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Learned Helplessness

by Metatone Thu Dec 29th, 2011 at 03:45:31 AM EST

I've been ranting in the physical world for more than a week or two about the "Learned Helplessness" of our leaders and the dominant economic consensus. Now it's finally inspired a rambling diary...

Today, it seems Krugman is channelling me:
The Defeatism of Depression - NYTimes.com

The Defeatism of Depression

A number of people have asked me to weigh in on David Brooks's piece today. Sorry, not gonna do a tit-for-tat. Let me instead just make a more general point.

All around, right now, there are people declaring that our best days are behind us, that the economy has suffered a general loss of dynamism, that it's unrealistic to expect a quick return to anything like full employment. There were people saying the same thing in the 1930s! Then came the approach of World War II, which finally induced an adequate-sized fiscal stimulus -- and suddenly there were enough jobs, and all those unneeded and useless workers turned out to be quite productive, thank you.

There is nothing -- nothing -- in what we see suggesting that this current depression is more than a problem of inadequate demand. This could be turned around in months with the right policies. Our problem isn't, ultimately, economic; it's political, brought on by an elite that would rather cling to its prejudices than turn the nation around.

front-paged by afew


We're drowning our economic lives because we've allowed ourselves to be propagandised into thinking of the economy as some kind of weather event - beyond all our actions.

I look at all this and I'm angry and I don't know how to explain it. But then I stumbled across this Tedx talk and it gave me a little glimmer of understanding. It's a good talk as a whole, but for me the mini-epiphany is found in the first 5 mins (and for the ultra-impatient, you can probably just watch from 4:00 to 5:00.)

One of the crucial failures in both the practice of financial regulation and the discussions about fixing it is the insistence on a small, strange duet of options. Either:

a) A perfect set of regulations that involves no human judgement is developed to do the job.

or

b) Nothing useful can be done to prevent anything, so we should just leave it as it is.

I'm inclined to call this the most effective right-wing frame of our times. But I'm starting to wonder if it's bigger than that, since it seems that this type of thinking has overtaken many minds on the left too.

So now those who watched the video are asking "what does this have to do with water pipes in Africa..?" If you didn't, I urge you again to watch it.

Simply, I think the same frame is at work and I'd generalise it further:

We've become conditioned to seek solutions that are composed entirely of structures. They might be algorithmic (regulation rules) or physical (water pipes) but it is the common wisdom that all any problem is some one-off building work. And if that doesn't work - well you know, life is hard and some problems cannot be solved.

The description in the video - the simple fact that aid projects are very happy to spend money on wells and water pipes, but never on the salary of anyone to maintain the system... it's so contrary to how our prosperity was built... but we seem to have forgotten.

In the past, great works of engineering were undertaken, but it was understood also that organisations had to be established to maintain everything that had been built.

The frame of learned helplessness began with cost-cutting measures, with attempts to save money by cutting back on running costs... but somewhere it became a dogmatic belief that any system that requires maintenance is too flawed to be useful.

ATinNM noticed me in an open thread, expressing disappointment and depression at how a number of thinkers in "complexity studies" seem to have lost the plot. This frame, I realise, is how they've lost the plot.

The right answer to how you regulate a complex financial system has been laid out well by JakeS a number of times here, I hope he'll forgive me for a very short (and potentially inaccurate) summary:

Get some sensible rules of thumb. Put them in the hands of regulators who are knowledgable and prepared to act to regulate new activities when they look dangerous, and respond flexibly to new circumstances.

But for many (Paul Ormerod springs to mind) this is impossible and unworkable. I never really understood the fullness of the objections, but it seems clear to me now, it's all about the frame. They want an autonomous system (because they've been taught that the market is an autonomous, self-regulating system?) and if there isn't one and instead the proposal is for a system that is maintained by humans - then well, it's just not worth it. Humans are not up to the job. There's too much unknowability to do anything but surrender to the winds of the market.

Yet it seems to me that every step human society has made from the proverbial "monkeys coming down from the trees" has been to deal with complexity and unknowability, not only through rules and physical structures, but by tasking people to maintain and when necessary refashion those things.

How did our culture get to a point where we'd rather be tossed by storms than trust someone to inspect a roof now and then?

Display:
My youtube embed doesn't seem to be working. Trying to fix it now.
by Metatone (metatone [a|t] gmail (dot) com) on Tue Dec 27th, 2011 at 05:23:46 PM EST
Seems to be fixed now...
by Metatone (metatone [a|t] gmail (dot) com) on Tue Dec 27th, 2011 at 05:27:31 PM EST
[ Parent ]
The description in the video - the simple fact that aid projects are very happy to spend money on wells and water pipes, but never on the salary of anyone to maintain the system... it's so contrary to how our prosperity was built... but we seem to have forgotten.

That doesn't describe only the way aid projects work. It seems to be pervasive - physical capital is an investment, people are a cost.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Dec 28th, 2011 at 04:23:26 AM EST
Bingo.

The frame is that nothing can have running costs.

So we can't have infrastructure...

by Metatone (metatone [a|t] gmail (dot) com) on Wed Dec 28th, 2011 at 04:34:08 AM EST
[ Parent ]
This doesn't square with the reigning short-termism, when expressed in financial terms.
Most recently, in 2011 PriceWaterhouseCoopers conducted a survey of FTSE-100 and 250 executives, the majority of which chose a low return option sooner (£250,000 tomorrow) rather than a high return later (£450,000 in 3 years). This suggested annual discount rates of over 20%.
A modest running cost, discounted at 20% annually, hardly matters in financial terms today (to wit: €1000 a year, discounted at 20%, is €5000 - as a cost, this is meagre).

I think the problem is not actually one of cost-benefit calculations, but has more to do with short attention spans. Nobody wants to think about having to come back 5 years from now to see if the problem stays solved, even less about being bogged down with monthly check-ups. People want to move on to the next shiny.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Dec 28th, 2011 at 04:45:23 AM EST
[ Parent ]
To be clear, I think this is all more cultural/psychological than just a product of accounting methods.

New shiny is also part of it, as is a mythos of change - commitments are out of fashion, better to rent or outsource for corporate flexibility.

But another part is that discounting is applied unevenly. Look at the treatment of pensions liabilities in both public and private sectors. Cost commitments are exaggerated to justify cutbacks...

by Metatone (metatone [a|t] gmail (dot) com) on Wed Dec 28th, 2011 at 05:37:19 AM EST
[ Parent ]
But the going concerns who are investing in making spending on building new infrastructure rather than spending on operating and maintaining existing infrastructure are those who are selling the design and planning of the infrastructure project, selling the material and components of the infrastructure project, and being paid to oversee the construction project.

Under that short-termism, it makes all the sense in the world to invest in finding ways to make spending money on new infrastructure projects sound good while finding ways to make spending money operating and maintaining existing infrastructure projects sound bad ~ since the downside of the latter is a general social drag on productivity that is always primarily in the out years ...
... even if we are now living in the out years of earlier iterations of the process.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Dec 28th, 2011 at 02:44:07 PM EST
[ Parent ]
And in a similar manner it makes sense for foreign aid. After all, the someone who would be payed to look after the system would probably be a local.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Wed Dec 28th, 2011 at 02:54:06 PM EST
[ Parent ]
Indeed ~ its from that very point regarding why foreign aid above the Peace Corps / VSO level is so often of zero or negative benefit that I got to the same point in domestic infrastructure spending.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Wed Dec 28th, 2011 at 03:22:07 PM EST
[ Parent ]
Aha, a qualified positive rating from Antoni.

What's the qualifier? Verbosity?

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Thu Dec 29th, 2011 at 03:47:37 PM EST
[ Parent ]
More likely that Antoni is just using a 3 to rate "Good" rather than "Excellent".

Not everyone knows the 3 is not often used around here.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Dec 29th, 2011 at 03:58:13 PM EST
[ Parent ]
You're not Antoni. On precisely that account, if my auto+4 button had an auto+3 button right next to it, that's the one I'd push.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Thu Dec 29th, 2011 at 05:19:40 PM EST
[ Parent ]
I will note that the culture of the original scoop site, kuro5hin.org (I wouldn't go there now, it has long since devolved), did use the entire rating range. 3 was average, 4 was good, 5 was excellent, 2 was poor, etc. Most of the original user base here came from dailykos where you give a + or -, and the - is rarely used. That culture was imported over here, with the 4 functioning as the + and the rest of the range functioning as the -.

you are the media you consume.

by MillMan (millguy at gmail) on Thu Dec 29th, 2011 at 09:29:21 PM EST
[ Parent ]
Kos started out with the whole range of ratings, but in one of their software overhauls they switched to +/-.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Fri Dec 30th, 2011 at 02:42:18 AM EST
[ Parent ]
Nobody ever used anything besides 4 or troll-rating on Kos. So the switch made sense.
by IM on Fri Dec 30th, 2011 at 08:53:43 AM EST
[ Parent ]
Here all ratings get used, except the 3 (mostly).

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Fri Dec 30th, 2011 at 08:56:05 AM EST
[ Parent ]
Might be simpler just to have a 'like' and a 'dis-like' for troll rating.

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Fri Dec 30th, 2011 at 10:03:15 AM EST
[ Parent ]
I've seen a scoop based site where the ratings extend into the double digits, encoding a wide range of distinct messages.

For those with the Firefox add-on, +4 as the standard rating is reinforced by the fact that its the button you can push without going through the whole "set rating, apply all ratings" process.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Fri Dec 30th, 2011 at 02:37:19 PM EST
[ Parent ]
I use the 3 as good, in the sense of something that merits some following, the 4 I use to mean an interesting conclusion in itself.

res humà m'és aliè
by Antoni Jaume on Sat Dec 31st, 2011 at 10:56:51 AM EST
[ Parent ]
Aha, I succeeded in eliciting a comment!

Hi, and in case you're a new arrival at the European Tribune, welcome. And if its belated, well, welcome anyway.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sat Dec 31st, 2011 at 01:36:12 PM EST
[ Parent ]
Yes, I only registered in November, however I've been reading Eurotrib on and off most of the past decade.

res humà m'és aliè
by Antoni Jaume on Sat Dec 31st, 2011 at 03:39:38 PM EST
[ Parent ]
So we shouldn't eat? We shouldn't refuel our vehicles?

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Wed Dec 28th, 2011 at 04:48:12 AM EST
[ Parent ]
isn't it more long term running costs rather than short term? If it can be pushed into the next accounting period then it is, as  current shareholders want to get in and get out withmaximum returns. things like petrol and food and materials, you can't put off feeding into the machine or everything is going to stop obviously, but the oilchange can be missed and nobody is going to notice unless things go really wrong and that ususally doesn't happen.

Management also avoids the maintenance costs as this keeps shareholder return up to demanded levels in the short term, so they look better, (Aren't I doing well at keeping costs down)

Is the core problem that finance is demanding a level of return that is in excess of the increase rate of GDP?  and so the only way to get this is to parasitically strip the underlying company? not performing the maintenance is a way of doing this essentially invisibly for a while.

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Wed Dec 28th, 2011 at 06:53:25 AM EST
[ Parent ]
Oh and Governments do this too, much of the 1980's cut in education budgets in the UK under Thatcherism consisted of not doing any building maintenance. So the Blairite education revolution with billions poured into education was almost entirely eaten up by repairing this lack of work that had been done in the previous 15 years.

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Wed Dec 28th, 2011 at 06:55:58 AM EST
[ Parent ]
Same thing with the London Tube and Network Rail maintenance backlog...

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Wed Dec 28th, 2011 at 07:02:21 AM EST
[ Parent ]
And that would still no doubt still be running on a minimum maintenance mode, if people hadn't started dying from it.

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Wed Dec 28th, 2011 at 07:05:19 AM EST
[ Parent ]
Companies that are run by accountants go broke - unless they are accounting firms, and countries that are run by financiers are run into the ground in the name of the short term - and there are no exceptions for that situation because the current system of finance is not sustainable.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Dec 28th, 2011 at 02:19:21 PM EST
[ Parent ]
Hmmmmm I've been suggesting we're increasingly getting more and more accountants as political representatives for a couple of decades now.

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Wed Dec 28th, 2011 at 02:33:23 PM EST
[ Parent ]
And that is not necessarily a good thing. But one of the better US Congressmen, Brad Sherman of Encino, CA is both a lawyer and an accountant, and in his case those facts are hardly a dis-qualifier. The difference is that, to him, they are tools HE uses, not rules he follows blindly. What we desperately need are statesmen with vision and a concern for the entire polity. But that is terribly out of fashion.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Dec 29th, 2011 at 01:38:24 AM EST
[ Parent ]
I know we've talked about this before, but I think it's a really important line of thought:

UK GDP annual growth rate varied between 0.5% and 2.7% this year.

Typical small business loan rate from a high street bank - 8%.

Now of course, big firms have different options, and you can drag in CAPM etc. but still, I think there's something here that needs to be thought about.

by Metatone (metatone [a|t] gmail (dot) com) on Wed Dec 28th, 2011 at 07:10:31 AM EST
[ Parent ]
UK GDP annual growth rate varied between 0.5% and 2.7% this year.

Typical small business loan rate from a high street bank - 8%.

You're comparing an inflation-adjusted GDP rate with a nominal interest rate.

Given that UK inflation is about 5%...

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Dec 28th, 2011 at 07:12:46 AM EST
[ Parent ]
True

1.08/1.05 = 2.8%

so it's not a huge difference.

by Metatone (metatone [a|t] gmail (dot) com) on Wed Dec 28th, 2011 at 07:29:35 AM EST
[ Parent ]
And at the fictitious (top) end of the growth range, 5%+2.7% = 7.7% nominal.

Of course, interest is not a claim on growth in income, its a claim on gross income. Very high rates of interest are quite compatible with nil or negative growth rates ~ they represent the share that the finance rentiers claim out of the gross revenues of the small business borrowers.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Dec 28th, 2011 at 02:50:06 PM EST
[ Parent ]
And it is dogma that businesses run day to day operations on borrowed money. But the best small businessmen I have known have always wanted, as one put it, to have that big barrel of money in the basement. I remember another businessman esclaiming in 1980: "Jesus Christ! Can you believe a prime rate of 20%!" I expect that was a reason for him to pull out of contracting and buy a horse ranch up in Paso Robles, CA. A lot of his credit was fixed interest rate on vehicles, etc. but carrying a union field crew with lots of work in slow pay LAUSD must have been excruciating.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Dec 29th, 2011 at 01:48:05 AM EST
[ Parent ]
Not just borrowed money, but also borrowed goods in the form of trade credit, 30days, 60days, or 90days same as cash.

Which is, of course, borrowed money at the level of the supplier, since the materials bill, wage bill and/or import bill was paid when the item was produced/imported.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Thu Dec 29th, 2011 at 12:04:24 PM EST
[ Parent ]
Which, it should be noted is the area of business where many large companies force small ones to borrow.

If you do work for large companies, many will make you wait 90 days for payment. Some even seem to make it a policy to try to "forget" to pay now and then just to see if they can get away with it.

Anyway, the result is that either the small businessman has a barrel of cash in the basement to fall back on, or he will need a line of credit from the bank, sooner or later.

(And yes, it's always possible to run a business so cautiously that you do not borrow, but when the typical business is borrowing, I think it's important that we understand the structural reasons why...)

by Metatone (metatone [a|t] gmail (dot) com) on Thu Dec 29th, 2011 at 02:18:45 PM EST
[ Parent ]
The productive sector as a whole must lay claim to productive resources before having finished goods or services available for sale ~ the detail is who precisely is on the hook for the required finance, but at the level of the system, providing finance to cover that gap is why its necessary for the finance sector exists.

Making bets on the failure of going concerns, OTOH, is not something we require to be done, so that is not why its necessary for the finance sector to exist.

Indeed, incorporation is an institution that is required for large, complex productive firms. Given a functioning Reserve Bank to protect the broader system from the consequences of commercial bank bankruptcy, we could well ban all for-profit commercial banks from incorporation and prevent the emergence of "too big to fail" banks in that way.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Thu Dec 29th, 2011 at 03:43:59 PM EST
[ Parent ]
UK inflation is about 5%...

Would that be driven primarily by soaring import costs?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Dec 28th, 2011 at 02:21:18 PM EST
[ Parent ]
The conventional wisdom is that it's partly driven by Bank of England Quantitative Easing.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Wed Dec 28th, 2011 at 02:48:13 PM EST
[ Parent ]
Yes, given declining terms of trade, the drop in national real income will be translated in whole or in part into inflation, if the inflation of prices by price setters is accommodated by the monetary authority ~ otherwise in depressed economic activity.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Wed Dec 28th, 2011 at 02:53:03 PM EST
[ Parent ]
Krugman thinks that:
The headline inflation number was running quite high, but even a bit of analysis showed that this largely reflected temporary shocks, mainly hikes in VAT and commodity prices plus some effects from the depreciation of the pound

And he's quoting FT Alphaville (who's quoting the BoE):

FT Alphaville » The UK's inflation myth

The Bank of England said inflation had peaked and would fall back sharply in coming months. And that looks to be playing out.

Indeed RBS economists Richard Barwell, Gareth Anderson and Nick Matthews reckon the MPC could get a nice inflation surprise in 2012 as the impact of VAT is washed away.

by Bernard on Thu Dec 29th, 2011 at 04:56:12 AM EST
[ Parent ]
In order for that comparison to be meaningful, you need to implicitly assume that interest is allowed to compound instead of being paid off as it accrues.

The only place that happens for any length of time is in private pension funds and Ponzi scams. Everywhere else you have non-negative amortisation.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Dec 28th, 2011 at 10:40:59 AM EST
[ Parent ]
This is an excellent description of the collapse of Penn Central.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Wed Dec 28th, 2011 at 02:45:07 PM EST
[ Parent ]
To a small degree, I wonder if this has to do anything with the very idea of the rule of law.

The response to every problem is framed in terms of new laws or new regulations, with the idea that since the law is the final authority, the focus should be on fixing the laws.  Patch the system so the people do what they are supposed to do.

Doing anything else is obviously authoritarian.

by Zwackus on Wed Dec 28th, 2011 at 08:28:45 AM EST
I think that is definitely part of it...

I also think that the word "patch" indicates how the conceptual framework of computer code and algorithms has taken root in our understanding of how systems work.

by Metatone (metatone [a|t] gmail (dot) com) on Wed Dec 28th, 2011 at 08:38:45 AM EST
[ Parent ]
Surely 'to patch' meaning to repair small holes predates its computer usage and would have been understood a century ago?  My grandma talked about patching clothes and friendships.
by njh on Fri Dec 30th, 2011 at 01:03:54 PM EST
[ Parent ]
Patch - A piece of code added to software in order to fix a bug or expand functionality, especially as a temporary correction between two releases

Most people wrongly restrict it to only the first.  

</PN>

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Fri Dec 30th, 2011 at 05:17:38 PM EST
[ Parent ]
But my point is that "changing the encoded instructions" has become a canonical response to a problem with a human system, even when another response is more appropriate.
by Metatone (metatone [a|t] gmail (dot) com) on Sat Dec 31st, 2011 at 03:19:22 PM EST
[ Parent ]
I agree with your point.

I was "comma plucking."

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sat Dec 31st, 2011 at 03:26:17 PM EST
[ Parent ]
The laws could be improved, but that will do no good if they are not enforced. "Regulatory forbearance" is code for calling off the cops. Whole countries are now run as if they were small towns in the US old west or deep south where the sheriff is corrupt and in charge of protecting all of the criminal activity.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Dec 28th, 2011 at 02:26:55 PM EST
[ Parent ]
It's not just when the system is corrupted, it's the very nature of the idea.  You don't fix a problem by empowering a person to do what is necessary on a case by case basis, you fix the problem by changing an abstract system of rules.

Confucian practice generally opposed written laws, as they were always artifacts of a particular time and place, and could never compete with informed human judgement.  Rather than trust in laws, one should trust in the virtue of the just man, whose authority has been handed down from the Emperor and thus partakes of the Mandate of Heaven.  The just man, by virtue of his position and his education, could be trusted to act in the appropriate way in every situation, and as such laws could only serve as an unnecessary restraint on the legitimate exercise of authority.

In practice, this obviously had some problems.  But every system has problems, it seems.

by Zwackus on Fri Dec 30th, 2011 at 12:27:38 AM EST
[ Parent ]
The right answer to how you regulate a complex financial system has been laid out well by JakeS a number of times here, I hope he'll forgive me for a very short (and potentially inaccurate) summary:

Get some sensible rules of thumb. Put them in the hands of regulators who are knowledgable and prepared to act to regulate new activities when they look dangerous, and respond flexibly to new circumstances.

Honest and reasonably competent regulators: Accept no substitute.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Dec 28th, 2011 at 10:43:29 AM EST
And when the exact opposite of these dicta are the norm you know the government is working for the criminals.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Dec 28th, 2011 at 02:29:25 PM EST
[ Parent ]
But when a well paid, professional class of civil servants are the scapegoats and posterchildren for 'big government', and their services are contracted out, you can bet government will stop functioning for all but those who own the contractors.
by Andhakari on Thu Dec 29th, 2011 at 04:15:42 AM EST
[ Parent ]
Can't view the video yet on my work laptop, but actually, that's pretty much what French philosopher, and founder of critical theory, Michel Foucault, spent most of his life writing about --that modernity and democracy, under the mantra "rule of law" and Aristotelian notions such as, "It is more proper that law should govern than any one of the citizens," has merely substituted institutional structures for the more personal tyranny of the church and aristocracy of the Middle Ages, without actually getting rid of the tyranny.

Instead of kings and popes and their interpretation of God's will as the foundation for otherwise obviously tyrannical policies, we moderns substitute "law" or like institutions without actually changing anything about the structure of the relationship between human beings and blind obedience to arbitrary social structures.

by santiago on Wed Dec 28th, 2011 at 11:03:54 AM EST
Two apposite quotations motivated by the Eurozone crisis:

From Eurointelligence: As ever, the mindset of lawyers frames the political debate among a political class that seems inhumanly uneducated in matters of economics. If economic voices are heard at all, it is usually the voice of the [Central Bank]. It is a peculiar democracy that expects either its constitutional court or central bank to have the final word of wisdom.Jörg Bibow

From the Financial Times: "One lesson Mr Bini Smaghi has learnt is that eurozone policy makers cannot opt out of taking bold decisions. 'Some of these decisions may not be optimal and may be criticised, especially with the benefit of hindsight. But not deciding, or postponing decisions, is not an option and leads to worse outcomes.' Nor, he says, should decision makers 'hide behind lawyers to avoid taking action'."

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Dec 28th, 2011 at 11:10:08 AM EST
[ Parent ]
You know, I'm lately getting an urge to read Aristotle's Politics:
It is evident from what has been said, that there are as many different sorts of democracies and oligarchies as I have reckoned up: for, of necessity, either all ranks of the people which I have enumerated must have a share in the government, or some only, and others not; for when the husbandmen, and those only who possess moderate fortunes, have the supreme power, they will govern according to law; for as they must get their livings by their employs, they have but little leisure for public business: they will therefore establish proper laws, and never call public assemblies but when there is a necessity for them; and they will readily let every one partake with them in the administration of public affairs as soon as they possess that fortune which the law requires for their qualification: every one, therefore, who is qualified will have his share in the government: for to exclude any would be to make the government an oligarchy, and for all to have leisure to attend without they had a subsistence would be impossible: for these reasons, therefore, this government is a species of democracy. Another species is distinguished by the mode of electing their magistrates, in which every one is eligible, to whose birth there are no objections, provided he is supposed to have leisure to attend: for which reason in such a democracy the supreme power will be vested in the laws, as there will be nothing paid to those who go to the public assemblies. A third species is where every freeman has a right to a share in the government, which he will not accept for the cause already assigned; for which reason here also the supreme power will be in the law. The fourth species [1293a] of democracy, the last which was established in order of time, arose when cities were greatly enlarged to what they were at first, and when the public revenue became something considerable; for then the populace, on account of their numbers, were admitted to share in the management of public affairs, for then even the poorest people were at leisure to attend to them, as they received wages for so doing; nay, they were more so than others, as they were not hindered by having anything of their own to mind, as the rich had; for which reason these last very often did not frequent the public assemblies and the courts of justice: thus the supreme power was lodged in the poor, and not in the laws. These are the different sorts of democracies, and such are the causes which necessarily gave birth to them.
(Book IV, Chapter VI, from Project Gutenberg)

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Sat Dec 31st, 2011 at 06:51:22 AM EST
[ Parent ]
Wolfgang Streeck: "Das Dopingregime des Pump-Kapitalismus ist lebensgefährlich" | Politik | ZEIT ONLINE Wolfgang Streeck, "The doping regime of credit capitalism is life-threatening' | Politics | Zeit Online
Der demokratische Kapitalismus war nie stabil, sagt der Soziologie Wolfgang Streeck im Interview. Bürger und Märkte verfolgten zu unterschiedliche Interessen.Democratic capitalism was never stable, sociologist Wolfgang Streeck says in an interview. Citizens and markets pursue different interests.
ZEIT ONLINE: Eine Depression wie in den dreißiger Jahren, mit allen politischen Folgen - das hat uns die IWF-Chefin Christine Lagarde prophezeit. Liegt sie richtig? ZEIT ONLINE: Depression like in the thirties, with all the political consequences - that's what the IMF boss Christine Lagarde predicts. Is she right?
Wolfgang Streeck: Wir befinden uns in einer Phase permanenter Turbulenz, wie wir sie seit dem Ende des Zweiten Weltkriegs nie gekannt haben. Niemand weiß, was als Nächstes kommen wird, auch Frau Lagarde nicht. Wer jetzt Prognosen abgibt, verfolgt eine strategische Absicht. Frau Lagarde will vermutlich eine expansive Geldpolitik durchsetzen, die angeblich Wachstum wieder herstellen soll. Wolfgang Streeck : We are in a phase of permanent turbulence, as we haven't known since the end of the Second World War. No one knows what will come next, not even Ms Lagarde. Anyone who supplies forecasts now is pursuing a strategic intent. Ms Lagarde probably wants to enforce an expansionary monetary policy, which is supposed to produce growth again.
ZEIT ONLINE: Und die Dramatik der Formulierung, ist die angemessen? ZEIT ONLINE: And the hyperbole of the formulation, is that appropriate?
Streeck: Das Dopingregime des Pump-Kapitalismus ist zweifellos lebensgefährlich geworden. Ein demokratischer Abschied daraus wird nur möglich sein, wenn die Probleme, die der Pump-Kapitalismus zu lösen versucht hat, künftig auf andere Weise gelöst werden. Wie, das weiß niemand. Streeck : the doping regime of credit capitalism has undoubtedly become life-threatening. A democratic departure from it will be possible only if the problems that credit capitalism has been trying to solve, will be solved in other ways in the future. How? Nobody knows.
ZEIT ONLINE: Was sind das für Probleme? Was ist schief gegangen? ZEIT ONLINE: What are the for problems? What went wrong?
Streeck: ... Märkte bedeuten Zuteilung von Lebenschancen nach Marktpreisen. Gesellschaften sind aber weniger "flexibel" als die Märkte von ihnen erwarten, und sie haben, völlig legitimerweise, andere Vorstellungen von Verteilungsgerechtigkeit. Bedürfnisse nach sozialer Stabilität, Sicherheit, sozial korrigierter Verteilung, wie sie durch demokratische Institutionen artikuliert werden, geraten in Konflikt mit der Dynamik der Märkte und den Verteilungsansprüchen derer, die "marktgerecht" entlohnt werden wollen. In den Nachkriegsjahren, den "glorreichen Dreißig", wie die Franzosen sagen, war dieser Konflikt durch hohe Wachstumsraten und tiefgreifende Regulierung der Märkte, insbesondere der Kapitalmärkte, weitgehend stillgelegt. Es gab in allen westlichen Ländern einen expandierenden Sozialstaat, funktionsfähige Gewerkschaften, Tarifautonomie, eine politische Vollbeschäftigungsgarantie. Diese Phase prägt immer noch unsere Vorstellungen darüber, was demokratischer Kapitalismus ist. Aber solche Wachstumsraten waren eben eine Ausnahme. Es hat sie seither nie wieder gegeben. Streeck : ... Markets mean allocation of life chances for market prices. Societies are not as "flexible" as markets expect them to be and they have completely legitimately, different ideas of distributive justice. Needs for social stability, security, socio-corrected distribution, as they are articulated through democratic institutions, come into conflict with the dynamics of markets and distribution needs of those who want to be paid "market conditions". In the postwar years, the "glorious thirty" as the French say, this conflict was largely shut down by high growth rates and in-depth market regulation, especially of capital markets. There were in all Western countries an expanding welfare state, functioning trade unions, collective bargaining, a political guarantee of full employment. This phase still characterizes our notions of what is democratic capitalism. But such growth rates were just an exception. They never came back.
ZEIT ONLINE: Also betreiben wir seit den siebziger Jahren Krisenbewältigung? ZEIT ONLINE: So we have been doing crisis management since the seventies?
Streeck: So ist es. Es gab vier Phasen. Als das Wachstum in den Siebzigern nachließ, standen die Regierungen vor der Alternative: entweder man respektiert die seit dem Krieg etablierten Erwartungen kontinuierlicher Zuwächse bei Lebensstandard und sozialer Sicherheit, was bei sinkenden Wachstumsraten nur mit Inflation zu schaffen war. Oder man bestand auf Währungsstabilität im Interesse der Besitzer von Geldvermögen, mit der Folge steigender Arbeitslosigkeit. Das aber war für damalige Regierungen undenkbar. Erinnern Sie sich an Helmut Schmidt: "Lieber fünf Prozent Inflation, als fünf Prozent Arbeitslosigkeit". Alle westlichen Regierungen vor Thatcher und Reagan haben das geglaubt. Sonst sei die Demokratie in Gefahr. Streeck : That is correct. There were four phases. As the growth subsided in the seventies, the governments were faced with the alternative: either you respect the established expectations of continuous growth since the war in living standards and social security, which -with decreasing growth rates- was only possible to accomplish with inflation. Or you insist on monetary stability in the interest of the owners of financial assets, with the result of rising unemployment. But that was unthinkable for governments in those days. Recall Helmut Schmidt: "Better five percent inflation, than five percent unemployment." All Western governments before Thatcher and Reagan believed that. Otherwise, democracy would be in danger.
ZEIT ONLINE: Man sah die Gespenster von Weimar heraufziehen? ZEIT ONLINE: You could see the ghosts of Weimar?
Streeck: Weimar, oder die Große Depression in den Vereinigten Staaten, mit ihren weltweiten Folgewirkungen - all diese Horrorbilder aus der Zeit, als der Finanzkapitalismus international unregierbar geworden war. So hat man sich mit Inflation eine Zeit lang Ruhe erkauft, in den USA und Großbritannien der siebziger Jahre mit Inflationsraten von zwanzig Prozent und mehr. Das ließ sich aber nicht ewig fortsetzen. 1979 begann unter Führung der amerikanischen Zentralbank ein weltweiter Angriff auf die Inflation, der außerordentlich erfolgreich war; seitdem ist Inflation in den reichen Industrieländern kein Problem mehr. Zugleich allerdings erreichte die Arbeitslosigkeit ein Niveau, wie man es seit der Großen Depression nicht mehr gesehen hatte. Dies ging einher mit massiven Angriffen auf die Gewerkschaften. Das war der Anfang der neoliberalen Ära. Eine strukturelle Bodensatzarbeitslosigkeit wurde erstmals und wird bis heute politisch als unvermeidbar hingenommen; überraschend war, dass Regierungen damit wiedergewählt werden konnten. Allerdings verschoben sich die Forderungen nach sozialer Sicherung und Besserstellung - die nun nicht mehr innerhalb der Wirtschaft realisierbar waren - in die politische Arena. Dort kam es zu einem Druck auf die Regierungen, durch öffentliche Ausgaben zu kompensieren, was in der Lohnpolitik nicht mehr erreicht werden konnte. Streeck : Weimar, or the Great Depression in the United States and its global repercussions, all these horror stories from the time when international financial capitalism had become ungovernable. Thus, some peace and quiet was bought with inflation for some time in the USA and Great Britain in the seventies, with inflation rates of twenty percent or more. These things could not continue forever. In 1979, under the leadership of the Federal Reserve a worldwide attack on inflation was begun, which was extremely successful and since then inflation is no longer a problem in the rich industrialized countries. At the same time, however, unemployment reached a level as had not been seen since the Great Depression. This was accompanied by massive attacks on the unions. That was the beginning of the neoliberal era. A structural base of unemployment was first and still is politically accepted as inevitable; it was surprising that governments could be re-elected then. However, the demand for social protection and betterment which was no longer feasible in the economy shifted to the political arena. There was pressure on governments to compensate for defiencies of wage policy by public spending.
ZEIT ONLINE: War das der Beginn der Staatsverschuldung, die uns heute bis zum Hals steht? ZEIT ONLINE: Was that the beginning of the national debt, which now is up to our neck?
Streeck: In der Tat. Unter Reagan erreicht die Verschuldung der USA ihren ersten, spektakulären Höhepunkt. In Deutschland begann der Prozess schon früher, weil wir wegen der unabhängigen Bundesbank nur eine vergleichsweise niedrige Inflation hatten. Weil zugleich, ebenfalls wegen des Wachstumsverlusts, der Widerstand gegen Steuererhöhungen zunahm, konnten die demokratisch beschlossenen öffentlichen Ausgaben nur durch Staatsverschuldung finanziert werden. Mittelfristig hatte das zur Folge, dass der Zinsanteil an den Staatsausgaben stieg und der politische Bewegungsspielraum des Staates wird immer enger. Auch begannen inländische und vor allem ausländische Gläubiger, die Staatsanleihen hielten, sich um die Rückzahlung ihres Geldes zu sorgen. Auch diese "Lösung" war also nicht auf Dauer durchzuhalten. Streeck : Indeed. Under Reagan, the U.S. debt reached its first spectacular climax. In Germany, the process began earlier, because we had because of the independent Bundesbank, only a relatively low inflation. Because at the same time, also caused by the loss of growth, there was increased resistance to tax increases, the democratically adopted public expenditure could only be financed by debt. In the medium term, as a consequence the interest portion of government spending increased and the political room to maneuver of the state's freedom was increasingly limited. Also, domestic and especially foreign creditors, who held the government bonds, began to worry about the repayment of their money. Even this "solution" could not go on indefinitely.
ZEIT ONLINE: Für die neunziger Jahre sprechen Sie von "privatem Keynesianismus". Was meinen Sie damit? ZEIT ONLINE: Regarding the nineties, you speak of "private Keynesianism". What do you mean?
Streeck: Die Kürzung der Staatsausgaben wurde ausgeglichen durch beispiellose neue Möglichkeiten für Bürger und Unternehmen, sich zu verschulden. Faktisch wurden öffentliche durch private Schulden ersetzt. Nicht der Staat nahm Kredite auf, um Bildung zu ermöglichen und Wohnraum zu schaffen, sondern die Bürger wurden ermuntert und de facto gezwungen, dies auf eigenes Risiko selber zu tun. Auch diese Strategie der Konfliktbewältigung hatte eine Zeit lang nur Gewinner: die Reichen blieben von höheren Steuern verschont und wurden immer reicher, die Armen konnten Häuser kaufen, die sie sich eigentlich nicht leisten konnten und die ihnen als Ausgleich für die Kürzungen der Altersrente und als Sicherheit für Konsumentenkredite dienten, mit denen sie sich über ihre stagnierenden Reallöhne hinwegtrösten konnten. Bis zum Crash, 2008.... Streeck : The reduction in government spending was offset by unprecedented new opportunities for citizens and businesses to borrow. In fact public debt was replaced by private debt. Not the state took out loans in order to allow education and to create housing, but the citizens were encouraged and in fact compelled to do so at their own risk themselves. This strategy of conflict management produced for a time only winners: the rich were not affected by higher taxes and have been getting richer, the poor could buy houses they could not afford, and were offered to them as compensation for the reduction of retirement and as a collateral for consumer loans with which they could alleviate their stagnant real wages. Until the crash, 2008.
ZEIT ONLINE: Niemand hatte damit gerechnet! ZEIT ONLINE: Nobody expected that!
Streeck: Nach 2008 mussten die Finanzwirtschaft durch Bail-out-Programme und die Realwirtschaft durch Konjunkturprogramme gerettet werden. Das ging nur, indem sich die Staaten erneut und in bisher ungekanntem Ausmaß verschuldeten. All die mühselig erreichten Konsolidierungserfolge der 1990er und 2000er Jahre waren damit hinfällig. Als Folge begannen nun dieselben Banken und Investment-Fonds, die gerade von den Staaten auf deren Kosten vor sich selbst gerettet worden waren, sich von neuem über die Rückzahlung ihrer Kredite Gedanken zu machen. Die Frage für sie ist, ob die Staaten ihre finanziellen Mittel in Zukunft dafür verwenden werden, demokratisch bewehrte Forderungen ihrer Bürger nach sozialem Ausgleich und sozialer Sicherheit zu bedienen oder zivilrechtlich begründete Ansprüche ihrer Kreditgeber auf Verzinsung und Rückzahlung ihrer Schulden. Darum geht es zur Zeit: um den alten Konflikt zwischen Marktgerechtigkeit und sozialer Gerechtigkeit in historisch neuer und politisch zugespitzter Form. Streeck : After 2008, the financial economy had to be rescued through bailout programs and the real economy was saved through stimulus programs. That was possible only by countries getting indebted again on an unprecedented scale. All the tedious consolidation successes of the 1990s and 2000s were no longer there. As a result now started the same banks and investment funds, which had just been rescued from themselves by states started thinking once again about the repayment of their loans. The question for them is whether the states will use their financial resources in the future to cater to their citizens' democratically reinforced demands for social justice and social security, or to service claims by lenders on interest and repayment of their debts. That's what this crisis is about: the old conflict between market justice and social justice in historically new and politically pointed form.
... ZEIT ONLINE: Die Bundesregierung erhofft sich von den technokratischen Übergangsregierungen in Südeuropa nicht nur die Sanierung der Haushalte, sondern auch eine Wiedergewinnung politischen Spielraums. Sie scheinen da kein großes Vertrauen zu haben.... ZEIT ONLINE: The government hopes that the technocratic transitional governments in southern Europe not only clean up the budgets, but also recover room to maneuver. You don't seem to have great confidence.
Streeck: Man weiß nicht, ob man weinen oder lachen soll. Streeck: We do not know whether to laugh or cry.
Die europäischen Regierungen machen einstimmig einen Mario Draghi zum Chef der EZB, der vor nicht allzu langer Zeit noch Europa-Chef ausgerechnet von Goldman Sachs war - also derselben Firma, die unter anderem die griechische Regierung bei der kreativen Bearbeitung ihrer volkswirtschaftlichen Gesamtrechnung beraten und ihr damit zur Aufnahme in die Europäische Währungsunion verholfen hat. Chef der griechischen Zentralbank war damals Loukas Papadimos, den die Europäische Union jetzt als griechischen Premierminister eingesetzt und mit der Sicherstellung der Rückzahlung der anschließend von Griechenland zu niedrigen Zinsen aufgenommenen Schulden beauftragt hat. Mario Monti, Italiens neuer Regierungschef, hat als europäischer Wettbewerbskommissar das deutsche öffentliche Bankenwesen zerschlagen (das dann versucht hat, sich durch Kauf amerikanischer Schrottpapiere zu sanieren). Nach seiner Zeit bei der Kommission hat Monti als Berater unter anderem von, Sie ahnen es schon, Goldman Sachs sein Geld verdient. Das sogenannte "europäische Projekt" als Einlagensicherungsfonds bzw. Inkasso-Agentur - die Einsetzung der Böcke als Gärtner.European governments unanimously make a Mario Draghi head of the ECB, who was not too long ago European head of Goldman Sachs of all places, ie the same company that advised, among other things, the Greek government in the creative structuring of their national accounts and helped them to join the European Monetary Union. Head of the Greek central bank was then Loukas Papadimos, which the European Union now used as Greek Prime Minister charged him with securing the repayment of the then low interest debt raised by Greece. Mario Monti, Italy's new prime minister, broke -as European Commissioner for Competition- the German public banking sector (which then has tried to rehabilitate himself by buying U.S. junk bonds). After his time at the Commission Monti earned his money as an advisor to, among other things, you guessed it, Goldman Sachs. The so-called "European project" as a deposit insurance fund or debt collection agency - the establishment of the goats as gardeners.


Schengen is toast!
by epochepoque on Wed Dec 28th, 2011 at 05:53:33 PM EST
That's what this crisis is about: the old conflict between market justice and social justice in historically new and politically pointed form.
the establishment of the goats as gardeners
Now it's just a matter of deciding "which side are you on, boys? Which side are you on?"
by Andhakari on Thu Dec 29th, 2011 at 04:43:11 AM EST
[ Parent ]
Something I left out:

ZEIT ONLINE: Was uns an Ihrer Konfliktbeschreibung nicht einleuchtet, ist die saubere Trennung: hier der Markt, da die Bürger. Wir sind alle auch Marktteilnehmer. ZEIT ONLINE: Something in your description of the conflict is not evident to us: the clean separation between the market and the citizens. We are all market participants too.
Streeck: Die Unterscheidung ist eine analytische, sie schließt nicht aus, dass die wirkliche Welt voller Paradoxien ist. Natürlich gibt es Menschen, die von der Dynamik der entfesselten Marktkräfte profitieren. Jemand, der bei Goldman Sachs arbeitet, dürfte nach drei Jahren für den Rest seines Lebens saniert sein. Aber zugleich gibt es eben die wachsende Zahl derjenigen, die aus dem Wirtschafts- und Gesellschaftssystem der reichen Länder ausgekoppelt sind. Streeck : The distinction is analytical, it does not mean that the real world is full of paradoxes. Of course there are people who benefit from the dynamism of the unfettered market forces. Someone who works at Goldman Sachs is likely to be set for life after three years. But at the same time there are just the growing number of people who are decoupled from the economic and social system of the rich countries.
ZEIT ONLINE: Auch die hören Musik aus dem i-Pod. ZEIT ONLINE: They also hear music from the iPod.
Streeck: Aber trotzdem sind sie draußen. Überall steigt die soziale Ungleichheit dramatisch an, selbst in Schweden. Dabei kommt es in der Tat zu den erstaunlichsten Gemengelagen. Die Mittelschicht hat ihr Geld oft in Staatsanleihen, weil die ja sicher sein sollen. Als Bürger wollen wir, dass der Staat für Bildung, Gesundheit, gute Straßen und sozialen Ausgleich sorgt. Als Sparer sind wir an einer guten Rendite auf unsere Einlagen interessiert. Damit wollen wir, dass die "Märkte" die Staaten dazu zwingen, eben jene Austeritätspolitik zu betreiben, unter der wir als Bürger leiden. Da geht dann der Konflikt zwischen Marktgerechtigkeit und sozialer Gerechtigkeit mitten durch den Einzelnen. Das heißt aber nicht, dass das kein sehr realer Konflikt wäre oder dass er sich nicht heute dramatisch zugespitzt hätte. Streeck : But they are still out. Everywhere social inequality is increasing dramatically, even in Sweden. It is in fact one of the most amazing mixed situations. The middle class often has their money in government bonds, because they are supposed to be safe. As citizens, we want the state to provide for education, health, good roads, and social equality. As savers, we are interested in a good return on our deposits. We want the "markets" to force states to push the same austerity policies under which we suffer as citizens. The conflict between market justice and social justice goes right through the middle of the individual. That does not mean that this is not a very real conflict or that it hasn't worsened dramatically today.


Schengen is toast!
by epochepoque on Thu Dec 29th, 2011 at 06:48:47 AM EST
[ Parent ]
 "The question for them is whether the states will use their financial resources in the future to cater to their citizens' democratically reinforced demands for social justice and social security, or to service claims by lenders on interest and repayment of their debts."

This is what's wrong, systemically, with capitalism: the concept of interest based on market demand, with all the evocation of human foolishness about now and the future.

Align culture with our nature. Ot else!

by ormondotvos (ormond.otvosnospamgmialcon) on Wed Dec 28th, 2011 at 07:52:07 PM EST
Not learned helplessness, just greed and short-term thinking.  Biggest ROI as fast as possible.  If you're planning to be elsewhere in three years why do you care?  

As to the preference for investment over operating costs, in the private sector that's two different groups of people.  And the guys who care about the second are usually further down the totem pole than the first group.  For them, investment is king; and the best investment is one that doesn't actually build anything or require any operating costs at all.

by tjbuff (timhess@adelphia.net) on Thu Dec 29th, 2011 at 10:46:20 AM EST
This is one of the most important ideas I have read recently. Many thanks, Metatone!

"Eurozone leaders have turned a €50bn Greek solvency problem into a €1,000bn existential crisis for the European Union." David Miliband
by Kostis Papadimitriou on Thu Dec 29th, 2011 at 02:05:09 PM EST
I'm glad it was of use!
by Metatone (metatone [a|t] gmail (dot) com) on Thu Dec 29th, 2011 at 02:16:06 PM EST
[ Parent ]


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