In a timeframe when economic arguments often get bogged down in particulars, I was somewhat relieved when Simon Wren-Lewis asked a rather basic question which boils down to this: what's the deal with the fight between monetary and fiscal advocates, anyway? Even though I have a limited understanding of macroeconomics beyond the level of a layperson, the fact that much of this discussion comes down to political differences is something I can engage in. That's not true because I think in normal political terms (as my readers are well aware) but because I prefer to weave my way around the minefields that both sides set up for one another. Why? Because I'm tired...and there are days when life feels too short for either "precise" logic or fallacy!
First, I need to stress that as a Market Monetarist, the basic issue for me is - yes - about a very specific parameter which I believe to be paramount for economic stability. (No, not that earlier IS-LM model that macroeconomists argued about) The parameter I'm concerned about, is a faithful following of the actual capacity which everyone has to spend - or consume - in any given timeframe. That is, money is made available to economic participants, based on recent commitments and contractual arrangements on everyone's part. The importance of providing adequate money for all the economic players (whoever they are) with a level target has been lost, in the competing arenas of finance demands and fought over government programs.
Even though following this parameter faithfully is not going to ease all unemployment, it can still clarify how to best focus on the remainder. By focusing on the actual time value of economic participants, the missing (knowledge use) marketplace of the present can also be addressed. That means governments can move away from inefficient and partial reimbursement of limited services, to reimbursing all citizens at local levels in their efforts to coordinate activity and services. When knowledge use becomes actual wealth and desirable product in its own right, services are no longer just a means to an end. This would be a tremendous boost for governments which have spent decades preparing citizens for knowledge use, only to end up not having room for them in the marketplace, because of tight money and special interests in the wake of the Great Recession.
When I suggest that monetary measures are more effective than fiscal measures, my reasoning also includes a historical timing element, besides the nominal targeting context. Governments in developed nations don't have the room to maneuver that they once had. Plus, the idea of fiscal action occurs within a general monetary framework at all times. What's more, the role of finance is quite similar to fiscal support in that regard. Unfortunately, a lot of priors for these arguments not only get lost, but correlation and causation are getting confused as well.
Therefore the primary thing I need to emphasize is the former growth trend level, which dropped at the onset of the Great Recession and has not recovered. What's more, it's difficult to even visualize what was lost, if graphs are not illustrated in nominal spending terms. Granted, some Market Monetarists no longer expect that the previous trend line can be restored, but until recently, there was considerable hope that it could be. What's more, Market Monetarists such as myself will continue to push for the return of the growth trajectory which existed prior to the Great Recession.
Not only do many fiscal theorists downplay this concern on the part of Market Monetarists, but they also downplay MM concern regarding persistent long term unemployment. Very few macroeconomists have given enough thought to that still missing territory in recent debates, which has resulted in yet more misunderstandings. Throwing up one's hands and declaring that we are facing stagnation well into the future, is not addressing the issue.
Why is it so hard to explore what happened to the core idea of wealth, almost overnight? Yes, people bought increasingly larger homes as the 20th century progressed. But this was hardly the way that most people conceptualized or spoke of wealth. So why did a decline in housing destroy wealth building potential? This issue is barely being spoken of in the present, and that wealth needs to be recaptured both in knowledge use and services terms. No one can afford to exclude the concept of missing wealth indefinitely, from these most recent versions of monetary and fiscal debate.
Governments once made a tremendous difference in infrastructure because of their ability to affect economic conditions in general. Unfortunately, this flexibility has been lost. What's more, some of the reasoning for that loss goes beyond finger pointing, and governments can reach out to their own citizens to find greater flexibility in decision making. So when I suggest that fiscal outlays are not as effective as monetary outlays, much of this has to do with government's inability to coordinate societal goals on its own. A primary reason I advocate economic coordination through informal group settings across the U.S. (domestic summits for citizens), is the fact that governments and special interests have become too entrenched to be able to respond to the actual needs of present generations.
The space in which many governments could partake in infrastructural design, was quickly filled, defined and hardened by special interests in the 20th century. That's why fiscal action is not the guaranteed economic booster it once was, especially in developed nations. In the meantime, past infrastructure continues to decline, and future infrastructure cannot be agreed upon . But even these differences in focus are not always obvious, because younger generations will be living in ways quite different from the Baby Boomers and the generation just prior to them.
Focusing on technical differences in models between New Keynesians and Market Monetarists has not really borne fruit, which is why I suggest digging a bit deeper, now. Even exploring political differences is not enough, for polarization is far greater here, than in the economics profession itself. For this blogger, recognizing the importance of following a nominal level target is vital, because until all economic actors are taken into account, finance alongside other special interests are going to win the bigger part of these battles while the rest of us lose.
Any time people can agree on coordinated action for the economy, fiscal efforts can certainly play a vital role. It is when fiscal elements are used instead for special interests that no one gains. Instead, more people ultimately end up unemployed or driven out of business, and taxes are even harder to come by. What the nominal target insists upon in all this, is that we all are monetarily covered for what we are already obligated to in the present, no more and no less.
That is the best starting point we have. When everyone recognizes what it actually means, then government efforts can continue to play their part in economic activity, just as they always have. Unfortunately, government efforts have become too bogged down in past promises of late, to really assist in present needs. Which is also why a better understanding of the monetary role is needed now, so that nations might once again move forward.
Tuesday, January 7, 2014
Wednesday, January 1, 2014
Midweek Market Monetarist Links and Summaries - 1/1/14
Happy New Year!
This has been a light week for blogging in general, although Nick Rowe has been quite busy...
Those who hire - do they "gain" in a recession?http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/efficiency-wages-and-recessions.html#more
There is a taboo against buyers of labor switching to a competing seller who offers a better deal. There is no taboo against sellers of labor switching to a competing buyer who offers a better deal.
"Never reason from an increase in inequality...Inequality is an endogenous variable": http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/two-compulsory-lotteries.html
Why can't all banks be as safe as the Bank of Canada? http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/banks-with-100-capital-ratios.html
What happens when two currencies are identical, but only one is backed by assets? http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/backedcoin-vs-unbackedcoin.html
My thoughts on reading this post: Remember Monopoly games as a kid? Imagine that - for a couple of turns - the banker gets cold feet and refuses to follow, back up or otherwise honor the role of the dice, that is our "moves". (Marcus Nunes)
http://thefaintofheart.wordpress.com/2013/12/25/in-5-takeaways-on-how-bernanke-will-be-remembered-pro-or-con-they-all-get-it-wrong/
In 2010, something happened: http://thefaintofheart.wordpress.com/2013/12/26/swedens-loss-of-faith/
1960's all over again? Except this time, finance doesn't have the "teeth" to back the fiscal bet:
http://thefaintofheart.wordpress.com/2013/12/27/monetary-policy-trumps-fiscal-policy/
Output alone does not tell us participation levels: http://thefaintofheart.wordpress.com/2013/12/29/never-reason-from-the-previous-peak/
Remember this bet? (Which Krugman "lost") http://thefaintofheart.wordpress.com/2013/12/30/nobel-wager/
Some interesting aspects of currency demand at Christmas, from Scott Sumner's dissertation.
When tapering is done, that doesn't mean the work of (most) Market Monetarists is done, by any means: Brace yourself for the taper
Scott will be guest blogging at Econlog this year Yes he will still continue his main blog as well.
Remember Dustin's question in one of Scott Sumner's posts, last week? Some more "untangling" in these two responses. First one is from David Glasner: http://uneasymoney.com/2013/12/26/never-mistake-a-change-in-quantity-demanded-for-a-change-in-demand/
And the second post is from Bill Woolsey: Interest Rates and Investment
Lars Christensen covers lots of territory in this post, and also thoughts on family life:
http://marketmonetarist.com/2013/12/26/christmas-muslings-on-life-money-and-blogging/
Kevin Erdmann understands the degree to which Obamacare affects very real scarcities - An important post:
http://idiosyncraticwhisk.blogspot.com/2013/12/abundance-requires-real-time-knowledge.html
This has been a light week for blogging in general, although Nick Rowe has been quite busy...
Those who hire - do they "gain" in a recession?http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/efficiency-wages-and-recessions.html#more
There is a taboo against buyers of labor switching to a competing seller who offers a better deal. There is no taboo against sellers of labor switching to a competing buyer who offers a better deal.
"Never reason from an increase in inequality...Inequality is an endogenous variable": http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/two-compulsory-lotteries.html
Why can't all banks be as safe as the Bank of Canada? http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/banks-with-100-capital-ratios.html
What happens when two currencies are identical, but only one is backed by assets? http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/12/backedcoin-vs-unbackedcoin.html
My thoughts on reading this post: Remember Monopoly games as a kid? Imagine that - for a couple of turns - the banker gets cold feet and refuses to follow, back up or otherwise honor the role of the dice, that is our "moves". (Marcus Nunes)
http://thefaintofheart.wordpress.com/2013/12/25/in-5-takeaways-on-how-bernanke-will-be-remembered-pro-or-con-they-all-get-it-wrong/
In 2010, something happened: http://thefaintofheart.wordpress.com/2013/12/26/swedens-loss-of-faith/
1960's all over again? Except this time, finance doesn't have the "teeth" to back the fiscal bet:
http://thefaintofheart.wordpress.com/2013/12/27/monetary-policy-trumps-fiscal-policy/
Output alone does not tell us participation levels: http://thefaintofheart.wordpress.com/2013/12/29/never-reason-from-the-previous-peak/
Remember this bet? (Which Krugman "lost") http://thefaintofheart.wordpress.com/2013/12/30/nobel-wager/
Some interesting aspects of currency demand at Christmas, from Scott Sumner's dissertation.
When tapering is done, that doesn't mean the work of (most) Market Monetarists is done, by any means: Brace yourself for the taper
Scott will be guest blogging at Econlog this year Yes he will still continue his main blog as well.
Remember Dustin's question in one of Scott Sumner's posts, last week? Some more "untangling" in these two responses. First one is from David Glasner: http://uneasymoney.com/2013/12/26/never-mistake-a-change-in-quantity-demanded-for-a-change-in-demand/
And the second post is from Bill Woolsey: Interest Rates and Investment
Lars Christensen covers lots of territory in this post, and also thoughts on family life:
http://marketmonetarist.com/2013/12/26/christmas-muslings-on-life-money-and-blogging/
Kevin Erdmann understands the degree to which Obamacare affects very real scarcities - An important post:
http://idiosyncraticwhisk.blogspot.com/2013/12/abundance-requires-real-time-knowledge.html
Sunday, December 29, 2013
Time Value is a Leap of Faith
We know that we can create value from our time - not just for ourselves, but for others as well. Why, then, is this so difficult to express monetarily in the present? It's an important issue: not just because of the economic responsibilities we hold in common, but because of the identities we assume through production and exchange. There is no separation of economic activity from our aggregate participation, even if the world of finance tries to make it so.
In other words, economic growth rises to the aggregate level of our actual production and consumption, and the money we print for that process. What's more, we're kidding ourselves whenever we put a stop to multiple means of production, and yet still expect everyone to be financially responsible for their own circumstance. Some in power may think it's possible to define wealth outside the perimeters of actual human participation. But in the long run, economic equilibrium always knows the difference.
Ongoing learning is a primary investment; skills sets and the mental spaces we inhabit, our calling cards. And yet, these forms of capital still end up outside the realm of economic activity that became the early 21st century. Presently, we are actually working harder to keep knowledge use out of the marketplace than we would be, if the tide of knowledge flowed around the barriers that have been placed in its path.
How do we know the tide is being held back? Think about the locations where knowledge and important information are "allowed entry". That is, for what society has deemed important enough to actually consider with randomly mined time value (i.e. not necessarily accomplish). It's an overwhelming environment, where everything of significance that needs to be happen, is trying to materialize along the same channels and limited time frames. From Shane Parrish (Farnam Street):
Services have mostly been provisioned in three ways: government redistribution, individuals with high discretionary income, or else randomly mined by institutions in general. That is, even though our time is a fixed scarcity, it came to be used in the 20th century as a random scarcity. Other service utilization remains cultural, religious, or outside of the bounds of rationality (i.e. near slavery or prisoner like conditions). That means we haven't really been free to coordinate services with one another as individuals: a reality which puts many men, women and young adults into compromised realities. Until services are recognized as a valuable form of product in their own right, their status as real wealth remains in jeopardy. When we think about substantial supply shocks, it becomes apparent that services of all kinds are disrupted - not just in depressions but recessions as well.
Today, governments are implored to reduce their budgets, and institutions of all kinds tend to the bottom line by reducing services needs to a bare minimum. Consequently, individuals with discretionary income are the only ones expanding services needs in a relative sense. Even if knowledge use is being funded, the purpose of that use may be different from the perspective of those who contribute time value. Thus in the aggregate - even with private substitution - knowledge use for multiple areas continues to decline in a monetary sense.
In the 20th century, even though we were making investments to improve the quality of our time use, we were still - unfortunately - moving away from the concept of our time as holding intrinsic worth outside of institutional structure. Prior to mass employment, time use took place primarily in managerial terms. That is, time value was structured so as to be responsible for a wide variety of resource combinations in one's immediate environment. Home economics was just one aspect of this reality, and management didn't necessarily mean status just as it doesn't necessarily mean so now.
Even though the 21st century strongly suggests a return to general environment management, it has become difficult to break away from the idea of time use as secondary to hierarchy. For many groups, boss and employee structures are all they've ever known. What's more, management models suggested in the present exist in conjunction with highly evolved technology, as well as the evolved skills sets of others. Institutions were only the first stop for skills evolution. Today, important patterns for economic activity occur within flexible teams and individual matches, rather than random elements within closely held institutions. This is as true for small communities, as for any city.
Significantly, it is the new technology that calls us back to a (now) earlier form of environment and resource management paradigm - the same evolution of which the 20th century asked us to temporarily reverse course. That is, the technology of the 19th and 20th centuries needed us to subsume identity into divisions of labor that were determined outside of ourselves, when technology could only provide simpler functions of labor provision alongside us.
This is why the reclamation of our time value would be an immense leap of faith. We are quite literally being asked - as fully participating individuals - to coordinate the needs of society, the needs of ongoing production and the needs of local community at the same time, if in fact these vital tasks are going to be done at all. What's more, we need to make this responsibility an understandable part of our monetary framework. Governments have taken these tasks and gone as far with them as they possibly can. Indeed, it is a wonder they have been able to advance knowledge use to the degree that they have.
Recall the earlier time management, before specific division of labor. In this environment, by way of property holdings, we moved between value in use and value in exchange. Generally, value in exchange was the additional product separate from our time. However in today's environment, our time is the very element that has greater value than what the robot or economy of scale can contribute. Often the product (separate from time) is our value in use tool, while the value in exchange marketplace to be created is one of ideas and negotiation.
Because it is impossible to assign contrasting value to complex aspects of knowledge use, lateral time becomes the plane in which we lever arbitrage. Here, time products are decisions, check-ins, verifications, acknowledgements, assistance, encouragement, maintenance, exploration, comparison, contrast, elucidation, validation or simply hearing one another. In other words, we highly value personal time for the kinds of things most of us really don't want robots to do for us. But when no one leaves room or recognition for time value in society, social elements tend not to happen anywhere near the degree they are needed in the aggregate.
There is no denying the missing element of time value today: it can be readily seen in the growth potential of nations, as that growth potential falls away from earlier long term trajectories (aptly illustrated by Marcus Nunes). And yet, sometimes there are glimpses of hope for better outcomes, such as the recent posts on respect. In one, Bryan Caplan suggests we can grow the respect pie (I like that term). Just as Bryan saw a beneficial addition instead of zero sum, the knowledge use pie need not be zero sum, either. Instead of letting knowledge use and valued services wither away because the old methods of funding no longer work, we can put real value back into time use. By doing so, services can once again take on added dimensions, renewed purpose and social meaning.
Services wealth has the capacity to smooth business cycles, bring economic diversity back to local economies, and reorient our time use as the primary intersection for resource use of all kinds. Services and knowledge use are valued product in their own right, even if they never had the chance to be thought of in those terms. Even though our time is fixed scarcity, knowledge use has the capacity to follow an ever growing trajectory. That is, when we refuse to let knowledge diversity be shut down by institutions or economic instability.
Technology allowed us to overcome the problem of land as fixed scarcity, and that was the very definition of real progress. However, in order not to default back to land use for survival, we have to evolve skills use so that technology can continue to work for us. By returning time use to the status of a fixed economic element, we can manage and coordinate knowledge use, just as we once managed and coordinated the resources of land holdings.
In other words, economic growth rises to the aggregate level of our actual production and consumption, and the money we print for that process. What's more, we're kidding ourselves whenever we put a stop to multiple means of production, and yet still expect everyone to be financially responsible for their own circumstance. Some in power may think it's possible to define wealth outside the perimeters of actual human participation. But in the long run, economic equilibrium always knows the difference.
Ongoing learning is a primary investment; skills sets and the mental spaces we inhabit, our calling cards. And yet, these forms of capital still end up outside the realm of economic activity that became the early 21st century. Presently, we are actually working harder to keep knowledge use out of the marketplace than we would be, if the tide of knowledge flowed around the barriers that have been placed in its path.
How do we know the tide is being held back? Think about the locations where knowledge and important information are "allowed entry". That is, for what society has deemed important enough to actually consider with randomly mined time value (i.e. not necessarily accomplish). It's an overwhelming environment, where everything of significance that needs to be happen, is trying to materialize along the same channels and limited time frames. From Shane Parrish (Farnam Street):
I'm hard pressed to think of an environment less conducive to rational decisions than that of the modern office worker...Environments play an important role on individual and collective abilities to make decisions and yet most organizations spend zero time thinking about this.Of course the problem here is that organizations can't really remedy the problem on their own. What this really comes down to is that we have not yet learned to think of many important services in a true market based sense. Even monetary policy can miss this to a degree, in that additional stimulus also has the capacity to add to the service product options (and participants) that gain entry into the marketplace, before translating into higher prices. Or said another way, tight money can also lower divisions of services differentiation in a quantitative sense.
Services have mostly been provisioned in three ways: government redistribution, individuals with high discretionary income, or else randomly mined by institutions in general. That is, even though our time is a fixed scarcity, it came to be used in the 20th century as a random scarcity. Other service utilization remains cultural, religious, or outside of the bounds of rationality (i.e. near slavery or prisoner like conditions). That means we haven't really been free to coordinate services with one another as individuals: a reality which puts many men, women and young adults into compromised realities. Until services are recognized as a valuable form of product in their own right, their status as real wealth remains in jeopardy. When we think about substantial supply shocks, it becomes apparent that services of all kinds are disrupted - not just in depressions but recessions as well.
Today, governments are implored to reduce their budgets, and institutions of all kinds tend to the bottom line by reducing services needs to a bare minimum. Consequently, individuals with discretionary income are the only ones expanding services needs in a relative sense. Even if knowledge use is being funded, the purpose of that use may be different from the perspective of those who contribute time value. Thus in the aggregate - even with private substitution - knowledge use for multiple areas continues to decline in a monetary sense.
In the 20th century, even though we were making investments to improve the quality of our time use, we were still - unfortunately - moving away from the concept of our time as holding intrinsic worth outside of institutional structure. Prior to mass employment, time use took place primarily in managerial terms. That is, time value was structured so as to be responsible for a wide variety of resource combinations in one's immediate environment. Home economics was just one aspect of this reality, and management didn't necessarily mean status just as it doesn't necessarily mean so now.
Even though the 21st century strongly suggests a return to general environment management, it has become difficult to break away from the idea of time use as secondary to hierarchy. For many groups, boss and employee structures are all they've ever known. What's more, management models suggested in the present exist in conjunction with highly evolved technology, as well as the evolved skills sets of others. Institutions were only the first stop for skills evolution. Today, important patterns for economic activity occur within flexible teams and individual matches, rather than random elements within closely held institutions. This is as true for small communities, as for any city.
Significantly, it is the new technology that calls us back to a (now) earlier form of environment and resource management paradigm - the same evolution of which the 20th century asked us to temporarily reverse course. That is, the technology of the 19th and 20th centuries needed us to subsume identity into divisions of labor that were determined outside of ourselves, when technology could only provide simpler functions of labor provision alongside us.
This is why the reclamation of our time value would be an immense leap of faith. We are quite literally being asked - as fully participating individuals - to coordinate the needs of society, the needs of ongoing production and the needs of local community at the same time, if in fact these vital tasks are going to be done at all. What's more, we need to make this responsibility an understandable part of our monetary framework. Governments have taken these tasks and gone as far with them as they possibly can. Indeed, it is a wonder they have been able to advance knowledge use to the degree that they have.
Recall the earlier time management, before specific division of labor. In this environment, by way of property holdings, we moved between value in use and value in exchange. Generally, value in exchange was the additional product separate from our time. However in today's environment, our time is the very element that has greater value than what the robot or economy of scale can contribute. Often the product (separate from time) is our value in use tool, while the value in exchange marketplace to be created is one of ideas and negotiation.
Because it is impossible to assign contrasting value to complex aspects of knowledge use, lateral time becomes the plane in which we lever arbitrage. Here, time products are decisions, check-ins, verifications, acknowledgements, assistance, encouragement, maintenance, exploration, comparison, contrast, elucidation, validation or simply hearing one another. In other words, we highly value personal time for the kinds of things most of us really don't want robots to do for us. But when no one leaves room or recognition for time value in society, social elements tend not to happen anywhere near the degree they are needed in the aggregate.
There is no denying the missing element of time value today: it can be readily seen in the growth potential of nations, as that growth potential falls away from earlier long term trajectories (aptly illustrated by Marcus Nunes). And yet, sometimes there are glimpses of hope for better outcomes, such as the recent posts on respect. In one, Bryan Caplan suggests we can grow the respect pie (I like that term). Just as Bryan saw a beneficial addition instead of zero sum, the knowledge use pie need not be zero sum, either. Instead of letting knowledge use and valued services wither away because the old methods of funding no longer work, we can put real value back into time use. By doing so, services can once again take on added dimensions, renewed purpose and social meaning.
Services wealth has the capacity to smooth business cycles, bring economic diversity back to local economies, and reorient our time use as the primary intersection for resource use of all kinds. Services and knowledge use are valued product in their own right, even if they never had the chance to be thought of in those terms. Even though our time is fixed scarcity, knowledge use has the capacity to follow an ever growing trajectory. That is, when we refuse to let knowledge diversity be shut down by institutions or economic instability.
Technology allowed us to overcome the problem of land as fixed scarcity, and that was the very definition of real progress. However, in order not to default back to land use for survival, we have to evolve skills use so that technology can continue to work for us. By returning time use to the status of a fixed economic element, we can manage and coordinate knowledge use, just as we once managed and coordinated the resources of land holdings.
Saturday, December 28, 2013
Overcoming Land Use and Knowledge Use Scarcities
There has been interesting discussion about two subjects of late: "inequality" and "optimal" land taxation (yep, scare quotes). Since my notes for both were a bit jumbled, it seemed appropriate to consider them together in this post. Certainly, optimal land use is a random (i.e. not fixed) scarcity. That's a reality which can eventually dash dreams and tax schemes alike. It's too easy to forget that when economic participation becomes limited, land use and land valuations can also suffer. What's more, some of the most problematic aspects of apparent inequality, primarily stem from limits in knowledge use.
Often, what appears to be insurmountable inequality and scarcity, are little more than the restrictions we collectively impose upon ourselves - something that rising income does not really address. The more that wages rise, the more tempting it can be to place further restrictions on overall land use and related assets. This makes us co-conspirators with the governments that restrict our options, and it also contributes to the land use scarcity which now makes homelessness a more difficult default position than ever, to maneuver.
This same lockout effect contributes to knowledge use scarcities, in that there is less overall economic participation to fund needed services on the part of everyone. One of the problems in using land taxation to generate services, is the fact that no one can predict whether many locations can generate a continuous wealth equilibrium. Communities often make the same mistakes as individuals when it comes to erroneous calculations. That is, they attempt to maintain certain levels of wealth redistribution through income capacity and exclusivity, rather than by continuous adaptation and multiple choice options for economic progress.
It's easy to lampoon governments for not being willing to start over, when it comes to the fiscal adjustments that are needed in the present. But governments' desires to make choices based on what generally worked before, are echoed by communities which will use the same economic strategies over and over - as long as possible. When we look around us now and say, "Egad...inequality!", what we're really seeing is a long term result of society's natural instinct to put up walls against economic inclusion, as wealth creation strategies.
Many varying paths have resulted - and converged - from that basic instinct. The fact that people have used exclusion tactics for far too long, has also led financial adjustments which distort monetary policies, savings and investments in general. This happens in numerous ways, especially at local levels where other options for economic activity and wealth creation have been closed off. Just the same, the time has arrived that these arbitrary walls need to be torn down. And it is best to do so with creativity and imagination, instead of war and pointing fingers at the supposed enemies.
Fortunately, land use aspects of scarcity is not as difficult to visualize as knowledge use scarcity, thus they are receiving a fair amount of consideration in the present. Still: forced, ad-hoc and otherwise reactionary land use "solutions" are no way to approach the matter. How to think about the kinds of options people need? First, all possibilities need to be presented in simple and recognizable forms. Otherwise, people would invest time, energy and effort in them, only to be disappointed that there was not enough common vision to sustain the process. What's more, this is not just a matter of walling off higher income communities from lower income communities as people are politically tempted to do in the present. Not only would complete separation of income levels create economic instability, but those static formations would not be sustainable.
So in a nutshell: how to approach what the title of this post suggests? Equality of opportunity means equality in time use, alongside accessibility in resource use. Services access has mostly become a problem for those who do not have middle upper to upper level incomes. What this also means is that anyone who has adequate income to pay for needed services, does not need to utilize systems that generate equality in time use. Just the same, these systems could coexist in the same places and environments, if it is widely recognized what the differences between them actually consist of. What's more, secondary systems of lateral knowledge use are capable of providing vital back up systems for knowledge use preservation. This issue becomes especially important, whenever knowledge use systems that rely on upper income levels become threatened by negative supply shocks or other problems.
Plus, accessibility in resource use does not mean the same kind of endogenous coordination structure, that lateral time use depends upon. Local resources would rely on the same pricing mechanisms as they would anywhere in the world. Any difference in wealth creation for product, lies in the degree to which local community can add value to those local resources before they ever leave the area. However this is an opportunity which far too many local economies have not been able to capitalize on: the combination of (price exogenous) commodity use alongside local endogenous coordination and relevant education. In other words, local pricing (through voting) optimizes services, while global pricing optimizes product and resources separate from our time.
With this understandable separation, many local economies would no longer be forced to maximize wealth creation through asset formations or bare bones commodity prices, just to pay for needed services formations. Problems of apparent inequality would fall away, as people start to produce and consume services that were once associated primarily with either formative years or upper level incomes. What's more, varied combinations of production and consumption formations in multiple use spaces can serve to break down land use scarcities. This can happen in part by loosely formed associations which coalesce for specific and variable needs.
3D printing technology will make it easier to encourage, what previously took place mostly through creative destruction in city locations. How so? There will not be such significant cost for capital, at risk for specific product formulations. That also allows individuals to claim small projects as their own. Because of this, economic activity would also shift back towards knowledge use, in that more knowledge will be required for short runs of product. This in turn makes it easier for those involved in services formations to maintain direct links to production cycles as well. Consider Lee Billings, in an article about architecture:
Snap together and pull apart building components could also allow greater flexibility in working relationships, as well as living arrangements. None of this is to suggest these are "preferable" to solid construction, long term commitments or fixed property purchases for that matter. Rather, land use flexibility provides choices that allow real respect for anyone with "handicaps" of any nature. By creating multiple definitions for economic access, individuals have the chance to survive occasional "steps back" (instead of forward) when necessary, and yet still be able to strive for their life's goals. Indeed, legal rules in the U.S. once gave individuals the ability to either start over or start out incrementally, when they were unable to do so in the Old World.
Flexible land use and building components also make one's personal income less important for economic mobility. Think of the race between the tortoise and the hare. When property and knowledge use take the tortoise into account, far more wealth is ultimately created in the process. That means less financial risk as well, when the world quits struggling to fit everyone into the same mold. Our ongoing efforts to survive and thrive deserve to be a greater determinant of our life options than they presently are. Consider for example, this advice about our future from the above link at HBR,
Knowledge use and land use scarcities can be overcome. How so? By creating economic time and space for multiple participants over the long run, rather than expecting individuals or institutions to be the sole provider every day of the week or not at all. Monopolies in scarce resources are one thing, but monopolies in services only make people forget how to negotiate with one another for their most basic life needs. Worse, knowledge monopolies make people forget the immense value of knowledge itself. When the differences between real scarcities and false scarcities are not well understood, the idea of "affordable" or "not affordable" is meaningless. By using environment integration and getting to the root of unnecessary time scarcities, it becomes easier to determine optimal choices for our finite time.
Often, what appears to be insurmountable inequality and scarcity, are little more than the restrictions we collectively impose upon ourselves - something that rising income does not really address. The more that wages rise, the more tempting it can be to place further restrictions on overall land use and related assets. This makes us co-conspirators with the governments that restrict our options, and it also contributes to the land use scarcity which now makes homelessness a more difficult default position than ever, to maneuver.
This same lockout effect contributes to knowledge use scarcities, in that there is less overall economic participation to fund needed services on the part of everyone. One of the problems in using land taxation to generate services, is the fact that no one can predict whether many locations can generate a continuous wealth equilibrium. Communities often make the same mistakes as individuals when it comes to erroneous calculations. That is, they attempt to maintain certain levels of wealth redistribution through income capacity and exclusivity, rather than by continuous adaptation and multiple choice options for economic progress.
It's easy to lampoon governments for not being willing to start over, when it comes to the fiscal adjustments that are needed in the present. But governments' desires to make choices based on what generally worked before, are echoed by communities which will use the same economic strategies over and over - as long as possible. When we look around us now and say, "Egad...inequality!", what we're really seeing is a long term result of society's natural instinct to put up walls against economic inclusion, as wealth creation strategies.
Many varying paths have resulted - and converged - from that basic instinct. The fact that people have used exclusion tactics for far too long, has also led financial adjustments which distort monetary policies, savings and investments in general. This happens in numerous ways, especially at local levels where other options for economic activity and wealth creation have been closed off. Just the same, the time has arrived that these arbitrary walls need to be torn down. And it is best to do so with creativity and imagination, instead of war and pointing fingers at the supposed enemies.
Fortunately, land use aspects of scarcity is not as difficult to visualize as knowledge use scarcity, thus they are receiving a fair amount of consideration in the present. Still: forced, ad-hoc and otherwise reactionary land use "solutions" are no way to approach the matter. How to think about the kinds of options people need? First, all possibilities need to be presented in simple and recognizable forms. Otherwise, people would invest time, energy and effort in them, only to be disappointed that there was not enough common vision to sustain the process. What's more, this is not just a matter of walling off higher income communities from lower income communities as people are politically tempted to do in the present. Not only would complete separation of income levels create economic instability, but those static formations would not be sustainable.
So in a nutshell: how to approach what the title of this post suggests? Equality of opportunity means equality in time use, alongside accessibility in resource use. Services access has mostly become a problem for those who do not have middle upper to upper level incomes. What this also means is that anyone who has adequate income to pay for needed services, does not need to utilize systems that generate equality in time use. Just the same, these systems could coexist in the same places and environments, if it is widely recognized what the differences between them actually consist of. What's more, secondary systems of lateral knowledge use are capable of providing vital back up systems for knowledge use preservation. This issue becomes especially important, whenever knowledge use systems that rely on upper income levels become threatened by negative supply shocks or other problems.
Plus, accessibility in resource use does not mean the same kind of endogenous coordination structure, that lateral time use depends upon. Local resources would rely on the same pricing mechanisms as they would anywhere in the world. Any difference in wealth creation for product, lies in the degree to which local community can add value to those local resources before they ever leave the area. However this is an opportunity which far too many local economies have not been able to capitalize on: the combination of (price exogenous) commodity use alongside local endogenous coordination and relevant education. In other words, local pricing (through voting) optimizes services, while global pricing optimizes product and resources separate from our time.
With this understandable separation, many local economies would no longer be forced to maximize wealth creation through asset formations or bare bones commodity prices, just to pay for needed services formations. Problems of apparent inequality would fall away, as people start to produce and consume services that were once associated primarily with either formative years or upper level incomes. What's more, varied combinations of production and consumption formations in multiple use spaces can serve to break down land use scarcities. This can happen in part by loosely formed associations which coalesce for specific and variable needs.
3D printing technology will make it easier to encourage, what previously took place mostly through creative destruction in city locations. How so? There will not be such significant cost for capital, at risk for specific product formulations. That also allows individuals to claim small projects as their own. Because of this, economic activity would also shift back towards knowledge use, in that more knowledge will be required for short runs of product. This in turn makes it easier for those involved in services formations to maintain direct links to production cycles as well. Consider Lee Billings, in an article about architecture:
Architecture will eventually enter a more biomimetic phase as the need grows for more energy-efficient building. Agent-based optimizations could become commonplace, along with new construction technologies such as 3D printing, which would allow unprecedented architectural experimentation and innovation. A revolution may occur in how humans construct and live within their homes. Boxy, self-similar houses and office buildings could give way to a wild profusion of easily produced and altered organic forms.
Snap together and pull apart building components could also allow greater flexibility in working relationships, as well as living arrangements. None of this is to suggest these are "preferable" to solid construction, long term commitments or fixed property purchases for that matter. Rather, land use flexibility provides choices that allow real respect for anyone with "handicaps" of any nature. By creating multiple definitions for economic access, individuals have the chance to survive occasional "steps back" (instead of forward) when necessary, and yet still be able to strive for their life's goals. Indeed, legal rules in the U.S. once gave individuals the ability to either start over or start out incrementally, when they were unable to do so in the Old World.
Flexible land use and building components also make one's personal income less important for economic mobility. Think of the race between the tortoise and the hare. When property and knowledge use take the tortoise into account, far more wealth is ultimately created in the process. That means less financial risk as well, when the world quits struggling to fit everyone into the same mold. Our ongoing efforts to survive and thrive deserve to be a greater determinant of our life options than they presently are. Consider for example, this advice about our future from the above link at HBR,
What will drive a more "optimal" decision framework? It will require emancipation from fundamental assumptions such as employment and organization.What's more, ongoing local skills and services proposals could also receive "keep trying" votes of confidence, whenever communities do not have room for them in the present. This is an important indicator, because it's one that many businesses which failed, never really had. Often businesses are missed when they close their doors, and former customers wish there were ways to somehow bring them back. A "keep trying" vote of confidence, not only indicates what people still want to be able to experience, it also allows them to get used to new concepts and thought processes that might otherwise act as unsettling disruptors, if introduced too quickly. Ongoing variations on proposals (in local activity calendars) allow people to get familiar with service offerings and how they can work.
Knowledge use and land use scarcities can be overcome. How so? By creating economic time and space for multiple participants over the long run, rather than expecting individuals or institutions to be the sole provider every day of the week or not at all. Monopolies in scarce resources are one thing, but monopolies in services only make people forget how to negotiate with one another for their most basic life needs. Worse, knowledge monopolies make people forget the immense value of knowledge itself. When the differences between real scarcities and false scarcities are not well understood, the idea of "affordable" or "not affordable" is meaningless. By using environment integration and getting to the root of unnecessary time scarcities, it becomes easier to determine optimal choices for our finite time.
Friday, December 27, 2013
What's Important - People, Results, or Both?
In the real world of course, the quick answer is people and results. And yet, many people have difficulty approaching dialogue in this way. Results tend to be about rationality instead of emotions, even though both are part of the process. Turns out it's not easy to engage both at the same time, which explains why leaders (for instance) who happen to be adapt at both, turn out to be the most highly valued leaders of all. So...how might this question get answered for Market Monetarism? Or, when we think of optimal action for economic stability, how does one also express this in personal terms?
This morning I found some links that also continue a few thoughts from yesterday's post: a good thing as economic uncertainty is still very much on my mind. This link suggests it's not "just me" as 70 percent in a recent U.S. survey indicated they didn't feel the economy was truly on the way to recovery. Pus, what I refer to as the forgotten rural areas, are where this lack of confidence is most keenly felt. Small wonder, as some people with little choice but to live in rural environs, despair over whether they can keep the car running so as to continue the job an hour away in the city.
If it's tempting to snicker at presidential candidates re their lack of ability to empathize with average voters, sometimes economists have trouble relating to the average citizen as well. How so? For one thing, economists tend to hone in on aspects of the economy, which don't necessarily reflect the average person's ongoing and daily challenges, in community. This is particularly true if the economist sees government or business in general as the only means of positive action, rather than the coordinated actions of individuals. Plus whatever inferences the economist makes, tend to be the ones that are going to gain the most public consideration as well. Unfortunately, that means a lot of second guessing occurs, as to the circumstances people are actually trying to work with to improve their lives.
For instance, Paul Krugman recently complained that "...high unemployment has greatly weakened workers' already weak position in the relationship." i.e. the power relationship between employer and employee. While this scenario might well be observable at times, unfortunately it has little to do with what actually needs to be done in the present. In other words, it gives not a clue how anyone might approach the present dilemma of economic uncertainty. Of course it never hurts for employers to be more considerate of their employees! But how does that meaningfully correlate with the fact that far too few of us have workplace participation in the present - especially in areas which have been economically forgotten?
Or sometimes, thought processes that would be conducive to economic progress get lost in translation, because of the limited academic environments where they take place. Indeed, political adherents on the left and right don't always listen to the more important elements of economic discussions. Thus the most important and substantive arguments are often made on the behalf of people who don't understand their significance. An overt political stance in particular, can obstruct the economic reasoning that people need the most. As for those power relationships Krugman is fond of speaking of, my readers already have a sense how I feel about this.
Power relationships exist mostly in our lives to the degree we lack the confidence (or the imagination), to take part in coordinating ongoing patterns for production and consumption. No one gets real economic results by keep seeking out villains and ransacking their village in yet another morality war. Why does anyone think that is the best way to appeal to people and emotion? Instead of looking for the "right villages to burn", why not consider increasing total economic participation instead. That's the way to put jobs back on the agenda.
The fact that we still don't have adequate passageways for knowledge use and services, also holds back the technologies that can support them. This partly accounts for the fact that 3D printing remains a somewhat "iffy" proposition, in terms of what it will be able to do in the next few years. Not so long ago, the news was full of debate in the U.S. as to 3D printing of guns, whilst in Iran (HT Mark Perry, AEI), 3D printing is already being used for medical purposes. Meanwhile, some states here are putting their primary efforts towards getting rid of the burden of Obamacare, with (???) to replace it. Has anyone noticed that some medical people are even having to take second jobs lately because they aren't getting paid on time by the government?
Clearly, there has to be a positive turnaround in local economic formation, before 3D can be utilized where and how it is actually needed - for production and services of all kinds. I will feel we have arrived when recyclables can be used in efficient, low cost and flexible production, for local building components and by all local citizens. No small community will need to be completely dependent on governments, cities or even auto transportation in the future, once it is allowed to utilize knowledge and resources for production needs locally.
Think about these changes on the horizon: with a bit of effort, we could already be preparing for local manufacturing which adapts to specific needs of all kinds. If we can do this, it also means things can change for the better, before millions of people fall away from the ability to participate economically. What's more, we don't know how those changes in local production capacity will affect overall costs for more basic living requirements of all kinds. Still, there are many legal hurdles to be cleared out of the way first.
How to think about the near future in monetary terms? For one thing, I see long term growth potential as a possible beneficiary of good deflation trends. Just the same, nothing realistic has been done to clear the way for them presently. That is why I am so set against a strong taper on the part of the Fed any time soon. Our local communities have to be permitted to take care of themselves in production and services based terms, before the stimulus levels of the present are no longer needed.
Presently, people in power are still acting as though little of significance has to change structurally, in spite of the realities. Or some power holders give structural needs "lip service" as an excuse to do absolutely nothing. By so doing, everyone ends up ignoring the reasons why so much additional stimulus was needed in the first place: to support the kinds of lifestyle expectations which special interests don't want to change now. So to just take away the stimulus because "it's gone on long enough", yet refuse to do anything to change the environments which required those infusions of money, would be like an ostrich putting its head into the sand.
Future generations need living and working environments that are better tailored to their needs. If ignoring that reality isn't enough, attempts to force them to live by the standards of earlier generations only invites more "bubbles" for asset formations. Meanwhile, government debt loads are the inverse of the "bubble" problem, in that they try to cover societal expectations which go well beyond what many family incomes actually represent.
Hopefully, we can find our way to dialogues that include emotional appeals and results oriented action in the same argument. But until we do, it would be most helpful to maintain the environments we presently have, to the best of our ability. That also means printing as much money as necessary, for total spending capacity. Building societies up only to knock them down again when no one agrees on anything, is no solution.
This morning I found some links that also continue a few thoughts from yesterday's post: a good thing as economic uncertainty is still very much on my mind. This link suggests it's not "just me" as 70 percent in a recent U.S. survey indicated they didn't feel the economy was truly on the way to recovery. Pus, what I refer to as the forgotten rural areas, are where this lack of confidence is most keenly felt. Small wonder, as some people with little choice but to live in rural environs, despair over whether they can keep the car running so as to continue the job an hour away in the city.
If it's tempting to snicker at presidential candidates re their lack of ability to empathize with average voters, sometimes economists have trouble relating to the average citizen as well. How so? For one thing, economists tend to hone in on aspects of the economy, which don't necessarily reflect the average person's ongoing and daily challenges, in community. This is particularly true if the economist sees government or business in general as the only means of positive action, rather than the coordinated actions of individuals. Plus whatever inferences the economist makes, tend to be the ones that are going to gain the most public consideration as well. Unfortunately, that means a lot of second guessing occurs, as to the circumstances people are actually trying to work with to improve their lives.
For instance, Paul Krugman recently complained that "...high unemployment has greatly weakened workers' already weak position in the relationship." i.e. the power relationship between employer and employee. While this scenario might well be observable at times, unfortunately it has little to do with what actually needs to be done in the present. In other words, it gives not a clue how anyone might approach the present dilemma of economic uncertainty. Of course it never hurts for employers to be more considerate of their employees! But how does that meaningfully correlate with the fact that far too few of us have workplace participation in the present - especially in areas which have been economically forgotten?
Or sometimes, thought processes that would be conducive to economic progress get lost in translation, because of the limited academic environments where they take place. Indeed, political adherents on the left and right don't always listen to the more important elements of economic discussions. Thus the most important and substantive arguments are often made on the behalf of people who don't understand their significance. An overt political stance in particular, can obstruct the economic reasoning that people need the most. As for those power relationships Krugman is fond of speaking of, my readers already have a sense how I feel about this.
Power relationships exist mostly in our lives to the degree we lack the confidence (or the imagination), to take part in coordinating ongoing patterns for production and consumption. No one gets real economic results by keep seeking out villains and ransacking their village in yet another morality war. Why does anyone think that is the best way to appeal to people and emotion? Instead of looking for the "right villages to burn", why not consider increasing total economic participation instead. That's the way to put jobs back on the agenda.
The fact that we still don't have adequate passageways for knowledge use and services, also holds back the technologies that can support them. This partly accounts for the fact that 3D printing remains a somewhat "iffy" proposition, in terms of what it will be able to do in the next few years. Not so long ago, the news was full of debate in the U.S. as to 3D printing of guns, whilst in Iran (HT Mark Perry, AEI), 3D printing is already being used for medical purposes. Meanwhile, some states here are putting their primary efforts towards getting rid of the burden of Obamacare, with (???) to replace it. Has anyone noticed that some medical people are even having to take second jobs lately because they aren't getting paid on time by the government?
Clearly, there has to be a positive turnaround in local economic formation, before 3D can be utilized where and how it is actually needed - for production and services of all kinds. I will feel we have arrived when recyclables can be used in efficient, low cost and flexible production, for local building components and by all local citizens. No small community will need to be completely dependent on governments, cities or even auto transportation in the future, once it is allowed to utilize knowledge and resources for production needs locally.
Think about these changes on the horizon: with a bit of effort, we could already be preparing for local manufacturing which adapts to specific needs of all kinds. If we can do this, it also means things can change for the better, before millions of people fall away from the ability to participate economically. What's more, we don't know how those changes in local production capacity will affect overall costs for more basic living requirements of all kinds. Still, there are many legal hurdles to be cleared out of the way first.
How to think about the near future in monetary terms? For one thing, I see long term growth potential as a possible beneficiary of good deflation trends. Just the same, nothing realistic has been done to clear the way for them presently. That is why I am so set against a strong taper on the part of the Fed any time soon. Our local communities have to be permitted to take care of themselves in production and services based terms, before the stimulus levels of the present are no longer needed.
Presently, people in power are still acting as though little of significance has to change structurally, in spite of the realities. Or some power holders give structural needs "lip service" as an excuse to do absolutely nothing. By so doing, everyone ends up ignoring the reasons why so much additional stimulus was needed in the first place: to support the kinds of lifestyle expectations which special interests don't want to change now. So to just take away the stimulus because "it's gone on long enough", yet refuse to do anything to change the environments which required those infusions of money, would be like an ostrich putting its head into the sand.
Future generations need living and working environments that are better tailored to their needs. If ignoring that reality isn't enough, attempts to force them to live by the standards of earlier generations only invites more "bubbles" for asset formations. Meanwhile, government debt loads are the inverse of the "bubble" problem, in that they try to cover societal expectations which go well beyond what many family incomes actually represent.
Hopefully, we can find our way to dialogues that include emotional appeals and results oriented action in the same argument. But until we do, it would be most helpful to maintain the environments we presently have, to the best of our ability. That also means printing as much money as necessary, for total spending capacity. Building societies up only to knock them down again when no one agrees on anything, is no solution.
Thursday, December 26, 2013
U.S. - Monetarily "Boring" Already? Perhaps Not!
Word has it that monetary policy in the U.S. might even be so "good" (relatively speaking) that it could become boring soon...Say it isn't so! (Lars I'm not picking on you personally) To be sure, in some respects it appears as though monetary issues are headed back towards "normalcy", as statistics and bottom lines continue to improve. Might this state of affairs even be reminiscent of the Great Moderation in the U.S.? Okay I'm being a bit melodramatic, but then I'm not quite yet ready to sing "Happy Days are Here Again".
Fortunately I'm in good company with plenty of Market Monetarists, who remain concerned whether greater economic stability is a certainty in the years ahead. Still, 2013 was a year for progress and not just in the U.S. by any means. Indeed, there has been enough improvement in the economy that Scott Sumner anticipates Market Monetarists will no longer expect further monetary stimulus in a year's time, give or take some wide variances in opinion among MMs!
In a sense the ongoing challenges come down to a one word question: Why? That is, why is Market Monetarism embraced by its advocates, and what they believe it can accomplish. Reasons - of course - vary. Yet individual positions will matter more, as the conversation moves forward. To a degree, advocacy for Market Monetarism came about as a somewhat impartial observation, regarding indicators that appear most capable of providing monetary stability. That basic premise of course continues to be the case. But behind the premise, also lie the millions of lives that have been affected by long term unemployment. What's more, this strict focus, which does not really include an active (symbolic) "why" except in terms of statistical efficacy, is frequently challenged on its face by those who doubt its capacity. This is true not just of economists but by observers in general.
And even though a nominal level target can provide economic stability, there is not yet a symbolic explanation for its rationale in anyone's mind. That means nominal targeting remains susceptible to misinterpretation or misapplication - even when people don't necessarily realize that this is happening. In the process of reaching out and attempting compromise with the concept itself, I've seen Market Monetarists ridiculed too many times because they allowed the conversation to take place solely in measurement based terms. Something is still missing here. We need to be able to indicate why this measurement can provide stability, beyond the economic language itself. What is it specifically about the level target that has this capacity? Can this stability still happen even if money no longer operates under recognizable circumstances?
It's not good if I question the continuing premise of IOR, for instance. Whether or not I believe normalcy is possible with IOR, laypeople have to be able to relate to the answers to these questions or they will not find reason to back the Market Monetarist framework. After all, we need all the support we can get, when in fact bureaucracy, business and academia obstinately stand in the way. In the 20th century, seemingly it would have been enough for central bankers to be convinced of the applicability of a nominal target rule. Even if central bankers were open to nominal targeting now, that alone might not be enough to create overall agreement in the 21st century. Certainly the political realm is not ready to provide productive input at the moment or any time soon, and we need to craft a broader appeal that reaches to the heart, not just the mind.
The gains of a nominal targeting rule - while they may appear to be about one institution, really are nothing of the sort, for the economic gain they represent goes well beyond the idea of institution itself - even if the action is something embodied by an institution that represents economic activity. Therefore the discussion of Market Monetarism suggests the possibility of reaching beyond institutions for solutions in general. What's more, a Market Monetarist solution to unemployment problems that is fully integrated with economic participation at all levels, is much preferable to an MMT solution for instance that would attempt to provide a base income with no true ties to consumption and production capacity.
To be sure the fact that I don't live in a "bustling" city has some bearing on my personal viewpoint. Not much here appears truly different than the days of the recession, re what is observable on a daily basis. Indeed, more shops and restaurants around the nearby downtown area have continued to close, in spite of oil production capacity gains. None of the recent stimulus efforts have changed my basic outlook. I remain convinced that rural areas especially need domestic summits at a national level, so as to find greater coordination for economic participation as government roles decrease over time. And, I'm frustrated that nothing is happening on the supply side in terms of organized action for economic coordination, in spite of the incredible possibilities that exist. Let alone the time that has passed that something - anything could have been tried at a national level. Instead we've gotten mostly diatribes against economic activity in general, and little more than theatrical reactions to the diatribes!
Seeing as how much of the economic discussion remains mired in political think tanks, prominent publications and academic environments - economics blogs notwithstanding, the debate is stuck. It's not accomplished what I thought it could, and I apologize for the scattered confusion of thoughts in this post as I worry about this problem. Something about these formats is apparently still not ready for the widespread national discussion which needs to happen. Nor have these debates inspired anyone to take to the road to bring about economic momentum across the country. Taking to the road to talk to people instead gets totally wasted on political elections. Believe me I would take to the road and talk to everyone who would listen, if I could, right now.
Many cities in the U.S. do not feel that they have reliable strategies to move ahead in the future, in spite of the recession in the rear view mirror. Plenty of cities would be glad to take part in domestic summits as well: cities and rural areas likely have more in common for new services strategies than they realize. Supply side services issues such as this are still not connected in anyone's minds to monetary stability, but they really need to be. While economists can sometimes support public efforts for economic revitalization and also help with such efforts when asked directly, it really is up to individuals outside of institutions to take up these vital economic issues on their own. Even though they are in the interest of city and country alike, domestic summits are outside the purview of specific institutions.
What's more, the services we capture through economic coordination are a major part of what our government cannot provide for us, though it would if it could. None of us can afford to continue leaving our Main Streets and neighborhoods devoid of real life, anymore. If we focus on this and make plans for the growing reality of economic transformation, these are positive actions for the future that our government will eventually be able to support.
Before Obama was even elected, it bothered me to hear him speak of change because I just didn't think he had a way to make it happen. Not then, not before the economic situation overall had become so desperately obvious. To his credit, I have heard him say that it is all of us that need to make a better reality. One only hopes that he - or whoever follows him in the White House, will give us the chance, if and when we come forth with potential solutions of our own. Until we do, nothing about our monetary reality will be boring - or certain, for that matter.
Fortunately I'm in good company with plenty of Market Monetarists, who remain concerned whether greater economic stability is a certainty in the years ahead. Still, 2013 was a year for progress and not just in the U.S. by any means. Indeed, there has been enough improvement in the economy that Scott Sumner anticipates Market Monetarists will no longer expect further monetary stimulus in a year's time, give or take some wide variances in opinion among MMs!
In a sense the ongoing challenges come down to a one word question: Why? That is, why is Market Monetarism embraced by its advocates, and what they believe it can accomplish. Reasons - of course - vary. Yet individual positions will matter more, as the conversation moves forward. To a degree, advocacy for Market Monetarism came about as a somewhat impartial observation, regarding indicators that appear most capable of providing monetary stability. That basic premise of course continues to be the case. But behind the premise, also lie the millions of lives that have been affected by long term unemployment. What's more, this strict focus, which does not really include an active (symbolic) "why" except in terms of statistical efficacy, is frequently challenged on its face by those who doubt its capacity. This is true not just of economists but by observers in general.
And even though a nominal level target can provide economic stability, there is not yet a symbolic explanation for its rationale in anyone's mind. That means nominal targeting remains susceptible to misinterpretation or misapplication - even when people don't necessarily realize that this is happening. In the process of reaching out and attempting compromise with the concept itself, I've seen Market Monetarists ridiculed too many times because they allowed the conversation to take place solely in measurement based terms. Something is still missing here. We need to be able to indicate why this measurement can provide stability, beyond the economic language itself. What is it specifically about the level target that has this capacity? Can this stability still happen even if money no longer operates under recognizable circumstances?
It's not good if I question the continuing premise of IOR, for instance. Whether or not I believe normalcy is possible with IOR, laypeople have to be able to relate to the answers to these questions or they will not find reason to back the Market Monetarist framework. After all, we need all the support we can get, when in fact bureaucracy, business and academia obstinately stand in the way. In the 20th century, seemingly it would have been enough for central bankers to be convinced of the applicability of a nominal target rule. Even if central bankers were open to nominal targeting now, that alone might not be enough to create overall agreement in the 21st century. Certainly the political realm is not ready to provide productive input at the moment or any time soon, and we need to craft a broader appeal that reaches to the heart, not just the mind.
The gains of a nominal targeting rule - while they may appear to be about one institution, really are nothing of the sort, for the economic gain they represent goes well beyond the idea of institution itself - even if the action is something embodied by an institution that represents economic activity. Therefore the discussion of Market Monetarism suggests the possibility of reaching beyond institutions for solutions in general. What's more, a Market Monetarist solution to unemployment problems that is fully integrated with economic participation at all levels, is much preferable to an MMT solution for instance that would attempt to provide a base income with no true ties to consumption and production capacity.
To be sure the fact that I don't live in a "bustling" city has some bearing on my personal viewpoint. Not much here appears truly different than the days of the recession, re what is observable on a daily basis. Indeed, more shops and restaurants around the nearby downtown area have continued to close, in spite of oil production capacity gains. None of the recent stimulus efforts have changed my basic outlook. I remain convinced that rural areas especially need domestic summits at a national level, so as to find greater coordination for economic participation as government roles decrease over time. And, I'm frustrated that nothing is happening on the supply side in terms of organized action for economic coordination, in spite of the incredible possibilities that exist. Let alone the time that has passed that something - anything could have been tried at a national level. Instead we've gotten mostly diatribes against economic activity in general, and little more than theatrical reactions to the diatribes!
Seeing as how much of the economic discussion remains mired in political think tanks, prominent publications and academic environments - economics blogs notwithstanding, the debate is stuck. It's not accomplished what I thought it could, and I apologize for the scattered confusion of thoughts in this post as I worry about this problem. Something about these formats is apparently still not ready for the widespread national discussion which needs to happen. Nor have these debates inspired anyone to take to the road to bring about economic momentum across the country. Taking to the road to talk to people instead gets totally wasted on political elections. Believe me I would take to the road and talk to everyone who would listen, if I could, right now.
Many cities in the U.S. do not feel that they have reliable strategies to move ahead in the future, in spite of the recession in the rear view mirror. Plenty of cities would be glad to take part in domestic summits as well: cities and rural areas likely have more in common for new services strategies than they realize. Supply side services issues such as this are still not connected in anyone's minds to monetary stability, but they really need to be. While economists can sometimes support public efforts for economic revitalization and also help with such efforts when asked directly, it really is up to individuals outside of institutions to take up these vital economic issues on their own. Even though they are in the interest of city and country alike, domestic summits are outside the purview of specific institutions.
What's more, the services we capture through economic coordination are a major part of what our government cannot provide for us, though it would if it could. None of us can afford to continue leaving our Main Streets and neighborhoods devoid of real life, anymore. If we focus on this and make plans for the growing reality of economic transformation, these are positive actions for the future that our government will eventually be able to support.
Before Obama was even elected, it bothered me to hear him speak of change because I just didn't think he had a way to make it happen. Not then, not before the economic situation overall had become so desperately obvious. To his credit, I have heard him say that it is all of us that need to make a better reality. One only hopes that he - or whoever follows him in the White House, will give us the chance, if and when we come forth with potential solutions of our own. Until we do, nothing about our monetary reality will be boring - or certain, for that matter.
Wednesday, December 25, 2013
Each of Us, a Filament
And there's reason to celebrate on Christmas morn,
Even if we know not, the reality
That just deepens the meaning, of the mystery
Each of us a filament, on interconnected strings,
Multi-colored lights for the tree of life.
There's this moment in time, to pause from the strife,
Feel the energy,
as it courses through cold dark night
From the distance, great brightness from many strands
of light from the fire which was given to man
Somewhere, past the pain, confusion and fear,
He waits with gift of calm, surely he still hears
After each fury,
The wind whispers down
There's stories yet to tell, another storm settles
Do we still know how to make this special
Who collects our wishes, who travels to tell...
Who watches us gain courage
Every time we stand tall
Or waits outside when we're broken and small
Who wants us to remain
On the dry side of the bridge
Yet holds the river of unknowing,
Even as we climb, back up the ridge
This could be what forever feels like
light from each filament for a path in the night
Can we remember why you brought the fire
Will we remember how you brought the fire
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