Thursday, December 31, 2020

2021 Forecast...

...from 200 years ago:

"The increase of trade and commerce opened a boundless extent to luxury:—the splendour of luxurious enjoyment in a few excited a worthless, and debasing, and selfish emulation in all:—The attainment of wealth became the ultimate purpose of life:—the selfishness of nature was pampered up by trickery and art:—pride and ambition were made subservient to this vicious purpose:—their appetite was corrupted in their infancy, that it might leave its natural and wholesome nutriment, to feed on the garbage of Change Alley*:—instead of the quiet, the enjoyment, the happiness, and the moral energy of the people, they read in their horn-book of nothing but the wealth, the commerce, the manufactures, the revenue, and the pecuniary resources of the country; the extent of its navy and the muster-roll of its hireling army:—in honour of this beastly Belial** they made a sacrifice of the high energies of their nature:—they hailed his progress with hosannahs, though on his right hand sat Despotism, and on his left Misery:– they made a welcome sacrifice to him of their virtues and their liberties:—to satisfy his cravings they forewent their natural desires:—honour and truth were offered up on his altars:—and the consummation of their hopes was characterised by misery and ignorance; the dissolution of all social virtue and common sympathy among individuals; and by a disunited, feeble, despotic, and despised government!"

* "Change Alley": nickname for the location of the London Stock ExCHANGE (equivalent to "Wall Street")

** Belial: personification of wickedness and ungodliness alluded to in the Bible.

Tuesday, December 29, 2020

How is it?

Why then is it that no existing society, nor society that ever had existence, has arrived at this point of time, considering that in all times, and in all societies, excepting only the very barbarous, a few years would naturally have led to it?
How is it too, it might be added, that notwithstanding the unbounded extent of our capital, the progressive improvement and wonderful perfection of our machinery, our canals, roads, and of all other things that can either facilitate labour, or increase its produce; our labourer, instead of having his labours abridged, toils infinitely more, more hours, more laboriously, than the first Celtic savage that crossed over from the Cimmerian Chersonesus, and took possession of the desert island?

Monday, December 28, 2020

Wayback to the Socially Available Future

In 1995 I launched the TimeWork Web, which was a "research site" for investigating the history, theory, desirability, practicality, and feasibility of reducing the hours of work. The fruits of that endeavor included my history and critique of the "lump of labor" fallacy claim, rediscovery of Sydney Chapman's once canonical "Hours of Labour" analysis, and the rediscovery and transcription of Charles Wentworth Dilke's The Source and Remedy of the National Difficulties deduced from principles of political economy. 

A couple of days ago I sent off my manuscript of an article about the 200-year old pamphlet, first read on microfilm in the basement of the UBC library nearly 22 years ago. The motto of this Sandwichman retrospective comes from Walter Benjamin: 

It is not the object of the story to convey a happening per se, which is the purpose of information, rather, it embeds it in the life of the storyteller in order to pass it on as experience to those listening. 

Here is the introduction and overview of the research project launched in 1995:

Sunday, December 27, 2020

Who Has Been Warring Against Christmas?

 Where I am the Third Day of Christmas is just finishing with the news that Grinch Trump has ended his own brief War on Christmas and is signing the Covid-19 relief bill, thereby reinstating unemployment benefits for 14 million people although they'll miss a week of payments, as well as preventing millions more from being evicted from their rental housing units, along with the Omnibus spending bill so the government will not shut down after tomorrow.  There has been less noise this year about the War on Christmas by the usual gang of right wing media types who like to whine about merchants and others saying "Happy Holidays!" rather than "Merry Christmas!" during the runup to Christmas, probably because so many of them have been caught up in whining about Biden supposedly stealing the election from Trump.  But this somehow draws my attention to another group entirely who have been at warring on Christmas for a long time.

So according to most of the major Christian denominations such as the Roman Catholic Church, and the Episcopalians, and Lutherans, and others of that ilk, the official proper Christmas season actually is the Twelve Days of Christmas, the first of which was Christmas Day itself, with the twelfth day of Christmas being Jan. 6, the Epiphany, the day supposed the Magi (Wise Men) visited the Baby Jesus. But for many they are not even willing to wait until New Year's day, the official seventh day, to bring it to an end.  There I was on Facebook yesterday, the second day, also known as Boxing Day in UK and some other places, and an FB friend posted about being "glad it is over," with a commenter on that thread getting even more worked up and declaring to have "taken down out tree and put away all the decorations, I could hardly wait for it to end!"  Yikes! Along these lines for some years now around here there is a rock/pop radio station that begins playing cheesy commercial "Christmas" music like "Frosty the Snowman" all the time starting almost immediately after Halloween, but reverts immediately to its usual fare starting December 26, the Second Day of Christmas. Sheesh!

Yes, it looks like that old bugaboo, the commercialization of Christmas and those pushing it have been the real Warriors on Christmas, shutting down the Christmas season the minute after it truly officially starts. They have been at pushing it earlier and earlier into the year, so of course gobs of people are totally sick of it by the time Dec. 25 comes around and are ready to toss it all out the following day.  Hooray! Nor more Christmas!  For a long time there were no commercials before Thanksgiving, or at least so it seemed when I was young, although the Macy's Thanksgiving Day parade had long been the unofficial beginning of the commercial Christmas season with it ending with the arrival of Santa Claus to be followed the following day by the Black Friday of Christmas shopping.  Indeed, that parade and Macy's and other stores in New York played a major role, along with the Coca Cola company in the early 20th century, in creating that modern image of Santa Claus, out of the image in the Clement Moore "Night Before Christmas" from the 1820s, which in turn drew on some versions of the Dutch Sint Niklaas who was celebrated by New York Dutch. All this was crucially at the heart of this vast commercialization that overcame the old Puritan resistance to any celebrating of Christmas.

But somewhere in the last several decades that Thanksgiving boundary was broken through.  The Christmas ads, and then the cheesy movies and music, all began earlier in November and proceeded to creep ever earlier, egged on by radio stations like the one near me that gets it going the minute Halloween has passed.  And in more recent years even the Halloween barrier seemed to begin to get broken, with ads appearing here and there even in late October.  No wonder so many have gotten so sick of it by the ostensible "First Day of Christmas" they are ready to toss their trees and purge their homes of any shred of decorations still lurking about.

Some have objected to all this.  One curiously has been the Jewish comedian, who came up with calling Dec. 23 "Festivus" to recognize this commercialized version of the holiday.  But not only has this not really caught on, but some have even accused him of engaging in "the War on Christmas" with his suggestion.  A quite religious colleague of mine who was a journalist once upon a time wrote a column that appeared in the Wall Street Journal of all places some decades ago in which he proposed that, like Seinfeld, we create an alternative celebration, which he said should be called "Excessmass," to be when the commercialized version of the holiday could be celebrated, so as to leave the good religious Christians like himself to have their proper holiday left alone.  That proposal has gotten even less far than the "Festivus" one by Seinfeld.

S o there we have it, folks.  The warriors on Christmas have been its commercializers, lot these many years.  Have a happy what is left of the Christmas season!

Barkley Rosser

Long Addenduem, next evening:

In may family when I was a kid, raised Presbyterian with a quite religious mother and a much less so father, we did not start celebrating Christmas until Dec. 1, the beginning of Advent, and did keep it up through Jan. 6.  Did not watch the Macy's parade on TV or otherwise recognize Black Friday or any of the rest of it prior to Dec. 1.

So I shall note how widely varying this is across countries.  In Russia Christmas is celebrated on Jan. 7 by adherents of the dominant religion, Russian Orthodoxy, although areas in the western part of the former USSR were dominated either by Catholics or Lutherans and thus celebrated it on Dec. 25.  As it was under Communist Party rule, public celebrations of Christmas itself were largely suppressed, although during most times were allowed to some degree to happen in the churches with services.

However, another much celebrated holiday had been celebrated since the time of Peter the Great that took on many aspects of Christmas we see in the West, trees, lights, and gift giving within families, as well as celebratory eating and drinking, with gifts being given by a Santa Claus-like figure known as Grandfather Frost (Ded Moroz) who is accompanied by his granddaughter, the Snow Maiden.  They are derived from pre-Christian pagan figures.  Anyway, this holiday is New Year's Eve (Snovem Godem), which is a much bigger deal than either Dec. 25 or Jan. 6.  It should be noted that Grandfather Frost is kept clearly distinct from Saint Nicholas, who is the patron saint of Russia.  In icons he is usually portrayed as beardless and with a long face, which fits his traditional appearance as thin and kind of grim actually, not a jolly old elf at all.

Then we have Catholic Mediterranean nations, with me having observed this period in particular in more than one year in Florence, Italy.  In this part of the world Christmas celebrations make a big deal about Mary and her role in it all.  So in Florence public Christmas decorations, especially lights, do not go up until Dec. 8, Mary's birthday. Most of those decorations come down after Jan. 6, but certain ones remain longer, most especially Nativity creches, which remain in churches until Feb. 2, yes Groundhog Day in the US.  But in the Roman Catholic Church this is Candlemas, coinciding with a pagan Celtid holiday, but known ad Candlemas and also marking 40 days after the birth of Jesus, when supposedly Mary entered the Temple to be purified, making it also the Feast of the Purification of the Virgin.  So there, for all those who want to get over Christmas on Dec. 26, take that!

Reichtum ist verfügbare Zeit und nichts weiter

How it started (Charles Wentworth Dilke, 1821):

THE PROGRESS OF THIS INCREASING CAPITAL WOULDin established societiesBE MARKED BY THE DECREASING INTEREST OF MONEY, or, which is the same thing, the decreasing quantity of the labour of others that would be given for its use; but so long as capital could command interest at all, it would seem to follow, that the society cannot have arrived at that maximum of wealth, or of productive power, when its produce must be allowed to perish.

When, however, it shall have arrived at this maximum, it would be ridiculous to suppose, that society would still continue to exert its utmost productive power. The next consequence therefore would be, that where men heretofore laboured twelve hours they would now labour six, and this is national wealth, this is national prosperity. After all their idle sophistry, there is, thank God! no means of adding to the wealth of a nation but by adding to the facilities of living: so that wealth is liberty––liberty to seek recreation––liberty to enjoy life––liberty to improve the mind: it is disposable time, and nothing more. Whenever a society shall have arrived at this point, whether the individuals that compose it, shall, for these six hours, bask in the sun, or sleep in the shade, or idle, or play, or invest their labour in things with which it perishes, which last is a necessary consequence if they will labour at all, ought to be in the election of every man individually.

How it continued (Karl Marx, 1857-58):

Die Schöpfung von viel disposable time außer der notwendigen Arbeitszeit für die Gesellschaft überhaupt und jedes Glied derselben (d.h. Raum für die Entwicklung der vollen Produktivkräfte der einzelnen, daher auch der Gesellschaft), diese Schöpfung von Nicht-Arbeitszeit erscheint auf dem Standpunkt des Kapitals, wie aller frühren Stufen, als Nicht-Arbeitszeit, freie Zeit für einige. Das Kapital fügt hinzu, daß es die Surplusarbeitszeit der Masse durch alle Mittel der Kunst und Wissenschaft vermehrt, weil sein Reichtum direkt in der Aneignung von Surplusarbeitszeit besteht; da sein Zweck direkt der Wert, nicht der Gebrauchswert. Es ist so, malgré lui, instrumental in creating the means of social disposable time, um die Arbeitszeit für die ganze Gesellschaft auf ein fallendes Minimum zu reduzieren und so die Zeit aller frei für ihre eigne Entwicklung zu machen. Seine Tendenz aber immer, einerseits disposable time zu schaffen, andrerseits to convert it into surplus labour. Gelingt ihm das erstre zu gut, so leidet es an Surplusproduktion, und dann wird die notwendige Arbeit unterbrochen, weil keine surplus labour vom Kapital verwertet werden kann. Je mehr dieser Widerspruch sich entwickelt, um so mehr stellt sich heraus, daß das Wachstum der Produktivkräfte nicht mehr gebannt sein kann an die Aneignung fremder surplus labour, sondern die Arbeitermasse selbst ihre Surplusarbeit sich aneignen muß. Hat sie das getan – und hört damit die disposable time auf, gegensätzliche Existenz zu haben –, so wird einerseits die notwendige Arbeitszeit ihr Maß an den Bedürfnissen des gesellschaftlichen Individuums haben, andrerseits die Entwicklung der gesellschaftlichen Produktivkraft so rasch wachsen, daß, obgleich nun auf den Reichtum aller die Produktion berechnet ist, die disposable time aller wächst. Denn der wirkliche Reichtum ist die entwickelte Produktivkraft aller Individuen. Es ist dann keineswegs mehr die Arbeitszeit, sondern die disposable time das Maß des Reichtums. Die Arbeitszeit als Maß des Reichtums setzt den Reichtum selbst als auf der Armut begründet und die disposable time nur existierend im und durch den Gegensatz zur Surplusarbeitszeit oder Setzen der ganzen Zeit des Individuums als Arbeitszeit und Degradation desselben daher zum bloßen Arbeiter, Subsumtion unter die Arbeit. Die entwickeltste Maschinerie zwingt den Arbeiter daher, jetzt länger zu arbeiten, als der Wilde tut oder als er selbst mit den einfachsten, rohsten Werkzeugen tat.

(In English):

The creation of a large quantity of disposable time apart from necessary labour time for society generally and each of its members (i.e. room for the development of the individuals’ full productive forces, hence those of society also), this creation of not-labour time appears in the stage of capital, as of all earlier ones, as not-labour time, free time, for a few. What capital adds is that it increases the surplus labour time of the mass by all the means of art and science, because its wealth consists directly in the appropriation of surplus labour time; since value directly its purpose, not use value. It is thus, despite itself [malgré lui], instrumental in creating the means of social disposable time, in order to reduce labour time for the whole society to a diminishing minimum, and thus to free everyone’s time for their own development. But its tendency always, on the one side, to create disposable time, on the other, to convert it into surplus labour. If it succeeds too well at the first, then it suffers from surplus production, and then necessary labour is interrupted, because no surplus labour can be realized by capital. The more this contradiction develops, the more does it become evident that the growth of the forces of production can no longer be bound up with the appropriation of alien labour, but that the mass of workers must themselves appropriate their own surplus labour. Once they have done so – and disposable time thereby ceases to have an antithetical existence – then, on one side, necessary labour time will be measured by the needs of the social individual, and, on the other, the development of the power of social production will grow so rapidly that, even though production is now calculated for the wealth of all, disposable time will grow for all. For real wealth is the developed productive power of all individuals. The measure of wealth is then not any longer, in any way, labour time, but rather disposable time. Labour time as the measure of value posits wealth itself as founded on poverty, and disposable time as existing in and because of the antithesis to surplus labour time; or, the positing of an individual’s entire time as labour time, and his degradation therefore to mere worker, subsumption under labour. The most developed machinery thus forces the worker to work longer than the savage does, or than he himself did with the simplest, crudest tools.

How it continued (Raniero Panzieri, 1961):

In effetti, per Marx, il tempo libero « per la libera attività mentale e sociale degli individui » non coincide affatto semplicemente  con la riduzione della « giornata lavorativa ». Presuppone la trasformazione radicale delle condizioni del lavoro umano, l'abolizione del lavoro salariato, la « regolazione sociale del processo lavorativo ». Presuppone, cioè, l'integrale rovesciamento del rapporto capitalistico tra dispotismo e razionalità, per la formazione di una società amministrata da liberi produttori, nella quale —  con l'abolizione della produzione per la produzione  — programmazione,  il piano, la razionalità, la tecnologia siano sottoposti al permanente controllo delle forze sociali, e il lavoro possa così (e soltanto per questa via) diventare il « primo bisogno » dell'uomo.  Il superamento della divisione del lavoro, in quanto meta del  processo sociale, della lotta di classe, non significa un salto nel  « regno del tempo libero » ma la conquista del dominio delle  forze sociali sulla sfera della produzione. Lo « sviluppo completo »  dell'uomo, delle sue capacità fisiche e intellettuali (che tanti critici « umanisti » della « società industrial » amano richiamare)  compare come una mistificazione se si rappresenta come « godimento di tempo libero », come astratta « versatilità », ecc. indipendentemente dal rapporto dell'uomo col processo produttivo,  dalla riappropriazione del prodotto e del contenuto del lavoro da  parte del lavoratore, in una società di liberi produttori associati.

(In English):

Indeed, for Marx, free time "for the free mental and social activity of individuals" by no means coincides simply with the reduction of the "working day". He presupposes the radical transformation of the conditions of human work, the abolition of wage labor, the "social regulation of the labor process". That is, it presupposes the complete reversal of the capitalist relationship between despotism and rationality, for the formation of a society administered by free producers, in which - with the abolition of production for production - programming, the plan, rationality, and technology are subjected to the permanent control of social forces, and work may thus (and only in this way) become man's "first need". Overcoming the division of labor, as the goal of the social process, of the class struggle, does not mean a leap into the "realm of free time" but the conquest of the dominion of social forces over the sphere of production. The "complete development" of man, of his physical and intellectual capacities (which so many "humanist" critics of "industrial society" like to recall) appears as a mystification if it is represented as "enjoyment of free time", as abstract "versatility" , etc. independently of man's relationship with the production process, of the reappropriation of the product and the content of work by the worker, in a society of associated free producers.

How I spent my disposable time (2020):

Friday, December 25, 2020

Rolling Out the Vaccine

 This morning’s New York Times offers a panel discussion on the question of who should get vaccinated against Covid first.  Broadly speaking, they take a utilitarian position: it’s interesting that none disagreed with the positions taken by panelist Peter Singer, the world’s most prominent utilitarian philosopher.  And I wouldn’t either, except for one thing.

The vaccines approved by the FDA, along with those approved by other countries like China and Russia, have gone through the fastest possible testing.  Tens of thousands of individuals have been placed in control and treatment groups in order to determine two things: to what extent do the vaccines reduce the likelihood of getting infected (efficiency) and how common and severe are the side effects (safety)?  Meeting both criteria is sufficient for approval, which is how it should be.

But there is another crucial question, to what extent do the vaccines reduce transmission of the virus to others?  The answer does not affect whether these vaccines should be employed, but they do have large consequences for other policies during this phase of the pandemic, such as rules for separation and masking, restrictions on activities and events, resumption of in-person schooling, and how much should be spent on interventions like ventilation overhauls. To the extent that vaccination reduces transmission, other restrictions and investments can be modified as the vaccinated portion of the population increases.  Unfortunately, our knowledge of this issue is minimal.  We don’t have any published lab results at all, and we are at least months away from meaningful epidemiological data.

A rollout that prioritizes crucial learning could change this.  Some substantial portion of the early vaccines could be reserved for community trials.  A number of communities could be given treatments in which a designated proportion of the population is vaccinated as soon as possible; this portion could be varied (30%, 50%, 70%) so that a variety of treatments could be tested.  Others matched to them by relevant demographic, economic and other variables would be controls and would not receive any vaccines during the trial period.  (Note that the lack of blinding at the community level should not be a serious problem as long as unvaccinated individuals in treatment communities are given a convincing placebo.)   Everyone living in these communities would be tested regularly.  We could then observe differences between community infection rates corresponding to treatment and infer transmission probabilities under real world conditions.  It might also be possible to learn how transmission varies across the different viral strains that have emerged.  The entire operation could be accomplished within the space of a month or less.

What is disheartening is that not a single expert on the Times panel broached this possibility.  They are entirely preoccupied with the health significance of vaccination at the individual level and consider communities only in social and economic terms.  To the extent they consider the need for learning at all it is in the context of individual response to vaccines, such as comorbidities and interactions with other drugs people may be taking.

Where’s the public health?

Wednesday, December 23, 2020

Trump As The Grinch Who Stole Christmas

 So the Congress struggled for months after the House passed a $3.3 trillion followup Covid relief bill, which Senate Majority Leader McConnell blocked and kept blocking.  House Speaker Pelosi and Treasury Secretary Mnuchin kept negotiating and coming up with this or that proposal, only to mostly have McConnell shoot it down, or sometimes Pres. Trump himself doing so.  Finally after the election, and with the threat of losing control of the Senate, McConnell suddenly decided a deal needed to be made, so sure enough, with Mnuchin supposedly representing Trump, a deal got cut.  It must be recognized that the push for having another round of direct payments was pushed by Trump, who threw out several numbers, and McConnell got it that this was popular. So he went along with Mnuchin's suggested $600 per person, half of what was sent out in the CARES round last spring.

The whole thing has also been linked to the Omnibus general budget spending package, which needs to get passed or the government will get shut down, with ongoing week by week Continuing Resolutions holding that off, the current one expiring on Monday.  It contains mostly things approved in the budget sent officially from Trump's OMB to Congress, although it is pretty clear he does not know what is in there.

So when the Congress managed to cut all sorts if possible things like aid to states and local governments as well as limiting liability of corporations for having conditions leading to workers getting Covid-19, but had about $300 billion for small businesses somewhat less for the $600 payments for those making under $75,000, not to mention a good deal less for continuing unemployment benefits set to expire the day after Christmas, and some other such things. Whew! It looked like this difficult, if highly imperfect, deal was cut just in time to keep lots of people from being dumped from benefits right after Christmas and also send out $600 to lots of people right after Christmas. Hooray!

But then last night Trump put out a video announcing his unhappiness with all this. On the one hand he called for something arguably desirable, a $2000 payment rather than $600, which has drawn forth Dem support at least from the House.  But then he also went on a rant against items in the Omnibus spending bill not part of the relief bill, notably about $5 billion in foreign aid and also some even smaller expenditures on such items as the Kennedy Center for Performing Arts and the Smithsonian, somehow suggesting incoherently that these monies were a wasteful part of the relief bill.  While it remains unclear what he is going to do in the end, for the moment he is not signing it, which means unemployment benefits might start ending right after Christmas, not to mention people not only not getting the supposed desired $2000 but even $600, and not to mention that hard pressed small businesses will not be able to apply for any of that $300 billion supposedly available for PPP loans.

So, indeed, President Trump is the Grinch Who Stole Christmas.

Barkley Rosser

PS: And of course Trump is also pardoning all kinds of criminals closely associated with him and has also vetoed the National Defense bill, first time that has happened in 60 years, something that maybe should happen, although his reasons are to prevent renaming military facilities away from Confederare officers and also to remove Section 230 that prevents him from suing social media companies that censor things he posts.  Quite a roll this grinch is on.

Monday, December 21, 2020

Bubble Bubble Toil And Trouble?

 Or maybe not.

So recently there has been a lot of buzz that we may be seeing a variety of speculative bubbles in the US and indeed world economy.  Many asset markets have risen in the last few months, with several of them either reaching new highs or getting close to doing so, with some of them rising very sharply quite recently, with all of this making many eyebrows rise to noticeable degrees and mumble about possible crashes, which could well happen in any of these markets. But probably not in all of them.

One is of course the US stock market, which has hit new record highs recently for most of its indices, with the Dow in particular making headlines when it passed 30,000, where it still is, if not at a record high level at this very moment.  It is ironic that President Trump spent so much time and effort focusing on the stock market, apparently engaging in stupid and ultimately deeply deadly policies regarding the pandemic out of a silly effort to affect favorably almost daily stock market movements.  People were not to be told how serious things were because, wow, the stock market might go down tomorrow and his reelection chances would be damaged!  Well, of course when how serious things were finally became clear in March, we did see a massive plunge of world stock markets, but a combination of Federal Reserve policy actions and a fiscal stimulus, along with the passing of the first wave of the pandemic, led the markets to recover quite rapidly from their horrific fall.  They generally continued to do not too badly even as we had another increase in the pandemic in the summer, which was probably just the spreading of the first wave into parts of the country that did not get it in March and April, especially parts where governors followed Trump in not enforcing masks and social distancing.

Of course it is probably the case that what has driven the most recent surge, including the passing of the 30,000 Dow barrier, has been driven by good news about vaccines becoming available, with this providing hope for a more solid recovery of the economy sometime next year.  However, much as Trump has whined that he deserves credit for all this (and he deserves some) and that if only those naughty companies had made their announcements two weeks earlier he would have gotten reelected, well, the real proof of the pudding is that stock market began moving up sharply in the immediate wake of the election with the word that Biden had won, before the announcement of the Pfizer vaccine, which led to Trump engaging in all sorts of tangled efforts to claim credit for that.

Well indeed the economy probably will improve more solidly eventually next year, and while price/earnings ratios are somewhat high, they are not in territory wildly out of line with what we have seen in more recent times, with in fact profits up substantially, a trend that predates Trump becoming president, although he certainly tried to implement policies to make them go higher.  In any case, while we may not see the stock market zooming all that much further in the near future, there is not an obvious reason to expect some sort of major crash ("corrections" can always happen), so, frankly, the stock market at least does not look wildly bubbly, despite having gotten to such high levels.

Gold has gotten some attention as it has flirted with old long time highs over $1900 per ounce.  It is just below those levels, and could yet go above them.  I have never felt able to explain gold prices very much, and we have seen bubbles in it in the past.  The funny thing is that much commentary on gold has been downplaying it as not performing all that spectacularly, given developments in other markets, including the stock market.  Of course supposedly gold goes up in times of uncertainty or fear of inflation.  And while there is still uncertainty, the appearance of vaccines seems to provide some optimism in general, and not too many are taking seriously a threat of reignited inflation.

Of course the other market that people are comparing gold to, with some claiming it is replacing gold, is cryptocurrencies, most especially bitcoin.  This has indeed surged dramatically recently and gone to more noticeably new highs, breaking through the old clearly bubbly high above $19,000 to surpass $23,000, with it still over $22,000 at the moment.  Other leading cryptos have also moved way up, including Ethereum and XRP, if not quite as dramatically as Big Player bitcoin (btc).

So these have been far more volatile in the past decade than stocks or gold or even oil for that matter, which has also moved up recently from about $40 per barrel to about $50 per barrel, not particularly bubbly.  And unlike any of those btc looks to be almost a pure bubble anyway, with no clear fundamental.  To the extent there is one it is use of btc by criminals to finance their activities covertly, which is certainly something real. But it is not at all clear that the demand for bitcoin for that has obviously expanded.  Ethereum and XRP both have clearly fundamental uses, the former allowing for contractual operations between firms even as that does not seem to have happened much yet, and the latter reportedly being used between commercial banks for settlements, although without its use expanding beyond that.

What seems to have driven this recent price surge in btc and other cryptos have been rumors and reports of central banks possibly establishing their own digital currencies, with other possible ones such as still-in-process Libra possibly appearing. These may or may not happen, but the funny thing is that if they do it seems to me that they would block any chance of bitcoin in particular becoming some sort of general international real currency, the "new gold" some claim it is. They would be the serious cryptocurrencies, not bitcoin, which would remain for use by criminals and the occasional coffee shop in this or that hipster haven.  I do not see these reports as providing some real foundation for a new higher fundamental for bitcoin.  But I do not know what is in the minds of the main traders in it who are reputedly in China and North Korea.

The final item that has been surging has been real estate in the US, which seems to have taken off quite dramatically in several parts of the nation since the pandemic struck.  What is odd about this is that in some major urban areas rents are down, reflecting many people fleeing to more rural or suburban areas to escape the pandemic.  But somehow prices in many areas are rising, with price/rent ratios thus rising.  Some of that may be due to record low mortgage interest rates, but these in turn are perhaps a bit mysterious as underlying interest rates have not moved all that much even as the Fed has maintained an expansionary policy, with certain monetary aggregated rising sharply.  

So, I guess a bottom line I see is that the most bubbly of assets look to be cryptocurrencies and real estate, with stocks and oil not especially so, and with gold perhaps in between those other two groups.  But, of course, who knows?  I may well prove to have all this quite completely wrong.

Barkley Rosser

Wednesday, December 16, 2020

Why Did AMLO Wait So Long To Recognize Biden Victory?

 I do not know, but it is on the surface at least surprising.

AMLO is the nickname of Andres Manuel Lopez Obrador, the President of Mexico since Dec. 1, 2018.  Only yesterday, along with Mitch McConnell, President Putin of Russia and President Bolsonaro of Brazil, AMLO congratulated Joe Biden on his victory over Donald Trump in the US presidential eleciton, leaving only North Korea's Kim Jong Un still not recognizing Biden's victory among world leaders.  Putin and Bolsonaro and Kim have all been personally close to Trump, with Bolsonaro also imitating him in terms of policy positions.  But what is with the delay by AMLO, especially given that polls have long shown Trump having the lowest popularity rating in Mexico of any nation in the world, down around 5%?

Besides Trump's massive unpopularity there are other reasons one might not expect this delay on AMLO's part.  One is ideological, although Kim Jong Un is a left wing Communist supporting Trump.  But indeed, even though he started out in the centrist PRI, AMLO has long been identified as the leading left progressive figure in Mexican politics, running as the presidential candidate of the main leftist party, the PRD, in 2006 and 2012 (Mexican presidents serves single six year terms), then starting his own party, MORENA, which he ran from successfully in 2018, although in that year he did have the support of a minor socially conservative party.

There is also the matter that there have long been differences over migration policy, with Trump's anti-Mexican immigration policy extremely unpopular in Mexico, along with his wall, and certainly his ridiculous demand that Mexico pay his wall on the southern border.  Trump even threatened AMLO with punitive tariffs if he did not help Trump out in slowing migration from Central America, and AMLO caved and went along with Trump's demands on that.

There have also been differences over joint operations against drug gangs and corruption, with the recent arrest in the US on drug-related charges of a former Mexican defense minister, Cienfuegos, creating a diplomatic hullabaloo. Even though the US ended up dropping the charges and releasing Cienfuegos, the reaction in Mexico has been to pass a bill that makes it much harder for there to be any cooperation on drug enforcement, with Mexican police/authorities needing official permission to cooperate with any foreign enforcement officials, with US officials saying this will severely hinder any such cooperation in the future, a great present for the incoming Biden admin.

One theory is that AMLO has been afraid of Trump since his nasty tariff threat and was trying to keep on his good side, at least until the electoral college voted, even if he really did not foresee that Trump would fail in his efforts to overturn the election result. Another is that somehow he is stupid and actually thought Trump would succeed in overturning the election result.  I doubt this, but in his first presidential election in 2006 when he narrowly lost to PAN's Calderon he contested the election result for a long time afterward, although without success.

I see two other reasons for this.  One has to do with the renegotiation of the former NAFTA, which is now officially in place as USMCA.  This may be tied to the negative of AMLO not wanting to anger Trump and have him impose new tariffs.  Trump is proud of USMCA and, of course, denounced NAFTA as "the worst trade deal ever," although I think he said that about some others also.  In any case, most observers see few differences between the two, most of them items that are in the TPP that Mexico (and also Canada) agreed to for being in that agreement, which they are, unlike the US.  So no big deal agreeing to those items with the US, some of which amounted to modernizations. The only other item that affected Mexico could be viewed as a mixed bag for Mexico, Trump's demand on higher wages for Mexican autoworkers. This looks like a loss to the extent jobs are lost but a gain to the extent higher wages actually get paid to workers who do not lose their jobs.

The other item is something less admirable, and something AMLO may well share with both Trump and Bolsonaro, a certain egomaniacal tendency to authoritarianism.  Even if it does not go that far, supposedly AMLO and Trump have hit it off personally.  Indeed, AMLO actually visited Washington in September in the middle of the campaign, something he got criticized for in Mexico.  I do not know what his personal relationship is with Biden, if any, but it is clear that he feels this personal connection, with it possibly boding ill for Mexico in the future if AMLO decides to pursue this authoritarian streak more fully. 

The part that really is a bit mysterious, and has also brought criticism in Mexico, is what did he think he was doing in terms of relations with the incoming Biden administration?  Most think that Putin has not helped himself with Biden by delaying recognizing the obvious, and we know that Bolsonaro is kind of a wacko as well as out there ideologically.  But I would think that AMLO would want good relations with Biden, and I think he is smart enough to have known after the outcome was declared that indeed Biden had won and would be coming into office.  Unless somehow he actually dislikes Biden personally, which I have not heard, the only way this delay makes sense is if he thinks somehow it gives him leverage by showing "independence," which is also coming with this new bill on cutting back drug enforcement cooperation, although I do not see how AMLO gains from such a lack of cooperation.  Maybe he will gain this, but my own view is that I think AMLO has made an error here, and he is going to have to do some adjusting down the road, preferably sooner rather than later.

Barkley Rosser

Saturday, December 12, 2020

The Fiscal Stimulus Gridlock

The best can be said about a possible fiscal stimulus in the face of a renewed Covid-19 surge that is dragging the economy down as many areas shut down in various degrees is that at least a few hours ago the US Senate approved a one week continuing budget resolution to keep the fed govt functioning. In past years govt shutdown was a big deal, but with the current president threatening to seize power in a coup even in the face of the SCOTUS unanimously repudiating his final "Kraken" lawsuit, not to mention the positive drama of the FDA approving the Pfizer vaccine for US use, well, a govt shutdown right now does not look like such a big deal. But, hey, for at least the next week it will not happen, snore.

But we are facing a much more serious matter than this matter of just keeping the US fed govt going now, given that the US economy seems on the verge of possibly going into "double dip," as cut backs on economic activity spread as we see the coronavirus surging across the country. The House back in either April or May or thereabouts passed the HEROES bill that was a $3 trillion bill. Mitch McConnell in the Senate said no.

I do not precisely know when, but some months later, in an effort by House Speaker Pelosi, an attempted "compromise" bill was passed in the House of a bit over $2 trillion . This also led to no response from McConnell, and I note that it is not a matter of the Constitution that the Majority Leader of the Senate can single-handedly block for consideration bills passed by the House, much less presidential nominations for the Supreme Court as when in 2016 McConnell blocked even the consideration of Obama's nomination of the clearly centrist nominee, Merrick Garland.

Which brings us to now, with the economy on the verge of a likely double dip decline, and the debate in Congress now reduced to an approximately $900 million deal, something put together by a bipartisan  group of centrists, a deal that by now has dropped the obvious demand of handing out money directly to people as was done earlier this year and so many other nations have done, an approach now backed by the vast majority of professional economists, with Noah Smith recently arguing, arguably a bit over the top, that all of macroeconomics has simply become "Give them money."

Anyway, it has looked like maybe this reduced proposal, that does not do what Noah and the vast majority of economists say should be done, has bogged down and is not being passed.  It seems that the rarely seen bipartisan committee agreed upon a deal that had a temporary cover for McConnell's demand that businesses not be liable for making their workers sick from Covid-19 and some reduced amount for state and local govts.

But McConnell has rejected this bipartisan proposal, already much reduced from the earlier bills passed by the House. Why he has done so is the question, although he has invoked both wanting a full liabitily protection along with a larger cutback for state and local aid.  At this point we must note that much is up in the air. Yes, Joe Biden will indeed be inaugurated as the legal President of the United States at noon on 1/20/21. But many will be contesting that, with half of Trump voters so out of touch with reality to think that Trump will actually be taking that oath of office on Jan. 20.

So obviously McConnell is playing the long game, having just gotten reelected in Kentucky. I think he is planning to replay what he die in 2009 and after, simply oppose anything Biden proposes in an effort to gain against him in 2022 and then oust him in 2024.  We have people like Ted Cruz saying the Senate should not approve any cabinet appointee of Biden.  Presumably Biden could imitate Trump and simply appoint his people on an "Acting" basis and proceed to govern. 

Frankly the bottom line seems to be that he wants to reprise how he played things after 2008, complete opposition to any admin proposal with the hope that the economy will do badly so the GOP can do well in future elections, with an eye to bringing down the economy as the coronavirus worsens, thus bringing back a hope for Trump or some other Republican in 2024. Given all the immediate noncertainties in the political sphere, how this all turns out remains very much up in the air right now.

Barkley Rosser

Thursday, December 10, 2020

The Failure of the Public Health Establishment

 Matt Yglesias has an excellent retrospective on the absurd reversals over mask usage that arose in the early stages of the pandemic.  You will recall that the public health establishment, amplified by mainstream media outlets like the New York Times, told us all to ditch our masks and concentrate instead on frequent, vigorous hand-washing.  This was transparently absurd at the time, since from the beginning it appeared that coronavirus transmission had something to do with airborne virus exposure.

We were told masking didn’t protect us.

We were told only N95 masks worked, and only if they were taken on and off just so, in a complex procedure us untrained mortals could never execute.

And we were told we had to save these precious masks so health care workers could protect themselves, even though that was in direct contradiction to argument #1.  (Later, Anthony Fauci told us that conserving the inadequate supply of N95's was the underlying motivation, and the rest was mostly persuasion.)

By mid-spring the story had changed, and now we were all supposed to wear masks at least some of the time, although the WHO and the CDC were reluctant to go the full distance and admit that aerosol transmission was widespread and justified routine use of masks in social settings.  Today we have arrived at the point where reluctance to wear a mask is cause for shaming and shunning—as if the initial mask guidance and its repetition in the media had never happened.

But the mask fiasco was only a part of it.  Yglesias also mentions the shifting and contradictory policies regarding distancing: the immediate shutdown of outdoor activities even though indoors was more dangerous and the “hygiene theater” of deep cleaning while air filtration languished.  He says we should have a serious, critical examination of America’s response to the virus once the worst of the pandemic is over.

I agree, but I want to add a further observation and hypothesis.  Every failure of guidance and regulation had a common theme, protection of the health care system.  We should abjure masks because the health care workers needed them.  We can’t base messaging or policy on aerosol transmission because that would require expensive retrofitting of health care facilities.  We can’t restrict travel because medical supply chains and the movement of health care resources can’t be disrupted.  The objective is to “flatten the curve”, not eradicate the virus, because the important thing is to not run out of ventilators or ICU capacity—even though flattening has no visible endgame and itself contradicts the messaging about how awful it is to get covid.  Put it all together, and it’s hard to avoid the conclusion that the mission of public health had quietly morphed from protecting the health of the public to protecting the resources and operations of the health care system.

This is how it looks to me, but it’s still a hypothesis.  We could benefit from scrutiny of public health schools in universities, not least their funding, and public health agencies at the state and federal levels—and also the WHO.  Has public health been redefined this way in practice and even in theory?  If so, what would it take to redirect it so the health status of the public and not the burden on health service providers is their guiding concern?

Saturday, December 5, 2020



On March 15, 2019 a gunman opened fire on worshipers at two Christchurch, New Zealand mosques, killing 50 and wounding around as many. Survivors of gunshot wounds often have traumatic injuries that require multiple surgeries and leave them severely disabled for life. Before embarking on his rampage, the alleged gunman broadcast over the internet a "manifesto" outlining the motive for his deed.

In his manifesto, the alleged perpetrator claimed to have had "brief contact" with "Knight Justiciar" Anders Breivik, the convicted Norwegian mass murderer, and to have taken "true inspiration" from Breivik's "2083" manifesto. Indeed, the Christchurch massacre would fit the definition of a copycat crime in terms of motive, manifesto and mass murder.

Breivik plagiarized approximately 15,000 words of his manifesto from a pamphlet on "Political Correctness" by William S. Lind. In turn, the alleged Christchurch killer "plagiarized" his deed from Breivik. On his March 17 traditionalRIGHT webcast, Lind spent a little over 16 minutes talking about the Christchurch rampage. Not surprisingly, neither he nor his interlocutors mentioned the Oslo precedent.

So what did Lind say about the Christchurch terror attack?  Did Lind take moral responsibility for the consequences -- even unintended -- of his words?

Lind's first observation was to caution that there was much that remained unknown about the attack. He then criticized "the establishment media rushing to judgment" by reporting that it was a right-wing hate crime. Then he launched into speculation -- "I only say possible no idea at this point" -- that the alleged attacker had been converted to Sunni Islam during his travels in Pakistan and that the attack on the mosques was "actually part of the Sunni-Shiite war" and that "it would make sense in many ways for him to try to blame this on the right because of course who's leading the opposition to Islam in the Western countries?"

It also could be somebody sitting on their bed that weighs 400 pounds, OK?

The "second thing that immediately jumped out" at Lind was "why in the Hell are there mosques in New Zealand to begin with?" This remark evoked appreciative laughter from his co-hosts, Brent and John. The real problem, according to Lind, was allowing Muslims to come to Western countries, or, if they are allowed to come, allowing them to build mosques.

Lind then expounded for three minutes on the unrelenting persecution of Christians in Islamic countries and the disregard of the establishment media toward "church bombings and mass murders -- those get a paragraph or two in the same papers that splash this [Christchurch] across the headlines on the front page with the biggest type." 

According to Lind, these atrocities are "happening all the time in Africa":
We have had Christians worshiping on a Sunday morning suddenly the doors of their church are barred and it's set on fire by Muslims. These don't even make the New York Times. Remember the Times's real slogan is "all the news that fits we print." So this [Christchurch shootings] fit their narrative of evil Christianity -- evil white males, evil right-wing etc. The mass murder of Christians by Islamics doesn't fit the narrative so, okay, doesn't exist and this by the way is exactly what the President and his supporters means by fake news.
So the murder of 50 people by a gunman in New Zealand was "fake news" because it fit a supposed MSM "narrative." After discounting media coverage of the Christchurch attack, conjecturing about an alternative scenario and objecting to Muslim presence in Western countries and lack of media coverage of atrocities committed against Christians, Lind turned his attention to the strategic disaster of the attack. 

For this analysis, he assumed the "current narrative" of a right-wing, anti-Islamic attack. From that perspective, Lind expressed sympathy for the killer's alleged motivation, "from what we're being told now were inspired by this guy's reaction to seeing Islamics all over France -- well, that's an understandable reaction [laughter]." Let's unpack that logic: according to Lind, it is an "understandable reaction" for someone to commit mass murder because he didn't like seeing so many Muslims in France. 

Nevertheless, Lind was eager to advise "our colleagues on the right [that] it's important to understand why actions like this actually work against us." 

In other words, the "understandable reaction" of mass murder is a public relations mistake.

Lind's analysis of the strategic inaptness of this particular kind of "leaderless resistance" action relies on his theory of "fourth generation warfare" and with the "cult of the victim" that he attributes to Antonio Gramsci and Georg Lukacs, "what we know as cultural Marxism or political correctness":
All Marxism is loser worship. It's if you're successful, if you're a builder, if you're a producer, if you're out there doing great things, you're evil, you're a capitalist, you're a member of the bourgeoisie, you're an exploiter, you're a landlord etc., you deserve a firing squad or the gulag. If you're a complete loser who produces nothing you know you're only a taker, you're, you're always defeated, then you're a moral hero and in the climate that we now live in where cultural Marxism sets the tone throughout much of the world the highest status you can achieve is victim.
Why "loser worship" makes this kind of "leaderless resistance" violence strategically disastrous for the right is left unspoken by Lind. My interpretation of what Lind is getting at here but not clearly articulating is that the attacks will evoke sympathy for the victims and thus elevate their status. 

But the real victims here, according to Lind and his colleagues, are the young, white heterosexual Christian men -- such as Breivik and the Christchurch terrorist -- driven to violence by the pervasive cultural Marxist oppression: many lost young men that feel like they have no future we're not allowed to have our own spaces anymore as like white Christian European people without having to have without foreigners coming in here...  
...we can't speak out against any of this without censorship or losing your job or something and it's driving people mad...   
...this feeling of oppression where you can't say what you think about anything because because certain viewpoints have effectively been outlawed... 
...more and more men young men particularly -- and this by the way, Brent, is happening in many parts of the world -- are finding themselves with no prospects if in this country they're white Christian men, heterosexual. They are considered somehow evil. Again they're the old equivalent of the capitalists and landlords under the old economic Marxism. They're inherently evil and they can't do anything without women but they can't do anything with women because if they displeased a woman she could immediately claim sexual harassment and he's guilty until proven innocent and the rage is just building and building and building and because of the way the internet fosters leaderless resistance I'm afraid you're right, Brent, we are going to see more of this but on our side we need to understand it is strategically disastrous.
Does your head hurt trying to follow Lind's "logic"? That is the point. It is not logic but a propaganda technique that relies on the listener/reader's conditioning to assume that what they are hearing/reading and trying to follow is a logical argument. Jacques Ellul gave a concise description of the technique Lind employs:
Propaganda by its very nature is an enterprise for perverting the significance of events and of insinuating false intentions. There are two salient aspects of this fact. First of all, the propagandist must insist on the purity of his own intentions and at the same time, hurl accusations at his enemy. But the accusation is never made haphazardly or groundlessly.* The propagandist will not accuse the enemy of just any misdeed, he will accuse him of the very intention that he himself has and of trying to commit the very crime that he himself is about to commit. He who wants to provoke a war not only proclaims his own peaceful intentions but also accuses the other party of provocation. He who uses concentration camps accuses his neighbor of doing so. He who intends to establish a dictatorship always insists that his adversaries are bent on dictatorship. The accusation aimed at the other's intention clearly reveals the intention of the accuser.
*Because political problems are difficult and often confusing, and their import not obvious. the propagandist can easily present them in moral language -- and here we leave the realm of fact, to enter that of passion. Facts, then, come to be discussed in the language of indignation, a tone which is always the mark of propaganda. 
Lind's cult of the victim enlists young, white, heterosexual Christian men driven mad by having their future -- their rightful prospects as successful builders, producers, capitalists, landlords and doers of great things -- stolen from them by losers. They just can't catch a break! Even when they go out a shoot a bunch of those losers, it is the losers who get elevated as high-status victims in today's cultural Marxist climate instead of the real victims, those meritorious young, white, heterosexual Christian, dispossessed males who deserve to be successful but have been cheated out of their victory because the system has been rigged by those inferiors who deserve to lose.

"We're all victims. Everybody here. All these thousands of people here tonight. They're all victims. Every one of you." -- Trump

Friday, December 4, 2020

Constructing An Alternative Reality

 This has been gradually developing for about the last quarter of a century or so.  While there was some of this going on before, it took off after the Newt Gingrich-led GOP took over Congress in the 94 election and Rush Limbaugh began his radio show.  Not long after Fox News began a more aggressive stance against President Clinton, pushing any and every scandal that would lead to his impeachment for lying about his sex life, although this proved unpopular with the public.  But that did not slow it down.  It became more developed in the Bush admin when support for the Iraq War became increasingly disconnected from reality, a war that was not connected to reality to begin with as it was based on false claims about WMDs supposedly in Iraq.  When Obama became president the alternate reality became more developed as Fox and talk radio obsessed on the fake news birther nonsense, not to mention the endless obsession on Benghazi and Hillary's emails.

And then Trump became president and all of this kicked up to a whole new level, with his 23,500 plus lies and counting, which came along with a personalistic cult worshipping him.  This was bad all through his presidency, but now that he has lost the election it has further accelerated, now reaching seriously deranged levels that are also seriously dangerous to US democracy.

So in the real world Trump allowed the GSA to allow the official transition to a Biden presidency proceed, and most foreign leaders recognize the reality (although not V.V. Putin so far), and we have now had all the six main swing states officially and legally certify that Biden beat Trump in their states, with none of the margins less than 10,000, not all that close, frankly. Even those so far not coming out to admit this reality sometimes leak that they recognize it, occasionally making remarks that clearly recognize that Biden will almost certainly be president as of Jan. 20, 2021, even as they do not officially come out and say so openly, with the pathetic GOP senators from Georgia at the top of this bizarre hypocrisy.

But even as this reality continues to creep forward, reinforced by failure after failure of the Trump team's lawsuits, a win-loss record currently at 1-46, even though they keep submitting more cases, Trump himself seems to be more than doubling down, with many people following him and becoming more seriously insane and dangerous in their efforts.

So we have freshly pardoned Michael Flynn openly calling for Trump to declare martial law and impose a new election, with a disturbing number of other folks coming out to support him on this. We have had death threats in multiple states against election officials who supported the vote outcomes, even as many of these officials have been Republicans (congrats to them for standing up for principle), with the most dramatic of these in Georgia where some of those officials have sharply spoken back with little effect on those pushing the false claims of fraud, most importantly President Trump himself, due to appear in Georgia tomorrow, supposedly to support the GOP senate candidates there, but more likely to push his own ongoing effort to overturn the election results.

At this point two items stick out to me how the effort to construct an alternate reality continues apace even as it becomes increasingly disconnected with reality.  One part of this is coming from Trump himself. Son two evenings ago he put out a 46 minute video of a speech he made alone in the White House that he labeled "the most important speech I have ever made."  Most of it was simply more of the lies and conspiracy theories he has been pushing and pushing for the past month since the election. But one item stuck out at me as showing an increasing degree of disconnect from reality.  He claimed that id there had been an accurate count of the votes, he would have won "all states." Really. Only two presidents have taken all states: George Washington and James Monroe in 1820.  So he really thinks he won Delaware, Massachusetts, and Hawaii, not to mention DC (not a state)?

The other was watching Sean Hannity last night.  OK, so others in the prime time Fox lineup are playing the game of "Trump is right that the election was a fraud and he should fight to show it, but maybe Biden will be president after Jan. 20." But not Hannity, who disappeared for most of last week after Trump caved on letting the transition legally proceed.  No, he is totally in with Trump, declaring that he will succeed in overturning the election results and be inaugurated on Jan. 20, even without declaring martial law. He points to the case out of PA going to the SCOTUS.  He points to the 4-3 Wisconsin Supreme Court ruling against Trump's motion being based on that Trump's team should have gone through a circuit court first, which they are now doing. And then there is a video out of Georgia, now being dragged through hearings in the Georgia legislature, supposedly showing some "suitcases" being brought out from under a table in Fulton County after poll watchers were kicked out, and votes getting counted for another two hours, hey, enough to overturn the GA results. I saw that video, and I do not know what was going on in it, but I saw one image of a white object being brought out from under the table that did not look like a "suitcase."  He also had some woman who claimed somebody else submitted an absentee ballot with her name, and some guy from Michigan claiming to be an independent who was a poll watcher in Detroit, whining about being kept back from looking at ballots.

I do not know where or how this is all going to end.  Maybe if we get the Electoral College actually vote Biden in on Dec. 14, but based on what has gone down so far, I doubt it will stop.  Next up will be the Senate having to certify that vote, and, hey, GOP will still be in control even if Dems win the GA runoffs.  And there is still the chance to declare martial law, and maybe he can get a war with Iran going, which seems to be on the verge of happening, given the assassination of their top nuclear scientist.  And we still have something like 70% of GOP voters living at least to some extent in this alternate reality, and today it came out that Trump has specifically praised the QAnon conspirators for "being for better government." This is going down to the wire with possible roadblocks at every possible location.

Addendum: I have just heard that the Biden transition team is being prevented from meeting with people from any of the intelligence agencies located in the DOD, which is by far the majority of such agencies, including such heavyweights as the NSA, DIA, and NRO, among others.  I find this to be very disturbing.

Barkley Rosser

Tuesday, December 1, 2020

Yellen And Akerlof Or Akerlof and Yellen?

 I have already posted about the nomination of Janet Yellen to be Treasury Secretary, a historic first and most duly deserved.  She is great and totally appropriate, and I have already bloviated at length on that.

I am now going to discuss a more obscure and odd matter, the view of her and her Nobel-Prize-winning husband, George Akerlof, in the eyes of the public.  This is triggered by various media stories that have sort of downplayed or dismissed him while praising her and lifting her up, which I am all for and have done myself here and elsewhere on numerous occasions.  I note that I may be in a special position to comment on this as I have known George for 60 years, which might make me concerned about how people view him, although as someone frequently described as "the nicest person in the economics profession" who is also genuinely humble, he does not mind or care about any of this at all.

Mostly I want to reaffirm his important role both in her work and more broadly his importance to the economics profession and more broadly the history and development of economic thought. While she published papers on her own and with others, her most important and influential papers have been coauthored with him, including the one getting mentioned in the news reports about efficiency wages.  They have had a long joint research program studying labor market behavior taking into account such things as social interactions effects such as workers taking seriously whether they are being treated fairly.  They also contributed to the lit on the downward stickiness of nominal wages, which is an important macro fact, with Yellen bringing this into the policy discussion at the Fed when she was first a gov there under Greenspan, with this playing a role in her helping him to move from focusing on a zero inflation target to a positive one.  A major paper by George with Dickens and Perry at Brookings would support this and help pin down what is now the nearly universal 2% target that most central banks use, for better or worse.  They have had an enormous influence on global central banking that is not all that well understood or recognized.

Regarding George himself a curious thing has reminded me, actually clarified, how important his work has been for microeconomic theory as a whole.  He merely shared his 2001 Nobel for asymmetric information with Michael Spence and Joseph Stiglitz, although I think that both he and Stiglitz deserved to get it each by themselves.  Anyway, nearly a week ago Tyler Cowen posted on Marginal Revolution the grad micro major exam at MIT for Spring, 1961, available at , or something like that.

Most of the exam looks like stuff one would see on a current one at most grad micro programs in the US, lots of stuff derived from Samuelson's Foundations, especially as mediated by the now somewhat passe Varian grad textbook, still in use.  Some questions look more undergrad for today, such as some industrial org applications not using game theory and a question on when are laissez faire equilibria not Pareto optimal.  There is also one question that would now be strictly on a macro exam, although it does have a microfoundation, to explain the distinction between nominal and real interesr rates, thank you Irving Fisher, whom Samuelson took very seriously.

Anyway, given all the continuity and carryover, what struck me is what was not on that exam, basically two items: game theory and asymmetric information. Of course von Neumann and Morgenstern published their book in 1944 and Nash proved his more influential equilibrium in 1950, published in 1951.  But while probably they talked about how the prisoner's dilemma explains the instability of cartels, game theory was largely still not being taught at the MIT econ dept in 1961. Its takeover of industrial org and other topics was still in the future, frankly at a minimum waiting for the modifications that Harsanyi and Selten would make on Nash's important theorem to bring forth the canonical Bayes-Nash-subgame perfect equilibrium, from which many developments would come.

And, of course, the other missing topic now all over the grad micro courses is asymmetric information. Ah ha!  Yes, there had been informal discussions of this topic, most importantly by Hayek in his arguments against the efficacy of central planning.  But it was indeed the now-taken-for-granted paper from a half century ago, yes, 1970 in the QJE, originally rejected by at least one other journal, "The Market for Lemons," about used car markets.  It is easy to forget about how important it was.  It began the formal discussion of this important issue, which as near as I can tell is along with game theory the main new thing that has happened in orthodox microeconomic theory in the last half century plus.

Indeed, much of what was new in standard micro theory in the final decades of the 20th century, as well as well into this one, involved integrating game theory with asymmetric information and then applying this to a a wide variety of topics in microeconomics, as well as occasionally macro as well.. Insurance markets, basic industrial org, auction theory, financial markets, health economics, it goes on and on.  A sign of this is more recent Nobels since that one in 2001, with Hart and Holmstrom getting it together in 2016 basically for their 1987 paper that really nailed down the principal-agent problem, and this fall's one for Milgrom and Wilson, with Milgrom having contributed substantially to the development of all this and auction theory an important product of it.

So, bottom line, quite aside from his important work with Janet, George Akerlof's paper from a half century ago is one of the most important papers published in economics since the early 1950s, being the foundation of one of the two main streams of development in microeconomic theory.  We can talk all we want about Yellen and Akerlof, especially right now, but in the longer run, George is just incredibly important.

I am going to add on to this post an odd item related to both of them coming from my old personal connections to them, especially George,. One sign of his humility is that he regularly says he was the intellectual failure of his family, especially on his mother, Rosalie Hirschfelder's, side.  Many of them, including her and her brother Joe, and his brother at least, went to Yale and majored in chemistry, and his father, Gustav, an immigrant from Sweden, was also a successful chemist, although I do not know if he went to Yale.  Anyway, George went to Yale for undergrad before going to MIT for grad school, but he did not do chemistry, and in this has said he viewed himself as not living up to the family ideal of hard science, going into the softer economics instead.

Anyway, his uncle Joe participated in the Manhattan Project as a chemist and after the war became a professor at the University of Wisconsin-Madison, where he became a friend of my father's, and I came to know him.  He married a woman, Elizabeth Stafford, a mathematician who had become divorced from her mathematician husband, with whom she wrote a widely used textbook in the 1930s.. Betty Hirschfelder wrote many papers on her own and taught math at UW for 20 years, but was never offered a full-time or tenure track position.  Nevertheless she lived to be 100 years old and eventually gave substantial money to the math dept, some for grad students and some for the library, which was closed a few years ago as part of stupid policies there.  I knew her, and my mother used to have her over for tea, and George regularly visited her.

After Janet Yellen became Fed Chair she wrote a paper, which I should track down to see where it was published, that got a lo of publicity.  It was about discrimination against women in American academia, and her leading example was this aunt-by-marriage of her husband George, Betty Hirschfelder, who was a highly productive and capable mathematician, but was treated poorly by the UW-Madison math dept.  And now Janet herself has helped improve conditions for women in economics and has become this shining example of breaking through to new positions by a woman in economic policymaking.

Barkley Rosser