The Somali pirates who have been very active in recent months have been asking for dollars, not gold.
Moneychangers offer wads of new US dollar notes, the only currency that matters in a country that has been in chaos for almost two decades.
The world’s reserve currency indeed.
I think my major problem with Mosler’s theories is that there are two sets of rules. The second set only applies to the the issuer of the fiat currency. It is not applicable to, for example, New York State, or Dutchess County, or the Town of Beekman, or the Arlington Central School District. Because money is not really an issue for the owner of the mint, some policy options are available to the Federal government which are not available to more local governments. More power is available to the Federal government which is not available to local governments. This is a problem if you think, as I do, that certain functions are forbidden the Federal government. This is a problem if you think, as I do, that certain functions are best performed locally.
Suppose, for example, that you are in favor of providing a free education to all citizens. If the town pays for it, then the town will need to float a bond issue, or raise taxes, or otherwise find the funds to provide the education. If the Federal government pays for it, then money’s not an issue.
If the Federal government pays for it, then control is not likely to be local.
It’s simpler if there’s just one set of rules.
I’ve been slowly reading Warren Mosler‘s theories since Zimran Ahmed pointed them out a few weeks ago. They are, to say the least, non-intuitive.
From what I can discern so far, there are two sets of economic rules: Those for mere mortals, and those for the Royal Mint. The former are constrained by a scarce resource; the latter are not.
Regulation is offered up as a means to prevent a repeat of the present financial situation. From what I have been learning of the instruments of destruction, however, it seems that — aside from the simple fraud of selling things one did not own — the failure was a lack of information. Much like a used car, the risks of these products were unknown.
Over the past month or so I’ve noticed more frequent mention of the cost of failure: what will happen if we don’t do this to save that. Explicit, or more often implicit, in these discussions is that it is right and good to do something, that something must be done. This something usually amounts to providing a social safety net so that the costs are avoided, so that Joe the Auto Worker, for example, does not lose his job, or so that if he does lose his job, he can still get medical care or retire in style.
The costs are terrifying.
Why, just today I learned that because a meat packer closed two plants it is now near impossible to find a kosher brisket!
I lost touch with my room-mate from Hampden-Sydney. He dropped out after my first semester there, and I ended up with a single for the next year. We did not keep in touch. I’ve often wondered what happened to him, but never put much effort into finding him. The Internet makes catching up with old classmates so easy that I never bothered to do something as simple as calling the alumni office to see if they knew where he was.
Now I know.
He died.
I found out today from the Hampden-Sydney group on LinkedIn about a new social networking site for alumni: The Network of Hampden-Sydney College. I applied for an account. I’m already a member at the alumni site for St. John’s College. It’s not very active. Both sites are built with tools from YourMembership.com.
The thing about network effects is that the first mover has an advantage, because the best network is generally the one with the most nodes, er, people. I wonder if perhaps the schools’ efforts might better be spent in building a community of interest on Facebook.
A couple of weeks ago, Zimran Ahmed tossed out the suggestion that the Federal government send $1 million to each person in the U.S. (Though he said “everyone,” I’m assuming that he means “everyone in the U.S.”)
Current U.S. Census estimates place the population at 305,630,009. So, that’s only $305,630,009,000,000 of new money.
Now, if he meant “in the world,” current estimates place the population at 6,736,197,368. Again, that’s only $6,736,197,368,000,000 in new money.
Because everyone receives the same amount, no one is favored over another — unlike the current plan. What does change is that assets valued in Day-1 dollars are now much cheaper than they are on D-Day. This essentially resets the game by wiping out all current debt, provided the players spend the new money on the old debt, while leaving all players in their same relative positions on the board.
On Day+1, prices will adjust to reflect the influx of money and the penny become extinct. So, how does this grant of new money not lead to hyper-inflation?
Most of the folks on our Christmas card list are off-line. Boy will they be surprised when they see this!
I was listening to old shows on my TiVo while I repainted the sun room. NOW reminded me that the amount of money that governments spend on mass transit pales in comparison to the amount spent on roads. [links needed, but I’m just taking a short break from painting.] One wishes that Randal O’Toole would realize that once in a while, instead of ceaselessly harping on trains.
Now, I like trains. I like the built environment that arises around foot traffic. Because of the nature of railroads, they tended to encourage foot traffic and villages where they stopped.
And I think that government funding distorts incentives. And I think it would be a very interesting project to examine the costs and benefits of the public works of the 20th Century. I suspect that the effects of the National Highway System might be comparable to, for example, the Erie Canal. The costs, however, include a built environment scaled for automobiles rather than humans.
For such a smart fellow, you’d think that Matthew Yglesias would not regurgitate the standard economic history of the Great Depression drummed into all of us by five or six paragraphs in our high school history textbooks. The portrayal of Hoover as an advocate of laissez faire economic policy is wrong, but repeated often enough is believed to be true.
I have Firefox set to prompt me to accept cookies, mainly because I don’t like the tracker cookies, and set most cookies to be session-only or denied, depending on how annoying the website is. You get a good sense of how frequently sites set cookies this way, and can see that most of them are advertising-related, and provide little to no additional functionality to my use of the site. Some of them are to store credentials, or preferences, and those are tolerable. From a design standpoint what bothers me is that a lot of sites seem to set cookies as part of establishing a session, when there is no need for a session in that context.
But what really bothers me is that when I open a tab in the background, Firefox switches context to that tab in order that I might confirm the cookie, and I then lose my train of thought. Stop it.
This one from the Dept. of State has a funny name: ForeseeLoyalty_MID_IJ80MItY0t
One method of fixing this problem, if the operating system does not let you attach the message box to the tab without bringing the window to the front, is to do as Google Chrome does and open the new tab immediately adjacent to the previous tab, rather than at the end of a long tail of tabs.
My daughters got into an interesting discussion on the way back from their religious education classes. The Little Sister was upset that one of her friends does not care about the President. The Big Sister suggested that maybe the friend does not care for the President.
The graphic artists at The New York Times, CNN, and pretty much every other outlet providing maps of the election results need to be provided with more than a pair of red and blue crayons. Maybe they should use pastels instead; they blend better.
This map, for example, allows interesting comparisons with past elections — consider the differences in party affiliation between 2008 and 1992 — but would benefit by a version showing the results as blended shades of red or blue representing the proportion of the electorate which voted one way or the other. (It would also help if the shades were offset by additional colors for the minor parties, but that would require that they exist as anything other than statistical noise.) There is a map showing the margin of victory, which is somewhat approximate to what I want and shows the results as shades of blue or red. But I’m interested in the relative density of the electorate, in both parties, on a county-by-county basis, and think that’s best represented by mixing primary colors.
Luckily, Mark Newman, of the University of Michigan, drew such a map. 
Whereas the typical map makes the country seem somewhat bi-polar, the use of purple indicates instead that it’s not so much bi-polar as unevenly distributed. Here’s the same map, but adjusted for population density. 
The 1992 election is a somewhat arbitrary cut-off for comparisons, but provides more perspective than the 2000 election does. This map, from Robert J. Vanderbei of Princeton, shows the distribution from 1962 to 2004. 
His map for 2008 is entirely purple.
Sandy Levinson, who finds it a horror that our defective Constitution allows the out-going President to stay in office past the election, would not take comfort in this report from the Mercatus Center on Midnight Regulations.
The paper shows that, going back to 1948, when the White House switches parties, the number of pages in the Federal Register increases on average by 17 percent in the three months following an election. To be sure, some of the regulatory issues during the midnight period have nothing to do with presidents trying to rush through last-minute regulations that they couldn’t, or wouldn’t, push during the first part of the year. However, the systematic outburst during the midnight period suggests a consistent effort on the part of each administration to hurry regulation through before they leave office.
Doing things at the last minute is something of a Presidential tradition.
I’m experimenting with Amazon’s aStore. After all these years of being an Amazon associate, I’ve yet to earn a nickel. I think that has something to do with my just linking to things, instead of promoting them. Anyway, I’m putting stuff in the store, mostly books, that I find interesting. Buy something.
My daughters, Beavis and Butthead, summed up the objections to Bob Barr for President quite succinctly.
His name is Bob Barf. Heh heh. Heh heh. Heh.
Little do they know what is in store for them.
Either I accidentally clicked the close box instead of the minimize box, or Google Chrome crashed a whole set of tabs. I suspect the former. Kudos to the idiot who put those two functions next to each other: You’re a moron and then some.
Meanwhile, Google, to recover from this idiot’s complete failure to understand the effects of clicking, could you please add a “recently closed tabs and windows” feature, not unlike the one that Firefox has? Thanks.
If I understand this [via Zimran] correctly, the Austrian theory is that consumption deferred is an increase in savings, which results in a lower interest rate, which stimulates investment, which results in growth. Meanwhile, the Keynesian theory holds that deferred consumption results in a real loss in wages because sales fall, production declines, businesses collapse, and jobs are lost.
Some questions for Keynes: How does a increase in individual deficit spending (i.e. credit card debt) translate into an increase in real wages? Conversely, how does a reduction in individual deficit spending (i.e. living within one’s means) translate into a reduction in real wages? Is the optimal state one where one has no savings, and where one’s wallet is empty?
A question for Hayek: What if the deferred consumption is saved under my mattress, and therefore does not cause the increase in the supply of savings that lowers the interest rate and stimulates investment?