Economic News

[prole]

One of Bail Out's glaring omissons is the return to the gold standard. Two big problems with mortgage backed securities are a) no one seems to know what they're worth and b) real estate values are subject to speculation. We need to base our fractional reserve on something with tangible, intrinsic value that, unlike real estate, is neither volatile nor speculated on.

 

Sunsets, air, the cosmos, emotion.

[tvashtarkatena]

I believe air and emotion as collateral have already been tried.

[Mal_Con]

The love of Baby Jesus?

[glassgowkiss]

from NPR- looks like Obama is 7 points ahead. also only 40-some percent stated Palin was qualified as vp candidate. Obama is leading in florida, colorado, ohio and pennsylvania.

chances for bailout are also not looking too good at the moment. one of the "experts" stated, that proposal was kind of like this: there are several boats on a lake, some are starting to sink. the solution- let's drain the lake.

[tvashtarkatena]

Now that's the love of the Baby Jebus.

[glassgowkiss]

i love my cheesus

[glassgowkiss]

Mcsame pulled out of michigan!

[j_b]

The senator from Vermont, Bernie Sanders, explains why the bail out bill isn't good enough:

 

[video:youtube]9xQuOjCBV0I

[j_b]

You seem to be convinced ...

 

it accounts for only one side of the balance equation; no real measure of supply or environmental externalities on relevant time scales, which suggests that your brand of economics isn’t a science,

 

economy is not a science. it's a system of trust. it's something that constantly evolves, therefor we can make assessments about the past and try to predict the future.

 

It is an ideology for most but it should be a science if we want it to have any predictive capacity. Obviously I am no economist but I am amazed by the lack of rigor of so-called experts.

[tomtom]

all these people are wrong?

 

Could be.

 

Economics isn't a science and they have a poor record of successful prediction. The only reason economists publish predictions is to make weathermen feel good about themselves.

[tvashtarkatena]

As I recall, economics is a social science; a discipline with testable theories and mathematical models the predictability of which is limited by the vagaries of human behavior and natural events. Predictability decreases as the system becomes more complex, as with any system, including completely 'scientific' ones such as the space shuttle or an ecosystem. To state it's not science or scientific simply because the accuracy of economic predictions varies belies a lack of understanding of what a complex system is and how deterministically its behavior can be predicted. But hey, I guess meteorology isn't a science, right?

 

 

[j_b]

To pretend the economy can expand forever or that ponzi schemes of debt amount to wealth creation isn’t science (social or otherwise), it’s crackpottery that ignores the most basic tenets of scientific accounting. The current lack of predictability has little to do with complexity but everything to do with fairy tales like “free markets” posing as theory.

[Mal_Con]

The House just ate a crap sandwich

[tvashtarkatena]

To pretend the economy can expand forever or that ponzi schemes of debt amount to wealth creation isn’t science (social or otherwise), it’s crackpottery that ignores the most basic tenets of scientific accounting. The current lack of predictability has little to do with complexity but everything to do with fairy tales like “free markets” posing as theory.

 

It's probably already clear to most readers here that I was referring to economics as an academic discipline, not any particular campaign slogan. If you try real, real hard, you may be able to separate political ideology from the social science in your mind.

 

Scientific accounting? Did you major in that, cuz, like, I don't remember that that being offered in my business school curriculum.

[tvashtarkatena]

The House just ate a crap sandwich

 

DId they vote? Yes or No? Either one's a crap sandwich.

[dmuja]

 

It passed.

 

Now get ready for a LONG recession/depression.

Edited October 3, 2008 by dmuja

[j_b]

To pretend the economy can expand forever or that ponzi schemes of debt amount to wealth creation isn’t science (social or otherwise), it’s crackpottery that ignores the most basic tenets of scientific accounting. The current lack of predictability has little to do with complexity but everything to do with fairy tales like “free markets” posing as theory.

 

It's probably already clear to most readers here that I was referring to economics as an academic discipline, not any particular campaign slogan. If you try real, real hard, you may be able to separate political ideology from the social science in your mind.

 

Economics as praticed today is mostly political ideology that ignores physical realities. It should be a science but it isn't.

 

Scientific accounting? Did you major in that, cuz, like, I don't remember that that being offered in my business school curriculum.

 

Yes I did major in scientific accounting like that found in conservations laws.

[tvashtarkatena]

To pretend the economy can expand forever or that ponzi schemes of debt amount to wealth creation isn’t science (social or otherwise), it’s crackpottery that ignores the most basic tenets of scientific accounting. The current lack of predictability has little to do with complexity but everything to do with fairy tales like “free markets” posing as theory.

 

It's probably already clear to most readers here that I was referring to economics as an academic discipline, not any particular campaign slogan. If you try real, real hard, you may be able to separate political ideology from the social science in your mind.

 

Economics as praticed today is mostly political ideology that ignores physical realities. It should be a science but it isn't.

 

Scientific accounting? Did you major in that, cuz, like, I don't remember that that being offered in my business school curriculum.

 

Yes I did major in scientific accounting like that found in conservations laws.

 

Again, you need to separate economics as its practiced by researchers as opposed to the economic platitudes of politicians. Yes, there are career economists who are quacks (just as there are scientists who are global warming deniers and intelligent design proponents), and presidential administrations are good at finding and employing these people, but the majority of professional economists provide a great deal of informed substance and insight to the debate. The fact that the public (and most politicians) don't understand the discipline and its indeterminate nature doesn't cast it into the realm of superstition.

 

Even in your field of study (physics or engineering, I assume), there are widely varying theories regarding some very fundamental processes that are not yet understood. The nature of gravity, dark energy, dark matter, why entropy increases, to name a few. Yet no one claims that, because there is uncertainty in this incomplete body of theory, physics is quackery.

 

 

[tvashtarkatena]

An NYT summary of the bailout. It included most of what I wanted to see, with the glaring exception of granting the ability to re-negotiate primary home mortgages during bankruptcy to address a root cause of the problem.

 

"The final agreement called for the $700 billion to be disbursed in parts: $250 billion at first, to get the program started, followed by $100 billion at the discretion of Mr. Bush and the remaining $350 billion upon request of the Treasury with Congress empowered to block the last installment by acting within 15 days.

 

It is impossible to predict the final cost of the bailout but officials insist it will be far less than $700 billion. Because the Treasury will purchase and then resell assets, potentially at a higher price, there is a chance the program will break even or perhaps turn a profit.

 

The deal provides for tight oversight by two boards, including an independent Congressional panel. And requires the government to use its status as an large-scale owner of distressed, mortgage-backed securities to take more aggressive steps to prevent foreclosures.

 

The bill also seeks to limit the pay of executives of some companies that sell bad debt to the government, including restrictions on so-called “golden parachute” retirement plans.

 

It also provides several taxpayer protections, including a mechanism for the government to take an equity stake, in the form of stock warrants, in some of the firms that seek government help, which will give taxpayers a chance to make money should the companies profit in the months and years ahead.

 

And, if the rescue plan has lost money after five years, the bill requires the president to submit a plan to Congress for recouping the losses from the financial industry, perhaps through fees or a tax on securities transactions."

 

 

[j_b]

Dude, you need to wake up and face reality: until recently the crackpots of the Chicago school ruled the roost. There are of course some economists who show rigor in their work but they are marginalized and their work has little to no impact on policy. The immense majority of economists are ideologues who refuse the reality of the physical world.

Edited October 3, 2008 by j_b

[tvashtarkatena]

Dude, you need to wake up and face reality: until recently the crackpots of the Chicago school ruled the roost. There are of course some economists who show rigor in their work but they are marginalized and their work has little to no impact on policy. The immense majority of economists are ideologues who refuse the reality of the physical world.

 

Oh, OK, and now I guess it's time for you to 'tell it like is' to the rest of us.

 

Until recently, the Neocons ruled the foreign policy roost...all 6 or 7 of them.

Edited October 3, 2008 by tvashtarkatena

[j_b]

As a matter of fact, I can hardly think of a better moment to point out that if there were many economists refuting the various myths that dominate the economic discourse we'd hear about it.

[tvashtarkatena]

It's also useful to point out that policy does not and has not followed theory to the letter, and that theories can have better or worse predictive accuracy depending on what you plug into them.

 

By way of example, Friedman once wrote an article about pollution. It would seem that, without environmental regulation, it's worth it for companies to pollute (empirically true, BTW). This would seem to refute Friedman's free market theories, but he countered that if companies had to pay the actual cost of the resource inputs they use (land, water, air, human lives and health, etc) as well as the actual cost of cleanup, not polluting would be the more economically beneficial option. It's politicians, he argued, not politicians, that determine whether or not companies pay these costs and how much they pay.

 

So Friedman was 'wrong' when one boundary was placed around his theory and 'right' when a broader boundary, which included environmental costs, was employed. He wasn't 'wrong' on the face of it.

 

Some theories, of course, are put forth by fringe kooks who gain favor with the rulers of the day. Every era has its Laffers.

 

It's also helpful to recognize that there is a world outside of the US with its own various schools of economics.

[tvashtarkatena]

As a matter of fact, I can hardly think of a better moment to point out that if there were many economists refuting the various myths that dominate the economic discourse we'd hear about it.

 

Perhaps you, rather than we, don't hear about them.

[j_b]

It's also useful to point out that policy does not and has not followed theory to the letter, and that theories can have better or worse predictive accuracy depending on what you plug into them.

 

By way of example, Friedman once wrote an article about pollution. It would seem that, without environmental regulation, it's worth it for companies to pollute (empirically true, BTW). This would seem to refute Friedman's free market theories, but he countered that if companies had to pay the actual cost of the resource inputs they use (land, water, air, human lives and health, etc) as well as the actual cost of cleanup, not polluting would be the more economically beneficial option. It's politicians, he argued, not politicians, that determine whether or not companies pay these costs and how much they pay.

 

So Friedman was 'wrong' when one boundary was placed around his theory and 'right' when a broader boundary, which included environmental costs, was employed. He wasn't 'wrong' on the face of it.

 

Spare me the nonsense. Friedman knew he had to acknowledge externalities but his work was all about dismantling regulations to maximize profits. Anyway, not everything has a price and, we don't necessarily want to burn it all up, right now, because someone can make a buck out of it.

 

Some theories, of course, are put forth by fringe kooks who gain favor with the rulers of the day. Every era has its Laffers.

 

It's also helpful to recognize that there is a world outside of the US with its own various schools of economics.

 

In case you haven't noticed neo-liberalism was applied almost everywhere, which explains why so many economies have tanked.