How Do You Get People To Explore Their Options? Give 'em Enough Income To Keep Doing So.

   (Commentary posted by Roger Erickson)

Speaking of trust, an erstwhile cartoonist examines the ...

Trans-Pacific Partnership

and, quite accidentally, ends up considering trust in government, and how to get people to explore their options. Could be worse. He muddles some of the issues regarding Free Trade, but at least he's against blind acceptance of the TPP ... for the simple reason that it ASSUMES that we can trust our lobbying process that produces the government we have. Amazing. We need a cartoonist to explain that? Maybe so.



What's also amazing? I keep reading (including in the TPP comic) of people getting Nobel Prizes for rediscovering common sense that peasants carved into stone inscriptions WAY before the Egyptians built the pyramids.

Don't rely on existing assumptions? (Daniel Kahneman) No kidding? That predates humans! Ever see a penguin afraid to go in the water even though it can't see any leopard seal?

Multiple people may both cooperate & compete simultaneously? (John Nash) Wotta concept! :( You mean like symbiosis, autocatalysis, or teamwork?

Weepin' Buddha on a decline! Are these people joking?

I'm sticking to my thesis. ANY aggregate* or network going through a growth spurt HAS to get clumsier (& dumber), before it can regain & extend agility.

Can I get a Nobel Prize for reminding the new, clueless hoards of THAT age-old observation? :( Or does anyone even care about getting Nobel Prizes any more, since our aggregate went through it's latest growth spurt, and triggered another round of deflation in aggregate intelligence?

Why? Good heavens. Do you have to ask? A network dependent upon interconnections & feedback ... that suddenly doubles it's number of nodes without increasing it's feedback interconnects by N! (AND TUNING them all) .... is a clumsy, ignorant network. [N! = N-factorial]

How fast does it take a disorganized, growing network to re-organize on a larger scale?

It takes time.

What's the half-life of feedback-based agility recovery in a network expanding faster than its inter-connects? 

There are endless options, but in our current challenge, we (or another country) will eventually evolve a culture that pushes to re-organize on a bigger scale, faster. Or maybe human nation states will do that through symbiosis - which sounds less statistically likely. Witness the EEU struggles, and the history of "Monetary" unions. How system evolution eventually occurs can't be predicted by prior systems, only discovered by trial and error.

We named our goal as "Adaptive Rate" over 150 years ago, yet we're still spewing students faster than we're reminding them what their core challenge is.

Until then, it seems that our culture won't have hit rock bottom until someone gets a Nobel Prize for rediscovering that 2+2 = 4. Once we stop sinking lower, we can turn the corner & start regaining cultural agility, and AdaptiveRight will reapproach survivable balance with CopyRight. It's a simple balance for any adaptive system: keep components alive a & adequately provisioned ... WHILE growing the system. Components eating their system is dumber than sawing off the limb they sit on.

* (not just adolescents, i.e., an aggregate of cells who go through an aggregate growth spurt, and yes, get clumsier before they can regain agility;  do I have to repeat this 12 times?)

Cultural Development at 31st Week of Democracy

Cultural Development at 31st Week of Democracy

Are we past the 2nd Trisequester yet?

Or still in the fetal position?

Narrow Statements Fall Short Of A General Policy Observation. We Need Synthesis, Through Coordination.

   (Commentary posted by Roger Erickson)

With enough of these narrow, repetitive statements, will all the emerging institutions representing the (growing thousands) of established disciplines join together in crafting ingenious POLICY remedies?

The distinction between tactics, strategy & policy is entirely one of feedback scale, and convergence to subtle tuning steps, 5 or more steps back in diverging causality chains. Policy agility can't emerge without sharing a deep enough general perspective on common context.

Of course solutions aren't obvious, and finding them isn't easy. Our only chance is to put our heads together and consider what's optimal for the 7th generation yet unborn. That's ancient tribal logic. Why are we failing to practice it on a bigger scale?

Glut of postdoc researchers stirs quiet crisis in science

What's the root causality behind this and all other un- & under-employment issues? Maybe we're just not setting national goals worthy of this electorate's talents?
Why not? Maybe we just got out of the aggregate habit of leveraging all the distributed talent we possess?

We as a people are what we practice.

If we as a people don't retain the practice of setting worthwhile Desired Outcomes ... we won't have any to tempt us ... and we won't have motivation to keep all of us busy.

Who were the first opponents of Neo-Liberal idiocy? Probably the first tribal members, over 100,000 years ago. Amazingly, they're still not the last.

"You f***ing Americans! Who are you to tell us, the rest of the world, that we're not [allowed to use as much of your currency as we want, whenever we want to]?" :)

   (Commentary posted by Roger Erickson*)

Coming from a British banker, that is drop-dead hilarious. Maybe he was fondly recalling the East India Company scrip? Or some of the UK-imposed Ghana colonial currencies. Or the infamous Hut Tax? At least one country has come a long way since then.





Yes, intelligent policy works, if simply used with agility. Meanwhile, however, elsewhere around the world:

"... leaders of the BRICS - China, India, Russia, Brazil and South Africa - will launch a development bank to be a symbol of their ambitions for global influence. The currency in which they have chosen to denominate its share capital is a familiar one, however - the U.S. dollar."

Ok then! Conclusion? Who says the finance industry is more trouble than it's worth? Without 'em, what would cynics & comedians (and counter-revolutionary counter-revolutionaries) use as fodder? :)

Wasn't it supposed to be our currency, and THEIR problem?

* This post is dedicated to Ramanan, who steadfastly believes that his home country can't control it's own policy until the USA reforms $US currency & fiscal policy. Whatever!

Fighting over the "Last, great, unguarded pools of money in this country." Really?

(Commentary posted by Roger Erickson)

That's how the American Federation of Teachers & AFL-CIO think?

That's what they think "People Power" is? Could we set our sights a bit higher?

No wonder we're focusing on tactics, winning a few Pyrrhic victories, ignoring strategy & context, and losing the class war.

Sounds like this topic meets their Gold Standard. :(

From AFL-CIO <peoplepower@aflcio.org>:

Join AFT President, Randi Weingarten

& ex Rolling Stone journalist Matt Taibbi

for a discussion of his new book

The Divide: American Injustice

in the Age of the Wealth Gap

Monday, April 21, 2014, 3–4:30 p.m.

AFT, 555 New Jersey Ave., N.W.

Washington, DC 20001, (4th Flr Conf Room)

RSVP to Carolyn Jenkins at cjenkins@aft.org byApril 18

Matt Taibbi has led the effort to expose Wall Street firms that are making millions in profits off public pension funds.

“Essentially it is a wealth transfer from teachers, cops and firemen to billionaire hedge funders,” Taibbi says. “Pension funds are one of the last great, unguarded piles of money in this country, and there are going to be all sorts of operators that are trying to get their hands on that money.” 

[As usual] Matt Taibbi's book, "The Divide" will be available for purchase and signing.

#####

This is amazing. And also deflating. 

Reminds me of the last, great, unguarded pool of ladders, and how people might use them to get a better view of context.

We're all supposed to focus on the "last, great, unguarded pools of money in this country?" Why? When all these static pools of already-expressed-fiat pale in comparison to continuous access to our own, unlimited public fiat. 

"Fiat" currency in the USA is a direct expression of public initiative (and has been, officially, since 1933, NOT just since the inter-gov-only adjustments of 1971). Once we're convinced that we can somehow run out of our own, unlimited public initiative, then perhaps we've passed a tipping point. Past that point, is every pool of static assets already divided and conquered? Is Taibbi only uselessly railing about the mop-up exercises, AFTER implied capitulation? And in the process, completely missing the far more important DYNAMIC ASSETS?

Someone please tell Matt & the AFL-CIO that capitulation has not yet occurred? And that dynamic assets always trump static assets?

And also tell them that over-emphasis on defending (to the death) the isolated pools of already-issued fiat currency credits is a strategic error of colossal proportions? Isn't that like hunkering down to defend Stalingrad, and forgetting the purpose of the whole class war? Hint to all. Success ALWAYS tracks ability to envision the expanding scale of context - i.e., "Battle Space" - and exploring new options with more agility than opponents.

Given that the "opponents" in this struggle represent only our own, distributed ignorance, this is a battle we should win with ease, if we'd only listen, sooner, to more of ourselves!

Taibbi's call is akin to ONLY fighting over pools of already-issued tax credits?

That's how losing sides illustrate that divide-&-conquer works.

Taibbi doesn't get it? Nor does the AFL-CIO? And, they're both missing the bigger point? Worse,by doing so they actually help divert our electorate's attention away from the far bigger crime proceeding under our very noses, unnoticed by nearly all?

Nothing is as defeatist as a victimized population going along with it's own robbery, while actually helping to distract their own, distributed attention to details which are subsidiary to the greater crime.

In an all or nothing struggle for operational democracy, you do NOT focus excessive attention on subsidiary details, to the detriment of grand strategy!!! What part of all-or-nothing don't these people understand?

Instead of getting tied in knots defending specific, completely optional beachheads, the US Middle Class needs to be on an ALL OUT OFFENSIVE to preserve functional democracy .... and ACTING WITH AGILITY!!!

If the AFL-CIO would only take this context more seriously, this pointless, class in-fighting could be over in 6 months .... or it could drag on, with tragic economic losses, for another generation.

If National Fiat = Public Initiative, Then A National Budget Surplus = Unused (Squandered) Public Initiative

(Commentary posted by Roger Erickson)



Static assets can be held in reserve, but that concept doesn't apply for dynamic assets, such as personal or public initiative, or fiat currency to a currency issuer.



You may wonder how entire governments end up expressing the exact opposite of something so simple. By 1001 ways? That's how a 10 year process of bureaucratic planning, left to the bureaucrats, ends up painting itself into a corner - as beautifully illustrated in the ongoing review by Bill Mitchell of the march to launch of the euro monetary union.

"Adherence to the objective of sound budgetary positions close to balance or in surplus will allow all Member States to deal with normal cyclical fluctuations while keeping the government deficit within the reference value of 3 % of GDP." [European Council, 1997b]

Using simple, algebraic substitution, one can translate that into the legal proposition that net national Public Initiative should be frozen, or partially wasted.

You can almost see where this 1st-grade thinking got started. If there was zero population growth and/or zero innovation rates, one might be tempted to see that rule as a way to keep adequate reserves of public initiative. However, that is, of course, NOT how things actually progress.

Attempting to use the EMU 1st-draft as permanently propagated policy is like requiring a child growing from age 2 to age 18 to spend the same amount of time motionless on the couch ... regardless of growth in size, capabilities or context. We're immediately talking criminal negligence! Seriously, everyone involved in the worldwide rape of the Middle Class should end up as defendants in a Nuremberg-like class-war--crimes trial. The scale of the social destruction is unprecedented.

As Bill notes, there has been a steady trickle of opposition even within orthodox economics.

"Most mainstream macroeconomic theoretical innovations since the 1970s (the New Classical rational expectations revolution associated with such names as Robert E. Lucas Jr., Edward Prescott, Thomas Sargent, Robert Barro etc, and the New Keynesian theorizing of Michael Woodford and many others) have turned out to be self-referential, inward-looking distractions at best. Research tended to be motivated by the internal logic, intellectual sunk capital and esthetic puzzles of established research programmes rather than by a powerful desire to understand how the economy works – let alone how the economy works during times of stress and financial instability. So the economics profession was caught unprepared when the crisis struck …" [Willem Buiter, 2009]

But to no avail. It's been too little, too meek, too late.

Unfortunately, a critical policy process was once again left to the presumed process owners. Equally inevitable, that entire field, systematically denied external feedback, promptly spiraled into self-referential insanity, divorced from the ongoing evolution of unpredictable reality. You can still see them, shuffling in front of their tenured mirrors, intellectual spittle showing at the side of their articles, mouthing "ISLM" reassuringly at their reflected images, and holding up large stacks of self-references as "overwhelming" proof. The only difference is in the public health profession, which finally sees the slack-jawed self-references for what they are, and has announced a diagnosis. Austerians.

The only step remaining is convalescence, and either therapeutic recovery or aggressive interventions. We can make recovery a face-saving, painfully drawn out adjustment, or simply change directions and drain the academic swamp, rather like George Marshall once did, to catalyze more agile responses to another war.

One Flew Over The Economic Cuckoo Nest? That may be a fascinating read, but it would have been more useful as a warning fiction, not as a review of experienced reality.
Now we're left wondering whether or not the main culprit, Big Purse, deserves all the blame, whether she should be fired, or whether all the actors are equally to blame ... for biasing the entire system in that direction, for letting the charade go on this far, and for participating in the first place! Instead of more letters to economists asking them what happened, why not pen letters to our aggregate self, asking ourselves "Whiskey, Tango Foxtrot happened?"

Our biggest regret, and shame, is that we all allowed this debacle to occur, under our very noses. And it is NOT just in Europe. Austerianism is an infectious cultural disease that works by perverting cultural embryology and stunting cultural development. The effects on specific cultures depends on local variables, but the outcomes are all bad. As always, prevention is the best cure, delivered via an educational vaccine, so that all citizens are immune to the regressive agents, whether memo-viruses, or a social Noirp.

Just put the book down, slowly back away, take a step outside ..... and return to discovered, operational reality?

Why? Here's why.

Ever notice that none of the characters in the original Cuckoo's Nest story had children, and were successfully reproducing, and then rearing productive adults? Those two themes don't interesect, which is reason enough to keep Economic Cuckoos in the realm of fiction, and out of the policy pages.

If we want a propagating future for the USA, do we want more aggregate options? Or do we want to sit on our fiat budgies, and be content to stare blankly at virtual non-reality, with simple, neat lines of ISLM drool on the cheeks of a declining, couch-potato nation?

Dynamic Value As Capital - What's Missing From MacroEconomics, And GDP Too

   (Commentary posted by Roger Erickson.)



If any economist wants to hear a description of what's missing from macroeconomics, here's a great example.

Achieving Greatness by Giving Control and Creating Leaders

... the concept of leadership [and group agility, AND policy agility, as real capital] is certainly more complicated than taking and receiving orders. As retired U.S. Navy Captain David Marquet explains in the following video, it’s about creating an environment that empowers the members of an organization to think creatively and take psychological ownership of the mission at hand, whatever it may be. [And, providing them with adequate venues to practice exactly that.]
It’s about “giving control and creating leaders, not taking control and attracting followers,”

Put that in your ISLM and, instead of smoking it, just blow it up? And toss ISLM in the garbage?

What's missing from GDP? It tracks only static assets. Not dynamic assets. As Steve Hansen points out, GDP became increasingly less useful as we transitioned further from a product to more of a service economy.

Leadership?  

Leadership, leadership everywhere, but nary a drop applied to enlarging our policy space. Or to increasing our policy agility.

  Rhyme of the Ancient Marriner Eccles

Peter Sims — The No. 1 Enemy of Creativity: Fear of Failure

So, I ask you: how do you personally define a "failure"?

If it's going bankrupt with a company you started, getting fired for doing something inconsistent with your values, or needing to break off a wedding engagement or a divorce that could have been avoided if you listened to your heart originally, then, yes, that is a failure, and I can empathize.

However, if your internalized view of failure is anything that is not perfect, then you are disempowering yourself from exercising your inherent creativity.

You're certainly not the only one shackled by these norms, and I don't blame you with the way our educational system is focused so rigidly on "correct answers" and standardized testing. This must change. And modern management systems must become far more adaptive....

Fortunately, the US Army provides a lot of insight about how a highly bureaucratic, command and control organization (the Army of the Cold War) can become more adaptive and creative (which it must when facing rapidly adaptive enemies, and when soldiers and officers can rarely predict what problems they will encounter). It starts with every individual, and unlearning many old bad habits. As Col. Casey Haskins, who heads up military instruction for West Point, has said, "You have to make it cool to fail."

Harvard Business Review | HBR Blog Network
The No. 1 Enemy of Creativity: Fear of Failure
by Peter Sims

Even though I was never a salesman, a number of years ago I put up twenty five bucks for a two-hour course from a salesman I had heard was really outstanding. His spiel was all about failing as the essence of sales rather than succeeding.

His message: in cold call, one in hundred close rate is successful. You just have to be able to take the ninety-nine no's, not all of which are polite. Fear of failure that erects obstacles to trying is mostly about ego-defense and an imposed straight jack rather than rationalized prudence or imagined inability.

His advice: Check off every "no" as being a step closer from a "yes," and analyze each encounter in terms of lessons learned, positive and negative, with a view to improving your ground game.

It was twenty-five bucks well-spent.

Just Because a Colony Has a Sovereign Currency, Doesn't Mean it Has Sovereign Policy

commentary by Roger Erickson

Wen Signals China Has Ample Policy Room to Meet Growth Goal

Specifically, he says they have "more room for fiscal and monetary policy to support growth."

If that's true for China, why the heck not in every other nation with a sovereign currency?

Maybe there's a subtle difference between sovereign currency & sovereign policy? A difference involving Benedict Arnold-Bankers?

Further, Wen "reiterated that China will maintain a proactive fiscal policy and prudent monetary policy and said the nation has implemented a series of steps to promote domestic demand."

Why the heck can't we get a person smart enough to say that elected to our Congress - or the White House, or even appointed to some government agency like the Fed or Treasury?

Meanwhile, German Finance Minister Wolfgang Schaeuble just weighed in with advice for the USA.

"Ahead of the election in the United States there is great uncertainty about the course American politics will take in dealing the U.S. government's debts, which are much too high."

Houston, we have an agility problem. The rate of thinking in politicians everywhere, but especially in the USA, is too slow. In fact, it seems to be worst in Germany, but let's just concentrate on our own mental agility.

We should have a chart comparing the agility of adjusting growth-relevant sector flows:
.public spending agility;
..tax rate agility;
...interest rate agility;
....net national agility in adjusting fraudulent looting (bubbles as accidents, or as elaborate "sting" operations).

Anyone know how to construct such a chart?

ps: This particular paragraph makes me want to suspend my belief and belt someone.

“German Chancellor Angela Merkel has established a close relationship with Obama and they are of one mind on many foreign policy issues.”

BMHOTK!

"Rent Theory" as a Symptom?

After reading Michael Hudson's essay, "Veblen’s Institutionalist Elaboration of Rent Theory," one can't help seeing rampant rentier mentality as a symptom, not the original cause.

Component momentum in a system comes as no surprise at all within biology or system theory, or even psychology or anthropology.

From other system perspectives, runaway rent-seeking habits are one specific that falls under the more general heading of institutional momentum. Other names are phenotypic persistence, principal of prior plausibility, etc, etc ... or just random habits unrestrained.

The deeper issue is why the group momentum of such habits isn't recognized, diverted & shaped to other purposes sooner. That comes down to failure at group-wide, situational awareness, followed by failure to automatically trigger appropriate checks & balances in a complex system - a topic well discussed by the framers of our Constitution.

In small tribes, daily or weekly group-wide council discussions address this group awareness requirement. However, given our population size, no current media process parses all our distributed observations fast enough.

That leaves one pondering how far off track we really are, and what the recovery steps are.

Just when we need to be distributing enough resources & time to continually improve the quality of our distributed decision-making abilities ... we've instead gone off the rails.  Our policy decision-making habits are already so concentrated that our population-wide, self-regulation gap may be widening beyond control. Worse, our distributed situational awareness may have lost ability to reconnect. Is the probability of recovery already insignificant? How would we know?  Can that gap be estimated quantitatively?

(And arranging terrorist events just isn't an adequate rallying cry anymore. Black Ops thinking just won't cut it as a continuous mobilization strategy.)

Rampant rent seeking is a symptom of distributed disconnects, & failure to evolve checks & balances as fast as our options are expanding. As a nation, culture or system, we're distracted, and it no longer matters what the distractions are. The core problem is that we can't parse our options fast enough to optimize how we explore them. The result is random policy drift by elites reconstituting Central Planning by any other name.

We need indirection, and the communication throughput to capitalize on best options that some will inevitably stumble upon before all will. It's no longer a question of if HP needs to know that HP knows. Rather, we need to know how quickly HP needs to know what HP knows. There's no other way to drive continuous improvements in group agility.

How WOULD we drive continuous improvement in group agility?  Group practice?  When was the last time YOU acted like an owner of your democracy?

Every day, there are always many things we should start doing differently.  Yet if we don't actually start, it just won't matter what we would'a, could'a, should'a done.