The profound insight they believe they have is that the level of debt doesn't matter, and that only the distribution of debt can be important. Ben Bernanke rejected Irving Fisher's "Debt Deflation" explanation for the Great Depression on this basis; after noting that Fisher did influence Roosevelt's policies, Bernanke added that:

`Fisher's idea was less influential in academic circles, though, because of the counterargument that debt-deflation represented no more than a redistribution from one group (debtors) to another (creditors). Absent implausibly large differences in marginal spending propensities among the groups, it was suggested, pure redistributions should have no significant macro-economic effects...' (Bernanke 2000, p. 24)

One crisis later, leading neoclassicals like Paul Krugman continue to argue that only the distribution of debt can matter:

People think of debt's role in the economy as if it were the same as what debt means for an individual: there's a lot of money you have to pay to someone else. But that's all wrong; the debt we create is basically money we owe to ourselves, and the burden it imposes does not involve a real transfer of resources. That's not to say that high debt can't cause problems -- it certainly can. But these are problems of distribution and incentives, not the burden of debt as is commonly understood. (Krugman 2011)

So can we ignore the level of private debt? No--because this "profound insight" is in fact a blind-spot about the role of banks and debt in a capitalist economy. Neoclassical economists treat banks as irrelevant to macroeconomics--which is why banks are not explicitly included in their models--and regard a loan as merely a transfer from a saver (or "patient agent") to a borrower (or "impatient agent"), as in Krugman's "New Keynesian" model of our current crisis:

In what follows, we begin by setting out a flexible-price endowment model in which "impatient" agents borrow from "patient" agents, but are subject to a debt limit. (Krugman and Eggertsson 2010, p. 3)

With that model of lending, a change in the level of debt has no inherent macroeconomic impact: the lender's spending power goes down, the borrower's goes up, and the two changes roughly cancel each other out.

... Making some agents debt-constrained is a surprisingly powerful assumption: Fisherian debt deflation, the possibility of a liquidity trap, the paradox of thrift and toil, a Keynesian-type multiplier, and a rationale for expansionary fiscal policy all emerge naturally from the model ...

...

Given both the prominence of debt in popular discussion of our current economic difficulties and the long tradition of invoking debt as a key factor in major economic contractions, one might have expected debt to be at the heart of most mainstream macroeconomic models- especially the analysis of monetary and fiscal policy. Perhaps somewhat surprisingly, however, it is quite common to abstract altogether from this feature of the economy.1 Even economists trying to analyze the problems of monetary and fiscal policy at the zero lower bound - and yes, that includes the authors (see e.g. Krugman 1998, Eggertsson and Woodford 2003) -- have often adopted representative-agent models in which everyone is alike, and in which the shock that pushes the economy into a situation in which even a zero interest rate is not low enough takes the form of a shift in everyone's preferences. Now, this assumed preference shift can be viewed as a proxy for a more realistic but harder-to-model shock involving debt and forced  deleveraging. But as we will see, a model that is explicit about the distinction between debtors and creditors is much more useful than a representative-agent model when it comes to making sense of current policy debates.

...

It follows that the level of debt matters only if the distribution of that debt matters, if highly indebted players face different constraints from players with low debt. And this means that all debt is not created equal -- which is why borrowing by some actors now can help cure problems created by excess borrowing by other actors in the past. In particular, deficit-financed government spending can, at least in principle, allow the economy to avoid unemployment and deflation while highly indebted private-sector agents repair their balance sheets.

Who said the home front isn't protected? People who have spoken in recent years with Defense Minister Ehud Barak know he's well aware of the suggestion that he take care of two things before a war with Iran: The return of Gilad Shalit and the sale of his home in the luxury Akirov Towers.

He had to take care of Shalit so he could look benevolent and patient before hundreds or thousands of lives are dumped. And the apartment? There's no better preparation for war than to sell. Because if "only" 500 people are killed, you can be sure thousands of apartments will be damaged. Barak's situation, in which he has sold his real apartment but his next one is still "on paper," is ideal. Apartments in the planning stage don't get destroyed. You can't compare Barak to former Chief of Staff Dan Halutz, who sold only a few of his stocks before he ordered the Second Lebanon War to get underway.

So, it's now waiting to be collected, hopefully on the promised one week turn round cos I'm back in Bulgaria Sunday week.

Anyway, fortunately I had a pc lying around and conencted it up. However, it was last updated in 2008 so I had over 100 updates to cycle through, fortunately it took 110 of them in one hit but I was going for bout 2 hours. Then anti virus (avast) and spybot for good measure.

Now rebuilding my bookmarks.

keep to the Fen Causeway

There is growing talk about Mitt Romney's "dog problem." Before the issue was specified in the poll, only 20% of voters said they had a favorable opinion of Romney's treatment of dogs; 29% said unfavorable. That compares to the president's 44-14 spread on the issue. Even Republicans only think their nomination frontrunner is kind to man's best friend by a 26-14 margin, while Democrats give the president's puppy friendliness a 66-7 nod. 37% say Obama would be a better president for dogs, while 21% choose Romney. 16% of Republicans cross over for Obama on this issue, versus only 11% of Democrats for Romney. Independents go 38-14 for the president.

I have no further comment

You can't be me, I'm taken

Larry Summers is the wrong person to lead the World Bank.

Summers has continuously advocated for deregulation and other policies that favor Wall Street and corporate interests. He should not be inflicted on the developing countries that the World Bank is supposed to serve.

Sign our petition urging President Obama to nominate someone better suited than Larry Summers to be World Bank president.

Global solar PV market up 40% in 2011

PARIS - Worldwide solar photovoltaic (PV) market installations grew to 27.4 gigawatts (GW) in 2011, up 40 percent year over year. The PV industry generated $93 billion in revenues in 2011, up 12 percent year over year, according to market watcher Solarbuzz LLC.

The new Solarbuzz annual PV market report indicated that worldwide solar cell production amounted to 29.5 GW in 2011, compared to 23.0 GW in 2010. Thin-film production represented 11 percent of total production.

ANOTHER GOP primary !!!!!!!

(yea!)

This week's pointlessly complicated bullshit primary is in Illinois where polling has:

American Research Group:

Romney 44%
Santorum 30%
Gingrich 13%
Paul 8%

Public Policy Polling (PPP):

Romney 45%  
Santorum 30%
Gingrich 12%
Paul 10%

The Illinois GOP runs more Centerist than most and Mittens is picking-up support from rural voters, thus the two digit lead.  Frothy over-preforming his polling has been a constant this primary season so expect him to do better ... 14 or 15 percent better?  Probably not.  

However it's not about the Beauty Contest but about delegates.  Man-on-Dog will get delegates according to ...

Teh Rules:

54 (3 from each of the 18 congressional districts) of Illinois' 69 delegates to the Republican National Convention will be directly elected in the Illinois Presidential Primary.

This is a so-called "Loophole" primary (a Delegate Selection Primary combined with an Advisory "beauty contest" presidential preference vote). The popular vote in the Illinois Republican Primary will have nothing whatsoever to do with the presidential preference of the 54 separately elected National Convention delegates.

    Each candidate for delegate ... must file a Statement of Presidential Preference supporting a specific presidential candidate, or a statement that he/she intends to run uncommitted [SBE No. P-1E]. Note: There is no law or rule officially binding the delegates to the candidate.

Each of the State's 18 congressional districts is assigned 3 to 4 National Convention delegates- the number of delegates assigned to each district being based on the relative strength of that district's vote for the Republican presidential nominee in the previous Presidential election: a total of 54 district delegates to be directly elected by the voters and individually listed on the ballot with their presidential preferences indicated.

I expect God's Own Candidate will do well outside Chicago and despite being down in polling could end-up with more delegates.

Ever since I learnt about confirmation bias I've started seeing it everywhere

Today, the Daily Mail has an excellent breakdown of what a young person will see when she receives her first tax breakdown next year. If the young person does as the Daily Mail hopes she will, she'll sit down and work through what she's happy to pay for and what she's not.

An unholy spat has broken out over a nondescript stretch of road in Florida as atheists and Christians stake their claim over the asphalt.

Polk County's Highway 98 was first blessed a year ago by a local church group wanting to prevent sinners and wrongdoers from entering the community.

Annoyed by the appropriation of the public highway by those of a religious bent, humanists took to the street last weekend to symbolically wash away the anointment oil.

Now, not to be outdone, the group behind the initial ceremony have indicated they will re-bless the road - but they are not saying when.

Oh, wait.

No, it's not the State's fault, it's the fault of the people dismantling the State (Poshboy and Cleggsy Bear).

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

I think that those who oppose the neo-liberal drive towards the "small state" need to re-imagine the the full enormity of what is going on.  Cameron and co - a group which includes Nick Clegg and Danny Alexander - and their two parties are engaged in the destruction of the historic postwar compromise between the public and private sectors with the wholesale transfer of public functions to private enterprise.  Their project amounts to no less than a modern enclosure movement, in which it is not common land but what is still left in the public sphere as a whole that is being wrested from the people.

This enclosure movement is most evident in the NHS where the purpose of the Health and Social Care bill is to give private companies the power to take over services, managerial processes and infrastructure in every area of the Service.  More NHS services will be put out to tender by law every year.  Look also at Gove's "reforms" of Britain's state schools; the outsourcing of police functions; the opening up of planning on behalf of developers;  the severe restriction of state welfare benefits; the abandonment by the state of families renting from private landlords; the  removal of environmental controls on behalf of industry; plans to hand over  roads to private capital; the potential sell-off of the Royal Mail, even our forests were in danger (and may very well still be so).

At the same time, the emphasis on "choice", always a Trojan horse under Labour, will privilege the middle and professional classes at the expense of working class families.  Gove's policies proclaim a universal intent; but even he admits that it is actually the middle classes who will benefit. And do not expect them to share their privilege.  Forget any notion that the "sharp elbows" of the middle classes will be employed to make room for less privileged families; they bond, network and move within their class, there is scarcely any cross-class "bridging". Instead, look to proposals in the budget that will reflect, and be influenced by, the interests of middle and professional classes alongside those of the private sector.

But, Nate Silver:

Although Mitt Romney has pulled well ahead in polls over the course of the last week, the notion that Illinois was up for grabs has some support in the exit poll conducted today.

According to the exit poll, 32 percent of Illinois votes decided whom to vote for either just today or in the last few days.

Anecdotal evidence from the Chicago 'burbs is a light turnout which is Not Good for the RomneyBot since he needs to do well there to balance the nutters downstate.

Still, the safe prediction is Romney will win Illinois.

Ever since I learnt about confirmation bias I've started seeing it everywhere

Gizmodo