All Things in Moderation

Morning Report 10/17/12

14 Responses

1. 

   markinaustin, on October 17, 2012 at 8:42 am said:

   This link is interesting to me because he is the first person with “credentials” to argue that de-globalization is coming, an argument that I have made for some time [although I had seen it as devolved by 2050].

   http://www.washingtonpost.com/opinions/what-will-replace-the-globalization-model/2012/10/16/57cf62da-0e6d-11e2-bd1a-b868e65d57eb_print.html

   I think continental trade patterns will replace globalization.

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2. 

   Brent Nyitray, on October 17, 2012 at 9:19 am said:

   From the article: “European banks have traditionally been the source of roughly 80 percent of trade financing in emerging markets. Now these severely undercapitalized banks are forced to bring that capital home, and it is not clear that U.S., Japanese or Chinese banks are in a position to fill the gap. ”

   I suspect he is referring to HSBC and Standard Chartered, which are officially UK banks, but really do most of their business in Asia. I just don’t see the Hong Kong and Shanghai Banking Corporation retreating to Canary Wharf. The Spanish banks (Santander and BBVA) are the ones concentrated in Latin America. If anything, that is where their growth is, and I cannot see them abandoning Brazil to focus on banking in Madrid.

   That said, as standards of living converge, the labor arbitrage will disappear. Which is good for the US worker, not so good for the US consumer.

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3. 

   jnc4p, on October 17, 2012 at 10:03 am said:

   Worth a read:

   “Sorry, U.S. Recoveries Really Aren’t Different
   By Carmen M. Reinhart and Kenneth S. Rogoff
   2012-10-15T22:30:29Z”

   http://www.bloomberg.com/news/2012-10-15/sorry-u-s-recoveries-really-aren-t-different.html

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4. 

   jnc4p, on October 17, 2012 at 10:11 am said:

   A revealing comment by Paul Krugman:

   “My Book—the one that has stayed with me for four and a half decades—
   is Asimov’s ‘Foundation Trilogy’, written when Asimov was
   barely out of his teens himself. I didn’t grow up wanting to be
   a square-jawed individualist or join a heroic quest; I grew up
   wanting to be Hari Seldon, using my understanding of the
   mathematics of human behavior to save civilization.

   OK, economics is a pretty poor substitute; I don’t expect to
   be making recorded appearances in the Time Vault a century
   or two from now. But I tried.”

   https://webspace.princeton.edu/users/pkrugman/FDT%20intro.pdf

   Original source:

   http://krugman.blogs.nytimes.com/2012/10/16/seldon-seen/

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5. 

   Michigoose, on October 17, 2012 at 10:14 am said:

   I didn’t want to be Hari Seldon, but I wanted to elect him!

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6. 

   jnc4p, on October 17, 2012 at 10:16 am said:

   This week’s “Real Time with Bill Maher” is worth watching for those who haven’t seen it. A good set of guests with Sheila Bair, Brian Schweitzer & Darrell Issa discussing Dodd-Frank & too big to fail in general.

   http://www.hbo.com/#/real-time-with-bill-maher/episodes/0/262-episode/index.html

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7. 

   jnc4p, on October 17, 2012 at 10:23 am said:

   “Michigoose, on October 17, 2012 at 10:14 am said:

   I didn’t want to be Hari Seldon, but I wanted to elect him!”

   If Krugman’s description is accurate (and I haven’t read the books myself), then I wouldn’t.

   “Let me be clear, however: in pointing out the familiarity
   of the various societies we see in ‘Foundation’, I’m not being
   critical. On the contrary, this familiarity, the way Asimov’s
   invented societies recapitulate historical models, goes right
   along with his underlying conceit: the possibility of a rigorous,
   mathematical social science that understands society, can predict
   how it changes, and can be used to shape those changes.”

   I reject the premise that there can be such a thing as a “mathematical social science” equilivent to the natural sciences such as physics and chemistry. Further, the attempt to create one is fraught with peril and primarily an excuse to impose a set of political preferences under the guise of “science”. Better for society (& liberty) to evolve organically than to attempt to engineer it.

   I’d also argue that attempting to categorize sociology and economics as “science” ends up discrediting science.

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8. 

   Michigoose, on October 17, 2012 at 10:32 am said:

   You’d have to read the books, jnc.

   I agree with you that sociology and economics aren’t science, but Hari’s mathematics makes them so in the books.

   Rainbow-farting bunnies, I know, but hey, the word “fiction” is in “science fiction” for a reason!

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9. 

   jnc4p, on October 17, 2012 at 10:40 am said:

   Which is a fine “suspension of disbelief” premise, similar to how some argue that neuroscience advances will negate the concepts of free will and legal culpability for ones actions.

   Again, the fact that Krugman found this idea inspiring and has tried to bring it about is revealing:

   “Now that I’m a social scientist myself, or at least
   as close to being one as we manage to get in these early days of
   human civilization, what do I think of Asimov’s belief that we
   can, indeed, conquer that final frontier—that we can develop
   a social science that gives its acolytes a unique ability to understand
   and perhaps shape human destiny?

   Well, on good days I do feel as if we’re making progress in
   that direction. And as an economist I’ve been having a fair
   number of such good days lately.

   I know that sounds like a strange claim to make when the
   actual management of the economy has been a total disaster.
   But hey, Hari Seldon didn’t do his work by convincing the
   emperor to change his policies—he had to conceal his project
   under a false front and wait a thousand years for results. Now,
   there isn’t, to my knowledge, a secret cabal of economists with
   a thousand-year plan to save our current civilization (but then
   I wouldn’t tell you if there was, would I?). But I’ve been struck
   these past several years by just how much power good economics
   has to make correct predictions that are very much at
   odds with popular prejudices and ‘common sense’.

   To take a not at all arbitrary example, a standard macroeconomic
   approach, the IS-LM model (don’t ask) told us that
   under depression-type conditions like those we’re experiencing,
   some of the usual rules would cease to apply: trillion-dollar
   budget deficits wouldn’t drive up interest rates, huge increases
   in the money supply wouldn’t cause runaway inflation. Economists
   who took that model seriously back in, say, early 2009
   were ridiculed and lambasted for making such counterintuitive
   assertions. But their predictions came true. So yes, it’s possible
   to have social science with the power to predict events and,
   maybe, to lead to a better future.

   I have a different view of the success of some of Krugman’s predictions (ongoing depression until we get more stimulus) and the actual results of policy like the stimulus in achieving their stated goals.

   The bottom line is that the last thing I want is policy made by “social scientists”. I reject the entire premise of their epistemology.

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10. 

    Mike, on October 17, 2012 at 11:00 am said:

    The bottom line is that the last thing I want is policy made by “social scientists”. I reject the entire premise of their epistemology.

    To be fair to Asimov, you’d have to have a Second Foundation full of mentalists that can alter people’s minds in order to have a successful 1000-year plan. Or a whole living planet with thought control powers.

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11. 

    jnc4p, on October 17, 2012 at 12:13 pm said:

    “Mike, on October 17, 2012 at 11:00 am said:

    The bottom line is that the last thing I want is policy made by “social scientists”. I reject the entire premise of their epistemology.

    To be fair to Asimov, you’d have to have a Second Foundation full of mentalists that can alter people’s minds in order to have a successful 1000-year plan. Or a whole living planet with thought control powers.”

    So the Borg would be his ideal society. No thank you.

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12. 

    Troll McWingnut or George, whichever, on October 17, 2012 at 12:17 pm said:

    I’m w/ J, The Knowledge Problem applies to a whole lot more than economics.

    http://en.m.wikipedia.org/wiki/Economic_calculation_problem

    It seems like hubris to think otherwise.

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13. 

    Mike, on October 17, 2012 at 1:07 pm said:

    jnc:

    So the Borg would be his ideal society. No thank you.

    Ah, but it would be a benevolent Borg. 🙂

    I have to say, though, that much of our economic policy is already driven by “social scientists” (e.g., Milton Friedman or John Maynard Keynes). But I wonder how else we would derive policy — empiricism? Which is kind of what we’re doing now, applying social science “thought” to current problems.

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14. 

    Michigoose, on October 17, 2012 at 3:49 pm said:

    jnc:

    I think it was more Borg Light. Tastes great and less filling.

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