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Posts Tagged ‘Economics’

Column of the week

Are jobs obsolete?

This is really priceless. It is like the bizarro version of Krugman’s broken world. We don’t need to break stuff to create jobs people… Let’s just stop with this silly thing called jobs! We already have too much!!!! Let the stupid robots work and let’s focus on spending those trust funds!!!!!!

There are so many fallacies and misconceptions here that it would take me an hour to write a complete post – something I could only do if I had a ‘creative activity’ instead of a mean spirited, corporate controlled mindless job.

And this is linked in the front page of CNN! Really, this makes me miss the real commies who at least had an actual theory to propagandize!

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The broken world fallacy

Golden boy has done it again. He now says that we should be literally breaking things just so we can get people back to work! Yes, you heard it right. GB is defying logic in ways I never thought he would!

At least the guy is consistent. If you defend the idea that the government should spend money (a.k.a. stimulus) in things we simply don’t need just because the economy has slowed down, it is really not a big jump to say that one of the things we should do is to break a window so the glass maker has some work to do.

Things get funnier once you take this kind of lunacy forward. If we have really thrown away all consideration regarding the return of investment, what we should really do is to break very valuable things; specially things that require a lot of work to replace/substitute. Therefore, Krugman should propose that we get rid of computers. There would be no better plan to get *everyone* back to work. I can guarantee it.

Fun fun fun!

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Tell them MF

This is possibly one of my favorite clips ever, from any economist. Take that, crazy hairdo pinko! (Watch the whole debate when you have a chance, it is awesome)

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Golden Boy wrote a post called Economics Is not a Morality Play and right in the middle of his rant he says that:

“The rich don’t necessarily deserve their wealth, and the poor certainly don’t deserve their poverty”

Oh well, I would say that everything else he wrote there is moot at that point.

Here is some breaking news for you dear Paulie: Everything involves morality. Taxing the rich is only acceptable if you think they don’t deserve their own profits. ‘Helping the poor’ will mean very different things if you think they have (at least part) of the responsability for being poor.

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What he said

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Krugman finally explains what is his magic potion to control the defict once the recession is over:

Yes, the United States has a long-run budget problem. Dealing with that problem is going to require, first of all, sharply bending the curve on Medicare costs; without that, nothing works. And second, it’s going to require some combination of spending cuts and revenue increases, amounting to at least 3 percent of GDP and probably more, on a permanent basis. I’d argue for doing most of that through higher taxes – and yes, I’m willing to go along with a VAT, as long as it’s used to pay for maintaining the social safety net, not to make room for tax cuts on high incomes.

So anyone out there who still wants to claim that this guy is ok with tax cuts or a deficit hawk? (and one of the masterminds behind the Clinton’s era lack of spending?)

Please… The guy is the classic tax and spend liberal. And if history has anything to teach about these folks is that they end up spending much more than taxes can afford.

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Scott Sumner reminds us of something I keep saying all the time – things are still way better than they were in the 1970s:

“In 1979 the British government owned many of the large manufacturing firms in industries like autos and steel. Even a candidate as conservative as Thatcher dared not suggest that perhaps the government had better things to be doing than manufacturing cars. (BTW, in Britain the election manifestos are taken much more seriously than in America.) In the 1950s, Eisenhower presided over 90% income tax rates. Until the late 1970s the US government set prices in many industries.

So it is not true that liberals have always believed communism is a bad idea, if by communism you mean an economic system where the government owns the major industries, sets prices, and has confiscatory tax rates on wealth. Of course they never bought into the (totalitarian) communist political system, but they most certainly did buy into its economic system. Samuelson’s textbook once predicted the Soviet living standards would surpass the US by 1990. If true, shouldn’t we adopt a democratic form of socialism in America?

We’ve come a long way. Right-wingers should not get too discouraged about the regulatory “reforms” being considered. Of course the crackdown on derivatives will probably do more harm than good, but the key point is that the harm it does will be trivial compared to the harm done by policies in the 1970s that even conservatives bought into.”

Read the whole thing, including comments. Very good stuff.

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This little joke from Boing Boing reminded me about a little peeve I have with the modern neuroscience movement. Here is the problem:

If we are all wired to be these non-logical beings that have no free will or at least have no idea how we come to decisions regarding difficult problems, how can neuroscientists really help us? I mean, were they the only ones programmed to be logical?

Expand this little conundrum to politics. If the electorate really doesn’t know better and we need left-wing mommies to control our actions through taxes and subsidies, how do we know that these incentives are logical at all?

This is all the continuation of the classic questioning of relativism – if everything is relative, how can relativism be right?

Or putting it in a little Watchmen-like way: Who manipulates the manipulators?

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This is a treat for anyone who loves numbers and graphs. Here are some interesting ones from the World Development Indicators comparing data between US, Japan, China, Germany, France and Brazil:

GDP Growth from 1960 to 2008 Look how the gap is still huge…

Market capitalization of listed companies as % of GDP Hmmm, you would think that the 2008 crash was much harsher on the US but take a look at China and Brazil!

Also check out the environmental data… China’s agricultural land has grown big time but I was really surprised at how low their Renewable internal freshwater resources per capita is.

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So it looks like someone finally noticed what I have been crying about for years: the total and complete lack of a ‘liberal’ (aka American conservative) political option in Brazil.

However, I think that this goes beyond economic policy. I think that in Brazil we have a leftist culture that is totally ingrained and absorbed by the public in general. This culture is what ultimately makes a free-market/conservative option utterly impossible to appear and much less succeed in any way.

For instance: Fatalism rules in Brazil. You ask anyone on the streets or a politician or a computer programmer why they think Brazil is not a developed country they will definitely blame someone else. It is either Portugal’s fault (a very popular option when I was a kid in school), the IMF (also a very popular choice in the 80s – Brazil’s left used to say that the country’s inflation was directly connected to the IMF’s debt!), America, ‘politicians’ (as if the people who elected them had nothing to do with it), etc, etc.

Furthermore, the entrepreneurial spirit in Brazil is dwarfed by the power of government. It is not just that taxes are too high… The whole system is so convoluted and corrupt that in order to have a business people have to choose between operating outside of the law (at some level at least) or to buy out their way into the government’s arena (i.e., bribes and illicit favors). There is no incentive, neither from the people in power nor from people in the private sector, to completely dismantle this leviathan. It has become part of the system and it feeds from it.

So how can you expect the country to truly embrace capitalism with this frame of mind? Honestly, I am always truly surprised on how much Brazil has advanced despite all of this.

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Canadian Premier Danny Williams is set to undergo heart surgery this week – in the United States
Hmmm… Weird! I thought we were trying to copy Canada’s health care.

According to the Washington Post, some Haitians want U.S to ‘take over’. Take over the money giving, that is. For those bastards religious freaks who are trying to adopt poor children, oh those need to rot in jail. Maybe Haitians are afraid of running out of slaves.

Talking about Haiti, Voodoo high priest claims aid monopolised by Christians
Let me see… yeah, no comments.

Moving to good news, this is an interesting article on the revolution brought by McDonalds in Russia. Was that only possible because we won the cold war or did we only win the cold war because of businesses like McDonalds?

Back here in good ol’ America, here is King Obama’s prediction on how unemployment will decrease. It looks like they plotted an average between fast recovery rates and the slower ones. Somehow I doubt they got this right. Talking about the recession, this is Samuelson’s take on what happened and why. Sounds more realistic than all the ‘blame Bush’ usual articles.

Finally, this is an interesting NPR program on the question: Why Does Time Fly By As You Get Older?

That’s it folks. I had some other links here but time flew by, I got to go!

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The Kübler-Ross grief cycle shows that people with terminal illnesses need to go through seven phases during their process of grief. GB is no exception:

Shock stage: Initial paralysis at hearing the bad news. – GB’s shock was a classic!

Denial stage: Trying to avoid the inevitable. – Check out the last paragraph of his article linked – “I still cling to a fantasy

Anger stage: Frustrated outpouring of bottled-up emotion. – Here GB compares Obama to… Reagan! Oh, the horror! Right next, he attacks Democracy (oh yeah, the authoritarian blood of the left pulses strong in GB’s veins as well!). Anger at its best.

Bargaining stage: Seeking in vain for a way out. – GB calms down a bit, say that “things are as they ever were” and now reminds us thatThat doesn’t mean that there’s no difference between the parties, that everything would have been the same if McCain had won“. Oh, he also says in another post that Democrats are not stupid and they’re not evil, which represents a vast improvement. Last thing he wants is to get more people voting Republican, let’s not go crazy here! Let’s keep the faith in the Blue party…

Depression stage: Final realization of the inevitable. – This is where our dear pompous friend has arrived today. He moved past the attacks against Obama (“Don’t blame Mr. Obama. There’s only so much one man can do, even if he sits in the White House.“) and now the problem is with the whole system (“I’m sorry to say this, but the state of the union — not the speech, but the thing itself — isn’t looking very good.“).

So there are only two stages left:

Testing stage: Seeking realistic solutions.
Acceptance stage: Finally finding the way forward.

Now you may ask, what is Krugman’s “terminal illness” here? Was it his love for the Messiah? No. Was his love for the Democratic party? No way. What GB really loves at heart is himself. He wanted Obama to follow all his ideas, all his “New Keynesian” theories on how to govern our economy. He doesn’t care about who does it or how it is done (his attacks on Democracy are very revealing). The fact that the Enlightened Obama is not doing what he wanted is highly problematic. At first he blames Obama, but then he blames the system because he probably understands that not even himself would be stupid enough to follow all his ideology to the end.

I look forward to his Acceptance stage. My guess is that he will start ‘lowering his standards’ and will re-embrace whatever Obama does moving forward. Once the economy naturally recovers, he will say something like “even though Obama faced issues, he has done enough to save us”.

Then he will go back to making up new unproven economic theories and getting himself some new Nobel prizes.

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The meltdown continues!!! Now Golden Boy says: Obama Liquidates Himself

This might be a bit too obscure of a reference, but GB’s cry baby reminded me a lot of this:

Sing it out loud with GB: “It’s pretty scary!!!” Hahahahahahaha

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Chavez says military will monitor Venezuelan prices

Ah, the joy of a true Socialist government. Or could this be part of the New Keynesian agenda too? After all, the ‘old’ Keynesians were all for price control right?

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Brooks is on a roll: The Messiah Complex

On the other end of the spectrum, Golden Boy continues to shine like a beacon of brown light he is.

Jobs? We are still doomed (funny how he doesn’t say much about November’s numbers – by the way, I wouldn’t be surprised if December numbers are revised upwards soon). Banks? Please, it is still all Bush’s fault… Even though he is stepping slowly off of Obama’s bandwagon and saying that the Messiah is giving ‘kid-gloves treatment of the bankers’ (note the dichotomy: Bush is a corrupt bastard, Obama is simply too nice).

But the funniest by far is this one, where Golden Boy says that the Chicago School of economics is dead (he should try to tell that to Obama!) and he defines himself as a ‘New Keynesian’. Ah, now that is such a relief! I always thought he was a good old plain Keynesian!!! I guess the ‘New’ is required to explain all the stupidity and chaos these guys created in the 70s, right?

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U.S. loan program may have made things worse

‘Money’ shot:
Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.

As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.”

Ah, liberals. Always in the business of trying to trick you out of reality.

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The future:
Modern Warfare 2 five-day sales hit $550 million
Half a billion in 5 days. Who would have thought that a ‘kids’ toy’ industry would become so important? Well, I did. BTW, my original point about Brazil’s backward approach on videogames continues to be valid: MW2 will be selling for the amazing amount of 250 Reais (aprox. 140 US$) compared to US$ 59.99 in the US.

The Past:
Fat cat pay – Then and now
Among all the stupid arguments and lies being sold during this recession, this whole controversy on CEO pay has to be the worst. Pure media garbage and political populism.

The clouds!
Chavez asking Cubans to ‘bomb clouds’ amid drought
What a clown.

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In his little post titled “If a deficit falls in the forest …” Golden Boy again shows why we cannot trust him a bit. His argument is that Obama should not worry about reducing deficits because “the public won’t even hear about (it)”. As proof, he shows a poll from 1996 that shows a percentage of Republicans (and Democrats and Independents too, but he only cares about Republicans) who thought the deficit was not decreasing, but increasing at that time.

That is a great reasoning isn’t it? You shouldn’t do a thing about issues that are not immediately and completely translated as political advantage. Does he talk about acceptable levels of deficit? No. Does he talk about long term implications of large deficits? No! (He only did so when Bush was in power, of course). AND THE GUY IS A ‘WORLD-RENOWNED’ ECONOMIST!

Listen, I don’t like Obama and all of that but this guy is the kind of Liberal that truly scares me. He is a total farce, a political monster posing as an economist – a Nobel Prize winner economist if that matters at all nowadays.

You can mark my words – the only possible destiny for this guy is to become an actual politician some day. Be afraid.

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