technology, the benefits of mass production and a relative current state of wealth which remains fragile as a result.
Indeed, the only time I experienced the somewhat scary outdoors version, was a couple of nights back in Los Angeles in the early eighties. Plus, that's an experience which people from many life circumstance have had, upon moving to that area. So long as you had a car to spend the night in, things would generally turn out alright and you could return to the demands of whatever temporary job one was able to "scratch up", the next day. (in my case, selling pots and pans and the like, from the trunk of the Volvo)
The physical aspects of homelessness are a lot more unsettling when they're not short lived. What's more, an overall social dynamic is gradually shifting towards a reluctance to allow homeless people to remain in nearby areas. Yes, people still worry about the well being of the homeless, but there is a lot of uncertainty involved. Even though homelessness statistics have been reasonably contained in recent years (partly through imprisonment and suicide, no doubt), the root problems have yet to be addressed. Plus, in order for society to be able to face up to homelessness, also means owning up to some basic aspects of societal identity, unemployment and property use dynamism in general. Ideological and political discussions don't really get at that core. Homelessness is also a lack of understanding re the diminished capacity of property utility, in general.
Look at most any element of society today and ask, how dynamic is this particular social function or environment? There is a city block nearby where one of the elementary school buildings of my youth once stood. All that remains is a tree or two, some grass and a no loitering sign. I get the no loitering sign by the train tracks but hmm, this is not someone's parking lot or driveway...What's up with the warning, especially given the fact that local property taxes easily take care of spots like this? What could have been going on, at this small unassuming piece of property which would cause anyone to say, move on?
Certainly when we pay the price for private property, we deserve privacy. But when arbitrary decisions are made to just keep people off public properties of all kinds, my radar goes up in a hurry. Expectations to "stay away" from numerous public properties had already been a sore spot with me in the last decade. Worst on that list were too many neglected forests on supposedly public lands, in poor shape from lack of any maintenance or public engagement whatsoever, on the part of anyone. Is this the best we can do, because we can't figure out how to utilize public properties in ways more agreeable to everyone involved?
When I began my studies regarding lack of economic access, something that really stood out were ill defined expectations for continued economic dynamism, regarding both public and private property most everywhere I looked. Some logic, if it could be called that, had holes that were big enough to drive a semi through. Indeed, the most egregious destruction I observed of private property, came from a place where few expect. Plus, even talking about it is apparently off limits for some elected officials: the sad results of convoluted familial laws. Some states are probably are a bit more adept at problem solving and actually useful in legal terms. But others have legal arrangements which do not give parties any true means of negotiation for property, in spite of billions spent for nothing and people going into poverty in their attempts to problem solve.
Unfortunately, the lack of ability to effectively negotiate with family members regarding property, has destroyed far more residences, landholdings, businesses and communities than the pitiful forests I observed. If one were able to measure such destruction, it would probably be greater than the destruction of many wars, but there is little impetus from the legal profession that I know of, to offer services to clients which actually help them. That is one of the reasons I believe that people need simple legal alternatives for property use, in which parties agree not to destroy one another and their jointly used properties, upon separations. Gridlocked legalities and a lack of ability to effectively negotiate with one another, diminishes both public and private property utility in multiple dimensions over time, and homelessness is just of them.
While I still don't understand appropriate taxation for land holdings, this much I do know: people need options in both public and private property dimensions that are much more dynamic than the limited purposes both serve in the present. Even though commercial private property is supposedly more limited than public property: at the very least, when it is successful, it serves many purposes and creates pathways by which many individuals can get things done.
This post is not intended in any way to be an argument against public property, but to suggest that public property be reconfigured to provide more meaning and purpose for society than much of it now serves. What's more, it could be capable of multi-purpose and local wealth generation in ways similar to private property, but for all citizens of community to access and maintain responsibly. While private property often gets needlessly caught between opposing parties, public property more than anything is simply suffering a crisis of imagination. We need more property of public designation, but even so, such designations would be pointless if they aren't capable of contributing to overall community well being. And presently, too many public designations don't really do so.
Consider why Hume believed in an unequal distribution of property. As indicated in Wikipedia, Hume felt that perfect equality would destroy the ideas of thrift and industry. He believed that perfect equality would thus lead to impoverishment. My question is why, then, do we observe steady legal impoverishment of properties in general? Once, our legal system made it easier for the marketplace to prosper, just as Hernando de Soto wrote in "The Mystery of Capital". But since the start of the Great Recession, the hopefulness expressed in his book has been diminished by a developed world which has forgotten how to continue the dynamism it once believed in.
Some of my strong feelings about property came from witnessing first hand, what turned out to be a decades long war between others over property. Those years of struggle which I could hardly extract myself from, impacted my own life with a homelessness identity which I am still learning to overcome. That experience is one of the primary reasons I strongly uphold the ideal of flexible property components and land holdings which can be separated as needed for business, individual and personal reasons.
What's more, dynamic and flexible components will only become more needed in decades ahead as crazy ants, for instance, take over the Texas countryside if this article is to be believed. Let alone global warming swallowing cities, hurricanes - argh, how many more reasons do I need for flexible snap together building components to become a reality?
And those flexible building components would do a world of good for the homeless now. Granted, I know that there are lots more issues at stake than innovative building components for the homeless. Trust issues are paramount, and this is where getting to the heart of more productive economic activity could really make a difference. These things really need to be accomplished soon, because not enough people are presently able to make the vital connections between technology, the benefits of mass production and a relative current state of wealth which remains fragile as a result.
Friday, December 13, 2013
Healthcare "Fail" Has a Silver Lining
How so? Every time I see one of those reports how the U.S. is near the bottom in terms of efficiency for healthcare spending in developed countries, I immediately think of the bright side: healthcare "fail" gives us a chance to seek out more inclusive free markets in knowledge use. What's more, open and voluntary healthcare markets can also serve as community templates, for further possibilities in other service and knowledge use areas. To be sure, it's not something that can happen overnight, but the lack of long term solutions for our present system, may eventually mean the demise of today's extreme limitations in healthcare practice.
Discrepancies have become vast, between what we would like to experience in service based terms, versus what people actually end up with. Insofar as markets for knowledge use are slowly evolving, the painfully dysfunctional healthcare marketplace of the U.S. is ripe for transformation. Just because a product is a services product, doesn't have to mean that more dynamic production and consumption patterns are impossibilities. Nor is any of this as simple as Baumol's disease costs, because methods of organization, ongoing coordination patterns, and potential healthcare strategies are also at stake.
Consider the recent "good" (?) news of growth containment in healthcare budgets. There is probably a world of pain behind those apparently "improved" numbers of slowing inflation, especially for anyone not close enough to retirement and Medicare. That is, many individuals and companies are likely delaying a lot of the healthcare consumption they would otherwise be taking on.
Delayed visits to the doctor are also a likely reality, since individuals are already transitioning out of private healthcare plans for the botched government rollout. Will it even be possible to determine the degree of activity which was lost in 2013, let alone continued delays in 2014? What's being missed in all this is the fact that balanced budgets and missed appointments are not a good indicator for imagined efficiency gains. While there are certainly problems in the system re some users "overusing" while others hardly use it at all, it seems fair to guess that few are really consuming to the degree that feels most appropriate to their circumstance, at the moment.
Not all doctors are comfortable with the participatory limits, which the AMA in particular has imposed over the years: wealth "shape shifting" limits on both production and consumption of healthcare in the U.S. While healthcare here has led to innovations which have spread around the world, at the same time its institutions have quietly subdued alternative strategies and healing methods. One aspect in this regard is that organized healthcare sometimes "takes out" preventative maintenance strategies, which can keep individuals from needing some surgeries in the first place.
How might one approach a better healthcare marketplace? Again this would not be a knowledge use market to replace current institutions, but to go where they can't go, and also provide what they often can't provide. Perhaps there was a time and place for the limitations they imposed so long as healthcare was available to wide swathes of the public, but that time is past. With government's permission, some doctors would be able to provide informal training in vital areas of medicine. This is especially needed for promising individuals in isolated areas who - by going the traditional training route - would have been priced out of the spending capacities of their own communities. Doubtless some would oppose this route, but it's not hard to see the writing on the wall otherwise as to a growing population with little healthcare access over time.
There is a significant degree of literature for alternative healing methods in the U.S. as well. While some of this is being accessed, one not only needs traditional medical education to provide it for patients, but the time available for alternative methods is quite limited. What's more, such options are more likely to be found in the cities, than in rural areas where they could do the most good for those with limited financial means. One of the benefits of voluntary coordination for healthcare is that people can also provide this in private settings which do not face the same regulatory problems and burdens of traditional healthcare environments. Private environments can be beneficial as well, to prevent the spread of disease and antibiotic resistant infections.
Lots of healthcare problem solving can be met without resorting to surgeries and extensive prescription drug use. Plus, some of us just don't have metabolisms that tolerate prescription drugs easily. Some healthcare needs are really about bringing what's available in urban areas back to rural areas as well. There are so many unique facets and aspects of healthcare that could be represented by many individuals, in communities both large and small. While some of us aren't well suited for providing more basic aspects of healthcare, all of us can still contribute something of real value, because so much about our lives is directly related to overall health.
Discrepancies have become vast, between what we would like to experience in service based terms, versus what people actually end up with. Insofar as markets for knowledge use are slowly evolving, the painfully dysfunctional healthcare marketplace of the U.S. is ripe for transformation. Just because a product is a services product, doesn't have to mean that more dynamic production and consumption patterns are impossibilities. Nor is any of this as simple as Baumol's disease costs, because methods of organization, ongoing coordination patterns, and potential healthcare strategies are also at stake.
Consider the recent "good" (?) news of growth containment in healthcare budgets. There is probably a world of pain behind those apparently "improved" numbers of slowing inflation, especially for anyone not close enough to retirement and Medicare. That is, many individuals and companies are likely delaying a lot of the healthcare consumption they would otherwise be taking on.
Delayed visits to the doctor are also a likely reality, since individuals are already transitioning out of private healthcare plans for the botched government rollout. Will it even be possible to determine the degree of activity which was lost in 2013, let alone continued delays in 2014? What's being missed in all this is the fact that balanced budgets and missed appointments are not a good indicator for imagined efficiency gains. While there are certainly problems in the system re some users "overusing" while others hardly use it at all, it seems fair to guess that few are really consuming to the degree that feels most appropriate to their circumstance, at the moment.
Not all doctors are comfortable with the participatory limits, which the AMA in particular has imposed over the years: wealth "shape shifting" limits on both production and consumption of healthcare in the U.S. While healthcare here has led to innovations which have spread around the world, at the same time its institutions have quietly subdued alternative strategies and healing methods. One aspect in this regard is that organized healthcare sometimes "takes out" preventative maintenance strategies, which can keep individuals from needing some surgeries in the first place.
How might one approach a better healthcare marketplace? Again this would not be a knowledge use market to replace current institutions, but to go where they can't go, and also provide what they often can't provide. Perhaps there was a time and place for the limitations they imposed so long as healthcare was available to wide swathes of the public, but that time is past. With government's permission, some doctors would be able to provide informal training in vital areas of medicine. This is especially needed for promising individuals in isolated areas who - by going the traditional training route - would have been priced out of the spending capacities of their own communities. Doubtless some would oppose this route, but it's not hard to see the writing on the wall otherwise as to a growing population with little healthcare access over time.
There is a significant degree of literature for alternative healing methods in the U.S. as well. While some of this is being accessed, one not only needs traditional medical education to provide it for patients, but the time available for alternative methods is quite limited. What's more, such options are more likely to be found in the cities, than in rural areas where they could do the most good for those with limited financial means. One of the benefits of voluntary coordination for healthcare is that people can also provide this in private settings which do not face the same regulatory problems and burdens of traditional healthcare environments. Private environments can be beneficial as well, to prevent the spread of disease and antibiotic resistant infections.
Lots of healthcare problem solving can be met without resorting to surgeries and extensive prescription drug use. Plus, some of us just don't have metabolisms that tolerate prescription drugs easily. Some healthcare needs are really about bringing what's available in urban areas back to rural areas as well. There are so many unique facets and aspects of healthcare that could be represented by many individuals, in communities both large and small. While some of us aren't well suited for providing more basic aspects of healthcare, all of us can still contribute something of real value, because so much about our lives is directly related to overall health.
Thursday, December 12, 2013
Time as Anchor
The realty of our measured time use matters immensely, both in both monetary and symbolic terms. Yet this measure of economic participation has not only been taken for granted, it has been abused time and again, by those who know it matters but can gain by keeping that information to themselves. Unfortunately it is not easy to observe the abuse, in that it generally happens in subtle contexts that play out spatially and over the course of time. Sometimes the full effect of abuse goes unchecked over multi-generational periods and contributes to business cycles in the process.
Once human skill develops and diversifies to a certain point, nominal targeting (aggregate spending) has the capacity to use time as a monetary anchor for economic stability. Why, then, are central banks reluctant to use NGDPLT as the primary monetary rule? Many who have gained power, have done so by abusing the anchor of time measure, whether by needless product limitations in the marketplace or by allowing finance to run amok with excessive take from the marketplace.
However the public needs to know what is actually at stake, for the very act of maintaining monetary confusion is still a powerful money generator for those who know how to play the confusion game. Arguments over financial regulation and government intervention only take attention away from what is actually needed: production reform and nominal targets for aggregate spending levels.
And to that end, governments and finance remain willing to obscure where the most important measure of economic activity exists. Perhaps this willing obfuscation wouldn't be so bad, if people could reasonably live with a limited rich class and no real participation from the rest. But our present environments and responsibilities were never laid out for those kinds of living options. Think of countless articles as to the costs of raising a child, for instance.
That doesn't mean some of us couldn't innovate into transformed living environments, at a fraction of today's costs. But so far that hasn't happened, and our monetary obligations to society are growing faster than income potential for the current infrastructure. Just one reason this is so important, is the fact that too few are really taking declining workforce participation seriously. To be sure, it's easy to rationalize that workforce participation was "artificially high" for decades thus a gradual return to something more "normal". But our present environment isn't ready for such a decline, normal or not. The fact that family formation is not really accessible to lower incomes tells us that. If we don't plan for better alternatives, technology is likely to be substituted on terms that are only accessible to some. Meanwhile in other areas without the same capital wealth, one can only guess what the price of one's room and board may actually consist of.
One reason for a possible bad outcome such as this: the world no longer has the same options for lifestyle choice that existed early in the 20th century. Before workforce participation ever became so high, people who could still opt out and live as one of my great uncles did, coasting through retirement and shooting squirrels out of the garden, fruit and nut trees so as to make squirrel dumplings. Some neighborhoods draw the line at shooting squirrels now, even if the pesky critters do throw half ripe fruit down to the ground.
But the more important point is that a lot of people aren't prepared to return to that subsistence still evident 50 years ago. For the most part, technology transformed land use options, and that in turn made our time use the ticket for economic access. The fixed scarcity of skills time use - not the fixed scarcity of land, - was supposed to be the primary wealth driver of the 21st century.
In subsistence circumstance, anyone gets that our time is important for survival. That does not necessarily mean we have to work nonstop, if basic needs are already being met in our environments and we utilize simple options. What it does mean is that participants have to take into account the maintenance needs of anything they create, use and rely upon, on a regular basis: let alone the time and resources that one's environment actually entails. I had to learn this lesson the hard way, by "saving money" on an older home which needed much more attention than I could give it with my limited finances and home repair skills.
Even people with more resources than I had, make the mistake of building homes requiring more hands on ability than they are able to provide when they get older. It is a travesty that people have not been able to innovate so that their environments don't have to be burdensome, difficult and even dangerous as they get older. It's great that we communicate better than ever before in the digital world. People complain regularly that the school environment hasn't changed in the last 100 years. But our surroundings also haven't changed one iota, in terms of making our lives easier or freeing up our time for other desirable activities.
Without the ability to use the fixed scarcity of our time as an anchor, we have no way to place relative scarcities into understandable and workable contexts. And because we do not understand the importance of time as a symbolic and monetary anchor, we have little means to free our time for anything but basic needs. To be sure there are individuals who manage to, but given the limitations of product definition they are in the minority.
Like the fixed scarcity of private property, our time use is a fixed scarcity in the midst of many confusing random scarcities. Just as property rights made today's marketplace possible, the right to competitive knowledge use in lateral time would make a free market in knowledge use possible as well. Consider what was written of David Hume, in Wikipedia:
When nations were in the midst of creating wealth and abundance, some individuals were able to declare to declare their time use as much more valuable than others, with the government's backing. Government acquiesced (thereby limiting time value for everyone else exponentially) in the belief that random scarcities could readily make up the difference for the fixed scarcity of time use. For a time, of course, they did. But now, those exponential differences mean the basic need of healthcare is only available to a portion of any population, regardless of money hoarding, compounding interest or any other numerous compensating factors.
The idea of secular stagnation really comes down to an inability to separate the idea of time use as fixed, from random scarcities in any meaningful context. It is when we look at the world from the window of time use, that the ability for other resources to contribute to our lives comes into sharp focus. This is also the window where we see what is possible to produce, so as to provide further choice for what is ultimately consumed. With time use as monetary anchor, we are better able to recognize what is actually scarce or plentiful in our own lives, and the degree to which that relies on income. That in turn leaves us free to determine the kinds of technology that works best for us.
With time as anchor, it becomes easier to consider innovation along income continuums that nations and corporations may not take into account. For example, innovation now is thought of as something not necessarily good by today's youth, in that they aren't convinced it would be used for actual utility. Somehow, a robot personal servant doesn't have the same marginal benefit, for instance, of a robot capable of cleaning chimneys or woodstove pipes on steep and frozen roofs, when people are no longer healthy enough to maintain balance in a biting wind.
Again this goes back to innovation through income spectrums and points along the Maslow pyramid. If we allow innovation in both basic and non essential areas, that immediately puts time back in our lives for the non essentials we crave. That also sidesteps the current problem of lower income "making do" with plentiful non essentials while not having basic essentials designed for their actual circumstance. This is a problem which leads to both social isolation, and the inability to be responsible for both cultural and familial expectations.
For all their seeming importance, government fiscal activities and for profit financial activities are just as random as many resource allocations that both capitalize on in the good times. Neither governments or finance should maximize our time use as bait for their personal rewards, because we still need our time use to get us through the rough patches. In other words, we are the ones who are expected to stay steady, whether the governments and the financial realm chooses to or not. If we are to fulfill our obligations, those in power might do us the favor of not taking away the fixed scarcity of time at our disposal.
While it is understandable that governments and finance wish to deem themselves primary, they do not have an ongoing and constant capacity by which to do so. Thus, they do us a disservice by pretending they are more capable than we, for they are more dependent on our economic participation than they care to admit. Growth for the long run means economic access by as many as possible, through as many means as possible. Otherwise no nation can remain strong.
Once human skill develops and diversifies to a certain point, nominal targeting (aggregate spending) has the capacity to use time as a monetary anchor for economic stability. Why, then, are central banks reluctant to use NGDPLT as the primary monetary rule? Many who have gained power, have done so by abusing the anchor of time measure, whether by needless product limitations in the marketplace or by allowing finance to run amok with excessive take from the marketplace.
However the public needs to know what is actually at stake, for the very act of maintaining monetary confusion is still a powerful money generator for those who know how to play the confusion game. Arguments over financial regulation and government intervention only take attention away from what is actually needed: production reform and nominal targets for aggregate spending levels.
And to that end, governments and finance remain willing to obscure where the most important measure of economic activity exists. Perhaps this willing obfuscation wouldn't be so bad, if people could reasonably live with a limited rich class and no real participation from the rest. But our present environments and responsibilities were never laid out for those kinds of living options. Think of countless articles as to the costs of raising a child, for instance.
That doesn't mean some of us couldn't innovate into transformed living environments, at a fraction of today's costs. But so far that hasn't happened, and our monetary obligations to society are growing faster than income potential for the current infrastructure. Just one reason this is so important, is the fact that too few are really taking declining workforce participation seriously. To be sure, it's easy to rationalize that workforce participation was "artificially high" for decades thus a gradual return to something more "normal". But our present environment isn't ready for such a decline, normal or not. The fact that family formation is not really accessible to lower incomes tells us that. If we don't plan for better alternatives, technology is likely to be substituted on terms that are only accessible to some. Meanwhile in other areas without the same capital wealth, one can only guess what the price of one's room and board may actually consist of.
One reason for a possible bad outcome such as this: the world no longer has the same options for lifestyle choice that existed early in the 20th century. Before workforce participation ever became so high, people who could still opt out and live as one of my great uncles did, coasting through retirement and shooting squirrels out of the garden, fruit and nut trees so as to make squirrel dumplings. Some neighborhoods draw the line at shooting squirrels now, even if the pesky critters do throw half ripe fruit down to the ground.
But the more important point is that a lot of people aren't prepared to return to that subsistence still evident 50 years ago. For the most part, technology transformed land use options, and that in turn made our time use the ticket for economic access. The fixed scarcity of skills time use - not the fixed scarcity of land, - was supposed to be the primary wealth driver of the 21st century.
In subsistence circumstance, anyone gets that our time is important for survival. That does not necessarily mean we have to work nonstop, if basic needs are already being met in our environments and we utilize simple options. What it does mean is that participants have to take into account the maintenance needs of anything they create, use and rely upon, on a regular basis: let alone the time and resources that one's environment actually entails. I had to learn this lesson the hard way, by "saving money" on an older home which needed much more attention than I could give it with my limited finances and home repair skills.
Even people with more resources than I had, make the mistake of building homes requiring more hands on ability than they are able to provide when they get older. It is a travesty that people have not been able to innovate so that their environments don't have to be burdensome, difficult and even dangerous as they get older. It's great that we communicate better than ever before in the digital world. People complain regularly that the school environment hasn't changed in the last 100 years. But our surroundings also haven't changed one iota, in terms of making our lives easier or freeing up our time for other desirable activities.
Without the ability to use the fixed scarcity of our time as an anchor, we have no way to place relative scarcities into understandable and workable contexts. And because we do not understand the importance of time as a symbolic and monetary anchor, we have little means to free our time for anything but basic needs. To be sure there are individuals who manage to, but given the limitations of product definition they are in the minority.
Like the fixed scarcity of private property, our time use is a fixed scarcity in the midst of many confusing random scarcities. Just as property rights made today's marketplace possible, the right to competitive knowledge use in lateral time would make a free market in knowledge use possible as well. Consider what was written of David Hume, in Wikipedia:
In contrast to Locke, Hume believes that private property isn't a natural right. Hume argues it is justified because resources are limited. Private property would be unjustified...if all goods were unlimited and available freely.
When nations were in the midst of creating wealth and abundance, some individuals were able to declare to declare their time use as much more valuable than others, with the government's backing. Government acquiesced (thereby limiting time value for everyone else exponentially) in the belief that random scarcities could readily make up the difference for the fixed scarcity of time use. For a time, of course, they did. But now, those exponential differences mean the basic need of healthcare is only available to a portion of any population, regardless of money hoarding, compounding interest or any other numerous compensating factors.
The idea of secular stagnation really comes down to an inability to separate the idea of time use as fixed, from random scarcities in any meaningful context. It is when we look at the world from the window of time use, that the ability for other resources to contribute to our lives comes into sharp focus. This is also the window where we see what is possible to produce, so as to provide further choice for what is ultimately consumed. With time use as monetary anchor, we are better able to recognize what is actually scarce or plentiful in our own lives, and the degree to which that relies on income. That in turn leaves us free to determine the kinds of technology that works best for us.
With time as anchor, it becomes easier to consider innovation along income continuums that nations and corporations may not take into account. For example, innovation now is thought of as something not necessarily good by today's youth, in that they aren't convinced it would be used for actual utility. Somehow, a robot personal servant doesn't have the same marginal benefit, for instance, of a robot capable of cleaning chimneys or woodstove pipes on steep and frozen roofs, when people are no longer healthy enough to maintain balance in a biting wind.
Again this goes back to innovation through income spectrums and points along the Maslow pyramid. If we allow innovation in both basic and non essential areas, that immediately puts time back in our lives for the non essentials we crave. That also sidesteps the current problem of lower income "making do" with plentiful non essentials while not having basic essentials designed for their actual circumstance. This is a problem which leads to both social isolation, and the inability to be responsible for both cultural and familial expectations.
For all their seeming importance, government fiscal activities and for profit financial activities are just as random as many resource allocations that both capitalize on in the good times. Neither governments or finance should maximize our time use as bait for their personal rewards, because we still need our time use to get us through the rough patches. In other words, we are the ones who are expected to stay steady, whether the governments and the financial realm chooses to or not. If we are to fulfill our obligations, those in power might do us the favor of not taking away the fixed scarcity of time at our disposal.
While it is understandable that governments and finance wish to deem themselves primary, they do not have an ongoing and constant capacity by which to do so. Thus, they do us a disservice by pretending they are more capable than we, for they are more dependent on our economic participation than they care to admit. Growth for the long run means economic access by as many as possible, through as many means as possible. Otherwise no nation can remain strong.
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