Take the money and sit around

Who's lazy in neoclassical economics?

I ran across what appears to be a semi-famous study that has been understood (on the economic right) to defeat Keynesianism. A paper by Cohen, Covan, and Malloy (CCM) from 2009 claims that when states get free money from the federal government, their GDP goes down. This is perhaps a mini-resource curse, like the oil curse that leads to bad governance, corruption, and bad political as well as economic outcomes. As a non-expert, I can not entirely judge their work. (Other critiques, incuding a typically sultry one by David Brooks who implies that no economic theory fared well in this recession, which is not true.)

Their analysis is based on the natural experiment of changing political fortunes. When, in the US, the legislature changes hands, the new party in the majority takes over all the chairmanships that write budget bills, and in typically corrupt fashion, channels vast amounts of money to the chairman's states and districts. The same thing happens at a smaller scale when a legislator gains a committee chairmanship through natural attrition. CCM claim that these switches are essentially unlinked to other economic phenomena and form a natural experiment on the effects of exogenous money on otherwise stable economies.

"During the year that follows the appointment, the state experiences an increase of 40-50 percent in their share of federal earmark spending, a 9-10 percent increase in total state-level government transfers, and a 24 percent increase in total government contracts."

They put the Keynesian prediction as being that GDP would go up in these states, (through direct added money), and the neoclassical prediction that GDP would go down, due to impairment of investment incentives and general human laziness. They find that GDP goes down. Win for neoclassical economics?!

"In the year that follows a congressman’s ascendency, the average firm in his state cuts back capital expenditures by roughly 15%. These firms also significantly reduce R&D expenditures and increase payouts to their investors. The magnitude of this private sector response is nontrivial: in the median state (which receives roughly $452 million per year in increased earmarks, federal transfers, and government contracts as a result of a seniority shock), capex and R&D reductions total $48 million and $44 million per year, respectively, while payout increases total $27 million per year."

Note that these are not very large effects, compared with the government injections. Only a fraction of the new largesse is socked away as savings, share buy-backs, etc. Where does the rest go, if overall GDP is claimed to go down? CCM never say, and I speculate that this is an enormous hole in the analysis. Their metric of employment is also "firm-level" employment, (indeed restricted to publicly traded companies), ignoring the public sector and small business employment that would probably be the main result of increased federal money.

"Also, consistent with Keynes’ view that crowding out should only occur under conditions of full employment, we find a stronger firm response to spending shocks when state-level employment, state-level real GDP growth, and US real GDP growth are at or above their long-term historical averages."

"As Table VII reports (in Column 3), the coefficient on the main effect, which measures the response of firms in states during high unemployment times, is actually positive (albeit insignificant). Meanwhile, for firms in states during low unemployment times, the interaction term is -0.024 (t=2.17) larger, which indicates that the negative impact of seniority shocks on corporate employment is concentrated at times when the supply of employable labor is scarce." 

"This result can be interpreted as providing evidence consistent with the view that government stimulus crowds out private sector employment when the economy has little slack in the labor market, but does not when the economy is experiencing significant slack in the labor market."

Here is where they admit that when unemployment is high, stimulus raises their metric of firm employment and GDP, even if most of the money is going to government jobs. When unemployment is low, government competes for private sector jobs, and so their measurement of "firm-level" employment goes down. But they do add on an analysis of aggregate state data, which shows overall employment losses resulting from a political stimulus. Insignificant statistically, but negative. Why would that be?

They make a snide parting comment about West Virginia in their conclusion. But that state was plenty poor before the modern age of pork, so they were hardly thrown into some dark age by their success in the political pork-stakes. Other explanations are needed. Perhaps pork tends to entrench existing corporate as well as political interests, sapping innovation and growth in favor of rentier behavior.

It is interesting to note that the paper's tip-off word is "leisure", (appearing nine times), which is the alternate to economic productivity, implicitly stigmatizing workers. But "rentier" might be a far more accurate description of what is going on, since it isn't the poor who are choosing laziness and non-investment in response to federal injections, but the rich who are choosing political money over market money in this model.

Indeed, they are remarkably vague on the mechanisms that may lie behind their findings. The one concrete illustration they offer is the state of Senator Richard Shelby, Alabama, which netted 96 million dollars more earmarks as of his ascension to chairmanship of the Senate Select Intelligence committee. One Alabama company, building trailer homes, saw a decrease of 30% in its employment, which CCM explain as perhaps due to the $15 million that Shelby brought in for the actual stick-construction of low-income housing, hitting the related market for prefab homes. Nowhere do CCM account for the jobs added (or lost) in this other construction business.

So one might model the findings by proposing that classical theorists know particularly well of what they speak- that the business class is prone to laziness and rent-seeking, not the working class. Working people need jobs without fail, and look for jobs that fulfill basic desires for a decent life. The business class also looks for income, but this can be from passive investments or higher margins just as well as from new business creation. If they get the former handed on a platter, then why create new businesses? What if corruption pays better than trade & innovation?

None of this really speaks to Keynes. Yes, government spending is inefficient, particularly the ear-mark kind of spending that this paper deals with. But the authors themselves say that when labor markets are slack, the extra spending is not at all bad, and since they do not poll public sector or privately held companies, they may be missing a good deal of growth.

Note that what this analysis also says, in essence, is that the higher one taxes those "job creators", the harder they work. Which stands to reason, but isn't the story we have been hearing for the last few decades!

• Limbaugh and the laziness narrative.
• It's all for the lower classes, you see. Romney campaigns in the Hamptons, at Koch's house. 
• Inequality generates the need (and capacity) for incumbents to lie, throw tantrums, and spread corruption.
• Too big to fail = market failure.
• Markets are weedy places.
• Why we make art... it expands the "self".
• BBC thought for the day rendered obsolete by handy flowchart.
• Religion as fossil fuel.
• Afghanistan- on a glide path back to civil war.
• Unworthiness of the Republican party, continued ...
• Retail is about to die another death. And check out the robotic warehouse link.
• Burgler cleverly incorporates self.
• Economics quote of the week, Bruce Bartlett:

"Balancing the budget by drastically cutting spending and raising revenue was what the economy needed. “Nothing will put more heart into the country,” Hoover said."

• Bonus economics figure. We need a carbon tax, and just how much carbon tax do we need? (An analysis focused on the nuclear industry.)

Poisoning the water

On lying in politics and in other places.

I have been reading an interesting book about the evacuation of endangered Hmong from Laos after the CIA's not-so-secret war there against the North Vietnamese and the Pathet Lao. It had a passage about the Pathet Lao's tactics:

"The Laotian Pathet Lao yesterday accused Defence minister Sisouk Na Champassak of the Right-wing Vientiane side of planning a coup d'etat in Vientiane, the Khaosan Pathet Lao news agency said... The agency charged that 'Sisoul Na Chamassak, Minister of Defence of the Provisional Government of Laos, and a number of high-ranking officials of the Vientiane side secretly met on May 3-4 at milestone 27 in Vientiane to map out a plan for a reactionary coup d'etat in the neutralized city.'" - quoted from the Bankok Post, May 11, 1975

This was as the Pathet Lao itself was overrunning the country after the US threw in the towel in Vietnam. My (maybe uninformed) reaction was this was classic propaganda and disinformation, throwing out wild lies just to stir the pot, cow the opposition, and keep everyone off balance. The Pathet Lao have been in power ever since, as have the communists in Vietnam, (and Cambodia, with interruptions), keeping Laos miserable and committing what appears to be ongoing gencide against the Hmong.

It reminded me of similar practices here in the US, where the right wing hate media cooks up toxic media messages, and then "sees what sticks". Which is to say, what outrages listeners more at the intended target ... than at the message makers themselves for their lying and extremism. The swiftboaters were notable examples from a few years back, but this time they are sprouting like mushrooms- Obama is a socialist, is muslim, is not born in Hawaii. Death panels, job creators, Gun walker coverup, lucky duckies, debt bombs and prairie fires. Jesus loves you. The list is endless.

Such messages "stick" far more easily in an environment where a segment of the population is systematically lied to by its primary media, (FOX and talk radio). In the conventional media, messages that reach a certain level of saturation in the fringe are treated as worthy of coverage, indeed of he-said/she-said "balanced" coverage, checking the reporter's brain at the door in an effort to "teach the controversy".

This is how our public discourse is debased, and the problem is far wider than politics. Religions lie to their flocks as a matter of course. We don't bat an eye. Corporations lie to us in every advertisement, and in as many other venues as they can manage, pushing the sexy wonder of cigarettes, the green jobs brought to you by the oil industry, the work of god being done by your local Goldman Sachs employee, or the critical importance of paying their executives like kings. Indeed, the TV show Mad Men stands as the culture's wink and nod to its own debasement.

It is, in short, an unpleasant atmosphere to live in, a fog of deceit that is one of those things making the West a less than shining beacon to humanity. Yet we are raised with higher ideals. All teachers tell us that truth is golden, that we must never lie, and that George Washington never told a lie. They paint scholarship as a high ideal, an endless and richly rewarded search for truth. And then we land in junior high school, where reality sets in. Cooperation hits its limits in a war of information and disinformation, whose aim is power, not truth.

The Martha Stewart prosecution was, to many, hard to understand in this new context. Aren't federal agents lied to every day? Aren't we lied to every hour of every day? What was the big deal? Isn't truth mine to know and yours to find out? Isn't this whole "under oath" stuff a little antiquated? Indeed, don't we live in a post-modern world where truth doesn't even exist, deconstructed by French philosophers to a story that just expresses subjective views and interests, whatever the "evidence" may say?

It shouldn't be that bad, obviously. Free market economists make a fetish of information & truth being the real currency of the markets, with firms facing ultimate truths in their success or failure. True enough, but the need for truth reaches far deeper. The Soviet Union found out that, after the naked truth of terror ebbs away, if all one has left is a pile of lies, the society can not function.

Perhaps I am overly sensitive to all this, coming from the culture of science, where truth is more highly valued than in, say, politics, business, or theology. Truth is not always the highest value, in deference to civility. But it should always trump incivility, corruption, inequality, fraud, laziness, and greed. Society is not going to work if we lie to each other all day long.

A young Hmong refugee made an astute observation quoted in this book (my emphasis):

"In the picture above, I am the tall young man with a backpack on. This picture was taken while we were fighting to get in the U.S. C-130 to flee to Thailand as a result of the U.S. withdrawal from the Indochina War, which was and is still or will probably be remembered as one of the biggest and most historic losses in U.S. foreign policy regardless of its status as a world leader. There are a few major factors that contributed to this loss for the United States and its three allies, South Vietnam, Cambodia, and Laos. These major factors are corruption among all levels of government officials, lack of a solid and strategic national organizational structure, a wide gap between the rich and the poor people (which contributes to social, political, and economic injustice), and the lack of leadership with vision and wisdom who could understand world events and modify their policies accordingly for the good of the Indochinese and people around the world."

• Must-read link of the week: What liberty means in the South.
• Bankers lying. And more bankers lying. And other companies.
• Money buys Hollywood lies and sleaze.
• Lying is a long business tradition, of course.
• Cringely on lying, cupidity, and class warfare.
• Stiglitz- we are still on FIRE. Rent-extraction vs innovation in finance.
• Maybe I'm just suffering from the just world fallacy.
• The paradox of too much information, little of it any good.
• Podcast on the elite cacoon. And story.
• Conversely, the crazy is getting crazier.
• Fascinating essay on economic distribution.
• There are no moral principles, on philosophy bites.
• Tri-faith as our anti-communist civic religion, more or less.
• We need a carbon tax.
• Economics quote, from Ragnar Frisch, via Jans Andvig, via Bill Mitchell:

"One has to understand that the ongoing crisis is not a crisis of real poverty, but an organizational crisis. The world is like a ship loaded by the goods of life, where the crew starves because it cannot find out how the goods should be distributed. Since the depression is not a real poverty crisis, but one of organization, the remedy should also be sought through effective organizational work inside the apparatus of production and distribution. The great defect of the private capitalist system of production as it is today is its lack of planning, that is, planning at the social level."

Job creating supply side trickle down

Let's take a look at the right wing economic mantras.

A recent cartoon struck me with a very simple statement. The K chronicles had a line "Rich people are rich because they save their money." Simple, obvious, yet profound. If we want to push the economy towards saving, then giving more money to the rich would be the way to do it. But if we want the opposite, we need to do the opposite.

The current crisis is at core a lack of demand. Credit has been pulled from businesses, homeowners, credit card holders. Wealth has fallen. Everyone is scrimping, saving more, and spending less, and the aggregate result is less economic activity- at least less than we could have if everyone were usefully employed and fairly paid.

The economy hangs on the balance of saving versus spending. If it were booming, we would want to encourage saving. But as it is crawling, we want to encourage more spending and less saving. The current low interest rates are part of the equation, but the more important part is missing- the spending that should be coming from government. The stimulus helped, but has petered out, while state and local governments have heavily retrenched and are spending less.

In the stimulus, legislators asked whom to give the money to. Would it be directly spent on public goods like infrastructure and energy sustainability? Would it go to individuals, and if so, which ones? Would it go to the rich or the poor? Washington came up with an unholy mix of payroll tax cuts, going to the lower and middle class, an extension of the Bush tax cuts, going to the rich, and some infrastructure spending and state support.

Going by the above, the Bush tax cut extension was entirely useless, hardly contributing to spending and demand. But aren't its targets the "job creators", and isn't giving them money bolstering the "supply-side" of the US economy, from whence higher pay and other benefits "trickle down"? This is the Reagan revolution in a nutshell, giving us three decades that dramatically reshaped economic inequality, towards the guilded age heights we now enjoy.

Back when inflation was an issue, reweighting the economy towards supply (i.e. away from demand) made some sense. Though why that involved giving money to the rich, instead of, say, cutting military spending and funding research, isn't clear at all. In today's environment, however, it is sheer madness, and we don't hear the line used very often anymore. "Job creators" has taken its place in the mouths of Republicans.

Republicans want job creators to feel comfortable and confident, not put-upon and protested against. They should be coddled by a reversion to feudal rights to run roughshod over the environment, over their employees, and into the public purse. Oh, and fawning treatment by the media would be nice too!

But who creates jobs and why? Most are just created by ongoing businesses in response to economic prospects. Anything the government can do to improve those prospects, by way of Keynesian spending, is going to raise employment and help get us off the deflationary / zero interest rate floor. Raising or lowering taxes on individual rich people will have no effect. If such a business needs money, they go to banks to borrow some- which is even more dependent on future economic prospects.

The other class of jobs is created by entrepreneurs- those hallowed innovators always threatening to "go Galt", in the minds of Republicans, if they face just one more environmental regulation or raised tax bill, perhaps decamping to Mexico, where they can find virtually stateless regions to do business in! More seriously, entrepreneurs are an important element of US innovation and success, but their critical decisions come long before they hire accountants to moan about the difference between marginal tax rates of 31% or 35%. That is not what sent the Steves to their garage to build the Apple I.

The inspiration of socially significant business success is only partly money, and then only in the most vague and uncountable way. Entrepreneurs need efficient monetary rewards to keep their dreams alive and building, (if successful), but other motivations and resources clearly are equally important, like the cultural influence they can have through their work, the education they and their colleagues have gotten from mostly state-sponsored institutions through their lives, and the sheer enjoyment of building a temple to themselves in the form of, in this case, Apple Computer, worshipped throughout the world.

The most fatal bar to entrepreneurial innovtion is generally the anticompetitive barriers and corruption sponsored by existing businesses. Who wants to license hairdressers? Not hairdressing entrepreneurs, but established hairdressers. Who wants to raise tarriffs against imports of sugar? Concentrated interests who use the state to further their own ends. It is not the state in general that is bad for entrepreneurs, but the state made captive to incumbent interests, expressed in bureaucracy, red tape, and corruption. If Republicans were interested in bringing those costs to light and eliminating them, they would be doing the country a service. But of course most of their funding (and Democratic funding as well) comes from precisely such incumbent interests.

Lastly, and most importantly, the trickle-down theory has long been a self-serving staple of Republican thought, if not rhetoric. Apparently, giving more money to the rich benefits society generally. How much more? Well, it is hard to tell where this process is supposed to end! As argued above, nothing could be more destructive in the demand-deficient environment we find ourselves in now, where encouraging people (i.e. the rich) to save is really the last thing we should be doing.

But it isn't true more generally either. The rich are thought to invest their savings. But what forms do these investments really take, and how socially productive are they? Much of it takes the form of government bonds, which lays the question of how such savings are employed right back onto the government. Most of the rest goes into the markets- bonds, stocks, real estate, hedge funds, etc. But buying such shares is difficult to truly call investing, since the businesses long since issued their shares and got their money (see the Facebook IPO), and one's purchase neither helps neither them nor anyone else hire more workers. These markets provide liquidity, buttressed by ongoing speculation by those rich enough to gamble in the prospects of the various companies, just as they might gamble on horses.

The listed companies can use their market valuation to issue more shares, or sell themselves, or buy other companies, but at this point, the individual investor is not doing anything for economic growth. If, say, Apple's stock rises to absurd heights due to market speculation, above what is warranted by fundamental parameters like its price/earnings ratio and dividend yield, then what have the investors jointly accomplished? They may have given the company the firepower to buy other companies, or to give themselves bigger bonuses. But all this is in the hands of the company's management, which may not hire any more workers or do anything economically productive with their high stock price at all. By far most of this wealth goes to other speculators who sell their shares at the proper time, rather the improper time (and then in all probability deposit them as government bonds). The transmission to economic growth is vanishingly tenuous, far more a symptom than a cause.

The spectacle of Bill Gates and his fortune should disabuse anyone of the trickle-down theory of pampering the "job creators". His percieved highest use for his money, after having crushed countless small companies and subjected us all to truly atrocious software, is not incubating startups and leading the next tech revolution, but giving it away on philanthropic projects such as disease relief in Africa. Laudible indeed, but it shows the ultimate poverty of accumulating money to absurd levels in private hands, for the sake of economic efficiency and prosperity. Much better if that money were in the hands of regular consumers driving normal demand for economic and other cultural goods, or, let it be said indeed, in the hands of the government in its role as provider of the public goods such as education.

• In the class war, we've lost.
• Krugman reviews it all again, for the umpteenth time.
• Skidelsky on leisure, consumption, inequality, and modern capitalism."That road leads to a division of society into a minority of producers, professionals, supervisors, and financial speculators on one side, and a majority of drones and unemployables on the other."
• Lakoff on Obama's weak economic framing- it isn't enough to be right.
• Apple, abusing its employees both here and there.
• For Greece, there is no way out. Not only do they need complete debt forgiveness, but also rebalanced trade flows with (or continuing bailouts/gifts from) the rest of Europe.. read Germany.
• Kaplan on Pakistan. But from what I hear, Switzerland has mountains & languages, too.
• Enough waiting for the Fed- they don't have the answer anyhow.
• Big banks- who needs 'em?
• Climate catastrophe, annals of appalling: "... the World Bank has been investing heavily in coal-fired power production"
• The Texas Republican platform reads as follows: "We oppose the teaching of Higher Order Thinking Skills (HOTS) (values clarification), critical thinking skills and similar programs that are simply a relabeling of Outcome-Based Education (OBE) (mastery learning) which focus on behavior modification and have the purpose of challenging the student’s fixed beliefs and undermining parental authority."
• Economics quotes of the week, from Joe Stiglitz:

"But the crisis showed to everyone what economic research had long revealed—the argument was a sham. What was called incentive pay was anything but that: pay was high when performance was high, but pay was still high when performance was low. Only the name changed. When performance was low, the name changed to 'retention pay.'"
...
"What we’ve achieved is a state too constrained to provide the public goods—investments in infrastructure, technology, and education—that would make for a vibrant economy and too weak to engage in the redistribution that is needed to create a fair society. But we have a state that is still large enough and distorted enough that it can provide a bounty of gifts to the wealthy. The advocates of a small state in the financial sector were happy that the government had the money to rescue them in 2008—and bailouts have in fact been part of capitalism for centuries."

"The narrative that you describe [of capitalism] ignores the extent to which a lot of the inequalities in the United States are not the result of creative activity but of exploitive activity. And if you look at the people at the top, what is so striking is that the people who’ve made the most important creative contributions are not there."

We are at fault

Humans caused megafauna extinction in Australia.

As we weigh just how badly we intend to destroy the biosphere over the next few decades and centuries, a glance back at pre-history tells of some past indiscretions already on the books. The megafauna of Africa co-evolved with humans, and perhaps got to know their murderous ways in time to avoid them, at least enough to survive in part up to the present time in some spectacular examples- elephants, hippos, giraffes. Other continents had easily as dramatic a cast of megafauna, from giant sloths, lions, mastodons, to giant kangaroos, and moas. But on other continents, they lacked behavioral experience of humans and perhaps immune or other defenses, and disappeared rapidly after humans arrived.

The story has been documented on a correlation basis all over the world, from major continental invasions (North America and the Martin overkill hypothesis) to every island ever inhabited by humans. The magafauna of the Galapagos (i.e. its tortoises) are hanging on by a thread and only by conscious human reversal of our otherwise rapacious ways. The causes of extinction of mammoths in particular remains controversial, but I would bet far and away on humans being the ultimate cause- at least preventing their persistence in the refugia where they took shelter during previous warm periods.

A recent paper nails down the case of Australia in quite a bit more detail, showing the extremely close coincidence in time between the arrival of humans and various changes in the local ecology, including megafauna extinction. The researchers searched through layers of a prehistoric swamp for pollen, spores, charcoal, and carbon dates, to come up with a broad picture of the area.

"Australia's megafauna included twenty or more genera of giant marsupials, monotremes, birds, and reptiles, which were extinct by 40k years ago, soon after people colonized Australia"

A key part of the analysis is the spores of Sporormiella, a fungus that specializes on herbivore dung, serving as an index of herbivory by large animals. Unfortunately, they provide their graphs in two pieces, and to make them fit better, I rotated them flat. They track several ecological markers from 129k to 3k years ago.

Pollen abundance and other characteristics, by depth, from a pre-historic swamp in Australia, showing changes throughout, especially around the arrival of humans about 40k years ago (light gray vertical highlight on both graphs).

Green- rainforest flowering plants

Dark green- rainforest conifers and other gymnosperms

Red- Sclerophyll taxa= scrubby savannah- eucalypts, acacias, banksias, 

Yellow- Poaceae = grasses

Brown- Sporormiella indicate large herbivore presence.

Gray- charcoal from wild fires.

One can readily see that conditions dried out a bit at 70k years ago, well before humans arrived, reducing the rainforest angiosperm count. Sporormiella counts went up all the way until humans arrived at ~ 41k years ago. At that same time, pollen from grasses rises dramatically, as does charcoal. Rainforest pollen declines progressively, replaced by pollen from scrubby savannah plants.

The significance of this data set is in part that it corresponds to waht was climatically a quiet time. All that happened was that some humans learned how to build a boat to float across the Sunda Straight to Australia. The North American megafauna extinction is mixed up with the end of the ice age, but here in Australia, the climate was stable, so it easier to assign these widespread and dramatic landscape changes to the one thing that did change- the arrival of humans. It is highly reminiscent of how native Americans managed the prairies- by burning them frequently, finally banishing even scrubby plants in favor of all grasses all the time.

So, humans have been wreaking large-scale landscape damage and extinction for a very long time. We live in an impoverished world with only a glimmer of consciousness of what we have lost. The first European settlers in the Americas had unimagined bounty at their doorstep, which they then went on to systematically destroy in a typical tragedy of the commons. Fisheries are doing the same worldwide. But consciousness isn't enough, we need collective action.

• Madagascar- same story.
• Arctic and antarctic today... same story.
• Do Chicagoans have a concept of public goods any more?
• Consumer protection from financiers... works. Another installment of Republican unworthiness.
• Economics quote of the week, by Wayne Angell:

"I have suggested to the monetary advisory committee for the FOMC that it is past time to try another tack: lower the payment for NOT extending credit. The power of monetary policy is to alter behavior in the world of credit. The 25-basis point payment, along with extremely low money market rates, enables banks to earn 1/4 percent a year from the Fed for doing nothing."

Aristotle would be amazed

An exceedingly brief review of De Anima, or, On the Soul.

As an amateur philosopher, it behoves to do some spade work in the vineyards of the ancients. So I picked up an edition of Aristotle, and was intrigued.

First, it gradually becomes apparent that Aristotle has something different in mind than we do with the word "soul". He is an inveterate biologist, and is interested in that which animates the organism. So in his day the very basic question of what separates the quick from the dead was, as it were, a very live question. What is the function of breathing? What is the nature of sensation, which must also cease upon death? What characterizes all living things- breathing (no), locomotion (no), vision or other higher sensations (no), touch (maybe), need for food (yes).

His proto-Darwinian thought is incredibly tantalizing, though typically tangled up with theology.

"The acts in which it [life] manifests itself are reproduction and the use of food- reproduction, I say, because for any living thing that has reached is normal development and whch is unmutilated, and whose mode of generation is not spontaneous, the most natural act is the production of another like itself, an animal producing an animal, a plant a plant, in order that, as far as nature allows, it may partake in the eternal and divine. That is the goal towards which all things strive, that for the sake of which they do whatsoever their nature renders possible."

Theology nowadays has of course been driven off the field from many of these questions. Its soul is a shadow of its former self- some sticky residue of intuition that consciousness could not possibly come from the same mechanisms that so evidently perform all the other wonders of life.

At any rate, one can readily tell that Aristotle would be delighted beyond words to see the knowledge we have today, so long in coming after his labored speculations. Indeed, only in the last 250 years have we markedly advanced beyond the ancients in the necessary knowledge (principally chemistry and evolution) to answer most of his speculations.

And speculations they were ... and endless hairsplitting and repetition that is, frankly, painful to read. He is frequently conversing with Plato, that mystic philosopher, and so has to trot out various commonly held theories of the day.

"Thinking, loving, and hating are affections not of mind, but of that which has mind, so far as it has it. That is why, when this vehicle decays, memory and love cease; they are activities not of mind, but of the composite which has perished; mind is, no doubt, something more divine and impassible."

"Some hold that the soul is divisible, and that one part thinks, another desires. If, then, its nature admits of its being divided, waht can it be that holds the parts together? Surely not the body; on the contrary it seems rather to be the soul that holds the body together; at any rate when the soul departs the body disintegrates and decays. If, then, there is something else which makes the soul one, this unifying agency would have the best right to the name of soiuld, and we shall have to repeat for it the question: Is *it one or multipartite? If it is one, why not at once admit that 'the soul' is one? If it has parts, once more the questikon must be put: What holds *its parts together, and so ad infinitum?"

"Mind is itself thinkable in exactly the same way as its objects are. For (a) in the case of objects which involve no matter, what thinks and what is thought are identical. (b) In the case of those which contain matter each of the objects of thought is only potentially present. It follows that while *they will not have mind in them (for mind is a potentiality of them only in so far as they are capable of being disengaged from matter) mind may yet be thinkable." -translation by J. A. Smith 

This gives you an idea of the language, which clearly comes from a time before modern editing. In many places, one has a distinct sense of disjoint-ness; that something has been lost in the lengthy chain of transmission from the author. Someone may have fallen asleep! Yet, there is also a glimmer of sense here, in that the nature of the mind is open to some kind of analysis, even though Aristotle couches the idea in a pile of nonsense about thoughts and minds being identical when abstract, a sort of identity theory of computational simulation.

It is fascinating to experience a person from such a long-ago epoch, deploying his formidable intelligence on problems that were incredibly obdurate. And it is a scandal that his wooly speculations would be the standard of intellect for the next nearly 2000 years.

• Republican unworthiness to hold national office, continued.
• Unworthiness and vitriol, continued..
• Chronicle of addiction: "And the jungle drums start to pound."
• Free range continues his tale. "And wait until you hear this tale my friends because it is beyond Afghan crazy; it’s Pakistan crazy and the only level of crazy above that involves extraterrestrials."
• Labor exploitation in IT.
• US median family net worth dropped by almost half during this little depression.
• Robert Reich: income = spending; lack of income = depression.
• JP Morgan is a hedge fund, on the taxpayer's dime.
• Inequality's relation to the crisis. Trickle up leads to an unproductive rentier class.

"According to the pro-inequality theorists, these growing surpluses [of concentrated corporate and private wealth] should have led to a boom in productive investment. Instead, they ended up fuelling commodity speculation, financial engineering and hostile corporate raids, activity geared more to transferring existing rather than creating new wealth and reinforcing the shift towards greater inequality."

Free speech ≠ Coerced listening

A comment on Citizen's United.

A recent article about the Citizen's United case and associated machinations at the Supreme Court got me thinking about free speech. When the decision first came out, I was somewhat sympathetic because, gosh, who could be against free speech? Does the government really have a justification for censoring advertisements and other media around an election?

But I realized that this is really a false framing. The constitutional right we have is to speak freely. Just like I am doing now.. you are reading completely free speech, published freely (indeed for free!) and are reading it voluntarily (I hope).

Campaign advertising, indeed all advertising, is an entirely different proposition. When we sit down to watch TV, for instance, we are attracted by one experience, say a dramatic show with smart characters and exciting stories. That is what we are volunteering to watch. But through the magic of modern capitalism, at the same time we are force-fed quite another experience- the advertisement.

We neither want to watch this other content, nor are enthusiastic about its domineering psychological effects, which are carefully engineered to invade the most heavily fortified mental citadel. We may record our shows and fast-forward through the ads, but they still leave their imprint, political or otherwise.

This is what the PACs, campaigns, 527's, think tanks, etc. are buying into with their dollars- an ecosystem of involuntary forced listening & watching which has nothing to do with free speech, but rather with the power of forcing others to listen to one's free speech. The money buys the power, not the free speech. The equation of money with speech could indeed not be more pernicious, and to see our Supreme Court fail to make this distinction is a true mark of its right-wingery.

What would a better system look like? The US has since before its founding always had mass media, and Benjamin Franklin well knew the power of owning one's own printing press. Now everyone has a printing press, and no one has the time to read everything or judge what is worth listening to. We continue to need editors, gatekeepers, and curators of the media landscape to sift the wheat from the chaff. In the world of books, the user-curated Amazon model has been wonderful, and similar real-time mechanisms through social networking services are, well, works in progress.

What we don't need is to enshrine the practice of force-feeding innocent citizens with toxic propaganda as some kind of constitutional right, because it isn't, neither for the victim nor the perpetrator. We have the spectrum now on the internet on many platforms to give everyone their own bullhorn and printing press to express free speech freely. The Democratic party can have its message go out 24/7 to anyone who wants to listen. What they don't have any constitutional right to is to force their message down anyone's eyeballs via advertising.

So, one model is to ban advertising entirely, at least for political uses, and leave political discussions to other venues like books, magazines, editorial pages, and news media, of which there are plenty. Ron Paul is a good example of someone getting his message out and thriving on virtually no advertising. That means banning robocalls too, incidentally. Talk about unwanted, coerced communication! Such a policy would also spare our politicians a great deal of expense, and dampen their corrupting arms race for money.

But I think our political system needs something more- more political speech, not less. More venues for civic engagement and political communication, just not coerced listening. We as communities have a strong role in regulating these political platforms / megaphones in ways that open them to diverse and civically useful views.

I have proposed a voucher system for media and political financing, where citizens have a new form of currency specially set aside for those purposes, insuring that they get equal votes in their provision.

Without being quite so ambitious, great improvements could be made in the media environment by promoting the public interest more systematically. The fact that most newspapers in the US are local monopolies presents one opportunity. They are typically owned by some conglomerate that milks their markets as best they can, holds uniformly Republican-friendly views, and has no responsibility to the public for their editorial policies or lack thereof.

Such newspapers easily fulfill the same kind of scarcity condition that has been found to justify neutral content regulation of broadcasters with their constrained spectrum licenses (back when we cared!). Thus they can and should be regulated in terms of their news and editorial content along the lines of promoting diversity and promoting expression from the local community. This might require, for instance, creating a public editorial board that runs the editorial content and is a non-partisan, independently elected office.

Publishers (and politicians) could still be free to publish anything they like in other forms- leaflets, articles, books, and competing newspapers and weeklies. But if one newspaper becomes an effective local monopoly, it would be deemed a public utility for the purposes of editorial content, and be run as a public-interest entity, much like PBS.

Of course this is a very tricky issue, promoting the public interest while keeping the state's hands off any direct controls, while keeping a strong interpretation of freedom of speech and press. But the point should be obvious- promoting maximally useful and diverse speech on the public stage rather than translating financial power into a megaphone that drowns out all else.

• Exhibit A: Coercive plutocratic scare-mongering.
• Exhibit B: Having all the money is not enough- they want anonymity as well.
• Exhibit C: Lessig's media reform campaign.
• Inequality is, at some point injustice.
• A believing household shakes to its foundations.
• Republican unworthiness for national office, continued, and continued.
• Krugman- a European invasion force of one. Naturally, a prophet ignored in his own country.
• Current prices for fossil fuels.
• Economics quote, from Bill Mitchell:

"It is clear that the system is failing and that means we have a choice. The problem is that we first have to identify that we have that choice. ...
 While for a few decades the neo-liberals were able to persuade us that there deregulation of labour and financial markets was delivering massive wealth to us all, it is difficult to mount that case now. The evidence is compelling – the neo-liberal model is fatally flawed. So we have a choice. The problem is that the choices we have are clouded by the snowstorm of lies that the elites bombard us with every day. The Irish yes vote is an extraordinary example of that."

A pore at the core of nerve action

A voltage-regulated ion channel protein studied in all its quivering atomic detail.

One of my earliest interests in biology was the nature of membrane proteins- how they could conduct ions back and forth across the membrane, thereby giving us energy as well as mental activity. One of the most obscure mysteries in the field was the dauntingly-named voltage-gated channel.

Nerves don't conduct electricity the way wires do. They are messy and biological, after all. Their conduction is far slower, but at the same time continuously refreshed as the signal moves along. The mechanism starts with a nerve membrane that is poised with an excess of sodium (Na+) on the outside, and an excess of potassium (K+) on the inside. This is the product of a pump (the Na/K exchange pump) that is always working away, sort of like the sump pump of the nerve cell.

The ion distribution is such that the resting state of nerve cells as well as most other cells is slightly charged, at -70 mVolts. If you open up the membrane to K+ ions only, this potential moves to -90 mV, and if you open the membrane to Na+ ions only, it moves to +100 mV. So the Na+ imbalance is significantly higher than the K+ imbalance.

The magic happens when a faint electical impulse comes along from upstream, and is felt by the special proteins mentioned above- channels (proteins that let ions through passively) that are gated by voltage- i.e. turned on when they feel a slight tingle. First, Na+ voltage-gated channels open, and dramatically let Na+ into the cell, which reverses the membrane polarity (the nerve fires, or spikes) to +40 mV. Then they close, and a different protein- the voltage-gated K+ channel- opens after feeling this positive charge. This restores local order, bringing the voltage back down to -70 mV. Indeed it brings the voltage slightly beyond, (called hyperpolarization), which prevents nerve impulses from going backwards, forming the so-called refractory period.

Action potential, in gory detail. The signal is travelling to the left, and some of the gating (Na+ and K+) on different protein channels is shown in seqeuence. The Na+ gates open when their "gating threshold" is reached, here at -55 mV. They close when the voltage rises further to +30 mV, when the K+ gates open.

A recent paper described in atomic detail how the K+ channels work, responding to a voltage change across the membrane they sit in, by shifting their shape in a complex way that alternately opens or closes their central pore, which is itself selective for K+ ions. How a protein channel can even be selective for K+ vs Na+ ions with their identical charge and similar shape is, incidentally, another highly interesting tale of protein structure & chemistry.

Author's cartoon model of the K+ channel's open state, with the critical S4 helix popped up and the channel opened, seen from the side in cut-away. K+ ions are in green, and the four channel subunits are shown on the right from a top view, with the voltage-sensitive modules in blue/red and the central pore in tan.

Author's cartoon model of the K+ channel's closed state. The S4 helix has descended and the regulatory domains have moved slightly away from the pore.

The key to this protein's dynamics is a part of its structure (helix S4, shown above as a purple rod) that has numerous positive charges on arginine and lysine amino acids along its length. This helix has been studied for some time, and its charges have been called the "gating charge", or "voltage sensor", following electrophysiological studies in bare membranes that showed that this segment of the protein, even in the absence of ions, accounts for some charge movement when one imposes an electic field, presumably being some important part of the protein that is itself charged and moves physically in response to an imposed voltage. A crystal structure has also been out for a few years, showing the static structure of this protein in open conformation.

The new paper is a tour-de-force of computation, taking these structural studies to the next dynamic level through atomic-level simulation of key parts of the protein over times up to 230 microseconds. Molecular dynamics is a well-developed field, though rarely deployed to protein-size chemicals, since the computational demands are so high. It resembles other kinds of compulational simulation, like aereodynamic airplane part simulation, weather simulation, climate simulation, etc., though it is very much on the more rigorous end of the spectrum, since basically all the relevant variables are understood.

In essence, it models each atom with its various chemical bonding, quantum mechanical, van der Waals, hydrophibic, and electrical characteristics, plus the jiggling of Brownian motion, to calculate by brute force a known chemical structure evolving through time. The method is commonly used by drug companies to "dock" drug candidates with their protein targets to see whether they might be effective lock-and-key matches. for instance.

In this case, the researchers started with known structures of the open channel, and imposed a simulated electrical field as would occur across the membrane the channel resides in to close it. They offer several movies of their simulations, two of which I link below, and believe have open access.

Starting frame from simulation, with open pore.

Ending frame from simulation, with closed pore, and red helices jutted down.

The pore of the channel is in blue at center, and begins in the open configuration. The voltage sensing domains are symmetrically arranged outside, linked by the critical red helix S4, which is the main voltage sensor. If you advance the movie rapidly by hand, you can note more easily the transition from open to closed. At the movie's native rate, the stochasitic Brownian motion overwhelms the closing movement, but is certainly interesting for that sake to show how proteins work in detail.

Another simulation frame, closeup of the sensor helix S4 from the side, in popped-up condition.

Above is a side view, of the voltage sensing S4 helix and its domain, but not the channel it regulates. The linked movie is a composite of two simulations, one from open to closed, then the reverse, from closed back to open. The colored bar at the bottom of the movie shows the charge being applied, which switches halfway through from red (more negative inside; hyperpolarization) to blue (more positive inside; depolarization). The rate is not uniform in the video, but the time elapsed is marked. Note how the critical arginine side chains (positively charged, with blue branched ends) work their way stepwise down the stable green helix by interacting with negatively charged partners.

As the researchers state, using the abbreviations R for amino acid arginine and K for lysine, both positively charged: "The S4 helix-bearing gating charge residues R1, R2, R3, R4 and K5- is the main VSD [Voltage Sensitive Domain]  moving part. S4 translated ~15Å overall across the membrane in sequential steps while rotating ~120°, moving in a groove formed by the largely stationary S1 ro S3a helices."

The S4 helix links to the pore in a couple of ways, first through its end, joining to a linker colored above in yellow, which tugs the inside end of the pore. Secondly, the four protein blobs that hold the S4 helices rotate around a bit in response to the S4 helix movement (evident in the first video sequence), in a way that helps the rest of the pore either open or close, in a sort of origami dynamic.

There is much more going on here than can be briefly related, but this gives you a taste for the main points, the explanatory power, and indeed the beauty of such a detailed analysis of an important biological structure.

• Down and dirty with intuition.
• Interesting diagram on UK energy infrastructure. Note the "losses" portion.
• Republicans jumping the shark... unworthiness continued.
• Krugman on the euro- this goose is cooked.
• Sorry about sending all your jobs overseas.. would you like to wait on us hand and foot now?
• What's so great about finance?
• London Banker speaks about the public benefit.
• A few problems calling the housing bottom.
• Breaking the conspiracy of silence about pay, which empowers others.
• The Taliban practice Corleone-style "sharia".
• Oh, the things you can find on YouTube...
• Economics quote of the week, from Bill Mitchell:

"The obvious measure of the failure of this approach has been that the IMF has not decreased world poverty. In fact, the overwhelming evidence is that these programs increase poverty and hardship rather than the other way around. The IMF has a long-history of damaging the poorest nations."

• Economics image of the week- we continue falling behind where we could be:

Philosophy: the infancy of knowledge. Or worse!

What is philosophy's relation to theology, and to other fields?

A recent CBC ideas podcast series was named "After Atheism", but was, disappointingly, all more or less blithering theology. Yet it had one perspective that piqued my interest, which is that religion is a sort of questing/seeking of classically philosophical questions. It is indeed remarkable that people of all places and stations are so persistently interested in those perennial, even esoteric, philosophical questions of the nature of being and of reality. Indeed, we quake before the core existential conundrum, and are more or less desperate for an answer. As the grand inquisitor says, "I tell Thee that man is tormented by no greater anxiety than to find someone quickly to whom he can hand over that gift of freedom with which the ill-fated creature is born."

An easy solution is to nail all the doors and windows shut with boards named "God". Fundamentalism is proud in its certainty, though terribly insecure in its intellectual surrender, always seeking social, even political, validation for a solution that doesn't command sophisticated appreciation, inside or outside the citadels of theology, let alone philosophy. It knows the doors are there, and can't shake the sense that something a great deal more interesting, if less comforting, lies beyond.

The CBC show was devoted to slightly more sophisticated theo-babble, which acknowledges the existential questions with some philosophical appreciation, even acknowledging the logic of atheism given the moral and cosmic desert we find ourselves in, but all the same insists, tic-like, that one is "grappling with God".

It is a testament to the cultural entrainment performed by our forebears and institutions that so many people are convinced that naming the void in this way is "fulfilling", and even philosophically "reasonable". Some of the guests on the show were indeed Jesuit-trained! But it isn't. Additionally, many of the questions they are grappling with have expired some time ago. For instance, humans have no more purpose than we see in evolution. The way we are destroying the biosphere should be clear enough evidence of that. We are neither gifted with special goodness, nor with any cosmic role. What we make of our various biological, (even geological, meterological, hydrological), social, and cultural bequests is up to us, frighteningly enough. The trick is not to be frightened by this answer- by this radical freedom.

Is there life after death? No. Is there free will in any basic, physical sense? No. Do we have "souls"? No. Is morality objective? No. These are answered questions, insofar as we are willing to make simple inferences from a large body of scientific and psychological knowledge. Behaving otherwise marks the philospher as a theological tool, not a true seeker in the vineyard of serious questions, whether big or small.

Other philosophical questions do remain out of reach, whether the cosmic one of how everything began, or the metaphysical one of whether our conception of reality is all there is ... whether there might be some Matrix-like "outside" of which our reality, rich as it is, is a shadow(1). Here again, the human gifts of imagination have found their métier, filling up these questions with theological wishes and dreams like some Egyptian tomb, before locking the door and saying that that is really the way it is .. out there.

Another oddity is the role of intuition in philosophy. On the one hand, nothing delights philosophers more than to "problematize" some intuitive or even sacred notion. Reality itself- may not be real! Consciousness- may be a property of electrons! Who knows? Science certainly agrees, holding intuition as one our weaker capacities and especially prone to go wrong on any non-social, non-human scale, such as the relation of the sun to the earth, to take a simple example.

On the other hand, intuition forms the bedrock of other kinds of philosophy. For Kant, it was part of his a priori- the logical and perceptual foundation allowing us to bootstrap our way into a working relationship with whatever it is that reality is for us- our inborn sense of space, time, etc. And then there is theology, which drives through brick walls of reason to reach its intuitive destination: god. In this case mysticism may be treated as "evidence", and subjectivity given absurd "veridicality" in ways that no philosopher would dream of doing for any other topic. Skeptical problematicization is replaced by ideology and gullibility. To top it all off, as theology wanes as an acceptable mode of philosophy, practitioners (notably those in the CBC series above) have taken up the mantle of "edgy", transgressive, and postmodern, as if they were not revanchists for the oldest and most regressive psycho-political tropes to which humans have ever been enthralled.

It is disappointing to see so much bad philosophy, however heartening it is that some of these questions can animate so much searching and thought. But what of the professionals? Do they do much better? I would say that it is a disappointing mixed bag. In the interests of professional relevance, philosophers need to keep their questions alive, sometimes well past their expiration date. For questions that remain current, they aren't getting any answers, so the best they can do is to make novel arguments about favored questions, and critique those of others. Calling this progress is rather generous, but is the bread and butter of professional philosophy. Doing this well necessitates knowing all the arguments and counterarguments that have crossed through the field previously, obviously a daunting prospect and the main barrier to the speculating guild, as it were.

But when a bad question remains a pet topic in the academy, something has gone disastrously wrong. Of course I am thinking of theology and its persistent place in academic philosophy. Memo: god is dead. Theology has become a problem of normal and abnormal psychology, anthropology, and allied fields. Just because people in all walks of life seek spiritual expression, and want existential answers, doesn't mean that their answers, (whether individual or from a larger tradition), or even all their questions, merit philosophical credence and discussion in a professional philosophical context.

Philosophy has lost many questions. Some, like physics and other natural philosophies, have become so productive and fertile that they have grown up, as it were, and taken a place far beyond the sort of loose speculation that is philosophy's stock in trade. Others, like many of the theological questions above, have dissolved in another way, by being so clearly empty and psychologically driven that good philosophers no longer care about them. Sometimes the answer is yes, sometimes the answer is no. It is critical for philosophers to recognize when this happens, even if it crimps their horizon. Success is not a bad thing.

To make the case in a concrete way, I will compile a list of evident theologians at publically supported institutions, (i.e. major state universities), who not only stand in the way of critical philosophy, but violate the separation of church and state. Most open theology programs are private, thankfully.
The study of religion is important, indeed wonderful. The promotion of religion in  academic guise is quite another matter. I'll note incidentally that these are Christian theologians almost exclusively- again calling into question just what is happening with public dollars in the higher education system, in constitutional terms. This may be updated periodically.

Footnote:
1. An example is "A beginner's guide to reality", by Jim Baggott, which ends up precisely where it began, in common sense mode, after an excursis through numerous philosophical thought experiments, movie references, and bizarre theories.

---

Publicly supported theologians, with sample work. I may add to this on an ongoing basis, to make it a comprehensive resource. The intent is to isolate evidently pro-religion advocates, though the zone between doing philosophy or study of religion and philosophy for religion (i.e. theological apologetics) is very broad.

• University of North Carolina, Marilyn McCord Adams, "Horrendous Evils and the Goodness of God"
• University of North Carolina, Robert Merrihew Adams, "The Virtue of Faith and Other Essays in Philosophical Theology".
• University of Texas, J. Budziszewski, "Written on the Heart: The Case for Natural Law"
• University of Colorado Boulder, Wesley Morriston, "Omnipotence and Necessary Moral Perfection: Are they compatible?"
• SUNY Stony Brook, Peter Manchester, "Kinds of Eternity: Temporal Problematic and Historical Horizons"
• SUNY Stony Brook, Gary Mar, "The Modal Unity of Anselm's Proslogion"
• UC Irvine, Bonnie Kent, "Happiness and the Willing Agent: The Ongoing Relevance of the Franciscan Tradition"
• University of Kentucky, David Bradshaw, "The Concept of the Divine Energies", "A Christian Approach to the Philosophy of Time."
• University of Virginia, Trenton Merricks, "The Resurrection of the Body", "'The Word Made Flesh: Dualism, Physicalism, and the Incarnation"
• (Note that the University of Virginia has an enormous Department of Religious studies, teaming with theologians, missionaries, and apologists. Thomas Jefferson would turn over in his grave.) "The Department of Religious Studies at the University of Virginia is the largest department of its kind among American public universities. Religious Studies stands among the humanities and social sciences at U.Va., a public, non-sectarian institution."
• James Childress, "A new dictionary of Christian ethics"
• Jennifer Geddes, "Evil Lost and Found"
• Gregory Goering, "Sapiential Synesthesia: The Confluence of Light and Word in Ben Sira’s Wisdom Instruction"
• Vigen Guroian, "The Fragrance of God"
• Kevin Hart, "The Experience of God"
• Paul Dafydd Jones, "The Atonement: God's Love in Action"
• Charles R. Marsh, "Share Your Faith With a Muslim"
• Charles Mathewes, "A Theology of Public Life During the World"
• Margaret E. Mohrmann, "Medicine as Ministry: Reflections on Suffering, Ethics, and Hope"
• Peter Ochs, "Another Reformation: Postliberal Christianity and the Jews"
• Vanessa Ochs, "Words On Fire: One Woman's Journey Into The Sacred"
• John Portman, "A History of Sin"
• Karl Shuve, "Entering the Story: Origen’s Dramatic Approach to Scripture in the Homilies on Jeremiah"
• Heather Warren, "The Discipline and Habit of Theological Reflection"
• University of Oklahoma, Neal Judisch, "Sanctification, Satisfaction, and the Purpose of Purgatory"
• University of Oklahoma, Linda Zagzebski, "Omniscience and the Arrow of Time", "Rational Faith: Catholic Responses to Reformed Epistemology"
• University of Indiana Bloomington, Timothy O'Connor, "Theism and Ultimate Explanation"
• University of Massachusetts, Lynne Rudder Baker, "Persons and the Metaphysics of Resurrection"
• University of Illinois, Robert McKim, "Could God have more than one nature?"
• University of Arkansas, Thomas Senor, "Drawing on Many Traditions: An Ecumenical Kenotic Christology"
• University of Arkansas, Lynne Spellman, "Unbolting the Dark: A Memoir: On Turning Inward in Search of God"
• University of Minnesota, Jasper Hopkins, "Hugh of Balma on Mystical Theology: A Translation and an Overview of His De Theologia Mystica"
• University of Kansas, James Woelfel, "The Existentialist Legacy and Other Essays on Philosophy and Religion"
• University of North Dakota, Gayle Baldwin, "From Sole Learning to Soul Learning"
• University of North Dakota, Charles Miller, "The Experience of Teaching a Course to Train Teachers of Biblical Studies in a Theological College"
• University of North Dakota, Troy Troftgruben, "Jesus: A Christological Perspective"
• University of Idaho, Janice Capel Anderson, "Mark and Method: New Approaches in Biblical Studies"
• University of California Riverside, John Martin Fischer, "God, Foreknowledge and Freedom", "Why Immortality is Not So Bad"
• University of California Riverside, Howard Wettstein, "God's struggles"

---

• Children learn ... by asking questions.
• California's demographic restructuring, snowballing segregation, and economic innovation.
• Mark Thoma and others, and yet others, on the unworthiness of Republicans.
• Is Afghanistan headed to disintegration in any case?
• God made me an atheist.
• Magical thinking at Fukushima.

How deep is my debt

Understanding the federal debt- economic peril or stalking horse?

Perhaps the most important political issue of the era revolves around our perception and understanding of the US federal debt. If we regard it as "high", "spiralling out of control", "skyrocketing", "sea of red ink", "inferno", and so forth, then, however many tears (crocodile or otherwise) we shed for the unemployed, we will agree with "serious" opinion that "there is no alternative", aka TINA.

On the other hand, if the deficit/debt is not a problem, now or in the future, then in policy terms we could all breathe a sigh of relief and turn towards the unemployment problem with new vigor and effective tools, like ... expanding the deficit. This is the fork in the road, and its importance can not be overemphasized.

I am going to make the case that the deficit is not very important, and moreover that if we were smart about it, we wouldn't have to add to it at all, while at the same time accomplishing all the goals we need through the government spending that customarily adds to it.

The first thing to say is that the federal debt never gets paid off. Really. If you have rich friends who own bonds, are they clammoring to get rid of them? No. They pile them up like ye olde horde of jewels and gold, ready to pass on to their heirs, pretty much in perpetuity. Overall, government bonds are a store of wealth, which pay steady interest and never go broke. So the constant refrain of how much there is to "pay off", or better yet, how much each man, woman, and child owes ... all that is irrelevant. While most wealth in the US lies in real estate, much also is in bonds, and no one has much interest(!) in seeing that level of stored wealth decline.

And what would a person get if they redeemed a federal bond? The government would hand over dollars, which it prints just as it prints up bonds. So bonds are a sort of flowery high-class dollar bill that pays a little bit of interest. And since bonds are used as savings, someone redeeming a bond for dollars would typically, on average, just stuff those dollars in her mattress and store them, just as she had stored the bond before. So the net effect of exchanging dollars and bonds is not very much.. it doesn't generate inflation or any other problem.

This is all to say that issuing bonds doesn't really address inflation risk, or fund any needs of the government. It could easily print money without issuing bonds, indeed. Bonds stem from the old days of the gold standard, when governments had not (yet) come across the alchemy needed to create gold out of baser elements (or thin air). If the government wanted to spend money, it had to get money, just as any other business or household, and one way to get gold was to borrow it on the open market in return for bonds. It was a true commercial transaction.

Now we live in a completely different world (excepting the Euro zone, which put itself back into a quasi-gold standard straightjacket by having German bankers control everyone else's currency). Currency-sovereign governments like the US create and issue a fiat currency that people have to get before they can spend or even pay taxes back into the Treasury. An initial issue (or deficit) is essential in the first place (as Alexander Hamilton understood) as a means to provide currency to get the system started. After that, continuing deficits continue to be essential to accommodate economic expansion, in addition to the credit extended by deputized banks, which can multiply the money supply (in good times) to some regulated extent by their lending on top of capital/reserve requirements.

So deficits are essential for economic growth, so that the private economy has enough money to work with, which the government can in turn again skim in the form of taxes, etc. to make room for its own real economic requirements. The big question is: how much deficit is too much? Whether net government spending over intake is reflected in bond sales or not, there is a simple metric for how much is too much, which is ... inflation.

Inflation in the overall economy is the consequence of too much money, either issued directly by the government, or over-lent by the banking system, or drawn out of savings, or relative to shrinking real economic resources. One of these problems must be at work. Not to be all Milton Friedman about it, but inflation is really a pretty simple problem, which the Federal reserve has plenty of tools to address.

It is obvious that in our current situation, which resembles Japan's over the last two decades, inflation is extremely low, even declining. We continue to flirt with deflation, which is far more damaging than inflation. The ideal policy interest rate continues to be negative. So by that metric alone, the deficit is not big enough. For all the trillions the Obama administration has added to the debt, the simple answer is that it isn't big enough.

Lastly, there is the issue of paying the interest on the federal debt. Obviously, interest rates are so low now that they make little difference to the government's finances for the foreseeable future. And printing a little more money to pay this interest is actually a good thing, insofar as government spending has been insufficient to restore aggregate demand in the economy (and fight deflation).

But as mentioned above, if bonds are not really necessary in today's world, why pay all this interest at all? It is in essence a future-promised economic transfer system from the poor (taxpayers and those who could otherwise get government services) to the rich, who own bonds. It makes very little sense, and is simply an annuity system for the rich funded by our antiquated ideas of a constraint by which the government cannot create money ex nihilo, which is false and has been for decades.

Some time in the future, when interest rates go back up and normal economic conditions resume, the government may find it has to pay slightly higher rates for bond sales. In the first place, such rates are always tied to the inflation rate, and are very low in real terms, the insolvency risk being zero (as long as idiots don't take over the government). In the second place, as mentioned above, the whole practice could be ended at any time, at the government's discretion. Remember when the Clinton administration went into surplus? Who complained? Financiers complained, because they were not getting their free annuities anymore.

So from an economic perspective, the government debt is a non-issue, more of a symptom of other economic conditions (and reflection of our accumulating national wealth) than a problem in its own right. Clearly, the-party-that-is-unworthy-of-national-office also feels that way, since both Mitt Romney's and Matt Ryan's budgets do nothing to reduce the debt or even the deficit, while screwing the poor and rewarding the rich. It is a stalking horse, based on the false analogy of household debt and national (sovereign) debt, more pernicious now than ever before.

• Just how corrupt is the banking system? We shall soon find out.
• Worse than Keystone. Bedeviled by demon coal.
• Working and having a job, is really, really important.
• Equitable and stable social institutions underpin prosperity, not "freedom".
• Facebook- feature or bug?
• Our society remains class-based.
• Economics quote of the week, from Keynes, writing on Europe, 1923, and just as relevant to the euro mess. But also to the public pension crisis, to financier bonuses, etc.

"The absolutists of contract are the real parents of revolution."

• Or from "Brother can you spare a dime":

"They used to tell me I was building a dream, and so I followed the mob,
When there was earth to plow, or guns to bear, I was always there right on the job.
They used to tell me I was building a dream, with peace and glory ahead,
Why should I be standing in line, just waiting for bread?"