Oil prices are quite high, and consumer spending is holding up.
Hi, this is an experiment post for links. I like looking at other peoples links, thought I would try them out here! Of course, this may get migrated to MMR at some point…
Let me know what you think.
- Taylor Rule Founder Warns US Debt Could “Explode” | ZeroHedge : Wow. My goal is MMR takes John Taylor into retirement in three years.
- Do Manufacturers Need Special Treatment? – Economic View – NYTimes.com : More wow. This is a person who doesn’t see the trade deficit is a demand leakage.
- Global Economic Intersection: More must read from GEI
- Another Experiment? – Tim Duy’s Fed Watch : Nobody really knows what will happen when Greece does it’s thing. Ed Harrison is watching closely, I read him to help sort through that morass.
- Greece Wrestles With Needed Spending Cuts – Bloomberg : Why is the private sector part of this negotiation? Hmm..
- Greek private-sector workers reject more pay cuts – The Denver Post
- Fiscal policy will matter | Challenge | Find Articles: This article is full of gold. I am calling this Godley’s Theorem: “It is thirty years since Carl Christ, of Johns Hopkins University, had the brilliant insight that should an economy ever reach stationary equilibrium, all stock variables as well as all flow variables would be constant; and that if all stock variables, including government debt, were constant, government receipts would have to equal government payments. It would then follow that if the economy were moving toward stock-flow equilibrium and if taxes were levied as a proportion of income, the GDP of a (closed) economy would always be tracking, perhaps with a long lag, government outlays divided by the average tax rate – the very same concept that we call fiscal stance. Therefore, a necessary condition for the expansion of the economy, at least in the long term, is that the fiscal stance should rise: Government expenditure must rise relative to the average tax rate. If the tax rate were held constant, government expenditure would have to rise absolutely for output to grow; if government expenditure were held constant, the tax rate would have to fall.
- Flying Robotic Swarm of Nano Quadrotors Gets Millions of Views, New Company | Singularity Hub: Beyond Terrifying.
- FT Alphaville » How Germany is paying for the Eurozone crisis anyway: Didn’t I say this about a thousand times in 2010-2011? Germany pays no matter what.
- (Saving…) The silliest set of arguments that have ever been created by serious intellectuals | The Economic Populist : This is for you, Clonal! You’ve probably already seen it…but download the PDF to see just how bad it was for non-financial companies for the last 37 years.
I happened to see Karl Rove on TV last night and was a bit astonished to find out he’s actually slamming the Chrysler/Clint Eastwood Superbowl ad, half time in America.
I have no idea whether Rove really believes Chrysler produced that ad in order to do President Obama a political favor. But the fact that he and other Republicans are so worked up could mean that they are scared—not of the advertisement itself, but of the themes it contains.
Those themes are optimism and national pride. As Salon’s Joan Walsh noted on the Ed Show Monday evening, Republicans have basically owned those themes since the 1980s, when Ronald Reagan won an election with them. But lately President Obama has been the one making the case that it’s morning in America or, at least, just before dawn. He did it in the State of the Union and he’s done it in a series of major speeches since.
The message wouldn’t resonate if it had no basis in reality. But the latest economic indicators suggest the economy really is starting to grow, albeit slowly and tentatively. And nowhere is that more obvious than in the Midwest and Michigan, where the auto industry’s rebound has helped reduce unemployment to levels not seen since before Obama took office.
This seems right to me. I’ve done a small amount of marketing in my life, and have been exposed to an industry which is heavily involved in marketing. If I think about Karl Rove as the worlds greatest political marketing person, he’s gotta be terrified by this development.
Marketing in politics is a zero sum game. You own an issue, or get owned by it. And if the dems start making progress on national pride and optimism, well that means the R’s are loosing ground on those same core values.
You can go to my word cloud and see how I do on issues like Optimism and Recovery. Someone pointed out these were prominent issues for me. :) I guess I need to throw a bit more national pride in the mix, because I am proud of the U.S.
Mosler started calling for the Obama boom to begin last year, and unfortunately, it was sucked away by the spike in oil prices. We’re starting to see the benefits of higher spending plus lower oil prices over the last few months.
Matt Y talks about how Malinvestement doesn’t always have bad results due to luck.
As we know, Christopher Columbus had problems financing his journey – which created the most powerful empire of the next 200 years – because he was totally wrong about the size of the earth and everyone knew it but a few rich fools.
“That said, it all made me wonder a bit about the social value of malinvestment. I’m really struck by the fact that Christopher Columbus sailed to the New World on the basis of a mathematical miscalculation about the size of the earth. It’s particularly striking that the conventional wisdom of Columbus’ time essentially had this question right—the earth, most scientists thought at the time, was much too large to make Columbus’ proposed westward sailing voyage a viable way of getting to China. Columbus shopped his idea to various monarchs, most of whom were in possession of accurate geographical analysis and rejected his idea. But Ferdinand and Isabella signed on to the crank’s erroneous ideas about where China was. For their trouble, they wound up in possession of a vast and wealthy empire and Spain became the leading Great Power of the 16th and 17th Century. Not bad for an unintended consequence of misguided idea based on an Italian navigator’s megalomania and calculation errors.”
This I think is one of the more important facets of human life: Luck. In this case, malinvestment turned out to have fantastically positive consequences for Spain. However, Luck isn’t always due to malinvestment.
There is a famous phrase about luck, “opportunity meeting preparation”, and lots of people try to apply this phrase to their lives. I know I do – it’s a good way to live.
But far fewer people think of this on the level of a country. How can we create situations where “good luck” happens? Well, keeping bunch of industries geographically close makes “lucky” things happen.
This is why Silicon Valley draws such bright people to it. It’s entirely possible to show up for work at some cool company and get lucky and become a multi-millionaire. It happens all the time – I at least one person personally who took this life path and it worked great.
I think about Tesla, how he would just walk around New York City and meet with people who would fund his crazy ideas. Some of those ideas ended up creating our modern electrical society. We created a place where it was really possible for society to get lucky, and we did.
I think about Jobs tramping around Silicon Valley, selling computers, getting cheap parts, having Woz work at his desk on Apple stuff. We created a place where our society can get lucky, and we did.
Matt Y talks puts Malinvestment in the title, but this post is just as much about luck as Malinvestment. This is why it’s useful to build things here. We could get lucky again.
It’s hard to fight back against endless lies about how our economy works, but I’ll take this small victory. I get a few clicks every day on that post.