This Episode of Life

The Job Guarentee is a pretty woman, even up close.

2012-01-04T19:50:00.022-06:00

Position: 230 miles south of KORD

Altitude: 37,000 feet

Groundspeed: 515 knots (592 mph)

Seat: 18A

Pax-on-Board: 120 + 2 jumpers

Local Time: 1220 hrs

Airborne... Compass heading 091 degrees. Ice crystals form on the Plexiglas that separates me from the cold farmland below.

Here is what I see playing out:

1) Another financial collapse is eminent.

2a)More govt stimulus will be required.

2b) Just like the time before, stimulus will be badly allocated, badly timed, and badly sized; the final nail in the Keynesian demand management coffin. Sounds preposterous, but then just look at the eurozone.

3) Blood on the streets / rise of ugly extremist politics

What is the Job Guarantee?

Under the Job Guarantee policy, the government continuously absorbs workers displaced from private sector employment. The Job Guarantee employees would be paid the minimum wage, which defines a wage floor for the economy. Government employment and spending automatically increases (decreases) as jobs are lost (gained) in the private sector. The approach generates full employment and price stability. The Job Guarantee wage provides a floor that prevents serious deflation from occurring and defines the private sector wage structure.
Reference:W.F. Mitchell (1998). ﾓThe Buffer Stock Employment Model - Full Employment without a NAIRUﾔ, Journal of Economic Issues, 32(2), pp.547-55.

The biggest issue to ordinary folks with the Job Guarantee (JG) is ideological. Government can't be part of the solution, don't even try, road to serfdom is paved on good intentions. Obama had one big shot at stimulus and that was it for him politically. It didn't matter that his advisers were telling him that another larger round of stimulus was needed. The left feels evermore naive advocating govt solutions to big social problems when they witness their own party fail to solve problems and often make them worse. They cling to a bygone era when American government corruption didn't rival that of third world nations; a time when government put a man on the moon.

The popular Civilian Conservation Corps (1933-1942) employed 2.5 million young
men who reforested American by planting nearly 3 billion trees , constructed and
upgraded most state parks, updated forest fire fighting methods, and built a network
of service buildings and public roadways in remote areas.

The alternative to govt planning of course is private planning, which every reader of this blog is aware of capitalism's serious internal contradictions and limitations. What we need are the people, via govt, to have a moderate sized victory to restore faith in collective action.

The Job Guarantee ideally would bring involuntary unemployment to zero. Children will wonder why we were so cruel to needlessly allow a large segment of the society to feel inadequate and impoverished. It solves the size, allocation, and duration problems that plague the current way of doing stimulus. By decentralizing the JG administration, it makes the program corruption resistant, and removes a justification politicians use to reward their campaign donors and socialize huge losses of big businesses. It restores some dignity to people's lives and lowers other social and financial costs involved with being unemployed. It satisfies those who believe unemployment benefits foster a culture of laziness. It promotes price stability; businesses don't lose as many customers in a downturn and can hire people that weren't idle for months during the recovery. We know from Argentina's experience, and even from our own experience with direct job creation in the 1930's people automatically transition to the private sector once the economy recovers. We know that millions of jobs were created quickly, and workers made valuable contributions to society. The JG restores people's faith that govt can make things better for the average man. This opens the door a little for future incremental changes progressives would like but couldn't achieve because of widely-held blind market ideology such as universal health care, environmental protection, shorter work week etc.

TINA is a lie. A better world is possible.

(above) Marshall Auerback discusses the JG on Bloomberg at 1:59

General audience work:

1. Dimitri B. Papadimitriou discusses the JG in the LA Times.
2. Bill Mitchell discusses the JG in the Newcastle Herald A new paradigm in public employment - a Community Development Job Guarantee

Academic audience work:

1. Promises and Problems of the Argentinean Experience

2. Is Argentina’s job creation project Jefes de Hogar a true Employer of Last Resort Program?

3. Employer of Last Resort Program: A case study of Argentina’s Jefes de Hogar program

4. Public Employment and Women: The Impact of Argentina’s Jefes Program on Female Heads of Poor Households
5. Life-Sustaining, Life-Enhancing Employment Public Service as the Center-Piece of a Humanistic Post Keynesian Economic Policy Program

6. Macroeconomic Stabilization Through an Employer of Last Resort
7. Further Simulations of an Employer of Last Resort
8. Full Employment through Job Guarantee: A Response to Critics
9. The Job Guarantee in practice

Critical responses to the JG:
1. PRAGCAP: WARREN AND I DISCUSS THE JOB GUARANTEE
2. The Transition to a Freer Society: BIG or JG?
3. Can the Government Guarantee Everyone a Job?

What is Tschäff working on

2011-12-16T08:25:00.003-06:00

In order of priority:

Travel more with Maika.
A mostly stochastic model with so far 20 interactive feedback loops for optimizing the flow of baggage around airports. Probably too ambitious, but I'm going to try. Right now thousands of bags are mishandled every day because people do this calculation in their heads. At the moment, I'm simply trying to apply Dijkstra's algorithm to figure out the shortest path between gates. Probably should look into neural networks, but that's for another day.
A turntable that a pumpkin (or skull or camera) sits on and rotates to face whoever is moving around its parameter. It will freak out the trick-or-treaters. Could be used as a tool to photograph animals in nature unattended. Still deciding on what mechanism to use to track people. The most simple and durable method I can think of is to use multiple IR LEDs or lasers that one at a time would transmit a unique pulse (like your TV remote does) the light would be reflected by an object which IR receiver which would cause the turntable to rotate to the corresponding position. The downside to this is the reflection must be very good and there will only be as many turn table positions as there are IR LEDs. A more difficult, but perhaps better solution would be to use a galvo to sweep a IR laser beam back and forth radar style. I'd use a uC generated sine wave->DAC->OpAmp->Balanced Line driver to create +/-10V to drive the galvo. The benefit of this is very accurate position sensing, and fewer parts. The laser would still need to be pulsed so the receiver won't pick up IR from the sun and mistake it as a signal. It would also need to be calibrated at every start-up to only respond to signals above a baseline so that anything in its line of sight doesn't trigger it. A third possibility is using two PIRs on servos to triangulate the position of a human... If anyone knows an easier method let me know.
Create a fake 3D rock background for the fish tank using foam and cement.
Make a TARDIS shaped candle
Read Ingham's The Ontology of Money
Read The Irrelevance of Equilibrium Economics
Create a more comfortable seat for my scooter for cross country trips
Make my own 12V heated clothing

Occupy today vs Occupy 1930's

2011-11-25T12:47:00.002-06:00

‎"As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth ... to provide men with buying power. ... Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. ... The other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.". ~ Marriner Eccles (Chairman of the Federal Reserve November 15, 1934 – February 3, 1948) Courtesy of Sam McLaughlin

(Reprinted in The Student Outlook through the courtesy of the World Telegram). From The Student Outlook, v. 2 n. 2 (December, 1933). FDRL, Joseph P. Lash Papers, Box 30.

Occupy Wall St Protester November 2011

Cover to The Student Call, v. 1, n. 1 (December 4, 1934). Tamiment Institute Library, Bobst Library, New York University.

Vested interests 2011

Cartoon graphic accompanying the article "True Color: Stalin Forces ASU Out Into the Open," which appeared in the Mirror, January 2, 1940.

2011

Photograph of student demonstration at Howard University. Originally published in the NAACP's Crisis magazine.

October 15, 2011 in Theatre District, New York, NY, US.

Three cameras compared

2011-11-06T11:05:00.002-06:00

Cell phone cameras keep getting better. It makes me think I should hold onto my old cell phone camera because some day long in the future its crappy pictures could be trendy.

For comparison I used my old HTC MyTouch Slide 3G, new Motorola Droid Bionic, and a Canon PowerShot SD1300IS and set them all to their automatic settings at maximum resolution, no flash, no zoom and the same shooting location.

Above is the Canon. All pics can be seen at full resolution by clicking them.

Above is the HTC MyTouch Slide. Blurry, dark, and crappy contrast ratio.

Above is the Droid Bionic. Almost as good, maybe better than the digital camera, colors a bit more vivid than real life.

Canon image 100% resolution
This has the most texture and accurate colors.

MyTouch Slide 100% resolution

Bionic 100% resolution
Although it is an 8MP camera, the edges are sharper in this than the 12.1.MP Canon.

Conclusion: Both the Canon PowerShot SD1300IS and Droid Bionic are very capable cameras for the average user. Phone cameras can (in daylight at least) replace stand alone digital cameras, if this keeps up they'll some day replace professional cameras as well.

Modern Money Toilers

2011-10-19T12:19:00.006-05:00

I made a DVD containing the fiscal sustainability teach-in videos and important wonkish and non-wonkish literature and audio. The videos have my contact information. Over a week after passing these out one contacted me about coming in to talk about these videos which I did last night. The meeting was held in a union lodge, there were six blue collar men in attendance and they had a 32" television in a narrow room. A phillipino man made a pot of tea in the coffee maker. The organizer had the video set to the part where the ELR solution is explained, and I was asked if I could explain this video and handed me the remote.

Dr. Wray came on, and explained why the war on poverty failed and how it is currently the government's goal to keep Americans unemployed to control inflation. Right away there were objections, one said the unemployment is due to cheaper labor overseas. I am used to debating economics on the computer, where you can sit and think for a while before you respond and you can write multiple drafts of your response before you click send. Not so in real life. The first thing that flashed in my head was Jamie Galbraith's article "Why populists need to rethink trade." It was too large of a topic to explain in a few sentences and I didn't want to overwhelm my audience with new information right off the bat. So I said, yes we lose jobs to foreign competition, but the unemployment rate doubled since the great recession. That wasn't foreign competition, but people buying less then they used to. Less people buying things, less jobs. We need our jobs to pay more and more people to have jobs. There were nods all around, this is what they've all thought for years, they're happy some guy who studied these things is validating their beliefs. I went on, "yes some spending will leak to low wage countries like China and Mexico." I didn't feel it wise to delve into terms of trade, monetary and physical limits to demand and the rest. "The trick is to raise spending to the level where it supports high employment at home despite foreigners making things for us." I finished with.

"Who's going to hire? What does America make?" the same man wanted to know.

"American companies will want to hire more, that's coming up later in the video."

"Why will American companies hire more?"

"Because they'll have more customers."

"Why will they have more customers?"

"Because we're proposing to have a FICA tax holiday that will put those making $50,000 a year an extra $325/month in their pocket, federal financial aid to states so they are aren't forced to slash the pay and lay off civil servants and raise tax rates, and a job guarantee program where the unemployment office will be changed to the employment office and you'll be paid to do community service."

"They take $325 a month from my check?"

"Yeah, a little less recently now that we got a partial FICA tax holiday. We believe that if working Americans get a bigger pay check they'll spend more."

"Sure, I'd buy that flat screen TV that my wife took when we got divorced. What is the FICA tax?"

"It goes to Social Security and Medicare." I really didn't want to explain why trust funds for the federal government are an accounting gimmick, I prayed no one would ask me who will pay for these things, they didn't. One brought up the corruption problem (this is Chicago Illinois, which is famous for crooked politicians and state governors who go to jail), they worry federal aid to states will just get pocketed. "Yes, it's a problem I agreed, businesses will move to states that are better run. The job guarantee program recognizes this problem and rather than give the money for it to local politicians, they'll deposit your pay directly into your FDIC insured account. No middle men with sticky fingers." There were no objections, so I hit play.

Dr. Way explained why efforts to eliminate poverty had failed, half of my audience was African-American there were "mm-hmms" when Wray explained that entire swaths of our population were not being helped, and the misery that causes them and their community. He talked a bit about the civil rights movement and the benefits our nation would experience if our government made achieving full employment, defined as everyone able and willing to work, a primary purpose. Seeing Dr. Wray, a white man from academia wearing a suit and tie, explain the details of their hardship, gave him credibility. He was an outsider saying he is here to help. Chicagoins are famous for not trusting the motives of outsiders. When President Obama came to Chicago to be a community organizer he got the cold shoulder until he allied with the controversial Reverend Wright.

Next Dr. Tcherneva came on screen and outlined the details of the job guarantee program. We watched a little of it, paused to discuss it, and our time ran out before we could watch it all. They had liked what they had seen. When leaving one came up to me saying this could work, another said he had run a small business that might have not gone under if these policies were in place back when the 1980's recession occurred. During the final discussion they wanted to know what they could do to make this plan happen. One didn't want to go to the Occupy Chicago protest because he didn't want to get arrested. "Common, take one for the team" one joked. "Spread the information, ally politically with progressive businesses that are also being hurt by our predatory government and demand change." I answered. It was a tall order I knew, but not unthinkable. I wonder, if this information is widely known, who among those financially insecure, scared to lose their job and not finding another, let alone one with equal pay and benefits, will risk this in order to try to get a better deal? I doubt many scabs were ever ideologically opposed to strikers risking their economic existence.

Why we can't have nice things anymore

2011-09-30T11:21:00.000-05:00

Reading Confidence Men where Ron Suskind does a fantastic job explaining the making of Obama's economic policy. Some policy makers and advisers come out looking like heroes, some end up looking like villains, but most appear dangerously uninformed. Here is Barney Frank in 2003 before Fannie and Freddie blew themselves up from buying mortgage backed securities to get around their solid underwriting standards that was essential if they were to have govt backing:

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_house_hearings&docid=f%3A92231.wais

I think it is important that the variety of groups in our country who care about housing be invited, because that is my major focus here, as it has been during my service on this committee.
I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We have recently had an accounting problem with Freddie Mac that has led to people being dismissed, as appears to be appropriate. I do not think at this point there is a problem with a threat to the Treasury.

I must say we have an interesting example of self-fulfilling prophecy. Some of the critics of Fannie Mae and Freddie Mac say that the problem is that the Federal Government is obligated to bail out people who might lose money in connection with them. I do not believe that we have any such obligation. And as I said, it is a self-fulfilling prophecy by some people.

The combination of lax regulation and government backing made these two a ticking-time-bomb. The question wasn't if they'd explode, but when and how much it would cost. The current figure? $154 billion plus most of what investors had in them.

Richard Baker, chairman of a congressional subcommittee on capital markets comes out like a good guy in the same hearing:

Recent developments have highlighted the extremely large, highly leveraged nature of these enterprises and the risks they are managing. Now, inappropriate or not, I find the IMF's concern about capital adequacy rather unique, but if they now have this concern, certainly the Congress should share it. To provide any level of assurance to taxpayer protection, we must have world-
class regulatory capability.

Let me say in defense of OFHEO, it has been dramatically underfunded since its creation in 1992, and this lack of support translates into lack of resources and capabilities to analyze the world's most sophisticated financial institutions. The regulator has not only been outmanned, it has been outlobbied. But those observations are not sufficient to explain why OFHEO has taken 10 years to develop a capital stress test and being underfunded does not explain how a glowing report of Freddie's operations was released only hours before the managerial upheaval that followed.

This is not world-class regulatory work. There are too many unanswered questions, the stakes, too high. It is up to the committee to take action needed to get appropriate answers. Taxpayers need to be assured. Potential homeowners need to have access to affordable homeownership opportunities. And contrary to the view of many, this effort will lead to enhanced mission compliance and opportunities for low-income and affordable housing.

I am of the opinion, and have been of the opinion, these enterprises do not meet the satisfactory minimum level in providing homeownership opportunities to minorities and low-
income individuals. We cannot let protest in the past keep us from doing what is right in the present. It is time we create a strong, independent regulator, independently funded with all
the powers necessary to take on the task. I believe the Secretaries' testimony is pivotal in setting
out the initial step the committee must take. It is not time for additional reflection. I have been criticized in the past for having too many hearings and recommended legislative
approaches. Now it is time to act and put this chapter behind us and move on to doing what is right for our American economy.

Now Ohio Republican congressman Bob Ney who didn't run for re-election after being implicated with the Abramoff scandal:

I am also interested to hear what our witnesses think should be done regarding the capital requirements for Freddie Mac and Fannie Mae, if anything at all. Personally, I believe the minimum requirements Congress has mandated for GSEs have done a good job of setting a strong safety and soundness standard. I think it would be a mistake for this committee to change those requirements into a regulatory reform, massive bill. Likewise, I think we should allow the newly required risk-based capital requirement to take hold before we begin questioning it. I know there are many critics of OFHEO, obviously, and its risk-based capital regulation; however, we should allow a decent amount of time to evaluate its effects before we begin to completely dismantle it.

De/Anti Ice Experience and Experiment

2011-09-23T11:38:00.091-05:00

With the Fall freeze approaching in less than half a month in Chicago, the airlines have been working full speed to prepare their anti/de-icing programs. I've finally put this science degree to use by going on a special assignment to help with the deicing plan which the FAA just approved.

Institutional memory of how to change the dilutions of Type I deicing fluid has been lost. It had been held by two very senior baggage handlers, who kept their secret closely guarded for years as it allowed them to avoid much manual labor. One retired and the other was out on long term medical leave. The FAA requires the freezing point of the deicing fluid to be greater or equal to10C colder than the outside air temp (OAT). This because the temperature on any given day tends to fluctuate, so that 10C buffer keeps the deicing fluid usable in colder temps. The airline tries to keep that freezing point as high as possible because it is achieved by mixing the deicing fluid with water and economizes deicing fluid ($5-$7/gal). However each day the OAT changes, so the Type 1/water ratio should be raised or lowered. Nobody knew how to do this. So I taught them how to convert freezing point (which they determine with a refractomitor which operates on the basis of Snell's Law) into a mixture ratio if it is unknown. From that I taught them how to use a formula to convert any original dilution and quantity to any desired dilution and quantity. For example a deicing truck with 1000 gallons of 40% Type I to 1600 gallons of 50% with scientific precision. By the end all the guys were acing my quizzes. I trust my life to their math, well that and the (tested daily) refractomitors they'll use to confirm the final freezing point. :)

While researching for this assignment I looked up the MSDS for the deicing fluid. The BOD made my jaw drop!

Pure propylene glycol has a BOD5 concentration of approximately 1,000,000 mg/L. A typical diluted propylene-based deicing fluid could therefore have a BOD5 concentration of approximately 500,000 mg/L. In comparison, raw sewage typically has a BOD5 concentration of approximately 200 mg/L. [source]

Many organic contaminants in water get broken down by microbes who use it as food, just about every water treatment plant has a stage where microbes and other microflora are fed swage water to decompose it. In the process the aerobic bacteria consume oxygen. The five day BOD test measures how much oxygen those microbes consume in that five day period at 20C, and is used to measure the effectiveness of water treatment. There are over a thousand flights a day out of O'Hare, each plane on snow events will need deicing. 1,000 to 4,000 gallons of deicing fluid may be needed for larger jets during severe weather conditions. If it is snowing, a jet requires approximately 35 gallons of fluid for anti-icing after deicing. My fears are that some fluid will leak into the groundwater where it won't be decomposed quickly due to the cold, and will end up in our drinking water. I also fear that some will flow into local lakes where it can deplete the oxygen and kill the life in it.

The EPA proposed regulations on de/anti icing fluid effluent in 2009 after very careful study, but nothing came of it. One of the proposals was to have the airline monitor the COD of what they are discharging into the sewers. COD is like BOD but monitors the oxygen depletion by chemical reactions. Since it's not being done, I feel a personal responsibility to monitor this. I can't do a COD test because I don't have a photospectrometer. I can do the BOD5 test on a couple bodies of water for about $160 for the season. By writing it here for others to see, it will force me to make good on my commitment. :-)

Update: There is a group of concerned residents and airline workers who have been complaining about the impact of de/anti-icing use at O'Hare Airport and a report was written in 1997 by Paula F. Cowan, M.D. Clinical Asst. Professor of Family Medicine, University of Illinois at Chicago. Her recommendations for action:

An investigation needs to be conducted to determine why these problems were allowed to exist without solutions for so many years.
Since there were past abuses, we need methods to see if the airport is adhering to the Clean Water Act. We need independent scientists and experts to monitor periodically to see if problems are being solved.
We also need waterways and water tables tested on a regular basis, looking for specific chemicals when deicing/anti-icing operations are in progress.

Genuine Buddy 150 scooter engine in a Buddy 125 body

2011-08-29T09:17:00.004-05:00

Refusing to pay $90/hour to have some careless mechanic put a new engine in my broken scooter, I've taken on the challenge myself. I picked up a Buddy 150 off Craigslist for $350 with 900 miles on it. It had been stolen and the scooterjackers ran it into some hard surface which bent the front fork. They also screwed up the ignition when they hot wired it. The front fork is welded on, so the decision was made to remove the engine and put it into the old Buddy. The only major difference between the two is that the 150 has an oil cooler that needs to be mounted between the frame's steel tubing, more on this later.

Phase A- Remove blown Buddy 125 engine

To get to the engine I removed all the plastics around it then disconnected the engine as explained in the service manual. I took zillions of photos and videos of everything from all angles to be sure I could reverse the process once the new engine is in. I wasn't able to disconnect the break cable until the engine was off, perhaps because I kept the mud guard that goes over the back tire on. Pay close attention how it is threaded through the C shaped mount behind the break. The engine has two mounting bolts. One long threaded rod and bolt in the center and one that attaches to the "rear damper bolt" which is the bottom of your shock absorber. I kept the heavy grounding wire attached to the engine since it was soldered on.

Phase II - Remove Buddy 150 engine

Repeat the process over again. There is no service manual for the 150 that I know of, but everything looks the same inside, plus the oil cooler. I never detached it from the engine. It is mounted to the frame with two bolts under the scooter. Once the engine was out, I used a saw to cut off the steel tube which is welded to the frame that the oil cooler is mounted to. Try to cut close to the welds without cutting into the frame if possible, it will make welding it into the new frame a lot easier if there aren't wide gaps, and be sure to measure the position of it relative to the rest of the frame so all the pieces will fit together again.

Phase III - Mount engine

This is a lot easier done with two people. I put the scooter on the rear stand, and slid the engine in from the back to the front. Then got bricks and wood to hold the scooter up to where the mounting points on the engine are even to where they are on the frame.

Weld in the oil cooler bar. This is the first time I'm trying my hand at welding, so I won't give details about my technique, just that I learned everything I know about it from YouTube. After that I cleaned the carb (it was dirty from 3 years of old gasoline. The instructions for this I also picked off YouTube. Then I changed the gear and motor oil, and connected the hoses and wires to their proper places. The hoses and wires part looks the most intimidating but it is really the quickest. I've wasted hours trying to figure out the rear break cable, can't get it. Remember to eat.

Phase IV - Test it

It took some cranking, but sure enough this engine still can RUN!! I think it's running very rich because it is pouring out copious amounts of smoke from the exhaust, it is also leaking quite a bit gasoline from the bottom most tube of the carb. Lastly I want to tune it and to check the valve clearances since I don't know what got messed up when the engine got into its accident. Overall it took about 10 hours of work to get this far. I'm feeling very thrilled to hear that motor sound again!!!!

That train to willoughby

2011-08-27T10:29:00.005-05:00

Where is Willoughby? Really a lovely little village. You ought to try it some time. Peaceful, restful, where a man can slow down to a walk and live his life full measure.

People were feeling they weren't cut out for modern life in this Twilight Zone episode from 1960 and now many share those sentiments. An eyebrow raising 29% of Republican voters and 43% of Democratic voters view the word capitalism negatively acording to a Pew poll taken in April 2010. It is a shame there aren't many good alternatives. The closest we have is the military.

Already it's not uncommon to hear resentment from those earning slave wages about the pensions, tuition reimbursement, health care, job security, salaries and other benefits of those who joined the armed forces. I don't think the benefits are overly generous, instead they should be the standard by which the private sector needs to offer something better in order to attract employees. Meanwhile the pressures of competition ensure constant stress and fear, thus depression. Then their life is over, in less than a blink of an eye. There must be a better alternative.

The military isn't just a job, it's another world, one that fits many people's needs better. It's no surprise a lot of servicemen find it extremely difficult to transition back into civilian life, even if they've never experienced combat. The military is the government's only job guarantee program. They'll take you regardless of your experience, train you, find work for you. There is no parallel in the private sector, it's a shame the government offers only this kind of job guarantee.

I listened to the BBC interview the victors of the uprising in Libya. They explain the moment the dictator fell due to scores of people risking everything to make it happen as an almost spiritual experience. It echoed what others who participated in the Arab Spring have said upon victory. Elation! What can do that for us in the USA? We need to plan for an economy that serves people's (and environment's) needs better. A good start could be implementing a job guarantee program.

Unexpected correlations

2011-08-25T09:02:00.001-05:00

M3 measurement of the money supply rises and falls with the fed funds rate after a 2ish month lag, so does CPI -food -energy but not as much and without the lag.

My response to Krugman's post Franc Thoughts on Long-Run Fiscal Issues

2011-08-11T11:11:00.005-05:00

"Regular readers of comments will notice a continual stream of criticism from MMT (modern monetary theory) types, who insist that deficits are never a problem as long as you have your own currency."

We don't say that. To quote Scott Fullwiler in his last response to you: The core point is that it is not the size of the deficit that matters, but rather the effects of the deficit. As such, MMT’ers only support large deficits to the extent that they do not push the economy beyond full capacity utilization and thereby create demand-pull inflation

"But we won’t always be in a liquidity trap. Someday private demand will be high enough that the Fed will have good reason to raise interest rates above zero, to limit inflation"

Your assumption that MMTers disagree with is that the size of the monetary base directly affects inflation. MMTers, and those familiar with banking operations say this is a false assumption. Quoting Dr. Fullwiler's response again: The currency component of the monetary base is entirely set in response to economic conditions, whereas reserve balances do not help banks “do” anything they couldn’t otherwise. Indeed, banks in Canada “do” exactly what banks in the US “do” even though the banking system in Canada has operated with 0 reserve balances for many years already. [ibid]

"And when that happens, deficits — and the perceived willingness of the government to raise enough revenue to cover its spending — will matter."

For MMTers, building on the insights of Abba P. Lerner says we should set tax rates and interest rates according to their effects on the economy. If inflation is rising, the proper response might be to raise taxes to reduce people's purchasing power. Interest rates are a blunt tool at best and their impact on inflation is ambigious due to a complex set of interactions. I.E. higher rates will mean larger transfers of income from borrowers to lenders. It might decrease propensity to borrow. I could go on and on... Mosler actually suspects ZIRP is mildly deflationary. Taxes are a much sharper tool.

I have a specific example that illustrates my point: France in the 1920s, which I wrote about in my dissertation lo these many years ago. Like many nations, France came out of World War I with very large debts, peaking at 240 percent of GDP according to this recent IMF presentation (pdf, slide 17). And France was unable politically to raise enough taxes to cover the cost of servicing that debt. And investors lost confidence in the government’s solvency.

Two points: if my memory serves me, and it may not, France in the 1920's was part of the gold bloc. During this time it was not a proper currecy issuer since the franc was convertable into gold, the supply of which it couldn't create at will, thus monetary policy had to be dedicated to defending the peg. I learned about the paper Golden Fetters from your blog, that would be the paper to revisit. Second point, it is consistant with MMT that government can spend to the point that it causes inflation. You keep mischaraterizing it saying we say that deficits don't matter.

"The composition of public liabilities as between debt and monetary base does matter in normal times — hey, if it didn’t, the Fed would have no influence, ever. So if we try at that point to finance the deficit by money issue rather than bond sales, it will be inflationary."

It matters now to the extent that bonds pay slightly higher interest than reserves, thus are potentially more inflationary. Once normal times come again and the Fed wants a positive FFR, then the Fed has a choice of either draining reserves (typically via tsy sec sales) or raising the interest paid on excess reserves or raising reserve requirements. Short-term sovereign government debt for currency issuing nations is always a very good substitute asset for overnight reserve lending, hence, its interest rate will closely track the overnight interbank rate.

"And unlike France in the 1920s, such a hypothetical US deficit crisis wouldn’t be self-correcting: the biggest source of our long-run deficit isn’t the overhang of debt, it’s the prospective current cost of paying for retirement, health care, and defense. So such a crisis — again, it’s very much hypothetical — could spiral into something very nasty, with very high inflation and, yes, hyperinflation."

This is consistant with MMT. They say the real constraints on govt (and non-govt) spending are physical. If we try to spend more on health care, retirement and defense than we can produce we'll get inflation or hyperinflation since vendors will be able to raise their prices to ration their output to the highest bidders.

BREAKING NEWS: S&P downgrades Air France KLM loyalty program

2011-08-05T23:26:00.000-05:00

The highlights from S&P's global credit portal brief:

The downgrade reflects our opinion that the airline's decision to reduce the issuance of frequent flyer miles falls short of what, in our view, would be necessary to stabilize the airline's medium-term Flying Blue debt dynamics.
We have changed our view of the difficulties in bridging the gulf between the rival executives over mileage policy, which makes us pessimistic about the capacity of the airline to be able to leverage their agreement this week into a broader reduction of frequent flier miles plan that stabilizes the Airlines's debt dynamics any time soon.
The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in point issuance than agreed to which will result in a higher general Flying Blue debt trajectory than we currently assume in our base case.

Sound absurd? It is. The airline won't run out of frequent flier miles. There is no point in arguing if it is better to charge more miles vs issue less miles to prevent the airline from running out of mileage points. The number of miles the airline issued over any two time periods is the mileage deficit. The accumulated deficits is the airline's mileage debt, and it is equal to the user's mileage savings to the mile. There are good reasons not to issue too many miles or to raise rates on some days or routes, but fear of running out of points is not one of them.

Let us never forget Eugene V. Debbs

2011-08-02T13:33:00.001-05:00

The Democratic president Grover Cleveland ruled the Pullman strike Eugene Debbs organized illegal, but Debbs didn't surrender. The strike went on and Debbs was imprisoned, in the same Cook County jail which housed the union activists that were wrongly sentenced to death for Chicago's Haymarket affair. Reflecting from prison on the Democratic party he declared, "I am a populist, and I favor wiping out both old parties so they will never come into power again. I have been a Democrat all my life and I am ashamed to admit it."

When will we learn from our experience?

Snapshot

2011-05-06T10:49:00.000-05:00

I've got more projects than I have time lately-

Reading Labor's Untold Story.
Designing the new battery management system to use Texas Instrument's latest and greatest chipset.
Using the data from my weather station to give me a scatter plot of wind direction and speed so I can decide if I should ride my bike to work (frequency and intensity of gusts)
Traveling (currently in California, last week it was D.C.)
Watching Fringe! (guilty pleasure)
Flying the new remote control airplane my lovely gf bought me for my birthday.
Experimenting with the optimum nutrient solution and feeding pattern for my hydroponic tomatos.
Think up ideas for the MMT movie.

and on the to do list-

Read to my lovely gf
Build the fan clock (LEDs imbedded into the ceiling fan blades so when it spins it shows a clock)
Volunteer more at the pet shelter
Read Scott's book Institutional Analysis and Praxis: The Social Fabric Matrix Approach
Convert my gf's bicycle to run on electricity.

Now I have seven days off work, I am devoting a lot of time to research for the MMT wiki. The next post should include some stuff I dug up regarding the money multiplier myth.

Faulty airline maintenance practices and the absence of planning

2011-01-30T21:39:00.011-06:00

I haven't been online much lately after taking a three month contract with United Airlines. It is likely to be extended, so that doesn't leave much time left for my passion of heterodox economics. It does give me a very close look at the present state of organized labor. What I have seen is a lot of bitterness among union members. People working there remember vividly what they have given up over the years in the name of saving their company- notably pensions, hourly wages, overtime and petty things like paid lunches. I saw industry practices of hiring two part time workers instead of one full time worker to avoid paying health insurance. Hourly wages at the company are currently at their 1993 nominal level, and instead of taking five years to reach the top of the scale, it takes ten years. Over 600 people applied for 40 open positions here in Chicago. So much for the myth unemployment is high because people don't want to work. New hires will work part time for $10.40/hour pre-tax dollars, not enough to support a guppy.

The airline is merging with Continental. So far very little has changed in terms of operating procedures, but that will change. The first to change is union representation. As departments merge each has to decide which union to adopt if any. Flight attendants are debating if the AFA (UA) or IAM (CO) will represent them. Rampers are choosing between IAM (UA) or Teamsters. Both pilot groups are represented by ALPA. Not sure about the mechanics. Workers are choosing somewhat based on personal preferences, i.e. the ability to work more extra hours vs get paid more for the times the airline can only use you for a few hours that day. Others are voting with their gut "I want a union that knows my struggle." There is a great deal of uncertainty which union will in the end represent them the strongest. Conversations between workers get heated. It reminds me of US political elections, where you're forced to choose between the lesser of two evils. Other than better job protection, the union offers little in terms of a living wage for 10 years. We all agree, in the absence of improved minimum wage laws we need an airline union monopoly between all air carriers. That way the airlines will have to compete harder over other things than who can cut their labor costs the most.

One way they are doing it now is by outsourcing mechanical work to less qualified, non-unionized firms in China and the US. The FAA is issuing citations and whistle blowers went on camera to warn of the potentially disastrous practices (see the video at the bottom) at these firms. Sometimes, in the absence of rules and enforcers, markets race to the bottom in terms of quality. You see it with accounting firms who never blow the whistle on criminal corporations (Enron) that pay them. Ratings agencies who give out easy AAA ratings so banks will pay them (Subprime mortgages). The political authority is rarely proactive in these matters. In the case of airlines the wakeup call will cost lives.

I saw some positive things too, such as the Alliant Credit Union, the nation's 7th largest credit union. Credit unions haven't been given much attention in the media, but good things rarely are. They haven't needed any government bailouts, their rates are fair, risks conservative, and they work for free with employees to get their credit score repaired and teach them financial literacy.

Over the long run, the future is very uncertain for the industry. In last week's State of the Union Address the president said, "Within 25 years, our goal is to give 80 percent of Americans access to high-speed rail." I voted for this guy and he does this to me! C'est la vie, at least he gives me time to update the résumé. Seriously though the airline's fuel hedging strategy is designed to handle short term spikes in prices but not a long term rise. The new CEO stated that it is "difficult" for the airline to pass on those costs and will be forced to leave the unprofitable routes if oil prices remain high. High oil prices are likely to be a chronic problem for all the airlines. They have tremendous fixed costs, leaving them highly inflexible to changing environments, like peak oil. The other interesting thing about the airline's predicament is that they are unable to plan for the long term. If oil becomes prohibitively expensive there is no plan in place to use alternative energy by any airline. High speed electric trains might be vital to the economy in the post-oil future.

This issue isn't limited to the airlines, our major exports- airplanes, agriculture, earth moving equipment all are heavily fossil fuel dependent. These businesses will all fail due to market's inability to plan for the future on their own. This is one of the problems with Libertarian ideology. New Orleans's failure to maintain the levee system made obvious the systematic absence of planning. The army corps of engineers gives our infrastructure a "D" but the major investments to maintain what we have aren't made. This isn't incompetence, although politicians would love for you to believe this. It is part of a long term plan by some of the extremely wealthy to shrink government "down to the size where we can drown it in the bathtub." It rests on the oligarch's hatred of taxes and public control. Their success depends on their full blown propaganda campaign to get people to hate government and demand very little from it.

Thermal shock?

2010-11-27T16:09:00.008-06:00

Woke up this morning to find one of the shower's glass panels shattered evenly all over. No explanation other than it is starting to get cold, but its been through many winters.

Before

After

This will be my next wallpaper.

Why the Euro was doomed from the start and what to do about it

2010-10-01T16:58:00.019-05:00

The crisis in the eurozone is a manufactured one. It isn't the result of there suddenly not being enough workers, social needs or a natural disaster. Worse, it was a predicable disaster. Put simply the currency union was based on political vision not economic fundamentals. The crisis brings out grinding debt-deflation that would make Irving Fisher bush. There is another crisis- one of government's inability to learn and adapt. There are good ideas out there but it requires listening to and evaluating ideas of those outside the mainstream who saw this coming. Here is Cambridge sociology professor Geoffrey Ingham on the euro (bold sentences are my emphasis):

As money is not a 'neutral vail', but rather a weapon in the 'economic battle of man with man' the legitimacy and effectiveness of any monetary system ultimately depend upon the enforcement and/or acceptability of a settlement between the major interests - that is to say creditors and rentiers, debtor classes of producers and consumers and the state itself. The potential weakness of the euro in the face of financial crisis is twofold. The first source of weakness as we have seen, stems from the absence of an overarching Europan political sovereignty that could speedily and unequivocally grant the European Central Bank the power to abandon the rules that might prove to be ineffective in a crisis. The second foreseeable source has the same basis. The Maastricht settlement, with its predominantly global creditors and money-capitalists, has been imposed on the other major nationally based interests - producers and consumers. Essentially the same regime is to be found across the capitalist world. But nowhere else are the constraints based on such inflexible stringent rules, and nowhere else do they exist in a sovereignty vacuum. In Goodhart's view, 'the defining moment for the eurozone will arrive when a (major) country is required by treaty to take deflationary fiscal action at a time when its economy is suffering the worse stagnation' (Goodhart 2003:194). Any individual state's non-compliance with the Maastricht conditions would effectively remove the credibility and political legitimacy of the euro. The response of the global money markets cannot be assessed with any confidence, but events in the euro's novel monetary space may well help to demystify the 'nature of money' more thoroughly.

As it is constituted by real social relations, money is an active element in social life- in Weber's terms, a weapon, as I have constantly stressed. The attribution of real force and efficiency to money does not entail a metaphysical nominalism, or, more prosaically in orthodox economics' terms, a 'money illusion'. This appears to be the case only if the economy system is taken to comprise nothing of importance other than the 'real' exchange ratios of commodities produced by individual optimizing strategies of economic agents. But this weapon, as we noted in the Introduction, is not only used despotically by the different interests in the constant economic struggle; it is also a collective resource - that is, infrastuctural power. The advance of human society's organizational capacity has been accelerated by changes in the social production of money - most notably by the balance of power between money-capitalists and the state in early modern Europe. As Weber also concluded, capitalism thrives on a delicate balance of its economic interests that prevents one group from achieving monopoly dominance. He believed that too great a concentration of power in the hands of one class -labour, producers, rentiers, etc - would inhibit the dynamism of the struggle. Following the conception of money as a neutral medium in a frictionless system of economic exchange, the Maastricht Treaty attempted to de-commission the weapon. By doing so, the European Union has temporarily enfeebled itself. The logic of the situation suggests - but of course can never determine - that it regains the power by placing its money in the hands of a sovereign body.

Source: Ingham, GI. (2004). The nature of money. Malden, MA: Polity Press.

There are many economists, even mainstream ones who saw the crisis coming. Lars Jonung and Eoin Drea's set out to find them for their paper Can’t Happen, It’s a Bad Idea, It Won’t Last: U.S. Economists on the EMU and the Euro, 1989-2002 What they discovered is that academic economists thought the euro didn't conform to to the optimum currency area and no mechanisms to deal with that problem were created. Economists at the Federal Reserve were even more skeptical because they took political considerations into account. Add to it the Maastricht treaty's caps on debt and deficits were set too low to allow automatic stabilizers to do their job in a severe recession.

There are ways to return to prosperity.

Option 1: Warren Mosler and I have long suggested the ECB distribute funds on a per capita basis to all member nation's governments. This will have the effect of bringing down interest rates on sovereign debt. It will not be inflationary for the same reason its not when American or Japanese or even Signapore's central bank buys government bonds. It is an asset swap. Savers will exchange government bonds for central bank reserves. If anything it is potentially less inflationary because reserves pay less interest as Scott Fullwiler points out. For there to be inflation a transaction must occur. The amount of transactions government is allowed to perform will still be limited by the Maastricht Treaty's deficit limits plus tax revenues. The debt limits can be adjusted to achieve economic goals. Enforcement can be handled by ECB witholding payments to nations which violate deficit limits. With the ECB being an active part of the solution, Eurozone governments can focus on serving the public purpose instead trying to pay for the budget by depressing wages, selling off valuable resources and cutting services to avoid high interest rates or default. In my view economic policy's success should be judged based on how it improves the lives of the least well off.

There should be some mechanism to balance trade because savings rates differ from country to country. Over time euros spent on imports leak out of trade deficit countries into trade surplus countries (more accurately current account deficit/surplus) and never come back causing the problems of insufficient aggregate demand over the entire euro zone, particularly in the trade deficit nations. If injections (Investment, Exports, Government Spending) are less than leakages (Saving, Imports, Taxes) the the country will enter a recession or depression.

Source: Europe's Web Of Debt Bill Marsh/NY Times

Option 2: Abandon the euro, restore old currencies and allow them to float. This will empower countries to be able to use their own labor and resources as they see fit. The government can spend on whatever is for sale in the domestic currency. They could implement a
job guarantee program, a tried and true powerful automatic stabilizer. The euro as it exists has many of the same flaws as the gold standard. It forces wages to fluctuate rather than the currency's exchange rate. It starves nations with a trade deficit of the funds it needs to sustain itself. In short, it deprives a nation of the ability to stabilize an unstable economy. If Ireland had its own floating currency, it won't need the permission of other euro governments to pay for Irish teachers, Irish police and whatever else they can produce internally. They won't need to cut wages or become more productive than the Germans in order to have competitive exports in order to acquire the euros needed to pay the teachers.

Both of these options require a major financial system overhaul so incentives for banks to make bad loans are eliminated. Neither option fixes the problems that corruption and wasteful government spending create. They will not solve all economic problems, protect the environment or help you lose weight. What they will do is break the power monopoly creditors have so governments can enact policies constant with price stability and full employment.

As Ed Hugh likes to point out, the demographics of Europe show that there will be an increasing burden on the pension system as the worker to retiree ratio becomes smaller. One way to manage this is to employ your whole workforce. That will spread the costs of retirees around. Another is to employ the workforce now. Talented workers are leaving their country in search of opportunities rather than stay at home unable to find a job. By tapping into their innovativeness more will be able to be produced in the future with less labor. The longer they wait to embark on this the more costly real social spending will be. These are not optional options. Careful people who have a habit of being right know that without major restructuring the eurozone is doomed.

Is it time to give up on electoral politics?

2010-09-18T14:00:00.003-05:00

I was moved by this article today. It was radical, and it was the first time that I found myself largely agreeing with the radical view: Electoral politics is a waste of time. It's sponsored and run primarily by the corporations, and until people stop buying things from corporations, until they stop working for corporations, we can't expect the populous to have much sway in Washington.

An always bitter Mark Aimes articulates what happens during a financial crisis best:

The nice things about financial collapses (like military disasters) is that all the ugly, corrupt realities underpinning a so-called economic boom are revealed, and the worst in humanity is laid bare, and everyone everywhere gets pissed off, cynical, and hopeless.

He goes on to say how this puts him in the mood but never mind, he was right. I'm now feeling hopeless. Not that the economy can't recover, it can, even with Washington making things worse. Can Washington DC be transformed into the institution which it was in its mythical past? The place where human values can flourish? Are electoral politics a waste of time or am I being overly cynical? People interested in making the world better for their grandchildren need to know where to focus their efforts.

Stay safe sister

2010-08-19T21:35:00.009-05:00

My sister left for Afghanistan today. Last time we spoke I told her why I don't support the war (always a risky move when talking to a Marine). It was fought on the pretense that it would end a safe heaven for extreme militants by overthrowing the Taliban and replacing it with some sort of government that would crack down on the most extreme radicals. It is a flawed strategy in my opinion. I don't know that the sort of long drawn out counterinsurgency can end the Taliban or change the hearts and minds of those who want to kill us. So far I am doubtful. Secondly it won't end militant safe heavens. They can exist in other countries as well, and now they are armed with photos and news of what Americans have done that serve as perfect recruitment material. We are probably less safe, and it's costing the nation a lot of blood and treasure. It's just not worth it. I believe she thought my objection was reasonable, and knew I was concerned about her and our family so she didn't take offence.

In Eisenhower's fairwell address he famously warned us about our powerful "military industrial complex" What is less known is that in that same speech he told us what must be done to combat it:

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the militaryindustrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

MMT the movie narriatave

2010-08-14T23:24:00.003-05:00

Ok, I've decided on the narrative, an adaption of Daniel's analogy. Young graduate school student gets taped by a secretive group to become the next head central banker of the US. His head is full of neoclassical gibberish so he needs reprogramming.

The reprograming happens in a casino. They get a private table and start discussing the horizontal relationships. Chips swapped around, between players. GDP is calculated as number of games played. Savings is represented as total chips of the players. Then the vertical relationship is introduced, tipping the dealer a chip leaves them one chip less. Credit is introduced, players get more chips from fellow players in exchange for IOUs. Lastly chips are exchanged for dollars. This is the fixed exchange rate regime (gold standard). All along the way the kid being tapped to run the central bank is making the usual objections. At the end he's told that he can't tell the truth in public. It will make him enemies within the Republican party, academic economists and any elected Democrats will not give their public support because it would make THEM unelectable due to the deep incredulity of the voters. So the lie has to be maintained.

Tschäff@Work

2010-08-13T17:41:00.008-05:00

A little behind the scenes look at the Petrol Avengers workshop

The screw head remover! (Yes, I did it. I stole all the erasers from the Ikea pencils)

A sneak preview of the new product.

Batteries for big toys, like electric cars. These came directly from the factory in China. Importing them was no easy experience.

BARS OF SILVER!!! plated copper

Me my electric scoot scoot

2010-08-12T15:29:00.007-05:00

When I was 16 you couldn't get me out of the left front seat. Hell, even when I was 15 I had crossed a few state lines at midnight with my best friend that my parents never found out about, and one that they did! Gas was 99 cents a gallon back then ($3.25 now), and joy rides were something we did to pass the time. Then came expensive gas and detailed knowledge about how the oil addiction is terrible for the nation and the environment and out went road trips. Electricity has restored that bygone pleasure.

Driving an electric scooter is a unique experience and offers much more than driving a car does. You are always acutely aware of the changes in temperature. A shallow dip could contain a pocket of cool air that you'd never notice if you were in a car. You can put your feet down and touch the road, and you're always watching the road for anything too large for your small scooter tire to roll over. The scooter itself is usually completely silent. You hear all the environment you're in, from the tires of the car next to you making and breaking contact with the road, to the sounds of doors of nearby shops shutting. As a passenger in a car, it is a much more quiet and isolated experience. Much more like watching a movie than actually having the experience.

When riding a scooter, you don't always take the fastest most direct route, you prefer the opposite. The goal isn't the destination mainly but the experience of the the ride. You take the more scenic routes, prefer long rural two lane highways to major state highways. You don't try to speed as fast as you can without getting a ticket. Like most joys in life, it's best not experienced alone.

Politics better than usual

2010-08-09T02:37:00.004-05:00

Most of us who pay attention to politics become very pessimistic about the future of our country. One thing that is a little bit reassuring is to know that in history it was just as dirty if not more than it is today and somehow, despite harmful politicians making it difficult, the country did not collapse into ruins.

The image to the left curtsy of the Library of Congress depicted a brawl in the U.S. House of Representatives in 1958 over a slavery debate.

On death of a loved one

2010-08-07T22:45:00.005-05:00

Disclaimer: I rarely give advice, this is just something I discovered on my own and find that these ideas helped me.

A lot of people never end the grieving process. I have been anhedonic for over a decade. The mentality one must have if you are to avoid endless suffering is to think how lucky and grateful you are for having that person in your memories, not how sad you are that they are gone. You had the privilege of being touched by that person, something not everyone can say. Smile a great big smile that your life has been touched by that person. Carpe diem.

For safe keeping

2010-08-03T00:46:00.012-05:00

Location: Middle of the empire (Missouri/Illinois)

Heading: 020 (North-east)

Altitude: 39,000 ft and descending

Time: 2245h CST

The captain had the flight attendants prepare for landing early and buckle down the carts, trays and themselves. Inside the cloud the red navigation light illuminates all the space between the wing tip and my window parallel to it. The plane drops rapidly causing hushed gasps from all around the plane. A few bolts of nearby lightning catch my pupils off-guard. The airwaves are full of requests from pilots for better routes, and reports from pilots who had tested new paths through the storm.

5 minutes earlier

On Channel 9 (Capitan's radio channel) I hear our pilot requesting from Chicago Center the freedom to change course to get to the airport via a hole in the storm. The pilots have been using their nifty wiz-bang multiscan radar all night to safely get us around the patches of violent storms over the Midwest. Permission was granted and we descend into the Nimbus cloud. The Airbus is diverting small amounts of hot air from the jet to heat the leading edges of flight surfaces to prevent ice from building up.

1 hour earlier

My neck is sore from staring at the last flickering cloud of the lightning storm we flew next to for the last hour. There is nothing on Earth similar to seeing an electric summer sky from above. The clouds strobe continuously, never relenting for even a second, illuminating the contours of the cloud tops. From a previous life as a flight attendant I remembered that I like mixing sparkling water with cran-apple juice which now sit on my tray table undisturbed by any turbulence. A passenger in front of me opens his shade, the golden glow from his reading light projects the shape of his window on the wing. His window stays open as he too pushes his nose against the cool Plexiglas trying to catch a modern view of Zeus at work.

Found this similar storm on YouTube.

MMT the movie

2010-07-20T11:06:00.004-05:00

In efforts to advance the national dialog and economics profession in the right direction, it would probably be a good idea to make a short (10-20 min) YouTube video about MMT. I am calling for any ideas for scenes, or must have concepts or phrases, that the movie should include. For example I thought I'd begin with the business card economy, have an auditorium full of people and have the person on the stage try to sell a business card or maybe baseball card? I'd love to include a clip of Obama or Clinton talking about the budget surplus like it was a good thing. I'm also looking for someone who can help with graphics. All ideas and assistance is welcome. If you would like to continuously observe and/or contribute to the creation of the script, please send me your e-mail address and I will send you an invitation to the google wave project.

Rationed demand to undermine labor

2010-06-13T10:59:00.031-05:00

On the first day of class, the teacher will proudly raise the flag of economics in the front of the classroom. You know, that chart with the two crossing supply and demand lines, price on the Y axis quantity on the X axis. Where the two lines cross is the place where markets "clear" or are "equilibrium" that is to say the price and quantity things of value are bought and sold at. While this happens all the time in classroom in the real world this is a very rare occurrence. What happens when a market is not in equilibrium? Then the market is rationed. Rationed markets depend on quantities, and follow a simple rule; whichever is lesser, demand or supply, sets the transaction quantity.

Supply and demand in labor markets are almost never in equilibrium. How do you know? Because persistent involuntary unemployment exists. Lately mass unemployment exists, especially intense for workers without a college education. There is always more labor supply than there is demand for labor because of macroeconomic policy norms. Thus labor markets are rationed by the weak demand for labor. How do you know? Because for most job openings in the country there are multiple applicants. Even for most new college graduates the job prospects are not looking good, they are finding themselves involuntarily unemployed. In the city in which I type this blog, Chicago, there are presently five applicants for every job opening. This would push the minimum wage close to zero as job seekers compete with each other to take the scarce job for the lowest wage.

In the case of full employment, business would need to pay better, much closer to the additional benefit the company gains by hiring that additional worker. Companies would compete with each other for who could hire that scarce worker. That worker will enjoy more of the financial rewards the company receives.

The graph is a simplification and there are still a number of assumptions associated with it, you can see some of them discussed here but the fact is the number one most urgent problem facing America is unemployment. This can and should be fixed rapidly, not years from now. Everyone in society, from most business owners to the unemployed parents who did everything right would do better if we implemented policies of trickle up economics. As Bill Mitchell would say this type of problem is basically there are 100 dogs and only 94 bones. No amount of dog training will fix that. Increased demand for labor would result in well paid job creation and the benefits that come with it such as less child poverty, crime, anxiety, and overall a better mental life. One tried and tested method of quickly solving the jobs problem is to create a government as employer of last resort program. There will be those who will argue we can't afford it. This is the wrong way to think about it. The question to ask is can we afford high unemployment? If so how long and how deep before it's time to try something else?

Image source: Werner, Richard. The New Paradigm in Macroeconomics: Solving the Riddle of Japanese Macroeconomic Performance. 1st. New York: Palgrave MacMillan, 2005. 32. Print.

Update: Upon further investigation it is revealed Keynes quipped about classical economic thinking on this topic for the same reason I did and came up with the same conclusions but back in 1936. He added that a decrease in real wages could increase employment, but only if business expected the lower labor cost to increase profitability but this was an unlikely scenario. A decrease in wages might for example lead to a decrease in prices with the same level of employment. He argued decreasing wages which lead to lower effective demand can cause a deflationary spiral: Labor is cut to adjust to lower demand. Thus neither businesses nor labor are able to control effective demand. Thus we need the 'visible hand' of government to stimulate demand, but not take over what was already being demanded.

Undirected revolutionary furver in Greece

2010-05-07T10:13:00.015-05:00

In the Euro area, the traditional historical links between money creation and sovereignty will be broken to a unique extent. Goodhart 1998:425

"The irrationality of the system is fairly clear, you have masses of capital and masses of labor unemployed, standing side by side in a world of social need. How stupid is that?" Philosopher David Harvey asked the audience of a Marxist conference in July 2009. His words ring even more and more true, bringing Greeks out on the streets to protest the austerity measures the Greek government is likely to implement.

Neoclassical economists got it wrong again, and it's the the main contributing factor to why the eurozone is melting down before our eyes. "One market - one money" is the view neoclassical economists have of money as a 'neutral veil' that covers real exchanges between 'factors of production.' They don't ask questions such as if a common market is ideal, where markets make decisions that traditionally political authorities would. They DO ask if Europe conforms to Mundell's influential Optimum Currency Area (the answer most often among American economists was no). The Optimum Currency Area exists where mobility, especially of labor is high and if countries adjust uniformly to an external shock. But the Euro went forward anyways, without addressing any of the existential flaws such as a supranational fiscal authority capable of dealing with asymmetric shocks, of the sort the US government is to the US states.

Automatic stabilizers, which are known to prevent things like great depressions, are not allowed to work in the EMU. Because the ECB is not guaranteed to buy bonds from member governments, the amount of deficit spending a country is allowed to do is limited by actors in the money market. So countries went from being able to spend then tax (if desired) like the US government still does, to having to secure financing before any spending, like a US state. This limits member nation's fiscal budget and eliminates their control over monetary policy, especially their ability to stabilize an unstable economy. As a result Greeks are on the street protesting, some even dying as a result, a drop in GDP larger than the great depression happened in Latvia, Spain has 50% youth unemployment, and as stated above there is this absurd quality of people willing and able to work, and a need for their work, just not enough money to hire them, this creates deflationary pressures. With deflation a whole host of problems occur such as those listed in Irving Fisher's theory of debt deflation, or you can just watch the news and see them happen in real time.

The benefits of the single currency are no more risks of exchange rates changing, no currency conversion costs. Conversion costs averaged less than 0.5% of EU national income (Eichengreen and Frieden)in the late 1980's. Exchange rate fluctuations were replaced with internal wage fluctuations. Inflation risk replaced with deflation risk. Some benefits indeed.

Money in fact is hardly a 'neutral veil' but plays an active role in a country's social life, Max Weber called it a weapon. The legitimacy and functionality of any monetary system depends on the enforcement and settlement between creditors and debtors. In the EMU's case the creditors and capitalists wrote the rules that became the Maastricht treaty. The debtor classes, being producers/consumers/and even governments had the creditors interests imposed on them with almost no flexibility. So the highly political institution, the ECB, is set on auto-pilot in a sovereignty vacuum. We are at the defining moment when keeping the Euro forces a country to take deflationary fiscal action during mass economic suffering.

Only the delusional can believe that, when everyone else is taking swingeing cuts, Greece's creditors can continue receiving 100 cents on the euro. It beggars belief that Greek government debt can top out at 150% of GDP, as the IMF envisages. At this point the government will be transferring well more than 10% of national income to the creditors. In a time of severe austerity, this outcome is unsustainable both economically and politically. -- Barry Eichengreen 2010

Recent protests

2010-04-30T08:18:00.008-05:00

This month's protests can be divided pretty sharply into two categories: sane and insane.

Click photo to enlarge Tax Day Tea Party 2010 by HA! Designs - Artbyheather

Tea party movement. Looks to me like it's the Republican base. It's not as overtly bigoted and selfish as the media makes it out to be if flickr pictures tell a story. These people (overwhelmingly white, overweight, ≥middle age) are peacefully protesting what they find outrageous. The only problem is they have been fed a very distorted view of reality so they have a lot of misdirected anger. Verdict: INSANE

March and Rally, originally uploaded by artfulactivist.

AFL-CIO protest in front of Wall Street. Financial reform now. Verdict: pretty SANE and obvious, maybe even a little bland.

A Sunday Rally in New York, originally uploaded by pamhule.

Crazy right wing Zionists in New York. Racists are a huge fan of dog-whistles. Palestinians are referred to as Arabs, Obama is always Barack Hussein Obama. They are upset that Obama called for a freeze on settlement building in occupied territories. Illegal land grabs don't get more cut and dry than this, but if you're a racist who with an overblown sense of entitlement international law is some left-wing nonsense. You have god on your side. Verdict: COMPLETELY INSANE

This may be the craziest one of them all. Praying for the death of our president got over a million fans. Crazy to call him socialist too, the left wing is getting none of the socialist things they want: medicare for all, cap-and-trade, public works programs, financial aid to states, financial reform, higher taxes on the richest. Verdict: INSANE

Edward S. Shaw in 1960 knew that loans create deposits

2010-04-27T19:39:00.013-05:00

UPDATE (10MAY10): Dr. Bill Mitchell after reading my blog did a much more detailed writeup on this paper here.

James Tobin knew it too: "Commercial Banks as Creators of Money", 1963, Banking and Monetary Studies. He writes many of the major features I thought was unique to MMT.

"An individual bank is not constrained by any fixed quantum of reserves. It can obtain additional reserves to meet requirements by borrowing from the Federal Reserve, by buying 'Federal Funds' from other banks, or by selling or 'running off' short-term securities."
"Depositors entrust to bankers whatever amounts the bankers lend"
"Money" is a broad loosely defined term, it's better to speak of specifics, i.e. reserves, bank liabilities, cash in circulation
In the case of government deficits, new private saving occurs
In the case of taxes, there is a destruction of private savings
Deposits are created when loans are made, and are destroyed when loans are repaid
The central bank doesn't have much control over the money supply, instead the interest rate which they control by adding or removing reserves

Mankiw doesn't get it. This is the crap I naively explained to my grandpa a when I was young and stupid. It did occur to me, if you combine the banks, how do new deposits get created? Sure many banks try to attract deposits because the interest they pay to depositors is lower than borrowing reserves, and from an individual bank's perspective, they may receive deposits which came from another bank. But if you imagine all the banks as just one, it's clear that causality runs from loans to deposits.

The euthanasia of the rentier

2010-04-27T09:55:00.001-05:00

Now, though this state of affairs would be quite compatible with some measure of individualism, yet it would mean the euthanasia of the rentier, and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital. Interest today rewards no genuine sacrifice, any more than does the rent of land. The owner of capital can obtain interest because capital is scarce, just as the owner of land can obtain rent because land is scarce. But whilst there may be intrinsic reasons for the scarcity of land, there are no intrinsic reasons for the scarcity of capital. An intrinsic reason for such scarcity, in the sense of a genuine sacrifice which could only be called forth by the offer of a reward in the shape of interest, would not exist, in the long run, except in the event of the individual propensity to consume proving to be of such a character that net saving in conditions of full employment comes to an end before capital has become sufficiently abundant. But even so, it will still be possible for communal saving through the agency of the State to be maintained at a level which will allow the growth of capital up to the point where it ceases to be scarce.
I see, therefore, the rentier aspect of capitalism as a transitional phase which will disappear when it has done its work. And with the disappearance of its rentier aspect much else in it besides will suffer a sea-change. It will be, moreover, a great advantage of the order of events which I am advocating, that the euthanasia of the rentier, of the functionless investor, will be nothing sudden, merely a gradual but prolonged continuance of what we have seen recently in Great Britain, and will need no revolution.
J.M. Keynes CH24 The General Theory of Employment, Interest and Money

Vocal Minority

2010-04-21T15:58:00.024-05:00

Members of the Writers Guild of America-West (WGA) joined AFA-CWA United Airlines members on the picket line (January 7, 2010).Originally uploaded by CWA Union

At a May 2007 shareholder meeting the CEO of United Airlines, Glenn Tilton, was confronted by a protesting pilot who said, "employee morale is at an all-time low... Your employees are no longer behind you." He dismissed this employee as part of a "vocal minority." Over the next couple weeks, blue rubber wrist bands with the words written in yellow "VOCAL MINORITY" started showing up on United employees all over the world.

Morale within the company couldn't be any lower. The unions were too weak to get a fair contract. Flight attendants were being paid so little that s0me were receiving food stamps. To add insult to injury the top brass was determined to play the game of who's got the biggest salary with other corporate CEOs. Tilton won that game that year in Illinois taking a huge lead over CEOs of far larger corporations such as Boeing, Kraft and Abbott Labs.

The outrage employees felt manifested itself in various ways. A minority accepted this turn of events as something they are powerless over. They bought into the story that the market sets everyone's wage, United had to bid against other companies for a superstar CEO. Higher skills demand a higher wage, and the company (and their jobs by extension) will do better as a result. Others pushed back in the only way they felt they could; they would hurt the company's bottom line so much that management would be forced to address the worker's demands.

Just like with CEOs, there is a temporary disconnect between a worker's performance and their salary. They get paid the same if the plane goes half empty or totally full. I was a flight attendant at the time. One winter night in Denver we knew the flight I was scheduled to work would be delayed two hours because the co-pilot's inbound plane was delayed. There were no other co-pilots around that could fill the seat. Most of the crew went to the crew lounge to wait in comfort. The silver haired pilot decided he would stay onboard and heat the whole wide-bodied 777, so the two of us could watch movies in first class in comfort. He fired up the APU, and burned Jet-A for two hours as we waited, heating the entire plane the length of a skyscraper just for the two of us. This disregard for corporate money was not an isolated incident. Many flights were intentionally delayed or canceled. Service onboard was cut by some flight attendants to bare minimums. Innocent passengers bore the brunt of these inconveniences in the same way they bought cars from Detroit that were intentionally built with annoyances like loose bolts in the door panels. The airline hemorrhaged money and upper management felt compelled to do something about it.

They decided to hold what amounted to a company pep rally in Chicago. United employees in every position within the company were required to go, attendance was taken. We sat at tables and played games together. We were fed a nice lunch while we were served the company Kool-Aid. One thing we all knew that wasn't on the lunch menu was a pay raise. Pilots walked out when I was there under threat of disciplinary action. Everyone was allowed a chance at the microphone. The meetings turned into a forum where outrage could be heard by all. The frontline workers were not drinking the Kool-Aid, and the organizers decided to end the experiment early. Glenn Tilton's name was always noticeably absent from the attendance roster.

What was happening at United was not unique to this particular corporation. Since the late 1970's, executive pay has been multiplying, while the median American wage has been pretty flat, even declining for many. What can explain this? Most economists fall back on simple supply and demand. There are many people willing and capable of being "unskilled" workers, but CEOs with experience running a large multi-national company are rare and highly

in demand. There are two glaring problems with this. How do you

derive a value for a CEO? They are usually the highest paid employee, but are they the most valuable employee to the company? In the 1970's the average CEO made thirty times the average worker's salary, in recent years it is been in the low to mid tripple digits. Have CEOs become so much more valuable in this short span of time? Scientists and engineers, like top executives commonly hold master's degrees, yet scientists and engineers have seen only modest pay increases. Even between competitors, a company with a long track record of worse performance may be commanded by higher paid executives. If pay was a reflection of value, you would expect in other countries large companies would have the same CEO to average worker pay ratios. But you don't. CEOs may even be paid enormous sums while destroying the company. This is certainly the case of the highest paid CEOs in America who bankrupted their companies by making the worst investments in recent history while pulling in record incomes. Six executives of the biggest banks in the US made a combined $83.5 billion dollars in 2009. To put this in perspective, it is about 5 times the GDP of Bolivia. Two of the executives each made the equivalent of the entire GDP of the middle income country of Jordan. If this smells fishy to you, it should.

So if a change in productivity isn't the driver of executive compensation what is? The answer a shift in culture. Investors, those paying attention, buy into the myth that high pay will bring high performance and welcome it. A larger segment of investors don't pay close attention to the company and tend to vote with the board. Commonly share holders are not even given a vote on the matter. Meanwhile promotion from within the company has declined. Another driver is the phenomenon of "Keeping up with the Joneses." This is evident because different countries have dramatically different norms on how many times more a CEO will pay him/her self.

So what sets the upper limit on executive compensation? Employee outrage. Set it too high and there will be strikes and other forms of sabotage. Outraged employees can be sacked though. Unions make it more expensive, but not impossible to sack an entire workforce.

The other problem is unions are pit against each other because of the competitive nature of markets. The union which makes the most concessions will give their company a competitive advantage. One way around this is for unions to collude with each other. They should negotiate minimum pay scale. This will remove the competitive advantage a company will receive by paying their employees less than their competitors. This is especially important for employees with a long tenure who can't join a competitor without starting over at the bottom of the pay scale. It shouldn't be done in a way that raises ticket price for the consumer (less will be bought) the goal is redistribution within the company not product price fixing.

*Employee compensation used to calculate these averages were those working in industrial companies with about $500 million in annual sales.

Another avenue to take is through federal laws. Management may have full control over the employee's work schedule. If a worker feels overworked there may be nothing they can do about it. This is where federal laws are useful to mandate maximum hours worked for all workers. This way all companies are paying equally. No domestic competitive advantages are gained, with the exception for companies which don't use much labor. A computer requires no health care insurance, no days off, no payroll tax etc.. Thus the system as it exists now penalizes companies for hiring people over those who go the route of automation.

While most people are in favor of technological progress, just like trade, some benefit and some get hurt. Shifting health care costs to the government is a good place to start. The cost burden will become less concentrated on those companies which create jobs and transferred to society as a whole. I won't go into the other benefits to universal health care but it has the potential to help small business, reduce medical costs and improve outcomes if done right. Elimination of the payroll tax would also go a long way to lower unemployment and leave workers making $50k/year with over $300 extra dollars a month.

The next thing that can be done is a government job guarantee program. The government will hire every able and willing person and pay them a living wage. Then companies which want to hire workers will have to pay at least a living wage in order to attract them. Since the increased costs of doing so can't be passed down to the worker, and competitive markets keep it from being passed onto the consumer, it will have to come from investors, executives and retained earnings. This brings in the minimum wage debate. Set the minimum wage too high, and companies won't hire. The simple truth is as long as a company can increase profits by hiring someone, that someone will be hired. This means the worker will get to keep a higher share of the profit they make for the company. When the middle class has more money to spend, both from working for a company or working for the government, companies will get more customers, the economic pie will grow and the business cycle will be far more stable. It's a very American solution where everyone can profit.

Paul Krugman calls the last 30 years the "Great Compression." It squeezed the middle class hard and began with steadily decreased taxes on the richest percentile of Americans. The top income tax bracket was set at 70% in 1977 compared to 35% today. This has had an extreme distortionary effect on our democracy. Having the fed keep overnight interest rates at zero will also do a lot to stabilize financial markets and do what J.M. Keynes termed "euthanasia of the functionless rentier class." Rent payments are a much larger burden on worker's pay check than executive compensation. Companies can turn to banks to raise funds for lower costs than they can get from bond sales or stock issuance.

What is possible is a restoration of the middle class. The top 1% in 2006 made 21.3% of all income in the United States, which is a big change from 12.8% in 2002. What we lack in money we make up for in numbers. We can demand smart universal health care, we can demand a job guarantee program, we can strengthen unions, we can restore banking to the public purpose, raise social security pay so we aren't dependent on the success of the Wall Street casino. We can spread the word that things don't have to be like this. Together we can make social justice prevail.

KLAX Approach

2010-04-10T20:16:00.005-05:00

Originally uploaded by flightlvl

At about 2AM Chicago time, I entered the flight deck to let the pilots use the toilet. Regulations require there to be at least two in the flight deck at all times. I had a seat and looked out the windows in awe. The co-pilot noticed my elation and dimmed the control panel lights. The roar of the jet engines is a little softer up there. We were cruising close to the maximum altitude of 38,000 feet. There was no form below us. Just black. Above us you could see the enormity of our galaxy. Bright stars were all around. Way out 100 miles in the distance directly in front of us was an orange glow radiating out into the atmosphere. "That's Los Angeles" the co-pilot announced.

The co-pilot was explaining to me what all the controls mean. "This is the exhaust gas temperature, these are the RPM's of the two engin.. " he was interrupted mid-sentence by the control tower coming over the loud speaker telling us to adjust our heading. It never ceases to amaze me that these pilots can speak and listen for their flight number over radio at the same time. The co-pilot echoed the tower's instructions and turned one knob on the top of his panel. The high contrast backlit LCD next to the knob displayed the new heading, and the plane's computers gently actuated the flight surfaces on the wings and tail to bring us about.

There is some feeling you get when looking at civilization from so far above. I don't know the words to describe it. It removes geographic boarders, the land doesn't change color when you cross a state or country. I consider myself very lucky to see such a thing in my life.

Dvorak final symphony

2010-04-10T01:44:00.004-05:00

This will be the last thing I write with the Dvorak layout. I like it better than Qwerty, it is a superior design, and we would more productive if we adopted it. However the qwerty layout has what economists call a first-mover advantage, so we are taught in school and use everywhere an inferior design.

My typing speed went up from 60 to 80 words per minute. It took a month and eight days of heavy use to get that proficiency. So why am I reverting? Simply put, my brain can't switch back to the old layout on the fly. I'm back to single fingered key hunting when you put me in front of a qwerty style keyboard, and often I need to use a public computer.

I used Hen Thumbs as my typing tutor software. It amazingly crafted logical (mostly) sentences using only the letters it taught me. Each time I would learn a new key new sentences would be presented. It is good software, I tried a bunch and liked it the best. It has the Dvorak layout option built into it.

Phonies who talk authoritatively are hurting America

2010-04-06T10:36:00.005-05:00

This one by Kathy Ruffing and James R. Horney from the Center on Budget and Policy republished by Jonathan Chait in The New Republic is the textbook example of people in the media who speak as if they were experts on a topic when they are anything but. There is always that temptation to overreach, just go into the local bar and hear Joe Sixpack pontificate on just about anything, who cares? The media however is required to be held to higher standards or awful things happen, like a belief we should go to war with Iraq, or that government run health insurance will destroy everything, climate change isn't real and man made to name some recent examples. Here is what got my goat:

Despite claims that President Obama’s policies will generate big increases in deficits, his 2011 budget would actually reduce deficits by about $1.3 trillion over ten years, based on a Congressional Budget Office (CBO) estimate of his budget and a realistic assessment of what deficits would be if policymakers continued to follow current tax and spending policies. ...

By itself, the budget does not do enough to put the nation on a sound fiscal footing, as the President has acknowledged.

Sound fiscal footing? Care to elaborate what that is?

Many analysts have coalesced around 3 percent of GDP as a reasonable target for the deficit in the second half of the decade; the President’s proposals would not accomplish that.

Interesting almost no one says why 3 percent should be the target. The budget deficit should be at least large enough to fill the non-government sector's desire to save. Without that people and businesses cut back on their spending in order to meet their savings desires, but their incomes depend on aggregate demand which will be reduced. Unrealized growth and unemployment persist. These phonies are so common in large part because it gives the people obsessed with small government and low taxes their intellectual support, a support that under examination by honest and intelligent people turns out to be completely wrong. So there are a lot of phonies giving bad information; this gang of frauds even managed to fool Obama. Shame on them.

Who says GM crops offer no advantages?

2010-03-27T20:59:00.005-05:00

Finally got around to reading the Biofuels Joint Roadmap 2006 by the D.O.E. and they showed some stunning photos of what science can do these days, eh 4 years ago:

Lithium Magic Mouse

2010-03-10T14:02:00.023-06:00

I've been using the Apple Magic Mouse since it came out. It's a sweet sweet mouse, best mouse out there. The only thing is it is a battery hog. I go through a pair of NiMH every week. It doesn't help that the mouse's firmware is setup for alkaline batteries and there is substantial juice left over in the NiMH batteries after the mouse goes into low voltage shutdown.

Frustrated, I took matters into my own hands and built a rechargeable lithium battery pack for it, that will last 2+ months per charge. Longer if you are not a heavy user like myself.

First I used my Zenbot to machine a wooden blank that would fit securely in the battery compartment. This took about four hours to complete.

Next I used a mini battery protection circuit (not shown) to prevent the

battery from being discharged too quickly (they tend to explode when that happens) or over discharged (the low voltage cut-off built in the mouse is set below the lithium requirements). This ensures the battery will get over 500 recharge cycles before it needs changing. At a recharge every two months, that means the battery will need replacement in about 1000 months or 83 years. Hmm I think the max life on lithium is 10 years from natural decomposition. In any case it should last a very long time.

Next step is to turn it on. The green light lit up! All is good. The tracking isn't tight because the batteries weigh down the back of the mouse lifting the front like a speedboat in water. This was remedied by raising the back with the old cover.

The battery meter will read 100% regardless of the lithium's state of charge. This is because lithium, until it is at the end of its charge, has a slightly higher voltage than AA batteries. It's nothing that the mouse can't handle though. 3.4V is the voltage reading of a fully charged pair of non-rechargeable AA batteries. 3.7V is my battery pack's unloaded voltage. Probably the mouse can handle up to 5V but I dont intend to find out. :-)

I would like to make a more elegant internal pack with a charging dock but the batteries can only be bought in bulk, with a minimum order of 10 +shipping, costing over $100. The capacity of the battery is only about half of an AA, but if I put it in its cradle when I am not using it, that ceases to be an issue. So if anyone would like a lithium battery pack for their MagicMouse send me an email at tschaff@gmail.com. $25 for for the battery pack $12 for the charger. Shipping in the US is included. Once I get 5 orders I'll send you a PayPal invoice, buy the parts, assemble the packs and send it to you. The battery door will need to be kept off to make a simple docking solution. It won't be beautiful but it will do the job.

Ghost busters

2010-03-06T15:01:00.011-06:00

The current debt to GDP debate between MMT/neo-chartalists and the rest of the economics profession sounds something like this:

Mainstream: Ghosts kill!

MMT: There is no such thing as ghosts.

Mainstream: DONT SAY THAT THEY WILL KILL YOU FIRST!

MMT: Really, do ghosts do a lot of killing?

Mainstream: YES LOOK AT AFRICA!!

MMT: I see people dying of Malaria not ghosts.

Mainstream: GHOSTS KILL!

MMT: aha prove it.

MAINSTREAM: THEY HAVE THE HIGHEST GHOST:PEOPLE RATIO BECAUSE MORE PEOPLE

HAVE DIED THERE THAN ANY OTHER PLACE. THATS WHY DEATH RATE IS SO HIGH IN AFRICA.

MMT: And Meleria has no effect on mortality?

Mainstream: GHOSTS !! LETS SACRIFICE LIVING PEOPLE TO MAKE GHOSTS HAPPY!

MMT: Aren't you worried that you will do more harm than the ghosts?

Mainstream: OMG WE CANT SURVIVE HERE WE ARE GOING TO AMERICA!

dvorak 1st symphony

2010-03-02T18:27:00.006-06:00

I'm doing a little experiment and seeing if the dvorak keyboard layout is any good.

First impressions:
Maddeningly slow; I type ~60 wpm and so far it has taken me 3 minutes to type this much! Must fight urge to cheat!!! Reminiscent of typing on a foreign language keyboard. Wow all the vowls are in the home row! 8 mins now.

Today I received my first order from nuts online. Really happy with them. Bought organic sun dried tomatoes, organic papitas which I will brine and roast myself and they threw in chocolate covered pretzels for free. They emailed me a tracking number asap and an informal follow up thank you once they saw it arrived. Best of all they are delicious.

20 mins. Getting faster.

Federal Outlays per State vs Tax Reciepts

2010-03-01T21:54:00.003-06:00

Here is a nifty link showing how much the federal government spends in a state per dollar it receives from that state from taxes up until 2005.

I had a hunch that blue states were subsidizing red ones on average. Sure enough it was quite true. 92% of red states (2008 presidential election) receive more from Uncle Sam then they give. Compare that to 60% of blue states give to the federal government more than they receive.

Note: R.I. was excluded because it is 1:1 and D.C. because it is not a state.

In other news, according to Daniel Kahneman's latest TED talk, more money equals more experiential happiness for Americans. At least it does up until about $60,000/year after which more money has absolutely no effect on experiential happiness. Now how about designing tax policy to reflect this reality?

Dictydium cancellatum aka Chinese Lantern.

2010-02-25T21:46:00.002-06:00

slime mold with bug, originally uploaded by myriorama.

This is a slime mold that grows on rotting trees. It's the most beautiful thing ever to come under my microscope. It grows only a few millimeters long, so you'll never see the details with the naked eye.

dictydium, originally uploaded by myriorama.

These photos are all at about 10X that I found on flickr. If you could zoom in more you could see that cribrarioid net on the top has tiny hairs which connect the net together. Zoom in even more and you can see spores all over the net that blow in the wind as if it were a microscopic dandelion. Who knew slime molds can be so beautiful.

Another slime mold which causes an emotional reaction in the viewer is the Fuligo septica aka dog vomit slime mold.

The Fair Rate of Interest

2010-02-20T17:35:00.005-06:00

Something nice that I read today:

It is not clear what advantage monetary policy has [over fiscal policy for achieving full employment and stable inflation], besides the fact that target interest rates can be easily altered every month or even every week. Indeed, by bringing back fiscal policy as the main tool to affect aggregate demand, monetary policy would now have an additional degree of freedom to set the real interest rate, which is a key determinant of distribution policy. The real interest rate could be set at its fair level, which, according to Pasinetti (1981), is equal to the trend rate of growth of labor productivity (see Lavoie and Seccareccia 1996). With such a fair rate of interest, the earnings of one hour of labor, when they are saved, allow its owner to obtain a purchasing power which is equivalent to that obtained with the earnings of one hour of labor in the future.

Source: Fiscal Policy in a Stock-Flow Consistent (SFC) Model, Godley and Lavoie 2007

Tree of Life

2010-02-18T21:12:00.008-06:00

The old
The new

I am working in a lab now to determine how increased CO2 levels will effect fungal life in soil. Scientists set up towers that emit CO2 around a circular parameter, and all the land inside the circle will be exposed to CO2 concentrations that we are predicted to have if humans keep up with their fossil fuel lifestyle. They send the lab I work in soil samples from inside the parameter and outside. It's my job to determine what fungi are growing in it by using genetic analysis.

Genetic analysis is a relatively new tool for science. Before it existed scientists had to classify life by different observable features (did it have a nucleus or not, was it multi-cellular, what is its nutrition source to name a few). Beginning in the late 1980's University of Illinois scientist Carl Woese introduced the three domain classification, based on the genetic code of cellular life. It was unsettling for many scientists. The results showed that humans and fungi are genetically very similar! No, I don't wonder why a large segment of our society rejects us.

Tract on Money

2010-02-04T22:14:00.017-06:00

A friend and university econ teacher was dismayed that he had no way to teach the chapter on money. His distress has been echoed by other econ professors I have talked with. It is the more bright ones that are most aware that the material in the textbooks is toxic and seek alternatives.

It seems the vast majority of economists and policy experts have a dangerously incomplete understanding of how the monetary system operates. There are well documented disagreements among central bankers. To name just one example, for some years in the early 1980's the consensus was that the Federal Reserve (what the US calls their central bank) should control the money supply (defined as M1 to M3). Had the bankers been taught more about money they would have known that the money supply quantity can't be controlled by them with any accuracy. Luckily enough of the Federal Reserve policy makers caught on that it wasn't working, so they abandoned the practice formally in 2000. Many academic economists still teach it can be done.

I am reminded of a Star Trek TNG episode where the ancient ancestors built a machine that serves humanity's every need. This freed up future generations to peruse other interests. Knowledge on how to build/service the machine was lost to history. Indeed, when the machine broke down they were up the proverbial creek.

Luckily we have a paddle. Hands down the best short summary (I agree with 95% of what he says) of how money works can be found on Google Books. It's a chapter from the new book titled Capitalism by Dr. Geoffrey Ingham at Cambridge University in the UK. It is easy enough to follow for a dedicated non-economist. One of the original thinker's ideas can be found in an article called What is Money by A. Mitchell Innes (first published in 1913), re-published in a collection of essays titled Credit and State Theories of Money edited L. Wrandall Wray.

The complexity of the topic is not replicated anywhere in the mainstream press or even any economics classroom I've attended. We need money to work so we can get things done. Without understanding how it works, how will we ever fix it when it breaks?

The muffled voice of the corporation

2010-02-02T22:30:00.003-06:00

I was reading the ruling of the recent court case Citizens United vs FEC. Before I began reading it I disagreed with the ruling on the grounds that the financial elite already have distorted our democracy enough. The main resistance we the people have against plutocracy is our power to vote out politicians who aren't serving our interest. Our capability to do that is diminished if we are misinformed. Even if you are in favor of the ruling, the downside is that corporations now will spend money on influencing campaigns. Money that would otherwise be used in the creation of goods and services. I've seen it in other countries, it's a form of bribery. Reading it was a it like science fiction. Some justices got confused what personal pronoun to use when referring to the corporation's speech. As if a legal entity has a voice like a human does.

Government has “muffle[d] the voices that best represent the most significant segments of the economy.

There are two significant ramifications to this. First is that enough of the court doesn't accept legal prescident. Secondly now if a politician wants to take on a powerful corporation, there is the constant threat that that corporation will attack them in their home district or state. The attack ads will take the form of a concerened citizin warning of the pain that will occur to them and their loved one if they vote for the attacked. Voltare said:

I disapprove of what you say, but I will defend to the death your right to say it.

Will you defend to the death the right for a corporation to influence elections? What about if the corporation is foreign owned?

There is a scholarly discussion going on over at RiskMetrics:

[Justice Stevens writes that] unlike other interest groups, business corporations have been “effectively delegated responsibility for ensuring society’s economic welfare ….”

[Professor Bainbridge replies] No. They haven’t. (2)

Google and Socialism

2010-01-29T14:24:00.014-06:00

Trend of the Google search keyword “socialism” in the United States

Click to Enlarge

If France is the new USSR, then socialism is the new communism. Here is a graph of how frequently someone googles the word socialism in the United States. There was a 9.7x deviation from the trend (1) in November 2008 during the presidential elections. Ever since then the trend has been up. We are due for another spike any day now.

There are curious dips every year in December and July. I thought this might be because those are holiday months and less people are making Google searches, but it turns out that these numbers are relative to total Google searches, so why the dips happen is still a mystery.

Socialism referenced in the news

The cities which deviate the most voted for Obama (10 out of 10) / generally supported Obama more than the nation on average (8 out of 10)*. Explanation? Obama supporters are wondering what all this socialism talk they see in the news is about, while McCain supporters don't want to learn about socialism beyond what they read in the news. If true, it's very disturbing that the people who are most the resistant to socialism are the least curious about it. It also supports my view that the right wing media is manipulating the ignorant.

*It could be as much as 9 out of 10 depending on how you measure Richardson. I used county data to approximate city voters and Richardson exists in two counties, so I averaged the two.

Sources: USA Today for election data. Google Trends for search data and and story data.

In response to followers of pundits

2010-01-27T17:25:00.014-06:00

I study economics and can report it's hard for economists to grasp the big picture, I don't expect non-economists to do it much at all, so you'll just have to take what I say on faith, but I think you can usually trust most your basic intuitions when it comes to identifying problems. You don't need to have a degree in economics to know that the economy could be producing much more but what we see instead is people sitting around unused, in a world of economic pain, while the operators on Wall Street make 40% of the nation's profits, somehow without producing anything, primarily extracting it from the rest of the economy which does produce things.

You're right to be worried, be tremendously worried. The vast majority of Americans are worried because the economy isn't working for them. The trouble is since the American economy is so complex, people are easily manipulatable about the causes of their pain, and there is no shortage of rats who will manipulate intentionally (like the Wall Street CEOs), or unintentionally by speaking about things they only partially understand, (like Niomi Klein's Shock Doctrine or Moore's Capitalism a Love Story). This breach of ethics has left the American people totally at a loss regarding what to demand from their elected officials. They demand jobs, but is the answer more or less government spending? They want respect from Wall Street but is the answer tighter regulations or were regulations to blame for the mess? They demand an economic system which serves the masses' needs, can capitalism be fixed or is it time to push for something radically different?

The good news is that we still have smart people, still have ethical people, we still have people willing and able to work, we still have enough resources that we can easily feed, shelter, dress, educate and provide health for everyone, and STILL have an abundance of spare resources to pursue art, spiritualism, exploration and science. Our problems are solvable.

In Roosevelt's words "We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men."

The University of Missouri Kansas City has long ago built up a staff of macroeconomic experts. Money is in fact a social creation, an invention to facilitate our every day social interactions near and distant, now and in the future. For this reason I don't say that they have the right vision for everyone, but I think most Americans will prosper from their policy prescriptions. For my economist friends, I recommend reading the IS/LM model replacement- The Sector Financial Balances Model of Aggregate Demand by Professor Scott Fullwiler.

Professor William Mitchel at the University of Newcastle in Australia echos those policy prescriptions, but in more detail. He also offers a indispensable series called Deficit Spending 101 and Fiscal Sustainability 101.

I discovered these scholars during my quest to find economists which predicted the Global Financial Crisis and had sound reasoning behind their prediction. From them I learned more about how economies operate than I ever did in all my economics classes combined. It's proved its worth many times over by making accurate predictions and offering solutions to restore employment and price stability.

In Defense of Obama

2010-01-25T12:27:00.006-06:00

I took two sleeping pills last night, it's dulled my cognitive abilities, but I'll try to write a blog anyways.

I usually counter the despair that consumes me after reading the news by catching up on the science news and reminding myself that technological advance consistently offers solutions to our most pressing problems. We may just solve our problems in ways of our choosing after all, but that's not what I want to write about. I think it is time we give Obama praise were praise is due.

Recently we're starting to see positive things on the financial reform front. He's given us Judge Sotomayor. He set up rules to protect net neutrality. He's improved America's image abroad. He deliberated before sending more troops to Afghanistan (I don't agree with his decision but I like that he deliberated). He nominated Linda Puchala (my previous union's president) to the position of National Mediation Board chair. He killed the F-22 fighters. He didn't send the underwear bomber to Guantanamo. He sent an unprecedented amount of aid to Haiti after their earthquake.

From the Obameter of kept promises:

No. 6: Create an Advanced Manufacturing Fund to invest in peer-reviewed manufacturing processes

"Will create an Advanced Manufacturing Fund to identify and invest in the most compelling advanced manufacturing strategies. The Fund will have a peer-review selection and award process based on the Michigan 21st Century Jobs Fund, a state-level initiative that has awarded over $125 million to Michigan businesses with the most innovative proposals to create new products and new jobs in the state."

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No. 16: Increase minority access to capital

"Strengthen Small Business Administration programs that provide capital to minority-owned businesses, support outreach programs that help minority business owners apply for loans, and work to encourage the growth and capacity of minority firms."

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No. 33: Establish a credit card bill of rights

The credit card bill of rights would "ban unilateral changes ... apply interest rate increases only to future debt ... prohibit interest on fees ... prohibit 'universal defaults' (whereby a credit card raises its rates because the consumer was late paying a different creditor ... require prompt and fair crediting of cardholder payments."

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No. 36: Expand loan programs for small businesses

Expand "the Small Business Administration's loan and micro-loan programs which provide start-up and long-term financing that small firms cannot receive through normal channels."

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No. 40: Extend and index the 2007 Alternative Minimum Tax patch

Extend and index the temporary fix to the Alternative Minimum Tax that was passed in 2007

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No. 50: Expand the Senior Corps volunteer program

Expand "the Senior Corps program, which connects individuals over the age of 55 to local volunteer opportunities, and work to provide additional security, including assistance with retirement and family-related costs, to seniors who participate in public service."

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No. 58: Expand eligibility for State Children's Health Insurance Fund (SCHIP)

"Expand eligibility for the Medicaid and SCHIP programs and ensure that these programs continue to serve their critical safety net function."

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No. 76: Expand funding to train primary care providers and public health practitioners

"Expand funding—including loan repayment, adequate reimbursement, grants for training curricula, and infrastructure support to improve working conditions— to ensure a strong workforce that will champion prevention and public health activities."

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No. 77: Increase funding to expand community based prevention programs

"Increase funding to expand community based preventive interventions to help Americans make better choices to improve their health."

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No. 88: Sign the UN Convention on the Rights of Persons with Disabilities

"As president, Barack Obama will renew America's leadership by making the United States a signatory to the UN Convention on the Rights of Persons with Disabilities; the first human rights treaty approved by the UN in the 21st century and a vital foundation for respecting the rights of people with disabilities worldwide He will urge the U.S. Senate to ratify the Convention expeditiously."

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No. 110: Assure that the Veterans Administration budget is prepared as 'must-pass' legislation

"Obama will meet early in the budgeting process each year with congressional leaders and the nation's leading Veterans' Service Organizations (VSOs) to ensure the VA budget is always given 'must-pass' status."

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No. 119: Appoint a special adviser to the president on violence against women

"This advisor will ensure that his agenda is coordinated across federal agencies and fully addresses prevention, programs, and the legal aspects of gender based violence."

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No. 125: Direct military leaders to end war in Iraq

On "my first day in office, I would give the military a new mission: ending this war".

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No. 132: No permanent bases in Iraq

"The U.S. will not maintain permanent bases in Iraq."

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No. 134: Send two additional brigades to Afghanistan

"As Obama removes our combat brigades from Iraq, he will send at least two additional brigades to Afghanistan, where the Taliban is resurgent. He will also provide our armed forces with the reset capability that they need. He will replace essential equipment, and he will ensure that our men and women in uniform get the care and support they have earned."

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No. 154: Strengthen and expand military exchange programs with other countries

Existing U.S. programs of military to military exchanges, joint training, education, and human rights programs must be reoriented from their current Cold War standards to reflect new strategic priorities and ethical standards. Relationships that reassure potential future competitors both of America's goodwill and its strength may help dissuade emerging powers from becoming threats. An Obama administration will also prioritize the strengthening training and working relationships with the next generation of military leaders in allied states in the Muslim and wider developing world, in order to build professionalism and respect for rights and democracy, as well as open and sustain unofficial channels of communication and influence.

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No. 156: Make greater investment in advanced military air technology

"We must adapt and make tradeoffs among systems originally designed for the Cold War and those required for current and future challenges. We need greater investment in advanced technology ranging from the revolutionary, like unmanned aerial vehicles and electronic warfare capabilities, to systems like the C-17 cargo and KC-X air refueling aircraft—which may not be glamorous to politicians, but are the backbone of our future ability to extend global power."

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No. 167: Make U.S. military aid to Pakistan conditional on anti-terror efforts

"As president, Barack Obama would condition U.S. military aid to Pakistan on their making progress to close down the training camps, evict foreign fighters, and prevent the Taliban from using Pakistan as a base to strike inside of Afghanistan. ... Obama also will increase aid to Pakistan for development and secular education to counter extremists."

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No. 174: Give a speech at a major Islamic forum in the first 100 days of his administration

"Obama will personally lead diplomacy efforts beginning with a speech at a major Islamic forum in the first 100 days of his administration. He will make clear that we are not at war with Islam, that we will stand with those who are willing to stand up for their future, and that we need theireffort to defeat the prophets of hate and violence."

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No. 182: Allocate Homeland Security funding according to risk

No. 184: Create a real National Infrastructure Protection Plan

"The federal government's National Asset Database, which is supposed to guide homeland security priorities, lists 77,069 potential U.S. targets including petting zoos and popcorn factories. Experts say this database is relatively useless for any level of homeland security planning. Barack Obama's Department of Homeland Security will develop a meaningful critical infrastructure protection plan across the nation and will work with the private sector to ensure that all real targets are prepared for disasters both natural and man-made."

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No. 188: Increase funding for local emergency planning

"Obama is committed not only to rolling back the funding cuts that have affected first responders, but also to increasing federal resources and logistic support to local emergency planning efforts."

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No. 197: Stand down nuclear forces to be reduced under the Moscow Treaty

Obama will "immediately stand down all nuclear forces to be reduced under the Moscow Treaty and urge Russia to do the same."

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No. 200: Appoint a White House Coordinator for Nuclear Security

Obama "will appoint a deputy national security advisor to be in charge of coordinating all U.S. programs aimed at reducing the risk of nuclear terrorism and weapons proliferation. This person will work closely with him, the national security adviser, the director of the Office of Management and Budget, and senior officials of the relevant cabinet departments, and will have budgetary oversight over all programs related to nuclear security."

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No. 204: Initiate a grant and training program for law enforcement to deter cyber crime

"Barack Obama and Joe Biden will also initiate a grant and training program to provide federal, state, and local law enforcement agencies the tools they need to detect and prosecute cyber crime."

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No. 208: Improve relations with Turkey, and its relations with Iraqi Kurds

"Barack Obama and Joe Biden will lead a diplomatic effort to bring together Turkish and Iraqi Kurdish leaders and negotiate a comprehensive agreement that deals with the PKK threat, guarantees Turkey's territorial integrity, and facilitates badly needed Turkish investment in and trade with the Kurds of northern Iraq. Barack Obama and Joe Biden will support the promotion of democracy, human rights, and freedom of expression in Turkey and support its efforts to join the European Union."

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No. 212: Launch an international Add Value to Agriculture Initiative (AVTA)

"In order to increase the incomes of subsistence producers, decrease the pressure on shrinking arable lands, and minimize the vulnerability of commodity exports to global price shocks, an Obama administration will launch the AVTA Initiative. Barack Obama and Joe Biden are committed to spurring research and innovation aimed at bringing about a Green Revolution for Africa, by partnering with land grant institutions, private philanthropies and business to support agricultural processing through increased investment in research and development for improved seeds,irrigation methods, and affordable and safe fertilizers."

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No. 215: Create a rapid response fund for emerging democracies

"Barack Obama and Joe Biden will introduce a new Rapid Response Fund – a seed fund that will provide a shot of adrenaline to young democracies and post-conflict societies, through foreign aid, debt relief, technical assistance and investment packages that show the people of newly hopeful countries that democracy and peace deliver, and the United States stands by them."

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No. 222: Grant Americans unrestricted rights to visit family and send money to Cuba

"Cuban American connections to family in Cuba are not only a basic right in humanitarian terms, but also our best tool for helping to foster the beginnings of grassroots democracy on the island. Accordingly, as president, Obama will grant Cuban Americans unrestricted rights to visit family and send remittances to the island."

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No. 224: Restore funding for the Byrne Justice Assistance Grant (Byrne/JAG) program

"The (Bush) administration has consistently proposed to cut or eliminate funding for the Byrne Justice Assistance Grant (Byrne/JAG) program, which funds anti-drug and anti-gang task forces across the country. …Since 2000, this program has been cut more than 83 percent. ... As president, Obama will restore funding."

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No. 225: Establish an Energy Partnership for the Americas

"As president, Barack Obama will establish an Energy Partnership for the Americas. This partnership will increase research and development in clean coal technology, the next generation of sustainable biofuels and in wind, solar and nuclear energy. The partnership will also look for ways for nations to coordinate to transport green energy across national borders. It will help Latin American and Caribbean nations become more energy independent and promote sustainable growth for the region. The partnership also will create additional markets for American biofuels and American-made green energy technology."

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No. 239: Release presidential records

"Will nullify the Bush attempts to make the timely release of presidential records more difficult."

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No. 241: Require new hires to sign a form affirming their hiring was not due to political affiliation or contributions.

"Will issue an executive order asking all new hires at the agencies to sign a form affirming that no political appointee offered them the job solely on the basis of political affiliation or contribution."

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No. 244: Provide affordable, high-quality child care

"Will provide affordable and high-quality child care to ease the burden on working families."

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No. 247: Recruit math and science degree graduates to the teaching profession

"Will recruit math and science degree graduates to the teaching profession and will support efforts to help these teachers learn from professionals in the field. They will also work to ensure that all children have access to a strong science curriculum at all grade levels."

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No. 266: Encourage water-conservation efforts in the West

Will "support federal policies to encourage voluntary water banks, wastewater treatment, and other market-based conservation measures" to address the water shortage in western states.

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No. 269: Increase funding for national parks and forests

"Will repair the damage done to our national parks by inadequate funding and emphasize the protection and restoration of our National Forests."

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No. 270: Increase funding for the Land and Water Conservation Fund

Will support "increased funding for the Land and Water Conservation Fund, which supports land acquisition and maintenance of parks" and "will lead efforts to acquire and conserve new parks and public lands, focusing on ecosystems such as the Great Plains and Eastern forests which do not yet have the protection they deserve."

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No. 272: Encourage farmers to use more renewable energy and be more energy efficient

"Will encourage the use of methane digesters that are being used to produce power from animal waste; and will expand USDA projects that focus on energy efficiency and conservation."

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No. 277: Pursue a wildfire management plan

"Will aggressively pursue an effective fire prevention, mitigation and land and forest management plan that decreases the fire risks that many communities are nowfacing. When wildfire threatens lives and property, an Obama-Biden Administration will increase the federal government's commitment to field the most professional, well-trained, and well-coordinated wildfire fighting force in the world. Unlike the Bush Administration, they will not finance these efforts by raiding the budgets relied upon by the Forest Service and Bureau of Land Management to provide public access to, and manage, the more than 430 million acres of public lands that they oversee. Barack Obama will work with Governors, Congress and local officials on a bipartisan basis to develop and enact reliable, dedicated funding sources to fight the most catastrophic fires so that public lands may continue to be managed for public access, fish, wildlife, recreation, forestry and other multiple uses."

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No. 278: Remove more brush, small trees and vegetation that fuel wildfires
"Will place a high priority on implementing cooperative projects to remove brush, small trees and other overgrown vegetation that serve as fuel for wildfires. Barack Obama will focus the Forest Service and Bureau of Land Management's efforts on working with local communities on hazardous fuels projects to make communities safer and forests healthier."
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No. 279: More controlled burns to reduce wildfires
"Will use controlled burns and prescribed natural fire to reduce such fuels in close coordination with those communities that are most at risk. Thousands of jobs will be created by working with communities to thin unnaturally crowded forests close to homes. And by coordinating fuel reduction efforts with biomass energy projects, communities will have the potential togenerate new sources of low cost energy. Resources will be focused where they will do the most good: in the wildland-urban interface, and not in fighting fires or on logging projects in remote, backcountry areas."
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No. 284: Expand access to places to hunt and fish
Will "support the Open Fields Incentives legislation that provides incentives to farmers and ranchers who voluntarily open their land to hunting, fishing and other wildlife-related activities."
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No. 290: Push for enactment of Matthew Shepard Act, which expands hate crime law to include sexual orientation and other factors
"Will place the weight of (his) administration behind the enactment of the Matthew Shepard Act to outlaw hate crimes."
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No. 297: Restore funding to the EEOC and the U.S. Department of Labor's Office of Federal Contract Compliance Programs
"Will restore funding to these vital agencies (the EEOC and the U.S. Department of Labor's Office of Federal Contract Compliance Programs), reduce their charge backlog and strengthen laws already on the books that help workers fight pay discrimination."
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No. 300: Reform mandatory minimum sentences
"Will immediately review (mandatory minimum) sentences to see where we can be smarter on crime and reduce the ineffective warehousing of nonviolent drug offenders."
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No. 307: Create a White House Office on Urban Policy
"Will create a White House Office of Urban Policy to develop a strategy for metropolitan America and to ensure that all federal dollars targeted to urban areas are effectively spent on the highest-impact programs. The Director of Urban Policy will report directly to the president and coordinate all federal urban programs."
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No. 310: Establish program to convert manufacturing centers into clean technology leaders
Will "establish a federal investment program to help manufacturing centers modernize and help Americans learn new skills to produce green products. This federal grant program will allocate money to the states to identify and support local manufacturers with the most compelling plans for modernizing existing or closed manufacturing facilities to produce new advanced clean technologies. This investment will help provide the critical up-front capital needed by small and mid-size manufacturers to produce these innovative new technologies. Along with an increased federal investment in the research, development and deployment of advanced technologies, this $1 billion per year investment will help spur sustainable economic growth in communities across the country."
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No. 325: Create an artist corps for schools
Will "support the creation of an "Artists Corps" of young artists trained to work in low-income schools and their communities.
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No. 326: Champion the importance of arts education
"Will use the bully pulpit and the example he will set in the White House to promote the importance of arts and arts education in America."
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No. 327: Support increased funding for the NEA
Will "support increased funding for the National Endowment for the Arts, the support of which enriches schools and neighborhoods all across the nation and helps to promote the economic development of countless communities."
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No. 332: Add another Space Shuttle flight
Obama "supports congressional efforts to add at least one additional Space Shuttle flight to fly a valuable mission and to keep the workforce engaged. He will work to ensure there is adequate funding to support that additional flight so that it does not interfere with developing the Shuttle's successor."
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No. 334: Use the private sector to improve spaceflight
"Will stimulate efforts within the private sector to develop and demonstrate spaceflight capabilities."
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No. 336: Partner to enhance the potential of the International Space Station
"Will enlist other federal agencies, industry and academia to develop innovative scientific and technological research projects on the International Space Station."
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No. 337: Use the International Space Station for fundamental biological and physical research
"Will use the ISS for fundamental biological and physical research to understand the effects of long-term space travel on human health and to test emerging technologies to enable such travel."
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No. 338: Explore whether International Space Station can operate after 2016
"Will consider options to extend ISS operations beyond 2016. After investing so much in developing the ISS, it would be a shame not to utilize it to the fullest possible extent."
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No. 342: Work toward deploying a global climate change research and monitoring system
"Will lean forward to deploy a global climate change research and monitoring system that will work for decades to come. The recommendations in the recent National Research Council decadal survey on Earth observations from space will guide his priorities in this regard."
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No. 345: Enhance earth mapping
"Will continue support for the Landsat Data Continuity Mission, which allows study of the earth's land surfaces and provides valuable data for agricultural, educational, scientific, and government use."
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No. 346: Appoint an assistant to the president for science and technology policy
"Will appoint an Assistant to the President for Science and Technology Policy who will report directly to the president, and be deeply involved in establishing research priorities that reflect the nation's needs based on the best available advice from experts around the country."
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No. 356: Establish special crime programs for the New Orleans area
"Will finish rebuilding the region's criminal justice system so that we do not have to rely on the National Guard to patrol city streets..Will establish a special "COPS for Katrina" program to allow communities impacted by the storm to hire and retain new officers and community prosecutors, develop community-based crime fighting strategies, and rebuild their lost infrastructure... Will strengthen Drug Enforcement Administration efforts to stop the reestablishment of drug gangs across the region...Will help local, state, and federal law enforcement agencies come together to establish an integrated regional crime control partnership so that each police chief and sheriff doesn't have to face these crime problems alone."
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No. 359: Rebuild schools in New Orleans
"Will help communities in the Gulf make necessary school infrastructure investments so all kids from all backgrounds have safe and supportive environments to learn."
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No. 371: Fund a major expansion of AmeriCorps
"Will expand and fund AmeriCorps from 75,000 slots today to 250,000 and they will focus this expansion on addressing the great challenges facing the nation." These additional slots will enable AmeriCorps to establish five new Corps: Classroom Corps to help teachers and students, with a priority placed on high-need and underserved schools; Health Corps to improve public health information and outreach to areas with inadequate health systems such as rural areas and inner cities; Clean Energy Corps to promote energy independence through efforts like weatherization, renewable energy projects and educational outreach; Veterans Corps to help keep America's sacred trust with its veterans; and Homeland Security Corps to help communities plan, prepare for and respond to emergencies.
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No. 377: Create a Social Investment Fund Network
"Will create a Social Investment Fund Network. This will be a government-supported nonprofit corporation, similar to the Corporation for Public Broadcasting, that will use federal seed money to leverage private sector funding to improve local innovation, test the impact of new ideas and expand successful programs to scale. The fund will operate through a network of funds that will be rooted in the private sector at the community level, with local decision-making informed by a shared network of best practices. For example, a successful nonprofit organization could apply for funding to study ways to improve or expand the organization to other locations. Or an angel investor could work with the fund to identify high-quality nonprofits that should be expanded to other locations and invest in that expansion. The network of funds would bring experts skilled at analyzing data, picking winners, measuring results, and building capacity to work."
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No. 380: Bolster the military's ability to speak different languages
"Will bolster our military's ability to speak different languages, navigate different cultures, and coordinate complex missions with our civilian agencies."
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No. 391: Appoint the nation's first Chief Technology Officer
"Will appoint the nation's first Chief Technology Officer (CTO) to ensure that our government and all its agencies have the right infrastructure, policies and services for the 21st century. The CTO will ensure the safety of our networks and will lead an interagency effort, working with chief technology and chief information officers of each of the federal agencies, to ensure that they use best-in-class technologies and share best practices."
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No. 394: Provide grants to early-career researchers
"Will provide new research grants to the most outstanding early-career researchers in the country."
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No. 411: Work to overturn Ledbetter vs. Goodyear
"Obama will work to overturn the Supreme Court's recent ruling that curtails racial minorities' and women's ability to challenge pay discrimination."
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No. 420: Create a national declassification center
"He will institute a national declassification center to make declassification secure but routine, efficient and cost-effective."
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No. 421: Appoint an American Indian policy adviser
"I'll appoint an American Indian policy adviser to my senior White House staff to work with tribes. I'll host an annual summit at the White House with tribal leaders to come up with an agenda that works for tribal communities."
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No. 425: Increase funding for land-grant colleges
"Obama will increase research and educational funding for land-grant colleges."
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No. 427: Ban lobbyist gifts to executive employees
"Barack Obama will issue an executive order banning registered lobbyists or lobbying firms from giving gifts in any amount or any form to executive branch employees."
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No. 435: Create new criminal penalties for mortgage fraud
"We will crack down on mortgage professionals found guilty of fraud by increasing enforcement and creating new criminal penalties."
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No. 452: Weatherize 1 million homes per year
"Will make a national commitment to weatherize at least 1 million low-income homes each year for the next decade, which can reduce energy usage across the economy and help moderate energy prices for all."
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No. 458: Invest in all types of alternative energy
"We'll invest in research and development of every form of alternative energy - solar, wind, biofuels."
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No. 459: Enact tax credit for consumers for plug-in hybrid cars
"We will leverage private sector funding to bring these cars directly to American consumers. We'll give consumers a $7,000 tax credit to buy these vehicles."
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No. 460: Ask people and businesses to conserve electricity
"Will call on businesses, government and the American people to meet the goal of reducing our demand for electricity 15 percent by the end of the next decade."
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No. 466: Create a 'Green Vet Initiative' to promote environmental jobs for veterans
"Will ensure that more of our veterans can enter the new energy economy. They will create a new 'Green Vet Initiative' that will have two missions: first it will offer counseling and job placement to help veterans gain the skills to enter this rapidly growing field; second, it will work with industry partners to create career pathways and educational programs."
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No. 467: Create job training programs for clean technologies
"Will increase funding for federal workforce training programs and direct these programs to incorporate green technologies training, such as advanced manufacturing and weatherization training, into their efforts to help Americans find and retain stable, high-paying jobs . . . will also create an energy-focused youth jobs program to invest in disconnected and disadvantaged youth. This program will provide youth participants with energy efficiency and environmental service opportunities to improve the energy efficiency of homes and buildings in their communities, while also providing them with practical skills and experience in important career fields of expected high-growth employment. Participants will not only be able to use their training to find new jobs, but also build skills that will help them move up the career ladder over time."
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No. 475: Require states to provide incentives for utilities to reduce energy consumption
"Will 'flip' incentives to utility companies by: requiring states to conduct proceedings to implement incentive changes; and offering them targeted technical assistance. These measures will benefit utilities for improving energy efficiency, rather than just from supporting higher energy consumption. This 'regulatory equity' starts with the decoupling of profits from increased energy usage, which will incentivize utilities to partner with consumers and the federal and state governments to reduce monthly energy bills for families and businesses. The federal government under an Obama administration will play an important and positive role in flipping the profit model for the utility sector so that shareholder profit is based on reliability and performance as opposed to total production."
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No. 480: Support high-speed rail
Will "Support development of high-speed rail networks across the country. Providing passengers with safe high-speed rail will have significant environmental and metropolitan planning advantages and help diversify our nation's transportation infrastructure. Our domestic rail freight capacity must also be strengthened because our demand for rail transportation has never been greater, leaving many key transportation hubs stretched to capacity. Obama and Biden are committed to renewing the federal government's commitment to high speed rail so that our nation's transportation infrastructure continues to support, and not hinder, our nation's long-term economic growth."
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No. 483: Invest in public transportation
"Will re-commit federal resources to public mass transportation projects across the country. Obama and Biden will work with state and local governments across the country on efforts to create new, effective public transportation systems and modernize our aging urban public transit infrastructure."
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No. 484: Equalize tax breaks for driving and public transit
"The federal tax code rewards driving to work by allowing employers to provide parking benefits of $205 per month tax free to their employees. The tax code provides employers with commuting benefits for transit, carpooling or vanpooling capped at $105 per month. This gives drivers a nearly 2:1 advantage over transit users. Obama and Biden will reform the tax code to make benefits for driving and public transit or ridesharing equal."
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No. 494: Share enviromental technology with other countries
"We'll establish a program for the Department of Energy and our laboratories to share technology with countries across the region."
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No. 495: Double federal spending for research on clean fuels
Will "double science and research funding for clean energy projects including those that make use of our biomass, solar and wind resources."
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No. 498: Provide grants to encourage energy-efficient building codes
"Will create a competitive grant program to award those states and localities that take the first steps in implementing new building codes that prioritize energy efficiency, and provide a federal match for those states with leading-edge public benefits funds that support energy efficiency retrofits of existing buildings."
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No. 500: Increase funding for the Environmental Protection Agency
"That's why I am committed to pursuing greater funding for the EPA so that itsresponsibilities are carried out. Clean water, land and air, and ensuring the health and safety ofour citizens, especially children, will be high priorities in an Obama Administration."
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No. 502: Get his daughters a puppy
"The pledge is (Sasha and Malia) will get their dog, win or lose."
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No. 503: Appoint at least one Republican to the cabinet
Interview with Steve Kroft of "60 Minutes": Question: "Will there be Republicans in the Cabinet?" Obama: "Yes." Question: "More than one?" Obama: "You're not getting any more out of me."
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No. 506: Raise the small business investment expensing limit to $250,000 through the end of 2009
Will provide "temporary business tax incentives through 2009. The February 2008 stimulus bill increased maximum Section 179 expenses to $250,000 but this expires in December 2008. This provision will encourage all firms to pursue investment in the coming months, but will particularly benefit small firms which generally have smaller amounts of annual property purchases and so choose to expense the cost of their acquired property."
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No. 507: Extend unemployment insurance benefits and temporarily suspend taxes on these benefits
"Obama and Biden believe Congress should immediately extend unemployment insurance for an additional 13 weeks to help families that are being hit hardest by this downturn. In addition, they believe we should temporarily suspend taxes on unemployment insurance benefits as a way of giving more relief to families."
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No. 513: Reverse restrictions on stem cell research
"I believe that the restrictions that President Bush has placed on funding of human embryonic stem cell research have handcuffed our scientists and hindered our ability to compete with other nations. As president, I will lift the current administration’s ban on federal funding of research on embryonic stem cell lines created after August 9, 2001 through executive order ... .."
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Izmaïlovsky Park - rommelmarkt

2010-01-25T03:10:00.002-06:00

Izmaïlovsky Park - rommelmarkt, originally uploaded by petranikolajova.

In a previous life I liked to spend time here.

Я скучаю по тебе

A Tale of Two Bubbles

2010-01-23T14:46:00.009-06:00

It was the best of times, it was the worst of times.

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I was trying to get a feel for the bubble economy and came up with this. The green line is the Fed's DSR or Personal Debt Service to Disposable Income ratio. The common narrative is that American consumers were living beyond their means and took on more debt than they can repay. After the bubble burst the crash was severe because everyone was trying to de-leverage at the same time. The data confirms these effects, but not to the extent I expected. The debt payment to income ratio since 1980 is relatively flat, the average is 12.07 percent. At its peak it reached 13.90 percent in 2008Q1. I had to graph percent change since Jan 87 to bring out the volatility on the graph. I don't know how it is calculated, you might get different results depending on if you take average income or median income. It would be really interesting if someone examined DSR of the bottom 25 or 50% of the population. Since 2008Q3 people have been de-leveraging.

Looking changes in the private savings rates, current account balance, and government sector balance should be the most important. Zombie banks play a role, structural unemployment too. Hasn't anyone looked at this stuff already?