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DougMacG
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« Reply #350 on: March 19, 2015, 10:09:46 AM »

This liberal article goes halfway to the truth of causation, IMHO.

http://www.slate.com/blogs/moneybox/2015/03/16/our_kids_culture_helped_kill_the_two_parent_family_and_liberals_shouldn.html

"Yes, Culture Helped Kill the Two-Parent Family. And Liberals Shouldn’t Be Afraid to Admit It."
------------------------

They suggest more liberal policies as the solution. 

Causation is a little more simple than this deep article suggests.  Government took over the role of the husband and father.  And would like to take over the role of the mother too!

The solution, in law of holes - when you realize you are in one, is generally to stop digging.
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G M
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« Reply #351 on: March 19, 2015, 07:37:19 PM »

This liberal article goes halfway to the truth of causation, IMHO.

http://www.slate.com/blogs/moneybox/2015/03/16/our_kids_culture_helped_kill_the_two_parent_family_and_liberals_shouldn.html

"Yes, Culture Helped Kill the Two-Parent Family. And Liberals Shouldn’t Be Afraid to Admit It."
------------------------

They suggest more liberal policies as the solution. 

Causation is a little more simple than this deep article suggests.  Government took over the role of the husband and father.  And would like to take over the role of the mother too!


The solution, in law of holes - when you realize you are in one, is generally to stop digging.

Insufficient opportunity for power and graft with a traditional family.
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Crafty_Dog
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« Reply #352 on: May 16, 2015, 11:27:57 AM »

Some dangerous thinking here , , ,how do we respond?


By
Carol Tavris
May 15, 2015 4:20 p.m. ET
8 COMMENTS

As a social psychologist, I have long been amused by economists and their curiously delusional notion of the “rational man.” Rational? Where do these folks live? Even 50 years ago, experimental studies were demonstrating that people stay with clearly wrong decisions rather than change them, throw good money after bad, justify failed predictions rather than admit they were wrong, and resist, distort or actively reject information that disputes their beliefs. In recent years, a new field has emerged—“behavioral economics”—to propose an alternative to the rational man of traditional economics. A spate of popular books and empirical studies have been published exploring human irrationality—in decision making, beliefs and actions. Researchers in this field are making up for lost time, or perhaps realizing that they are social psychologists after all.

As the offspring of traditional economics and experimental social psychology, behavioral economics shows remarkable hybrid vigor, and Richard Thaler, one of the new field’s founders, acknowledges its debt to psychological science throughout his highly enjoyable intellectual autobiography, “Misbehaving.” Indeed, his opening aphorism is Vilfredo Pareto’s 1906 claim that “the foundation of political economy and, in general, of every social science, is evidently psychology. A day may come when we shall be able to deduce the laws of social science from the principles of psychology.” That day is here, as Mr. Thaler explains.
Misbehaving

By Richard H. Thaler
Norton, 415 pages, $27.95

For all of his creative career spanning 40 years, Mr. Thaler, who is a professor of behavioral science and economics at the University of Chicago Graduate School of Business, has been studying “the myriad ways in which people depart from the fictional creatures that populate economic models.” As human beings who arrogantly and often wrongly consider ourselves “sapiens,” we simply don’t match the model of human behavior favored by economists, one that “replaces homo sapiens” (whom Mr. Thaler calls Humans) with “a fictional creature called homo economicus” (whom he calls Econ). “Econs do not have passions; they are cold-blooded optimizers,” he says. “Compared to this fictional world of Econs, Humans do a lot of misbehaving”—thus the book’s title.

The problem, Mr. Thaler argues, is that although economists “hold a virtual monopoly” on giving policy advice, the very premises on which that advice rests are deeply flawed. That is why “economic models make a lot of bad predictions”: some small and trivial, some monumental and devastating. “It is time to stop making excuses,” he admonishes his colleagues. Mr. Thaler calls for an “enriched approach to doing economic research, one that acknowledges the existence and relevance of Humans.” By injecting economics with “good psychology and other social sciences” and by including real people in economic theory, economists will improve predictions of human behavior, make better financial and marketing decisions, and create a field that is “more interesting and more fun than regular economics.” In that way, Mr. Thaler believes, economists will finally produce an “un-dismal science.”

That enriched (and fun) approach is on display in “Misbehaving.” Mr. Thaler’s goal in this conversational, informative book is to “tell the tale of how it all happened, and to explain some of the things we learned along the way.” He tells us that he began having “deviant thoughts” about economic theory as a graduate student in the 1970s—an unsettling experience for a not-yet-professor, comparable to having deviant thoughts about Freudian theory when it dominated clinical psychology.
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The book’s organization is both chronological, describing Mr. Thaler’s discoveries over time and productive collaborations with scholars from other fields, and topical, devoting long sections to findings from four areas of particular interest to him. These are “mental accounting” (with chapters on bargains and sales, sunk costs, budgets and gambling), self-control (the difference between people who plan and people who impulsively act), finance (including the irrationality of people’s behavior in the stock market), and fairness games (why people often prefer fairness to self-interest). In a two-person game in which one person must allocate, say, $50, most recipients would prefer to walk away with nothing than accept an offer they consider “unfair” (such as $5).

Dense with fascinating examples, each of Mr. Thaler’s topical areas tells, in a way, the same story: Traditional economics predicted X; evidence failed to confirm X and indeed often contradicted X; establishment explained away the evidence as an anomaly or miscalculation. For example, by the 1980s, investment guru Benjamin Graham’s classic, decades-old work on “value investing”—“in which the goal is to find securities that are priced below their intrinsic, long-run value”—had become passé. Mr. Thaler explains that Graham’s evidence of the benefits of buying cheap stocks rather than expensive, fashionable “darlings” had become inconsistent with the Efficient Market Hypothesis, which said that value investing simply could not work—not that anyone had bothered to refute Graham’s claim empirically.

Therefore, when the accounting professor Sanjoy Basu published a “thoroughly competent study of value investing that fully supported Graham’s strategy,” in the late 1970s, Mr. Thaler writes, he “had to offer abject apologies for the results” in order to get it accepted for publication; indeed, Mr. Basu “stopped just short of saying ‘I am sorry.’ ” When another economist found that the assumption of market efficiency was not supported by his data, he concluded that there must have been a “pricing model mis-specification.” When Mr. Thaler and Werner De Bondt, his psychology-and-economics graduate student, did their own research, using psychological principles to predict market anomalies that occur because of what they called the market’s “generalized overreaction,” the researched showed why the Efficient Market Hypothesis was wrong. Their paper, ultimately published in 1985, got in through the back door thanks to their having an ally on a major journal—without an apologetic conclusion. “Werner was too principled” to write one, says Mr. Thaler, “and I was too stubborn.”

Time after time Mr. Thaler cheerfully reports how many of his most famous papers in behavioral economics, often written with scholars across enemy lines (that is, noneconomists), were “pure heresy” that “got people’s blood boiling.” One article directly attacked the “core principle underlying the Chicago School’s libertarian beliefs,” namely consumer sovereignty: “the notion that people make good choices, and certainly better choices than anyone else could make for them.” By empirically demonstrating that consumers often do precisely the opposite, because rationality and self-control are bounded by human perceptual distortions, their paper undercut this principle. This was “treacherous, inflammatory territory,” he writes. In 1998, Christine Jolls, then an assistant law professor at Harvard, Cass Sunstein, a law professor at the University of Chicago, and Mr. Thaler published their groundbreaking paper, “A Behavioral Approach to Law and Economics,” which infuriated members of both professions in one blow.

Mr. Sunstein and Mr. Thaler then collaborated on another scandalous claim, that human beings are susceptible to cues in the environment that affect their behavior—a fact that governments and businesses can use to promote healthy behavior and wiser choices. Needless to say, many economists and others were outraged by the implication that the authors were promoting “paternalism” and intervention by government bureaucrats. Not at all, says Mr. Thaler. They were simply noting that “the knee-jerk claim that it is impossible to help anyone make a better decision is clearly undercut by the research.” No matter how often they added that bureaucrats are Humans, with their own biases, their critics wouldn’t listen, even when Mr. Sunstein kept repeating that they were not pro-paternalism but rather “anti-anti-paternalism.” Mr. Thaler preferred the term “libertarian paternalism,” but that didn’t catch on either. Eventually they found the right word to capture the gist of their argument, using it for the title of their book “Nudge.”

Accordingly, the final chapters of “Misbehaving” take on the key issue of nudging: “Could we use behavioral economics to make the world a better place? And could we do so without confirming the deeply held suspicions of our biggest critics: that we were closet socialists, if not communists, who wanted to replace markets with bureaucrats?” Yes, he argues, and yes. Because people make predictable errors, we can create policies and rules that lower the error rate, whether it has to do with reducing driving accidents, getting men who use public urinals to aim better or enticing people to save for retirement—and do it in a way that makes people themselves happier with the results.

Reading this book made me think of (one version of) the classic story of Jascha Heifetz’s American debut at Carnegie Hall in 1917, when he was 16 years old. At intermission, the violinist Mischa Elman turned to his friend, the pianist Leopold Godowsky, wiped his brow and said, “It’s awfully hot in here!” Godowsky replied, “Not for pianists.” Mr. Thaler’s research doesn’t raise my temperature, but that’s because I am not a traditional economist. Pianists will enjoy this book, but violinists need it.

It is long past time to replace Econs with Humans, both in theory and in the practice of prediction. Mr. Thaler believes that, soon enough, all economists will be “behavioral,” and his field will vanish. But the Econ-oriented theorists who have been major players in (mis)predicting the stock market and consumer behavior will—I predict—continue to resist its message. Psychologists, and Mr. Thaler, know why.

—Ms. Tavris is co-author, with Elliot Aronson, of “Mistakes Were Made (But Not by Me),” forthcoming in a revised edition in the fall of 2015.
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Roger Brown
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"even when Mr. Sunstein kept repeating that they were not pro-paternalism but rather “anti-anti-paternalism.”

Means that They, Sunstein, Thaler, were "paternalistic".

That is, behavioral economics can improve economic choices.

A stretch.


I agree completely that over-reaction and attachment to sunk costs are irrational behaviors that are noneconomic and make many predicitions wrong. More rational actors might use such to make money, however, and then sentient beings on the wrong side of markets should use feedback to improve their rational thinking. Is it not fun to write books that claim everyone is wrong but me?


Irrationality of markets provides ammunition for the statists among us, unfortunately, and since it is not a universal principal (there are people who make perfectly good decisions for themselves and families after all), then what occurs in practice is that a central agent makes "good choices" that turn out to be good for some at the expense of others, a la the ACA.
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G M
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« Reply #353 on: May 16, 2015, 12:24:29 PM »

Free markets have a much better track record then command and control economies. Yet totalitarians like Sunstein keep going back to the Marxist well, hoping a new rebranding on rthe same failures will finally work this time.
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Crafty_Dog
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« Reply #354 on: May 23, 2015, 03:43:34 PM »

Haven't read this yet , , ,

http://fee.org/freeman/detail/paul-krugman-three-wrongs-dont-make-a-right

This seems intriguing , , ,
http://www.businessinsider.com/paul-krugman-shifts-chart-to-show-non-existant-correlation-2015-5
« Last Edit: May 23, 2015, 03:45:43 PM by Crafty_Dog » Logged
Crafty_Dog
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« Reply #355 on: June 03, 2015, 03:55:07 PM »



http://www.cato.org/publications/commentary/book-review-forgotten-depression-1921-crash-cured-itself
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Crafty_Dog
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« Reply #356 on: July 08, 2015, 09:03:55 PM »

https://americanprinciplesproject.org/wp-content/uploads/Gilder.pdf
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DougMacG
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« Reply #357 on: July 12, 2015, 07:55:54 PM »


Okay, I read this.  Did anyone else read it?  Let's discuss.

I am a big fan of Gilder.  That said, I'm not fully following his logic here.  Will come back to this to post some quotes.  This is a long scholarly piece.  At the end, out of the blue, he is saying that the world will turn to a de facto gold standard.  I think he is also implying that we could save ourselves a lot of heartache and economic damage if we would do that now rather than later.

An easier solution would be to simplify the mission of the Fed and appoint a Federal Reserve board that would competently pursue that mission, namely maintainng a US dollar as stable, as strong and as predictable as gold.  Same goes for all other countries and currencies if they want to succeed and prosper.
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G M
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« Reply #358 on: July 12, 2015, 08:05:42 PM »

I believe in buying gold and silver. Even more, I believe in guns, ammo and canned food.
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DougMacG
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« Reply #359 on: July 13, 2015, 12:35:43 AM »

I believe in buying gold and silver. Even more, I believe in guns, ammo and canned food.

Then if our currency was tied to gold, would you buy and hold money instead?  Nothing's perfect in the bunker; canned goods are damaged by freezing and guns can damage with moisture.

(Frustrating that I can't cut and paste from the pdf, but...) Gilder says in effect, with QE and other tampering, money moved from being the neutral medium of exchange to being the message itself.  Only if the channel (money) is changeless can the message in the channel [clearly] communicate changes.  In 2003, Milton Freidman acknowledged failure of his money supply target theory.

8 canons of Gilder's information theory, slightly shortened and paraphrased:
1. The economy is not an incentive system, but an information system.  (An odd distinction.)
2. Creativity comes as a surprise.  Planned economies don't produce it.
3. The capitalist economy is not an equilibrium system (static, as taught) but dynamic domains of entrepreneurial activity.  
4. Money should be / needs to be - a stable and reliable standard of measure.
5. Interference (The Fed, QE, etc.) is noise and makes it impossible to distinguish between content and channel.
6. Gyrating currencies are deadly to the commitment of long term enterprise.
7. Profits and losses are unexpected outcomes.  The real interest rate represents average return.
8. Velocity is not a constant, therefore the effective supply of money is not controlled by the central bank but by free decisions made by individuals.

Bonus point, time is the scarce resource.

As Crafty said, serious read.  103 pages, 87 sources cited.  All this should be in the monetary thread also.
« Last Edit: July 13, 2015, 12:56:21 AM by DougMacG » Logged
G M
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« Reply #360 on: July 13, 2015, 05:41:18 AM »

People will recognize gold and silver as having value when the current dollar is being used to kindle fires.
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Crafty_Dog
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« Reply #361 on: July 13, 2015, 12:31:08 PM »

Glad to see the discussion here but while I am in Germany on a small computer I will not have time to respond, but I hope you guys will continue to do so.
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Crafty_Dog
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« Reply #362 on: September 16, 2015, 09:38:30 AM »

https://www.facebook.com/prageru/videos/941293992580124/
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DougMacG
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« Reply #363 on: October 27, 2015, 11:33:59 PM »

Can anyone else see anything that could go wrong with this?

The Key Role of Conservatives in Taxing Carbon

SEPTEMBER 4, 2015
Economic View
By N. GREGORY MANKIW

This summer, a friend sent me a remarkable headline from The Seattle Times: “ ‘Green’ Alliance Opposes Petition to Tax Carbon.”

My initial thought was that this doesn’t make sense. It is like reading “Democrats Rally to Cut the Minimum Wage” or “Republicans Unite to Hike Income Taxes.”

But the political debate in Washington State is a case study about why smart environmental policy is so hard to enact.

First, some background.

Scientists have been telling us for years that the earth is warming and that one of the culprits is human emissions of greenhouse gases like carbon dioxide. Some believe that global warming has contributed to the current severe drought in California.

Sure, there are skeptics about the climate science behind these claims. But science is always a matter of probabilities, not certainties. Even a reasonable skeptic should be willing to embrace modest steps to curb carbon emissions.

Policy wonks like me have long argued that the best way to curb carbon emissions is to put a price on carbon. The cap-and-trade system President Obama advocates is one way to do that. A more direct and less bureaucratic way is to tax carbon. When polled, economists overwhelmingly support the idea.

One reason is that putting a price on carbon alters incentives in many ways. It encourages utilities to switch to cleaner forms of generating electricity, like wind and solar instead of coal. It encourages people to buy more fuel-efficient cars, form car pools with their neighbors, use more public transportation, live closer to work and turn down their thermostats. A regulatory system that tried to achieve all this would be heavy-handed and less effective.

Motivated by this thinking, Washington Carbon, an advocacy group in the state, is now trying to put a carbon tax on the 2016 ballot. Initiative Measure 732 would institute a tax on fossil fuels of $25 a metric ton of carbon dioxide (which translates to about 25 cents a gallon of gasoline).

Most of the revenue from the measure would be used to reduce the state sales tax by one percentage point. A smaller amount would be used to reduce taxes on manufacturing companies and to fund a tax rebate of up to $1,500 for low-income working families. The overall plan is progressive and revenue-neutral. If passed, the initiative would yield a tax shift, not a tax increase.

That is why some environmentalists are opposed. Rather than rebating the money the carbon tax would raise, they want to spend it on environmental and other government programs.

To be sure, a person can favor both a more environmentally friendly tax policy and greater government spending. But there is no good reason to marry these policies. If the goal is to build a political consensus to tackle climate change, there is good reason not to.

The size of government is an issue that divides the political right and the political left, and it will most likely always do so. The same need not be true of climate change.

Bob Inglis, the former Republican congressman from South Carolina, heads the Energy and Enterprise Initiative at George Mason University A recent winner of the John F. Kennedy Profile in Courage Award, which is given to public officials, he has been pushing for climate change solutions that are consistent with free enterprise and limited government.

Environmentalists in the United States would do well to look north at the successes achieved in a Canadian province. In 2008, British Columbia introduced a revenue-neutral carbon tax similar to that being proposed for Washington.

The results of the policy have been what advocates promised. The use of fossil fuels in British Columbia has fallen compared with the rest of Canada. But economic growth has not suffered.

What is most noteworthy, however, is that the policy was championed by a right-of-center government that did not previously have close ties to the environmental movement.

It was a Nixon-goes-to-China moment: Gordon Campbell, British Columbia’s premier, had more credibility by acting against type. Because of the government’s conservative credentials and its commitment to make the policy revenue-neutral, it brought along the crucial support of the business community.

Could such a situation happen in the United States? Right now, it is hard to imagine, as many of the Republicans vying for the presidential nomination pander to the deniers of climate change. But the experience of British Columbia suggests that this attitude could change.

This brings me back to my friend, Yoram Bauman, who sent me that headline. He is an environmental economist and stand-up comedian (yes, an unusual combo). He is also one of the leaders of the effort in Washington State to pass a carbon tax. He has been working tirelessly to build support.

Based on his experiences, he has a message for environmental activists: “I am increasingly convinced that the path to climate action is through the Republican Party. Yes, there are challenges on the right — skepticism about climate science and about tax reform — but those are surmountable with time and effort. The same cannot be said of the challenges on the left: an unyielding desire to tie everything to bigger government, and a willingness to use race and class as political weapons in order to pursue that desire.”

Yoram Bauman is a funny guy, but this time he is not joking.

N. Gregory Mankiw is the Robert M. Beren Professor of Economics at Harvard University.
© 2015 The New York Times Company

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Crafty_Dog
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« Reply #364 on: October 28, 2015, 11:22:46 AM »

Ego Alert!

I have been making exactly this point here on the forum for years now.
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G M
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« Reply #365 on: October 28, 2015, 11:27:30 AM »

Ego Alert!

I have been making exactly this point here on the forum for years now.

Climate action?
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Crafty_Dog
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« Reply #366 on: October 28, 2015, 12:42:55 PM »

No, about taxing pollution and reducing taxes on good things in equal or greater measure.
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DougMacG
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« Reply #367 on: October 28, 2015, 01:37:48 PM »

Ego Alert!
I have been making exactly this point here on the forum for years now.

Yes.  I was going to give you 'credit' in the intro.

"taxing pollution and reducing taxes on good things in equal or greater measure"

Yes and that is what the supposedly conservative author* has in mind too.  *former chief economist for Pres. Bush and head of the Harvard Economics dept.

That said, I have a couple of questions...

1)  Per GM's follow up, what is the 'external cost' of adding carbon, not pollution, to the atmosphere when the current concentration is .000400, (400 parts per million)?  The hard answer after rounding is nothing, right?

2)  Per my criticism of the national sales tax, what is the safeguard that after creating this new tax (that will clean up nothing) that the new tax will not be used a) to change behaviors according to bureaucratic preferences and b) to raise the total burden of taxation?  The answer is that of course it will be used for arbitrary social engineering and of course it will be used to increase the total tax burden.

Theoretical arguments for new sources of government revenues need to be held up to political realities.

Social security was passed because it was it was a 1% tax on up to 3000 of income, a $30 tax.  It was capped to not exceed 3% up to the same maximum making it never more than a $90/year tax, not indexed for inflation or wage levels.  http://www.justfacts.com/socialsecurity.asp

Great idea, but FDR's law has nothing to do with the system we have now.
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G M
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« Reply #368 on: November 28, 2015, 06:36:28 AM »

http://www.cato.org/blog/singapore-power-economic-freedom

I wonder what the stats would look like for Venezuela?

What is strange, is that Marxism is scientific. Or so I have been told.
« Last Edit: November 28, 2015, 10:57:54 AM by Crafty_Dog » Logged
Crafty_Dog
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« Reply #369 on: March 26, 2016, 11:54:21 AM »

The praise this week for Andy Grove, who died on Monday at age 79, has been wrapped up in praise for Silicon Valley, where he was a towering figure in the semiconductor revolution and the longtime leader of Intel, the world’s biggest supplier of microprocessors.

Lost in the lore is Mr. Grove’s critique of Silicon Valley in an essay he wrote in 2010 in Bloomberg Businessweek. According to Mr. Grove, Silicon Valley was squandering its competitive edge in innovation by failing to propel strong job growth in the United States.

Mr. Grove acknowledged that it was cheaper and thus more profitable for companies to hire workers and build factories in Asia than in the United States. But in his view, those lower Asian costs masked the high price of offshoring as measured by lost jobs and lost expertise. Silicon Valley misjudged the severity of those losses, he wrote, because of a “misplaced faith in the power of start-ups to create U.S. jobs.”

Mr. Grove contrasted the start-up phase of a business, when uses for new technologies are identified, with the scale-up phase, when technology goes from prototype to mass production. Both are important. But only scale-up is an engine for job growth — and scale-up, in general, no longer occurs in the United States. “Without scaling,” he wrote, “we don’t just lose jobs — we lose our hold on new technologies” and “ultimately damage our capacity to innovate.”

And yet, an all-out commitment to American-based manufacturing has not been on the business agenda of Silicon Valley or the political agenda of the United States. That omission, according to Mr. Grove, is a result of another “unquestioned truism”: “that the free market is the best of all economic systems — the freer the better.” To Mr. Grove, that belief was flawed.

The triumph of free-market principles over planned economies in the 20th century, he said, did not make those principles infallible or immutable. There was room for improvement, he argued, for what he called “job-centric” economics and politics. In a job-centric system, job creation would be the nation’s No. 1 objective, with the government setting priorities and arraying the forces necessary to achieve the goal, and with businesses operating not only in their immediate profit interest but also in the interests of “employees, and employees yet to be hired.”

When Mr. Grove wrote his critique, he was concerned about the corrosive social and economic effects of high unemployment, then 9.7 percent nationally. Unemployment has dropped considerably since then, but problems persist. Insecure, low-paying, part-time and dead-end jobs are prevalent. On the campaign trail, large groups of Americans are motivated and manipulated on the basis of real and perceived social and economic inequities.

Conditions have worsened in other ways. In 2010, one of the arguments against Mr. Grove’s critique was that exporting jobs did not matter as long as much of the corporate profits stayed in the United States. But just as American companies have bolstered their profits by exporting jobs, many now do so by shifting profits overseas through tax-avoidance maneuvers.

The result is a high-profit, low-prosperity nation. “All of us in business,” Mr. Grove wrote, “have a responsibility to maintain the industrial base on which we depend and the society whose adaptability — and stability — we may have taken for granted.” Silicon Valley and much of corporate America have yet to live up to that principle.
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Crafty_Dog
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« Reply #370 on: March 31, 2016, 07:57:43 AM »

http://scottgrannis.blogspot.com/2016/03/chinas-gift-to-us-cheap-goods.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+blogspot%2FtMBeq+%28Calafia+Beach+Pundit%29
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DougMacG
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« Reply #371 on: April 08, 2016, 12:44:36 PM »

This is important today.  9 out of 10 economists or news agencies getting this wrong doesn't make wrong right.  it wasn't caused by a failure of private businesses.  It was caused by a failure of the federal government.

https://www.youtube.com/watch?v=ObiIp8TKaLs

Who is the Milton Friedman today?  Besides being brilliant, he explained economic things in a way that everyone can understand and he openly debated anyone.

The above takes about 7 minutes of your life for you to not be wrong about something that caused a decade or more of misery.  The wrong lessons learned from the Great Depression are central to the problems we face today.

Here is another, Friedman on wealth inequality and inheritance taxes, 4 minutes.  MUST SEE.
https://www.youtube.com/watch?v=ObiIp8TKaLs

Ted Cruz needs to watch this and speak this clearly and persuasively on economics.

Glenn Beck has been doing a series of Milton Friedman on radio.  These are two clips are heard there and found on youtube.

http://www.glennbeck.com/2016/04/04/milton-friedman-part-i-economics-101/

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G M
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« Reply #372 on: June 01, 2016, 02:52:00 PM »

http://www.freerepublic.com/focus/f-news/2190282/posts

Pass it on.
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G M
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« Reply #373 on: June 01, 2016, 02:57:38 PM »


https://mises.org/sites/default/files/Road%20to%20Serfdom%20in%20Cartoons.pdf

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DougMacG
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« Reply #374 on: June 03, 2016, 07:15:42 AM »

Larry Elder puts to words what we all know but some want to deny.

http://townhall.com/columnists/larryelder/2016/06/02/on-inequality-n2172075

Is there a more brain-dead concept than to empower the government to fight "income inequality"? What sane, normal, rational human being thinks that human talent, drive, interests and opportunity can -- or should -- result in equal outcomes?

Despite my love of athletics, I knew in third grade that my friend, Keith, could run much faster than I could. For two years I played Little League ball, and I got better at it. But no matter how hard I tried or how many hours I spent, I could not hit, run or throw as well as my friend Benji.

Later in life, I started playing tennis, and I became quite passionate about it. But most of the people I played against had started playing years earlier, and most had taken lessons for years. I got better, but given my competitors' head start, the gap remained.

Financial planners advise clients to start early and stick to some sort of game plan. Is there any wonder that those who do so will have more net worth than those who started later, or who lacked the discipline to follow and stick to a plan? How is government supposed to address these "unequal" outcomes?
Most entrepreneurs experience failure before hitting on an idea, concept or business that makes money. Even then, it takes 20 to 30 years of long hours and sacrifice, along with occasional self-doubt and a dollop of luck, to become a multimillionaire.

I recently saw a movie starring Cate Blanchett. She is a very good actress, but she is also strikingly beautiful. Is there any doubt that her good looks, over which she had no control, are a factor in her success? Is it unfair that an equally talented actress, but with plain looks, will likely have an "unequal" career compared with that of Blanchett?

Speaking of acting, most who venture into that field do not become successful, if success is defined as making a living as an actor. These overwhelming odds still do not deter the many young people who flock to Hollywood every year to "make it."

Had a would-be actor dedicated that same drive and personality to some other profession, success would have been more likely, if less enjoyable. Should the government intervene and take from the successful non-actor and give to those who unsuccessfully pursued a long-shot acting career? An ex-actor told me of her recent lunch with a friend she had met when they both left college and pursued acting. While the ex-actor moved on to a different, successful career, her friend stuck to acting, through thick and thin. The actor informed her friend that she recently turned down a commercial. Why? What struggling actor turns down this kind of work? Turns out, through some sort of "assistance" program, said the friend, the state of California is "assisting with her mortgage." She has no obligation to repay the money, and she will continue to receive the assistance as long as her income is not above a certain level. How does this strengthen the economy? The ex-actor, through her taxes, subsidizes the lifestyle of the actor, who admits turning down work lest she be denied the benefits.

But this is exactly the world sought by Bernie Sanders -- a government that taxes the productive and gives to the less productive in order to reduce "income inequality."

In the real world, two individuals, living next door to each other, make different choices about education, careers, spouses, where to live, and if and how to invest. Even if they make exactly the same income, one might live below his or her means, prudently saving money, while the other might choose to regularly buy new cars and fancy clothes and go on expensive vacations. Is there any question that the first person will end up with a higher net worth than the latter? Is their "inequality" something that government should address?

Although Beyoncé is a good singer, is there any question that there are others with superior voices? But Beyoncé is also blessed with "unequally" good looks, charisma and perhaps better management -- maybe better than the other two ladies in her musical trio, Destiny's Child, whom she once sang with. Three singers, in the same group, have had "unequal" outcomes.

Communism, collectivism and socialism rest on the same premise -- that government possesses the kindness, aptitude, judgment and ability to take from some and give to others to achieve "equality." Karl Marx wrote, "From each according to his ability, to each according to his needs." And that's the problem. The statement implicitly acknowledges that some have more aptitude, drive, energy and ability than others. To take from some and give to others reduces the initiative of both the giver and the givee.
This is the fundamental flaw with income redistribution, the very foundation of communism, socialism and collectivism. One would think that Bernie Sanders would have figured this out by now. But wisdom among 74-years-olds, like outcome, is not distributed equally.
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Crafty_Dog
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« Reply #375 on: June 05, 2016, 11:22:31 PM »

http://www.wsj.com/articles/a-guaranteed-income-for-every-american-1464969586
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ccp
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« Reply #376 on: June 06, 2016, 06:20:52 AM »

Lets see.  Wikipedia states 27% of population is under 21.  That means 73% are over 21 or 225 million if we assume there are 300 million in the US.  Giving everyone of those $10,000 comes out to 2.25 trillion dollars.

Did I miss something?  Did the article above explain who is going to pay for this?

Of course the answer is the "rich".  It always is.  Doesn't add up.

His point about less jobs if AI really fulfills it's promise is worth thinking about though.
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Crafty_Dog
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« Reply #377 on: June 06, 2016, 01:24:27 PM »

"First, my big caveat: A UBI will do the good things I claim only if it replaces all other transfer payments and the bureaucracies that oversee them. If the guaranteed income is an add-on to the existing system, it will be as destructive as its critics fear."
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DougMacG
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« Reply #378 on: June 06, 2016, 01:42:21 PM »

"First, my big caveat: A UBI will do the good things I claim only if it replaces all other transfer payments and the bureaucracies that oversee them. If the guaranteed income is an add-on to the existing system, it will be as destructive as its critics fear."

Also, he begins: "Replacing the welfare state with ..."

I oppose a new gigantic program because it WON'T replace all other programs.  The politics of this isn't that simple.  For example, the left doesn't actually want to solve the problem and the right isn't going to embrace a new $2 trillion program either.   Still I like the thought process.  We need to find ways to help those in need and reform our basic safety net WITHOUT all the disincentives to produce that we currently put on both the payers and the recipients.

It is a sign of how bad our current system is to know that paying everyone, need it or not, 13k/year is better.

People on the edge of working more and not working for money often face real, marginal tax rates greater than 100%.  The Unaffordable Healthcare Act puts all our previous disincentive to work problems on steroids.
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« Reply #379 on: June 06, 2016, 01:55:06 PM »

Sorry to muddle the waters with a second subject at the same time:

Not sure I agree with Scott 100% here , , ,
http://scottgrannis.blogspot.com/2016/06/recommended-reading-ikenson-on-trade.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+blogspot%2FtMBeq+%28Calafia+Beach+Pundit%29
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DougMacG
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« Reply #380 on: June 06, 2016, 04:41:21 PM »


"nearly all economists agree that free trade, by expanding the size of the market to enable greater specialization and economies of scale, generates more wealth than any system that restricts cross-border exchange."

   - I would like to hear your view on this.


"Consider Apple. By availing itself of lowskilled, low-wage labor in China to produce small plastic components and to assemble its products, Apple may have deprived U.S. workers of the opportunity to perform that low-end function in the supply chain..."

   - this is a great, current example.  I was going to cut it there and say, we could require US workers to build it and then the number built would be zero as the phones would need to be so expensive.  Same point, but they answered it better than I could:

"...But at the same time, that decision enabled iPods and then iPhones and then iPads to be priced within the budgets of a large swath of consumers. Had all of the components been produced and all of the assembly performed in the United States — as President Obama once requested of Steve Jobs — the higher prices would have prevented those devices from becoming quite so ubiquitous, and the incentives for the emergence of spin-off industries, such as apps, accessories, Uber, and AirBnb, would have been muted or absent."


What is the alternative to free trade that works better?  Government managed trade?  Government targeted trade?  We will get tougher on their products and services entering and they won't get tougher on ours?  Government will stay benevolent and not be corrupted by cronyism as it picks winners and losers?  I don't think so on all counts.  
------------------------
Smoot Hawley data (Smoot Hawley was not the only factor, but telling IMO):  
Smoot Hawley raised tariffs on 20,000 items by 6.3% to 19.8%.
Imports fell 66%, exports fell 61%  
GDP fell over 25%.
« Last Edit: June 06, 2016, 05:30:48 PM by DougMacG » Logged
Crafty_Dog
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« Reply #381 on: June 08, 2016, 11:19:39 AM »

I'm leaving tomorrow for the three day DBMA Camp in Central PA with Top Dog and Lonely Dog and a proper answer of this would require more time and mental effort that I have today.

Part of the answer has to do with what happens when a hostile fascist state e.g. China, targets certain sectors (e.g. rare earth minerals) for geo-political military considerations.  Russian control over Euro natural gas would be another example.

Part of the answer has to do with the predatory pricing of fascist states.  Yes in the long run this is unsound, but in the long run we are all dead.

There's more, but as I say, no time today.
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DougMacG
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« Reply #382 on: June 08, 2016, 12:06:59 PM »

Have a great trip and camp.  We aren't very far apart on this.

"Part of the answer has to do with what happens when a hostile fascist state e.g. China, targets certain sectors (e.g. rare earth minerals) for geo-political military considerations.  Russian control over Euro natural gas would be another example."

"Part of the answer has to do with the predatory pricing of fascist states.  Yes in the long run this is unsound, but in the long run we are all dead."


On the first part from my point of view, national security is always a valid reason to interrupt free trade.  Freeze assets, cancel purchases, block trade, all are legitimate if national security is the valid reason.  But that is the exception and it doesn't mean, from my point of view, that 'managed' trade in general is an acceptable alternative, economically or in terms of liberty, to free trade.

Each of those examples, China rare earth elements and Russia natural gas warfare, are great topics to dive into later when time permits.  How do we address those?

On the second part, dealing with fascist states, I guess the same applies.  How do we best address that?  If we are going to violate our own principles in our trade policies, then our express purpose in a range of policies should be to bring about the end of that fascism and those policies, not to move us in the permanent direction of government managed trade.

I don't buy the premise that China can gain on us by devaluing and under-pricing.  Anti-trust violations, copyright theft etc are obvious exceptions to that and should be aggressively dealt with .
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DougMacG
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« Reply #383 on: June 28, 2016, 11:38:49 AM »

One more economics post for today - the previous one is on the Monetary thread.

Walter Heller was my Econ professor at U of MN.  He was chief economic adviser to Presidents Kennedy and Johnson, author of the Kennedy tax cuts, the war on poverty and part of the Marshall Plan.  A Keynesian.  Milton Friedman hopefully needs no introduction.  A Monetarist.  They each make their case and respond to each other:

https://fraser.stlouisfed.org/docs/meltzer/monetary_fiscal_friedman_1969.pdf  80 pages plus glossary etc.
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DougMacG
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« Reply #384 on: August 16, 2016, 04:45:03 PM »

"When politicians use bailouts to protect borrowers or lenders from their folly, they just encourage more folly."

  - Alan Reynolds on the sub prime mtg market one year before it crashed.  Like nearly all economists, he missed predicting the crash, but was grasping the cause.  http://townhall.com/columnists/alanreynolds/2007/03/22/subprime_economics

« Last Edit: August 17, 2016, 01:22:07 PM by Crafty_Dog » Logged
DougMacG
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« Reply #385 on: August 18, 2016, 02:32:40 PM »

The measure most heavily used to gauge the health of the economy in terms of jobs and joblessness has become useless in an era where the workforce participation rate has been plunging.  

Hold the workforce participation rate constant and the unemployment rate tells a different story:



It is time to devise a better measure.

http://www.investors.com/politics/editorials/its-time-to-dump-the-unemployment-rate/
« Last Edit: August 23, 2016, 06:32:55 AM by Crafty_Dog » Logged
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