Europe Engineers Another Versailles, in Greece

One person's take on the Greek economic crisis and the fallout of the Euro.

What happened in Greece? The narratives are shockingly divergent. On the one hand, Germans view Greece as a spendthrift poor relation who borrowed up the gills and now wants sympathy and even more money to throw down the drain. Nein!

On the other hand, Greeks are suffering depression conditions even worse than our Great Depression, and surrendered utterly in their most recent deal with the Trioka, (aka Germany), who are behaving like the Nazis of yore in destroying Greek independence and sending them into incredible poverty. The deal dictates that the Greek government run substantial budget surpluses as far as the eye can see, despite presiding over an economy in free-fall. It is reminiscent of the Versailles treaty that likewise tried to wring blood from the stone of then-Germany for its culpability in World War I.

Who is at fault and what is to be done? Greece is obviously heavily at fault, both for borrowing when lenders of Euros were willing to lend, and for not running an economy that maintains a rough trade balance with the rest of the Europe and the world, necessitating that borrowing (and for running a government that can not even collect taxes competently). But who were the lenders? As in our own sub-prime crisis, are the lenders who gave money so irresponsibly to the most corrupt and dysfunctional government of Europe, in full knowledge of its poor trade position, not a little to blame? Or mostly?

That is the first issue, that debtors should not be always and entirely to blame when debts go bad. Just ask the Donald. He has no qualms about redemption through the magic of bankruptcy, and Greece likewise should have few compunctions, morally, about reneging on its debts. But then it shouldn't expect any more bailouts or lending, of course. That would be the deal.

Obviously, having just been through a confidence-shattering banking crisis, the Germans and others are not excited about leaving their banks holding the bag for their bad loans to Greece. So they are extracting all the blood they can. And their bargaining position is excellent, because Greece's trump card, its willingness to leave the Euro at the same time it defaults on its Euro debts, seems to be unplayable since 80% of the population favors, even after all this misery, staying in the Euro.

Leaving the Euro would have the beneficial aspects of 1) allowing Euro debts to be more easily reneged, since Greece would henceforth have its own currency and not rely on Euro institutions; 2) allowing currency devaluation that is desperately needed to bring Greece's trade imbalance under control by automatically making imports expensive and exports cheap; 3) allowing the government to get out of its troika-imposed austerity and run budget deficits as any normal & sovereign government in its position (with trade deficits and depression conditions) would do. It is worth noting that the Euro zone is not a democratic entity. There is no president of the Euro, or popularly elected legislature, etc. It is a bureaucratic monster with little accountability, specifically constructed along the lines of a central bank to be independent of political control, except for its masters, who are the leaders and technocrats of the European economic powers, aka Germany. Which leaves little say for countries like Greece.

In the Euro system, if it were run properly, Greece would have no more currency or budget flexibility than the State of Alabama has. Alabama doesn't print its own money, or budget with ongoing fiscal deficits, or benefit from natural adjustments of a floating currency in its trade. It resembles a household that uses money originating from outside and must balance its books. Sure, there may be debt in the form of long-term bonds, but there is no scope for the many uses of a truly soverign currency. At the same time, the welfare state of Greece would be willingly under-written by the Euro zone in toto, as would some attempts at fostering economic growth, instead of making Greece sell off its public assets and endure decades of austerity.

It is thus remarkable that the Greek people are so attached to the Euro, and to being part of the European political project in general. They see themselves, indeed, as the historical and cultural heart of Europe ... where it all began. I think there are some class aspects to this position as well. The upper crust in Greece are much more tied into the European system and benefit far more from inexpensive imports than the lower classes. They would naturally regard leaving the Euro as unthinkable, and lead the political system in that direction. Also, they have so far been able to game that system so well, with all the loans and corruption, that it might seem as though the party might not have to end, even at this late date.

In any case, in or out of the Euro, Greece has to start balancing its external trade. In the absence of currency devaluation, which provides the cleanest and most progressive way to accomplish this, that takes the form of paying people fewer euros, enduring lengthy recession, and hoping that everyone with any prospects doesn't flee to other countries before a new balance between internal average pay (lower than that of their dominant trading partner Germany) and tradable productivity is found.

The role of the government in all this is something of a side-show. It ran all kinds of deficits over the Euro period, and incurred many debts. But its future budget surplus and extra taxation can not do the heavy lifting of bringing the total trade balance back on course. And what if different regions of Europe have persistently different trade balances? Not every country can be better than average. What then? In the US, different states have clearly different trade balances, and while Federal spending makes up some of the difference and supplies a safety net, in the end some states become poorer than others and send their labor out to more productive ones. The rust belt rusted out, and Social Security and unemployment insurance was not enough to save it. Property values there may be a fraction of what they are on the coasts, but the prices of other goods are typically set nationally, making these regions suffer on a permanent basis. This is one price of currency union, that laggard regions that have trade deficits with productive regions have no means of trade/currency adjustment, and can become hollowed out ruins.

That fate awaits Greece and the other poor relations of the Euro zone, unless more robust and regular means of "adjustment" are found. So far, profligate lending filled that role, until the party ended. But the need for such transfers did not end, indeed is especially acute now, with unemployment at unimaginable levels in Greece and Spain. Greece's debt should in all decency be a dead letter in its entirety, for example. Germany can't keep selling its wares to the other Euro countries, not buy enough in return, and expect the system to sail on without someone coming knocking.

• Stiglitz on Greece.
• New Yorker on Greece.
• Who caused the crazy? Too much religion, or too little?
• The evolution of hate-words.
• Coal, at least, is slowly dying in the US.
• The Taliban is still about.
• This week in the WSJ: Martin Feldstein warns of new depression due to Fed pumping of stock prices, turns around and advocates raising the interest rate.
• The traffic is soul-crushing.

Free Banking: How Good, and How Free?

A fixation of libertarians is banking without any government control, or free banking. Did it work? Can it work?

What if we could get the government off our necks and out of our pockets, reverting to a more blissful state of nature when human relations were voluntary and markets rendered, by their invisible hand, everything we need? That is the dream of libertarians, especially monetary libertarians, who yearn to go back to gold and back to a time when anyone could issue any kind of money they pleased.

It is difficult to take all this seriously, but let's try. We would have to put aside the myriad problems of the gold standard. The gold (and silver) standard did one thing very well in its day, which was to keep money similarly valued over long periods of time. A ducat was worth something reasonably similar for hundreds of years, as was a Pound Sterling, i.e. a pound of silver. The intrinsic scarcity of these metals, and the nature of mining that added to stocks in very rough proportion to human economic activity (at least when economic growth was very slow), made them natural stores of value, virtually universal among pre-industrial human societies.

Free banking has actually happened, apparently most purely in Scotland in the 1700's and 1800's, till the evil British put the Bank of England in charge of monetary policy for good, in 1844. In this system, banks competed by issuing notes on their stocks of gold. These notes constituted their funding for loans, and acted as currency. This was truly a fractional reserve system, where on a certain stock of gold, they could issue several times the value in notes, and expect that redemptions back to gold would be rare enough that they would not, in normal circumstances, face a "run" on those reserves. Their motivation, therefore, was to have their notes be as trusted as possible, and thus as long in circulation as possible, so that loans could be made in large amounts. This style of banking goes back a long way, back to the Venetians and probably beyond. The early US in the 1800's had a similar system, though free banking enthusiasts look askance because it was heavily regulated (and corrupted!) by the states, not to mention that it ended up being extremely unstable, with numerous runs, collapses, and depressions.

Free banking is not really free, in my estimation, but highly restricted in several respects. First is the gold standard. The only commonly and universally recognized form of money at the time was precious metal, for which the notes served merely as an IOU. But were everyone to wish to convert their notes to gold for safe-keeping in their mattresses, (say, if war beckoned), the system would fall apart instantly. So it was a sort of ponzi scheme from the start, as is, in fairness, most banking. The gold standard meant that many banks could operate simultaneously, recognize each other's notes, and clear each other's payments, (and have the motivation to do so), because ultimately, they knew they could settle in gold if the need arose. Crises arise, now as then, when one institution loses this trust, faces lack of credit from intermediaries and / or customers, and spirals immediately into liquidation.

Under what I would take as true libertarian principles, really free banking would be something quite different, where a bank could issue money based on any form of value at all, and compete in the marketplace of customer trust. Its reserves could be land, or timber, cows, or cockle shells. Perhaps this would reduce in practice to the old gold standard, or perhaps to the money of some well-run state far away, as many dollarized economies practice it today(!) In any case, the use of gold/silver would not be forced on the banks and their customers, but be their own choice of funding / backing.

The second restriction was the nature of the bank corporation, which had unlimited liability. Thus, unlike our own corporations, which can escape any adversity through bankruptcy, the owners (partners) of classical banks were on the hook if there was a run or over-lending and their gold stores ran out. The Scottish system had one spectacular failure, of the Ayrs Bank, which reportedly ended up with virtually no losses to the note holders because the partners were cleaned out. Obviously, this rested on a legal system that was willing to hold the partners to literal account, something that seems to be oddly lacking in the current business climate. Likewise, the legal system had to underpin the gold standard, recognizing its central role of value in economic life.

Additionally, arch-libertarian Murray Rothbard brought out a rather tart paper about how unfree the Scottish system actually was, since its banks evaded their gold redemption requirements with great determination, and relied instead on Bank of England notes for most redemptions, treating it as their central bank. It is actually an excellent article about banking in general, graced with terror over proto-Keynesian "rank inflationists".

"Professor Sydney Checkland points out that Scottish banks expanded and contracted credit in a lengthy series of boom-bust cycles, in particular in the years surrounding the crises of the 1760s, 1772, 1778, 1793, 1797, 1802-03, 1809-10, 1810-11, 1818-19, 1825-26, 1836-1837, 1839, and 1845—47. Apparently, the Scottish banks escaped none of the destabilizing, cycle-generating behavior of their English cousins."

"The Scottish system was one of continuous partial suspension of specie payments. No one really expected to be able to enter a Scots bank . . . with a large holding of notes and receive the equivalent immediately in gold or silver. They expected, rather, an argument, or even a rebuff. At best they would get a little specie and perhaps bills on London. If they made serious trouble, the matter would be noted and they would find the obtaining of credit more difficult in the future."

"Bailey overlooked the fundamental Ricardian truth that there is never any social value in increasing the supply of money, as well as the insight that bank credit entails a fraudulent issue of warehouse receipts to nonexistent goods."

Anyhow, given these important restrictions and traditions, the Scottish system was quite competitive and reasonably robust for its day, with a few large and many small banks. The one thing it didn't do was serve the state, which by time was becoming used, in England, to running the monetary system for purposes of both inflation control and its own funding, especially in war. As Rothbard notes, the Scottish system had led to credit gyrations and substantial inflation, issuing roughly fifty times as many notes as the underlying gold/silver. This allowed economic growth, but also was completely unsustainable in terms of a true gold standard.

In the end, we return to the questions that were current in the 1800's as modern banking began to take shape. Should fractional banking be allowed in any form, or should money be 100% backed by the precious metals of tradition? If fractional banking be allowed, how should the creation of money be controlled to prevent the incessant cycles of boom and bust which appeared inherent to the free system whereby banks printed paper money in response to business demand for credit? If fractional banking be not allowed, how could one accommodate economic growth when the supply of money failed to grow- that is, when one's mines (or Imperial thievery) failed to crank out as much new metal as proportionately required for growth in population and technology? Would everyone end up being "crucified on a cross of gold"?

The answer, obviously, is that neither a 100% gold standard, nor free, unregulated banking, are optimal. Given the world's current wealth of about $250 trillion, an ounce of gold would have to be worth $50,000 to back wealth at 100%, which seems not just unrealistic, but obscene and a threat to our natural environment, given the mining this price would entail. Historically, as economic growth far outstripped metal mining, central banks took over macroeconomic policy with regard to money creation, inflation & interest rate control, bank regulation, reserve requirements, and many other practices. Central banks have made their share of grievous errors, particularly in the Great Depression. But some lessons have been learned, and our latest brush with the pitfalls of ponzi banking was significantly less bad than the Great Depression.

Nor is a stable store of value over long periods of time the only point of having a monetary system. Rather, it should exist to increase prosperity and human well-being. Gold is still available, after all, to all and sundry who wish for that imperishable store of value. For the rest, modest and controlled inflation using an elastic supply of money, as a spur to productive investment and labor over pure saving / mattress-stuffing, may be a more desirable feature of an optimal monetary system, combined with active state management to maintain value over booms and busts in the business cycle.

• Stiglitz on banking and credit catastrophes. A failure of mainstream economics.
• Bill Mitchell on basic Keynes.
• "Faith" is not faith.
• "Free" enterprise is anything but. There is always a network of consequences.
• The 1% vs Social Security.
• Modi calls Pakistan a spade. There is no "good" Taliban.
• All our money is belong to your national debt. Paul Krugman schools Rand Paul.
• The atheists are OK.

Whatever Happened to Bangladesh?

Saudi funding sows a whirlwind of extremist Islam.

Bangladesh had a difficult birth, with war and something close to genocide. The irony is that the killers and rapists were Islamic co-religionists from West Pakistan, now called Pakistan. Bangladesh was saved by the Hindus of India, who drove Pakistan out of a country about which it cared evidently less than nothing. Yet Islam and Islamism survived, and seems to have come to the fore vs the other main cultural thread, which is Bengali culture.

Bangladesh has been in the news recently for the murders of four outspoken atheists, particularly the brutality and impunity with which they were carried out. Why? Why has the virus of Islamism found a home so far from the core Arab areas whose extremism we take for granted? Money seems to be the short answer. Money that funds innumerable mosques, madrassas, and a variety of terrorist groups. The private madrassa system in Bangladesh has grown enormously over the recent decades, now rivalling the state educational system, which has been forced to offer its own madrassas of a hybrid nature that combine modern and Islamic education.

The private madrassas couldn't exist without large infusions of money, (donations), since they are typically free to students. The government spends about 50 million a year on its own system of madrassas, which should give an idea of the money involved. A large amount for a poor country, but very little for a country like Saudi Arabia, whose petro-wealth makes supporting ultra-conservative Islamism all over the world relatively easy, both by way of state policy, and by private donations. Charity is a very important duty in Islam, and is prone to chauvanistic and political interpretation, funding jihadist groups, proselytizing, and fundamentalist educational activities.

There are two important native institutions of Islamism in South East Asia. One is the Deobandi school or movement, and the other is the Jamaat -e-Islami political party. Deobandis are more conservative than the mainstream Barelvi Muslims, who preserve local and mystic Islamic traditions. The Deobandis are more by-the-book, holding to the Hanafi school mostly, and putting importance on following some major tradition. This contrasts with the evern more extreme movements like the Salafists, who renouce all the traditions after the first three generations and thus base their interpretations on the Koran and Hadiths, without regard to current scholarship, mainstream schools, or famous Islamic universities.

So there are more or less Calvinist schools at work here, from the culturally traditional Barelevis, who are nonetheless quite divisive in their own right, having supported the Pakistan movement and countless instances of anti-Hindu violence, to the Islamically traditional Deobandis, to the Islamically fundamantalist Salafis and Wahhabis. Of the latter, if they had wanted to recapture the Islamic golden age, the roughly 500 years from 800 to 1250, with its cosmopolitanism and scholarship, that would be a worthwhile enterprise. But trying to recapture the days of the first generations, with their incessant bigotry and warfare, in the current age, is naturally a recipe for global disaster.

The Jamaat -e-Islami is analogous to the Muslim Brotherhood, (or the Christian Fellowship, for that matter), in working assiduously to propagandize for a religio-political fundamentalism and to place its acolytes in powerful positions. It has an interesting distain for nationalism, viewing the modernizing movements of Nasser and others in the mid-20th century Islamic world as distractions from the world-wide revolution that would bring Islam to the head of affairs globally. It was outlawed for its violence in supporting West Pakistan at independence, but was later legalized by an Islamic dictator and now is a minor party with outsized power in the parliamentary system of Bangladesh.

The extent of funding flowing from the Gulf states to Islamist enterprises in Bangladesh is very hard to judge, as it goes under many routes and guises. There are several billions in remittences from individual Bangladeshis working in the Gulf states, (and subject there to Islamist propaganda, naturally), perhaps a billion in direct foreign aid, extensive business relationships including the curious and secretive practices of Islamic banking, and unknown billions in private charity. This is not to mention the Haj and its associated opportunities for propaganda. One example: "The Saudi Arabia-based al-Haramain Islamic Foundation, banned internationally by United Nations Security Council Committee 1267, has come under suspicion, along with other charities from the Middle East, for financing terrorism in Bangladesh."

All this is working against the indigenous, orthogonal culture of Bengal, which is Buddhist/Hindu as well as Islamic, literary, and rather non-violent. A recent podcast about Rabindranath Tagore tells some of the story. But Bangladesh was and remains torn between its Bengali and Islamic identities. The Islamic union with Pakistan certainly went sour, (as do all relationships with Pakistan, apparently), yet with the Gulf states putting their thumbs on the scale for decades, we end up with continuing schizophrenia, culture war, Islamic fundamentalism, and violence.

Will Islamism burn itself out anytime soon? It seems to be powered, not by its own logic or success (see the problems ISIS has in governing anyone in a popular manner), but as a bitter reaction to the long-term decline of Islamic culture, set against colonialism and continuing cultural dominance of the West. A reaction to modernity; to Muslim powerlessness in the modern worlds of technology, cultural soft power, military power, scholarship, creative arts, feminism, gay rights, political theory, ... the list could go on. There is a great deal to be bitter about. In Bangladesh, the majority remains moderate, democratic, and peaceful. Why outsiders like the Saudis and Pakistanis would want to stir up hatred is, as usual, not clear except on a psychoanalytic plane. As usual, a belief system seeks to bolster its tenuous believability by making as many people adhere to it as possible, by fair means or foul, since success is itself a form of truth in the Darwinian world of culture and ideas.

• Another review of Islamism in Bangladesh, if a bit right wing. 
• ISIS as (non-) governing organization- soft power, branding, governance. Who governs better?
• Afghanistan is doing better than Iraq. Which is not saying a lot, but perhaps enough.
• Must atheism be irritating, and irritable?
• You go, Carly!
• It would be hard for the GOP to be more 1%-friendly.
• A steaming pile of BS from theologian John Millbank.
• Monetary policy has real effects, only not on ideologues.
• To wingnuts, running a monetary system is "socialist".
• Lack of shame among economists.
• Jeb! ... for a significantly creepier foreign policy.
• Solow on rent.
• Science fiction as prescient cultural critique.
• Another organism with more genes than we have.

The Humble and Nether Origins of New York

The story of New Amsterdam is surprisingly well-documented. And a little sad.

A delightful, if a little fusty, book from 1978 "A Sweet and Alien Land", tells the story of Dutch colonization of what we now call New York State, beginning with the purchase of Manhattan from the local Indians in 1626, and outward to Long Island and upstate up to Albany. There is a surprising amount of documentation available, thanks to the scrupulous record keeping of the Dutch, including the cost of Manhattan itself, a steal if there ever was one. But the most interesting facet of the story is the subtext of human density and the role it plays in conflict. Whoever has more people wins the land, a process that may someday come back to haunt us.

The land was only sweet because it was underpeopled, (from a European perspective), partly through the technological backwardness of the resident native americans, partly from their decimation by exotic diseases. Nevertheless, like other colonists up and down the new world, the Dutch had a very difficult time getting a foothold and making their old-world methods work in the new. Maize was one technology they had to learn, for example. It didn't help that the Dutch colony was not really about colonization at all, but about "harvesting" the local beaver skins. it was founded by the Dutch West India Company, the ill-starred sibling of the Dutch East India Company, expressly and solely to make enormous profits from trade in the skins, which were brought down the Hudson River from the interior by Native Americans.

As one can imagine, the supply dwindled from overkill, and never came up to the company's expectations. So the colony was left with little investment, few defenses, and mediocre personnel. Its strong suits were its prime central position on the coast, outstanding harbor, and easy-going culture, compared to the fanatics up in Boston. The population was roughly 270 by 1640, and 4,000 by 1664. In the absence of completing claims early on, the Dutch expanded their network of outposts from Connecticut down to Delaware, but the outlying sites were doomed from lack of personnel and from encroachment, not by Indians, but by other Europeans, particularly disenchanted New Englanders who took over the Connecticut area, and then Long Island.

The book proceeds through the gory details of successive governorships, which  will leave aside, except to note that it was an excruciating position to occupy, faced with rude, obstreperous colonists, and months travel from one's putative overseers in Holland. and from there he was ruled by two bodies- the West India Company, and the Dutch government proper. Neither of which appreciated the great difficulties of the new colony, and provided as little guidance as they did resources.

The English had as little foresight in their settlement of the new world, it being a dumping ground for religious dissenters (New England) or for deluded economic opportunists (Jamestown and the South). But for them, the settlement took precedence over the economic plunder, and the people came. When enough had populated New England in the later 1600's, they cast their eyes southward upon the weak settlement in New Amsterdam. A few political machinations later, particularly in England where the king's brother York was eager for a feather in his cap, and they presented an overwhelming show of force and defeated governor Peter Stuyvesant on September 5, 1664, with very little firing or bloodshed.

Who should own the land? Those who currently possess it, or those who can most densely populate it and put it to its most productive economic (and martial) use? Or those who have the firepower to take it? As soon as Europeans took over land in the new world, they set up systems of property deeds and law that completely contravened their original mode of acquisition, which was by swindling, terror, killing, and stealing. Europeans continually overwhelmed and "opened" up lands during American settlement on the basis of both higher density and stronger force. If density and productivity is the rule, we may eventually be on the short end of such a competition from Asia. Even Mexico, at 64 people per square kilometer, has about twice the population density of the US.

• What lack of competition and regulation is costing us in internet service.
• Reich, on the ruling class candidates, whose outstanding characteristic is BAU corruption. As Trump so clearly mentioned in the debate.
• Why did Turkey's war on ISIS turn into a war on the Kurds?
• Guess what a "Top environmental official in the George W. Bush administration" was doing lately? Not much for the environment. It is also well past time to call out the Chamber of Commerce for anti-planetary and anti-human activities.
• The sacred right to bear guns stops at the debate venue, apparently.
• Stiglitz on social investing.
• Finance as leech: there are no economies of scale here.
• Just who, and what country, is Charles Schumer representing?

Seeing Speech in the Brain

An fMRI study of brain dynamics during speech production.

fMRI is now a standard method to look at brain activity, though its resolution in both time and space are poor. It only detects changes in blood volume, which is an indirect, if regular, response to neuronal activity. Additionally, the (living) brain is always on, churning away at its own fantasies and unconscious levels, so the differences between resting and active states can be quite hard to detect, especially at this gross level of resolution.

A recent study took a stab at detecting speech production in the brain by fMRI, analyzing the data by correlation between regions. They broke up the brain into 212 regions, and measured the mutual correlation between each of them under separate tasks given to 14 subjects. The first task was the resting state, when the subject's eyes were closed and they were told to have no specific thoughts. Not the greatest method, from my experience of meditation, actually(!) The other two tasks were 1. they were asked to make simple eeee and iiii vowel sounds, and 2. they were asked to repeat simple but complete English sentences. The respective brain correlation networks are shown below.

Correlation maps among the best-correlated nodes selected from a total of 212 nodes (brain volumes) of fMRI activity in an average of 14 subjects. Nodes are colored "hotter" the more connected they are to others, and the lines between them are colored "hotter" depending on the strength of correlation. The A images show the complete map. The B, C, D, and E graphs are sub-selections of the data by "hotness" of the nodes, with the most connected (red) in the B maps, etc.

While the complexity of these images resists interpretation, they show several notable things. First is the overall lower connectivity in the resting state, which is dominated by green-level correlations. There are only about 3 "hot" nodes, as shown in the B sub-graph, in red. In contrast, during speaking of either syllables or sentences, far more nodes (15, and 11, respectively) are highly connected, and the overall graph is heavily weighted towards higher connectivity. The identity of the "hot" nodes is difficult to pin down in functional terms, but they seem to be dominated by premotor and motor cortex regions, noted as 6 and 4 in the graphs.

Secondly, while the syllable graphs have even higher connectivity in some respects than the sentence graphs, they show much less involvement of the frontal cortex, which is entirely absent in the orange and green-level correlation graphs, compared to the sentence speech case. This makes, on the face of it, complete sense, and supports the idea that we are seeing aspects of speech processing going on through this method. The emphasis in the syllable case is on the motor processing, while the full sentence case adds in executive complexity as well as some cerebellar fine sequencing control. That the resting state shows some frontal cortex activity and connection also stands to reason, if one assumes that uttering plain syllables leads to utter boredom, while letting the mind run free with "no thoughts" is likely to lead, frequently, to some relatively complex thoughts.

Did they find anything interesting? Long lists of brain areas with slight differences were offered, but seem to deserve much deeper (future) analysis to come up with anything approaching a theory of how speech production circuitry might look and work in a comprehensive way. This is really only a first peek at the issue, using crude imaging and advanced analysis methods.

The researchers try to further differentiate the brain states by an analysis of their modularity. The claim is that the speech producing brain seems to have tighter and more intensively local activity than the resting state, whose weaker correlations seem more widely and loosely spread. The speaking brain also generates more active modules, such as one reaching into the cerebellum. Unfortunately, despite some extremely snazzy graphics, I found the data impossible to interpret, and not, on the face of it, compelling, though reasonable enough. It is going to take a great deal more work, and perhaps better technology, to map the speech circuitry in a useful way. Without much better spatial and especially temporal resolution, one can't capture such dynamic and nano-scale activities.

An example quote points to possible functions underlying what was imaged. But the differentiation from the resting state was not very strong, since it showed plenty of connections / correlations as well, just slightly weaker.

"The SPN [speech production network] core sensorimotor hub network established connections with the brain regions responsible for sound perception and encoding (auditory cortex), phonological and semantic processing (parietal cortex), lexical decisions and narrative comprehension (middle/posterior cingulate cortex), motor planning and temporal processing of auditory stimuli (insula), control of learned voice production and suppression of unintended responses (basal ganglia), and modulation of vocal motor timing and sequence processing (cerebellum)."

• A brief poster of the above work.
• Speech on the A-train.
• Institutions of fiction- money, heaven, companies, rights, states.
• "Sneering at religion is juvenile."
• Just what is addiction?
• Race conscious, or race unconscious?
• Echos of the Ruhr.. Greece to run 3.5% surpluses forever? Don't bet on it- those debts are dead. Also, bonus podcast on Greece, which will need balance of trade discipline one way or another, inside or outside the Euro.
• State of the GOP race.
• Cringely on the OPM disaster and who was running their systems.
• Friedman created not only his own economic fantasies, but fantasy versions of his opponents.
• Coal is still the big problem for climate change.
• Economic graph of the week: inflation is dead. So is US currency volatility.