Today has been one of those days dedicated to jumping through an intricate combination of bureaucratic hoops, so, alas, no proper post.
Use this post to discuss topics unrelated to recent posts, and remember that I have a fundraiser going on, with nifty goals and a determination of how much I’ll write in general, if you care to give.
Just ban all AirBnBs in your city and anything similar. If someone wants to rent temporary rooms they can be regulated as a hotel.
I guarantee rent prices would crash overnight in most major cities.
A lot of condos and so on are now being built FOR people who want to AirBnB.
(I am fundraising to determine how much I’ll write this year. If you value my writing and want more of it, please consider donating.)
If you want to be a little kinder, make it so that people can AirBnB their primary residence and one other place and that’s it, and only individuals/sole proprietorships can AirBnB. If it’s really about some additional income, then great.
This all may seem harsh, but rental price increases in a lot of cities are out of control, and in many major cities there is now a housing bubble far more advanced than the bubble in 2008. AirBnB isn’t the only cause, but it’s a major one. Cities are for residents first. High rental prices destroy people’s lives, while having to pay a bit more to stay at a hotel is either a business expense or a trip you didn’t actually have to take, while residents need somewhere to live.
Make some laws forbidding people to own empty residences; don’t allow foreigners to own residences or locals to own residences that are held beneficially by foreigners, shut down foreign money flows, and you’ve got the rest of a solution.
Housing: Owned or rented, is a utility. Treating it as an investment or a way to get rich is intensely harmful, and because there is nothing that is quite as rentier has housing (even the word comes from renting), it is also really bad for the economy in the longer run.
AirBnB, like Uber and Lyft, is a leech. A parasite which harms its host.
Sensible countries and municipalities will put it down or put it on a leash.
We have now raised $6,278. That means we have made the goal of ten reviews at $5,000 and are $1,722 from the second goal of six reviews. We’re $4,722 from the final goal of a booklet meant to teach how to think better about society, world events and the future.
I want to talk a bit about the book reviews I will be doing. Our 2016 fundraiser included reviews as well. Then I emphasized books which had been fundamental to forming how I think about the world. Jane Jacobs, the great sociologist Randall Collins—patterns and ways of thinking, more than specifics, though there were some specifics as well.
This time I want to introduce books which are more about specifics, though specifics should, as I think always be examined to understand how they illustrate or arise from more fundamental rules.
So, for example, a book on China’s economy, because there are facts about that economy most Westerners don’t know. One, that floored me when I learned it, is that China is the most decentralized major economy, and it isn’t even close. Chinese central planners actually give more money and freedom in spending to provinces and municipalities than Western governments do.
This isn’t emphasized anywhere, and it’s extraordinary, and it contradicts much of what we assume about China. If you don’t know this, you can’t actually understand China.
A specific book I want to review, probably in more than one article, is Peter Hall’s Cities In Civilization. It’s almost 20 years old now, and it’s a massive doorstopper made up of huge chapters on cities golden ages: artistic, technological, administrative and so on. So there’s Athens and Elizabethan England and Paris, but there’s also Silicon Valley and Berlin (the premier electrical city in the world, a fact forgotten after WWII broke it in half) and Tokyo. There’s Rome, and so on.
There’s a lot there. For example, a real history of Silicon Valley (half entrepreneurial, half government support); the fact that some tech golden ages are government driven (Tokyo/Berlin) and some are largely private (Manchester and Detroit , and so on.
What nurtures artistic golden ages? What causes technological ones? How do great cities handle their massive growth?
All good stuff. Just as interesting is that the book is older. It is written just before the internet take-off. Seeing how major players in Tokyo missed the boat, despite having understood the strategy, is fascination.
In addition to such big picture books, I want to discuss a few more intimate books, about how we think and act as individuals.
So those are the ideas behind this year’s book reviews.
Finally, I should note that I fundraise for two reasons. First, I need the money. For many years, I didn’t raise money because I didn’t need it. But food and rent are like taxes and death, alas. The second reason is related to the first: how much people give, both in these fundraisers and thru the year, is something I have to take into account when I decide how much to write for the blog.
‘Cause that food and rent.
In any case, if you value my writing, and you aren’t having money issues, I hope you’ll give.
This is the second collation of articles on why our world is what it is, and how we can change it. Some of these articles are old, as I don’t write as much as I used to about economics, mostly because the decision points for avoiding a completely lousy economy are now in the past. The last decision points were passed by when Barack Obama announced his economics team and refused to try and get rid of, or bypass, Bernanke to enforce decent policy on the Federal Reserve.
However, this economy was decades in the making, and if we do not understand how it happened we will only wind up in a good economy through accident, and, having obtained a good economy, will not be able to keep it. These articles aren’t exhaustive; a better list would include almost five centuries of economic history, at least in summary, and certainly deal with the 19th century and early 20th centuries.
I was heartened that hundreds of people read the articles linked in my compendium on ideology and character so I dare hope that you will, again, read these pieces. If you do, you will walk away vastly better informed than almost anyone you know, including most formal economists, about why the economy is as it is.
The Decline and Fall of Post-war Liberalism
Pundits today natter on and on about income inequality, but the fundamental cause of income inequality is almost always determined by how society distributes power. As power goes, so goes income–and wealth. The last period of broad-based equality was the “Liberal Period,” which started with the Great Depression. You can locate the end of that era at various points from 1968 to 1980, but 1980 was the point at which turning back became vastly difficult. This was the moment when a new political order was born; an order conceived to crush those who were willing and able to fight effectively for their share of income and money.
(I am fundraising to determine how much I’ll write this year. If you value my writing and want more of it, please consider donating.)
Why Elites Have Pushed “Free Trade”
Those who are middle-aged or beyond remember the relentless march of free trade agreements, the creation of the WTO, and the endless drumbeat of propaganda about how FREE trade was wonderful, inevitable, and going to make us all rich. It didn’t, and it was never intended to. Fully understanding why “free trade” has only enriched a few requires understanding the circumstances required for free trade to work, the incentives for free trade, and the power dynamics which make free trade perfect for elites who want to become rich (often by destroying the prosperity of their own countries). Free trade is about power, and power is about who gets how much.
The Isolation of Elites and the Madness of the Crowd
All societies change and face new challenges. What matters is how they deal with new circumstances. The US, in specific, and most of the developed world, in general, is in decline because of simple broken feedback loops. Put simply, ordinary people live in a world of propaganda and lies, while the rich and the powerful live in a bubble, isolated from the consequences their decisions have on the majority of the population, or on the future.
The Bailouts Caused the Lousy “Recovery”
This may be the hardest thing to explain to anyone with a connection to power or money: The bailouts are WHY the world has a lousy economy, not why it isn’t even worse. If people cannot understand why this is so, if they cannot understand that other options were, and are, available, other than making the people who destroyed the world economy even richer and more powerful, we will never see a good economy, ever again.
(I am fundraising to determine how much I’ll write this year. If you value my writing and want more of it, please consider donating.)
The Rapid Destruction of Countries
You may have noticed, you probably have noticed, that most countries are becoming basketcases faster and faster. Some are destroyed by war and revolution, others by forced austerity. However it happens, the end of anything resembling a good economy through austerity in places like Greece, the Ukraine, Italy, or Ireland, or through war, in places like Lybia and Syria, is sure. Understand this: What is done to those countries, is being done to yours if you live in the developed world, just at a slower pace–and one day, you, too, will be more valuable dead than alive.
Why Countries Can’t Resist Austerity
Many of you will realize that much of the answer to this is related to the article on free trade. Weakness, national weakness, is built into the world economic system, and done so deliberately. The austerity of the past six years is simply the deliberate impoverishment of ordinary people, for the profit of elites, on steroids. But it is worth examining, in detail, why countries can’t or won’t stop it, and what is required for a country to be able to do so.
Why Public Opinion Doesn’t Matter
We live in the remnants of a mass society, but we aren’t in one any more (though we think we are). In a mass-mobilization society with relatively evenly distributed wealth and income, and something approaching competitive markets, public opinion mattered. If it was not a King, well, it was at least a Duke. Today it matters only at the margins, on decisions where the elites do not have consensus. Understand this, and understand why, or all your efforts to resist will be for nothing.
Money, my friends, is Permission, as Stirling Newberry once explained to me. It is how we determine who gets to do what. He who can create money, rules. This is more subtle than it seems, so read and weep.
It’s Not How Much Money, It’s Who We Give It to and Why
We have almost no significant problems in the world today which we could either not have fixed had we acted soon enough, or that we could not fix or mitigate today, were we to act. We don’t act because we misallocate, on a scale which would put Pyramid-building Pharoahs to shame, our social efforts.
Higher Profits Produce a Worse Society
No one ever told you that, I’m sure. Read and learn.
The USSR fell in large part because of constant and radical misallocation of resources. This misallocation occurred because those running the economy did not receive accurate feedback. Despite the triumphal cries of the West and the managerial class who pretend to be capitalists, a version of this exact problem is at the root of our current decline, and it would serve us well to understand how and why the USSR fell.
Of all the ideological bugaboos of our current age, one of the strongest is the idea that private enterprise is always more efficient and better. It’s not, but that belief is a very profitable to our elites, and understanding how the engine of privatization works is essential to understanding both our current economic collapse and how the fakely-bright economies of the neoliberal era–especially the early neoliberal period of Thatcher and Reagan–were generated.
It is, perhaps, odd to put this article so far down the list, but it’s wonky and important and not very dramatic. Simply enough, what we define as prosperity is not prosperity, which is why we are sick, fat, and unhappy with rates of depression and mental illness and chronic disease which dwarf those of our forbears despite having so much more stuff. Fix everything else, but if we insist on continuing to produce that which makes us sick and unhappy, what we have will not be what we need or want, nor will it be, truly, prosperity worth having.
The Four Principles of Prosperity
Prosperity, at its heart, is an ethical phenomenon, as much as it is anything else. Without the right ethics, the right spirit, it will not last, nor be widespread. If we want a lasting prosperity, which is actually good for us, we will start by reforming our public ethics.
How to Create a Good Internet Economy
The internet is wonderful, but despite all the cries of “Progress, progress!” it has mostly made a few people rich, created a prosperous class of software engineers who often lose their jobs in their 50s, and has simultaneously overseen the decline of the prosperity for most people in the developed world. It has not produced the prosperity we hoped it would. Here’s why and how to fix it.
Concluding Remarks
The above is so far from comprehensive as to make me cry, but it’s a start. I do hope that you will read it and come away with a far better idea of why the economy sucks for most people, and a clearer understanding of the fact that it is intended to suck, why it is intended to suck, and how the old, better economy was lost.
(Author’s Note: This was originally published October 6, 2014. I’m putting it back up top, as I have gained many new readers since then.)
This post is by Tony Wikrent
The Green New Deal has forced into public discourse the fact that solving the crisis of climate change is going to require trillions of dollars of new investment. A recent example:
Ocasio-Cortez: $10 trillion needed for effective climate plan
[The Hill, via Naked Capitalism 6-6-19]
Freshman Rep. Alexandria Ocasio-Cortez (D-N.Y.) said Wednesday that any plan to sufficiently address the climate crisis will need to cost at least $10 trillion.
“I think we really need to get to $10 trillion to have a shot,” the progressive firebrand said in response to a question from The Hill in the Capitol.
“I know it’s a ton,” she added. “I don’t think anyone wants to spend that amount of money, it’s not a fun number to say, I’m not excited to say we need to spend $10 trillion on climate, but … it’s just the fact of the scenario.”
If you had been reading Real Economics, in December 2014:
Dear Dems: Give me $100 trillion and I’ll save your sorry ass
“$100 trillion to build a new economy” will be another test, but one that we need to impose over the coming two years. It can completely transform what issues are defined, and how, for the 2016 election. We need to get general public awareness of the need for “$100 trillion to build a new economy” – and how doable it actually is. Once we do that, it will be a relatively simple matter to determine if someone is serious about solving the problems we face. The next time we meet someone who is a leader in the Democratic Party, mention the fact that we need “$100 trillion to build a new economy” and watch carefully how they react. If they are hopeless neo-liberal water carriers for our would-be corporatist overlords, they will recoil in horror, or try to argue that such a huge amount is simply preposterous. Anyone who is stuck talking about programs of a few billion, or even a few hundred billion dollars, is simply completely uninformed about the problems we face – or just not willing to face reality – because reality is that we can no longer afford to let Wall Street play funny money games. We must figure out how to impose new laws and regulations that force banking and finance to serve the general welfare, not just private gain.
And about Trump and USA politics: if you had been reading this blog, Real Economics, in June 2014:
The best of times. The worst of times.
….what is needed to survive, we have already at hand. We have the science, and we have the technology. What we do not have is the political will to create crash programs to apply that science and technology, because that would require crushing our present rulers and leaders. Indeed, one half the formal political system in the USA has devoted itself to opposing science. And much of the other half has devoted itself to opposing technology.
But what we lack most of all, is VISION. We do not have a coherent, plausible, positive vision. And without vision, the people will perish – another hard-learned lesson of human history the world’s major religions warn us about.
The 2008 Obama campaign showed us how powerful a vision of hope can be, no matter how much of a charade it might be. What do you think would be the electoral results if Democratic candidates starting telling people we are actually on the verge of a massive new economic boom? Because there is $100 trillion of work we need to do to solve the problem of climate change. This new boom will last for decades, just like the boom unleashed after World War 2 by meeting pent-up consumer demand and rebuilding Europe and Japan. I believe, in a few years or decades, the harshest and most important historical judgement of President Obama will be that he took office at a point where he could have led the nation and the world into a new golden age of capitalism, but instead chose to defend the status quo, and as a result the populist upsurge against the status quo veered right instead of left. (Bolding not in original 2014 posting.)
Corn That Won’t Get Planted This Year Could Shatter All U.S. Records
Michael Hirtzer , Isis Almeida , and Dominic Carey, May 30, 2019 [Bloomberg]
Rabobank is predicting an unprecedented number of unplanted acres of corn, the most widely grown American crop. A Bloomberg survey of 10 traders and analysts indicates growers could file insurance claims for about 6 million corn acres they haven’t been able to sow, almost double the record in 2013.
It is fundraising time. I hope to be able to keep writing at a fair pace (an article almost every day.) To justify doing so, I need to see that people care enough to give. If you do, Please Donate.
Warren’s Astonishing Plan for Economic Patriotism
The Massachusetts senator presents by far the most serious proposal to bolster American industry.
Robert Kuttner, June 4, 2019 [American Prospect, via Naked Capitalism 6-5-19]
Warren’s proposal does nothing less than turn inside out the globalist assumptions pursued by the past several administrations, Democrat and Republican alike. Where they have pursued more globalization of commerce as an end in itself (and as a profit center for U.S.-based multinational corporations and banks), Warren’s goal is to bring production and good jobs home.
Even better, she knits it all together with a coherent plan, beginning with a new Department of Economic Development “with the sole responsibility to create and defend quality, sustainable American jobs.”
The new Department will replace the Commerce Department, subsume other agencies like the Small Business Administration and the Patent and Trademark Office, and include research and development programs, worker training programs, and export and trade authorities like the Office of the U.S. Trade Representative. The new Department will have a single goal: creating and defending good American jobs.
Globalization didn’t just happen, Warren points out.
“America chose to pursue a trade policy that prioritized the interests of capital over the interests of American workers. Germany, for example, chose a different path and participated in international trade while at the same time robustly—and successfully—supporting its domestic industries and its workers.”
By contrast:
Biden girds for clash with Trump over China
Politico, via Naked Capitalism 6-6-19]
Donald Trump’s campaign is itching to take on Joe Biden over his pro-free trade past and his comments downplaying the China threat — an issue Republicans see as especially potent in critical Rust Belt states where Trump is struggling and the former vice president has strength…. [Biden:] “Our workers are literally three times as productive as workers … in Asia. So what are we worried about?”
Scott Warren is charged with helping immigrants who were crossing the Mexican border.
“He gave them food, he gave them water, he gave them a place to stay…He did a bad thing.” — Anna Wright,
@USAO_AZ in her closing argument that#ScottWarren should be convicted.
I wonder if the prosecutor thinks she is a Christian?
35 For I was hungry and you gave me something to eat, I was thirsty and you gave me something to drink, I was a stranger and you invited me in, 36 I needed clothes and you clothed me, I was sick and you looked after me, I was in prison and you came to visit me.’
37 “Then the righteous will answer him, ‘Lord, when did we see you hungry and feed you, or thirsty and give you something to drink? 38 When did we see you a stranger and invite you in, or needing clothes and clothe you? 39 When did we see you sick or in prison and go to visit you?’
40 “The King will reply, ‘Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me.’
I would also note that Sodom and Gomorrah were destroyed, essentially, for treating visitors badly.
It is fundraising time. I hope to be able to keep writing at a fair pace (an article almost every day.) To justify doing so, I need to see that people care enough to give. If you do, Please Donate.
Feel free to use this thread as an open thread, in addition to discussing the above Christian Nation act.
If you wonder why America has become so hostile to China, it comes down to this.
Back in the 80s, Japan looked like a threat. If fizzled, in large part due to some mismanagement, but the truth is it was never really a threat, because it didn’t have the population to be one, and while highly technologically advanced, it wasn’t a generation ahead of the US, or likely to make that leap.
China already has a first world population that is larger than America’s. Oh, they earn a little less, but they still qualify as “rich” by global standards.
Technologically it is not as advanced, but it’s catching up. The furor over Huawei 5G is because Huawei has the lead in that technology, and so many countries are going with their technology. China produces far more engineers and scientists than America, and they are growing in competence.
(I am fundraising to determine how much I’ll write this year. If you value my writing and want more of it, please consider donating.)
The most important region in the world for electronics manufacturing is Shenzhen. Oh Silicon Valley still matters for design and software, but for actually building things, Shenzen is where it’s at. And they’re catching up in design and software.
Back in the late 19th century, when America became the largest economy, Brits consoled themselves that they were still creating most of the new inventions (and the Germans were inventing a lot of the rest).
It didn’t last. The inventiveness moved to where the factories were.
So China is a real, credible, threat. For most of the last 2,000 years it’s been the world’s most advanced region, with the largest economy. (Before that it tended to be India, and before that it was usually the Tigris-Euphrates region.)
The last two-hundred years, in which China wasn’t the world’s greatest, most advanced economy, are an aberration. Europeans industrialized, and industrialization was an order of magnitude more powerful than agricultural civilizations.
That period is over. China is industrialized, has information tech, and so on.
There are two great threats to the rise of Chinese hegemony. The first is a population time bomb, even worse than the Japanese. All of that “one child policy” is about to come back and bite hard. The Chinese, however, know that, and it is why they are trying to make gains now, in the South China Sea and with the Belt and Road Initiative. They recognize they have a window, and that they must use it.
The second is climate change and ecological collapse. China will be hit hard. The south is subject to both heat and rainfall problems; the Chinese have vastly overused their aquifers, and climate change in general is going to hit their food production hard.
The first threat is serious, the second one may be existential. But the other great powers are facing these threats, in various forms as well.
For now, America is freaking out over China because China is actually a threat to American hegemony. It’s that simple.
What is also true is that, historically, this leads to war more often than not.
I’m good at predicting some thing. Economic events, longer term political and social trends, and so on.
When I was younger, I was also good at predicting elections.
Then I started getting election results wrong.
It took me a while to figure out why.
I knew too much.
When I was young, I didn’t follow politics much, I just read the newspaper and maybe saw the occasional newscast.
So I knew what ordinary voters knew.
Later I studied economics and politics and so on. I started knowing the actual consequences of elections, and I knew what governments had actually done, not just what was reported enough to sink into someone who wasn’t paying much attention, like most of the population.
In other words, I was no longer a proxy for the population.
Nor does analysis which tries to model “what does the ordinary person know” really help.
(I am fundraising to determine how much I’ll write this year. If you value my writing and want more of it, please consider donating.)
The reason is simple enough: we don’t make most decisions, including voting decisions, rationally. We make them based on our feelings. The strongest feeling determines our vote.
Since my feelings, as someone who followed politics closely, were no longer in sync with those of the majority of the population, I could no longer use my feelings to judge. Even if I were to try and feel like someone different from me (not impossible) I still knew too much. My empathic sense of what they would want was based on more knowledge than they had.
And boom, lousy electoral predictions.
Talking with other close observers of politics and economics and so on I’ve noticed that this curse of knowledge is not mine alone. Most political experts predict elections badly.
So I’d keep thinking “wow, if you elect this dude it’ll be disastrous,” because I knew the consequences of what they were actually likely to do, and primary and general election voters would keep picking awful people.
The problem, of course, is that the consequences of actual government policies don’t go away. But the other problem is figuring out how to avoid the curse of knowledge: one needs it to make important predictions other than electorally, but if you don’t understand the electorate, that cripples any chance of good candidates being elected.
So far, I don’t know how to avoid this and if anybody else on the more left wing side does, I’m not seeing it.
A problem.
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