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Cosmic constants

By Owen Paine on Sunday February 14, 2010 04:46 PM

Simon Johnson, who despite his fresh educated-rube's face, prefers playing Old Testament prophet, put aside his usual thundering against the Shylocks of Wall and Lombard Street to compile this economic tour d'horizon for our congressional caretakers. It ain't Jeremiah but it is B-plus work.

Upshot? Pretty simple: the emerging giants, India and China, remain the darlings on the MNC dance cards, whereas old Europe is quagmired worse than Norte-Amigo and we all may hit another global contraction this fall.

Sounds good, eh? In fact it's "very nicely played indeed", if you happen to be a Plutonian lady or gentleman anxious to see the hi-fi Laputa sailing through blue skies again over Whole Earth, incorporated. Give or take a few scares, all's well up ahead if you're one of those, like Tim Geithner or the Calydonian boar, Larry of Harvard Yard, who have the privilege to presently manage this cautious restoration project.

As to the problematic progress of us OECD joblingers: try another planet, lugheads.

For the ADHD clique here's Doctor Johnson's quite exciting coda:

"The most worrisome part is that we are nearing the end of our fiscal and monetary ability to bail out the system.

In 2008-09 we were lucky that major countries had the fiscal space available to engage in stimulus and that monetary policy could use quantitative easing effectively. In the future, there are no guarantees that the size of the available policy response will match the magnitude of the shock to the credit system... Much discussion of the Great Depression focuses on the fact that the policy response was not sufficiently expansionary. This is true, but even if governments had wanted to do more, it is far from clear that they had the tools at their disposal – in particular, the size of government relative to GDP is limited, while the scale of financial sector disruption can become much larger...We are steadily becoming more vulnerable to economic disaster on an epic scale."

"Fiscal space"? As in -- "the size of government relative to GDP is limited."

Really? Yup, sez Simon. I'm glad no one told FDR that in 1940.

NB: "We are steadily becoming more vulnerable to economic disaster on an epic scale." Closing out with that piece of meaningless high-C gibber proves one thing for sure: In the end -- if you want to stop the show -- nothing, nothing at all, beats a hi-fi agitprop-induced bout of pure catatonia.

Possible headline of tomorrow and tomorrow and tomorrow:

Globe's Economy Suddenly Totally Collapses

Manhattan: After years of teetering and tottering, yesterday at 3:37 pm he world's economy imploded to form a hypermassive black-hole singularity, which immediately sank to the center of the earth and now appears to be devouring the physical mass of the planet.

Viewing the wreckage from his tower window, one Wall Street regular observed: "Guess that system of chrome steel skyhooks we built just couldn't hold 'er up any longer."

Surely there is a limit there somewhere? I mean the system can carry only so much virtual debt weight, right? There must be a brick wall at the end of the universe, a limit to the cumulative indebtedness it can owe to... itself?


Comments (9)

Seems to me the whole point of a house-of-cards economy is to crush the poor and the middles.

Seems to me it's just a modern form of feudalism.

If they say derivatives are worth something, they can also say that debt is irrelevant.

And I predict that's what they will say when the system seems implosive.


"they can also say that debt is irrelevant."
not your debt and mine
only the debt of the corporations able to drink the credit elixir without limit

but if uncle himself drinks this elixir
without self binding taboos


then like a Pantagruel among states
capitain america could perform
titanic epical ..amazing even
fetes of
massively and popularly spread
" bountifaction"


a citation:

"Humans, like many other species, Lanier says, have a cognitive switch that permits us to be individuals or members of a mob"

delightful nonsense
like gals all have a g spot
we hu caps
all have an m-spot
if stimulated we rage riot ravish and revenge ourselves
that is if we're not sedated

but restore our creative classes'
intellectual property rights
and all will be florentine


“There are some things crowds can do, such as count the jelly beans in the jar or guess the weight of the ox,” Lanier added. “I acknowledge this phenomenon is real. But I propose that the line between when crowds can think effectively as a crowd and when they can’t is a little different. If you read [James] Surowiecki’s “The Wisdom of Crowds,” he, as well as other theorists, say that if you want a crowd to be wise the key is to reduce the communication flow between the members so they do not influence each other, so they are truly independent and have separate sample points. It brings up an interesting paradox. The starting point for online crowd enthusiasts is that connection is good and everyone should be connected. But when they talk about what makes a crowd smart they say people should not be talking to each other. They should be isolated. There is a contradiction there. What makes a crowd smart is the type of question you ask. If you ask a group of informed people to choose a single numeric value such as the weight of an ox and they all have some reason to have a theory that is not entirely crazy they will center on the answer. You can get something useful. This phenomenon is what accounts for price fitting in capitalism. This is how markets can function. If you ask them to create anything, if you ask them to do something constructive or synthetic or engage in compound reasoning then they will fail. Then you get something dull or an averaging out. One danger of the crowd is violence, which is when they turn into a mob. The other is dullness or mundaneness, when you design by committee.”

remarkable paranoid jabber

Boy, N. K.:

I thought you'd enjoying peeing on this, op.


Al Schumann:

BNK, thanks for dragging that over for a good stomping. It's going to keep needing one too. Libertarian collectivism is ugly stuff. All the rugged individualists get frantic when the corporate choke collar tightens up and they find they're producing uncompensated "content" for the latest surplus value extractor.

Save the Oocytes:

All I really got out of the article was "mobs can be ugly" and "it's not a supportable model for no one on the web to get paid for anything." And that there's a lot of groupthink somewhere on the internet (blogs?). What is he talking about? Why do you find it repugnant?

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