File this under the heading economics is not even a dismal science, because mainstream economics isn’t even science. Economics could actually be a rigorous discipline, if orthodoxy can be kicked out.
“ In contrast to its attitude to private debt, which it ignores, mainstream economics obsesses about government debt. But this volte-face doesn't besmirch its record of being 100% wrong.”
The charts and the discussion of them remind me of the Bank of England publishing a report on something similar.
McLeay, Michael, Amar Radia, and Ryland Thomas. “Money Creation in the Modern Economy.” Bank of England Quarterly Bulletin 54, no. 1 (2014): 14–27. https://ideas.repec.org/a/boe/qbullt/0128.html.
@mike805
The problem is it's not enough to have a correct theory to make money, you also have to know facts about what people are doing. For example, if I jump out of an airplane without a parachute you would probably imagine I would die, but then they did a randomized controlled trial and NOONE who jumped without a parachute died... it's a published research paper @GhostOnTheHalfShell@economics@a.gup.pe
The remarkable aspect of mainstream economists is their persistence treating values in (digital) ledgers as actual instances of banknotes (physical paper) as their mental model, then selectively dropping the model.
So pick through columns of a spread sheet, say nominal and ordinal data, to organize it, then pull data from time (like gdp per country per quarter over 5 yrs, something like that).
In the back of my mind I think, wait, map-reduce.. but feeding minsky, but something like that is retrospective and not forcasting.
It’s a different approach. Steve works macro from macro. There is good reason to do this as macro from micro has a problematic history in economics; demand curves are such an absurdity, but by intuition there are other kinds of questions to be asked, such as small scale dynamics showing themselves at scale, like the fineness of sand effecting the dynamics as a mass..
It’s different thinking from mainstream crap, fo’ sure.
"When the Swedish Central Bank awarded its fake "Nobel" in Economics (Offer and Söderberg 2016) to Ben Bernanke, for a model of banking in which bank loans don't create money, the so-called "Scientific Background" paper for his Prize did not even cite the Bank of England's contrary declaration about bank lending (Committee for the Prize in Economic Sciences in Memory of Alfred Nobel 2022)."
My own vulgar interpretation: economics suffers a particular great sin: shoddy sloppy definition.
If you polled most people, they'd reason about money in terms of paper currency, a physical object, but the immense mass of transactions occur in digital ledgers, which have wholly different tricks to them, like hardware and software are different.
Banks "creating" money clashes with the popular model, because people know banks don't print currency.
🧵
"The conservative project of the past 40 years has been to reverse this: to return the great majority of us to the status of desperate, forelock-tugging plebs who know our places. Hence the return of child labor, the tradwife movement, and of course the attacks on labor unions and voting rights.."
I have one big critique of economists: it's the absurdity and questionable analytical results arrived upon depending on where analysis starts in the system.
What ecologist demands a description of a bug's life cycle must begin at one stage of their life cycle, and that the model constructed depends on that choice? Which comes first, the aphid or its egg?
:ablobgrin: I think if I suggested you were mainstream, you’d mute, then block me and rightly.
I think you’re safe, because they prolly all on Twitter.
Also Keen comes with touches of snarl here and there, all entirely needed. His latest serial post for his book (chap 9) mentions other names. Mike Radzicki is a regular on the stream. The weekly stream resumes soon and it’s a good place to learn more faces. The list I have is gleaned from past guests.
Oh that’s but the tiniest sample of it. His yt channel is ProfSteveKeen. He’s published several books on debunking economics. Likely you’ll find them cathartic.
There are a few shorts from other interviews posted to the hashtag mentioned before.
"Before I show why he fails, I want to clarify what it means to say that banks create money “out of nothing” (Schumpeter 1934, p. 73). It definitely does not mean that banks create money via magic. What it means instead is that there is no other account from which a bank loan is financed, whereas there is such an account for a non-bank loan."
In reality it tends to be less crazy than that, but it still invents reserves out of nothing in response to credit panics created by banks ability to manufacture funds run amok.
“ One look at this chart should be sufficient to understand why the Great Crash of 1929 was both great, and a major cause of the Great Depression which followed it, and why levered speculation, rather than rational calculation, dominates the behaviour of asset markets.”
Oh yes, let’s also not forget Black-Scholes assumptions
“ Any mathematical model of reality relies on simplifications and assumptions. The Black-Scholes equation was based on arbitrage pricing theory, in which both drift and volatility are constant. This assumption is common in financial theory, but it is often false for real markets.”
I’m kind of curious what the system response (of housing prices) to a deceleration of interest rates. If price changes reflect acceleration of home loan interest rates, how does a deceleration propagate into the economy? The US economy is built upon the housing sector. It plays an outsized role in economic health.
@GhostOnTheHalfShell
I think what happens is the equity of the bank declines. This means it can't lend as much, and it can't pay out as much dividends into its investors deposit account. But the deposits created by you spending $900k don't disappear. Since banks collect interest, there needs to be new deficit spend always to keep the money supply growing. Bankruptcy would seem to reduce the required deficit spend since the interest disappeared. @economics@a.gup.pe
The payout seems the victim here, but banks can lend to businesses freely. It’s just balance sheet management. They can’t be in the red at the end of a business day and even so, there’s always the discount window.
So yeh, that seems solid. Banks come away with interest (less expenses) from the transaction, always.
Let me disabuse you of the idea that a Martian colony is the way to save mankind.
Survival on Mars is 1000x more difficult with no free flowing water, no atmosphere, no ozone, no magnetosphere, much less solar radiation to power anything including biological life.
Choosing Mars is picking the absolute worst probability to beat gambler's ruin.
Even a 3' warmer Earth is better.
The first IQ test is to stop pursuing stupid ideas as a magic bullet.
If the USS Enterprise found our solar system as an alternate system, with the 3rd planet from the sun 7C warmer, with life on it and everything else the same on all the other planets, what fucking planet would they pick for a colony?
But nope, Mr Modernity will absofuckingly decide Mars, even though any tribe on Earth would absolutely pick the Earth -- because they understand survival and modern humanity only understand big dick technology.
The party at the switch are billionaires, the large group of people is the world’s population and the individual on the track is billionaire wealth (not a person, unless we substitute a corporation, then SCOTUS treats it like human embryo).
The billionaires have welded the switch to “kill world population”
The Trolley problem is meant to tease out moral instincts in impossible situations
@GhostOnTheHalfShell@KrisConsaul No, it definitely is not pleasant. And what our entertainment media have taught us is that when it happens, it happens fast. In reality, what we're seeing has been decades in coming and will likely continue a slow disintegration over at least another decade or two, would be my guess.
I suspect that's one reason so many people are in denial that it's happening. They can't see it in real time, and they're unaware of history and astute sociological predictions.
GOP governors swing into action:
“In America, we respect our workforce and we do not need to pay a third party to tell us who can pick up a box or flip a switch. No one wants to hear this, but it’s the ugly reality. … The experience in our states is when employees have a direct relationship with their employers, that makes for a more positive working environment. They can advocate for themselves and what is important to them without outside influence. …"
"According to Goldman Sachs, American corporations will spend over a trillion dollars this year on stock buybacks alone, all money that could instead have better compensated workers and thus strengthened our working class."
I'd like to suggest buybacks be made illegal like they used to be.
@GhostOnTheHalfShell
One comment made by Milton Friedman is wholly repugnant and totally vitiates his concept of capitalism. He said that capitalism is based on greed. That's incorrect. It's based on fear, the fear of failing to make a profit. His idea runs counter to my experience working with business clients for twenty-five years. Many successful clients told me horror stories about how they were nearly bankrupted.
Cast the first stone and double down slapping cheeks.
It’s a bit of an experience picking up bits of the Bible and realizing just how deeply Christian conservatives suffer a massive reading compression deficit. Like Otto from A Fish Named Wanda.
I have to wonder what would happen if people read this at Walsh and the rest when they spew their defamation and violate of the 9th (not to bear false witness).
@GhostOnTheHalfShell IMHO a religion is an organized dogma shared among a group. Faith is a belief without evidence. I am more rooted in the actual results than in the debate itself
@asbestos i could see several ways to dissect the distinction you are making, if only because each is so broad, the definitions have nothing to do with supernatural beings per se. it is so broad it applies to systems of government or rules of the road.
lastly i will note your own tenor is itself dogmatic.
but i don’t much care to pursue it other than make the above remarks.