The horizon is not so far as we can see, but as far as we can imagine

Week-end Wrap – Political Economy – May 26, 2019

This post is by Tony Wikrent

Strategic Political Economy

The radical plan to change how Harvard teaches economics

[Vox, via The Big Picture 5-25-19]Harvard finally has someone who is challenging Bush Dubya’s economic guru Greg Mankiw in the teaching of introductory economics. Personally, I think Mankiw should be turned over to some impoverished country like Chad or Ecuador and tried for intellectual crimes against humanity. In the summer 2013 issue of Journal of Economic Perspectives, Mankiw published a paper entitled “Defending the One Percent.”  (pdf)

Raj Chetty, a prominent faculty member whom Harvard recently poached back from Stanford, this spring unveiled “Economics 1152: Using Big Data to Solve Economic and Social Problems.” Taught with the help of lecturer Greg Bruich, the class garnered 375 students, including 363 undergrads, in its first term. That’s still behind the 461 in Ec 10 — but not by much.

The courses could hardly be more different. Chetty has made his name as an empirical economist, working with a small army of colleagues and research assistants to try to get real-world findings with relevance to major political questions. And he’s focused on the roots and consequences of economic and racial inequality. He used huge amounts of IRS tax data to map inequality of opportunity in the US down to the neighborhood, and to show that black boys in particular enjoy less upward mobility than white boys.

Ec 1152 is an introduction to that kind of economics. There’s little discussion of supply and demand curves, of producer or consumer surplus, or other elementary concepts introduced in classes like Ec 10.

Will China play rare earths card in clash with US?
[Asia Times, via Naked Capitalism 5-21-19]

“An American chemicals company and an Australian miner want to build a new supply chain for rare earths that bypasses China. The plan by Blue Line Corp. and Lynas Corp. is aimed at shoring up supplies of important commodities caught up in the U.S.-China trade conflict, … highlighting how companies are growing more worried about the Washington-Beijing showdown” [Wall Street Journal]. “Production of rare earths is dominated by China, and some of the world’s biggest buyers are U.S. technology companies that use rare earths in a wide range of electronics, including military equipment. The White House has been reluctant to impose tariffs on China’s rare-earths shipments, but China has slapped higher tariffs on American shipments of the unprocessed minerals. Lynas has become the largest producer of rare earths outside China and runs a unique supply chain shipping rare earths from Australia to Malaysia for processing.”

“China Raises Threat of Rare-Earths Cutoff to U.S.” 

[Foreign Policy, via Naked Capitalism 5-22-19]

“U.S. oil refiners rely on rare-earth imports as catalysts to turn crude oil into gasoline and jet fuel. Permanent magnets, which use four different rare-earth elements to differing degrees, pop up in everything including ear buds, wind turbines, and electric cars. China supplies about 80 percent of the rare-earth elements imported by the United States, which are used in oil refining, batteries, consumer electronics, defense, and more. ‘It would affect everything—autos, renewable energy, defense, and technology,’ said Ryan Castilloux, the founding director of Adamas Intelligence, a strategic metals consultancy….Those concerns became a lot more tangible this week when Xi, accompanied by his point man for U.S. trade talks, visited a facility in the heart of China’s rare-earths industrial complex.”

“The devastating biological consequences of homelessness”
[Nature, via Naked Capitalism 5-25-19]

“Since 2013, a team led by Margot Kushel, director of the university’s Center for Vulnerable Populations, has followed a group of about 350 older homeless adults in Oakland, California, to determine why this group ages in hyper-speed. Although the participants’ average age is 57, they experience strokes, falls, visual impairment and urinary incontinence at rates typical of US residents in their late 70s and 80s.”

Unchecked corporate power: Forced arbitration, the enforcement crisis, and how workers are fighting back
[Economic Policy Institute 5-23-19]

A new report by Economic Policy Institute and the Center for Popular Democracy projects that in just five years, over 80 percent of private sector, non-union workers will be forced to sign away their right to take their employer to court when their employer violates their rights under the law.

In response, Representatives Jerry Nadler (D-NY) and Bobby Scott (D-Va.) and Senator Patty Murray (D-Wash.) have introduced the Restoring Justice for Workers Act―a crucial step toward shifting the balance of power back to working people. This new bill―if passed―would ban mandatory arbitration and class and collective action waivers.

Predatory Finance

Wall Street’s Six Biggest Bailed-Out Banks: Their RAP Sheets and Their Ongoing Crime Spree

Research Study on Ongoing Crime Spree by Wall Street Mega Banks Gets News Blackout: Here’s Why
Pam Martens and Russ Martens: April 12, 2019 [Wall Street on Parade]

….nonprofit watchdog, Better Markets, released an in-depth research report on “Wall Street’s Six Biggest Bailed-Out Banks: Their RAP Sheets & Their Ongoing Crime Spree.” The report detailed facts, figures and this inescapable conclusion: “[Six Wall Street mega banks] have engaged in—and continue to engage in—a crime spree that spans the violation of almost every law and rule imaginable. Taking the breadth and depth of their illegal conduct as a whole, the six biggest banks in the country look like criminal enterprises….

We know that the Wall Street Journal was aware of the report because Lalita Clozel, a banking regulation reporter for the Wall Street Journal, Tweeted on April 10 that Democrats in the House Financial Services Committee room were handing out the report to journalists while the Chair of the Committee, Congresswoman Maxine Waters, was introducing the bank CEOs.

There are four words in this outstanding report from Better Markets that rendered it unpalatable to corporate business media: “rap sheets” and “criminal enterprise.” We searched Bloomberg News, the Wall Street Journal and the New York Times back to 2004 to see if at any time they had used the words “rap sheet” to describe the unprecedented serial crime sprees of these Wall Street mega banks. They had not….

There is also another reason that big business media found the Better Markets report too hot to handle. Since at least 2013 there has been a concerted effort on the part of lawyers and giant public relations firms working on behalf of Wall Street and its trade associations to silence any media suggestion that Wall Street is inherently evil, criminal or has a business model of fraud, as Senator Bernie Sanders has correctly asserted.


Trump’s Real Estate Dealings Needed a ‘Criminal Organization:’ Deutsche Bank

[Real News Network 5-20-19]

In 1990 Trump reorganized his finances and no bank would lend him money except for Deutsche Bank. Deutsche Bank has already paid $600 million dollars in fines for money laundering says David Cay Johnston

Trump, Kushner and the Times Bombshell: What You Should Know About “Private” Banking in New York City
Pam Martens and Russ Martens, May 20, 2019 [Wall Street on Parade]
Senator Sanders and Representative Lee Propose to Make Wall Street Pay

[CEPR, via Naked Capitalism 5-25-19] Financial transactions tax.
The Country That Exiled McKinsey [ProPublica, via Naked Capitalism 5-19-19]

[In These Times, via Naked Capitalism 5-25-19]
How Chase And The Big Banks Undermine Climate Action
[International Business Times, via Naked Capitalism 5-19-19]

Health Care

44 States File Suit Against Drug Companies for Inflating Prices
[Real News Network 5-22-19]

Ending patent monopolies and prosecuting big pharma will drive prescription drug prices down, says Alex Lawson, Executive Director of Social Security Works.

Total Depravity: The Origins of the Drug Epidemic in Appalachia Laid Bare
[Longreads, via Naked Capitalism 5-23-19]

This is a long article, but very well written and compelling.

In 1921, a series of armed labor disputes known as the West Virginia coal wars culminated in the Battle of Blair Mountain, where miners with rifles fought pitched battles with Pinkerton agents, the army and the police. Together these combatants fired more than one million rounds at one another. The colored neckerchiefs of the resisting miners originated the term ‘redneck’, and the confrontation means the Second Amendment of the Constitution is locally sacrosanct. In most places, armed defense against government tyranny is a hypothetical. In West Virginia, it is a memory.

….Coal has killed West Virginians in subtle and various ways for well over a century. It bowed them, it cru-shed them; it took their sinews and their lungs. As late as the 1920s, Appalachian coal miners were still boys, as young as eight, preferred because their hands were small enough to work the seams. If these boys were severely injured or killed, the conveyor belts did not stop. After the whistle blew at the end of the shift, the gore and body parts (traumatic amputations were frequent) would then be collected….

I had not, before coming to Huntington, ever heard of a ‘coal doctor’ before, but this profession has a long history, rarely an honorable one. Often coal camps were lonely, rough places with few services, and coal doctors were rugged men who travelled long distances to provide medical aid to the workers. They were often chancers, and have retained some of this quality to this day. Not long ago, miners would finish their work and rise to the top of the pit to find a physician, ready to hand pills to any man with pains. As the unions faltered and their protections were stripped away, time spent sick became time unpaid, or an invitation to be laid off. Pain management was no longer just optimum, it was indispensable, and then, naturally, addictive.

Around the same time organized-labor laws were weakened, a company called Purdue Pharma ‘invented’ OxyContin….

Information Age Dystopia

Baltimore ransomware nightmare could last weeks more, with big consequences
[Ars Technica, via Naked Capitalism 5-21-19]

Houses can’t be sold, bills can’t be paid while city networks are shuttered….

It’s been nearly two weeks since the City of Baltimore’s networks were shut down in response to a ransomware attack, and there’s still no end in sight to the attack’s impact. It may be weeks more before the city’s services return to something resembling normal—manual workarounds are being put in place to handle some services now, but the city’s water billing and other payment systems remain offline, as well as most of the city’s email and much of the government’s phone systems.

An entire US city is being held hostage by cybercriminals who are asking for $100,000 worth of bitcoin, via Naked Capitalism 5-22-19]

A private and influential legal group you’ve never heard of is about to vote on what critics call a fundamental rollback of consumer rights….

As public outcry mounts over companies like Facebook collecting and selling user information, the new proposal would prime courts and legislatures to give businesses even more power to extract data from unwitting consumers. If the proposal is approved, merely posting a link to a company’s terms of service on a homepage could be enough for the company to conclude that a user has agreed to its policies. That includes everything from provisions that allow the sale of customer data or grant the right to track visitors to policies that limit consumers’ legal rights by barring them from suing in court or in class actions. Some courts have already given their blessing to this practice. But the proposal up for a vote Tuesday is set to make those kinds of business-friendly rulings all the more common….

There’s been little discussion of the impending change in the general public. That’s because the vote isn’t before Congress, the Supreme Court or a regulatory agency. It’s before a private association virtually unknown outside legal circles: the more than 4,700 judges, legal scholars and practicing attorneys that constitute the American Law Institute….

The reputation of the Restatements is such that for decades courts have treated them as something close to an authoritative explanation of what the law is and where it’s heading. “The ALI is the unofficial College of Cardinals of the U.S. legal profession,” said Adam Levitin, a Georgetown University law professor and ALI member who has helped spearhead opposition to the new Restatement. “Even though its members are not representatives of the public, once the ALI approves these Restatements, lawyers, arbitrators, judges and justices use them as a handy reference guide to what the law is and should be.”

[Credit Slips, via Naked Capitalism 5-22-19]

“The American Law Institute’s membership will vote next Tuesday (the 21st) on whether to approve the ALI’s Consumer Contracts Restatement project. Let me recap why you should care about this project: it opens the door for businesses to use contract to abuse consumers in basically any way they want. The Restatement would do away with the idea of a “meeting of the minds,” as the touchstone of contract law for consumer contracts, and allow businesses to impose any terms they want on consumers, even if the consumers are unaware of the terms and haven’t consented to them. Under the proposed Restatement, a consumer would be bound by any and all of a business’s standard form terms if the consumer (1) assented to a transaction, (2) had notice of the terms, and (3) had a reasonable opportunity to review the terms. In other words, the consumer would not actually have to know or agree to any of the terms to be bound by them. The Restatement would replace meaningful assent with a legal fiction of notice.” • Dark patterns, here we come! Fortunately, alert reader AF forwarded us this from Litigation Daily: “After sharp pushback from 24 state AGs, consumer advocates including Sen Elizabeth Warren, more than a dozen trade groups and even some stalwart business champions, the elite and highly influential group of 4,000-odd judges, legal scholars and lawyers postponed its draft restatement on consumer contracts.”

Uber, Lyft drivers manipulate fares at Reagan National causing artificial price surges
[ABC – WJLA 5-16-19, via The Big Picture 5-20-19]

Drivers say after three years of pay cuts, they now have to fight back. By turning off their apps at certain times, drivers are able to artificially manipulate the Uber and Lyft apps into higher fares.

“Uber doesn’t pay us enough, what the company is doing is defrauding all these people by taking 35-40 percent,” one driver told ABC 7.

Climate and environmental crises

“Why Carbon Credits For Forest Preservation May Be Worse Than Nothing”
[Pro Publica, via Naked Capitalism 5-22-19]

“I looked at projects going back two decades and spanning the globe and pulled together findings from academic researchers in far-flung forest villages, studies published in obscure journals, foreign government reports and dense technical documents. I enlisted a satellite imagery analysis firm to see how much of the forest remained in a preservation project that started selling credits in 2013. Four years later, only half the project areas were forested. In case after case, I found that carbon credits hadn’t offset the amount of pollution they were supposed to, or they had brought gains that were quickly reversed or that couldn’t be accurately measured to begin with. Ultimately, the polluters got a guilt-free pass to keep emitting CO₂, but the forest preservation that was supposed to balance the ledger either never came or didn’t last.” • Because markets.

Misinformation plaguing Texas’ energy policies, says observer
Windpower Monthly (UK) (free content), via American Wind Energy Association 5-23-19]

Texas may be the nation’s energy leader, but tension is mounting between the state’s fossil fuel and renewables industries, as the latter spreads misinformation about support mechanisms for wind and solar, renewables lobbyist Jean Ryall said at WINDPOWER. Contrary to rumors, the wind industry does pay property taxes.

Making industrial chemicals “green” requires a lot of renewable electricity

[Ars Technica, via Naked Capitalism 5-22-19]

In a recent PNAS paper, researchers from universities in Germany and California tried to estimate how effectively the chemical industry could decarbonize and whether such a decarbonization is likely.

The result? If we develop certain technologies, “greening” the chemical manufacture industry can reduce CO2 emissions significantly. But the transition would require so much renewable energy that it’s far more efficient to focus on decarbonizing transportation and even residential heating first….

The limiting factor? Electricity. Creating synthetic, “green” hydrocarbons from captured CO2 would require enormous amounts of renewable (or nuclear) energy. Carbon capture in the chemical industry “could only reduce GHG emissions on the large scale with the joint massive expansion of electricity production capacities,” the paper notes. “As a result, the carbon footprint of electricity from the technologies used to expand the electricity production capacities will determine the climate benefits” of creating a low-carbon chemical industry.

If all of the electricity needed to reduce and eliminate fossil fuels from the chemical industry came from renewable electricity, we would require the addition of 126 percent (in the high-TRL scenario) or 222 percent (in the low-TRL scenario) of the renewable energy capacity that’s currently targeted to come online by 2030.

Climate Change Hits Southern Mexico Hard; Farmers Develop New Ways of Coping
[Real News Network 5-20-19]

The town of Yukuyoko, in the Mixteca region of Southern Mexico, is developing innovative ways of confronting drought. Laura Carlsen reports from Yukuyoko for TRNN

“Changes in honeybee behaviour and biology under the influence of cellphone radiations” (PDF)

[Current Science, via Naked Capitalism 5-22-19]

From the abstract: “Honeybee behaviour and biology has been affected by electrosmog since these insects have magnetite in their bodies which helps them in navigation…. We have compared the performance of honeybees in cellphone radiation exposed and unexposed colonies. A significant (p < 0.05) decline in colony strength and in the egg laying rate of the queen was observed. The behaviour of exposed foragers was negatively influenced by the exposure, there was neither honey nor pollen in the colony at the end of the experiment.”

Creating new economic potential – science and technology

Billion-dollar gamble: How a ‘singular hero’ helped start a new field in physics

[Minnesota Public Radio. News, via Naked Capitalism 5-20-19]

Asked about the chances that a government-funded science project like this could happen today, he says: “Zero.”

GE Catalyst – world’s most “printed engine,”- Makes First Full-Power Tests
[Aviation Week and Space Technology 5-20-19]

The world’s most “printed engine,” GE’s new Catalyst advanced turboprop in which additive manufacturing replaces 855 normally made parts with just 12 “printed” components, ran at full power for the first time last month with its composite five-blade McAuley propeller….

All performance requirements are being met or exceeded, says Brad Mottier, vice president and general manager of business, general aviation & integrated system at GE Aviation. “The fuel burn is good. We wanted to get 15% better over the flight mission (than an equivalent-size 800-shp to 1,650-shp Pratt & Whitney Canada PT6), and we’re validating that. It looks very positive,” Mottier says. “We had a target of 10 plus percent more power at altitude, and we’re exceeding that.”

“At the last count, more than half the turbine aircraft that are on display at EBACE this year are arriving with blend of SAJF and Jet A-1 ,” he added. “It’s a huge achievement, and it demonstrates that it can be done: that 20,000 business aircraft in service globally can safely fly on SAJF today.”

But the route the industry will have to take if it is to reach the ambitious goals it set for itself in 2009 – which include a 50% reduction in carbon emissions from the sector by 2050 – is by no means an easy one to follow. The introduction of SAJF raises complex and intertwined questions that cover economic, logistic, scientific and operational areas. Yet, industry leaders say, what matters most at this stage is that everyone agrees on the need to head in the same direction….

While a small number of flights have been carried out with 100% SAJF, for everyday use, each certified SAJF has to be blended with Jet A-1 in ratios that, additionally, have to be certified. Some SAJFs are approved for a 50:50 mix with Jet A-1, while others can only be used in 30:70 or 10:90 blends. This means that there is no one single SAJF product: rather, the term covers a multitude of different synthetic fuels which are approved for use only when blended with conventional fuel.

RMV orders 27 hydrogen trains from Alstom
[Railway Age 5-22-19]

Rhine-Main Transport Authority (RMV) subsidiary Fahma has awarded Stadler and Infraserv Höchst a €500m contract to supply 27 hydrogen fuel cell Coradia iLint multiple units, which will replace diesel trains on four regional lines in the Taunus region north of Frankfurt-am-Main from 2022

Every GW of offshore wind could create 8,000 jobs, says IHS exec
[SouthCoastToday (New Bedford, Mass.) (tiered subscription model), via American Wind Energy Association 5-24-19]

Offshore wind is an incredible job creator and economic opportunity for US states, with 1 gigawatt of capacity translating to 8,000 jobs, says IHS Market executive Philippe Frangules. “This is a big job-creation story,” he says.

Vestas unveils new turbine that targets US market

[Reuters, via American Wind Energy Association 5-21-19]

Vestas has developed the V138-3.0 MW, which the company thinks will help it capture a larger share of the US market. While maintaining a tip height less than 500 feet, the new turbine is expected to produce at least 30% more energy than the V120-2.2 MW turbine, according to Vestas Chief Technology Officer Anders Vedel.

Wind costs declined 69% from 2009 to 2018, says AWEA
[Power Magazine, via American Wind Energy Association 5-21-19]

Technological innovations drove the levelized cost of wind energy down 69% from 2009 to 2018 and will likely result in further cost reductions and growth over the next several years with support from the wind energy Production Tax Credit phaseout, according to the American Wind Energy Association. Wind generation hit record levels in “every regional transmission organization and independent system operator at some point in 2018,” says CEO Tom Kiernan.

Economics in the real world

[Bloomberg, via Naked Capitalism 5-21-19]

Disrupting mainstream politics

“Walmart workers invited a special guest to crash the company’s annual meeting: Bernie Sanders” [Washington Post, via Naked Capitalism 5-21-19]

“The presidential candidate, who has repeatedly called on Walmart to improve its working conditions, is heading to Bentonville, Ark., on June 5 to introduce a shareholders’ proposal that would give hourly Walmart workers a seat on the company’s board… The presidential candidate, who has repeatedly called on Walmart to improve its working conditions, is heading to Bentonville, Ark., on June 5 to introduce a shareholders’ proposal that would give hourly Walmart workers a seat on the company’s board….. ‘We really want Walmart to think about us — the lowly associates who, behind the scenes, are the ones bringing in the money,’ said Davis, who works as certified pharmacy technician in New Bern, N.C…. Davis said she invited Sanders to speak at the shareholders meeting because he has supported workers in their fight for better pay and paid sick leave.”

“It’s Time to Hold American Elites Accountable for Their Abuses” 

[Rahm Emanuel (!), The Atlantic*, via Naked Capitalism 5-21-19]

“[E]ven after being bailed out, the nation’s banking executives never faced any real consequences. No one went to jail. They never had to repay the personal fortunes they’d made by passing out those bad loans. Once again, the middle class was called to bail out the elites who were responsible for the mess while the elites got off scot-free…. As the White House chief of staff, I argued, unsuccessfully, that the American people needed the catharsis of seeing that the bankers who had gotten the country into this mess were being forced to take responsibility—that faith in government would plummet if we failed to deliver some ‘Old Testament justice.’”

Rahm Emanuel’s Deficit of Self-Awareness New Republic, via Naked Capitalism 5-23-19]

Chicago’s New Mayor to End Water Shutoffs Real News Network, via Naked Capitalism 5-23-19]

Democrats Cozy Up to Wall Street While Shunning Corporate Cash
[Bloomberg, via Naked Capitalism 5-22-19]

“The mayor of South Bend, Ind., the senators from California and Minnesota, and the ex-vice president are among the Democratic presidential candidates disavowing corporate cash, lobbyist checks, or the super PAC system. They’re trying to outdo each other with promises to finance their campaigns with grassroots contributions. But while they play down the role of money and influence, longtime Wall Street donors who have both say little has changed. ‘I’ve talked to about half of them, and I have not run into a single one who said, ‘Hey, you worked at Goldman Sachs, I can’t take your money,” says Heyman, who helped elect Barack Obama by collecting checks from friends, and later became his ambassador to Canada. ‘I’ve not heard that—ever.’”

14 Years Ago, Warren And Biden Battled Over Bankruptcy. Their Fight Still Defines A Party Rift WBUR, via Naked Capitalism 5-22-19]

One Little Video Shows How Democrats Are Trying and Failing to Control Restive Progressives
[Ghion Journal, via Naked Capitalism 5-23-19]

…The first issue to consider is one of institutional control. I recently conducted an extended interview about political strategy with author, journalist, activist and veteran Stan Goff. One of the things Stan took pains to emphasize during our conversation was that large institutions like the Democratic Party operate on a centralized strategic basis—and one thing that falls out of that is the institution’s need to maintain ideological control, to keep a grip on their members through the power of hierarchy, to squash unsanctioned individual initiative, and to focus more squarely on managerial priorities.

When Jennifer Albrecht redirected Currie Dobson’s question, sounding so reminiscent of the head of the DNC Tom Perez, she inadvertently revealed how important it is to the managers of the Democratic Party—and that importance has been communicated from the top all the way down to the local level—that their rigging of the 2016 Democratic Primary not be discussed. Furthermore, when seen in the context of a fraudulent election process that was directed at one specific party member (an extraordinary act of party disunity, if you think about it), it is deeply ironic that party managers find it necessary to call for unity. If the party weren’t fragmenting, this call would be wholly unnecessary.

In light of the 2016 election fraud, the smears directed at Sanders originating from within the party’s managerial structure, and the continuation of those smears with the additional target of Tulsi Gabbard—all of which represent remarkably public acts of inter-party warfare—it is not too difficult to see that Democratic Party calls for unity are not genuine, and certainly not what they appear to be on the surface. They are code. They are, in fact, calls for obedience. And party managers want that obedience from progressive-minded candidates like Sanders and Gabbard, as well as from voters who support their work.

[Washington Post, via Naked Capitalism 5-21-19]

Meet the Fixers Pitting States Against Every Varied to Rob Tax Breaks for Contemporary Factories
[FindRealNews, via Naked Capitalism 5-25-19]

Avenatti, Wohl and the Krassensteins Prove Political Media Is a Hucksters’ Paradise
Matt Taibbi [Rolling Stone, via Naked Capitalism 5-25-19]

Conservate Infestation – The Federalist Society

A conservative activist’s behind-the-scenes campaign to remake the nation’s courts
[Washington Post Special Report, May 21, 2019 (behind paywall)]
Everyone knows about regime change. Even worse is paradigm change or ideology change. The Federalist Society impact on the judiciary is going to be an increasingly divisive problem over the next half century. I don’t see how you fight it without resorting to classical republican ideas of why the income inequality of free markets is so dangerous to maintenance of a republic. Pathways to Power: The conservative movement transforming America’s courts
[Washington Post, via The Big Picture 5-23-19]
Very important 29-minute documentary.


Open Thread


2019 Fundraiser


  1. bruce wilder

    Exchanging Raj Chetty for Greg Mankiw ought to be filed under the heading of be very careful what you wish for.

    I have no doubt the politically correct will be reassured that Chetty is able to apply his apparatus to confirm that little black boys do not do as well as little white boys on average. Still, I doubt anyone nodded her head, saying, “I did not know that.”

    The “empiricism” of econometrics is, if it is anything, more impoverished intellectually and informationally even than the traditional theory of markets (that mostly do not exist). This is replacing one tired brand of false reason and dogma with a new, “improved” brand of agnatology.

  2. Albertde

    The ultimate currency is energy. It costs energy to extract natural resources; people need food to have energy, etc. The ultimate source of energy for “Earthlings” is the sun. All the energy we use today is either obtained from the sun through solar panels or is stored energy that originated from the sun.

    All true economics revolves around energy. Read Chapter 2 of The Macroscope (translated from the French) by Joël de Rosnay. Ultimately, when it takes more energy to extract a raw material like oil than the energy extractable from that oil, it will not be extracted, but even before that, if no one can afford the price needed for profitable extraction, it will not be extracted.

    The economics taught today is comparable to pre-Newtonian physics, i.e., useless. Unless economics is taught from a systemic point of view, it is not worth learning.

  3. Hugh

    I agree with Bruce Wilder. The problem with economics is not one that will be solved by exchanging one kind of methodology for another. The problem is with its theoretical and intellectual underpinnings. We need to agree on what kind of a society we want to live in before we can even begin to figure out what kind of an economy we need to create and maintain that society. But in economics, as in so many other fields, there just aren’t people who know how to ask fundamental questions, let alone answer them, or have a clue about theory and its structure. About the only economist who has ever shown a passing inkling about any of this, and even then rarely, is Stiglitz.

    Public-private “partnerships” are cons. The government guarantees the financing. The rich take the profits. And it all gets paid for us rubes in the form in fees and tolls, which are nothing more than regressive taxes. Curiously, the biggest obstacle to these partnerships comes from the rich who don’t want to invest because they feel they can make even more money in the casino bubbles of Wall Street.

  4. StewartM

    Bruce, I regard empiricism in economics is far better than the non-empirical approach of idealized behaviors, as long as one keeps in mind that empiricism can only draw conclusions from the range of observations, and cannot extrapolate beyond that. Nor does economics infer, let alone replace, political morality (Hugh’s point).

    The economics professors I had in school always reiterated the latter point. It was the economic idealists (Austrian school plus Uncle Milton) that elevated “the market” to God.

  5. DMC

    The rare earths bottleneck posed by China may not be immutable. There’s considerable evidence that Afghanistan may shape up to be the Saudi Arabia of rare earths, if only they could reach some form of political stability. This may also light a fire under efforts to make extraction more efficient and more marginal concentrations exploitable. That’s the thing about rare earths is that they’re not really all that rare, its just that they seldom occur in high enough concentrations to be exploitable with current technology.

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