There is something that does not makes sense.
And he reason it does not makes sense; I think, it is that economic theory is not right... it is not, it can not be epistimelogichally right.
The basics of the economy , or so called basic of the economy are not clear at all. It is not only about stuff, money around (M1, M2, M3), companies , consumers and money-value or money-debt.
There are tendencies, impulses and simbolic variables not taken into account.
I have not still seen any clear and new perspective, new way to look at the glbal system (and the US in aprticualr) which makes sense.
The "normal" way to look at this stuff is krugman eyes, it makes sense, sort of, but not quite completely. Banks were deregualted, they had a lot of liquidity, made awfull bets to enrich themselves, nobody knew exactly what they were buying, so they bought stuff that nobody knows how much it costs..s now there is no market.. if there is no market,there is no liquidity ina bucn of assets and no credit and economy halts..
But given that debt-money is a 30 trillion market (almost like GDP accordign to soem readings credit swaps are worth one year US GDP) what was really the bas bet? Well, actually the whole market.
Antoher approach is that the financial institutions, all of them except local banking, are useless. this is, this is a failure of Wall Street...We do not need finantial services.. but is it true? We do not need credit? But can capitalism exist without credit?
And what about the way stirling looks at it.. captalism does not exist as such, there are purely periods in history where particualr arrangements are set in place to make feel people happy by creating a particualr production-money structure. Stuff produced is no longer a problem: it is kept constant, the improtant thing is the sense of growth, which sicne the great depression came from land for money, then oil-for money and finally debt-mortgage for money. Bt if this was the general structre in palce, what about doing stuff, you know making things (computers, planes, cars, medical apparatus). Why peple got moey in the frst palce by making things and selling them? who were the first money-holders who wanted huge profits for their money?
Probably it is because I do nto know enough details about economics, or maybe it is becasue economics never quite makes sense.
Structrually one would think that a major redution of wall Street is necessary, and that energy and public transprot investment shuold be the way to creat money-value for consumers. it really seems the best way to go... but I am nto so sure about if it is the way to go fro china, or India.. or even Japan.. So wat happens when some coutnries like the US would benefit for it, while probably europe would but not that much, and china probaby can get more money-value for tis citizens int he way of producing stuff we have adn 1 billion peple may want?
But we could all be wrong, maybe a small Wlall street does not address the problem, maybe debt is the problem as magnifico says, maybe is the investment nature of capitalism, maybe it is the economy fundation... maybe it is that this econmic system does not makes sense at all...maybe..
maybe Europe will avoid the meltdown... but again how is a balacned economy ,a s the german or french, suppose to grow? what is growth? maybe growth is just accounting.. or not..
only maybes...
A pleasure I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude
Now, given the armies of traditional marginalist economists and the relative handfuls of analysts in heterodox approaches, it is an open question as to what a particular heterodox approach is capable of effectively addressing ... that is, the ability to talk about a problem in an approach is no guarantee of the ability to effectively address the problem in that approach.
However, an inability to talk about a problem in an approach is a guarantee of an inability to effectively address that problem.
Traditional marginalist economics, for example, has a unit of analysis that is incapable of addressing the accumulation of legitimizing folkviews around habits of behavior that reinforce the institutional system that depends upon those habits. It also has a unit of analysis that is incapable of addressing strategic decision making in the face of intrinsic uncertainty regarding critical information required to make the "rational" fully informed decision.
That means it is incapable of talking about anything that is crucial to understanding why financial systems get into financially fragile states, or how to get out of those states. And if sliding into a financially fragile state is of short term benefit to the accumulation of wealth of the wealthy, it is no surprise that a trained incapacity in understanding the risks of credit/debt leverage is quite popular in the middle of an asset inflationary boom. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
If you are actually standing by it, then that includes being specific. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
M1, M2 and M3 almost mean nothing nowadays. te descritpion of the monetary base is illusory. Does it reall matter when the arkets freeze becasue there is no amrket for sm assets? no correspondence or capital movimetns around the world and black holes or deposits hidden from tax heavens.
The whole structure is illusory also regarding exprimental measures, there are no experiemtal language, no xperimental structure, no double checks.
Also very itneresting is the money graph movement, the knowledge and description of money acroos different industries and consumers ort he work on geo-differences is almost nill becasue the lack of ability to redict. But this is more a lack of interest or methods tahn illusory.
And trade, wow, trade.. I think we have been discussing about that.. it was not illusory but probably bad faith regarding how Friedmanists plunder a bunch of industries in favor of the rich guys. But, it does seem hat some nerd really buy into that given the whole illusory structure.
And then, there are a bunch of others thing that once in a while I think "wow there again non-reality based, event he basics makes no sense" but toehrs seem to make some specific non-illusory claims.
Some examples.
Do they really know wha theya re talking about when they talk about dollar problems and stampede, do they know about the way the dollar print and the whole global system work once the gold standard was eliminated? Do they know what they talk about when economists explain the inflation without aywhere mentioning mesoinflation or micro inflation or across the board inflation (except stirling)?
And on a related note, the realtion betewwen production , goods, money to buy, debt, loan and bubbles seem disconnected without a coherent frame. Sometimes lack of coherence frame also indicates lack of real knoweldge regardintg the descrption, and most of the time there is a illusory component.
I can go and on . but I think you get an idea.
A pleasure. I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude
that was my point... but maybe it is my lack of knowledge. Maybe economists have made improvements after Keynes (and that monetary ass may matter) on consolidating the Economic Bulding, but from where I stand, I really do not see the improvement. It still looks illusory.
But ei. what do I know? I do physics of complex system and biology nor economy... and Ic an certainly do not know how to apply everything I knwo about complex system to economy..
It is illusory the way they talk about value, it is illusory the way they talk about markets.. markets has lost any meaning when there is a bunch of things now at the core which are out of the market, or there is no market.
This sounds very much like an argument why the American Institutionalist approach to analysing markets as one among many real world socioeconomic institutions is superior to the traditional marginalist approach of looking at all transactions through the filter of the market model.
Many American Institutionalists do indeed use a General Theory informed description of the macro-economy, but not all do, and its not in the core of the approach ... obviously Veblen and Commons couldn't have done since they died before the publication of the General Theory, but the work of Wesley Claire Mitchell was more used by Keynes for empirical information on the operation of the business cycle than making use of Keynes.
And trade, wow, trade.. I think we have been discussing about that.. it was not illusory but probably bad faith regarding how Friedmanists plunder a bunch of industries in favor of the rich guys.
Yes, that would seem to be the most common institutionalist analysis of these so-called "trade" agreements, that they are in reality agreements to eliminate constraints on the exercise of economic power by large transnational corporations.
I am not clear on why you disagree with that analysis. Are you seriously siding with the traditional marginalist economists? worshipping at the alter of "free trade" no matter what the details of the agreement may happen to be? You prefer that position to the American Institutionalist analysis that it is a naked power grab?
Really? I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
new instituonalism school can discuss with small changes int ehframework.
So My point is, since them it all seems ilusory.. maybe I am wrong.
At elast Keynnes made some sense of the structure, but nowadays economists sound like them in the terms of illusory structrues.
Maybe I am wrong though.
... after enough examples, at Tennessee we decided that "New" is an acronym for "No Effing Way". "New Institional" is No Effing Way Institutional, "New Keynesian" is No Effing Way Keynesian, "New Classical" is No Effing Way Classical.
The frustrating thing about the New Institutional approach is that they have an analytical toolkit that could be used to consider questions beyond the limit of what traditional marginalist economics can talk about ... but they refrain from doing so in order to remain in contact with traditional marginalist economics. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
