Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Great read... but I am sorry but I think you are quite wrong.

first, boom and boost are not necessary int he general sense (there is a huge discussion about cycles but that's antoehr topic... if you are Marxist)... and precisely the subpriem morgage is not necessary.. just look at the sapnish bank system and you see a clear example of why not.

So, some types of ups and downs of capitalism are indeed not "part of the equatio".

And regardind the secon point about making a metaphor between monetary policy and thermodyanmics to defend that there are ups and downs in general. Sorry, it is not right.

Thermodynamics, the first law is a complete uber tested theory (I know I gave classes) regarding a created entity whcih is energy whcih is conserved and that should eb defined in each system. the key point of thermodyanmics is to nbe able to identify this energy (I woudl rec Feynamn as always and the examples of the cubes in a children garden...what can I say,w e all talk about Feynman)

The reason why monetary policy can not be related with anything close to thermodynamics not even in the metaphoric sense is that the "variables" ( a key concept in tehrmodynamics) are not properly define in monetary policy.

Migeru has ptroduced some interest diaries about how you could stablish a real relation between tehrmodynamics in the metaphoric sense of "state varaibles" and "non-state varaibles". I would urge you to read them.

Summing up.. purely moentary arguemtns are compeltely wrong ing eneral, they do not reflect the presten economy and the variables are not even properly define.

Debt and growth and real economic growth can not be isolated from the different types of monetary base, and the bubble-debt phenomena. The lack of dundamental flux laws (or its equivalents) is a key problem of present economics plocies..sicne it can not allow you to stablish anything as a variable (you only eally understand a variable when you understand the flux close to equilibirum).

The fluxes of debt, money (the different types of) and the different scales of production and units (from cities, to states to group of industries) are not properly known 8though I know a bunch of people are working on it with too simple models)... therefore drivers and variables remain in a vaccuum which is esoteric.... until someone can define the itnernal variable proeprly I am afraid you are wrong.

in any case.. great read.

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

by kcurie on Tue Mar 11th, 2008 at 03:46:32 PM EST

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