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No-bellum in caelo

By Owen Paine on Sunday November 8, 2009 04:13 PM

That's my grad school macro teacher right there, Fauxbel winner Ned Phelps, and here he is producing a stream of yellow piss not even a Polish plough horse could equal:

" -- Keynesian economics, which had been nearly forgotten inside the macro field, has found new voices from outside. They take the position that fiscal “stimulus” of all kinds is effective against slumps of all causes."
Straw man time, eh?

And here's Princeton pwog demigod and fellow Fauxbel recipient Paul de-Krooggamo, incensed by Ned's tooning of the golden host of Keynesian schlockmeisters:

"OK, no point in reading any further. Nobody, and I mean nobody, holds that alleged position -- it doesn’t even rise to the level of caricature, since it bears no resemblance to what people like me are saying."

"For the most part, the opponents of stimulus just don’t listen; they have this image of the idiot Keynesian so fixed in their minds that they can’t be bothered to pay any attention to the actual arguments."

My my my! Do you really think that's what's up here, Paul?

PK, ever the confident pedant-pedlar-preacher, instead of giving the Phelps treatment its due, simply proceeds directly to his own stupid pet trick, the zero bound moment we're in now -- aka Keynes' liquidity trap. It might be worth following Ned a little farther than his second paragraph, though.

The liquidity trap: As the story gets told, the monetary authorities lose control of their ultimo weapon -- the "real" rate of interest -- when the policy rate is basically already at zero. Yup, the Fed is handcuffed. Imagine that. "Love to help, folks, but...."

You just can't push the policy rate any lower than zero without it becoming a tax on bank reserves, or something equally extra-terrestrial -- heaven forbid!

That's a problem because if you want a recovery led by the private sector, you might have to do something just that wild and crazy. Because in such a recovery, as Ned sez, "Employment will recover -- only as far as investment demand will carry it."


Say you're gentle Ben and you reckon the real rate of interest necessary to restart corporate investment in plant and equipment or even building up inventory has fallen to -9%. (Yes, you'd have to be allowed to pay back less than you borrowed.)

Recall the nominal rate is now assumed to be zero and inflation is, say, running around 3%. Now if we've got a policy block at the zero bound, that puts us 6% short of full spontaneous investment-led recovery.

Now as mad redhots without scruples, and without any respect at all for the capital markets, we could simply make uncle pay the diff -- you know, get the bank to loan out at zero percent for some term and have sucker sam pay the borrower a 6% per annum subsidy on outstanding balances till paid off -- kool, eh?


We could have Uncle simply, you know, -- perk up inflation. Up to 9% -- but, umm that's just the other horn of the liquidity trap. There is no way to push up inflation simply by flooding the system with dollars, and basically that's about all the Fed could do.

In times like these, the private markets turn sponge-dry, so Uncle might have to buy in all the federal debt he has out there and still -- well, you get it, right? Regardless of the possible -- Realpolitik-wise we're gonna obviously fall far short of these remedies, especially given Wall Street's Turkish submission hold on the Fed.

So -- what else might a pwog goo-goo suggest?

Enter schlock fiscal policy -- the old Keynesian hydraulics. Run a big deficit -- pump up demand so much that Uncle lifts the recovery real rate of interest. In fact with enough pumping Uncle might get it up to the -3% real rate we can reach without braking the zero bound (remember dat ole debbil inflation).

"Well, maybe not," sez my mentor Ned, at least not in today's context, because "To pump up consumer or government demand would force interest rates up and asset prices down, possibly by enough to destroy more jobs than are created."

That is, the attempt to lift effective demand by running a deficit might get offset by simultaneously increasing the bugaboo real interest rate -- which remember, by assumption I pinned at -3%.

My man obviously gets Krug's zero-bound policy-rate stymie. In fact he trumps it by generalizing the stymie to all levels of nominal interest. Ned don't need no stinkin' zero bound -- err -- in the present context. Right now, no matter what the nominal rate is, if a signifigant drop is called for, the fed can't make it happen 'cause "interest rates cannot fall much in an open economy."

What? Why? When? Wherefor?

Imagine the Fed shoots in money to offset the deficit effect on real rates. Then -- and just accept this as true: if the rate drops the dollar forex rate will drop too. Now the dollar falls and "a weaker currency has contractionary effects on output supply [which] could spoil the expansion coming from the effects on export and import demands."

Ned admits the falling dollar would have a recovery effect too -- the normal one I beat to death 'round here: increasing exports while decreasing imports. But his "contraction of output supply effect" trumps it -- err, I guess.

Ned has secretly assumed a magic bean set of elasticities here. A lower dollar would increase output in most settings of this baboon tree of elasticities. To get his beans to grow into a pole reaching up to the clouds, you gotta have Ned's hidden bevy of additional variables and set 'em just so -- or else you won't get this eddy-dominates-prevailing-current effect.

He might of course be right, and Krug might have gone a little deeper into the reasons he might not be right. But maybe Krug's instincts aren't all wrong. Here's Ned's own forecast:

"As I see it, the poor state of balance sheets in households, banks and many companies augurs a “structural slump” of long duration."
Just what the Wall Street witch doctors ordered. Ned ends up back on Queer Street with the vulgar trans-nat Babbit drummers.

Comments (30)


the big horro diff between krug and ned

krug urges a recovery deficit on the whate house
phelps like taylor acts as if its impoosible to get there thru deficits
we just gotta wait it out
perfect wally world cover story eh???

Al Schumann:

From reading a couple of other Phelps' papers, I get the feeling he was simply bored and looking for a way to irritate people like Krugman. This is not necessarily a bad thing, but the dimbulb Babbittry is weird, and pointlessly stupid.

On the other hand, there's little that works as well for political jockeying. Obduracy and dull wits rile the goo-goo every time.

Al Schumann:

Phelps writing about economic inclusion (pdf) shows some meliorist liberal tendencies and a relatively enlightened understanding of the difference between subsistence and participation. His understanding of its relative decline is very much at odds with the history of how it actually happened, that is panic-stricken crackpots making conscious decisions, narrowing their options in an effort to maintain control, ceding ground to allocation parasites, parasitic capture, etc. But he's not reflexively stupid. It takes an effort.

Mike Hunt:

In all the economic hoopla this gets overlooked

Here There Be Big Nymbers (Sic)
Submitted by Tyler Durden on 11/08/2009 01:51 -0500

The earlier discussion of CDS, Einhorn, and the US UST-CDS basis trade, sparked a flurry of queries on the topic of "really big numbers." Therefore, even as ZH staff awaits the most recent data out of the BIS, we present for your numeric (in)comprehension pleasure lots and lots of zeroes. The chart below summarizes the biggest relevant numbers currently out there, appearing as pixels occasionally on every single computer in the financial world. And what does it say? That the total notional value of all OTC derivative contracts as of the most recent count (sucks to be on the recount committee), was $592,000,000,000,000.00 at the end of 2008. Fear not: this number is actually a reduction from the most recent previous read of $683,700,000,000,000.00 in June of 2008. Well wait, that thing we said about fear not, ignore that: because the net notional, or the market value of all OTC contracts, i.e. what someone (cough taxpayer cough) would be on the hook for when the Fed's plans go astray, increased by 66.5% over the same period, to $33,900,000,000,000.00. Like we said, big numbers - and this is just OTC. The real number includes regulated exchanges, and to estimate that, double the numbers above. In totality, the "sidebets" on everything from interest rates, to F/X to corporate default risk, amount to about $1.3-$1.4 quadrillion (that's 15 zeroes before the decimal comma) in terms of uncollateralized liquidity (think inflation buffer): take all those zeroes away and the value of the dollar would go down by 1E10-15: you listening yet American middle class? And the actual exposure, or "money at risk" is roughly $60 trillion: a number which is about the same as the world GDP if one were to remove all the various stimulus programs. Take away Goldman, JP Morgan, and all the other wannabe BSD's, and this is what you end up with: the heart and soul of the Too Big To Fail monster itself. And there is no way on earth to stop that mangled, mutated heartbeat without destroying the very fabric of both our capital markets and societal system. Please give the Federal Reserve a golf clap for this truly amazing accomplishment.
Less than $3 trillion? I mean, how is that even worthy of an FT op-ed? Most people won't even bend over to pick up a $3 trillion bill on the street: sorry - if it doesn't have a quint-, or at least a quadr- in front of the -illion, people frankly don't give a shit, thank you Tim Geithner. Trillion is just so..... pre-Obama.

Yet where it gets moderately interesting is when analyzing Interest Rate derivatives (swaps, options and forwards), not only because the numbers suddenly really perk up, but because of the $420 trillion in notional OTC total, about $200 trillion is held by none other than the usual zombie stooges: Goldman, JPM, BofA, C and WFC. Do you see now why the Fed will kinda, sorta always and forever be forced to bail out this unholy pentagram? The shitstorm as a result of the collapse of one or more of the five major spokes of at least $420 trillion (and as much as $840 trillion) in IR derivs would basically wipe out anyone and everything in its path. No exceptions.
Thus net notional exposure in IR land is nearly $20 trillion or almost double the US GDP (or triple if one excludes the impact of Obama funny-money). So why are we reading again how CDS is anti-social? By that logic IR swaps, sloshed around by the JPM-Goldman-BofA trio of Mutually Assured Destructors, is the pinnacle of delusional, schizophrenic, psychotic behavior. Which is not to say that the CDS' destructive impact should be underestimated. On the contrary: CDS, when handled by the current group of greedy, risk seeking idiots, will undoubtedly destroy the world. It is just a matter of time. However, to keep things in perspective, how about we also consider Interest Rate swaps, whose numerical danger is more than 5x that of CDS (again, really big n(y)mbers here). And we haven't even touched on FX, commodity, and equity derivatives.

Which brings us to our point: thank you Mr. Einhorn for finally starting to focus people's attention on one of the many facets of the Fed's uncontrollable liquidity Frankenstein. CDS, while destructive, is merely the appetizer. What will truly annihilate financial markets are all those instruments that are in place only to perpetuate the myth that a 5% interest rate in 30 year Treasurys is somehow exorbitant (based on a quick back of the envelope calc, should prevailing interest rates move higher by 1%, the net IR exposure will rise by $3 trillion... in the wrong direction... at an exponential pace). Yet what better way to keep rates where they are than than to tell China: "Hey guys, you bust one auction, and this spring loaded balloon full of $420 trillion pieces of worthless Washington feces will blow up right in your face (and take us all down with you)." In essence this is an amusing revision of that old fable: the Fed owes the world a few billion here and there: well, Ben, you are out of luck, "You're Fired"; the Fed owes the world $1.4 quadrillion in naked and worthless pieces of paper (whose nudity will become apparent the second someone calls Bernanke's bluff) and the Fed owns the world.

It is, Mr. Einhorn, unfortunately as simple as that. Which is why may we suggest after you are done with your philosphical anti-CDS crusade, that you take a long hard look at this BIS report and consider just who your friends in the business are: something tells us that of the JPM/GS/BofA trio you Prime with at least two of them. If you really want to make a stand against those who are abusing weapons of financial annihilation, maybe you can demonstrate your seriousness by cutting all prime brokerage relationships with Goldman and JP Morgan. Then, and only then, will we, and everyone else, know you are willing to put your money where you mouth is (and where your CDS P&L used to be).

Long discussion and I skipped parts.
This comment sums it up nicely.

by Cognitive Dissonance
on Sun, 11/08/2009 - 08:15

"There has to be a way to make the real risk in this mess clear to the average American."

At first I thought the average American was simply too frightened to process information about the severity of these problems and to a certain extent I still hold that view.

But the problem sweeps across the education and occupation spectrum and in my view actually gets worse as you move up the ladder. This isn't simply an education or exposure issue. After I began asking more detailed questions, the picture became clearer to me. Mr. & Mrs. average American is worried about their piece of the pie, that they won't get out of the poker game before it's busted.

They bought into the economic system, often working at miserable jobs for years or decades in order to accumulate wealth and pensions. Now, with retirement around the corner, the economic vehicle is coughing and sputtering and might not make it to the end. I've posted before on ZH how Americans are deep captured by the system. In their minds, their ticket is stamped and thus non refundable, they're on the plane at 35,000 feet, it's two thirds of the way to their destination and they're committed regardless of how they feel about the situation.

The higher up the social/economic curve you travel, the more they're dependent upon a functioning system in order to "cash out" and retire. And that's how they see it. Cash out. While they do understand that most of their assets must actually remain in the system in order to be usable, they see a finish line, not a 20-30 year retirement process. They see their money as a pile that once accumulated, can be moved off the table to somewhere "safe" which is the actual word they use.

Reasonable or not their view is mostly fearful optimism. While things are going to hell, they will probably survive the plane crash mostly intact. This is more along the lines of wishful thinking or even head-in-the-sand denial than a thoughtful careful analysis of their own situation. You might be surprised how many doctors, lawyers, engineers and upper management types secretly pray to the God of their choice to just get them to their destination.

Not everyone feels this way and awareness varies. Those lower down the curve have less accumulated and thus less to lose. We ZH readers must remember that we do not represent "average" people, Americans or otherwise. We are engaged, curious, reasonably informed and for the most part mad as hell. Average Americans are not and I'm becoming convinced that up to a certain point and for the most part, this is a deliberate and conscious decision.

BTW, here is a link to a .PDF chart showing outstanding derivatives as measured by the BIS. Please don't leave it lying around for little children to pick up and possibly shoot someone with.


BIS.org -> Statistics -> Derivatives

This table is chart 19 but there's other data there that will curl your hair.

Al Schumann:

Mike, overlooked by whom? Marx nailed it in Capital.

Mike Hunt:

Al Schumann

Overlooked by damn near every economic discussion put forth in the MSM or government.
Overlooked by Joe Middle class and his cousin Joe Six pack.
Merely forgotten to mention by the TPTB.
The Gorilla in the room has migrated from abstract philosophical fiction to heavy stinky breathed reality.

Those Americans who are interested in money and commerce should be working to expose the fraudulent nature of the field of "economics," which is nothing more than excuse-mongering for robber baron capitalism in America.

What is economics? It is sociology, with a spin on people's attitudes toward money.

It's not a magical field of ethereal studies that can be entered only by an elite of massive noggin power.

It's just about money. That's all. And there's surely nothing magical about money. We all understand money. What "economists" try to do is inflate money's value in human existence to the point where it is the center, the driver.

I laugh. This is where people get all flustered, and complain that Marx and Engels said it all. What they said was nothing more than a recasting of THEIR reality, to fit THEIR whims. They just wanted to invert the power structures they observed. They didn't want to fix the problem caused by "economics," they just wanted to distort the field to their advantage.

What is money?

Why do people revere it?

It's nothing but a place-holder for interactions of a commercial nature.

Peter Ward:

I agree with Charles that economists are among the secular priesthood. Although, their collective failure to say much plausible re: the current crisis has done the job of discrediting them pretty effectively.

I think, rather than get diverted by mainstream economic discussions (which I'm granting have little scientific value therefore are not defensible even from the standpoint of "keeping informed"), it is better to consider what we would like things to be, observe what resources and potential resources we have, figure out what is possible and what isn't based on this (to the extent we can in advance) and act accordingly.

In reality I think things are much more straightforward that they are made out to be. The problem lies not in economic design so much as in people occupying privileged and empowered positions deceiving us so they may stay in those positions, including economists themselves (Even Marx, possessed with the sight of God, tends to perpetuate the class stratification by making economics an obscure, infallible doctrine and the domain of a guardian elite.).


what is the point you are making ??
the "this " here refers to what?:
"In all the economic hoopla this gets overlooked"

derivatives ???

the repaste of some pink oafs
blog gibber is just that
gibber to me
put all these numbers in pennies and its 100 times huger

what's the fear factor here ??

do any of these people know what these numbers ought to be compared to ??
or how they net down to base number
that is all you'd map onto any risk sheet ??

if there's something of substance here
edit it down so i can find it
anything at all
besides this vast roll of ignorant hot air


"Marx, possessed with the sight of God, tends to perpetuate the class stratification by making economics an obscure, infallible doctrine and the domain of a guardian elite"

i doubt marx 's writings on political economy
require a "guardian elite"

or any other obscure cultish elaboration

but the reality b4 us is obvious
we have a vast herd of jobless geefs
out there
and the reason it will continue that way
is ..

those in a position to make policy and implement policy
prefer a very very slow recovery here at home
their means
a fiscal stim-stag policy
that leaves this herd un jobbed
and a small firm and household credit famine

none of this is necessary
like the weather this winter will be
or the next earthquake in california

my point in bringing forward ned
is to demonstrate how
the leading figures of the profession can "necessitize " the un necessary
by moblizing their model tricks
here two pundits collide
comedy emerges of course
but not the naked fact
ned is playing the big boys mouth piece
note krug sez he's not willing to think it thru
when obviously ned
starts with a conclusion:
the protracted job stag is inevitable
and un-remediable
by keynesian schlock methods
or at least unremediable
within the bounds of prudent action
cause its "structural"

so he sets his model to produce that result

of course we don't get to see the model
only the result and we gotta trust his intentions

hey maybe since no one can force him to produce his model and his settings
he's just winging it as super Al suggests
epater les pwog-nerds


Super Al

ned indeed believes in the full mobilization
of all availible labor power
by subsidizing hiring by corporate outfits
note unlike
with eitc he'd pay the corporations not the jobblers

now this is like the cap vs pigou tax choice
each can do the job in theory
each can accomplish various other covert agenda

in reality
details matter
the choice may be dictated to accomplish various other
covert agenda
given who fashions these programs
i suspect we all here at SMBIVA
would prefer
the jobbler got the reward eh ??

ned also has a george gilder streak
he wants exciting venturing souls full of zest to get the access to funds and markets
they need to play for all the marbles

the social market as sufficator of innovation
disturbs him

basically he's a really grotesque elitest
wanting the zest of achievement
a means to clearly demonstration

a champion of the creative class ??

but mediated thru private "capital" markets


"the history of how it actually happened, that is panic-stricken crackpots making conscious decisions, narrowing their options in an effort to maintain control, ceding ground to allocation parasites, parasitic capture, etc"

he likes hierarchy ...built on merit of course
his dominant
competitive ...affect blunted
loner streak

you know how sometimes you figure you got a guys number ??
well i'm kinda sure i got ned's

he's been moving with the flow
further and further right
err that is since the early 70's when left wasn't kool anymore

odd how some of em can't shift back
when the tide turns back the other way


hero of an academic greek tragedy

Al Schumann:

He's really something, then. And the inclusiveness is only "waste not, want not" Babbittry too, eh? With built-in mechanisms for punking labor, and getting inside their heads.

What a piece of work.


the soft spot in krugs schlock keynesianism

is simple really

the deficit caan bring back the economy but how do your then reduce that deficit ??

that is where the corporate sector's "investment" comes in

and neds private investment led recovery
which was an option
becomes a private investment sustained economy

enter the green machine project
ie uncle sam financed rebuilding of the entire production platform of amerika the bountiful

of course we can't have an import substition led recovery because that would require forex reform on a global scale
and since the trans nats like it just as it is ...more or less
that ain't happening either

review us economic facts 37-49
all these issues
emerge in martial garb
not green but forms and methods could be very similar

ie green machine rebuilt dollar over val rectified

op asks what to do about the jobless problem.

I say the fix is in these:

1) remove corporate veil/shield, remove corporate legal personhood

2) remove electoral college

3) make interest illegal, therefore making derivative products illegal

4) jubilee for all present debt

All of the above could have been done with the governmental power/authority and governmental money given toward the "bailouts" of wall street and other business fields with US Treasury money.

Other remedial measures exist but the 4 just listed would go much further. What really needs to happen is a wholesale revision to the role of a "job" in the average American's life. If the only purpose in a "job" is to make money, then the "job" is mere makework, taskmaking that has no relation to existential validation, no relation to the worker's interests. Work must have meaning, and the meaning should be given by the person doing the work -- not the person who seeks a galley slave to pull an oar.


"the dimbulb Babbittry is weird, and pointlessly stupid"

by the babbits yes

but by phelps it takes on a more sinister hue

the models he might deploy would not be seen thru
like a blioler plate rotarian speech
produced by the club for growth

phelps is no mankiw or feldstein
of course

but any guy who invests in a theory
that stock prices drive employment
is all too obviously
playing wall streets game no ??


oxy :

"1) remove corporate veil/shield, remove corporate legal personhood

2) remove electoral college

3) make interest illegal, therefore making derivative products illegal

4) jubilee for all present debt"

number four has promise

numbers one and two
to be honest
i think are meaningless

number three like number four
is a call
as old as interest itself

but number three can be accomplished

number four if i understand you
would be quickly and fairly easily evaded
as countless societies have in the past

as to derivatives
all that's special about them
is their newness
not the difficulty of harnessing them

wall street will invent whatever novel instruments it needs to invent
to escape regulation

that is the real lesson
i think
the recent derivative episode teaches

op -

Whether (1) and (2) are meaningless depends on what you assume guides the retention, increase, and exercise of governmental authority over the individual.

My suggestion that they matter greatly is bound up in the idea that most Americans are not looking for a full revolution and many believe that we need to stick to our present Constitution and its scheme of government. If that's where things will lead, the steps of (1) and (2) will help rebalance power. They won't fix the poor level and type of education received in public schools, so they can't ensure that people will be better equipped to make deep thoughtful analysis and solution of public problems. However, they will make it more feasible for individuals to gain some authority over their everyday lives.

Corporations run our present federal government because they have money which they contribute both to PACs and to individual campaigns. Thanks to the SCOTUS a corporation can "vote" with its money, and through its directors' individual votes -- a nice double-dip on the electoral process. This is layered on top of the financial pull already held.

As to derivatives, I agree with you that the latest crop are but isomers of the same basic theme. If you eliminate interest then you eliminate the primary thrust behind derivative gambles. Will people still want to gamble on when debts are repaid if there is no interest accruing on those debts? Sure, humans like to gamble on all sorts of stuff. Will a similar market of thick vectors of derivative interest crop up? Maybe, but I wonder how and in what form.

Ultimately the question really is what can be effective in repairing the present problem. The biggest systemic problem I see is the artificiality of "growth" and the construction of "growth" premised on mere accounting exercises rather than creation of durable goods that are needed, rather than merely wanted courtesy of some clever "marketing" angles worked on the American people.

PS to op --

I think your callous dismissal of wall street inventing derivatives to avoid regulation is sorely misplaced. There is no reason or need to avoid regulation when the regulator is a former member of the regulated. Derivatives arose not to end-run a path around regulation, but simply because people who love money and loathe physical labor will always spend time creating new ways to imagine "value" in something intangible and gauzy. The whole point of a derivative interest is to assign a possible dollar value to something that previously held no value.

Valuation is the problem and it's a problem whose persistence is enabled by "economists" who pretend that valuation is a science, while the best any scientist can do with human whimsy is observe and record. The predictive end of things is so fuzzy and incoherent that economics is not science or scientific, even though universities and colleges will award a Bachelor of Science in "economics."

Son of Uncle Sam:

Bachelor of Sci-Fi ?? Economics is as much of a sci as Poli Sci-Fi or marketing, "it slices and dices"
As for Joe six pack- did you mean the guy waiting for his bus w/ 2 40 oz bottles of Colt? Clearly thats a man that knows value.


"most Americans are not looking for a full revolution and many believe that we need to stick to our present Constitution and its scheme of government'
i agree
i just don't think reforming the funding process or the method of election
will change much

corporations have decisive power
we agree on that
i just figure the favorable court
treatment of them
follows from that power

i think a federal gub prepared to hire
citizen over 16
who applies
at the minimum wage for 30 hours a week
50 weeks a year
would be a more effective reform
i think indexing the minimum wage
to labor productivity after resetting it
to the trend line ratio today
by using say the minimum wage productivity ratio of 1950 as a base

i think a minimum guaranteed dwelling
would mean more
i think the eitc should be jacked
so combined with the minimum wage
its a living job income

the list would go far down b4 i'd put depersonalizing corporations
or abolishing the electoral college


"There is no reason or need to avoid regulation when the regulator is a former member of the regulated"

fair enough
but that's the nuclear option button
you just pushed
now if so
then any regulatory law is meaningless
including zero interest
no one can control
the big corp klan
all of your reforms are useless

not really, op.

You're reading it upside-down. Corporations have control because of their ability to use "free speech" via money, and because this creates a voting double-dip -- or triple-dip if you count PACs.

Corporations have money because they're not personally responsible despite their legal personhood.

If you think (for example) that partnerships and LLPs would achieve the same as corporations, then somehow the legal ramifications of corporate status aren't being fully assessed.

And of course if there's evidence that regulators aren't either former members of the regulated, or very empathetic to the regulated, then you're not looking closely at the American framework of regulatory/legal intersection and the supposed justice that comes out of it.

I'm pretty confident in the importance of the 4 points I raised. The only things that make them unimportant are a fully blown overhaul of everything related to business organizations law, and federal government framework. Incidentally, you might notice that's where my 4 points are aimed.

Son of Uncle Sam -- there's a lot of fields of study that are bogus, and called "science."

Political Science

those four stand out for me. I suppose the list is even larger. I don't hold much respect for a college degree in any field that can be studied fully by watching people in a bar.

As to Joe 6Pack -- that's just a nickname to distinguish him and his buying/thinking habits from those Joseph Merlot, the Yupster American who believes in the exceptional status of a graduate degree from a "prestigious" post-secondary academy, and takes his "news" from NPR, PBS, and the NY Times.


"If you think (for example) that partnerships and LLPs would achieve the same as corporations..."
i do ...they did

"You're reading it upside-down "

well one of us is
dog tail ???

to me the lobbying and donor class activity
are a means to an end
change the rules and new means would be found

why ??

because its their system if the rules started to work consistently against them
the rules would be change...one way or other
or if not ..well maybe we'd get
"a slaveholders' rebellion"
ahh see by route circuitous
we come to
social revolution ...peaceful or otherwise

my premise:

reforms preserve a class system
often giving the hegemonic class a chance to regroup and counter attack ...another day

revolutions overturn one class system
to construct ..well as of now ..another


"I'm pretty confident in the importance of the 4 points I raised"

hey i gave you one and a half
jubilee as metaphor
and zero interest as target
are both jolly good and extremely important

"If you think (for example) that partnerships and LLPs would achieve the same as corporations..."

i do ...and in their days of dominance as bizz org forms ...they did

may i suggest
you are reversing the causation between base and superstructure

the "laws" reflect corporate power and yes reinforce it as well
or they wouldn't exist

what is the basis of corporate power
their de facto
collective monopoly
on jobs
credit based investment
high productivity
means of production

sorry to reveal my convictions so starkly
but they are what they are
and if it makes me seem reasonable
i'll gladly acknowledge a decretification of corporate personhood would be a registration in the superstructure
of a change in class balance in the base

ie corporate hegemony had exceeded
its own enlightened self interest
and needed to remove a certain abused "privilege" from the greatest game of all
class struggle

nb the struggle is between the bourgeois class
and its various groupings and classes
of semi or completely exappropriated
fellow citizens

too often proletarianization
which is a process
is viewed as a final condition


---while i seem to be inadvertently
waxing so orthodox
let me add this caveat :

pauperization is very falsely
equated with proletarianization

one must keep the distinction between
one's pour-soi's
and one's en-soi's
clear here


so long as a soul has some marketable hu-cap
(skill) she/he is indeed a worker for wage
but not yet
a fully defledged proletarian
i note so long as she/he
remain willing to sell
their raw labor power
and from time to time for a spell of time
succeeed in selling their raw labor power
are they not lumpenized souls

ahh but isn't this all quite an intricate story when one gets down
to the brass tacks of it all

op --

I'm afraid I disagree. LLPs did not do the same as corporations because LLPs were not preferred vehicles. Partnerships cannot create the same types of combination that corporations can create. The whole structure of business was radically altered by corporate behavior.

Is there some chance you're speaking out of theoretical readings rather than work in the trenches of corporate America? Because in theory anything can be spun to be "the reality" if you're good enough at spinning.

What evidence is there that corporations had such a negligible effect? Have my decades of studying corporate laws and decisions been for nothing? Was what I studied artificial? Was I misled by the opinions and statutes themselves? If so, how?

Maybe I'm stupider and less well informed than I thought.

Maybe you could indulge me and tell me how partnerships and other non-corporate business formats created the problem we now have, independent of corporate legality and the expansion of corporate powers.

Son of Uncle Sam:

Charlie Foxtrot

That was agreement which lost something in haste.

exceptional status of a graduate degree from a "prestigious" post-secondary academy,

They can't all be Ivy grads. Elitist corps A-Z want grads and "prestigious" post-secondary academy will produce*.

*for not a penny more then 15k a semester with a 4 semester minimum. Most credits will not transfer, see bursar for student loan info.


don't miss my point oxy

obviously limited liability etc
handed out like
free candy was a huge transformative event in gilded age american superstructure

and yes the modern public but private corporation
has evolved in mighty ways
mighty enough to get the court system
to produce results to it's liking
prolly regardless of statutary reform

one things of the legalization of union organizing
that points to both the advantages and limitations of superstructure modification

"Have my decades of studying corporate laws and decisions been for nothing? Was what I studied artificial? Was I misled by the opinions and statutes themselves? If so, how?"

but it's all legal jibber
all secondary
all subordinate
to movements at the class base

and reforms that directly effect the struggle at the base

reforms that might emerge
out of the next techtonic shift
of the class plates

reforms that strengthen the hand of wage labor


"Is there some chance you're speaking out of theoretical readings rather than work in the trenches of corporate America?"


but it's not clear to me how my experience
out there in commercial amerika
deeply informs me
if i am without deep theoretical constructions

don't mistake prioritzing for rejection

naderism makes for great alliances
between radical merit class types
and vulgar rebel unionites
together you and i
might make beautiful music oxy

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