The ramblings of an Eternal Student of Life     
. . . still studying and learning how to live
Thursday, September 27, 2018
Current Affairs ... Economics/Business ... Technology ...

We hear that many in the Democratic Party today are warming up to the idea of socialism; and that many young adults now favor socialism over capitalism.

One of the strongest criticisms of socialism, in academic terms anyway, came from the 20th Century philosopher and economist Fredrich Hayek. In a nutshell, Hayek said that the problem with socialism, relative to free market capitalism, regards information. According to Hayek, free markets make good and efficient use of economic information, automatically – no one oversees the information flow, but it works out in a very good way. Whereby, in a socialistic economy controlled by a centralized government, human intervention gets in the way of information flow, and makes the overall economy very inefficient.

A New York Times article put it this way —

[Hayek] argued that most of the knowledge in a modern economy was local in nature, and hence unavailable to central planners. The brilliance of a market economy was that it allocated resources through the decentralized decisions of a myriad of buyers and sellers who interacted on the basis of their own particular knowledge. The market was a form of “spontaneous order,” which was far superior to planned societies based on the hubris of Cartesian rationalism.

A web site dedicated to this “knowledge problem” includes this summary of Hayek:  »  continue reading …

◊   posted by Jim G @ 5:11 pm       No Comments Yet / Leave a Comment
Tuesday, November 8, 2016
Art & Entertainment ... Economics/Business ... Society ...

Today is the big day for American politics, the Presidential Election. There will be thousands if not millions of articles written over the next 48 hours about it. I will probably chip in my 2 cents at some point. But for now, in the early afternoon calm before the evening storm when the results start coming in, I’m going to zoom back a week or two and think about the World Series.

As you probably know, the 2016 World Series was quite dramatic, pitting two Cinderella teams that haven’t won a World Series for a long time; since 1948 for the American League Cleveland Indians, and since 1908 for the National League Chicago Cubs. Cleveland jumped off to a 3 win / 1 loss start, and it looked like the Series could finish up in game 5, surely by game 6. But no, the Cubs clawed their way back to an exciting extra-inning win in game 7.

After the fourth game, my friend Mary wrote to me with her theory that the Cubs would come back and the Series would go thru to a game 7. This no doubt reflected her faith in the Cubs, given that Mary is a life-long Chicago-lander. But Mary also thought that the financial powers behind Big Baseball would encourage teams to play as many World Series games as possible, to avoid 4 or 5 game routs so as to maximize the profits from tickets, media revenues, and memorabilia sales. Well, obviously her forecast that the Cubs would force a 7th game was on the money. But what about the overall theory that the World Series games are rigged  »  continue reading …

◊   posted by Jim G @ 12:28 pm       Read Comment (1) / Leave a Comment
Wednesday, October 12, 2016
Economics/Business ... Politics ...

The theme of the September 2016 issue of Scientific American was “The Future”. That is not an unusual theme for a science magazine. Over the past few decades, however, SciAm has become more and more “socially conscious”, for better and for worse. Science certainly does have to answer to society, and what society values will influence science (although by the same token, science needs and has traditionally maintained some independence and shelter from the whims of politics and business; science is supposed to be about truth, whereas politics and business so often aren’t!).

Therefore it was not all that unusual to see an article in the “future” issue written by a Princeton economics professor. This article was titled “The Threat of Inequality“, and it discussed the potential social and political consequences of the economic trend over the past few decades (but especially since the 2008 financial crash) of declining economic growth and growing income inequality. The name of the author is Sir Angus Deaton. Whoa, now there’s a name that reeks of authority! Well, in my book, anyway. But let’s see what Professor Deaton has to say.

Sir Deaton starts by reminding us how much economic progress the world has made since the 18th century. “We are enormously wealthier and healthier now than at any time in human history”. Over this time, Prof. Deaton admits that the world has not shared uniformly in this progress. “Per capita incomes in the US are 4 times higher than China, 10 times higher than in India or Nigeria, nearly 20 times higher  »  continue reading …

◊   posted by Jim G @ 7:55 pm       Read Comment (1) / Leave a Comment
Saturday, October 1, 2016
Economics/Business ... History ... Public Policy ... Society ...

In my last post, I discussed the notion of a “political economy” and reviewed some very insightful thoughts by political journalist John Judis, which seek to explain the rise of Bernie Sanders and Donald Trump in economic terms. In a nutshell, Judis feels that both Sanders and Trump represent different points on the same underlying wave of populist dissatisfaction with our nation’s current political economy. Just what is this “economy” that so many people are dissatisfied with? It’s a high-tech version of what we called “Reaganomics” back when it was introduced in the early 1980s, with various modifications and adjustments made during the presidency of Bill Clinton. As such, I call it the “Reagan-Clinton1” political economy, although Judis gives it the more academically acceptable tag of “market liberalism” (not to be confused with political liberalism, which largely detests Reaganomics).

Many other pundits have explained the rise of Trump in terms of racism, perhaps a backlash against the ascent of Barack Obama. They admit that many of Trump’s largely white supporters have experienced tough economic times, but contend that the motivations behind Trump’s ascendancy largely reflect the fact that minorities have gained power, and that whites are increasingly anxious about this. Certain pundits, however, (e.g. David Roberts and Derek Thompson) also contend that this racial resentment has an economic component, a racial selfishness reflecting the belief that whites are no longer automatically first in line when it comes to reaping the benefits of the system.

My question is whether the political responses to Reaganomics from the black community and its leaders have in any way fed into the white racial anxieties that Trump seems to have drawn much of his support from.

Ironically, a look at some income statistics spanning the past 40 years indicates that in the aggregate, whites  »  continue reading …

◊   posted by Jim G @ 4:33 pm       Read Comment (1) / Leave a Comment
Friday, September 23, 2016
Economics/Business ... Politics ...

Have you heard anything lately or read much about “political economics”? If you attended college, you may have taken a Political Economy course, or you might have heard the term used in a high school civics class. But then you got out into the real world, and you almost never hear these two words used together. You heard a LOT about politics, and almost as much about the economy. But political economy?

Nevertheless, politics and the economy have a whole lot to do with one another. In reality, they are just about tied at the hip. President Clinton the First realized this and had a saying about it . . . remember “it’s the economy, stupid”? (This somewhat irritating motto was coined in 1992 by Clinton campaign strategist James Carville). So, what can we take from the “political economy” viewpoint to help understand what’s going on today on the political scene? The biggest happening over the past two years has obviously been Donald Trump. But following not too far behind in black swan-dom was Bernie Sanders. Can we relate Trump and Bernie to what’s going on in the American economy today?

A senior and very well respected American political journalist named John Judis recently published a good article that did just that. The article is called “All the Rage“, and is available on the New Republic web site. It’s a long read, but worth every word. There have been a whole stack of articles over the past few months attempting to explain why Trump and Sanders came out of nowhere and surprised everyone on the political scene. For now, we’re through with Bernie Sanders, but the Trump drama obviously continues to  »  continue reading …

◊   posted by Jim G @ 10:44 pm       Read Comment (1) / Leave a Comment
Saturday, August 20, 2016
Current Affairs ... Economics/Business ... Politics ...

America today seems to have a race relations problem; that’s not saying anything new. A lot of people today perceive a worsening in such relations over the past decade.

Perhaps a key factor is the information revolution that has been caused by the widespread availability of video recording to the public, which stems from the rise of smart phones. These phones have been increasingly used over the past 4 or 5 years to video police interactions with the public, especially when there is police misconduct. These recordings have uncovered a great deal of disrespect or improper acts by the police when dealing with African-Americans in a wide variety of contexts, from simple traffic stops to pursuing criminal suspects. Too often, these potentially improper police acts turn out to be fatal. In some of the more “viral” examples of these recent video cases, the police actions eventually turn out to be justified; there was a clear and present danger to the police and public. These videos often do not tell the whole story. But too often, it becomes apparent that the police were in the wrong, and that underlying racial attitudes on the part of police officers and officials may have been involved.

And thus the rise over the past few years of the Black Lives Matter movement. BLM appears to have been spawned by these highly publicized incidents. However, BLM is increasingly trying to transcend the troublesome matter of  »  continue reading …

◊   posted by Jim G @ 9:12 pm       Read Comment (1) / Leave a Comment
Saturday, January 16, 2016
Current Affairs ... Economics/Business ...

Oil prices are currently hitting historic lows; hard to believe that they were above $100 per barrel not so long ago. Now they are struggling to stay at $30. As late as December, 2011, I said in one of my posts that “unfortunately, oil production doesn’t seem to be growing at all anymore”, and I anticipated that oil prices would remain high. I now need to eat my words.

So what’s going on? Oil production definitely has gotten a boost from new technologies that because usable over the past few years, e.g. fracking and super-deep sea drilling. On the demand side, most analysts cite the economic problems in China, i.e. its serious contraction of growth over the past 3 or 4 years. At the same time, the rest of the world in general isn’t doing so well either; world economic growth is expected to remain less than 3% per year. And then add in all of the energy conservation and alternative energy efforts that were started back when oil was above $100 per barrel. Overall world demand for oil is still rising, but not as fast as before, and less than many people had anticipated.

The classic economics 101 explanation for the oil situation is that there is an oversupply in the market, which has allowed oil users to bid down their purchase price. Under that textbook scenario, the producers will soon stop producing and offering so much oil to users, and the users will then have to start bidding more to get what they need. I.e., prices will rise once again, back to the lowest marginal cost of producing a new barrel of oil under present conditions (which is certainly above $30 at current usage levels, although that cost is much lower than it once was due to technology innovations such as fracking).

That’s the theory. But what appears to really be happening is  »  continue reading …

◊   posted by Jim G @ 11:00 am       Read Comment (1) / Leave a Comment
Saturday, July 25, 2015
Current Affairs ... Economics/Business ... Religion ...

If you are a private investor looking to get rich, or just an aging middle-class schlemiel like myself hoping to retire sometime in the next five years or so, you might know about the web site. It’s a pretty good place to get up-to-date stock and bond market information, and it publishes a fair number of articles that might be of interest to small-fish “investors” like me.

(Really, I never thought of myself as a capitalist financier. But any working person today who wants a half-way decent retirement is not going to be able to fully rely on Social Security and whatever few real pension arrangements are still out there. You’re going to have to save, and your employer, if they really like you, is contributing to your old-age savings. By the time you pass the big six-oh, if you’ve been diligent, you’ve got what might sound to many like a really big chunk of money; it looks like you’re rich!! But no, this chunk is all that stands between you and poverty over the next few decades of your life, as your body slowly weakens and mind slows, and you really just can’t stay up with the 9-to-5 working world anymore.)

So anyway, if you’re presently in the boat that I’m in, you may have heard of and have read some of their articles. One of the regular featured columnists on that site is Paul Farrell, who seems to be the “house pessimist”. In late 2008, as the US economy was hitting bottom  »  continue reading …

◊   posted by Jim G @ 2:46 pm       Read Comment (1) / Leave a Comment
Saturday, July 4, 2015
Current Affairs ... Economics/Business ... Foreign Relations/World Affairs ...

One of the biggest world-news items over the past few weeks has been a new flare-up of the whole Greece-versus-the-rest-of-Europe (but mostly Germany) thing. As with most big issues, this thing is all about money. Lot’s of money. In a nutshell, Greece borrowed too much of it from the European Union, and now can’t pay it back. So what happens next? Greece is part of the EU. Should it be kicked out? If allowed to stay, should it be punished, or sympathetically helped to resolve its underlying problems?

You’d think that sympathy and addressing underlying problems would be the right way to go. But a lot of people think that Greece hasn’t been such a good member of the Euro Union, that it has built up a lot of bad habits and has been lying and otherwise acting in bad faith, and now needs to suffer a bit so as to discourage other members of the Union from ever trying anything like this (and dissuade the Greeks from ever thinking about it again). This is approximately the same rationale that underlies all criminal law. I.e., people don’t always act nicely, and nations don’t either. So they sometimes need to be roughed up for a while; once they’ve shown that they’ve learned their lesson, the Union can get more lenient about getting them back on their feet (i.e, give them significant debt forgiveness).

I’ve read a number of articles on the situation over the past few days, and I’m going to cite some that I’ve found interesting. First off, Bloomberg has a good overview of the whole situation, not surprisingly; if you want to understand something about big money, Bloomberg is  »  continue reading …

◊   posted by Jim G @ 4:00 pm       Read Comment (1) / Leave a Comment
Sunday, May 24, 2015
Economics/Business ... Society ...

My brother has been living in hell lately. At least some of the time. His old Chevy S-10 pickup is on its last legs, and he has to get some new wheels soon. His finances might allow him to get a new pickup or SUV (he’s not a Honda Civic or Ford Focus kind of guy, given that he is a drummer in a local band and has to lug drum kits around); so, he’s been doing his homework on-line, and is now ready to enter the dealers showroom.

Actually, he already had his first encounter, with a Nissan dealership here in northern NJ. His experience was not good. He got all of the usual dealer tactics and was pressured to buy something different from what he wanted (more expensive, of course). He had the good sense to walk out, but not before experiencing a lot of macho angst and being made to wait and then having the “wizard of oz” (i.e. the manager or someone pretending to be the manager) come over and try to smooth the situation out. He definitely needed a glass of wine – or three – after that encounter. But he’s gearing up for his next battle in the upcoming week.

He and I have been talking about this, wondering what percentage of car salesmen are decent people who work to balance the interests of both the customer and the dealership, who try to be helpful to the potential buyer (and not set out to confuse and wear you down, so that in your exhaustion and despair you finally  »  continue reading …

◊   posted by Jim G @ 8:32 pm       Read Comment (1) / Leave a Comment
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