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Globalization, Debunking the Deficit, Great Depression Redux & Ayn Rand…

June 12, 2012

Another quick flash of crazy-making.

Hmmmm. Globalization perspectives.

But in spite of the enthusiasm for science that accompanied each wave of globalization, as a historical rule it was primarily commerce and finance that drove globalization, not science or technology, and certainly not politics or culture. It is no accident that each of the major periods of technological progress coincided with an era of financial market expansion and vast growth in international commerce. Specifically, a sudden expansion of financial liquidity in the world’s leading banking centers — whether an increase in British gold reserves in the 1820s or the massive transformation in the 1980s of illiquid mortgage loans into very liquid mortgage securities, or some other structural change in the financial markets — has been the catalyst behind every period of globalization.

This is impressive, but yet again lacks a “bio-physical component.” There is a definite sense that economics, in its modern incarnation, has modeled itself on a continuous flow between “producers and consumers.” This is like a First Law of Thermodynamics perspective, where nothing is created or destroyed, devoid of a Second Law of Thermodynamics understanding where the usable energy dissipates. In other words, interesting article, but still lacking in any understanding of the Bio-Physical realities of the world. Also, if I hear “Technology” as a catch-all mythic term one more friggin time…

I don’t want to be all partisan, but…

Putting all the numbers in the C.B.O. report together, we see that continuation of tax and budget policies and economic conditions in place at the end of the Clinton administration would have led to a cumulative budget surplus of $5.6 trillion through 2011 — enough to pay off the $5.6 trillion national debt at the end of 2000.

Tax cuts and slower-than-expected growth reduced revenues by $6.1 trillion and spending was $5.6 trillion higher, a turnaround of $11.7 trillion. Of this total, the C.B.O. attributes 72 percent to legislated tax cuts and spending increases, 27 percent to economic and technical factors. Of the latter, 56 percent occurred from 2009 to 2011.

Yeah, who’s to say? Ho hum.

It is not the same, but it is not all that different neither… The takeaway points are that 1) Europe is a key player in how world events shake out – see, freedom fries & 2)

There was indeed much wisdom in Kindleberger’s lectures, about how markets work, about how they are managed, and especially about how they can go wrong. It is no accident that when Martin Wolf, dean of the British financial journalists, challenged then former-US Treasury Secretary Lawrence Summers in 2011 to deny that economists had proven themselves useless in the 2008-9 financial crisis, Summers’s response was that, to the contrary, there was a useful economics. But what was useful for understanding financial crises was to be found not in the academic mainstream of mathematical models festooned with Greek symbols and complex abstract relationships but in the work of the pioneering 19th century financial journalist Walter Bagehot, the 20th-century bubble theorist Hyman Minsky, and “perhaps more still in Kindleberger” (Wolf and Summers 2011).

Also, Occupy the SEC is kinda awesome… And Alexis Goldstein is my new “hot-librarian” heroine:

…with each Senator getting only five minutes each per witness, makes it difficult for a questioner to pin an evasive or clever witness. It won’t be hard for Dimon to either run out the clock or bamboozle his interrogators. But he might, as he did in his hastily-called press conference announcing the losses, make more admissions to the effect that he and senior management weren’t on top of what the group was doing. That would support the notion that JP Morgan’s risk controls were inadequate, which would mean that Dimon’s Sarbanes Oxley certification for 2011, and potentially earlier years, was false.

I prefer to cut through the self-aggrandizing, childishly ego reinforcing words (Ayn Rand Redux) and just state the facts: We have scientifically validated models of human moral development. Yes, they start off “ego-centered” and “selfish” but they expand to include larger and larger chunks of reality. This is what we mean by “inclusivity” and the expansion of the “self-sense.” See Kohlberg & Gilligan, as feminist critique (don’t read “rebuttal,” but rather modification for how women do it along the same lines… See especially: Mapping the Moral Domain: A Contribution of Women’s Thinking to Psychological Theory and Education, Harvard University Press, (1989))

But yeah, Rand is wrong. It isn’t an alternative to academic philosophy or a challenge to what we know. It is simply the rantings of someone with a markedly low level of moral development attempting to justify her self-centered wants and needs… And people eat it up, cause you know, we all want to be self-justified and vindicated, somehow.

Anyways… The News Makes Me Crazy.

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