dagblog - Comments for "Fashionistas in our time: an anti-review"

The Machines are coming.

PeraclesPlease — Sun, 21 May 2017 10:08:34 +0000

In reply to Fashionistas in our time: an anti-review

PERACLES I cannot pretend to

Richard Day — Fri, 12 May 2017 18:27:24 +0000

In reply to Fashionistas in our time: an anti-review

PERACLES I cannot pretend to understand what you are writing about except the Chinese 'experiment' is a miracle.

Where once there was nothing? there is now a middle class of 350 million people? Of course how does one define a 'middle class'.

It is nevertheless a miracle.

And yet, there are wondrous things occurring in India.
And in this great land of science and industry and progress and 'democracy'...There are people who are achieving things never know how to spell occurring.

Your note about 250,000 Indian farmers dead?

I have other personal thoughts about this.

I grew up in the fifties hearing abou

predicted by Ghandi?

Hell my PC says I do not even

t poverty in China and India.

Oh, and I have always prepared for dissapointment.

Thank you for this.

Thanks for the extended

PeraclesPlease — Thu, 11 May 2017 15:57:00 +0000

In reply to Interesting read. I'm not

Thanks for the extended comments.

I certainly don't think we have no options, and there are certainly previous analogies to where we are even if there might be 1 or 2 novel twists.

I do think the definitions or use-in-practice of productivity and demand will be evolving, and I don't know that workers across the board will find the leverage for a while to push for the fading living wage - i.e. unions fight with threats and pentup demand, not with empty goodwill & lack of critical need - except in Germany - though this could easily be a temporary situation, and as you or Jared note, possibly blamable on other specific factors, not our new Gilded Age.

The thing is in Europe we have at least a winning government-is-good faction that means we can largely push for policies that make sense and help people, whereas the standoff in the US that's lasted for a few decades now is based on a pretty overbearing effort to rip out the structural beams and see how much money they can make as it all falls down. So there's no real analysis of natural state to be had to analyze - it's all "rigged" and we have to design solutions around that rigging. Like robosigning - that certainly didn't have to happen and shouldn't have been allowed to escalate to the horrid extent it did - but that's just how our system & the people involved swing. :(

but as for the essay (& don't have time to think much more about it), I do think there's some bigger issues at play to discuss, and the biggest idea I wanted to impart is we're not going to do very well if we try to tackle it simply through protectionism and individual go-it-alone national policy, unless we simply don't significantly give a shit about the rest of the world, left or right, which is certainly a thesis to consider.

Interesting read. I'm not

Obey — Thu, 11 May 2017 15:26:27 +0000

In reply to Fashionistas in our time: an anti-review

Interesting read. I'm not sold on the idea that this is some brave new world where we have no points of reference. It doesn't strike me as a significantly different transition than the one from an economy dominated by agriculture to one focused on manufacturing. Back in the 30s there were agronomists around who understood that markets need a whole lot of in-depth knowledge on the part of economists to effect any useful tweaking and regulation. Nowadays we just seem to throw up our arms and point to free-market theory and complain that things aren't working out the way the book told us they should. I quite like Jared Bernstein's theory that the broad demand-side shortfall the US has been facing since the beginning of the 2000's can be almost fully accounted for by the Fed keeping us below full employment since Volcker.

http://jaredbernsteinblog.com/full-employment-a-force-against-rising-inequality-and-stagnant-incomes/

Correlation is not causation, but there is also a plausible causal story here too.

Add to that the vast corporate subsidies that get swallowed up by profits and exec bonuses, the short-termism that permeates corporate culture causing an investment deficit, trade policy that hurts workers (as you allude to), I don't put too much store in the story of technology hurting workers as some "law of economic nature". It's conscious policy that is causing the problem, at least there is a lot we can do policy-wise that has not been tried. Given the state of the democratic party in the US, they are unlikely ever to be tried there.

More optimistically for me is the fact that I don't think the Fed will be able to continue to squeeze interest rates in order to maintain so much slack in the labor market, and a lot of the pressure on wages has come from the global labor market soaking up a billion Chinese workers within a 15 year period. India and others are coming on slower, and can be assimilated without causing the same kind of shock.

In short, my sunny view is that technology is all good, as long as we allow the benefits to be more broadly shared. When we see a market heading towards cartel-like behavior or monopolies or monopsonies, it should be regulated accordingly instead of just having government sit around acting helpless. As long as we don't artificially dampen demand by funnelling all the gains from productivity improvements to the top 0.1%, people will spend money and demand and create work for others, no matter how smart computers and robots get.

Another thought. We just had Antonio Di Pietro visiting here in honor of the 25 years of Mani Pulite - the big, but ultimately failed, cleaning up of the corrupt Tangentopoli system of government contracts involving cartels of contractors and kick-backs for granting contracts. The system remains, but has been "mechanized" - Ingegnerizzato - with kick backs funneled through professionalized above-board accounting tools and shell companies and "consulting services". He spent 10 minutes putting side by side the costs of comparable government contracts in Italy and less corrupt northern European countries - say, a per-km cost of a new high-way in Milan and one in Zurich - and he showed how the costs in Italy tend to be more than the double that of the northern counterparts. All that is money taken from the tax-payer and split between political and corporate elites and involves huge sums.

The question can in my view transferred: how corrupt the US political economy is, with an even more souped-up version of Tangentopoli, where it goes far beyond government contracts to playing with regulations, packing Fed boards and Federal courts, inlfuencing trade agreements. How much more do banking services cost in the US, including implicit subsidies - compared to what they should cost? We know finance has tripled as a percentage of GDP, without much clear improvement in productivity (admittedly hard to measure). Is all that growth just the bloat of corruption? what about health care? We know health care costs are double what they are in comparable developed countries, doctors making twice as much, equipment costing twice as much, drugs multiples of what they cost in Canada, not to mention insurance. And what about multinationals effectively getting away with a massive invoice scam to avoid paying taxes? We can go on. There is a long list of things we can actually do something about without worrying about a hypothetical BIG PROBLEM.

We have as yet no reason to believe that the BIG PROBLEM even exists.

It feels like the same debate we are having about climate change. The right says we can't do anything about it because it isn't man-made. It is far beyond our power so let's just chin up and accept the crappy situation. Or the more sophisticated variant - the Bret Stephens line - we just don't understand the phenomenon yet, we must be careful to study it for 30 more years until we are literally drowning in melted ice caps. Likewise here in this economic policy debate, we see the right pulling the same crap. Gosh, wages have been getting crushed since 1980, and we just can't figure out why. Sure, we've crushed unions, cut welfare programs, deliberately built a trade deficit hurting workers, massively subsidize banking and health care. And the list goes on. But Noooo, that has nothing to do with it. It's some irresistible force of some invisible hand that is at work, which we don't understand and can't do anything about. It's just as laughable as the Climate change "debate". More study needed. More chin scratching.

Misdirection is all it is.

Mostly.

/end of rant.