Current situation

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The current situation.

Apocalypse we have to say,  is not coming – we are already in it. Climate, finance, impact of robots, health, population. and more.

Post election we have the majority, angry at

  • Losing out
  •  Fear of losing what they have

These two are quite different, but both support Trump (as a voice of anger, not as a voice of policies). The Sanders supporters are part of that.

But we are in a phase where the anti-establishment progressives and the pro Clinton mainstreams appear to both share a common anti-trump agenda but are to be torn apart by the difference between anti-establishment (anti-Clinton)and pro-establishment (pro-Clinton) perspectives within the democratic storm-tossed “tent’,

So we have, going forward

  1. Trump supporters
  2. Third party supporters
  3. Democratic party supporters.

In the fight over cabinet, inauguration and the spring, we will see  much incivility. The progressives will do what they had feared the right would do post a Clinton election:take to the streets with violence and name calling. In short trying to making governance impossible and providing an excuse for repression (very dangerous)

The problem is, we cannot have a civil discussion because the real problem is wealth concentration and the stuff that goes with it: class and race disdain. An open discussion about capitalism, representative democracy, the media – all in the context of weak government, population increase, and near unavoidable climate change – seems to be beyond us, but we must try.

 

 

 

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1737. Entrepreneurship

I am all for entrepreneurship. We need  it to get to a greener sustainable and attractive  world.

But we are frozen in the current matrix of corporations and expectations. These require customers for new services. But the reality is, most people do not have any money to spend.  And wealth concentration (do the arithmetic) is making this worse.

Going  greener and sustainable is blocked by the desire to keep the current money machine going (even though it is not doing well).   The hopes for replacing non-green with green opportunities are limited to investments that that will continue the up escalator for money payoff to investors. If not by direct investment then by government (taxpayer) guarantees that make investment not only risk free but risk prone with no cost to investors.

Going green and sustainable  can’t work under these conditions.

If we start with the problems: debt, warming, wealth concentration, weakness of government, increasing likelihood of war..  you know the rest… any approach which maintains capitalism as deep inequality will not work.

So we need to free entrepreneurship from the need to make money to a desire to cope with the whole system.

 

This will be very hard. As one exec said to me “would you rather we continue as we are for fifteen yeas, and then collapse, or try to change now and collapse now?

 

I think this is a fairly common belief, especially among people with serious power.

 

We need entrepreneurs but we need entrepreneurs who are seriously interested in the good of all of society, not just the already rich and their professional support.

 

Drucker also wrote The End of Economic Man, showing how the despair of the lower large portion of society leads to fascism. Why don’t we read that?

1737. Who are the elites?

Provocation 59. Elites = professionals

Who are the “elites”? We tend to think they are they, not us. But lets take for the moment the idea that the elites are the owners of big capital and the supporting professional staffs of lawyers, accountants, pr firms, spouses and children, and all the people who have used licensing or selection, such as college admissions, to get a place in society. Residue of the old craft guilds.

The reality is that the game is quite fixed with prepared paths to neighborhood, school, college, and first “jobs” that follow from parental influence, outright interventions, and values. Some are supported by regulations that allow quasi monopolization of their small business such that the owner of a hardware store, a chain restaurant, can have an annual income in the neighborhood of a million. Other regulations create preferred paths to colleges and graduate degree, all protected by thousands of “procedures”, like the GRE, the grade system, grants and licensing that define and protect the professionals, making them part of the one percent, and being a target of the Trump voters. This would be tolerated if the income of the top 10% were reduced by 10%, the top one percent by half, the top .1% by 90%

The point is that the nexus of relationships is seriously hard to modify. This means, among other things that climate warming will proceed till the under 30 generation pulls governance apart, and inequality will continue to generate multiple social pathologies. We need to take responsibility that it was us, not the Trump supports who benefitted by and helped legitimate, if not create, the dysfunction we currently live in.

Our current mess highlights that the chief output of an economy is not the society of the spectacle as Guy DeBord brilliantly has it, but the society of power. We need to take seriously the idea that the power established is an economic outcome of the economy we have and participate in, as earners and spenders. Change must break habits. In order for economics to play a role in such changes we have to break out of the cocoon of economic formalism into the messy reality of the humanities and social sciences. From archeology through political thought to post modern novels.
PS.

Is this mere coincidence?

The first-move advantage in chess is the inherent advantage of the player (White) who makes the first move in chess. Chess players and theorists generally agree that White begins the game with some advantage.
First-move advantage in chess – Wikipedia
Wikipedia › wiki › First-move_advantag…

The white first rule seems to have been established in the 1860-1880 period.

1736. Wealth and climate

we can’t get very far on changing rules or goals so long as the system that makes the rich richer remains in place. Political forces from the powerful will resist any change that takes away power and wealth from the group, including the growth path.

We need growth, they say, to pay off the interest on the debt, and because so many broker types only make a living when there is growth. Breaking apart that system in some socially acceptable way, is key.

1735. The real DT?


I have been horrified by the conventional thinking of almost everyone I know (as often, the best are better), not interested in Trump, just trashing. As though there is an alterantive that is obviously better.

Along the way, the division between right and progressive, progressive and working class, do not get at the fundamental that it is a complex mixture that cross cuts all standard divisions but comes down to poor in cash or education or prospects vs the professionals (elite, wealthy and their supporters.) minus minorities who are more afraid of Trump (and rightfully so)

Trump has said some intresting things, most noteably in the conversation with the NYT staff. I am sure you have read it carefully. Language like

Because our country’s really in bad, big trouble. We have a lot of trouble. A lot of problems. And one of the big problems, I talk about, divisiveness. I think that a lot of people will appreciate … I’m not doing it for that reason. I’m doing it because it’s time to go in a different direction. There was a lot of pain, and I think that the people that supported me with such enthusiasm, where they will show up at 1 in the morning to hear a speech.

Suggests a greater sensitiveity, humanity, than we usually get in press quotes.

So who is he? My current view is that he is a spoiled rich kid who went to private school, learned standard patriotism and sports, thinks winning is importnat, and has a lot ofdecency but, lacks education in other persepctives and can under pressure revert to bullying in defnese of what he considers a reasaonble bunch of ideas.

How smart he is, unclear. Does he hide knowledge? How viscious can he be? Is he drawn to violence? Does he know more history than he lets on? Does he hide motives? Is he a prince Hal on the way to being Henry V?

Only careful listening will help us answer these important questions. The Warren letter suggests he may be running a klpetocracy and hides it under salesmanship. I find myslef interested in who he is, how he thinks. The appointments feel like over reach to me and he will generate a strong rfesistance, from many in congress and in the population. Through this he could collapse as he finds he can’ govern. I also think we can expect that the climate issue will loom large more reapidly than most thingk. A weak Trump fighting to get appointments and facing a public surge around climate, would create the opening we need to deal with climaete and a different kind of economy. .

Each day stirs the Sherlock in us: notice, pay attention, be ready for revising opinions. To our friends, we need to advise replacing anger and depression with vital interest.

Blessings,
Doug
http://dougcarmichael.com
http://gardenworldpolitics.com

1734. Bias in numbers away from action

Provocation # 58. Why do economists present us with bad numbers?

What can economics – and INET – do about the use of economic indicators that are distortions of reality, either toward simplicity, or politically motivated? GDP is the most grievous. “Third world country X has an increased GDP so all is well, we are lifting billions out of poverty”. But increasing earnings at the top (the people who work for corporations or government or the professions) and lowering for the bottom 80%, GDP can be increasing, but most people are worse off. Th effect is amplified because while income is up, costs have risen faster, and people are being pushed off the land removing them from the statistics on earnings.

Janet Yellin’s testimony to congress last week got standard headline across most of the press. “Unemployment at 4.9% we should move the fed rate up.”

4.9% fails to deal with the large number that give up job search because there aren’t any in their neighborhood, and that those who are working are working fewer hours and for less wages than their previous jobs.

Yellin’s testimony to Congress was relatively nuanced but you have to go to the Fed’s web site to find her speech and see that nuance.

Her testimony. The Economic Outlook
The U.S. economy has made further progress this year toward the Federal Reserve’s dual-mandate objectives of maximum employment and price stability. Job gains averaged 180,000 per month from January through October, a somewhat slower pace than last year but still well above estimates of the pace necessary to absorb new entrants to the labor force. The unemployment rate, which stood at 4.9 percent in October, has held relatively steady since the beginning of the year. The stability of the unemployment rate, combined with above-trend job growth, suggests that the U.S. economy has had a bit more “room to run” than anticipated earlier. This favorable outcome has been reflected in the labor force participation rate, which has been about unchanged this year, on net, despite an underlying downward trend stemming from the aging of the U.S. population. While above-trend growth of the labor force and employment cannot continue indefinitely, there nonetheless appears to be scope for some further improvement in the labor market. The unemployment rate is still a little above the median of Federal Open Market Committee (FOMC) participants’ estimates of its longer-run level, and involuntary part-time employment remains elevated relative to historical norms. Further employment gains may well help support labor force participation as well as wage gains; indeed, there are some signs that the pace of wage growth has stepped up recently. While the improvements in the labor market over the past year have been widespread across racial and ethnic groups, it is troubling that unemployment rates for African Americans and Hispanics remain higher than for the nation overall, and that the annual income of the median African American household and the median Hispanic household is still well below the median income of other U.S. households.

Quite good, though I fault the lack of mention of automation and climate on future trends in employment. (I think these are already having effects). The press is a huge industry hungry for quotes, conflict, and emotion. How does a profession like economics function in such an environment? And how much have economists swallowed the 4.9% unemployment rate as real?

Perhaps the tendency of the press, echoing the more vocal economists, make things look better than they are is because the pressure is then off to do something, in particular redistribution.

I realize that in the time of false news, this is a bit quixotic, but standards are important for building a viable culture.

——-
I sense that Trump’s overreach on a number of issues will lead to massive reactions and mid course changes. But meanwhile perhaps he tries to run the government as an infrastructure for Trump Inc. The feudal system of large corporations evolves toward a strong King. History favors this dynamic. The enlightenment reaction against absolute monarchy may have run its course and the parts, such as IT have aligned with central power.

1733. Race and economics conference

Provocation # 57.

INET Detroit Race and Economics conference

https://www.ineteconomics.org/events/tomorrows-detroits-and-detroits-tomorrows

The conference has so many edges open to explore. First, economics came off well, presenting usable analytic perspectives on some key issues.

At the same time speaker after speaker made it urgent that we deal with complexity, combinations of issues “intertwined’, heard a number of times. Economics was severely criticized for “ignoring reality.”

John Powell in the closing moments of the conference said, “the stakes could not be higher.”

What should INET do? So many INET sponsored and posted pieces take one issue at a time.

Barber, in the opening keynote said, “We cannot wait. You cannot just do one, you have to deal with the whole.” With the interaction of the issues.

The way to handle complexity of many intertwined issues is through creating some plausible narrative scenarios of how the future, starting now, and aware of the past and working out the implications, letting conversation bring out blind cul de sacs and unintended but unavoidable secondary consequences, discovering both feasible and implausible narratives through an analysis that includes all the issues. They cannot be adequately judged before lots of talk, rubbing contrasting scenarios together to bring out conflicts and potential possibilities. Indeed, we do not know ahead of time what the interwoven issues are/ Climate and jobs, governance and wealth ..? This is just one suggestion. I hope we get others.

We could start, for example, on what would happen to the economy if
We cut economic activity by a third and froze use of all oil and coal in order to prevent +3 degrees global heating. Jobs? Financial system? Impact on all asset values?

Obviously that would quickly lead to a need to
1. Discuss the structure of an alternative green economy
2. Some plausible paths to get through that transition.

As a second example, what possible path could there be to restructure the economy under severe tech induced unemployment ? That would shift from the current distribution of jobs to a world where the major full employment job categories are

1. Serious greening (food and living conditions and aesthetics for the planet)
2. New forms of health and care for the billions that would be dislocated
3. Managers needed for the two.

Think Freedrick Law Olmstead and Central Park x10(6) as a world wide social task.

As we think about these we will probably realize that we have a choice to stay within the system, or break it open. Do we assume all basics remain as they are while we try to change from within? Private property, money, capital, ownership, corporations, insulated representative democracy, corporate owned Media?

Or change some of these?

Derrick said that growth, for whites was based on government guidance. Now that the results of subsidies are realized, the powerful want to eliminate government interference, especially that which would attempt redistribution.

All downturns in the economy transfer wealth upward because the rich know earlier when to sell, and if there is an upswing, when to buy.

We are in a mess. Is economics a peripheral player, or intimately implicated in politics, morals, quality of life for all, the understanding and management of the earth and society. Economics comes from the greek, estate management. The estate is larger but our vision seems to have become smaller. Lots to do.

The stakes could not be higher – Powell

1732. My reflection

Modern society has taken a large toll on culture, family, environment, personal integrity.

Part of the current mess is a result of ww2 and the unique advantages in the economy of the US after the war. We could sell anything, and quality dropped. As the rising “success” leveled off, political decisions changed regulations, like getting rid of the air traffic controllers union, that made it appear that the success – for the top – was continuing, while we missed that the costs and loss of equity were carried by the lower parts of the population.Maintaining the top and milking the bottom has been the chief cause of the Sanders/Trump reaction, long overdue.

Bt this too had aearlier causes. The nation states after the treaty of Westphalia, the culture of mechanization and mathematizing the culture from Descartes and others. The stress by the church on a limited view of truth and repressing others. The objective and conceptual clarity of the classical Greeks (in contrast to the more flowing sense of reality by the Chinese.)  In some sense the problem is the philosophy of the west.

I would say that the real problem, cutting across these, is culture. We need to know what it is, how it works, what of culture and belief if needed for a thriving society.

But another major driver of the mess is population. Increased population destabilizes all arrangements. Taken climaye and population togther we must realize we are dealing with the managment of the human spcies and its place in nature. Can we do it?