Video: "Christian Debate?" About the Morality of Nominal Sophistry

(Commentary by Roger Erickson)

Data is meaningless without context. So before viewing the video below, please consider it's context, and the parameters which allow us to assess REAL vs only nominal success in a given context.

Many have heard of the origins of the phenomenon named "sophistry" by the Greeks.

2300 years ago, Greeks noting and naming the structure of language, immediately also noticed the fluidity and gradual change of what they named grammar, vocabulary, semantics and sophistry.

Semantic plasticity - the function of letting the same word imply different things in different contexts or usage patterns - allows a relatively small number of words to describe an unlimited set of concepts, when specified by context, word order, or many other linguistic tools (prefixes, suffixes, and noun/verb/other variants).

Sophistry was one, early form of humor noted, used and abused by various people. It use is described in the dialogues of Socrates.

"Is that YOUR dog?" 'Yes.'
"And is YOUR dog a mother?" 'Yes, she has puppies.'
"Then that dog is YOUR mother!" :)     Socrates noted two general classes of responses.
      Intelligent people: '[Greek equivalent of "bug off."]'
      Naive youth: "Oh my gosh. My dog is my mother!" Fear. Panic.

This brings up a moral dilemma. Or does it?

Maybe not in the same way for all people. The early sophists were soon reviled, for their irritating habit of practicing and refining ancient methods for confusing, dividing and 'conquering' naive targets, so that they could be more easily tricking into being the object of ridicule. Worse, sophists were soon followed by others who refined their methods of cheating at wagers, or even robbing people. Sophistry has long been associated with subterfuge, propaganda, and looting.

So, is it immoral for a person to have a dog as "their" mother? What if they own multiple dogs with puppies? How immoral is it to have multiple mothers, and that they are all dogs? :(

Or is this all a lot of data, and semantic descriptors, uselessly applied completely out of context, and therefore contravening a basic, hierarchical rule of language utilization ... i.e., that it be applied to orient to REAL, not just imaginary, nominal or nonexistent scenarios?


Let's take another example.

"Is that YOUR fiat currency?" 'Yes.'
"And in purely nominal, double-entry accounting ... fiat currency creation has to be balanced with an equal entry labeled, purely for form, a 'deficit' or 'debt?' " 'Yes.'
"Then that nominal metric is YOUR real debt!" :)

Just like with Socrates, we're seeing two general classes of responses.
   Intelligent people: '[Get lost.]'
   Naive people unaware of basic banking operations: "Oh my gosh! Our nation is in DEBT!!!' Fear. Panic

Is it only nominally immoral for a population to have a purely semantic 'debt' to itself? What if that population grows AND the transaction rate of each resident increases! Is it immoral to allow increasing use of nominal or fiat measuring units for our growing populace to denominate necessary transactions with - i.e., an increasing volume of fiat currency?

Or is the only functional immorality that of an electorate leaving itself unaware of basic operations, unable to discriminate sophistry from functional semantics, and flat out unaware of actual context?

Now, please watch this video and the 2nd link, to see how it is promoted. Then please comment below.

"Christian" Debate About the Morality of Nominal Sophistry

Government Debt is 'Idolatry,' Hurts the Poor, Future Generations, Christian Panelists Argue

The immediate issue here is confusion over the dual roles of any currency system, and conflating two separate needs.

1) denominating any and all, unpredictably needed transactions, WHENEVER they need to be denominated (tempo is paramount for group agility)

2) short term vs long term stable store of value. (Value is ultimately dictated by context, not by denominating units.)

The deeper issue is basic need to maintain situational awareness, as the threshold for survival of a functioning democracy.

Since tempo is critically important, we really need to address our electorate's situational awareness, ASAP - before we're robbed again, or confused and divided enough to be conquered? What else could be more important for National Security?

Very Useful Historical Analysis of Blunders On Europe's Path To A Shared, Fiat Currency System - By Bill Mitchell

(Commentary posted by Roger Erickson)



Options for Europe – Part 2

Great history review here by Bill. Much of the historical thinking he reviews held equally well for economic policy deliberations in the USA as well, and still does.

That history drives home the point that we should never let theoretical economists anywhere near national policy?

And we should also never let any single lobby, in this case banking, dominate policy?

Policy agility requires consensus? Otherwise, you end up with a constrained policy space. If populations could keep that simple idea in mind when approaching group policy, theoretical economists would be kept in check.

Coordinate narrow factions - ignorant by definition - through appropriate checks and balances? James Madison's anthropomorphic, 1776 summary of system science still awaits application of appropriately adjusted methods, for constantly changing situations.

To explore group options, we need far less discussion of theory, and far faster evaluation of new, more indirect methods?

For every intractable cultural task, there is a solution, and that solution will always involve invention of methods allowing yet another level of indirect, cultural adaptations?

Members of diverse system-science fields have been saying that for decades. Centuries, in some cases. Call it statistical process control, or ecology, or autocatalysis, or evolution. Call it what you want - even political economics - ... just DO something to adapt group methods at the same pace that change occurs? For Desired Outcomes to stay the same, EVERYTHING has to change? Constantly? To adapt to changing situations, we need citizens with situational awareness and the audacity to change anything that needs to change.

Can we please start retaining that simple fact throughout K-12 education? That's how we can damp the frequency of Ayn Rand acolytes (and sanity-lite's) like Paul Ryan, or 99% of our Congresspeople. They reflect our electorate, after all, which reflects the mal-adaptive operation of our K-12 school curriculum.

We as a people are what we let our Congress practice. And our Congress is what our citizens practice during training and education.

Shipping Coal to Newcastle = Sending Fiat to Issuer

   (Commentary posted by Roger Erickson)

"Record High, 72%, of Citizens Have Zero Situational Awareness"

Wow! They may as well get into the business of sending coal to Newcastle, and hope for a miracle! [That actually happened, you know. Dumb luck.]

That's as dumb as sending fiat to the issuer?

"Hey buddy, can you spare a paradigm?"
Sparadigm? "Hey, electorate, can you sparadigm?"

(Nope. We've run out of those too. They followed the fiat ... which followed the Dodo bird.)

Maybe a future generation can bring fiat back to culture, in a pair'a Digmassic Pork episodes?

Could an infected mosquito carry a dynamic intelligence gene & innoculate a Luddite, maybe even a Control Fraud Bankster? Even one's carrying shotguns and with advanced weaponry able to defend themselves and their financial slaves from any and all adaptive evolution?

Or could the same thing be accomplished with a frenetically-engineered, crypto-semantic memovirus? We gotta fight corrupto-semantic memoviruses with their own weaponry. There must be 1001 ways to lead a Luddite to progress, but you have to let them waterboard themselves?

Conflating CURRENT FIAT with FUTURE REAL OPTIONS

(Commentary posted by Roger Erickson - replicated from a comment first posted Dec, 2012 at Seeking Alpha)



Every citizen should learn the rudiments of Situational Awareness by, say, age 10, so that we as a people can keep exploring real national options, not just working at looting one another.

Teamwork. Surely that's not a difficult concept in such a sports-mad country?

Teamwork, like any goal, requires assessment systems, so we can practice before seeing if we can be successful in novel situations. Successful outcomes can always be interpreted in short, medium and long-term metrics. How about these familiar standbys?
.. fiat currency accounting?
.. proportional population employment?
.. survival of the country (based on capabilities & affinity ... of US citizens).

No citizen can assess what they can do for their country if they don't understand the basic operations listed above, starting with fiat currency.

Yes, we already have these measures that could let the public track success, but that doesn't mean that they're used. Largely because most citizens don't learn much about policy tools we already possess. Most of our problems were, in fact, taken care of by the Automatic Stabilizers enacted during the 1930s-1940s (social security, FDIC, unemployment benefits, etc). The only one remaining is Control Fraud (google William K. Black), and that's only because we let crooks talk us into deregulating financial crime, right up to repealing Glass-Steagall.

Everything else comes down to a fight between merchants and citizens, waged through the currency supply, either restricting it to preserve the buying power of hoarded cash, or letting it depreciate to continuously grow liquidity. Let's see how many grasp the following argument.

How do we afford to pay the "fiat interest on fiat bonds."

If carried far enough, that discussion eventually leads to 2 points.

First, we can't fail to pay the interest, since we can always generate as much fiat liquidity units as we want.

So, second, the argument reduces to either:

a) Arbitrarily maintaining the purchasing power of previously hoarded fiat (liquidity units), by progressively depriving an increasingly complex economy of both relative liquidity AND return-on-coordination [i.e., pay the fiat interest by draining private savings of previously issued currency; even though population & net capabilities... are both increasing]. [Even fools don't want that, when faced with a choice. Only pure sociopaths do.]

or

b) Instead, enlarge the fiat currency base [the unit of liquidity] with expanded issuance (public spending), thereby diluting the absolute buying power of yesterday's liquidity units. Why? In order to provide enough liquidity to readily DENOMINATE and hence rapidly explore the expanding options of tomorrow's return-on-coordination. Coordination possible from the pairing of more people with more capabilities.

That is the "SOCIAL-SPECIES DILEMMA." Evolve and stay in the adaptive race, by organizing on a larger scale ... or ... become a has been culture, and become either extinct or a domesticated lunch source for some other, more rapidly adapting species - i.e., one optimizing it's liquidity in order to explore expanding options faster than your culture does.

People who save excessively, i.e., hoard fiat beyond liquidity needs, are hoarding today's output and thereby depriving their grandchildren of expanded options.

Our grandchildren's options are reduced without our full investment in generating those options. Our Output Gap = grandchildren's Options Gap, and the relation is not linear, but exponential.

If our output gap is "j", their options gap is [j(e)], i.e., "j" to some unpredictable exponential "e".

That's how evolution has worked since the dawn of time. We die so that our descendents can be far more than we were. It's called sexual recombination, or cultural recombination, or - in general form - Options Recombination. (see the "Traveling Entrepreneurs Task")

This all follows from the simple, bottom-up dynamics of organized systems.

Walter Shewhart: "In all complex systems, the highest cost, by far, is the cost of coordination."

Obvious corollary: "In all complex systems, the highest RETURN, by far, is the RETURN on [investing in] coordination."

***

SeekingAlpha Commenter Zmartmoney added a key point.

To all who care to notice, you've just explained all our problems in one short treatise. The fact that 90% of the population does not understand any of what you wrote is our heritage - we, as a nation, are now virtually clueless as to how govt, business, or economies work and what role each of us plays in it. This is a testimony to the insidious nature and capabilities of politicians and their success in dragging the discussion into the ditch to drown it quietly while stealing from everyone in sight. The number of statesmen in the Legislative, Judicial, and Executive branches of our govt can be counted on two hands, and we'd probably argue about which ones those are. Our doom is sealed by our inability to grasp why we are here and what solutions, if any, might lead to our recovery to a state of being well informed and capable of making decisions in our personal lives and our govt. Sorry.

We as an informed electorate were not always this ignorant, nor do we need to remain that way. I hope we can someday prove him wrong. To do that, our grandchildren need more options, and they need to be AWARE of them. To provide those options and capabilities, we need to express more initiative (fiat) now, and also select where to apply it - wisely, not randomly.

Now We've Heard Everything - Some Think That The Fed Needs A Bailout

   (Commentary posted by Roger Erickson.)



OMG! Yes, Maude, it's true. This raises the most dire spectre of all!!! The USA itself could run out of fiat! If that were to happen, who would be left to bail us out? Who and what would they have to defraud next, to make it look real? The US Constitution? Please, let's not take the idiocy that far.

As stimulus tab rises for Fed, worries grow it may require a bailout

Just when you thought the level of discussion could not sink further.

LA Times: "The Fed's bond-buying binge could put the central bank's finances at risk if interest rates were to rise sharply, critics warn."

Seriously? In a prominent US newspaper? With a straight face?

You couldn't make this stuff up! What's next? Bail needs an out? In case systemic fraud were to rise sharply? Coupled with an increase in ignorance about fiat currency operations? It could happen, you know.

So who are the geniuses espousing this view?

James D. Hamilton, an economics professor at UC San Diego."It's really pretty cut-and-dried as far as the arithmetic goes: If you buy bonds and interest rates go up, you're going to take a capital loss on those bonds. The more they buy, the bigger their balance sheet, the bigger the loss they're going to face."

Sounds like the organ responsible for generating his logic DID dry up! No intellectual capital left.

Rep. Mick Mulvaney, R-SC. "The Fed stands to lose a lot of money, and by a lot of money, I mean hundreds of billions of dollars. It is not hyperbole to suggest the next big bailout could be of the Federal Reserve."

Ooh! He means it. There's a lot of fiat involved in denominating Public Initiative. Somebody get his train of thought a track to run on. It's chugging, but obviously derailed.

Et tu, Ben Bernanke? "The bottom line is that for any reasonable interest rate path, this is going to end up being a profitable policy for the taxpayer" says spineless, pandering Ben, as he sinks further into the political quicksand.

Sounds like Ben Bernanke is the one bailing out! Seems he pines for his cushy job at Princeton, where he can just go back to writing his little papers, not responsible for even pretending to counter the Erble Logic that is leading his nation astray. Ben prefers to sit in a comfortable deck chair and play his violin, as the ship goes down? With a stiff drink? Anyone noticed if he's been drinking more lately? Maybe he's planning to move to Switzerland too, or the Cayman Islands.

Marvin Goodfriend, an economics professor at Carnegie Mellon University's Tepper School of Business. [Finally! Surely we can expect a bit more from people grounded in business, not just nominal economics?]

"In the short term, it's a money-maker. The borrowing cost is cheap right now. Those borrowing costs are going to rise."

Ok, guess not. Another hope dashed. Move along folks, no situational awareness to see here.

The last word goes to the venerable LA Times. "When interest rates begin rising, the Fed will have to pay a higher rate on bank excess reserves. That will eat into the Fed's bottom line."

Let me get this straight. The Federal Reserve, accountant to the Treasury of the USA, denominator of a growing nation's purely nominal records of Public Initiative ... has a bottom line of nominal? Perhaps in nom only? Where'd this come from? How do we turn out citizens like this with no remaining connection to reality? Is our education system now completely nominal as well? Real situational awareness is considered purely nominal?

The article goes on to quote the least authority of recent times, Peter Schiff. I won't bother dipping into his meandering path, as his skiff sails further beyond the bounds of reason. Maybe he'll drop off his imagined horizon someday.

Too bad the US electorate doesn't set a bottom line in situational awareness. We could use a threshold defining a minimal, survivable level for an informed electorate right about now. Our economists are advising us to tighten the nominal noose we've placed around our own economy's real neck. Even if this is just some eco-erotic game for economists, please stop now, before it's too late for everyone?

Since assisted suicide is illegal, surely citizens could plausibly arrest all orthodox economists, for promoting and abetting economist_assisted_national_suicide?

Semantic Debt and Situational Awareness - As Opposed to Mad Hatter Policy

Commentary by Roger Erickson

Unemployment falls but hiring slows

We're living a Semantic Nightmare on Elm Street? Yes, and it's in more than just your [bad] dreams!

Is that a perfect way to confuse an audience?

Gotta conclude that that's the goal?

These marketing campaigns never happen by themselves.

Didn't FDR have a quote on that very topic? "In politics, nothing happens by accident. If it happens, you can bet it was planned that way."

Brad Lewis writes "Part of this ends up being highly contested territory because we [lazily] distinguish between those looking for work and those who [supposedly] are not."

Of course, but when the semantics don't follow the direction of the conversation accurately enough, or soon enough ... group coherence evaporates, and entire electorates lose their orientation to reality. Without adequate agreement on the definition of basic terms, national alignment and policy agility is not possible. Isn't our goal an informed, not a mis-informed, electorate? Midway through WWII, did our DoD brass say the following? "Tell all military staff something different, or at least ambiguous. Then let's see where they all go, what they do, and what happens." Hell no! Team navigation doesn't work when every crew member thinks everyone else's feedback means something other than what was intended.

Our Semantic-Debt burden highlights both the art of and risk of politics as indirection. We have to be free to quickly mis-direct one another ... SLIGHTLY ... in order to quickly trigger distributed exploration of new situations. Yet, we must all the while be careful to remain within survivable tolerance limits. There's only so much group confusion we can tolerate, before distributed misdirection overwhelms collective intent. Call that burden our Semantic Debt, and keep it paid down.

To keep adjusting to new situations, organized groups must wipe the semantic-debt clean periodically, just to clear the air and regain NET situational awareness.

Asymetric Analysis: 10 Things Most Americans Don¹t Know About America

Commentary by Roger Erickson

This is a very useful list. Most economists should read it too.

This is real Asymetric Warfare - the art of speedily maneuvering through Situational Awareness with ounces of prevention, not just wasting endless pounds on late repair and punishment after the fact.

Worst of all, most Americans will be outraged, fly off the handle and refuse to even think about these 10 observations below. That is exactly why they are largely true. Don't be one of the knee-jerks.

Have we BECOME the places we originally left in order to make America? Our ancestors would be appalled. Thankfully, it's not too late to again start acting like ingenious Americans.

Talk about things we don't need - that's the definition of capitalism we've settled for. Seems the Ugly American of the 1950s had kids who grew up even uglier in the 1990s. And NOTE ESPECIALLY #9, THE COMMENT ON AGRICULTURE & FOOD PRODUCTS!

Finally, many if not most people worldwide still WANT TO BE LIKE AMERICANS - so let's set an example worth emulating.

Anything else to add to the list below?

10 Things Most Americans Don't Know About America
(scroll down to the text; the speech-to-audio conversion quality in the video is very poor)

1) Few People in Other Countries Are Impressed By Americans,
2) Few People in Other Countries Hate Americans,
3) Few Americans Know Much About The Rest Of The World,
4) Most Americans Have Become Impolite, & Poor At Expressing Gratitude & Affection,
5) The Quality Of Life For The Average American Is Not That Great,
6) Most Of The World Is NOT A Slum-Ridden Shithole,
7) Most Americans Have Become Paranoid,
8) Most Americans Have Become Status-Obsessed & Attention Seeking,
9) Most Americans Have Become Very Unhealthy (we've industrialized our entire ag/food chain),
10) Most Americans Are Conditioned To Mistake Sloth (not just comfort) For Happiness.

by Mark Manson

How Do You Get People to Explore "THEIR" Options?

Commentary by Roger Erickson

Everyone's got a source, but too few sources share data, let alone share enough context to make available data useful.

Example: even the Agriculture Lobby has advice on sequestration.

As does Drovers CattleNeckwork News.

This familiar refrain brings up the same old question. How do you get people to explore "THEIR" options?

It helps to make them aware of their macro options as well as their micro options.

Then, it also helps to ensure that a threshold proportion of an electorate gets actual PRACTICE at analyzing, prioritizing and constantly adapting methods for exploring their growing options. No culture grows at the edge only. Rather, sustained growth is possible only by tuning foundations, which in our case means our early education methods.

Without agility at scaling Situational Awareness to keep up with situations of increasing complexity ... simple statistics dictate that large populations will repeatedly paint themselves into corners.  There is a better way, but ONLY if we practice ounces of preparation and prevention versus pounds of cure.

Journalism and Innocent Fraud - STOP Reading Any and All Ad-Supported News?

Commentary by Roger Erickson

Jobs Fuel Stock Rally

? What are these people smoking? Most of the terms used don't adequately convey Situational Awareness, and Walter Shewhart specifically warned us, 80 years ago, that "Data without [full] context is meaningless."

No wonder most media expressed "surprise" over everything from Madoff to mortgage fraud to TARP to TBTP to Control Fraud. Most citizens are still in the dark!

Labor "FARCE" participation rate down.
Wholesale inventories growing.
Personal incomes bad & deteriorating.
Aggregate Demand is Degrading.

Yet most people are reading only the wrong sources, like the first headline above, about a "jobs rally?"  Why? Maybe because most journalists are reporting selectively useless data?

They only talk to yesterday's experts, who are ALWAYS wrong about tomorrow's change! What on earth happened to investigative journalism? For comparison, we place roadsigns to tell motorists what's coming ahead, not to affirm and reassure them about what they've already passed!

Granted, you can sell more soap with ads tagged to familiar news. That's exactly the trap.

Hence ad-driven & eyeball-driven & profit-driven source & story selection ALWAYS misinforms, precisely by increasingly lagging accelerating change. That's a BAD combination! Firewalls between journalists & advertisers are as essential as the extinct firewalls between commercial/investment banking were - or those that used to exist between services and risk ratings. Journalism as it is augments Future Shock by always directing attention back instead of forward to what's patently unfamiliar. If we could rely on always extinct credentials, we wouldn't need evolution!

How many journalists ever hear about Sampling Theory? It applies to Situational Awareness too, not that they'd know. To provide a useful service, adaptive change in journalism has to match or exceed situational change.

More than anything else, that means honestly and adequately RE-SAMPLING all available sources daily, to update Situational Awareness. It's treasonousally useless - and Innocent Fraud at best - to simply reaffirm overadaptation to situations that no longer exist.

To keep an electorate informed well enough to surf ongoing reality, everything about journalism has to change ... FASTER. The whole field is hurting our country more than helping, by only preaching to the choir instead of honestly informing about change that is emerging - or is even long past.

Why Operations Actually Do Matter, Not Just Theory or Ideology

commentary by Roger Erickson

Several articles this week sum up the critical state of confusion over our budget process. Yes, people are trying to deal separately with the inseparable issues of constraining and directing fiat, but there's a deep lack of operational and situational awareness at every turn. It's not just banking.

When literally everyone doesn't understand some key operational aspects of the situation they're proposing changes to ... then we're in deep shit as a group. And, is it clear that our situation is ALWAYS getting more complicated, and is not static? Time to initiate a very patient and continuous group discussion, with people from at least 2000 - and growing - distinct professions. We need that just to stay aquainted with one another, and to stay oriented to our own changing situation, with all it's increasingly interdependent operations. Otherwise, the relative heat loss from our entire economic engine will tip uncontrollably towards 100%. At this rate, we'll soon be burning calories, oil, coal and everything else at record rates ... while going nowhere.  Or are we already doing that?

Obama, The US And The Muslim World: The Animosity Deepens

A Stampede of Hysterics

Panetta’s Phony Doomsday Scenario

A Pentagon Budget Primer, Leading to Two Questions for the Defense Secretary

Hat tip to Dan Flemming, Chuck Spinney, Winslow Wheeler and Lynn Wheeler

Fiat is miraculous? No. It's Called the Return-on-Coordination

commentary by Roger Erickson

Aka, the amazing things that coordinated teams, including public initiative, can generate.

"For the naïve mind there is something miraculous in the issuance of fiat money. A magic word spoken by the government creates out of nothing a thing which can be exchanged against any merchandise a man would like to get. How pale is the art of sorcerers, witches, and conjurors when compared." – Ludwig von Mises

Really?

How on earth does the economics profession fail to teach something so trivially obvious as the fundamentals of organizational dynamics - which so many other professions recognized as an axiom, beginning thousands of years ago? From physics to evolution to anthropology to sports to entertainment to military science, the dynamic value of teamwork - return on coordination - is a given (see auto-catalysis).

How can the same people act so intelligently in one situation, then walk across the street and act so ignorantly in another setting?

Am I missing something here, or is the entire economics profession displaying symptoms of moon-madness?

Unlimited "fiat" flows from the inexhaustible potential return on scalable coordination. We can't run out of that source until something as momentous as, say, the next Big Bang occurs - either that or we all get too stupid or ignorant to pursue that accessible source. Ignorance can only occur as a policy choice, as the opposite of situational awareness.

Organized "Systems" Cannot Grow by Decreasing Use of Their Own Liquidity Tools

commentary by Roger Erickson

Consider the "Austerity Now" drumbeat still rising in Europe, and then think outside isolated perspective of any one speciality blindly groping an elephantine context.

Do the specialists calling for austerity even know that there their calls produce contradictory signals in the perspectives of other, invaluable segments of their own population?

"Two less steel factories in every country, and two less chickens in every pot! Yeah!!"

Cameron tells EU leaders to stop budget 'tinkering' and instead impose big cuts

Cameron digs in to protect UK rebate [rebate? freeze the rebate from a shrinking budget?  dead-on-arrival negotiating ploy?]

Tata Steel is to axe 900 jobs and shut a dozen plants in the UK in a bid to cut costs after it revealed it had tumbled into the red earlier this month.

It's already evident that when perspectives from inseparable system processes become isolated, their inevitable re-collision invariably sounds much like a script from Alice in Blunderland, especially the paragraph on things sometimes done twice before lunch.

Fuel for poets, comedians and cynics also result. What's the inverse of building the British Empire? Self-degradation? Dismantling, and taking others down with you? Burning the furniture in hovels below Camelot? A burning sewer beneath a hill?

Humor aside, let's imagine stepping back far enough to get a full view of the entire group of blind specialists groping this context and shouting out their blindly local advice.

The first, obvious lesson from our encompassing view is that continuous growth of an organized "system" cannot occur by decreasing use of it's liquidity metrics. That's logic 101.

In the isolated sub-context seen by most economists and politicians, disuse of liquidity metrics equates to hoarding fiat currency, aka sequestering 'profit' margins. Yet in the perspective of all system analysts, liquidity as a concept is inseparable from quality (including tempo) of feedback distribution, which is what greases the quality of distributed decision-making in supposedly organized systems.

Astute readers may immediately jump to the conclusion that Political Economics is too important to be left to the combination of politicians and academic economists? Ya think? The isolated views of politicians and economists are meaningless unless shaped by the full range of operational feedback (aka, context models), from all other sub-processes existing in a given economy and culture. A context model = the full body of group feedback, it's that simple.  We have no higher authority available to appeal to.  Just ourselves.

By now it should also be blindingly obvious that every process is too important to be left to the presumed process owners, especially in any group growing by either diversity or population. That's a truism precisely because liquidity for decision-making in such groups is mediated by increasingly context-specific re-use of the same language signals. Given that data is meaningless without context, no specialist part of a complex system can ever - by definition - access or wield the inter-dependency data required for full-group tuning, aka policy agility - unless they receive adequate samplings of full-group feedback, in real-time.

Just as unlimited fiat currency supplies accurate records of transaction liquidity, "unlimited cross feedback" in group discourse constitutes "awareness liquidity," and supplies accurate instantiation of Situational Agility. That's why optimal organization =  OpenSource.  To be blunt, agile group actions track our rate of updating group-wide Situational Awareness (aka, NOT isolating process management from timely group feedback). Distributed Situational Awareness only occurs with adequate feedback liquidity, constantly cutting across all sub-context-specific wording, taxonomies and semantic triggers to continuously rebuild and drive just-adequate Group Agility.

The very act of restricting semantic liquidity - aka, leaving sub-processes to presumed process owners - precludes system tuning. Leaving political economics to politicians and economists was not only doomed from the start, it was always an act of outright imbecility. Without scalability of council interactions, every culture quickly degrades to action patterns driven only by mob ignorance.

Every collection of highly organized tribes fusing into a super-culture must, by definition, get collectively dumber before new methods allow them to regain and then actually grow group smarts. Re-growing expanded group intelligence always starts with complete redesign of feedback channels, bandwidth, and methods for relaxing information flow patterns to states first to deliver just-adequate Adaptive Rate performance.  [After all, adequate Situational Awareness today is better than perfect historical awareness next year.]

Survival depends on developing distributed methods for doing all of the above faster every year. In human cultures, one small part of that involves methods for adjusting lean, coherent language taxonomies and managing local variance of semantic triggers.

In a population as large and dynamic as ours, we cannot survive unless an informed electorate is aware of different patterns of things every year, is acutely responsive to the moment to moment demand to alter it's Situational Awareness, and is also aware of tools and methods for tuning and leveraging it's own, distributed awareness.

Having said all that, a simple question results. Has anyone ever seen a single taxonomic model providing rapid, population-wide visualization of Public Policy Perceptions? Without models for increasingly rapid tracking of degenerate use of terms by diverse sub-audiences, we will, with absolute certainty, grow into an unstable mob, not a growing nation.

We Can't Keep Learning and Relearning Things This Slowly, and Succeed

commentary by Roger Erickson

“If the agony we experienced in Iraq and Afghanistan-due to our inability to grasp the nature and scope of those wars-has taught us nothing else, it should have taught us to pay attention to the aspiration of the local people and thereby avoid inflicting pain on ourselves and others”

This was never a problem of available knowledge. Ditto for managing fiscal currency operations.

It's an ongoing problem of sampling, hearing and listening to data already available - far enough in advance to make educated guesses about whom to start trusting differently - thereby changing your pattern of trusted sources in real-time. That defines managing ongoing situational awareness while traversing an unpredictable survival path, and how we chase it well enough to stay within recovery distance.

If you wait for "credentials" to catch on to emerging reality, it's always too late. By definition, that means waiting for people who are experts in obsolete situations to become expert in today's situations. That can never happen in real-time, obviously. It's adequate for historians leisurly writing entirely academic opinions, but not for the people tasked with actually surfing and surviving situations.

Iraq and Afghanistan sure sound like situations where policy people meddled in tactics, rather than defining a worthwhile goal and trusting delegates in the field to rapidly improvise ways to shape the situation to a satisfactory conclusion - relying upon painstakingly tuned and retuned automatic stabilizers (aka, whatever operational reflexes work). The influence of orthodox economics on real-time fiscal/tax/monetary policy sound awfully similar.

Once supposed leaders don't trust their staff, and staff - including electorates - don't trust their leaders, any organization is completely vulnerable to top-down blunders.

How useful to have a copy of your own genome sequence?

New Gene Sequencer to Break $1,000 Cost Barrier With NVIDIA Tesla GPU Acceleration

Well, just about as useful as having the engineering printouts for your car.

Practical utility for most people ... about nil.

Eat your fresh veggies, diet & exercise appropriately. Yo granmama told you nearly all you need to know.  Your physiology already runs almost entirely on automatic stabilizers, PRECISELY so you can focus on using it to help invent cultural organization on an even greater scale.

Much better to focus on inventing the template for the next evolution of US culture. Now THOSE are options worth exploring!

Can someone instead make it dirt cheap to use a GPU (graphical processing unit) to visualize our existing currency & fiscal policy operations - i.e., our "policyome"?  If every 10 year old boy & girl could know what Marriner Eccles & Beardsley Ruml realized, maybe the quality of our policy discussions could climb out of the gutter.  That would help improve public situational awareness, something that matters even far more than expensive personal health repair.

We need an Android fiscal policy app, based on basic Marriner Eccles, Beardsley Ruml and Warren Mosler insights.

Is This Why Most CEOs Won't Make Good Policy Leaders?

Lack of situational awareness?

Romney on disaster relief: ‘We can’t afford to do those things’

They don't recognize altered context? Isn't that rather like walking outside ... and noticing that you're no longer inside? What's more basic than noticing context?

In this case, a Presidential candidate doesn't know the difference between the ISSUER & the USERS of sovereign, fiat currency. That's more than a bit surprising. Unfortunately, the other candidate doesn't either, and neither party's platform illustrates adequate understanding of that basic, operational point.  Ergo, it's up to the electorate.

How, pray tell, does a group run out of fiat?  Just as a point of logic.  Can we resurrect dictionaries, and agree upon terms?

There's a better way to mix domain expertise into policy development. We need to find it. FAST!

Otherwise, watching policy development will continue to be like watching old Wile E. Coyote & Roadrunner cartoons.

Please Help Educate Military Communities About Fiat Currency

A military historian runs a quite popular and highly respected blog called "Fabius Maximus." While astute at interleaving quite a few factors building situation awareness for military and political realities, FM remains only superficially aware of the nuances of fiat currency, and the policy implications. His latest entry proves that emphatically.

America’s strength is an illusion created by foolish borrowing

I've corresponded with the author in the past, but to no avail so far, as he is disbelieving that so much "common knowledge" about currency could be so thoroughly wrong.  The topic is apparently largely outside his reading area so far, which is, after all, the case for the vast majority of our electorate.

It's a highly professional set of authors and readers, so please help out by commenting directly at the site above, and help educate this part of the military community. Please be constructive and educational, and forgo anything rude, impatient or insulting. What follows is the comment that I left already. I'm including it only in case it is removed by the FM moderator.

***

Oh my lord, Fab. If you claim to grasp the concept of situational awareness then you have to go back and ask yourself why you're ignoring the fundamental change in our currency situation since 1933, when we transitioned from a gold-std to a fiat-currency-std. It's quite a fundamental change, with trivially obvious consequences. Anyone not at least looking into that situational change is doing their country a grave disservice.

Would a military deploy soldiers who were not able to fully disassemble/reassemble their personal weapon in the dark? Similarly, you shouldn't try to talk about currency operations without learning at least the simple rudiments of how they actually work.

On a fiat currency regime, there is no "national debt," there's no REAL function of "balanced fiat," and it's plain ignorant to directly compare the budget of currency users (e.g., Greece or, say, Nebraska) to currency issuers (e.g,. USA, UK, Sweden, even the ECB [european central bank]). Countries using the "euro" are not sovereign masters of their own currency. Comparing them to sovereign currency issuers like the USA is worse than comparing apples & oranges, it's more like comparing predators & prey.

1) "Fiat" means there's no static metric that a unit of account (currency) is convertible to upon demand. Rather, the unit of account is backed purely and only by the [dynamic] initiative of the public issuing the currency.

2) [A fiat currency issuer doesn't obtain fiat currency from anyone], hence there's no one to "pay it back" to. The goal reduces to maintaining currency supply within tolerance limits, neither too much (contributing to EXCESS inflation) nor too little (contributing to EXCESS deflation, what we have rt now in the USA).

3) The concept of currency revenue is obsolete for a fiat currency ISSUER. In 1933, the entire function of taxes changed, from obtaining currency revenue from gold-hoarding plutocrats, to managing net aggregate demand and shaping it's profile (i.e., taxes as deterrents for specific transaction types).
http://www.curiousevidence.com/(S(cnekbxjj3y4xwimbw2sg12vj))/samples.aspx?id=21

4) You're completely conflating the concepts of foreign currency (Fx) reserves, Treasury bonds, and fiat-currency "deficits."

a) Countries who export to us are paid in $US, THEY HAVE ALREADY BEEN PAID IN FULL! Their payments are sitting in accounts at the US Federal Reserve bank - as Fx Reserves. We DO NOT BORROW OUR OWN FIAT CURRENCY FROM ANYONE ELSE! It's actually impossible, since the US Treasury is the monopoly issuer of $US.

b) As part of the double-entry accounting process for acknowledging currency creation (i.e., an accounting entry w/o a corresponding debit), we use TTL Accounts & T-bonds to drain banking-reserve notation from the accounts of private banks at the Fed. T-bonds are just a habit left over from the gold-std days. They're simply a policy decision to spend more fiat, not to borrow fiat."The Treasury tax and loan account system was designed as a mechanism for minimizing the dislocations on bank reserves and the money market arising out of the sizable and irregular transfers between the Government and the public."
Treasury tax and loan accounts and Federal Reserve open market operations
http://www.newyorkfed.org/research/quarterly_review/1978v3/v3n2article7.pdf

c) A fiat-currency "deficit" is purely an accounting term, denoting the growth in net currency supply used by a growing nation. The fiat deficit is the difference between currency created by Treasury spending and that amount clawed back as federal taxes. The cumulative, so-called, "public debt" is also net private savings, to the penny. Given a monopoly currency issuer, a growing economy can only accumulate net savings (credits) if the issuer commits to net issuance (debits) - they're simply the accounting terms necessary to manage national currency supply.

If you want to at least learn the rudiments of fiat currency operations and reserve banking, here's a Dick&Jane level primer.
http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf

After that, please read up on Marriner Eccles, the Fed chief who oversaw our transition from the gold std to our existing fiat currency.

Marriner S. Eccles and the Federal Reserve Policy, 1934-1951
http://www.econ.utah.edu/activities/papers/2006_04.pdf

Marriner Eccles - HEARINGS BEFORE THE 1933 Senate COMMITTEE ON FINANCE
http://fraser.stlouisfed.org/docs/meltzer/ecctes33.pdf

DIRECT PURCHASES OF GOVERNMENT SECURITIES BY FEDERAL RESERVE BANKS - Marriner Eccles, 1947
http://fraser.stlouisfed.org/docs/historical/house/1947hr_directpurchgov.pdf

Can Taxes and Bonds Finance Government Spending? - Stephanie Kelton
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=115128

'Managerial Cowardice' Plus Failed Situational Awareness

commentary by Roger Erickson

Forget Mice & Men, Steinbeck could have written a quite similar novel called, "Of Paradigms and People."

Parts of this sounds good, but then it all goes south.  Buddy, can you spare a paradigm?

Gates Slams Congress for 'Managerial Cowardice'

First the good.
"Former Defense Secretary Robert Gates on Monday issued a scathing criticism of lawmakers who he claims are willing to cripple the U.S. economically and strategically in the world to retain the votes and financial backing of the ideologues they’ve become beholden to.

“Too many are more concerned with winning elections and scoring ideological points than with saving the country,” he said in remarks at a meeting of the Center for Security and International Studies in Washington."


Gets even better.
“Across the board cuts are the worst possible way to exercise budget discipline,” Gates said. “When Mike and I were working together, my guidance was if we had to cut or find more resources we would never resort to across the board cuts. I referred to it as managerial cowardice, a refusal to make choices and establish priorities,” he said.
...

Gates likened [across the board budget cuts] to a scene in the Mel Brooks Western spoof, “Blazing Saddles.”
“The sheriff holds a gun to his own head and warns the crowd not to make him shoot,” Gates said."

Then it all goes south!
"Gates said if the politicians are serious about getting the country’s spending under control, they have to look at Social Security and Medicare, which constitute a much larger percentage of federal spending than defense."

Does this vaguely remind you of a troupe of ballerinas trying to discuss ballistics? Or quantum physics? Try as they might, there's simply nothing in their training that prepares them to discuss operations outside their prior areas of experience and reading. It's baffling. Even DoD managers can't extend situational awareness past points of propaganda that "every one knows?"

When it comes to situational awareness, what part of transition from a gold-std to a fiat currency standard didn't the Pentagon recognize?

How can military planners dare to try contingency management without at least determining which paradigm they're tasked with working in?

“Ideas are like rabbits. You get a couple and learn how to handle them, and pretty soon you have a dozen.”

But what if you don't get 'em fast enough? Or can't handle them? Predator prey cycles feature crashes when the predators can no longer find rabbits. If we run out of our own ideas, or we can't find and explore 'em, we'll crash too.  There's a suspicion that a Deficit Terrorist couldn't find a free idea even if it tried to gate-crash what passes for his brain.  There's no "snare," there.

What do you call it when a managerial class is prejudiced against any paradigm outside it's class-based ideology? A Dead-Culture-Walking?

Super-Sizing Public Knowledge and Situational Awareness

commentary by Roger Erickson

Here's an alternative book to recommend to those who won't believe any novel currency operations advice from just one source.

It's always better to have independent support for a view. Few will believe something that they think only one person espouses. Most people are intellectual cowards, and will do anything in their power to avoid thinking ... and thereby quickly examining tough questions for themselves, even if only one person in the entire world is raising them.

Financial Crises, Contagion, and the Lender of Last Resort: A Reader
(only $25 at Amazon)

Do you realize how much faster our entire populace could learn if EVERYTHING was immediately put online, for minimal cost? I'm talking pennies, not dollars.  We super-sized Pepsi back in 1981. Why not Super-Size public knowledge and situational awareness?

This goes along with another book already 2 years old, and read by too few to matter.

Unsettled Account: The Evolution of Banking in the Industrialized World since 1800. Richard S. Grossman, 2010. Princeton University Press, Princeton.
review:  sounds like mostly theory, & less about operations
$33 at Amazon

Ever seen a book specifically on the History of Banking Operations?
How rare is it to find good operations people, in any field, who will stoop to writing a history book?

Back to Open Access. It's occurring, inevitably, but far too slowly. For culture-wide access, tempo counts.

Ten Years after Budapest Open Access Initiative New Recommendations Released

10 years? What part of "Adaptive Rate" don't these people understand? Anything not accelerating adaptive rate = stagnation, by definition.

What part of past & emerging "culture" shouldn't be distributed to an expanding culture's populace - as far and fast as possible?

It's not just the finance industry that is more trouble than it's worth. Our entire publishing and knowledge-dissemination industry is also rapidly sliding into that category.

Race to the Bottom: Producing Regulators who are Invertebrates, and Triggering Epidemics of Fraud

commentary by Roger Erickson

In a long review article, Bill Black sums up 4 conclusions.

'For the sake of brevity I make four points. 

First, if regulation is determined by the race to the bottom the regulatory leadership will be selected (with a great deal of self-selection plus industry dominance) for their opposition to effective regulation. The leaders will lack a spine. The idea that anti-regulatory invertebrates (think slugs) will successfully go “toe to toe” with a fraudulent CEO is fatuous. Anti-regulators are bred to be lap slugs.

Second, “judgment-led regulation” is a PR phrase – not a positive theory of financial regulation. Honest bank CEOs would not “hate” effective financial regulation. Instead, they would see it as essential to their ability to compete. The true independence of effective regulators (as opposed to the faux independence of inside and outside professionals hired and fired by the CEO) is also invaluable to honest bankers.

Third, the PR phrase appears to be a pretext for further deregulation in the UK designed to achieve greater regulatory laxity in order to “win” the race to the bottom. It is disastrous to remove the regulations that drive dishonest banks CEOs “wild.” In the U.S., for example, the savings and loan underwriting requirement for mortgage lending that the Clinton administration removed was the single most destructive act of deregulation. The rule was a paperwork rule – the category that the anti-regulators love to target. We used it in 1990-1991 to stop S&Ls in Orange County, California (where all good financial frauds originate) to drive liar’s loans out of the industry. The rule was extremely useful in preventing criminogenic environments, bad loans, and in helping to prosecute accounting control fraud.

Fourth, the “old guard” at the regulatory agencies was the solution, not the problem. The S&L “old guard” established systems and professionalism that survived even the appointment of anti-regulatory leaders in 1987. The folks that failed during the current crisis were typically the anti-regulatory leaders of the regulatory agencies appointed to “win” the race to the bottom.'

And then, Bill closes with this zinger.

"The takeaway is that the elite banks demand that their political patrons be total sycophants like London’s mayor, who will celebrate banks committing felonies that aid terrorists as long as the banks are located in the City of London. The elites believe in the divine rights of bankers. Anything less [than] unconditional devotion from their political lackeys represents “demonization” and requires that the politicians be defeated and replaced. Modern [elite] bank CEOs are not tough. They are thin-skinned adolescents who demand veneration."

All good points. What do we do about this state of affairs?

First, interact widely enough to develop your own sense of situational awareness, and consider why an uninformed populace and it's options are soon parted.

Second, decide for yourself if you want to be easily manipulated by propaganda, or select methods that will actually form a more perfect union, and the insanely great capabilities and general welfare of the people that follow such union.

Third, decide for yourself whether we can scale up a larger version of a more perfect union, by practicing less, not more, self-regulation. Does agility vs clumsiness require more or less self-control?

Fourth, if Luddites are standing in the way of our national progress, please make a decision, and make it quickly. Either stand on those Luddites - now - and find a better way .... or get out of the way yourself.

Fifth, please consider if YOU are willing to pander to idiotic, so-called elites defined by their zeal at sequestering resources from their neighbors and country. Do we really need elite hoarders, or elite contributors?

Answer: Since SCOTUS was Ceded to Scalia

commentary by Roger Erickson

The Question: "Since when have we Americans been expected to bow submissively to authority and speak with awe and reverence to those who represent us?" William O. Douglas  Posted at The Long Goodbye

Oh, and delegating the Fed to Greenspan, Geithner & Bernanke helped. May as well have installed Bernie Madoff & Meyer Lansky at the Fed, and Robert Rubin & Henry Paulson at Treasury cum Citibank cum Goldman Sachs. Control Fraud becomes a religion superseding but utilizing all prior affiliations.

That left only the insignificant White House for self-fraud intern, Larry Summers, ex-clerk to Rubin.

It is, of course, easy to rail at the current idiots, but they're simply the latest in a cast of characters in a continuing play. Actors waiting in the wings claim that they can do a "better job" at the same role. Working harder to grease squeaky wheels will only starve us. There's a better way, and we need to find it.

http://www.englisharticles.info/tag/political-corruption-quotes/

Self-delusion used to be simpler, even innocently incompetent. Now it's subtle, and already diversified further.

http://memegenerator.net/instance/9923751

From all our collective history, there's not enough methodological wisdom in the entire pantheon of all religions & all Constitutions to have prevented this from happening - yet again - the last 40 years, right here in the USA of all places. We're still a day late & a dollar short, and find ourselves still needing faster access to a steady stream of new insights.

So we obviously have to start doing some things differently around here. All of us. Suggestions are welcome.

If we're going to explore our growing pantheon of options, we must at least keep them all constantly visible in one continuous spectrum - shared by all. Situational Awareness does not mean having an opinion. It means being ready to perceive NOVEL opportunities in any mix of events, opinions and actions.  Tactical, strategic & policy agility all follow situational awareness.

Since there is always fear of moving too fast, distributing situational awareness is more important than all other needs. How do we overcome our own innocent frauds, neither too soon nor too late, but with precisely the right timing?

First, we need OpenSource ways to instantly plot all existing opinions on any subject, to make it easy & fast to recognize the organizing axis, the average and the tails of every opinion distribution.  We need to share those tools simply because the return-on-coordination trumps all other returns.  Don't settle for hoarding crumbs, when we can make the pie grow faster than we can eat it!  In systems jargon, the diversity of an "opinion cloud" provides us with enough options.  Yet from that opinion cloud, only parsing skills select the unpredictable profile of the given, complex solution to every situation.

Second, therefore, we also need an easily accessible, OpenSource way to track the 1st & 2nd derivative of every opinion plot, so we can recognize and select success options sooner rather than later.

Here's the simple rub.  If the incompetent, the self-deluders and the outright crooks can band together and self organize across prior divisions, why can't we?  And why can't we always adapt faster than they do?   

Crooks & misfits can organize quickly precisely BECAUSE their Luddite goals are outmoded and simple.  It's largely because they're a smaller group than all of us, and have the advantage of smaller group intelligence as well as small minds.  When they always know what their mindless goal is - hoarding - it's quicker & obviously easier to organize.  

It's far harder to constantly scale White Collar Crime immune processes across a larger and constantly growing population. Multiple examples available from other settings suggest what we already know - we need agile, scalable regulatory institutions able to generate astounding rates of mobilizing and demobilizing, at a moment's notice.  To be agile, we need to train ourselves on agile methods.

What on earth makes us think we can't AFFORD to self regulate, tune and accelerate our own adaptive rate? That's what the entire history of the USA demonstrates. Why lose faith now, at this particular time?  We can't afford to NOT scale up our own self control.

So, please send your suggestions for where to start and, if possible, examples of momentum others can coordinate with.

As you make suggestions, remember that things that work at one scale don't necessarily scale successfully as population grows.  The minor devil may be in every given set of details, but the distributed devil grows with the scaling details.

http://socialcapital.wordpress.com/2008/04/24/across-countries-where-social-trust-is-high-crime-and-corruption-are-low/