Sunday, February 09, 2014

Say’s Law Holds True - Eventually


Paul Krugman’s Jan 16th column lamented a recent re-validation of Say’s Law in regards to Europe’s recovery from America’s 2008 stock market crash.
His juicy quote was from François Hollande, the president of France: “It is upon supply that we need to act,” and he further declared that “supply actually creates demand.”
Krugman reference another site (blog) that drew the same conclusion on Say’s Law.  Here I learned Say was French, and that Say’s Law is taught as gospel at the college where Hollande went.  I couldn’t believe it:  Says Law is still taught – and not just mentioned like the old theory that the world is flat and the center of the universe – and Hollande had a college education.  Say's staying power is still being discussed, follow along with Google.

What Krugman and Francesco Saraceno, the other economist whose site is hyperlinked above, don’t get is that Say’s Law will hold true.  Supply will create a demand in the long, long run.

Supply does create demand – eventually – but it will be a sluggish, struggling economy, which by the way, we may very well be seeing lo these five and a half years from the last crash.  Current economic reports are showing Say’s Law doing its best.  A subsistence economy is all the supply siders are going to get us. 

Basically, those that have been able to hold on to a job and feel they have weather the economic recession will venture into the economy and make necessary purchases to sustain their subsistence position.  It’s not much of an economy but it is Say’s at his best.

If supply side economics was effectively valid, merchants should act like it is December all year round.  Increased inventory, employees, and hours, plus bargain   prices and sales specials would create the annual Christmas demand all year round – that is if supply created the boom in sales at the end of the year and not the demand.  The annual Christmas business boom is Keynesian demand and not Say’s Law of supply side economics. 

In the U.S., social security, welfare payments, unemployment relief, food stamps, and all the other government assistance even including Obama’s underfunded stimulus package kept the recession from becoming Great Depression II.  Times have changed since the Great Depression and the constant and automatic government payments affect the economy in ways the latest pundits fail to notice.

It’s the demand not the supply that counts.  If you have the means to produce supply, which in the current political fashion is referred to as “job creators”, you would be stupid to invest in today’s economy.  Hold your money, put it in derivatives, invest off shore as one notable presidential candidate did, but do not invest it in developing supply until the supply side economy slowly, sluggishly turns around.

As long as the U.S. and Europe stay with Say, we can expect only a subsistence economy.

Sunday, January 12, 2014

Gates to Sunni-Shia War


Commenting on a book I have not read and will most probably not read, am I committing some sort of journalist faux pas? 
Dam the ethical torpedoes! Full Speed ahead!
I’ve been banging away all over the Internet about Gates new book on his job at Defense.  Most of the discussion – the hard news reports – has been on Gates evaluation of Bush and then Obama, their staffs, and individuals like Hillary Clinton and Joe Biden.  In book reviews all over the Internet, Gates tells us a lot of things but he does not illuminate on one big stupid decision – the one the first G Bush decided not to do – which was to invade Iraq and overthrow Saddam.  As thought democracy would be introduced into Iraq if we got rid of Saddam, the second G Bush – and his handler, D Chaney – may have done way more than they could even in their tiny brains ever imagined.  
We, the U.S., the Bushes, the Neocons (Remember them?  They predated the Tea Party, and they were big, really big, that is, back then.), the Cheney-Rumsfeld debacle of a strategy may have started the great, mythological, and legendary Sunni-Shia War with the overthrow of Saddam.  We started a war that will go on for years, and will affect everyone in the World, no matter your religions beliefs. 
The Syrian war is not a war of independence, or the rights of individuals groups, democracy, or freedom.  It is a war between the Sunni and the Shia and who will control Syria.  And with Iran ensconced in Iraq (thanks to us) and the backing from the Sunni Middle Eastern countries for groups like Al-Qaeda and those groups that represent Sunni interests, we got ourselves a war with no end.  The only question is where will it happen next.
Every event needs to be held up to the Sunni-Shia benchmark to understand what is going on from the eastern shores of the Med to Iran.  The U.S., Europe, and Israelis are not the ones who should be worrying about Iran’s development of nuclear capability.  How ironic:  A promise of 40 virgins causes one very young Arabian boy to strap fissional material to his body and detonate it in a Middle Eastern City.
Libya’s problem is tribal, Egypt’s problems are internal, but the Middle to Eastern Middle East is going to erupt in the infamous – 1,000 years in the waiting - Sunni-Shia War.  All thanks to us, and somehow, Gates didn’t mention this.  Go Figure.  

Saturday, December 07, 2013

Why the Y?

Maureen Dowd opinionated sarcastically in her column recently about the incredibly shrinking Y chromosome, the male DNA molecule.  She sat in a classroom at MIT on the subject “Are Males Really Necessary?”
She repeated two questions from the class:
“Since only females can give birth, why is it of any advantage to the species to have a second sex?”
“Why should nature bother with males?”
MoDo referred to the differences in reproduction between sex as meiosis and cloning as parthenogenesis.  Like her, I’ll just go with the common terms.
Answer to the first question: none to little advantage for “a” species.  Once a species has evolved, cloning would keep life going generation after generation almost as well as sexual mixing of genes. 
The advantage comes during a plague or pandemic.  We can see this in history for groups isolated or remote when exposed to an infectious agent.  Because of restricted selection and the resulting interbreeding within secluded group, their offspring are very similar to clones, and a contagious disease could wipeout the entire group.  Whether the infection was newly introduced or some local virus that mutated or evolved, the results are the same.  Those pesky viruses swap genes, and any species that mingles its gene has the advantage over those that don’t.
As to the answer to the second question, nature does not “bother with males”, their presents takes advantage of evolution’s driving mechanism.  They are there because nature chose sex overwhelmingly compared to cloning.  Sex was one of nature’s greatest invention – or mutation, since only humans invent or create what was not there before.  Nature does not create; it just rolls the dice.  Winning numbers keep rolling; losing number go extinct.  Sex not only survived, it exploited evolution like no life had before.   Speciation occurred because of the greater chance of a successful mutation with sex.
Now it is true that in most species, males are only sperm providers.  Females do everything else.  Not all females reproduce but mothers, daughters, aunts, and female cousins run the pack, pride, and hive in most species.  Male dominates in our species is the rare but not an entirely singular exception.
The important issue not mentioned in MoDo’s column or in the MIT class she attended is the fact that while males are not longer needed, neither are females.   True, only females can carry life from conceptions to birth, but those days are numbered.  We are on the verge of doing gestations within a machine.  Not only males are obsolete; but so will be females, probably before the end of this century. 
While males and sex was chosen by natural selection, evolution has ended.  Our species has taken over evolution.  It was the survival of the fittest; it is now survival as we see fit.  We have driven some species to extinction, and through agricultural and cultivation, altered selected species to fit our needs, mostly for food, but also for fun and our own amusement. 
Now, we are of doing this not by selectively breeding the traits we want but by altering the DNA molecule directly.  We do not know exactly how DNA works in detail, which gene or combination of genes produces specific traits, behaviors, or working body parts, but we will eventually.  Like producing babies outside a woman’s body, this too will occur in this century.  We could choose to clone females or we could clone males – or both or something in-between.  Not why the Y, but why the XX, also.

Wednesday, November 27, 2013

The Hunger Games - Ayn Rand’s World All Over Again


How fortuitous that during these times when one elite backed group wants things their way or no way, a movie should come out depicting the world of which they dream.  This group is willing to shut down not only the government but also the American economy and wreck the world’s dependence on the dollar to get what they want.  Drum roll please:  and then a franchised movie comes out with its latest installment that represents the world this elite backed group is striving to obtain. 
Ayn Rand’s dream world and the setting for “The Hunger Games” are one and the same.  It is the dream world for the true leaders and backers of the Tea Party movement in the country and Washington. 
Rand Paul is named for Ayn Rand, so prominent was her work to his father Ron.  I would have gone with Twain or Vonnegut, but it’s a free country - for now.  While the Pauls are not true Tea Party fellows, they are fellow travelers.  However, there can be no truer Tea Party fellow than the former vice president candidate and budget slasher, Congressman Paul Ryan.  Ayn Rand’s dream world is his adolescent idealism.  The world they are lobbying for, the world for which they are willing to wreck the American economy to achieve is the world of “The Hunger Games”. 
The Ayn Rand connection of “The Hunger Games” is not the story of the young female protagonist.  It’s the controlling government against which she struggles.   
In this world, the top 10 percent, mostly Capitalist, own or control most of the country, while the remaining 90 percent live a life of subsistence.  For most, life is a struggle to provide food and housing for family, and nothing is left over, and there is no way out for their children.  No college or starting out your own; the only hope is to do as your parents did before you.  Today’s recessionary world but much, much worse: no health care – Obamacare or any other care - no Medicare, no Social Security, no retirement accounts, no savings, no nothing.  
The only way out is to win some game concocted by the elite 10 percent as a means to control the masses and retain their exalted position.  Am I describing Ayn Rand’s dream world or “The Hunger Games”?  How incidental the latest release of this franchise movie, or is it?  Is this planned, coincidental, or part of a conspiracy?
Much of Ayn Rand’s world and that of The Hunger Games is adolescents’ idealism or angst, which is not to be marginalized, but both works of fiction are targeted toward adolescents and nothing is more idealistic than adolescents’ reading lists.
As for economic theory, Ayn Rand totally missed the boat in the real world.  She is as wrong as Marx proved to be about Communism as the workers paradise.  By the way, Ayn Rand was no more a Capitalist than Marx was a Communist, but that is a subject for another post.  Ayn Rand’s dream world would be an economic disaster much greater than any recession in the free market.  It would be a Great Depression with no end, with the elitist doing whatever it takes to maintain their extravagant lifestyle and position.  These Ayn Rand devotees within the Tea Party are as delusional as the CINOs (Christian In Name Only) within their ranks.
What Ayn Rand and the Tea Party’s elite backers don’t get is the American Middle Class is the economy.  Small time capitalism makes the big time capitalists rich.  Until the middle class is booming there is no recovery.        

Saturday, August 10, 2013

The Strategy that Ate the GOP


Nixon’s “Southern Strategy” for Republicans to win over conservative Democrats and Dixiecrats has proven fateful.  Not only did the GOP get their support, the target of the strategy took over the party.  While the initial target was southerners, the political spin they used in their strategy was not limited to the South.  The inclusion of these disenfranchised southerners in the GOP embolden others of like mind all over the country.  They evolved into the Tea Party and became a major force within the party.  Bob Dole’s lament is proof of the change in the GOP that has been going on lo this last few years.

The group whose basic tenant is exclusion now controls the party and its mouthpiece, Fox News.  Moderates are being cleansed.  Ronald Regan said he did not leave the Democratic Party, it left him.  Well guess what Ronnie, you and your kind have been left again.

Republican moderates are running scared.  In Washington where seniority means power, the Tea Party is willing to remove senior Republicans because they are deemed too moderate.  Local Tea Parties would sacrifice power and influence for their state or district's interests for their party's cause.  The campaigns of many Republicans are more about justifying their right wing credentials to their own, than opposing some Democratic opponent.  The mid-term election may see the removal of moderates.

The tragic flaw for the Tea Party is that they believe their own spin.  Fox News’ inability to recognize Obama’s win over their projected winner Romney is proof they change truth and facts to fit their expectations.  That’s why truth is view as liberal bias. 

The Tea Party believes a dysfunctional government is better than one that can pass laws and act.  Congress will remain in deadlock and unable to functions for the next three years.  While supporting anything related to Obama is political suicide for Republicans, Democrats can crossover and support a Republican initiative.  However, the undue influence the Tea Party controlled Congressmen have over any Republican initiative does not bode well for any meaningful legislation.  

Maybe it would be better for the U.S. if we elect only Republican presidents for the next few years until this Tea Party takeover of the Republican Party leads to the same fate as the Whig Party, or they become marginalized like the Prohibition movement of the previous century.  A Republican president can ignore the Tea Party extremist because sufficient Democrats will crossover and support moderate initiatives and the government can govern.

Only the politically gifted, such as Clinton or LBJ, as Democratic presidents deal with a split Congress like we have now, and they are rare and infrequent, so maybe we should just elect Republicans for president and enough Democrats for Congress for the next few years.