Saturday, December 31, 2011

Science and religion, version umpteen

Science is the culmination of the Western religious tradition. 

A striking thing about Eastern religions is their humility. They recognize that they are addressing human needs, which many other paths can also address. They are philosophically shy. Buddhism may be right, but if not, then no big deal.. it is just an offered solution to human suffering, and an expression of spiritual values and emotions that can take other forms. Hinduism offers more gods than you can shake a stick at ... take your pick and be happy. Shintoism has no truth at all, other than a conviction that nature, in its spiritual guise of Kami, is worthy of veneration- an almost pure biophilia.

In contrast, Western religion, at least in the monotheistic tradition as it developed out of late Judaism, (with additions of Greek philosophy), is obsessed with truth. We are right, our model of invisible reality is right, or else we will kill you. This appalling combination of spiritual and philosophical malpractice has led to monumental amounts of suffering.

On the other hand, this same obsession with correctness, truth, belief, and ontological competitiveness had one silver lining, which is that it led to Western science. At some point, crypto-theologians like Isaac Newton, Galileo Galilei, and Charles Darwin, who were interested in truth perhaps a little more than tradition and theology, struck out to new intellectual territory, away from received explanations and ontologies, and lo and behold! Truth with a capital "T" emerged, far more powerful and durable than the mouldering not even half-truths of theology.

It is terribly ironic that Western religions, faced with (let us call it Darwinian) competition from its offspring- a truthmaking tradition vastly more effective than their own, are banding together in hopeless ecumenical projects and rear-guard actions like conservative political tantrums and denialism, after having spent centuries evolving a kaleidoscope of divergent and often violently antagonistic confessions, each with its own "truth". I guess this is how it ends ... with a whimper.

Nevertheless, religion as a whole is surely not dead. What is dead are its claims to "philosophy", "knowledge" and "truth". As the Eastern traditions understand, (as do those few Western traditions that confine themselves to spiritual emotions), the human need remains for ministering, for belonging, and above all for deeply felt appreciation of the wonder of existence, particularly human value. All that remains, once all the "truth" has been burned away one way or another, is love.

  • Populism- the empty vessel.
  • More commentary on the South.
  • Crony capitalism thrives when laws are enforced selectively, at the discretion of prosecutors and regulators.
  • Economics quote of the week, From Michael Moran, on declining US influence:
"Longer-term, however, this [Japan and China denominating their mutual trade in local currencies rather than dollars] is a part of the long game played by Beijing. Since American financial “creativity” nearly threw the world into Depression in 2008, China, Russia, Malaysia, South Africa and others have called for the creation of a new global reserve currency not beholden to the dysfunction of the US political scene."

Saturday, December 24, 2011

Brains a-building

Just how does the self-constructing computer self-construct?

The brain is probably the most exciting and complex frontier of biology. How does it work? How does the mind happen in amongst those 100 billion neurons? However, before we get to all those questions, the brain has to develop, all by itself in the fetal and infant body, from the most minimal ingredients and from an extremely spare blueprint comprising some fraction of the 25,000 genes of our genome.

One is tempted to call it a miracle, except that it happens all the time, all over the world, more or less dependably and following, as far as our incomplete knowlege reaches, no script but those of the physical / biological world. A paper came out recently highlighting the varying role of gamma oscillations in brain development, which seemed worth reviewing.

Many people may not be aware that brain development involves vast migrations of cells, from one place to another in the developing brain. "So, most neurons migrate from the site of their last mitotic division, near the ventricle, towards the outer surface of the CNS, where they integrate into specific brain circuits." (From a very nice review of the field.) Doubtless this inefficiency reflects a long evolutionary history, as do numerous other weird anatomical paradoxes of the body. An idea that didn't seem so bad in the infinitesimal brain of a gnat becomes a bizarre marathon of long-distance cell treks in our own. Which is a little ironic, because after they get to their final position, these neurons spend the rest of their lives in one position, with their plasticity confined to forming or deleting synapses among their far-flung axonal and dendritic branches.
"Vertebrates show far more widespread neural migrations than previously realized. In general, these migrations can be seen as DV [dorsal-ventral] or AP [anterior-posterior] migrations, pathways thought to be prominent in lower organisms but not in vertebrates. Indeed, genes discovered in C. elegans and Drosophila provide molecular mechanisms for the DV and AP migrations in higher vertebrates."
Schematic of a few major pathways of cell migration in early brain development. Neurons in the cortex all come from stem areas near the core of the brain. MGE is the medial ganglionic eminence.

Indeed, inhibitory interneurons and excitatory neurons are distinct cell classes, and orginate from different stem locations and migrate by separate pathways, but migrate into close proximity to make up the final brain network.

Later on during development, the micro-architecture of the cortical layer (the side-by-side columns of cells with related functions, occurring all over the sheet-like cortex) refines itself through feedback from connected areas. For instance, the columnar arrangement of our visual cortex maps strikingly to our visual fields and other salient properties of vision- a mapping which forms soon after the eyes first open (the "critical period").

The current researchers looked at whisker sensing areas in the rat brain, which organize themselves similarly as the visual system, into columns of discrete function. "In the rodent 'barrel' cortex, each cortical barrel column receives a specific input, conveyed via the thalamus, from a corresponding whisker." In the critical period for this region, (days 2-7 after birth), this area doesn't communicate much with other areas of the brain, but only with its whisker inputs and perhaps with local neighbors.

These columns are further divisible vertically into layers that extend over most of the cortex. The cells of these layers are somewhat distinct at each level, and closely connected to each other up and down the column, while inputs and outputs to other columns and other brain regions are typically differentiated by layer. Which is to say that inputs to the column from one area of the brain may typically come to a subset of layers, while outputs to some other brain region may emerge from another subset.

The key topic is the "early gamma oscillation", or EGO. Gamma waves are famous as the highest-frequency brain waves, which are the leading candidate for "binding" mental contents over long distances across the mature brain. The interesting finding here is that, unexpectedly, in early development, gamma oscillations happen but seem to have a quite different and simpler function- that of binding a developing neural zone to its sensory inputs, and thus helping it self-organize.

Layers:SG- supragranular, G- granular, IG- infragranular, Pia- the pia matter, or innermost membrane surrounding the brain. LFP- localized field potential, MUA- multiunit activity (individual spikes), CSD- current-source density (overall conductance/resistance).
In this figure, a needle electrode is shown as it is stuck vertically into one column of a rat brain, with cell bodies stained in green and electrode points shown as dots along the electrode depth. The graph shows the associated recording, with the rat's whisker touched by the experimenter at time 0. The 50 Hz gamma oscillation is obvious over several layers. The researchers claim that these gamma oscillations had been missed previously because typical surface recordings wouldn't catch them.

What are they doing? Normal gamma oscillations coordinate large regions of brain activity, but these have only localized coherence- with the whisker input. The next figures compare gamma intensity from different stimuli and at different ages:

PW means principle whisker (the one directly innervating the probed column), while AW means adjacent whisker, which innervates nearby columns. LFP is "local field potential", i.e. the Y-axis, while GR is granular layer, the middle one shown above, and SG means supra-granular layer, the one over it, which the researchers find ties up to nearby columns during development. The next figure shows graphic summaries of the same data by electrode depth, at postnatal day 5 (P5) and day 33 (P33). The sequence is clear- that low-level, exclusively local and whisker input-driven gamma oscillations at early times are followed by more powerful oscillations located in higher cortical layers and driven not only by the innervating whisker, but by nearby ones to a high degree. One can truly see the knitting together of neural networks over time.

The experimenters also probed the thalamus, which conducts the signals from the whiskers to the cortex, showing that the signal timing is appropriate. The gamma peaks in the thalamus ("VPM") lead those in the developing cortex by about nine milliseconds.

Indeed, if they remove brains entirely and probe slices that retain the thalamus-cortical connection (shown below, H), they can simulate whisker stimulation by electrical stimulation on the thalamic area (VPM) which creates artificial early gamma oscillations (aEGO's) in the cortical region. If these are carefully timed to sync with endogenous cortical neural firing, they strengthen their neural connections, which can be assayed by downstream currents out of the cortical layer (excitatory postsynaptic currents; EPSCs- the red vs the black graphs below). By this method of artificial "learning", evoked EPSCs are significantly stronger after a bout of thirty induced aEGOs than they were before, using low levels of aEGO stimulation to test with.

OK- that was seriously technical. But the lesson is that by enough poking, prodding, and taking things apart, we are beginning, in baby steps, to understand that most intricate and delicate mechanism- the wetware of our minds.

"What is to be done? That demands a huge agenda. It must cover employment, education, corporate governance and financial reform and, however difficult, also elements of redistribution. It will be unavoidably divisive. So be it. This debate cannot be avoided if western democracies are to stay legitimate in the eyes of their peoples. That may not be true in the US. It is surely true in the UK. Warren Buffett has argued that 'there’s been class warfare going on for the last 20 years and my class has won.' The remark has not made him popular with his peers. But he was surely right."

Saturday, December 17, 2011

Burning bright

The earth is still warming. We are still dithering.

A recent report on climate change had an arresting graphic, showing where New York State is migrating to, in climate terms:

NY starts in its customary position in the mid-atlantic in the mid-20th century, and already now occupies roughly the position that Pennsylvania used to. Easily within a hundred years, and quite possibly sooner, NY is going to land where the Carolinas used to be, climatically speaking.

Climate change is often spoken of drily, in terms of degress of average temperature change and the like. But to anyone who knows the climates of these two areas, the differences are stark. Unbearable summers, no-snow winters, and a completely different biome, all within the life span of a single tree. A recent Scientific American article pointed out that another extreme warming episode happened in the early Eocene. Geologists are astonished at its speed, but they are thinking in geological time. It was nothing compared to the speed with which we are changing the climate now, 150 times faster.

All this means that not only are we as humans going to be mighty uncomfortable, but animals and especially plants are not going to make the transtion- there just isn't the time. Biological diversity will continue to plummet via extinction, adding this global climate catastrophe to the localized habitat destruction, ocean fish-killing free-for-all, tropical forest burning, megafauna killing, and so many other catastrophes we have already authored. Just what kind of a world do we want to leave to future generations?

I'll close with another graphic, of CO2 emissions from power plants in the US. The task should be clear. The economic equivalent of World War 2 that we are waiting for to energize our economy is staring us in the face.

"Imagine you had a headache and some economist tells you that you can cure the headache by bashing your head against a wall. So you duly bash your head against the nearest brick wall and not only does it hurt (perhaps drawing blood depending on the severity of the blow) but you note the headache is now worse. The economist then concludes you didn’t bash your head hard enough and instructs you to stick to the “rule” and give it another try – only this time go harder."
"As I have noted previously, other professions are held legally liable for their professional behaviour. If they consistently make large errors then they will be deemed unfit to practise.
The IMF economists are immune from these standards. They consistently make bold predictions and impose harsh austerity programs based on those projections. The predictions are consistently shown to be wrong when the data arrives."

Saturday, December 10, 2011

Definitely not a dick-tionary

Mary Daly's feminist Wickedary of the English language.

Is the job of feminism done? More women than men are now in college, and the employment prospects of men seem to have taken a particularly significant dive in the current economic crisis. Yet the upper reaches of our society continue to be addled by testosterone. Presidential contenders compete over how shamelessly they can sweep their personal misogyny under the rug. The economic downturn can be largely chalked up to an army of besuited males gambling, cheating, "innovating", and cronying their way into financial armeggadon, and thence into the pockets of the government for bailouts and bonuses.

Women were among the most significant and prophetic obstacles to this headlong descent into what Mary Daly might term our financial phalloclasm- such key officials as Sheila Bair, Brooksley Born, and Elizabeth Warren. The Occupy Wall Street movement might usefully consider a name change to Castrate Wall Street.

bored, Chairman of the: any bore-ocratically appointed bore who occupies a chair- a position which enables him to bore others all the more.

Dragon: Primordial Female Foe of patriarchy whom the gods, heros, and saints of snooldom attempt to slay over and over again; Metamysterious Monster, Original Knower and Guardian of the Powers of Life.

Her-etical: Weird Beyond Belief.

Mary Daly passed away almost two years ago, and the brief mentions of her life in the media piqued my interest enough to read one of her works- "Websters' First New Intergalactic Wickedary of the English Language, Conjured in Cahoots with Jane Caputi". A "Webster" being "A Weaver of Words and Word-Webs". Daly was a poet and wordsmith, a philosopher and theologian, curiously educated and employed throughout her life by Catholic institutions, at least until her refusal to admit men to her advanced women's studies course at Boston University finally brought a discrimination complaint and retirement in 1999. She was a creature of the liberal 60's and Vatican II, when the church's windows were opened and fresh breezes such as Jungianism and Feminism found a brief audience.

Papal Bull: the most sacred form of bull. Wholly, Holey, Holy baloney.

Incarnation, The: supremely sublimated male sexual fantasy promulgated as sublime christian dogma; mythic super-rape of the Virgin Mother, who represents all matter; symbolic legitimation of the rape of all women and all matter. See Sadospiritual Syndrome.

omniabscence: essential attribute of the wholly ghostly divine father, who is acclaimed by the the-ological reversers as "omnipresent"; attribute of the dummy deity who is never there, no all there, and therefore does not and can not care.

Daly was also a great humorist. Her Wickedary is a hilariously ascerbic re-valuation of all values, setting women as "Biophilic", "Shrewd/Shrewish", and many other positive, inverted, new-age-y attributes, while condeming the "snoolish", "bore-ing" daddy-ocracy with its daddygods and Big Lies that destroy not only women in a mire of silence and oppression, but the entire biosphere, as becomes clearer by the day.

Biophilia: the Original Lust for Life that is at the core of all Elemental E-motion; Pure Lust, which is the Nemesis of patriarchy, the Necrophilic state. Compare necrophilia N.B.: Biophilia is not in ordinary dictionaries, though the word necrophilia is.

Broom: Hag-ridden vehicle propelled by Rage, Transporting Dreadful/Dreadless Women out of the State of Bondage.

Her favorite symbol was the Labrys- the double headed axe of antiquity with which she notionally split phallocentric words into new and better forms, like her famous construction Gyn/Ecology, and which also carried feminist and lesbian overtones.

Naming: Original summoning of words for the Self, the world, and ultimate reality; liberation by Wicked Women of words from confinement in the sentences of the fathers; Truth-telling: the only adequate antidote for phallocracy's Biggest Lies; exorcism of patriarchal labels by invoking Other reality and by conjuring the Spirits of women and of all Wild natures; Re-calling the Race of Radiant Words.

patriarchy 1: society manufactured and controlled by males: Fatherland; society in which every legitmated instution is entirely in the hands of males and a few selected henchwomen; society characterlized by oppression, repression, depression, narcissism, cruelty, racism, classism, ageism, objectification, sadomasochism, necrophilia; joyless society, ruled by Godfather, Son, and Company; society fixated on proliferation, propagation, procreation, and bend on the destruction of all Life   2: the prevailing religion of the entire planet, whose essential message is necrophilia.

foolosophy: fooldom parading as wisdom. See academentia.

phallosophy: inflated foolosophy: "wisdom" loaded with seminal ideas and disseminated by means of thrusting arguments.

It isn't only in its word-smithing and attitude that the Wickedary excells, however, but also in Daly's introductory essays, which are prose poems of revolt by the Revolting Hags of Wildness. One might note in passing that she puts all the male attributes in lower case, while the transvalued female terms are excited into capitalized status. A sample:

"Wielding our Witches' Hammer, Websters Dis-close the Glamour of words, their magical/musical interplay as they Sound and Resound together in complex combinations. We Dis-cover connections, not only among words, but among the realities they Name."

"Daredevil dolphins, declaring and end to jumping through hoops, take Muses for Be-Musing rides. Mischievious monkeys mimic men of science. Denouncing the latter as "missing links to nothing," whose sadistic kinks require final solution, the foment revolution. Encouraged by guinea pigs, rabbits, and mice, they "deconstruct" cages, mazes, treadmills, and other shocking tools employed by evil "experts"/fools."

"Other Spirited animals also Denounce. The formerly baited and "dancing" bears, for example, dance rings around rippers who have used them for atrocious a-Musement. Viragos dance with them, proclaiming the end of such tyranny. Sagacious Seals, Denouncing their "training" in prestigious aquariums- the degrading institutions where they learned to bounce balls in return for a fish- Bark Out Loud their Seals of Disapproval and Distain. Bitches Bark with them, Outshouting the users of animals, women, and words."

"Spinsters Spinning Widdershins- turning about-face- feel/find an Other Sense of Time. We begin by asking clock-whys and then move on to counter these clock-whys with Counterclock Whys- Questions that whirl the Questioners beyond the boundaries of Boredom, in to the flow of Tidal Time/Elemental Time. This is Wild Time, beyond the clocking/clacking of clonedom. It is the Time of Wicked Inspiration / Genius, which cannot be grasped by the tidily man-dated world.

The man-dated world is clockocracy- the society that is dead set by the clocks and calendars of fathered time. ..."

One might think all this overkill, and Daly certainly took things to extremes. She was quite enamoured of the society of bees, whose males are barely tolerated and cast off with their one and only mating flight. For humans too, she proposed limiting males to 10% of the population. I take it all quite tongue in cheek, recognizing that when it comes to religion and values, literal belief and systemic seriousness are the most dangerous falsehoods. Daly knew very well that the Dolphins were not taking the Biophilic Revolting Hags for rides in the surf, but used this mythic poetry to open her listener's imagination to a trans-value system, while indicting and getting a rise out of her antagonists.

"... Brainstorming, Be-Spelling women Distemper in both of these senses, throwing bore-ocracy out of its odious order and smoothly working adjustment by Raising Hailstorms and Tempests and Otherwise Exercising Disturbing Elemental Powers.
To Be-Spellers overthrowing dronedom/clonedom it is clear that such disturbance/derangement is absolutely necessary. The Spelling of Soothsayers throws the old order out of order, Dis-covering New/Archaic Orders. In this Stormy atmosphere other women begin to Realize their own Ecstatic E-motional Disorder. Finding her Rage and Hope, a woman observes the melting away of plastic passions that had possessed her, blocking the flow of Elemental Communicating Powers. The old guilt, anxiety, depression, bitterness, resentment, frustration, boredom, resignation and- worst of all- feminine full-fillment begin to disappear. Seeing these as pseudopassions injected into her soul by the fathers of fixocracy, she flushes them away. As she exorcises these plastic parasites she begins Be-Spelling. She finds it especially efficacious to begin Spelling/Be-Spelling Out Loud."

Looking at societies like contemporary Afghanistan and Pakistan, where an unoppressed woman can hardly be observed without being beaten or raped, and where the incessent quest for "honor" among males has made their societies a living hell for everyone, her proposals might, however, not be so far-fetched.

Courage to Sin [sin derived fr. Indo-European root es- to be]: the Courage to commit Original Acts of participation in Be-ing; the Courage to be Elemental through and beyond the horrors of Obscene society; the Courage to be intellectual in the most direct and daring way, claiming and trusting the deep correspondence between the structures/processes of one's own mind and the structures/processes of reality; the Courage to trust and Act on one's own deepest intuitions.

Saturday, December 3, 2011

Do wages cause inflation, or does money?

Oil, the Fed, and Stagflation ...  or: 'twas Arthur Burns that done it!

There are two basic observations that Milton Friedman made on inflation, and which still today consitute the economic mainstream. First is that inflation is a monetary phenomenon- if you have too much money, prices will rise even while the real economy stays the same size as before. He also authored the NAIRU concept- (non-accelerating inflation rate of unemployment)- i.e. the lowest unemployment rate consistent with stable prices.

To a naive observer, these are contradictory ideas. If high employment can cause inflation, then it isn't a montary phenomenon after all. But if monetary causes are paramount, then the NAIRU is merely a symptom rather than a cause, and all the supply-side, trickle-down anti-worker economics of the last few decades have been a cruel as well as wasted effort.

Perhaps there is more going on, and that is what this post is about. Going by what we have learned in MMT economics, the main money-creating mechanism is not the government, (i.e. via net deficit spending, however important that is from time to time), but banks, which create money every time they make a loan, and extinguish it when the loan is paid off (or written off). The bank mechanism is what central banks control via their adjustment of short term (and long-term) interest rates. Only they don't always do such a great job, and this channel of money creation is prone to much more volatility than the government's channel, which in turn necessitates the anticyclical fiscal / monetary policies of Keynesian economics.

How could persistent inflation and high wage demands affect the bank mechanism of money creation? Another tenet of MMT economics is that most lending is demand-driven, in that banks generally lend to any worthy borrower who comes in the door. Every loan is an asset to the bank, and its only total / legal constraint is capital, which can also be raised if its past bets have been sound, perhaps in the interests of growth and the dream of becoming "too big to fail".

One theory would be that inflation is consistently under-appreciated when it is gathering steam. Thus real interest rates tend to not catch up to inflation as fast as they should, creating an incentive for borrowers to ask for loans. In effect, real interest rates in an environment of rising inflation tend to be lower than they should be.

Thus when competitive pressures press on a company, it may be more willing to make up the difference with a loan, and justify that loan with recent growth, even if that growth was only nominal rather than real. The whole environment may become skewed towards monetary growth, in effect.

On the whole, this mechanism seems relevant, but not very strong, given a central bank that is paying attention to real interest rates. It also does not provide a direct channel for wage demands to fuel inflation, since companies are faced with competing demands for money all the time. Being in a hot labor market might cause firms to alter the share of revenue going to wages, but can't automatically give them the power to raise prices.

If the entire labor market were hot, all companies might be faced with the same increasing labor costs, allowing them to raise prices in unison without a competitive penalty. And then perhaps the workers are realizing commensurate wage gains across the board, allowing them to pay the increased prices. It all makes sense, except ... where is all the extra money supposed to come from? That part is very hard to see, unless the banking system funds the general expansion by excess lending, which the central bank is supposed to explicitly monitor and prevent. Price inflation has to come from general monetary expansion.

Other effects may come into play at the margins. Perhaps a hot labor market may cause workers to spend more of their money and save less, increasing monetary velocity, and thus inflation. Perhaps a general "boom" atmosphere causes lending standards to decline, causing monetary inflation. Low unemployment might thus correlate with inflation without being particularly causal. Nor would a particular level of unemployment be strongly associated with a particular level of inflation, which is the lack of relationship that is empirically observed.

Incidentally, a resource shock like higher oil prices is also unlikely to cause inflation directly, since any money spent on oil is withdrawn from other uses (though perhaps from savings, which would be temporarily inflationary). Again, unless monetary expansion occurs, an oil shock can't cause inflation, and indeed if vast amounts of dollars are exported to overseas oil producers, such a shock should cause net deflation instead.

In this scenario, it is possible that an oil shock leads to economic recession, and thus to monetary loosening, which does indeed cause inflation when coupled with declining real economic capacity due to the resource constraint. But loosening during such a recession might be a misuse of monetary policy, as done in the 70's (a paper on the era has details). Incidentally, inflation can arise from dramatic declines in economic capacity, as in Zimbabwe, where the real economy collapsed, without the monetary system contracting in unison- another form of monetary error, though in fairness, this is a very difficult adjustment to make.

The point I am getting at is that inflation does not seem to be caused by high or low employment, but rather by errors of the monetary and/or fiscal policy in trying to control a somewhat chaotic and time-lagged system. Labor demands are only that- demands. If their counterparts lack the money to meet those demands, inflation can't happen.

The Phillips curve, which eventually gave rise to the NAIRU concept, (here is a brief review), showed a general correlation between employment and inflation- an empirical finding that remains true. But as we all know, correlation doesn't necessarily mean causation, and I think that is the case here.

Friedman's ultimate argument was that monetary expansion can't be effective as a continual policy to reduce unemployment, which also remains valid, I think. (Not that this was central to Keyensian policy.) Monetary effects on employment are temporary, though at times like the present such temporary measures can have very long-lasting consequences, to counteract effects of monetary and real contraction. I have to admit that my many statements over the last couple of years about the Fed's general role ensuring full employment in normal times are probably not accurate or wise. In normal times, it should regulate inflation, (and regulate banks properly!), and leave employment policy to other branches. It would also be nice if it gave positive and useful advice on fiscal matters, though its track record there is abysmal- the less said the better!

Yet on the other hand, the deeper point I am getting at is that the war on labor carried out in so many ways over the last few decades, by increased low-wage immigration, by NAFTA, by "supply-side" economics, by union-bashing, and by ending the overall progressivity of the tax system ... was never about inflation, though it was often couched in those terms. Efficiency and productivity were other rationales, though these also applied curiously only to the lower classes.

It was about something quite different. It was about about squeezing more from lower-paid workers while finding ways to pay executives more. It was about redistributing income from the lower classes upward to the rich, who became lost in a self-aggrandizing narrative which Milton Friedman did so much to popularize. It was about reversing the pro-labor policies of the New Deal and the anti-poverty policies of the Great Society, frequently under the cover of fighting inflation. It was a royal restoration of Darwinian, winner-take all economics over Keynesian economics.

It is surely a human weakness to look up to the rich and powerful, assuming that their good fortune arises from good works, divine favor, or at least the favor of natural selection. But mostly, quite unnatural selection is at work, whether through government corruption, financial chicanery, or simple inheritance. The adulation of the rich is part of the social and media complex that has made the Occupy movement so necessary, yet also so tenuous.

What has the Darwinian restoration gotten us? It has eroded the middle class, sapped overall economic growth, promoted gambling by the investor class in place of productive investment, mired the poor in debt peonage, and corrupted our social and political systems into the bargain. Not a pretty sight, in my estimation.

And while right-ists continue to look for inflation under every bed, it is dead. It is high time to put this fight against inflation on the back burner and attend to the suffering that the last decades have wrought. One step would be to create a jobs-for-everyone policy, offering modest-paying public service work to everyone who wants work. The analysis above indicates that despite in essence outlawing unemployment, such a policy would have little effect on inflation. Yet it would have a huge positive effect on our culture and future prospects, in concert with suitably large investments in infrastructure and education.

"The most terrifying thing to emerge from the Bank of England’s reports is that the Bank embarked on its experiment without any macro-economic model specifying how money was to be transmitted to income. In other words, QE was launched on a wing and prayer."
  • Economic quote of the week, from Dean Baker, via Bill Mitchell:
"The European Central Bank (ECB) has been working hard to convince the world that it is not competent to act as a central bank." (Salon provides some background.)
... and Bill continues ...
"Further, I know it is twee for so-called progressives to keep telling us that the solution to the crisis for governments to “make the rich pay” but the reality is that might sound nice and be a useful policy on equity grounds but it is not the solution to the crisis.
The crisis is being extended because there is not enough aggregate demand to drive growth and income. Taking some purchasing power off the rich will probably worsen that situation although it would not be as damaging as taking cash off the lower income groups.
These distributional matters (whether the rich pay or not) should be separated from the main game – which isn’t to say I don’t support higher tax rates for the rich and lower tax rates for the poor."