Thursday, August 20, 2009

Asking About What's Going On


President Obama speaks of “stabilization of the economic system.” Those are his exact words from an internet broadcast I tuned into; Thur, August 20th. This is not really the right point for him to emphasize when talking about economics (since what appears to be stable at this juncture in history may be anything but, and since of course all the paranoid bankers and Fed chairmen are always assuring us that the economy is stable when they fear just the opposite) and my fear is that the president's understanding of economics is way off. Speaking of President Obama characterologically, he sometimes seems tp buy into a standard story --- or defaults to the mainstream logic. Looks like a character trait. But defaulting to the standard story for economics may not work so well. If the only method that occurs to you is to is to take what passes for the standard view -- the state of the art in the academic field -- you still are not there. The default, standard-issue view still does not give you enough to work with. In any case, capitalism is a difficult thing to understand -- OK, not unlike healthcare -- and highly ideological.

And the "ideology" is connected directly to the matters of economics. That is where it gets dicey. Here's my rather sophisticated view. Economics is, on the one hand, about the basic competition for resources, but, on the other (especially as things develop and we get more and more productivity), it is about the layers of ideology that get built up on that basic physical struggle for resources. It is a merging of ideology and materiality.

Now, most economists are more interested in their fantasies, which apparently appear to them as a rich saga. In other words, they're more into the non-physical or ideological side.

After all, they are not actually working for a living, are they? Do they work in the economy? No!! They claim to be hard at work on it. They are not working --- in the sense of doing work in the economy itself. Are they? So: ideology is easier! You can't be a lazy bricklayer and get the job done but you can be a lazy economist and "do great work." At any rate, I say that economic views are ideological. Since this is the case, what the views of economics do not reflect is an unbiased investigation into economics. Or: into economics in all of its depth or as to all of the matters related to the proper subject of economics. They basically miss a lot of material.

Let's get a bit more into this: If you did not accept standard views, would you get accepted in the typical corporation, or into our American culture of business? It's a good question, OK? And even if persons are independently wealthy they, too, sign on. Even then because they still need social acceptance. Obama goes with a standard set of advisors, remaining apparently unaware that anything else even exists.

And, in a sense, it doesn't. Another truth exists, but it isn't represented. Hey: is that Post-modern of me? This is possible.

Due to the structure of society one cannot get around the (wrong but) standard set of views. Let's be clear, then. Here's how it works -- not at Harvard Law Review but in the world of economic thinking in our society -- The coursework in economics departments bars anyone who has contrasting ideas from being able to pass because the wrong views are embedded to such a high degree. You have to actually do economics, and it's just too much. Persons today are no longer willing to torture themselves. I mean, not to this degree. It does not make sense. How much silly math do you really want to do? --- for nothing. Unless of course, you revert to orthodox Marxism. That is the other option. Not quite the only, but I think I am on target to say there is basically not much else out there. Other options are not very common, and also tend to be highly specific and if you do not like what you are seeing you will have to make your own school or economics ---- unless: you study it on your own, as I do. And why do I do it? Because I LIKE to, and also because, due to having myself seen through to a totally original point of view there really is something there to work with. (Now I am posting the original material. It is found in the material in the August 10 post and in the followup about six days later and will henceforth I hope be included in the posting practice I develop on this website).

So as good as he seems to be on health care, maybe the president is not so good when it comes to economics, and it is because what he is saying is, "hey, the economy seems to be recovering." That is very, very limited. You have to think outside the box. The problem is that President Obama wants the economy to look better on the outside. Which is, I suppose, something else again.

But this is much more important than that, and it deserves a better, deeper sort of attention. You have to understand the psychology of these bankers and these entrenched forces. The matter is deeply psychological. He rushes to fix up the obvious weak points --- like that Dutch boy standing by the dam, right?, and he has advisors. These are they who tell him just how to fix up the outside appearance or the weak spots in the dam.

What the president does not understand is the dishonesty of his own advisors. Economics is a big game. Attn. Mr. Obama: not everybody is what you are: an activist renegade whose career depends on being willing to break down barriers and thereby explore his own path to the voters and the White House. They got where they did differetnly. Am I right? Those advisors, like Geithner and Summers, did not come up Obama style.

They got there through working with very small entrenched groups selected out of the social elites. So that's different, isn't it? It's a weird thing, and it's psychological. The bankers? Who are even they? We have to make a basic decision. The decision that needs to be made is the decision to no longer trust the banking leadership. That's pretty simple, isn't it? There is a dirty little clique on top of the baking game. (Although this is my opinion, strangely, some of the more down-to-earth or lower-level regular career bankers, like the staff members of the World Bank, seem better: there are some books written by these guys. There are some great things to read from certain officers of the regional Federal Reserve banks. So where is the problem? Where is Paul Volker? Is he being held captive, in a cage somewhere?) We can easily see, for example, that Greenspan as it turns out, was poor. I am not giving the details, but there is a literature on this, and it is not so difficult to get the idea. I will note here thought that he seems not to have been able to see things that were right in front of his nose. Maybe that is the skill they need on that level. For example, he though the sort of half-secret shadow banking derivative industry was good, in Alan's mind. Good, because they "distribute risk." That kind of observation makes a dubious point, but moreover it shows that there are some other things that are not even remotely occuring to Greenspan. He simply thought, "derivatives, oh goody!" These people are freaks. It's real ominous.

This thinking that we are looking at here: it's economics; the reality of economics is a big deal, and it is social and it has to do with the fabric of society. What is at risk is the fabric of the society, and there is a right and a wrong way to do capitalism that has to do only with how we behave and never is something determined automatically or by "the market" without our intervention. Such thinking is simply senseless. Now we know that we do not relate to one another in a traditional, agrarian way anymore. So, Ideas count: and economics has the ability to tell us what to THINK. The monopoly on our thought by only a certain specific brand of economics has got to stop, at some point is has to: let's just hope it is not too late. OK?

There are structural weaknesses in the economic aspect of society. These are weak points for that society. This means for the society itself and it is not a matter of cleaning these up only in a superficial way. You have to dig down. you have to wonder enough. You have to ask questions. And I know enough to know that you have to investigate enough to embarass and flush out these liars in order to protect society and the world and all of us. The hypocrite bankers are too far gone. They cannot change themselves. That is not human nature and it is impossible. We are doing them a favor. They have to be helped. That is called governmental authority.

In economics, you have to ask about what is really going on deeper. Economics is about how the denizens or citizens of a country go about getting their access to goods and services. This is very important and it is about our human culture, as it exists for us at present. A giant, hypocritical banking machine does not serve the culture. And it is a unique and vital institution, not a sidelight.

Ask what's going on, Obama; ask yourself a few questions

Tuesday, August 18, 2009

Trading Situation of a New Sort

(continuation of Monday Aug 10; International Trade Idea)

What we see in any developed capitalist society is a condition - i.e. an "economy" --that has a lot of production going on. Even if some factories lie dormant, or fields remain unplanted, there is a lot of capacity for producing. So, this is an inherent capacity. Some of that capacity or productive ability could be diverted, as an extraction. This extraction is now to be applied to those in countries usually far away from the developed area, but yet linked by globalization. The people of those regions would use the grant-goods by simply consuming the goods.

This is an economic transfer. Giving this stuff away, across that divide between wealthiest and poorest regions or groups appears to be a capitalistic trade situation. It is a trade situation of a radically different kind, however. It would be a large scale transfer that impacts the entire system, or, essentially, a new method of trading. Any trade occurs between traders or trading parties, or parties to the trade. This appears to be what trade is all about. Is this really trade? I do not think it matters: we can call it the transfer event or trade event. They are the developed regions, which have a lot to give, and the less developed or less wealthy regions, with the most need. These are the two parties to this kind of pseudo-trade.

Saturday, August 15, 2009

The book I'm Reading, by Ahamed

Here is a quote from that book by Ahamed. It's on the "Lords of Finance"

"Governments then believed matters of finance were best left to bankers..."

It refers to the years leading up to the Great Depression. This sounds like the attitude today also: that of Geithner, today, who is head of Treasury and also, we find, a great friend of the bankers. Or it could be Paulson, who was something akin to a banker, was he not? All of this is dangerous stuff and will probably get me killed in about three days.

Actually, bankers were very important. The Jewish bankers, in particular, did a lot of things for the world, taking leadership when it was needed. But let's get over it. The question of whether they should still be held up as our leaders is another thing. It would be a great advance if the democratic governments of the world could take control of economics away from these bankers. The time for such a move has come.

Mine and Their's, pt. 2

So this is about social distribution of goods:

We know that there are goods. There have to be, we require them. We require them to live. Right? Animals eat food, and hey: so do humans. Animals also build houses as do the hominids. If there were no goods, there would be no discussion. So: they aren't scarce. It's as simple as that. So there!

The point is that scarcity is not a salient theoretical principle for use in economics theory. So, the reader of this blog can see how I find myself completely outside of the goings-on university side.

In fact, I recently read something very interesting from J.M. Keynes on how capital should not be understood as a scarce good. That is an example of my thought converging with some well-known economists' thought. So, as I mentioned in the last post, that happens too.

And I'll keep doing what I was doing today, which is looking into this book thingie called "Lords of Finance" which is actually a "Chapter One" book, courtesy NYT. Also not scarce --- assuming you have an internet connection and the (scarce) fossil fuels keep feeding the server farms. The common link is that this book, as well, finds great appreciation as well as interest in J. M. Keynes, who, predictably, is dispised by some of the mainstream-type economists.

When you study this stuff, you have got to simply continuously shake your head...or I do mine, at any rate.

My Economics and Theirs

Starting with the previous post, about my original international trade idea, this blog will now shift to talking more about my own economic theorerical system, rather than the general chatter, comments, etc. you saw before.

Here is something I ran into by searching self-interest, economics. It is linked to "economist" magazine -- not a publication I will usually be very interested in.

Absolute advantage
"This is the simplest yardstick of economic performance. If one person, firm or country can produce more of something with the same amount of effort and resources, they have an absolute advantage over other producers. Being the best at something does not mean that doing that thing is the best way to use your scarce economic resources."

This serves as a way to contrast "their" economics and mine. I am seldom interested in the standard approach that has been developed in regard to economics. I do agree with the general import of the term (i.e.: economics), so I do not have any problem with the name of the subject category itself. There are some other striking agreements with the standard discussion, but I do not think, for example, that economics is about scarce resources. Linking economics with scarcity seems to be, on the other hand, the standard school's (or mainstream academic's) opening move or opening gambit of some sort. In the quote above, once they have explained what "absolute advantage" is, then they ask about what this producer will do: what the producer's next move (its behavior) will be. This is all preliminary to just piddling about forever which is of course precisely what they want to do.

For myself, I would interrupt right at this first point about "absolute advantage," which point seems clear enough, and point out that whether or not one has some kind of advantage in the absolute, the questions of economics concern how one relates socially to other beings (particularly humans) and therefore, the question is that of how that product that you could produce will be distributed.

This, of course, throws out the whole emphasis on "self-interest" as well as any number of other things.

For example, lets say I have absolutely bigger muscles than others in my society, the question is more that of what I will do with that. It does not necessarily mean I should beat everybody up. That really has so little to do with it. Now we shall assume that the society is capable of some basic economic distribution. Assuming that such is the case there are two choices that are of more merit to consider than going up to the first person I see and punching him (which has also been done, and also reminds me of the way I have been treated by certain law enforcement officers in Prescott, AZ, New Jersey, and Chicago, IL): I can use those muscles to compete, or to cooperate. Many behaviors are likely to be a very complex mix of those two.

So then: going into the matter by first positing absolute advantage (or scarce resources) and then making a big deal of whether one will use it or not use it -- waxing philosophical about absolute advantage vs. competitive (ooops! --- isn't that "comparative"?) advantage as if they are two equal considerations -- misses the opportunity to instead focus on how the social distribution of the resources one possesses will transpire. This is the problem of economics --- which was eventually solved by capitalism.

So, there was your short little economics lesson from my point of view. I am highly pleased, after about eight years of doing this, to be able to extemporaneously write in the subject area of economics and see several points of my own economics theory pop right in there as if it happens all by itself! (Took eight years, really.)

I have -- no doubt -- an "absolute advantage" when it comes to jackSilverman-type economics theory...

Monday, August 10, 2009

International Trade Idea

As to my original idea in international trade, the idea is that if we use some of this wealth for others instead of ourself what this creates is a trading situation. It involves the diversion of a certain amount of wealth. The wealth that we divert out of the original trade system is an extraction taken out by the society itself, according to broad public policy, and not taken out as a matter of an individual firm’s (or even an individual industry’s) choice.
This suggests an interpretation of capitalism as one system, which is (ought to be) broken into two, with the extracted portion moved from one of the two delineated but pre-existing parts (the rich side) to the other (the poor side). Sharing and trading become co-emergently defined terms.
The idea that capitalist trades take place out of isolated self-interest is now discarded.
A bundle or basket of goods is extracted from the whole system. One way to speak of these taken-out goods is to say “free.” The take out or extraction is created to be set aside as wealth that is valued as a sort of “trade item,” yet, co-emergently, also as a sort of free give-away.
The gain is that of a more stable world order. A world where wealth continuously accumulates in the hands of just a few at some point ceases to make sense. Senselessness is not a defensible trait, obviously.

The money – or value, or wealth – that the wealthy West possesses exists in the form of a vast pool that simply circulates from one denizen of the “rich world” to another, based on what we may call various subterfuges that one calls “business.” Few of these are materially essential to our survival. Also, it generates waste. These practices contribute to pollution, global warming, etc. Then let us find new ways to distribute capitalistic output (not that an argument is being strongly made here that the present idea would impact the waste issue). To earmark some of the output resulting from all this historical “accumulation” or, differently put, from this humanly-generated productive activity to the benefit of the “poor” of the global system not only seems just and moral (since these are the same folks this system has created) but it creates a more well-balanced system overall. The benefits from increased rationality seem obvious, as has been noted.

The individual is anonymously well-treated as a “customer” in the “rich west” block – a transnational group tantamount to an ethnicity or master race, while others live on “two dollars a day.”
In its total anonymity the entire “rich west” block is like one social unit, like a particular ethnicity or nation.
Firms such as banks and so forth automatically defer to any “customer.” There is a quality that may be thought of as a kind of equality. This trade idea – if “trade” is indeed the word – offers the idea of a sort of connection, or relationship between the two halves (or, we could say, haves and have-nots). The fundamental referential concept or sort of relationship that this would be would be capitalist.

What we are saying then is that there is a different sort of trading situation that we can conceive of where the build-up or excess is transferred, in order to get a better system of social relationships going. It is still capitalism. Moving items of commerce from rich sector to poor sector is simply another kind of capitalism: no more, no less. This is the basic epiphany, and from there a lot of new ideas may begin to emerge. The idea of a new type of trad/give away leads to a conclusion that indicates that actually capitalism is public rather than private; and that globalization can be rendered most rational, sane, just, etc. when it is divided into two parts; and, that the additional step of marking off or formally designating that which exists anyway --- the divide between global rich and poor, more prosaically called the haves and have-nots --- is not a bad thing but a good one. We find that capitalism survives and changes --- but it survives only by modifying itself. And not, therefore, by sticking to the same old method.