What are these London riots really about?

[sodderboy]

The rules that make it so hard to fire workers, makes it equally difficult for employers to give new workers a chance on the fear they may be stuck with a bad worker.

Actually, they have found a way around that. A great proportion of the jobs I see advertised over the last couple of years are 'Temporary, fixed term contract'. A close friend of mine got one of these jobs. He is very experienced in his field and highly employable. His employers kept bringing him in every month to review how he was doing, and dangling the prospect of being 'let go' over him. This 'probation period' went on for about 9 months, when one day he was called into the office and told that he had been seen leaving the office 3 minutes early and they would be dismissing him. (He had actually been going by the clock on his office telephone, so was not guilty).

This has actually meant reduced job mobility, as I have seen jobs that I would apply for if they weren't fixed term temporary. Why should I leave my current, safe, stable job for a slightly better paid job that might disappear in 6 months time? Especially in uncertain times like these. I have a family to support!

Your response pretty much supports my point, that the legislation often does not accomplish the promised headline effect of helping workers, and can cause unintended consequences.

There have been uglier times in our history when workers needed protection from business exploitation, but IMO not so much now.

Of course opinions vary.

JR

That is a sick way to work, and I am in total agreement with John.  The red tape of jobs legislation has been wrapped so many times over the hands companies and talent that everything is screwed.  It actually forces individuals to try to unionize in order to try to gain back the power of their talents.  Problem is that I encounter very few talented union talents.  Most recent is a bunch of union "fabric installers" at a studio job.  Those blobs had more excuses not to work than constructive ideas how to finish early.  Total soviet mentalities.  Complete idiots, and I have never worked with messier a$$holes on a job site.
What is so messed-up about having skills and either selling them to clients or being employed by a good company?
Sorry, this has nothing to do with the drunken boneheads in the UK!
Mike

 

[sahib]

Every story has two sides but, yes, the unions had their share in screwing up many industries in the UK. In terms of musicians' union as Sodder said a total Soviet mentality. My wife used to work at the opera and use to regularly have musicians coming to demand additional pay because in the news  (on tv or radio) they showed/played a bit of the opera literally two seconds more than they should have. In one occassion they had a visiting dance company at the theatre which performed to their own music and playback. The union demanded that they should employ some of the musicians from the orchestra to perform the music. The company was going, errr it's our music, our playback and nothing to do with you. Cut long story short the compromise was that four string instruments  played at the foyer during the arrival of the audience, and they were naturally paid overtime. In another company (in England) apparently the orchestra members who had long intervals between pieces used to sneak out through the back door into a pub, knock a couple of pints and come back to continue playing. The company built a wall to stop that happening and the whole orchestra went on strike. I am not joking. Totally serious.

 

[Rochey]

It's that kind of behavior that kills small companies, and slows down large companies.

Unions are there to defend employees from exploitation, not to help the employees screw the employer out of more money.

*sigh*

Maybe I'm becoming more conservative in my old age.

 

[JohnRoberts]

Maybe I'm becoming more conservative in my old age.

The classic quote:

"Any man who is not a socialist at age 20 has no heart.
Any man who is still a socialist at age 40 has no head."

has been copied more times than some limiter circuits around here... So I am note sure who said it first, but I just copied it again.

JR

PS: For some counter point there were some nice accommodating comments from the new head of UAW about their new "us" relationship with detroit's big three... but some would argue they already got their taxpayer payday, and if it really was "us" between them, there would be no function for the union to perform. 

 

[sodderboy]

Heck, the musicians union in NYC killed the demand for musical talent.  They won points on movie scores for musicians.  An oboist with one riff in a score, or a fifth violinist for that matter, recorded at Clinton or Magno would get a fraction of a fraction of a point on the publishing of the BIG movie.  Poof goes the biz!  Luckily we didn't have drunken mindless french hornists mobbing Zabars and throwing lox.  But the reality is harsh.  So many "part-time flexible" scoring jobs were lost due to that union negotiation.  Work went to Canada, the UK, and to East Europe.
I spec'ed a job where a guy wanted to build a studio on a party boat that would sail 3 miles out of Brighton Beach NY to international waters with ex-soviet classical musicians (!!) and record what "effer tha feck yu watt" and he was dissuaded by both city officials and musicians union "reps".
So the Weinsteins go to Tbilisi instead of Athens Georgia to do their scoring.  Go Union! 
Mike

 

[sahib]

"Any man who is not a socialist at age 20 has no heart.
Any man who is still a socialist at age 40 has no head."

True. And for the communists, even in Russia they are asked to leave for Cuba. ;D

But let's make it clear here. Insufficiently regulated capitalism is as dangerous and damaging as hard core socialism.

 

[Spiritworks]

Is that a tricky question?

: : : :

Wasn't meant to be . I'm not well-versed in either history or economics. It feels to me that there are a lot of similarities between post-war Germany and where the US is today. Stretching a bit, I know, but something to ponder. And I fear that, while most of the world were willing to help post-war Germany ( though with some arm twisting, I'm sure ) I doubt the US will be on the receiving end of much, if any help from the rest of the world now.

 

[JohnRoberts]

But let's make it clear here. Insufficiently regulated capitalism is as dangerous and damaging as hard core socialism.

You will get no argument from me there.. Capitalism with no checks, is not unlike simple democracy, a potentially dangerous thing.

======

At the risk of a veer allow me to simplify or distill down the world's economic problem. No not another rehash of how we got here, but what the problem is getting out. It's simple, we need economic GROWTH. To explain the why of this, governments all around the world historically operate at modest deficits, counting on future growth to pay for the budget imbalance. This has worked for so long that it has become ingrained into the government bureaucracy. 

I have talked about the marginal reserve banking system before and this is hugely stimulative, literally multiplying available capital as the same bank deposits are loaned out multiple times. This capital, created from thin air, is then employed to grow business. This too has served us well for a long time, but the higher growth rates we enjoy, fueled by this easy money, is less stable and the under damped economy under shoots and over shoots.

I have also spoken about the management of normal business cycles (the regular boom/bust oscillations). When the economy gets too hot they raise interest rates to reduce this fractional banking supply of capital and the economy slows. When the economy is too slow (for growth targets), they drop interest rates to throw some more fuel into the growth engine.

The recent credit collapse, whose root causes have been well discussed, created a hole much larger than the typical business cycle so normal interventions don't work.. we have 0% interest rates so can't drop that. Government spending has been used to bump "apparent" growth since government spending does add to private spending in the totals, but this only works for short term tweaking, and is arguably fudging the numbers since borrowing to fund the spending can not be sustained.

Austerity in government spending will in fact cause a real drop in GDP so in the short term make matters look worse, but it will free up capital for the real sources of growth that actually create wealth not destroy it.

Italy will be an interesting object lesson, if they can stick to their guns. They have called the legislature back in the middle of Aug  (Yes italy), and promise to balance their budget in 2 years.  I think the last time a government official worked on cutting entitlements there he was assassinated, so lets hope that ugly history does not repeat.

Now to bring this fill circle to regulation... Yes we need regulation, but effective targeted regulation to prevent abuses, not a blanket of new regulation reaching into every aspect of business behavior and acting like a sea anchor to this ship of state. The credit bubble was not simply a case of not enough regulation, but failures of the existing regulators. The markets have already changed the way they rate and value derivatives, but where were the regulators who looked the other way over the rest of the mortgage chain while all those bullshit mortgages were originated. There were failures up and down the chain, but the fix is not to add more ineffective regulation, but make the regulation that should have been enough to prevent this actually effective. Canada didn't suffer the same housing blow up we did because they had more responsible mortgage rules at the point of origination with consumers. 

The recent expansions of regulation here are worse than ineffective at their intended task. Dodd-Frank the response to the banking credit crisis, didn't even attempt to clean up Fannie and Freddie, the vehicles that the politicians used to hold the pedal to the metal for the catastrophic housing credit expansion, that we are still trying to work out of. Their solution for too big to fail was saddle the entire banking system with more regulatory oversight. The natural effect of such government interventions is that the bigger stronger corporations, can adjust and carry the regulatory borden (actually pass it along to customers), while small banks get smaller. The big banks prosper, and are still too big to fail.

I won't pretend that there are simple answers from here, but I believe the best path is closer to Italy's pulling back, than our government still pondering more borrowing and spending.

We have mostly a crisis of confidence, and doing more of the same while expecting a different result is not only the definition of crazy, it is crazy. I remain confident that 2012 will result in more house cleaning, to get more adults in government. We will get this ship turned back on course eventually but there have been some huge holes cut in the bottom of the boat, so we need to both make the holes smaller (reduce spending) and get the speed of the boat (get growth again) faster...  This will not be easy since the captain has already pushed as hard as he can on all the easy levers... We can't stop dead in the water or we will sink, but making more and bigger holes in the hull will not help increase our speed or improve out situation.

Time to man up, and make some difficult calls. What some people call leadership. I call it being adult.


JR

 

[living sounds]

Maybe the stagnating productivity per worker and stagnating growth that plague industrialized countries (and especially the US) for decades now (at least compared to the post-war era) has a different, structural reason: Outsourcing work abroad and stagnating worker's wages at home. Think of textile manufacturing for example. Manufacturers don't have high incentives to invest in costly R&D for fully-automated sewing if they can simply have it done manually overseas. Of course, this evasive strategy simply externalizes all the problems to a third-world country and not much progress is made. Sweatshops in special economic areas have not been the long-promised path to prosperity for developing countries, on the contrary, the envionmental and human toll is huge, and the industrialized countries may also pay the price of higher unemployment, (potential) trade deficits and slowed technological progress.

Investments in China more often then not lead to unidirectional technology transfer followed by a takeover of production over there.

It sure is cheaper to have your SMT boards made and populated in China, but there is a cost to the economy of the country where they get exported to. After all, the automated production plant could just as well be at a domestic location, with the added benefits of revenue for local contractors (even if it's only electricity), jobs and tax revenue.

Now, we want for example clean air and fair wages for our workers in Germany, so there are lot's of regulations manufacturers have to follow. The problem lies in the fact that we don't demand the same high standards for how import goods are produced. This inevitably leads to a lot of jobs getting lost, and the only way to bridge that gap is innovation, being even better than the competition. This works in some high tech fields, but it doesn't work in many other less R&D driven fields. Domestic consumption is actually pretty weak here, and the souped up jobless numbers don't hold up to scrutiny.

So what to do? Higher taxes on import goods are hardly an option, this would mean a fully-fledged tarriff war an export-oriented country cannot afford. Increase subsidies? Possibly, but the EU makes this more diffcult and it's costly, nothing a country with high deficits can afford. Well, raising taxes could be an option, but there is competition in this field to, and the high taxes need to be justified by other benefits such as stability, security and prosperity. So in the end the only way is to put more money in innovation, research and education and hope it pays of. If we had those fully-automated sewing machines over here made by our engineers there would be no need to get clothes made overseas after all. This is largely how Germany manages to stay reasonably ahead of the game IMO, even though people here are on vacation more than elsewhere in the developed world and there is comprehensive health care and a substantial social net.

The bottom line: Stimulating growth through monetarist policies alone probably isn't much use, lowering workers wages and thus our standard of living isn't a good option either. Innovating is, through private and public long-and short-term investments in education, infrastructure, R&D. And there need to be incentives created for it, especially if it only pays of in the long run.

And over time developing countries will of course gain economic buying power and become ever more important markets for developed countries. As long as the products offered by the latter countries justify their higher price.

 

[JohnRoberts]

Maybe the stagnating productivity per worker and stagnating growth that plague industrialized countries (and especially the US) for decades now (at least compared to the post-war era) has a different, structural reason: Outsourcing work abroad and stagnating worker's wages at home. Think of textile manufacturing for example. Manufacturers don't have high incentives to invest in costly R&D for fully-automated sewing if they can simply have it done manually overseas. Of course, this evasive strategy simply externalizes all the problems to a third-world country and not much progress is made. Sweatshops in special economic areas have not been the long-promised path to prosperity for developing countries, on the contrary, the envionmental and human toll is huge, and the industrialized countries may also pay the price of higher unemployment, (potential) trade deficits and slowed technological progress.

Once again be careful about easy answers.

I was somewhat surprised, while I shouldn't have been, by the amount of automation and level of it, I encountered when visiting contract manufacturers in China years ago..  The benefit in manufacturing electronic good over there is not as simple as employees working for a few fish heads a day and a bowl of rice...  I was involved in pricing products and worked with CM price breakouts that showed parts cost and labor/profit separately. The labor was not the only or largest cost saving from sourcing there.

FWIW, low cost labor intensive manufacturing has already moved beyond China to cheaper, and perhaps also ironically less worker protected areas of the world. I think low cost textile manufacturing is bouncing around between countries in Africa these days.

[note: I favored preferential trade deals with pakistan for textile products that would help them with jobs and revenue, to perhaps get their economy running on something other than military aid... ]

For another data point the cut backs in the labor force here have if anything increased nominal per worker productivity, but that is just one data point, and not the root problem, so not the answer. 

Investments in China more often then not lead to unidirectional technology transfer followed by a takeover of production over there.

They sure try to do that when they can... while this is not a new trend, copied from the Japanese playbook. What really matters is the flow of innovation and new technology. They can have all the buggy whip technology they can carry. We need to keep inventing new replacements.

It sure is cheaper to have your SMT boards made and populated in China, but there is a cost to the economy of the country where they get exported to. After all, the automated production plant could just as well be at a domestic location, with the added benefits of revenue for local contractors (even if it's only electricity), jobs and tax revenue.

This assumes that this is all a zero sum game, it isn't.  Capital needs to be deployed where it delivers the most return if we want to end up with THE MOST RETURN (more wealth creation means more wealth).

The distribution of this new wealth creation is a valid issue, and also worth discussion, but we must be careful to not stop all generation of wealth in a well intentioned pursuit of  "fairness". If there is no new wealth creation, redistribution will run out of other people's money to take and give away to others.   

Now, we want for example clean air and fair wages for our workers in Germany, so there are lot's of regulations manufacturers have to follow. The problem lies in the fact that we don't demand the same high standards for how import goods are produced. This inevitably leads to a lot of jobs getting lost, and the only way to bridge that gap is innovation, being even better than the competition. This works in some high tech fields, but it doesn't work in many other less R&D driven fields. Domestic consumption is actually pretty weak here, and the souped up jobless numbers don't hold up to scrutiny.

Germany is the best house in that neighborhood but surely growth is slowing, as the entire world seems to be softening. As we become more linked economically (Friedman's "world is flat"), we are more linked for better and worse.

So what to do? Higher taxes on import goods are hardly an option, this would mean a fully-fledged tarriff war an export-oriented country cannot afford. Increase subsidies? Possibly, but the EU makes this more diffcult and it's costly, nothing a country with high deficits can afford. Well, raising taxes could be an option, but there is competition in this field to, and the high taxes need to be justified by other benefits such as stability, security and prosperity.

Bugger thy neighbor didn't work in the '30s and won't work now.

So in the end the only way is to put more money in innovation, research and education and hope it pays of.

We almost agree... Innovation and wealth creation is the path from here... But rather than the government deciding industrial policy and what the future growth engine will be, IMO we need to free up the private sector to do what they naturally do so much better.

In the US, the current administration has thrown a huge pile of (borrowed) money at their opinion of what future technology will look like. Solar cells and windmills and electric car batteries... Well windmills have been around even longer than electric golf carts, and if these were going to power us into a better future with a stronger economy for all, these old ideas would have already been perfected and driven to higher levels of capability. Instead what we get are yet more industries dependent on government's thumb (and taxpayer money) on the scale to break even. It's one thing to prime the pump to get it started and yet another to have to fill the well with the same water we want to get out (OK a little exaggeration on my part with the dry well example.)

Government has a job and that is to facilitate the private economy to prosper, mainly by getting the hell out of the way. Note: German industrial policy has historically been much more successful than most, but times are difficult. 

If we had those fully-automated sewing machines over here made by our engineers there would be no need to get clothes made overseas after all. This is largely how Germany manages to stay reasonably ahead of the game IMO, even though people here are on vacation more than elsewhere in the developed world and there is comprehensive health care and a substantial social net.

Interesting that Hon Hai (makes Apple/Sony/etc products in China) announced plans to outfit their factories with 1 million robot arms... so much for cheap labor.

The bottom line: Stimulating growth through monetarist policies alone probably isn't much use, lowering workers wages and thus our standard of living isn't a good option either. Innovating is, through private and public long-and short-term investments in education, infrastructure, R&D. And there need to be incentives created for it, especially if it only pays of in the long run.

We still come down to a fundamental disagreement about whether government is the solution or the problem. I see them as the problem.

And over time developing countries will of course gain economic buying power and become ever more important markets for developed countries. As long as the products offered by the latter countries justify their higher price.

This is a win win, if the economic buying power for the developing countries comes from newly created wealth.  The win-lose aspect of this, is that older workers will not get the same fat paycheck just for living in the western world. They need to adapt to the new paradigm where they may need to know how to drive a steam shovel. and not just dig a ditch by hand. I see many anecdotal reports of unfilled jobs in the US despite 9% unemployment. 

We agree that education is important. We pay a lot here and get sub standard results, so once again the remedy is not to do more of what isn't working.. As with everything  else there is little agreement and from my perspective a knee jerk resistance to free market solutions in education.  It seems obvious we are not turning out the workers for tomorrows jobs. Yesterday's jobs are gone and never coming back. 

JR

 

[sahib]

At the risk of a veer allow me to simplify or distill down the world's economic problem. No not another rehash of how we got here, but what the problem is getting out. It's simple, we need economic GROWTH.

Economic growth where? In producing tangible goods or speculating on bits of paper? Yes, I wouldn't like to hash how we got here but if we look at the history we'll see that the reason of all economic downturns was not producing tangible goods but was speculating on bits of paper.  I do not know very much about all these economic models and sh*t. All I know is that as long as the money is a commodity economic downturns will regularly  happen. And when it  happens the ones who produce tangible goods always sink but the ones who print the money always stay afloat. And every time it happens the managers of the system, hence the government always rescue the ones who print the money. And every time it happens it is not the ones who print money get the ship on course, it is the ones who produce tangible goods. And every time this happens we hear the same old statement. We need economic growth.

Edit: Sorry John, I think my post sounded a bit strong and I did not mean to have a go at you. All cool.

 

[living sounds]

What government can and must provide is the grounds for fundamental research not driven by immediate profits. The unprecedented growth after WW2 was largely thanks to a thousand technical innovations brought about by publicly funded R&D. Private industry can take over later, no problem, but there needs to be this huge playing field to try out new ideas without the restrictions of immediate practical applications and payoffs. Because you never know what a lot of things may be good for (same thing about why we should treat the environment with care, we never know what we might need later and how things might develop with certainty). There was no practical application at the horizon at the time when Maxwell wrote down his equations, but look at it in hindsight... Germans traditionally put a very high intrinsic value on education and being well-educated, and this still pays off to this day. The Chinese seem to have understood this very well now. Meanwhile in the US there is an ongoing war against science and education by religious zealots on the one side, and to a certain degree postmodern BSers on the other. All nicely mingled with simplistic ideas about how the market would organize quality education and bring about innovation all by itself.

There's a fundamental misunderstanding of human psychology and motivation at the heart of the prevalent all-economics view. People need dreams and inspiration. Big costly projects that aim to break the next barrier for the sake of doing it can provide the needed inspiration. This spirit got lost between postmodernist sentiments and religious fundamentalism. Congress stopped a half-build particle collider in the 90s and now they're thinking about defunding the James Webb Space Telescope. What a shame. Over here the postmodernist crowd wants to stop building the new fusion reactor. No way. Especially since there was alot money already invested, which is all peanuts compared to military budgets anyway.
In the 40s, 50s and up to the 60s the papers were full with articles describing scientific research and the world of the future, leading a whole generation to get to work at it. This got replaced by entertainment, sensationalist news coverage, economics.

To sum this up, the governemnt should play a big role in providing grounds for basic R&D since noone else will do it, and there are payoffs far beyond immediate economic advantages.

 

[JohnRoberts]

What government can and must provide is the grounds for fundamental research not driven by immediate profits. The unprecedented growth after WW2 was largely thanks to a thousand technical innovations brought about by publicly funded R&D. Private industry can take over later, no problem, but there needs to be this huge playing field to try out new ideas without the restrictions of immediate practical applications and payoffs. Because you never know what a lot of things may be good for (same thing about why we should treat the environment with care, we never know what we might need later and how things might develop with certainty). There was no practical application at the horizon at the time when Maxwell wrote down his equations, but look at it in hindsight... Germans traditionally put a very high intrinsic value on education and being well-educated, and this still pays off to this day. The Chinese seem to have understood this very well now. Meanwhile in the US there is an ongoing war against science and education by religious zealots on the one side, and to a certain degree postmodern BSers on the other. All nicely mingled with simplistic ideas about how the market would organize quality education and bring about innovation all by itself.

That's a mouthful. I am not going to respond to every single point but lets just say I disagree with almost every single thing said. I won't argue with a german about what german's value.

There's a fundamental misunderstanding of human psychology and motivation at the heart of the prevalent all-economics view. People need dreams and inspiration. Big costly projects that aim to break the next barrier for the sake of doing it can provide the needed inspiration. This spirit got lost between postmodernist sentiments and religious fundamentalism.

Thanks for clearing that up... I always though there was a pretty straightforward list of basic human motivations (food, shelter, etc)..

Congress stopped a half-build particle collider in the 90s and now they're thinking about defunding the James Webb Space Telescope. What a shame.

How dare they not borrow more and spend more. But perhaps this is not the optimal moment to undertake a massive spending program, as they've already got the ratings agency downgrading them for fiscal imprudence.. They did restart a clean coal research project that was already shut down once for not being promising. I'm sure the fact it was in Il. had nothing to do with that 

I am waiting and watching to see how private industry stands up to provide near space cargo and personnel delivery. The last shuttle has been flown and parked, so for now we are dependent on the soviet program to support the space station. Promising early work from Ruttan and friends with a bunch of private backing (Branson). 

Over here the postmodernist crowd wants to stop building the new fusion reactor. No way. Especially since there was alot money already invested, which is all peanuts compared to military budgets anyway.

Damn those post modernists...  I want that cold fusion. But isn't fusion nuclear energy too?

In the 40s, 50s and up to the 60s the papers were full with articles describing scientific research and the world of the future, leading a whole generation to get to work at it. This got replaced by entertainment, sensationalist news coverage, economics.

Damn those economist... Maybe it was the LSD and marijuana back in the 70's that caused everybody to turn on, tune in, and drop out. IIRC in germany they had more hashhish than grass but it still did the job. 

To sum this up, the governemnt should play a big role in providing grounds for basic R&D since noone else will do it, and there are payoffs far beyond immediate economic advantages.

I suspect you saying that over and over again doesn't make it any more true, than me saying over and over that it isn't true. That said I do appreciate your unswerving faith in government to spend (our) money wisely. That isn't my judgement. 

JR

 

[JohnRoberts]

At the risk of a veer allow me to simplify or distill down the world's economic problem. No not another rehash of how we got here, but what the problem is getting out. It's simple, we need economic GROWTH.

Economic growth where? In producing tangible goods or speculating on bits of paper? Yes, I wouldn't like to hash how we got here but if we look at the history we'll see that the reason of all economic downturns was not producing tangible goods but was speculating on bits of paper.  I do not know very much about all these economic models and sh*t. All I know is that as long as the money is a commodity economic downturns will regularly  happen. And when it  happens the ones who produce tangible goods always sink but the ones who print the money always stay afloat. And every time it happens the managers of the system, hence the government always rescue the ones who print the money. And every time it happens it is not the ones who print money get the ship on course, it is the ones who produce tangible goods. And every time this happens we hear the same old statement. We need economic growth.

Edit: Sorry John, I think my post sounded a bit strong and I did not mean to have a go at you. All cool.

No worries, it's hard not to be angry these days...

We need to create more new wealth, so everybody reading this needs to design some new kick ass products that we can sell for more than the parts cost. The profit difference between parts an labor and selling price is new created wealth, from thin air. If we do well all this new wealth will help grow our economy...

JR

 

[living sounds]

Thanks for clearing that up... I always though there was a pretty straightforward list of basic human motivations (food, shelter, etc)..

Only on the most basic layer. Many of the most clever mathematically minded people who would have chosen scientific research in the postwar era went on to create complicated financial instruments on Wall Street instead in the last 30 years or so. Not very productive, unfortunately.

Another substantial and consequential step happened in regards to eduation. Traditionally about the only job with higher education availible for women was the teaching profession, so the best and brightest women going for a career overwhelmingly became teachers. Since women can choose whatever job they want the best would rather become doctors, lawyers etc., at the very least far less of them would become teachers now. This is one of the reasons for the decline in the quality of primary and secondary education, since better teachers make better students... Money doesn't work that well as an incentive for women, BTW., so paying teachers a lot more wouldn't necessarily change things..

I am waiting and watching to see how private industry stands up to provide near space cargo and personnel delivery. The last shuttle has been flown and parked, so for now we are dependent on the soviet program to support the space station. Promising early work from Ruttan and friends with a bunch of private backing (Branson). 

I don't have a problem with that. But there's not much of an incentive for profit-oriented private enterprises to build and support a telescope as it won't generate any money.

Damn those post modernists...  I want that cold fusion. But isn't fusion nuclear energy too?

Cold fusion would be neat, wouldn't it, but this is planned to be a hot fusion reactor, so there's a real chance it will actually work. It will get built eventually and even if it doesn't prove to be of much use as an energy source in the end it will create a lot of useful data and experience.

BTW, if you factor in all the money dumped into nuclear fission reactors over the years (only possible by massive government intervention) and in the future (just taking a reactor apart again is a massive undertaking, not to speak of the long-term problem of waste) green energy production comes out as very competative even with subsedies added into the calculation.

Damn those economist... Maybe it was the LSD and marijuana back in the 70's that caused everybody to turn on, tune in, and drop out. IIRC in germany they had more hashhish than grass but it still did the job. 

Actually it was the invention and application of more and more sophisticated marketing strategies and tactics (as a reaction to declining demand from the 60s onward) and above all lobbying. In the US this got started in the mid-70s, with corporate PACs and comitees. From that point onward corporations and plutocrats used their unique financial power to influence political decsions and attitudes by all means possible.

Just to be clear, what I'm trying to do here is point out certain problems, not point my finger at a country. Everyone else in the world holds the US more accoutable than other countries, too, simply because they are more effected by what's going on there. I tend to use Germany for comparisons more often since I'm a lot more familiar with what's going on here than say Canada or Japan. As you may imagine I'm very critical on a wide range of domestic issues, but we don't have any good or bad or crazy guys remotely as interesting and the lines aren't nearly as clearly drawn here, especially in recent years. And nothing remotely as good in the field of popular arts and entertainment, although current US pop music sounds a lot like crappy Eurodance from the 90s, unfortunately...

I doubt you would really like to have Merkel, she simply does whatever is necessary to keep her in place, and it was her center-right government that passed giant stimulus programs, ended naket short selling, is on track to establish cap and trade legislation and even put an end to nuclear energy now (the latter pressured by public sentiment, of course, but nevertheless).

 

[JohnRoberts]

Getting back ever so slightly on topic, the real bad guys out there are watching how the west is dealing with social media, apparently a handy tool used to mobilize and coordinate the thuggery.  This enabling technology for protests against oppressive regimes elsewhere, seems handy for stirring up less justified demonstrations in the free world. Interesting times indeed.

It seems to me that inciting riots via social media could be a smoking gun, with specific communications captured and used as evidence to prosecute miscreants for creating civil disorder. There will surely be lots of wiggle room for judgement about the nature of specific communications, but it seems there would be electronic footprints, out there for police to capture.  Of course there are privacy issues, but it seems tweeting in the middle of a riot may justify some lower expectation of privacy.

Social media by itself can not cause riots, but with all the dry tinder around, it can be the match that lights the fire, or wind that fans the flame already started. I still blame inflammatory political speech for being complicit, but that is a cost of free speech. At what point does it become directly connected to actions and implicated as causal?  Another interesting question.

JR

PS: I was just kidding about Merkel, but I wouldn't mind having Reagan back. But then is then and now is now, we need today's solutions for today's problems. 

 

[MikeClev]

Social media is perfect for pooling together like minded people who's opinions then sum coherently. In the absence of a balancing counter opinion, this means people feel right and justified in their otherwise extreme actions and opinions.

I'm not in favour of banning social media, its a tool like anything else, bad people use it for bad things, thats all.

On the US Government... can we call the US a failed state yet? It hardly has a functioning government these days. Just a bunch of people who's reason to get up in the morning is to block the opposing party from getting anything that they want. How can a country go anywhere but down with those squabbling chimps at the wheel.

Government is in theory capable of great things that no corporation would ever think of doing. These guys (and many before them) seem to do everything they can to give it a bad name...

 

[JohnRoberts]

Social media is perfect for pooling together like minded people who's opinions then sum coherently. In the absence of a balancing counter opinion, this means people feel right and justified in their otherwise extreme actions and opinions.

I'm not in favour of banning social media, its a tool like anything else, bad people use it for bad things, thats all.

Nobody is talking about banning social media, even if does amplify bad behavior, not the first time technology has done that.

I believe the UK was looking at temporarily blocking it in the middle of the riot areas to maybe prevent it making a bad situation worse.

Like I mentioned some countries like Iran are watching with interest since they were criticized for blocking social media in their country when it was used by opposition groups against them. This is not quite an apples and apples comparison, but i can imagine the propaganda spin meisters already.
 
Note: an interesting variant on this is the new technique of calling a flash mob to swarm some small retailer and they shop lift the innocent retailer clean as he is helpless against the crowd acting in symphony. 

On the US Government... can we call the US a failed state yet? It hardly has a functioning government these days. Just a bunch of people who's reason to get up in the morning is to block the opposing party from getting anything that they want. How can a country go anywhere but down with those squabbling chimps at the wheel.

The measure of a failed state includes : (from wiki)
--loss of control of its territory, or of the monopoly on the legitimate use of physical force therein,
--erosion of legitimate authority to make collective decisions,
--an inability to provide public services, and
--an inability to interact with other states as a full member of the international community

We aren't remotely close, so that is not accurate. 

If you inspect history the economy and country has generally done better when there was divided government. One party controlling the legislature and executive branch generally leads to excess and problems.

The lesson I draw from this is that cooperation and passing lots of legislation is not a great thing.. We already have a pretty good set of basic rules in the constitution and the amendments, that were made hard to pass for a reason. Our founding fathers were wise.

Regarding the squabbling chimps at the wheel, this is classic political posturing to paint a picture that makes one side or the other look better.  The recent debt limit stand off is embarrassing to all of us. Embarrassing in so many ways. Nobody with an IQ above 12 believed either side would default on our debt... We already smoked that dope, we have to pay the man, or the bond trolls will get us. 

before we inspect the individual monkeys, how about the expectation that having a debt ceiling statute, that must be raised periodically would ever effectively limit borrowing? if we rubber stamp raising it every time, what is the point? The debt ceiling is reviewed after it is much too late to avoid exceeding it, so this is just more bullshit legislative wallpaper that superficially looks like they are being responsible, but in fact does nothing. So the high wire act was over the top, but in fact got the monkey's attention, at least momentarily

So how do we control government spending to live within our means? It's our money and credit line they are pissing away. Well there is supposed to be a federal budget, while that routinely tolerates a certain amount of deficit spending (this is why everyone around the world is so frantic to find some growth). Growth is the magic bean that makes modest deficit spending work. No growth, and everybody is in a hurt. I think the recent anger and over reaction to the debt hike is related to lack of a formal budget for a few years and wanton spending with no apparent end in sight. All I hear still is that we didn't spend enough and calls for a new infrastructure bank, and more participation from Fannie and Freddie to prop up housing. Now there's a matched set of failed states (F&F), put in receivership years ago, but still spending taxpayer money like it will never run out.

There is a proposal for a balanced budget amendment (which would take years to ever pass), and i don't support a strict net zero cash balance...IMO there needs to be a little wiggle room. Some capital spending has persistent value so doesn't need to be expensed immediately, but even some modest amounts of deficit spending makes sense in lean times, but this should net out to zero over time (including the growth). But I'm not worried that we would ever pass a simple cash balanced budget... however what we are doing now is out of control...

We blew a wad ($1T+) on deficit spending to buy a couple years of a short term pop to the economy (yes the last two years have been the good years with the updraft). So now the false lift is over and we are no better off... Short term stimulus spending is just like a shock absorber, good to level out small bumps in the road.but we fell into a debt caused hole and we can't get out by digging even deeper. It will be painful for all, especially those who have been getting fat from all that government cheese. 

Government is in theory capable of great things that no corporation would ever think of doing. These guys (and many before them) seem to do everything they can to give it a bad name...

Government can do great good, when they empower their citizens by providing rule of law and a stable base to build upon. The true greatness comes from the people. Business is just a vehicle for creating wealth. it needs to be regulated lightly to prevent excess, but mostly left alone to create wealth. Business/government partnership is a dangerous road to follow. Eisenhower warned us about the military industrial complex long ago. Wall street and big business has been more than a little too friendly with government and now we have, who know how many government funded projects to build electric cars and other manifestations of their vision of the (green) future. A timely object lesson in that area is the the solar cell factory that just went bankrupt in MA.

About the only thing government should ever be trusted with is running the military, because we don't really want them to get too productive, while they do kick ass despite government oversight (boorah). 

Of course I could be wrong.

JR   

 

[MikeClev]

Great post JR!

As for "Regarding the squabbling chimps at the wheel, this is classic political posturing to paint a picture that makes one side or the other look better."

I was actually painting the whole lot of them as equally bad, no exceptions! As a non US citizen, I have no affiliations with any of them...  After their debt 'ceiling' antics, playing chicken with driving the economy at a wall, they made it clear that they were an embarrassment to the people they allegedly serve.

 

[JohnRoberts]

The squabbling is their job, but publicly threatening to default on our countries debt commitments was clearly a play for public controversy and attention. I would say it worked, and I don't condone them doing it because their monkey business contributed to the downgrade by S&P which will cost us even more money.

So Yes they are squabbling monkeys but leading with that ignores the reason they were and have been squabbling. Sovereign debt and fiscal responsibility is an issue all around the world, and the time to get your house in order, is before the bond bears start demanding higher and higher rates.

I consider the topic important and healthy to discuss, I regret that they chose such a lame pressure point. I am reminded of years ago when a similar scrum shut down the government briefly (maybe we could do that agains for a few months?). Back then I think it was about the federal budget, apparently they don''t do those any more.  :-X

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Getting ever so slightly back on topic, I read that BART police shut down cellphone antennas inside their system, to disrupt an anticipated demonstration. Apparently the police tactic worked that time but now there are 1st amendment issues being raised and another protest scheduled. It looks like we will get to inspect this up close sooner than I thought.

JR