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Archive for the ‘Human Action’ Category

Quick question: in 2012, which economy will grow the fastest in the world? China? India? Brazil? Hmmm… According to this, here is the answer:

Yes, yes, this is all from oil but still… Saddam had that same oil available and that country was not going anywhere. Let’s hope this time things will be different.

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Occupy the USA

Americans make up half of the world’s richest 1%

That is why all the OWS people should move immediately to Cuba. You will find a lot of the real 99 percenters there…

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Quantifying history

Crisis aside, let’s not forget how much capitalism is better than everything else:

From here.

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For a layman like me, economics was always a field that helped explain how the world worked. You had a bunch of failed theories (like communism) that clearly caused havoc when tried. Then you had the other side, capitalism, that clearly worked and brought prosperity to the world in an unprecedented fashion.

Now since 2008 when the current crisis started, economists seem to have gone insane. Again from an outsider point of view, what seems to be happening is that not only economists don’t quite understand why that crisis happened (you can see the high number of completely disparate theories that have come up) but even worse, they have no idea on how to solve it.

It looks things were reduced to two camps here: the ‘keynesians’ (mostly the left) who basically say government stimulus is the only way to get out of this. You do have people who favor different types of stimulus here but at the end they think that only government spending will ‘heat up’ the economy. You try to understand how they think this works and it is again not clear. My understanding is that they think government is able to force people who are currently not spending (i.e., the rich) to spend money anyway. Actually, the way this is suppose to work is: Government spends money (which it doesn’t have, so it gets it from the people who do) and that spending creates new jobs which in turn causes money to be earned by people who were previously unemployed. These people now spend that money, and the cycle continues generating more economic activity.

The other camp here says that this government spending scheme simply doesn’t work. First, because in order to redistribute money the government needs to either raise taxes OR print/borrow money. Raising taxes causes people who do have money to spend even less. That means less consumption, less jobs, cancelling the so called ‘positive’ effect of the redistribution. Also, printing/borrowing money causes inflation or a credit crisis, which makes financing the regular government operation difficult and possibly impossible (i.e., Europe). Furthermore, these economists say that when the previously unemployed people earn this redistributed money they will not really spend it as expected. They will still save as much as possible because of all the uncertainty in the economy. This group of economists tend to favor basically no action from the government. They think that the economy will recover naturally, and the only way government can help is by leaving this process to occur without external intrusion.

That’s it. As far as I can tell, there is nothing else out there. Krugman for instance, only argues that the stimulus was not large enough. He says (or at least implies, since he is a weasel) the economy will *never* recover until a huge (in the order of hundreds of billions to trillions) stimulus occurs. On the other hand, economists that are against the stimulus think the economy will not recover until the negative effect of the stimulus (i.e., our debt) is controlled.

I don’t think neither of these two things will happen very soon. However, from what I see from my day to day life and from the latest economic indicators, the economy is improving. Slowly but constantly. So my guess is that the ‘correct answer’ lies somewhere in the middle of these two points.

That brings me to the final point of disenchantment regarding economics: Even after things improve, I bet that we will get no consensus on why that happened. Krugman and his folks will find some explanation (the ECB started to print money! Obamacare took effect! We are not measuring inflation correctly!) that proves their point, and so will the other side (Republicans took back congress and that made people more optimistic about no new taxes!).

There is no theory out there that can be called scientific because nothing can be disproved. We learned that we don’t know how or why capitalism worked and why it is not working as well now. Hopefully things will go back to normal soon but the question of why might not be answered in the process.

Economics have turned into politics which is pretty much saying that Economics is dead. Hopefully I am wrong.

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Wow, it was exactly 6 years ago that I wrote this. Time does fly but things don’t change that much. Now instead of our beloved monster, we have Tite, the Dude equivalent of the brazilian soccer world:

—x—

Sports are one of the last windows into our primitive selves. It’s messy, it’s irrational, it’s cruel. We can cite statistics, try to prove how ‘fair’ or ‘deserved’ that final result was. But at the end of the day, we don’t really care about any of that… You are happy because you won, and it really doesn’t matter how. Your little tribe conquered the other one. Sing it out loud and off with their heads!

Nowadays it’s only for fun you would say. Yeah, I wish that was it. After the final game last sunday, my wife told me she was really rooting for Corinthians this time. I was kind of surprised (she hates soccer) and asked why. “Well, you become unbearable when they lose regular games. I could only image how hard it would be to stand you had they lost this time.”

—x—

Which brings me to the really puzzling aspect of this all: how can we still willingly participate in this madness? How can I, after all these years and distance, still care for a group of people I don’t know (and never will) with this passion and commitment? Is this irrationality rooted on our psyche in some inexorable way? Do sports actually prevent us from going back to killing eachother even more than what we already do?

Ah, whatever! Bring it on my jingoistic brothers! Let’s celebrate and thank the Gods for our supreme victory over the hateful losers who could not place the ball inside our rectangular wooden frame! Hahahaha, we rule the world!!!

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Listen and learn

Tyler Cowen from MR was at the Diane Rehm show yesterday talking about OWS. It is available online here and his (short) participation is around 20:30. I thought it was much better than his latest NYT article on the same subject (I left a comment about that in MR).

I think that whole show is a good example of how this OWS ‘movement’ is a farse. You have one or two guys trying to keep the conversation going within some reason but the rest are just crazy folks. They talk about invading homes, “gumming up” the system (see around 35:00) and so on. There was also a good point made by a caller (around 43:00) on the different ways OWS and Tea Party were judged.

I know I’ve been talking a lot about this but to me the fact that these people are actually being taken seriously by the media is mind–boggling. It is a dangerous and irresponsible thing in my opinion, since that attention might be inciting these people to go the next step, which is violence. Nobody wants to see that.

Right?

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I suppose more and more people will trade their typewritters for this sort of equipment eh?

Ah, the awesome 80s!

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