Representation Of Dynamic Creation In Double-Entry Bookkeeping. It Doesn't Exist.

   (Commentary posted by Roger Erickson)

Finally, an economist who speaks my language!

[Economics] "is a classic example of trying to understand something that is essentially dynamic - innovation - in a static model focused on calculating the optimal or the most efficient allocation of resources."

Ya think? NeoClassical economics is absolutely blind to the greatest return by far, the return on coordination.

To economists of all stripes, it's like the history of evolution, and the history of the universe, never happened. Only this quarter matters. Yeah right, to them and dinosaurs!

And Peter Thiel is an example of an idiot savant, so naive that it's laughable, no matter his Buffet-like talent at over-adapting to a transient context.

Speaking of evolution, it's the art of charting an optimal path through an unpredictable series of transient contexts, occurring with unpredictable intervals. Over-adapting to any transient context is the surest way to fail to prepare for the next one, and hence a good way to commit suicide.

Economics is the art of optimal asset allocation for a single context. 

Hence, long term cultural survival is about USING ECONOMIC ANALYSIS WITHIN PRACTICAL BOUNDS. Is that really so difficult?

Having economists dictate the limits of Aggregate Policy is like an architect letting a carpenter with a hammer dictate design limits. All you can end up with is dents in everything, and a lot of damage.

Risk management is NOT leadership. Nor is asset allocation. 

Where can cultural evolution take us? Where will it take us? Don't ask lawyers, and for humanity's sake, do NOT ask economists. All they can tell us are the risks to today of going to someplace else or becoming anything else tomorrow, and hence they also can't grasp the risk of NOT changing, and not going somewhere else from here.

Capiche?

Any nomad would understand the risk of not moving on. You'd think human Context Nomads would understand the risk of listening to lawyers & economists, when it comes to deciding where to go next.

Don't ask me why they won't.  Ask yourself.

Let's Just Start Taxing Economic Policy Lobbying, Instead Of Sales & FICA Taxes?

   (Commentary posted by Roger Erickson)

Damage-Subtracted taxes, instead of Value-Added taxes? DST vs VAT?*

John Cochrane Explains Neo-Fisherism

Really? When is too much too much? Orthodox economics - like Aristocracy - has turned into nothing more than hoarding behavior. First people hoard static goods, then they soon hire academics to train shamans, create political-religions, and finally flood us with "economic" theory - in distracting attempts to hoard public fiat, and cultural perspective itself.

Personally, if I became President, I'd do something to seriously tax all this excessive economic theorizing that somehow accumulates as paid lobbying - unproductively dominated by "savers hoarding" instead of "labor producing" ...

... and get back to actively managing a highly dynamic economy based on more/faster/wider feedback based on better/faster/more cultural instrumentation.

Surely we must stop letting these hoards of Economic Policy beginners continue over-modeling an economy as an adequately described, static machine running at constant load.

A dynamic democracy is not a simple machine, it's an incredibly dynamic, rapidly evolving bio-cultural engine. Just stop trying to constrain our democracy & culture.

I've now read enough economics literature to stop reading it.

What do we need? Funny how those words cheques & balances come back to haunt us. :)

The original checks & balances intended by the Constitution were hacked within 8 years, when we let factions create political parties instead of sticking to our intended practice of finding consensus Desired Outcomes anew, with every year of changing context. The easiest time to betray any revolution is immediately, while rebels are still thinking that they won.

Disorders of hoarding behaviors in defined central nervous systems are continuously studied, yet those individual disorders are trivial compared to the impact of distributed hoarding behaviors in definable cultures, whether the cultural boundaries are defined by markets or nations. We won't address cultural hoarding until we invent new methods for training citizens to acknowledge and study it. By then, we'll have distributed disorders on a supra-cultural scale. Will the quality (including tempo) of our distributed discourse rise to meet that looming challenge, fast enough for humans to survive? Not if we don't start practicing audacious new methods, ASAP.

We need more methods, not models. And more practice, not just theory.


* A sin tax on public practice of economic theorizing, just like on other forms of gambling? Sure. Why is it ok for rich lobbyists to gamble with public policy, while poor people may only gamble their personal options in casinos (owned by rich people)? Yes, political parties are casinos, where naive voters are enticed to roll their dice - while not playing with House options, nor the Senate's. :(

Exporting Stasis: Euro-zone Politics & Social Instability Seem To Be Inching Towards A Showdown

(Commentary posted by Roger Erickson.)

Time to say goodbye? Shauble Calls on Italy to Pursue Structural Reform

German Finance Minister Wolfgang Schäuble called on Italy to pursue its ambitious structural reform efforts if it wants to boost its economic-growth prospects. “Especially since growth forecasts for Italy have been reduced recently, it’s important to reform and cut the debt level convincingly,” he said. Italian Prime Minister Matteo Renzi has presented ambitious and broad-based reforms, he added. “The Stability and Growth Pact is the foundation for politico-economic cohesion in Europe,” said Mr. Schäuble.

Euro-zone politics & social instability seem to be inching towards a showdown over making a simple choice. Neuter the fiat? Or allow cultural growth? Seems like an easy choice, for those able to think clearly, so what, exactly is Schäuble demanding? Three distinct interpretations come to mind, but they're all guesses.

#1 Is Schäuble calling for every country to be a net exporter, like Germany? Really?

It's hard to imagine a collection of stereotypical engineers ... who nevertheless won't admit that the sources/sinks of production/consumption (not the dimensionless liquidity units) have to roughly balance in a growing global economic system.

There still seems to be a widespread inability to separate liquidity units from saving units. Schäuble isn't the only one blind to the obvious.

Fiat currency is NOT the right vehicle for stable, long-term savings.
That is WHY the linguistic terms "asset appreciation" & "interest rate" were invented!
Labor wages can't be the ONLY variable that "inflates!"

I blame our outmoded education system - & Germany's too - for not including something so fundamental as a basic part of education. There is a difference between dynamic & static assets, and how they are denominated. Failure to grasp that is half killing many aspects of policy.

#2 On the other hand, perhaps Schäuble is drawing a line in the sand & saying - for EEU "politico-economic cohesion" - that there can be only one .... net exporter? Fine. He still doesn't come out & acknowledge the required, running sectoral balance between production & consumption - and the tolerance limits for deviations from it, in the form of demand leakages (savings). Has anyone met this guy, and hence have any idea what he's really thinking?

#3 Do you suppose that Schäuble's master plan is to export static assets to the future? :) Instead of exporting increasing options to future generations? Perhaps he has a point worth considering ... for maybe 5 seconds. Just imagine where we'd be if our grandparents had put every Model-T into long term storage, instead of using them at the time. :)  Fine again! If Schäuble's message is really all that valuable, surely the Europeans should just put HIM into cold storage, and preserve his valuable message for some time in the future, when his descendants will clamor to stop doing whatever they're doing, and instead do less. :)

He might want to take an extra pair of pj's to the cryo chamber, in case the slumber party lasts longer than he expects. Good way to export pj's too! :)

All joking aside. It's no longer clear what structure Schäuble is keen on reforming, but his own brain circuits might be the best place to start. It's rumored that vigorous exercise of both body & logic ward off Alzheimers and preserve the ability to think clearly.

Exporting clarity & Context Awareness? What a novel thought!  :)  Now that might be a way for Germans to have their exports and increase their dynamic value too!

Can We Transition From Hoarding Static Assets, To Hoarding of Coordination Capabilities?

commentary by Roger Erickson

How do people like this get tenure at the Princeton Economics department?

Beyond Our Means: Why America Spends While the World Saves

For Pete's sake!  With orthodoxy like this, who needs Luddites?

How do we further accelerate the transition from inefficient hoarding of static assets, to hoarding of coordination capabilities? Is another world war the only way to demonstrate the return on coordination ... once again? Are we still that dumb?  Given the transition to a fiat currency, what fool would persist in trying to hoard fiat?  ??  Does the concept of "use it or lose it" exist in economics?  Especially when applied to dynamic vs static value?

What part of dynamic, scalable "teamwork" in a social species, and among citizens of an organized nation-state does the Fed not understand? Which part of that does the typical orthodox economist also not understand?

How about we at least stage Rhyme of the Ancient Marriner Eccles as a play, in every highschool in America? I'd pay just to NOT have to see Music Man ever again, or Death of a Traveling Economist.