Finally, a reputable magazine is finally reporting on a problem that has festered for too long among the financial classes in our country, viz., the infection of ideology.
The Economist points out that much of the economic mess we find ourselves in results from slavish adherence by our financial and economic priesthood to the conceptual ideals of economic theory.
I regularly instruct my students on the conceptual assumptions of economics: supply & demand curves, the invisible hand, rational actors, self-interest. I go the extra step to remind them that humans aren't entirely rational. Markets don't always correct properly without some assistance.
The incentives of the financial world boil down to money. When the goal is to maximize the cash, an ideology justifying greed easily takes root. Like all good memes, the language of economics eliminates or hides any threats to its existence.
Those reifying economic theory to validate and justify their self-interest (greed) fell victim to the irrationalities that their faith ignored. They took us along with them.
Religions and ideologies provide ready-made concepts to explain events; it's a type of reductionism to avoid internal inconsistency--Economics As Religion is no different.
We--and by that I mean those pushing the economic levers of power--must disengage from the ecstasy of their ill-conceived, economics-driven faith.
It's time for a reality check. As a nation, we can't afford any more flights of religious or ideological fancy.
Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts
Thursday, July 16, 2009
Saturday, June 20, 2009
Capitalistic medicine defies the laws of economics and risks patient lives
Our medical system has many problems. Greed is the worst feature of the system.
When the primary motivation for doctors or future doctors is money, patient health and well-being take a backseat.
When the demand for primary care physicians isn't being met, then the invisible hand of economics has broken down.
Capitalism is great, but to ignore its problems won't improve our system. It's time for a change.
When the primary motivation for doctors or future doctors is money, patient health and well-being take a backseat.
When the demand for primary care physicians isn't being met, then the invisible hand of economics has broken down.
Capitalism is great, but to ignore its problems won't improve our system. It's time for a change.
Sunday, March 22, 2009
Legal profession fills in the gap where government oversight is scant
When politicians complain about lawyers ruining America or some right-wing idiot blathers about trial lawyers hurting the medical profession or so on, stories like this provide the real value lawyers bring to society--quasi-regulators.
I'll be the first to complain when some lawyer goes too far. However, the legal profession is not defined by some outlier of a lawsuit, regardless of how newsworthy it may be. Lord knows that the media reports the stupid lawsuits, but ignores the millions of stupid cases most lawyers refuse to file.
This present case highlights the legal profession's role in protecting the public.
Who else protects the public from unscrupulous sorts when government neglects its obligation to protect consumers taken in by unfair trade practices?
Lawyers stand as society's safeguard against companies and individuals that profit by externalizing costs to the public's detriment.
You'll note that those complaining about trial lawyers do so as a pretext for complaining about the true costs of doing good business. Good business factors in all the costs of doing business, not just the quickest way to make a buck.
If a business can't survive without externalizing their costs, then, economically, it loses any claim as a viable concern and more resembles organized crime--the height of extreme cost externalization.
Profitability based on cutting corners is artificial. The rest of society must absorb those costs to ensure the continued existence of extreme eternalizers.
The complexity of our economy militates against a purely caveat emptor business system. Demanding that every consumer evaluate fully every commercial decision to maintain profitability defies reason and can't possibly be an effective approach.
Arguing otherwise is tantamount to arguing for a dog-eat-dog world where only the strong survive. Fortunately, social darwinism as a social model has long been discredited as an effective policy. Besides few people want what amounts to plutocracy anyway.
Lawsuits re-balance the equities created when producers exploit informational inequities in society for profit by taxing the costs to those best able to prevent them and those best able to bear them---the producers.
China will learn the meaning of good business after our legal profession gets done with them.
Good thing too.
I'll be the first to complain when some lawyer goes too far. However, the legal profession is not defined by some outlier of a lawsuit, regardless of how newsworthy it may be. Lord knows that the media reports the stupid lawsuits, but ignores the millions of stupid cases most lawyers refuse to file.
This present case highlights the legal profession's role in protecting the public.
Who else protects the public from unscrupulous sorts when government neglects its obligation to protect consumers taken in by unfair trade practices?
Lawyers stand as society's safeguard against companies and individuals that profit by externalizing costs to the public's detriment.
You'll note that those complaining about trial lawyers do so as a pretext for complaining about the true costs of doing good business. Good business factors in all the costs of doing business, not just the quickest way to make a buck.
If a business can't survive without externalizing their costs, then, economically, it loses any claim as a viable concern and more resembles organized crime--the height of extreme cost externalization.
Profitability based on cutting corners is artificial. The rest of society must absorb those costs to ensure the continued existence of extreme eternalizers.
The complexity of our economy militates against a purely caveat emptor business system. Demanding that every consumer evaluate fully every commercial decision to maintain profitability defies reason and can't possibly be an effective approach.
Arguing otherwise is tantamount to arguing for a dog-eat-dog world where only the strong survive. Fortunately, social darwinism as a social model has long been discredited as an effective policy. Besides few people want what amounts to plutocracy anyway.
Lawsuits re-balance the equities created when producers exploit informational inequities in society for profit by taxing the costs to those best able to prevent them and those best able to bear them---the producers.
China will learn the meaning of good business after our legal profession gets done with them.
Good thing too.
Tuesday, January 27, 2009
Congressional Republicans are fighting against job creation! Are you kidding me?!
Everyone has first hand experience with the economic downturn. Either by losing a job or knowing someone who has.
I bring this up to draw attention to the Congressional Republicans. These bozos are doing everything to stop a stimulus package (that contains no earmarks mind you) that directly affects an industry employing over 5 million people. This is 5 million jobs!
This particular industry is unduly sensitive to downturns in the economy because people stop buying this industry's products when money is tight.
The stimulus package has allocated $50 million for this industry. The industry has an efficient and well-designed system for moving that money into the hands of its primary producers.
The problem: The Republicans are calling it pork and want to stop it. In it's place they want more tax cuts--that haven't worked thus far--but that disproportionately benefit those with jobs and money, viz., the wealthy.
What industry am I speaking of? The Arts.
$50 million would directly impact an industry in a transparent way (the NEA is open and public with its grant awards, unlike private corporations...) creating jobs that would that redound to the benefit of society, while creating even more jobs.
Fund the Arts and create jobs--it's simple.
I bring this up to draw attention to the Congressional Republicans. These bozos are doing everything to stop a stimulus package (that contains no earmarks mind you) that directly affects an industry employing over 5 million people. This is 5 million jobs!
This particular industry is unduly sensitive to downturns in the economy because people stop buying this industry's products when money is tight.
The stimulus package has allocated $50 million for this industry. The industry has an efficient and well-designed system for moving that money into the hands of its primary producers.
The problem: The Republicans are calling it pork and want to stop it. In it's place they want more tax cuts--that haven't worked thus far--but that disproportionately benefit those with jobs and money, viz., the wealthy.
What industry am I speaking of? The Arts.
$50 million would directly impact an industry in a transparent way (the NEA is open and public with its grant awards, unlike private corporations...) creating jobs that would that redound to the benefit of society, while creating even more jobs.
Fund the Arts and create jobs--it's simple.
Sunday, December 14, 2008
Keynes to the rescue...again. Out of the wilderness and into our hearts.
I've said it for a time now that we get out of our economic mess through government spending on infrastructure.
The New York Times offers a story about how the last time we faced such a big crisis and what economist got us out of it.
I love it that the laissez-faire types were all down on Keynes before the market meltdown, but now it's Keynsian policies we need to cure their profligacy.
Keynes had it right when he said government must step in and spend in order to overcome banks' and the public's fears about spending liquid assets (cash).
Now, it seems the old is once again new....the worm turns.
The New York Times offers a story about how the last time we faced such a big crisis and what economist got us out of it.
I love it that the laissez-faire types were all down on Keynes before the market meltdown, but now it's Keynsian policies we need to cure their profligacy.
Keynes had it right when he said government must step in and spend in order to overcome banks' and the public's fears about spending liquid assets (cash).
Now, it seems the old is once again new....the worm turns.
Wednesday, December 3, 2008
Bush: Neo-Hooverian
This op-ed sums up pretty much what I think about Bush and the economy.
Bush has been true to his trickle-down philosophy in the bailout. He chose to provide financial help to the marge corporations, the well-connected, and the well-heeled (although not so well-heeled as well-connected currently).
The problem with trickle-down economics is that it doesn't work. The current economic fiasco should finally put the nail in the social darwinism of corporate welfare.
The best approach, in my opinion, for bailing out the economy should consist of pumping money toward the lower end of the socio-economic level.
Why would this work better than the current screw-up?
The poor are less likely to save and more likely to spend any resources directed their way. Considering that one-third of our economy depends on consumption, we should encourage that consumption by giving resources to the those most likely to consume.
Who would that be? The poor.
The trickle-down approach has failed and it cannot nor should it be resuscitated.
Of course the rich will have to suck it up and actually participate in this economy that has provided them with such largesse.
Bush isn't a neo-con, but a neo-Hooverian.
Let's give it rest.
Bush has been true to his trickle-down philosophy in the bailout. He chose to provide financial help to the marge corporations, the well-connected, and the well-heeled (although not so well-heeled as well-connected currently).
The problem with trickle-down economics is that it doesn't work. The current economic fiasco should finally put the nail in the social darwinism of corporate welfare.
The best approach, in my opinion, for bailing out the economy should consist of pumping money toward the lower end of the socio-economic level.
Why would this work better than the current screw-up?
The poor are less likely to save and more likely to spend any resources directed their way. Considering that one-third of our economy depends on consumption, we should encourage that consumption by giving resources to the those most likely to consume.
Who would that be? The poor.
The trickle-down approach has failed and it cannot nor should it be resuscitated.
Of course the rich will have to suck it up and actually participate in this economy that has provided them with such largesse.
Bush isn't a neo-con, but a neo-Hooverian.
Let's give it rest.
Friday, November 21, 2008
Virtual economies serve as a lab for real world economies
This story is rather cool. At least the geek in me thinks it is.
Virtual economies are providing some insight into how real world economies work.
It seems that the libertarian utopia of zero regulation in Second Life has led to downright fraud and economic ruin for virtual banks.
That's the trouble with self-regulation. It's another word for libertarian economic policies.
We're seeing the results of such extreme de-regulation in our own economy.
Virtual worlds provide insight into the real world, but without the costs to real people.
Cool stuff.
Virtual economies are providing some insight into how real world economies work.
It seems that the libertarian utopia of zero regulation in Second Life has led to downright fraud and economic ruin for virtual banks.
That's the trouble with self-regulation. It's another word for libertarian economic policies.
We're seeing the results of such extreme de-regulation in our own economy.
Virtual worlds provide insight into the real world, but without the costs to real people.
Cool stuff.
Wednesday, September 10, 2008
Econ paper highlights history of U.S. prosperity and how we lost it for the middle class
Here's a link to a PDF of an Econ paper published back in June.
Link
This paper details what allowed the U.S. to prosper from the 1940' through the 1970s. The paper points out the changes that have occurred to undermine American economic stability for the Middle Class.
This is worth a read if you want to educate yourself on why American is swirling the drain from the Middle Class' perspective.
In the end, this election will be about economics. If the U.S. voter is distracted by non-issues and ignores the underlying problems of economics, America will suffer.
Link
This paper details what allowed the U.S. to prosper from the 1940' through the 1970s. The paper points out the changes that have occurred to undermine American economic stability for the Middle Class.
This is worth a read if you want to educate yourself on why American is swirling the drain from the Middle Class' perspective.
In the end, this election will be about economics. If the U.S. voter is distracted by non-issues and ignores the underlying problems of economics, America will suffer.
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