The Retirement DEMAND LEAKAGES Will Continue To Grow, Until Aggregate Demand Picks Up

   (Commentary posted by Roger Erickson)

These people are all missing the point?

Hence,

The retirement Demand Leakages will continue to grow, until Aggregate Demand picks up. ... Doh!

THE problem? (There's only one?)

THE solution? (Really, Tina? There is no alternative?)

Or, is "retirement" a trick question?

Haven't these people ever heard that no plan survives contact with reality, and that the best way to proceed is to Never Tell People HOW to do things? There is never just one way, and the eventual, most adaptive route is always a total surprise.

Otherwise evolution wouldn't have taken this long to occur.

Even chemists eventually learn that it takes oxy + morons to create Luddites capable of really gumming up the works. Natural selection means that at least a few of even highly social rats will eventually abandon a sinking ship, instead of going down en masse.

And here I thought that the successive, asynchronous generations in our social species WERE both a way to optimize our aggregate demand AND save it for prior generations too! Such an ingenious solution available from the start, but maybe we're not smart enough to grasp that yet? We're certainly not scaling up the same principle, from families to our citizenry.

So what, exactly, IS the definition of intelligence, and why isn't it increasing with increasing population size? What good is a growing network if TINA can't connect the newly emerging dots?

If War Is Too Important To Be Left To The Generals, Surely EVERY Single Process - Including Reserve Banking - Is Too Important To Be Left To The Presumed Process Owners?

   (Commentary posted by Roger Erickson)




Warren Mosler:

Comments on Stanlely Fisher’s ‘Lessons from Crises, 1985-2014′

This is where Mosler really shines. He knows the functional details of reserve-banking OPERATIONS like the back of his hand, and can make it simple.

WHICH IT IS!

I read these comments and conclude what any biologist would. Why such a tempest in a straw man teapot? With the shrinking breadth of operational knowledge in today's orthodox economics ranks, the best we can muster is an intellectual, purely theoretical Teapot Gnome scandal? The cause is underwhelming, while the aftermath is worse - as we voluntarily constrain response to reality, based on pure theory alone, without the benefit of timely feedback.

Stanley Fisher "notices" that every aggregate selectively shields SOME it's components - somewhat - from their distributed folly. Wow! Where have he and his profession been all these millenia?

There's a simple logic revealed in that ancient observation, involving distributed exploration and feedback-based imposition of incrementally learned, aggregate policy.

Well Duh! We've known that for ~3.5 Billion years? Here on planet earth alone? It's like modern economists & bankers never heard of autocatalytic-aggregates or even social species, despite being part of one! Did they all go to school in a barn?

You couldn't make this up.

Bankers & economists are GROSSLY under-educated and isolated, to the point of being an insult to their own electorate.

If war is too important to be left to the generals, surely EVERY freaking process imaginable is too important to be left to it's naively presumed process owners?

Ya freaking THINK? Isn't that the very definition of "teamwork?"

This is exactly WHY aggregates share data, use widely distributed feedback, and leverage flexible inter-dependencies with constantly INCREASING aggregate agility. Social species succeed for a reason. This is NOT rocket science ... and it is NOT new!!!

Yet with orthodox economics and banking, we've been steadily shrinking and constraining and trying to ignore even the minimally required distribution of feedback, interactions & inter-dependencies. It's like sending Catholic Priests along with the soon Greenland Vikings, to constrain their adaptations to changing conditions.

There's nothing wrong with economics & banking that a slightly more liberal education wouldn't have prevented. US citizens used to absorb the key lessons of their own history - and ability to recognize obviously changing context - by the time they graduated from high school - or sooner. Not anymore.

Now you can apparently get a PhD & Nobel Prize in economics while never having even discussed biology 101, or looked up the definition of a @#$%^&! Social Species, let alone grasped even the most superficial implications of distributed teamwork, democracy & the shared, coordinated, rights of citizens.

And we send OUR youth to die in foreign lands, to preserve the narrow interests of bankers hiding behind "economic" policy advice? Are you #$%^& KIDDING me?

@#$%^&! ... ON A @#$%^ ... +*@^%~#$$!!! Auuuuuggghhhh! It should be primal scream time for the US electorate. Yet for whatever reasons, they're still waiting to inhale, let alone waiting to let loose & exhale.

Note to electorate: Please send some people OTHER than functional illiterates into politics at all levels. Perhaps people who can scout aggregate context, AND sample ALL available feedback, AND then simply do what's easy & obvious for an aggregate - QUICKLY? In short, stop trying to kill your own, distributed Golden Goose (the resilient Middle Class of a functioning Democracy), and instead, just let it feed itself? This is NOT difficult. Just stay the hell out of your own way, and demand that your public servants stop asking you to over-tax and under-fund YOURSELF!

Note to politicians "representing" their electorate: Appoint some damn Fed & Treasury political appointees who are NOT functional illiterates. Maybe a few who understand net reality, and aren't restricted to the fantasies of the orthodox economic religion? Out of 320 million citizens, surely there's SOMEONE like Marriner Eccles floating around today - who is not restricted to being just an economist, but an actual thinker and innovator? You have thousands of professions to select from! Just start leveraging a wider spectrum of available feedback, interactions and inter-dependencies? It might save your country.

Excuse me while I go pound my head on a local wall, to alleviate all the distributed stress triggered by living downwind from Teapot Gnomes Fishering into the wind.

Capitalism Redefined? .. Not Really

   (Commentary posted by Roger Erickson)



Two capitalists list capitalism's flaws ... can't make any plausible suggestions

For Democracy's Sake! Can't these guys just use ANY previously existing chemical system as a precedent model?

How about the trillions of biochemical model systems already existing?

Or the billions of physiological models?

Or even mathematical models of closed-loop, ecological systems?

Only naive, hopelessly anthropomorphic capitalists would say that capitalism is the greatest problem-solving system in history.

Capitalism is simply a crude, and very partial, VIRTUAL ACCOUNTING SYSTEM used in some human cultures. It's an accounting system that we're currently using as a crutch until better system instrumentation methods evolve, to allow more agile, real-time sensing, discussion, exploring and assessment behaviors among human aggregates. Capitalist accounting is simply a hack we use, AFTER THE FACT, to divvy up - productively or not - the spoils of group endeavors. There's a reason no army uses capitalism to manage it's operations. It doesn't work as a guide for group operations. Only as a hack for maintaining some some arbitrary degree of honour among a mob of thieves.

If any amoeba had to depend only upon capitalistic behavior among it's trillions of molecules to survive .... it wouldn't! Not for a minute. 

The highly regulated, coordination METHODS which are deeply programmed into the characteristics of ANY functioning aggregate, are those which are painstakingly selected through trial and error. It is NEVER every man for himself, which is what most people assume capitalism means. 

Bottom line is that cultural attributes are how we survive. Capitalism is just an arbitrary accounting methods which cultures use to track SOME, but not all, of their transactions. For example, we don't (always) overtly buy/sell citizenship, spouses, or babies - or even friends, or countless similar examples.

These guys must have been raised in an MBA or Finance school. They don't seem to know anything else.  As usual, they completely leave out any mention of the return-on-coordination, which is a given in the very definition of a social species, but isn't even mentioned in "capitalism."

The Only Thing We Have To Fear, Is Fear Of Further Coordination?

   (Commentary posted by Roger Erickson)

:)

That actually says a lot.

To coordinate, we have to give up some individual options, and expose ourselves to the probability of harm, in order to get access to the probability of achieving some additional group options.

That's a given, given that the closer you look at the risk/benefit of any sort of cooperation, you see only probability/probability functions. :) A ratio of probabilities.

The success of social species - and cultural methods - indicates that the probabilities are EVENTUALLY weighted far in the favor of FURTHER coordination. Yet that is not INITIALLY true, and the ratio never grows to fully 1.0, or even past 0.999.

No insane returns accrue, without exposure to significant, known risks and even complete uncertainties.

Thinning Money Out of Mint Air

commentary by Roger Erickson

The power to create money out of thin air

Ann Pettifor discusses HOW capitalist countries keep their electorates so misinformed about currency creation, and implicates orthodox economists as unwitting accomplices - let's just say Innocent Frauds.

It seems like a rather long treatise to summarize a simple point, and she immediately gets into a shouting match with Mike Norman over semantics, then off into sidetracks with Ralph Musgrave about fractional reserve banking. Unfortunately, little of the treatise or discussion quickly reduces public confusion.

For the public at large, why not just hammer on 5 of the simplest points - as a start? If the bulk of the electorate knew at least the following, it would be a significant milestone that we could build upon.

1) A growing economy requires a growing currency supply, simply for liquidity.

2) A steadily increasing currency supply means the buying power of a unit of liquidity must float.

3) #2 sets up a potential point of friction. Those inappropriately hoarding fiat currency see net liquidity growth as "Thinning Money Out of Mint Air" - i.e., reducing buying power of their stash. Their narrow, personal preference limits systemic liquidity. How do we handle that limiting friction between individual and group fortunes?

4) The solution is to make sure that all understand that the potential return-on-coordination from scalable liquidity far outweighs the static-asset value of hoarded liquidity units (fiat currency). Simply put, personally "save" by investing in some mix of dynamic and static assets, but do NOT try to save primarily in liquidity units.

5) Our constant need? Continue the ongoing transition from hoarding static assets to hoarding ability to procure dynamic assets. That's what social species do. It's called evolution (of teamwork).

ps: In a fiat currency regime, there is no fractional reserve banking, since banks don't lend out reserves - but leave that to later.