Republicans attack food stamps, but dole out billions to wealthy farmers

Marshall Auerback interviews Warren Mosler

INET
NET MA Mosler

Marshall Auerback interviews Warren Mosler

Metal Interest Story: Tons of Silver Hauled Up After Decades Undersea

Philarguria still running rampant in the U.K. sad to report, story about this latest moron-fest metal rescue at the NYT here.

Forty-eight tons of silver bullion that spent more than 70 years at the bottom of the North Atlantic have been hauled to the surface and returned to its rightful owner, the British government. (Ed: These morons can't figure out how to employ people, but they can figure out a way to satisfy their desire for possessing large mass measures of "precious metals" so-called.)

Mike Penning, a minister at the British Department for Transport (a successor to the Ministry of War Transport), which hired Odyssey, said in a statement that he welcomed the company’s “hard work in the salvage operation” and its successful “recovery of the valuable cargo.” (Oh yes!,,,yes!..yes!... very valuable to the metal-lovers in copious amounts mind you!)

Mr. Stemm said the old bars exhibited none of the shimmering patina usually associated with fresh silver. “It’s been underwater so long, it could be mistaken for iron,” (Ed: Heaven forbid not our precious silver!  Mistaken for Iron!  Please say it ain't sooooooo!) he said.

And the US media reports on these actions like it actually makes sense in some deranged way.

We keep trying to re-submerge this stuff for good and the morons just keep bringing it back up like it is some sort of critical search and rescue operation, oh well...

Henry A. Giroux — The United States Is Awash in Public Stupidity, and Critical Thought Is Under Assault

From celebrity culture to phony public intellectuals to shallow politicians -- there's an assault on rational thinking in this country.

Americans have always been more pragmatic than intellectual, but how do you actually be pragmatic when you don't understand the situation in the first place? Shoot from the hip and hope you don't hit your foot.

AlterNet
The United States Is Awash in Public Stupidity, and Critical Thought Is Under Assault
Henry A. Giroux | Truthout
(h/t John Zelnicker via email)

Welfare for the wealthy...more people are starting to catch on

I've said for a long time that welfare in the United States was not dead, it's just been taken away from the needy and given to the wealthy.

Whether we're talking about tax policy, education policy, investment policy, labor policy, banking, finance and Wall Street, the national debt, you name it...the government heaps trillions on the wealthy and guts programs left and right for the truly needy.

Here's Bob Schieffer on Face the Nation, calling it like it is. Maybe he reads this blog.

Jon Ward — Raul Labrador Playing Crucial Role In Immigration Fight, With An Eye On Higher Office

Labrador placed himself within what he called "a new kind of conservatism" that he said is marked by a focus on fiscal issues and civil liberties, with less emphasis on social issues. 

"I think it's a conservatism that's a wave of the future, where conservatives are actually going to be appealing to more independent-minded people," he said in an interview.

Difficult to do without losing the significant part of the base that are single-issue voters and that issue is social conservatism. 

Labrador joins Marco Rubio and Ted Cruz as among the Latino rising stars of the GOP, a list which is soon to include George P. Bush, son of Jeb Bush. And that is worrisome to Democrats counting on a demographic advantage.

The Huffington Post
Raul Labrador Playing Crucial Role In Immigration Fight, With An Eye On Higher Office
Jon Ward

Personal savings collapse. Thanks President Obama!

"Here’s what could make or break Abe’s reform plan"

Commentary by Roger Erickson

Warren Mosler writes: "Seriously! :( [To fund public initiative for the nation of Japan] it's crucial that [their PM] pushes ahead with plans to raise a controversial consumption tax "

quoted from: Here’s what could make or break Abe’s reform plan

Hey, the fiat's gotta come from SOMEWHERE, right? :(

After all, fiat doesn't just grow on citizens! Nor Public Initiative, being the same thing.

Ya gotta wonder who first decided that public initiative - aka, fiat - was something we had to get from someone else in order to have. By the way, Peter Peterson offers public fiat, for a fee! So where did HE get our fiat, to sell to us? He prefers that you don't ask - supposedly to "avoid confusion".

According to accountants, our original debt started with the Big Bang debt event! One has to smell shamans or an orthodox economics priesthood at work here, touting an original debt-sin.

How else do you justify an industry that's more trouble than it's worth? Well?? Any theories? :)

They have to invent something!  They may be killing us, but you DO have to wonder about the chutzpah of parasites that parasitize even themselves!  Who knew that self-assisted group suicide was a protection racket? Priests and accountants and investment bankers throughout history, that's who. Oh, and their latest orthodox economics priestly order too.

We're all anti authoritarian-theists now, if we want to survive. There's always yet another Age of Reason unfolding, but only if we allow reason to be extended. That requires acknowledging emerging operations and exploring emerging options, not letting deranged shamans dictate which few public options we're allowed to explore, based on their presumptions. Orthodox shamanism has no shame, unless we apply it. Without feedback, frauds will always take just as much as they can get away with.

Viva la Public Initiative, including enough initiative to ignore deranged shamans. :)

Killer Points In This Little Essay About Currency Operations

Commentary by Roger Erickson

Demand Leakages: The 800lb Economist in the Room

Especially the last paragraph.

Pity it will be neither widely read nor widely understood by Joe & Jane Sixpack, who want results, not explanations. Until currency operations are discussed as widely as any other mundane operations - and show up in Scientific American or National Geographic -  we'll likely continue to ignore, and put up with, the consequences.

Yes, most people will never even want to have to know how currency operations work, but that holds for basic operations in all other disciplines as well. The ongoing failure of economics and banking operations is an economic engineering issue within that particular engineering profession, and it represents a failure of epic proportions.

If physical engineers were letting real bridges collapse as often as fiscal/monetary engineers let Main Street economic bridges collapse ... they'd all lose their professional licenses within a week. In addition, engineering schools would lose their accreditation. Heads would have rolled long ago, and people would be in jail.

Which brings up a simple point. Why isn't every economist, banker and investment banker required to get a license to operate, just like physical engineers?

And why aren't more people like Larry Summers already debarred, banned from practicing on us, or in jail? Any credible answers? And, why is Harvard Economics still accredited, and it's faculty still being paid, not jailed, for malpractice?

The supposed field of economics reminds me of the general pitfalls of "Assigning models (preconceptions) a higher priority than observations" - Chuck Spinney. That's not what occurs in real sciences or real engineering fields. What's that say about economics? Not much, except that it's not an operational science. It seems to be more of an academic fantasy land, and shouldn't be allowed anywhere near any policy office anywhere whatsoever.

And yes, many people have been saying exactly that, for decades on end, even centuries. So why are so few listening to that simple message? Is there a criminal lobby protecting the economics discipline from reality? Or are getting exactly what we deserve for our sloppy approach to self-governance? Both, always. That's reality. Only two questions matter.

1) What are YOU going to do about it?

2) What are WE going to do about it?

Until we get serious about doing something, in local & then global steps, everything else is just data not yet applied to changing context.

Randy Wray — How Wall Street’s Rent-Seeking Vampire Squid Sucks All Life Out Of The Economy

In economics there is the notion of economic rent—payment in excess of what is required to mobilize factors of production. For example, such rents accrue to those who have “cornered the market”—by artificially restricting supply of some resource, they are able to dictate usurious terms to buyers. We call them “rentiers”.

Here’s the point that is critical to understand: the rentier performs no useful function, and the economic rent can be eliminated without reducing the supply of the resources needed for production. This is why J.M. Keynes advocating “euthanizing” the rentier. As you know, “euthanasia” means “mercy killing”—you kill to reduce pain and suffering. Keynes was serious about this—his recommendation came in the final chapter of his great General Theory, as one of his two fundamental policy proposals.

Brilliant lede. Best short explanation of economic rent and rentier I've seen yet. Great to see it being brought into MMT analysis.

Economonitor — Great Leap Forward
How Wall Street’s Rent-Seeking Vampire Squid Sucks All Life Out Of The Economy
L. Randall Wray | Professor of Economics, UMKC

Kicking "The Can Kicks Back"

I recently stumbled upon a political action group called "The Can Kicks Back" on Facebook. It is a youth-oriented political action group that advocates for entitlement reform and deficit reduction, and does so with "hip" looking website and articles clearly written for a college age audience. It appears that most of its members are of or near college age as well, and a quick glance over the website makes it seem innocent enough. Upon closer inspection however, I quickly realized that it was just another variation on the Pete Peterson-funded theme of disseminating false information about government spending in order to gut our old age benefit programs of Social Security and Medicare. For those of you who don't know, Peterson is an ancient billionaire who has been using his money to advocate for gutting of SS and Medicare for decades now, with little success. (btw Peterson's money dump into this fruitless cause is an excellent demonstration of the low utility of rich people's dollars and the need for higher marginal tax rates!)

Anyhow, while I am always excited to see people my age interested and engaged with federal policymaking, I simply cannot trust any Peterson funded institution, of which "Can Kicks Back" is one of the most recent. It saddens me to see what seem like well-intentioned people wasting their talents on the cause of this billionaire hack. A basic understanding of modern public finance reveals that just about all the claims made on the "Can Kicks Back" site are incorrect. As we MMTers know, there is nothing to prevent the US from meeting any and all of its liabilities in the future. In no way are "unfunded liabilities" or the federal debt a "burden" to future generations. These funding issues are entirely within our control and are not worth 1/100th of the time we dedicate to debating them.  As the Maestrodamus himself said to Paul Ryan several years ago 'solvency is not a concern for SS, since we can always print money and give it to people....the real question is if there will be real goods and services for those dollars to absorb.' Additionally, spending on entitlement programs doesn't really preclude us from investing/spending on anything else.

Instead, it is climate change, which is several degrees of magnitude more important, than we should all be worrying about. Mitigating and adapting to climate change will be incredibly difficult, since the laws of Nature are most certainly NOT in our control. All economic and financial systems are. For future reference, here is my list of things to worry about:

1) In the short term: Unemployment
2) In the medium term: Health care costs (the primary driver of our deficits)
3)In the long term: Global climate change

Happily, PetersonInc has missed its July 4th deadline for brokering a "Grand Bargain" in Washington, partially due to the shrinking deficit and the media shifting its focus elsewhere. So while the deficit reduction fetishists seem to have been silenced for the time being, I'm sure they will return soon. Their over-the-top calls for deficit reduction come not from any real world understanding of macroeconomics; rather they are just further efforts by the PetePeterson medusa to impose on the rest of us his normative preference for smaller, impotent federal government. Thanks to the shrinking deficit, along with valiant efforts from Dean Baker, Paul Krugman, Brad DeLong, and the growing group of MMT economists, the latest Peterson snake head has been lopped off. However this is no time to rest on our laurels: He will be back soon enough.

INET — How to Get the Economy Back on Track: Austrian Economics vs. Modern Monetary Theory

The status quo clearly is failing. But what should government do? It could step in and take more radical counter-cyclical steps to get the economy going, as Mosler suggests. Or it could get out of the way and let prices work, as Murray says.

Who do you agree with? Check back tomorrow for a “New Economic Thinking” interview with Mosler on Modern Monetary Theory and his suggestions for getting the economy back on track.

INET
How to Get the Economy Back on Track: Austrian Economics vs. Modern Monetary Theory

Yves Smith — Beyond Debt and Growth: An Interview with Robert Pollin

As readers likely recall, Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst wrote a paper, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” which revealed serious methodological problems with one of the linchpin papers used to justify cutting government spending even in times of recession. Nevertheless, Reinhart and Rogoff have been trying to salvage what they can by claiming they never said the relationship between high deficit levels and their claim of serious economic damage was causal. The interview that we’ve republished includes a box that shows that, au contraire, Rogoff did in fact did push the austerity line. 

Naked Capitalism
Beyond Debt and Growth: An Interview with Robert Pollin
Yves Smith

Caught again. Reputations shredded.

Marshall Auerback, Stephanie Kelton and L. Randall Wray — A Plan for All the Detroits Out There

MMT to the rescue. Pass it on.

Note that this plan is based on job guarantee but not the MMT JG in that compensation would be indexed so that the real wage would remain constant against inflation.

New Economic Perspectives
A Plan for All the Detroits Out There
Marshall Auerback, Stephanie Kelton and L. Randall Wray

Dirk Ehnts — The equity premium puzzle and the default of Detroit

Did the profession of actuaries by using the equity premium puzzle arrive at a “wrong” rate of return? If so, should not all plans be redesigned? How to do that, without causing an earthquake on financial markets? These must be unnerving questions for pension funds and financial sector firms in general. However, these should be questions to be discussed in the open, in newspapers and journal articles. The manipulation of the US stock market by the Fed might be legal, but as a result it should be clear to everybody that stock market prices are heavily influenced by the central bank and financial market regulation. Should the Fed have a goal for the Dow Jones? Should it just watch it slip down again after quantitative easing failed to increase economic growth and only succeeded in redistributing wealth?

Detroit’s financial problems leave us with urgent questions about the design of pension plans and the role of financial markets.

econoblog 101
The equity premium puzzle and the default of Detroit
Dirk Ehnts | Berlin School for Economics and Law

Seeing Through the Fog of Policy, to Outcomes Management: To Survive, We Need a Form of Capitalism Where All Forms of Capital are Co-Managed

Commentary by Roger Erickson

This essay started as a discussion with an investment manager who initially argued that Lockheed Martin was a great private investment for individual citizens. It inevitably turned into an essay on net vs quarterly Outcomes Management, and where current views of capitalism have fallen short. The relevant evidence is near infinite, so here are just a few initial references, to trigger discussion.

Gauging short/long term balance between localized gains & systemic losses (see the comments from Spinney & Cockburn, below) can get complicated, so lets label it as Net Outcomes Management for now.

Net Outcomes Management can be a slightly confusing subject, but obviously one that can't be ignored. And, it's nothing that any high school calculus-101 student can't handle. It's not Rocket Science.  Simply put, the behavioral paradigm we use at age 5 is different than what we adopt by age 10, different again by age 20, and different yet again by the time we're grandparents, CEOs and/or elected public servants. During that span, we're tasked with learning how to manage NET OUTCOMES for increasingly more complex systems and contexts.  The same task looms for teams, companies and nations where both workforce count and workforce capabilities are constantly expanding.  In all instances, we need to adapt our policy methods fast enough to ensure that policy space and policy agility outrun growing demands.

At some point, the systemic investments we make are far, FAR more important to the welfare of our grandchildren and nation than our transient investments in personal liquidity.

How do we co-manage local, global and emerging investments? By rigorous national selection from rigorous national trial and error of course! The example essays from Spinney and Cockburn remind us how badly we're currently failing. Those failure remind us quite abjectly of what's happened to the US Middle Class, which has also been largely outsourced, by and for the 1%, also for transient gains which cannot propagate to a secure national future.

Chuck Spinney - Why is Boeing Imploding? Part II

Boeing’s Plastic Planes - How Boeing’s adoption of defense-contracting practices led to the flawed Dreamliner 787
By Andrew Cockburn, Harpers, July 17, 2013

See also Casey Haskins comments on "outside trainers" and outsourcing of key system processes. These topics all sound familiar, rather quickly - and all converge under the topic of Total System Tuning by Net Outcomes Based, OpenSource Feedback Networks.

ps: Spinney's references to Seymour Melman are more useful than any specific point raised in Cockburn's article below. They're worth calling attention to.

Profits Without Production

After capitalism: from managerialism to workplace democracy

Taken together, these essays are FINALLY approaching well established biology principles. After all, have you ever heard of a body that successfully outsources, say, liver functions to an extra-corporeal entity? It just doesn't pay, since the reduced platform resiliency & agility inevitably overwhelm any supposed short term savings. One message of evolution is to keep RIGOROUSLY SELECTED basics in-house, as the platform which then allows pursuit of the astounding return on further coordination. Make interacting system parts as simple as possible, BUT NO SIMPLER! 

That is always an exercise in system tuning - based on excruciating rounds of systemic trial and error - since we have zero predictive power. How quickly we learn from our trials and correct our errors determines National Security, and survival of our nation. If not, then our nation itself may become an error, in it's current format. It's our option to explore.

In our current situation, EXCESSIVE and/or random outsourcing of key capabilities from a given corporation - or killing the US middle class - both seem analogous to a brain thinking it can keep a body alive without liver, lung, kidney and skeletal muscle function, etc - which are to be "outsourced." It may look good on paper, given naive assumptions, but there's no evolutionary precedent supporting sustainability of that strategy. Quite the opposite, in fact.

We're left wondering why there's no capitalist model for careful investing in democracy & return-on-coordination, instead of just transient, local hoarding. Have "capital" investment models become too shallow & superficial for their own good?

That seems to be the question Marriner Eccles answered "yes" to, when he decided to expand from personal investing to investing in democracy, back in 1933. After all, there are multiple forms of capital, and none can exist in isolation. They are ALWAYS inter-dependent.

Why aren't Democracy Methods and return-on-coordination considered assets worth equal or greater management attention? If tools, tactics, strategies, policies, goals and outcomes are all assets, why don't we pursue more balanced management of all of them simultaneously? If we don't keep tuning everything, why bother tuning some isolated part of a failing system?  Isn't that like fixing the gas tank on a rusting car, when 1000 other parts are failing?

Zero Hedge — Michael Hudson: QE End Game Over for Our Post-Feudalistic Economy; & Mosler on MMT

Getting noticed.

Zero Hedge

Michael Hudson: QE End Game Over for Our Post-Feudalistic Economy; & Mosler on MMT

EB

Lawrence E. Rafferty — Is Freedom of the Press Dead?

Not quite dead yet, but on life-support.

Jonathan Turley
Is Freedom of the Press Dead?
Lawrence E. Rafferty (rafflaw)-Guest Blogger

Yves Smith — How Goldman Made $5 Billion By Manipulating Aluminum Inventories (and Copper is Up Next)

Neoliberal capitalism at its finest. Free to frontrun and manipulate markets.

Naked Capitalism

How Goldman Made $5 Billion By Manipulating Aluminum Inventories (and Copper is Up Next)
Yves Smith

Chris Cook — Post-Modern Fiscal Theory

New financial architecture that is energy-based.

The Financial Times — FT Alphaville
Guest post: Post-Modern Fiscal Theory
Chris Cook
(h/t Frederico Carvalho at FB)

Mike Konczal — Mirowski on the Vacuum and Obscurity of Current Economics

I just finished reading Philip Mirowski’s Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown. It’s fantastic, wonderfully dense, packed with ideas running from Foucault through how game theorists botched the TARP auction design. It provides a stunningly detailed summary of topics economic bloggers would be interested in, ranging from the debate on the Efficient Market Hypothesis after the crisis, the structure of the Mont Pelerin Society, to the way conservatives spread the idea that the GSEs caused the financial crisis. If you like Mirowski’s other works, you'll love this. Mirowski is an economist and a historian, and has a knack for showing the evolving arguments and justifications and contexts for economic ideas and approaches. I'm writing a longer review of it, but I'll be bringing up pieces of it here.

The Next New Deal — Rortybomb
Mirowski on the Vacuum and Obscurity of Current Economics
Mike Konczal

Earth's Gold May Come From Collisions of Dead Stars

Some emerging information on where all the gold came from from Harvard University, story at space.com.

All of the gold on Earth might have come from cosmic crashes between superdense dead stars, new research suggests. The origin of the universe's gold is mysterious... (Ed: tipoff!!!!!)

...a new study posits that the collision of two neutron stars — the tiny, incredibly dense cores of exploded stars — could catalyze the creation of the valuable metal. (Ed:   So smart yet so dumb...)

"We estimate that the amount of gold produced and ejected during the merger of the two neutron stars may be as large as 10 moon masses — quite a lot of bling!" lead author Edo Berger, of the Harvard-Smithsonian Center for Astrophysics (CfA), said in a statement.

"To paraphrase Carl Sagan, we are all star stuff, and our jewelry is colliding-star stuff."

Colliding stars somewhere far off in the universe some time back ultimately fomenting mass amounts of moron-hood in the lovers of this metal here on earth (many in leadership no less!) over the last couple of thousands of years ... simply amazing allegations.

Animation below on how two stars may have collided/fused to form conditions that perhaps could create gold, round and round we go...

Steve Keen — The self-destruction of Economics (3)

This is the third article in a three-part series on the self-destruction of neoclassical economic theory. See part one here and part two here.

Looking at the bright side, Steve ventures that change is perceptibly in the works, coming from central banks and treasuries, the media, and social media.

Steve Keen's Debtwatch
The self-destruction of Economics (3)
Steve Keen

Lars P. Syll — How to understand science

My subsidiary aim is thus to show once-and-for-all why no return to positivism is possible. This of course depends upon my primary aim.For any adequate answer to the critical metaquestion ‘what are the conditions of the plausibility of an account of science ?’ presupposes an account which is capable of thinking of those conditions as special cases. That is to say, to adapt an image of Wittgenstein’s, one can only see the fly in the fly-bottle if one’s perspective is different from that of the fly. And the sting is only removed from a system of thought when the particular conditions under which it makes sense are described. In practice this task is simplified for us by the fact that the conditions under which positivism is plausible as an account of science are largely co-extensive with the conditions under which experience is significant in science. This is of course an important and substantive question which we could say, echoing Kant, no account of science can decline, but positivism cannot ask, because (it will be seen) the idea of insignificant experiences transcends the very bounds of its thought.

Lars P. Syll
How to understand science
quoting Roy Bhaskar

309. "What is your aim in philosophy?-To shew the fly the way out of the fly-bottle." — Ludwig Wittgenstein, Philosophical Investigations 

Bhaskar apparently misunderstands Wittgenstein's fly bottle analogy, or uses it for his own purposes. In Wittgenstein's use the analogy serves to reinforce his fundamental "elucidation" in Philosophical Investigations (PI) that uncritical use of language runs up against the boundaries of language, e.g, by attempting to use logic to describe itself. The fly that continues to bang up against the sides of the bottle, unable to see the mouth as the only path to free itself, represents speculative thought attempting to do some that the logic of the language prevents it from doing — and doing this over and over again obsessive-compulsively.

Wittgenstein regarded his logical investigation of the logic of language as therapy rather than theory (PI 133, 254). The correct approach to speculative questions that are inherently undecidable based on the way they are cast is to show the fly the way out of the bottle through logical elucidation rather than explanation, which is impossible owing to the limitations of language. PI is a logical work rather than a metaphysical or epistemological one.

LW's objective in the later works was showing how "philosophical" problems are pseudo-problems resulting from failure to grasp the logic of the language being used to solve them, rather than being theoretical or empirical issues subject to argumentation.

A reason that questions are undecidable is for lack of criteria. Criteria do not exist independently, as many suppose, but within an information system. The norms and boundaries, testing inclusion and exclusion, for instance, provide the fundamental criteria in that information system and other information systems with the same assumptions.

Overarching information systems dealing with the same data are different possible ways of viewing of the data. These delineate different points of view having the scope of worldviews that determine a way of seeing in the sense of organizing information, evaluating it, and acting in terms of it.

The history of philosophy and speculative thought in general, much of which is also expressed in terms of literature and mythology, can be interpreted as the history of the articulation and rationalizing of different worldviews, often in terms of the conflicts among them. Scientism that materialistic and reductionist is also a POV, for example, and extreme positivism can be viewed in this light.

The question then becomes, Is there an overarching information system based on a universal POV to provide final decision criteria? If there is, what would guarantee it's criteria. Are we faced with either circular reasoning or infinite regress in the search for absolute criteria, as skeptics assert. Isn't this the abyss of nihilism and relativism that risks moral relativism as well? Was Protagoras correct  that man is the measure of all things?

As a grad student in a philosophy program that emphasized the historical approach, I soon came to realize that one had to be able to see from the perspective of the various worldviews being elaborated instead of trying to decide how to rank them, which, of course, is necessarily in terms of one's own preferred worldview.

It was not until I studied Wittgenstein that I comprehended what philosophy was about from the logical vantage, and that lacking absolute criteria no position can be justified as certainly true and others certainly false. That would have to take place in an absolute information system, which would require absolute consciousness.

Absolute consciousness is a possible "information system," and some assert it with respect to the universal ground, which is called by different names in the different religions and wisdom traditions. Some claim that this is realized as human perfection.

Those that reputedly have realized this state have claimed that the absolute ground is the only reality and all relative states are "illusory," "imaginative," "contingent," or "dependent" manifestations of this unchanging reality that appear for a time in finite and changing states of awareness. What one takes to be reality is a resultant of the relationship of subject and object in which the nature and state of subjects is contributive and cannot be entirely isolated or eliminated.

Realization should not, however, be confused with Western philosophical idealism, which is speculative rather than the realization that is reported. Realization is sometimes set forth in terms of a model for understanding, but it is made clear that a model is not the reality, just as the map is not the territory.

This is somewhat analogous to the difference between understanding theoretically that the earth orbits the sun or hearing reports of astronauts and actually going into space oneself. That experience is rare at this stage of scaling up technology, just as are reports of realization are rare historically.

Absolute knowledge is not available to most people, even if they assume it is possible. So for all practical purposes, there is no absolute context to provide publicly available criteria. Humans are part of nature and cannot stand outside it to observe it, any more than they can stand outside themselves to view themselves. As Wittgenstein sought to show, humans cannot stand outside of their language either, language being the tool of thought. We use mirrors in which to see ourselves. So too, elucidation enables us to clarify the logical dynamics of language.

In LW's terms, seeing is seeing as, which he elucidates using a Gestalt figure that can be seen as a duck or rabbit. Speculative argument can be thought of as arguing over whether the figure is a duck or a rabbit. The way out is through realizing that the figure can be seen as both depending on the perspective taken.

We can be aware of multiple perspectives, and even use multiples perspectives within wider perspective, but just as we cannot see without perspective, so too we cannot communicate with ourselves (think) or with others outside the perspective of an information system. In this sense, what we call "reality" is ambiguous, in that different information systems exist that are applicable to the same data.

The difference between the duck-rabbit analogy and POVs is that it is much more difficult to shift between worldviews than perspectives on Gestalt figures, if it is even possible in many cases. For example, Western people often say they find Asians to be inscrutable. Studies have shown that a reason for this is likely that Westerners emphasize the foreground more than the background and elements over relationship, where Asians see in terms of the background, which calls attention to relationship and connectedness. Westerners tend to be more attentive to structure and Asians to function. Consequently, the Western POV is more analytic and the Asian perspective is more synthetic. An interesting contrast is presented by those raised bi-culturally and speak a Western and Asians language natively.

Another distinction in ways of seeing is reflected in William Blake's "The Everlasting Gospel."

"Both read the Bible day and night, But thou read'st black where I read white" (13-14) 

"This life’s five windows of the soul Distorts the Heavens from pole to pole, 

And leads you to believe a lie, 

When you see with, not thro’, the eye 

That [which] was born in a night, to perish in a night, 

When the soul slept in the beams of light" (172-175).

What Blake is asserting is that not only are there different perspectives on the same thing but some are more comprehensive than others. This is the assertion of a criterion that those holding the other point of view reject. It has been the bone of contention between mystics and normative religions, for instance, which Blake is addressing.

Blake is attacking the POV of normative religions that holds the bible is a literal narrative (black letters) albeit "inspired." Blake is contending that mystics see things differently.

Mystics see the white background against which the black letters show up, that is, unity underlying diversity, eternity underlying time, and infinity underlying space. The white background is what Blake calls elsewhere "infinity" as in, "If the doors of perception were cleansed everything would appear to man as it is, infinite." (Marriage of Heaven and Hell), and, "To see a World in a grain of sand/And a Heaven in a wild flower/Hold Infinity in the palm of your hand/And Eternity in an hour.… (Auguries of Innocence). So the "other POV" here is that of the priests and pulpit, which views mysticism as heresy. Blake was a "dangerous" poet in his day.

This insight about POV is especially important in light of the pragmatic use of language, e.g., in persuasion. Different views may have different normative and performative consequences following from assumptions such as norms and criteria that are particular to the structure of the information system, for example. Philosophers often begin with ontology and epistemology, and then an ethical system follows from that, and from the ethical system a social and political system, as well. Most rationales can be quite convincing if one accepts the assumptions, norms and criteria that build the framework.

Everyone operates from an individual perspective, usually culturally and institutionally organized but also influenced by the person's disposition and habit structure. These are naive worldviews that those who hold them take "intuitively" as reality. Philosophers attempt to construct sophisticated worldviews that avoid the issues that riddle naive perspectives. Propagandists attempt to shape worldviews, or to convert people from one to another.

There are obvious comparisons between economic approaches and philosophical approaches, too, based on different POVs. I'll leave that for another time.

Savings rate collapses due to tax hikes. Thanks, Obama!

Take a look at this chart of the personal savings rate. You'll see that it shot higher after that huge dividend payout by corporations in Q4 2012. They were concerned about coming tax hikes and all the fiscal cliff stuff so they decided to "dissave." Those savings then went to people.

But then taxes were raised on Jan 1, 2013 and a big component of those tax increases included the payroll tax hike that President Obama backed.

So what happened?

All of those savings have been wiped out. Where did they go? To the government.

Thanks, Obama!

Exposing the Blurred Lines Between Political Operations, Banking Operations & Currency Operations ... and other Economic Policy "tools"

Commentary by Roger Erickson

This excerpt from CounterPunch seems to say it all.*

"Strange Bedfellows: The Unholy Trinity of Gulf Sheikhdoms, the Fulool, and Egypt’s Secular Opposition

On April 22, 2011, UAE Crown Prince Mohammed Bin Zayed brought his intelligence and security chiefs to meet with King Abdullah of Saudi Arabia and his security officials to discuss the ramifications of the Arab Spring. Bin Zayed warned that unless the GCC countries developed a proactive policy to preempt the wave of popular uprisings sweeping the Arab World at the time, none of the region’s monarchs would survive."

How do YOU spell mindless "C.O.N.T.R.O.L. F.R.A.U.D?"


* Perhaps with the addition of this line: "The intellectual dishonesty of these liberal elites is appalling"

Juan Cole — Detroit's Collapse Reveals the Awful Dystopia that the United States Is Becoming

The big question is whether Detroit’s bankruptcy and likely further decline is a fluke or whether it tells us something about the dystopia that the United States is becoming. It seems to me that the city’s problems are the difficulties of the country as a whole, especially the issues of deindustrialization, robotification, structural unemployment, the rise of the 1% in gated communities, and the racial divide. The mayor has called on families living in the largely depopulated west of the city to come in toward the center, so that they can be taken care of. It struck me as post-apocalyptic. Sometimes the abandoned neighborhoods accidentally catch fire, and 30 buildings will abruptly go up in smoke.

AlterNet
Detroit's Collapse Reveals the Awful Dystopia that the United States Is Becoming
Juan Cole | Informed Comment | Professor of History, University of Michigan

Les Leopold — Shocking Things Wall Street Financiers Say Off the Record About Their Bloated, Corrupt Industry

A new survey shows how brazenly immoral Wall Street is.

Nothing we didn't know, but here is study showing it.

AlterNet
Shocking Things Wall Street Financiers Say Off the Record About Their Bloated, Corrupt Industry
Les Leopold | Director of the Labor Institute

Noah Smith — The hard-money people throw Gene Fama under the bus

I think where one does see evidence of prices higher than they would be otherwise is likely in equities were low borrowing rates decrease the cost of margin (leverage). Cost of margin is hugely influential in speculative markets.

Housing "bubble" reigniting? No way. Prices are still way down from their highs, a historically high percentage of purchases of existing residential RE are foreclosure or underwater related and for cash, with Wall Street and flippers big buyers in expectation of exceptional ROI on resale. Rent/purchase ratio is still reflecting the bursting of the bubble, and new housing is not exactly "on fire." There is not going to be another housing bubble in the US for years and there are still housing bubbles to pop abroad.


But it's good to see the inflationistas in retreat and throwing the EMH under the bus, too, in favor of financial instability. But is the Fed creating financial instability now? No way. The Fed is still fighting the consequences of financial instability and not all that successfully.

Noahpinion
The hard-money people throw Gene Fama under the bus

Noah Smith

Gavin Kennedy — Jag Bhalla Nails the Myth of the Invisible Hand in Economics!

This in exceptional article from Jag Bhalla on the IH metaphor. 
It is the best I have seen, including all of my own.

It nails the nonsense written by generations of economists (and not a few politicians, even some theologians creeping superstitions into economics).

Read it and pass it on, plus its source at Scientific American, (they are due a Damascene experience) to your own contacts - and send it to your economic theory tutors and colleagues.

Adam Smith's Lost Legacy
Jag Bhalla Nails the Myth of the Invisible Hand in Economics!
Gavin Kennedy

File this one for reference.