Moon of Alabama Brecht quote
September 02, 2021

On The Breeding Of Money - by Gordog

Gordog

Some continue to delude themselves about the so-called US economy, which is nothing but a house of cards---and this meaningless, completely fabricated 'metric' of GDP. In real terms, China's economy is already bigger by half then the US. And that is being charitable.

Let us review some basic facts about how NUMBERS actually work. This is known as MATHEMATICS.

Take for instance the Ponzi Scheme. This is an ingenious bilking scam where a group of investors is promised a guaranteed rate of return. Since there is no PRODUCTIVE business of any kind that can generate any return, the only way to pay those initial investors is to draw in more investors over the next term, usually a year. The incoming investors are likewise paid their return by the next crop of investors, etc. Now it is obvious just from this description that the amount of new investors has to INCREASE each year, in order for this to stay afloat.

The mathematical underpinning of this scheme is exponential growth. This is a mathematical function where the growth of something is a function of the EXPONENT of TIME.

In simple terms: if you start with a single cell that splits in two...then those two each split in two and so on, it is obvious that the number of cells doubles at a given rate of time. In a Petri dish, such organisms will rapidly multiply in number until they have exhausted all the nutrients available...and everybody DIES!

Now let's consider a bank that is lending money at interest. Here we have a group of BORROWERS rather than investors.

If in the first year, the bank has a given number of borrowers, it will receive back not just the amount of money it has lent, but an additional amount of money in interest. This accumulation of interest will continue building in perpetuity, according to the exponential math exactly like the Ponzi Scheme or Petri dish.

This is the fundamental mathematics of both. Only they are mirror images of each other. One is drawing in lenders [investors], while the other is drawing in borrowers. From the wiki entry on exponential growth:

Finance:

For instance if you borrow money at a rate of 9 percent interest per year, the amount you owe is DOUBLE after just 8 years [provided you are required to just pay it all back in one lump sum and not payments].

Now let's take into account that the ONLY way for brand new money to come into existence is if it is created as a BANK LOAN. That is actually how our system works. The borrower can be a consumer, a corporation or a government. It doesn't matter. But somebody has to step up to the bank counter and say 'I want a loan' before any new money can come into existence.

So here is the catch 22: Because the borrowers in any given year are also paying back interest, that means that more and more brand new money has to come into being each year, simply to account for that extra interest money that wasn't there before!

So you need an ever greater amount of borrowers stepping up and asking for loans.

Where do they come from? Can you just keep going like this forever?

Obviously the Petri dish and the Ponzi Scheme both tell us that this is a house built on foundations of sand. It cannot possibly continue in perpetuity. It all has to come crashing down.

Consider that 100 years ago, very few ordinary people needed to borrow money. Oftentimes people would buy a house or a car with money they had saved. By the time of the postwar years of the 1940s, you already had a new kind of borrowing culture emerging, where people would often seek credit to buy their own home more quickly.

[Recall the scene in Frank Capra's It's a Wonderful Life, where George Bailey [Jimmy Stewart] who runs a family savings and loan that lends to aspiring homeowners, confronts the badguy Henry Potter who is a slumlord and wants to ruin the small family S&L.]

For good or bad, this depiction of getting ordinary folks to borrow money so they can more quickly own their own home, as something positive and progressive, took root. Of course getting people to borrow for buying a house and car was just the beginning. Soon, you needed a whole new crop of borrowers, so we started women entering the workforce and becoming part of the debt slave pool.

[Remember, just like the Ponzi Scheme, the interest lending scheme needs EVER GREATER numbers of borrowers each year.]

Then when that dried up, you had to start importing brand new PEOPLE, ie immigrants! Today that is an increasingly fraught subject as the wheels continue to come off this Ponzi machine and there is less to go around for everybody. So people start resenting the newcomers. Yet, the powers that be insist on bringing in ever more people! They are needed. Each one is going to go to the bank and borrow to buy a car, a house, etc. Just like that Ponzi Scheme somehow has to find new investors to avert going tits up. Then you had credit cards, and then a very big one: EDUCATION. Now you have not only mom and pop debt slaving away, but even junior has to be pressed into the chain gang, before having even gotten an education or a vocation in life.

Is there any possible stone that has been left unturned in the search for new debt slaves? And this is all supposed to be so 'glorious'?

Some have foreseen all of those problems, such as Michael Hudson. He told us long ago that ancient civilizations had all come up against the same problem with EXPONENTIAL MATH: When you attach interest to loans, the amount of debt reaches unmanageable levels and has to simply be wiped clean. We see this from the graph of exponential math:


bigger

A real productive economy can be expected to grow only linearly, as in the red line. And even then, at some point it cannot grow any more!

But the amount of accumulated debt starts overtaking the amount produced by the real economy until it is double, triple or even many more times that of the real, productive economy. Obviously, the only thing you are doing is producing money itself, not actual and real things! That is why we have had ZIRP for more than a decade now. Zero interest rate policy. Not wanting to actually write off unpayable debt, at least cutting the money creation rate to zero is supposed to accomplish the same thing.

Only it's not working. And it's not ever going to work.

This is the fundamental problem. And the fact is that the moneychangers who are in charge of directing this whole Ponzi ball of wax are much much dumber than they imagine themselves to be. They work like Wile E Coyote: trying the same scheme over and over [greed], but hoping for different results. But the end result is always the same: BLOW UP IN FACE! And that's not even to mention the absolute morons who look up to these idiots as some kind of 'bright' people, lol! And absorb all of their made-up bullshit practically by osmosis!

But the REAL results cannot be papered over. The US is a third-world dump across vast swathes of its living terrain. Look at a comparison of the Moscow and New York subways, for instance.

Many of these dimwits who believe the bullshit peddlers also seem to think that the US still has some kind of advantage or lead in technology. WRONG! In real technologies that are hard to do, like rocket science and nuclear, the US is nowhere [despite a lot of ridiculous hype about the former]. China is already ahead in many key aspects. Even in consumer electronics like computer chips, which is not actually any kind of difficult technology, but simply a commodity business dominated by countries like Taiwan and Korea, China is systematically plowing ahead. The only real flagship industry where the US still has something left in the tank is in civil aviation manufacturing, although even here formerly great companies like Boeing have recently shown to be moving downhill quickly as they become 'financialized.'

The bottom line is that our physical world is governed by real, foundational principles, not by made-up bullshit that says Ponzi Schemes can succeed. They can't. No matter how much you contort yourself to believe that.

On the matter of wealth and gaining it, The Great Thinker had much to say:

There are two sorts of wealth-getting, as I have said; one is a part of household management, the other is retail trade: the former necessary and honorable, while that which consists in exchange is justly censured; for it is unnatural, and a mode by which men gain from one another.

The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest.

And this term interest, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth this is the most unnatural.

Aristotle, Politics Book One, Part X

There is no getting around these foundational truths. No amount of bullshit from various flim flam artists on Wall Street or Madison Avenue is going to change the result.

It's quite obvious that the wise and learned folks who are carefully guiding China along the path to a truly Great Society have taken these known truths to heart.

Posted by b on September 2, 2021 at 15:48 UTC | Permalink

Comments
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@ Posted by: c1ue | Sep 2 2021 22:05 utc | 91

Interest merely is a portion of the profit rate. If you take the profit rate of any business and subtract the interest the capitalist has to deduce to pay his debt, what is left is called "profit of enterprise" in Marx's theory.

The contradiction becomes acute when the financial products themselves are sold as products to other financial institutions, as if they represented real things. Then you have the interest of the interest, and so on. In the crisis of 2008, the housing market was just the first domino to fall, not the entire problem, of the American economy. The analogy of a house of cards is adequate here.

But yes, the process of simple lending is not a problem per se. In fact, it is, in practice, as if the lender was a partner in the business (when they lend to a productive enterprise, not to simple consumption), and a bank is no even necessary in such process. But that's not what happens in the advanced stage of capitalism, where everybody can - and do - get into debt.

Now, the question is why such "house of cards" is built up in the first place. Why does the capitalist class put their own system in danger?

Marx explains that in book III of Das Kapital. As capitalism develops the productive forces, reproduction of already existing capital gets more valuable and, therefore, more expensive to maintain in value terms. To put it simply, more complex and technological advanced societies are more expensive and cumbersome to maintain themselves. In capitalism, it is mathematically and logically demonstrable, and Marx demonstrated that it does happen (even though there are small periods of destruction, so it's not a straight line) through the process of rising organic composition of capital (OCC), which in worker language is nothing more nothing less than the process of firing people and substituting them with robots (or inanimate infrastructure).

As capitalism gets more and more automated, less workers are necessary to produce everything needed. But that's bad for capitalism, because less workers mean, most often than not, a falling profit rate. Profit rate is the rate of surplus value extracted beyond total capital invested, i.e. beyond what society at that point in time needed to maintain itself (maintain in the literal sense: pay all that society's bill, maintain the infrastructure intact, pay all the salaries etc. etc.). But only humans can give you more than they need to reproduce themselves: you can't cheat a machine or animal to overwork, because it is not a social being, its existence is enclosed entirely in the capital's rotation (e.g. a printer will only print 2,000 pages per ink cartridge and that's an absolute given: you can't whip it so it can print 5,000 with one same ink cartridge).

Posted by: vk | Sep 2 2021 23:20 utc | 101

The forest. The trees.

As I repeatedly say: IT'S THE SYSTEM! And no, it's not Capitalism or any other ism. It's the Growth System. EVERYTHING is based on the false premise that there can be infinite/perpetual growth on a finite planet. "Money" is nothing more than a weak attempt to account for the physical world, of the "use" of natural resoruces (natural resources are the ONLY thing of real value- without them nothing happens).

Derrick Jensen said that the Big Trick is to run the premise past people such that they don't see it, don't question it. If you can obscure the premise then you can create a story that appears to make perfect sense.

"Money" is but another piece of the Big Trick, one that has an appearance of legitimacy as long as one doesn't question the premise for which it operates. Comments are that it's not a Ponzi, and, well, perhaps one CAN make that argument, BUT, it IS a component of a Ponzi, the Growth Ponzi. And "money" is so connected to this Ponzi that it can be seen as a Ponzi in itself. Let's not, however, get distracted in that there is a fundamental premise that has run amok, one that assures a catastrophic outcome: I believe we're seeing some of the cataclysm starting to unfold.

Posted by: Seer | Sep 2 2021 23:31 utc | 102

Gordog,

> My contention is that this kind of growth, by a set percent each and every year, is not possible in the real world. At least not in perpetuity.
>
> It is possible TEMPORARILY, as long as there is ROOM to grow. At some point, there is no more need for any real goods. That is just a physical reality!

So you are saying growth will stop because all the needs will be satisfied, and there is no need for more "stuff"?

People buy lots of things not because they need them, but because they want them. You need food, you want prime rib. People will always want a faster car, a bigger house, a bigger tv, etc. They may not get it, but not because they don't want it; they won't get it because they cannot afford it. But this is a distributional issue - if wages don't keep up with productivity growth, then inequality will grow, and yes, the growth will at some point have to stop, because all the wealth will concentrate in very few hands (owners of capital) and there are only that many cars, houses, boats, planes, etc. that Jeff Bezos can use.

You think you found this growth-limiting obstacle - economy is credit-based, and interest rates charged by the bank exceed (in real terms) the productivity growth, hence the interest owed to the bank will grow exponentially faster then the economy, and something has got to give, since this cannot go on forever. The debt has to be reset.

Yes, it is being reset all the time. There many ways this happens. One is called bankruptcy. Barrower cannot repay, loan goes kaboom, the bank has to eat the loss. Another is inflation. A great way to reset debt. Nature has other ways - revolutions, famine, wars, economic depression, etc. In 1929, debt was out of the wazoo, by 1940, most of the debt was "reset" (and when WWII ended, economic growth went gangbusters). When unemployment is 25%, people and companies go bankrupt left and right; a lot of debt gets reset.

There is no reason productivity cannot grow as far as eye can see (in practical terms this is unlimited; note that this is not same as infinite). It has been growing for many thousands of years. Why do you think we live better lives today than in the year 1000? For just one reason - productivity growth (better technology too, but the is directly related to productivity).

Productivity does not grow at a constant rate each year, sure. There are bursts of productivity growth and periods of stagnation.

You think science/technology will stop advancing? Funny thing is, e.g., at the end of 19-th century it was a wide-spread view, that in physics, everything that can be discovered, had been discovered. Well, that point of view did not age well!

> There is no such thing in the real world as INFINITE GROWTH! Neither in biology nor in any other physical science!

Infinity is not the same of unbounded/unlimited. Unbounded/unlimited means that you cannot fix a specific dollar amount and say that the GDP can only grow to that amount and no more. If it can grow to $x amount, it can also grow to $x+1.

Posted by: KK | Sep 2 2021 23:38 utc | 103

My suggestion to Gordog and all other barflies interested in this topic and those related to it is to go to Dr. Hudson's website and use its search function using money as the search term, which will give you a great many results. I'll aid you all by linking to what I consider the top three in importance, although some will provide a greater overall context. First is "Palatial Credit: Origins of Money and Interest". Second is "Debt, Land and Money, From Polanyi to the New Economic Archaeology". And Third is "Democratizing Money--A Discussion". As noted, there're a great many more that I find fascinating, but then I'm a Political-Economic-Historian and biased about such things. Another many might enjoy is this panel discussion video "Left Forum: Money Matters". On the mathematical side of the discussion, I find Steven Keen to be excellent and you can't beat this old Forbes article, "What Is Money And How Is It Created?"

Keen and Hudson have often collaborated and one can search for videos of the two talking shop, which I highly suggest.

Posted by: karlof1 | Sep 2 2021 23:46 utc | 104

This would be more credible absent the nativist crap and claims about South Korea being a major computer chip manufacturer.

Posted by: Jay | Sep 2 2021 23:57 utc | 105

We can all agree that the Federal Gov't in tandem with the Fed has created a behemoth wherein the economic lifeblood of its system is disordered and not functioning along any type of cohesive, graspable theory of economics.

It is mere willful-force thrust upon a world increasingly mistrustful of its master's guiding-hand.

And it is indeed the diminishing flickering of this trust that will eventually bring down the Greenback.

Like Orphans we will wake devoid of that guiding-hand in the near future. The more experienced (read: aware that the collapse was assured) in the Orphanage should then make sure the situation does not devolve into Lord of the Flies-territory.

Pray for the collapse of the Greenback everyday!

Posted by: NemesisCalling | Sep 2 2021 23:57 utc | 106

Interesting that Gordog points to China as a country somehow immune to the Debt Ponzi scheme.
Sure, they have more of a real economy to pay their debt off with than others, but their debt to GDP ratio is higher than the US', according to Reuters anyway... 250%, Private Debt is especially high and a lot of loans are being handed out by the Government for the BRI/OBOR all over the world...

Granted the BRI/OBOR seems like a wiser investment than say, the Afghan Army etc... but the fundamental dynamics of growth by debt are still at play in China as they are everywhere else.

Does Chinese maths work differently or am I missing something here?

http://fingfx.thomsonreuters.com/gfx/rngs/CHINA-DEBT-HOUSEHOLD/010030H712Q/index.html

Posted by: Et Tu | Sep 3 2021 0:14 utc | 107

The so called "best and brightest" of the Ivy League all believe in algo's to get rich. Little do they know it's all GIGO and the game is fixed.

Or one can become a politician and govern not for your constituents but for your portfolio.

The great american dream has without a doubt become the great american nightmare

Posted by: ggersh | Sep 3 2021 0:38 utc | 108

Only problem is that us little people need to play along if we can scrape a few pennies together, because the banks don't offer interest to speak of and the FDIC is perilously underfunded. Only problem is: When to stop playing?

Oh, and there's another teensie-weensie problem: Assuming we cash in our chips before the next crash, who's to say the chips will be worth anything?

Posted by: corvo | Sep 3 2021 0:43 utc | 109

I would like to echo James, K and Peter AU 1 in thanking Gordog for writing an interesting article on the topic of money and the reality of money creation in Western and other societies beholden to Wall Street, the City of London and the Bank of International Settlements, and their puppet masters and connections.

It is interesting that people with technical science and engineering skills can often see economics-related issues with a lot more clarity and explain them better than those who have swallowed classical economic theories and models and never questioned them.

Many comments here critical of Gordog's article are barking around the details and edges of what Gordog says but rarely challenge or directly address what it says.

At the risk of putting extra pressure on Gordog, I would be curious to know what he thinks of Boeing's recent history of becoming a financialised company based in Chicago, away from Seattle, and how that has led to the Ethopian and Indonesian air crash disasters involving the 737 MAX passenger jets. I suspect that my hunches that financialisation led to changes in corporate and engineering culture encouraging outsourcing of software development to overseas engineers, and putting pressure on technical staff to come up with the cheapest and easiest changes in aircraft and software design and manufacture, may be proven correct.

Posted by: Jen | Sep 3 2021 0:43 utc | 110

Et Tu @ 106:

I am looking at the two graphs under the "worrying part" of the article:

1/ there is a missing context, and that is the relative sizes of the Japanese, US and Chinese economies in 2006. What was the size of China's economy compared to the other two nations in that year? If the Chinese economy was smaller then, the growth in combined private (corporate and household) debt looks more alarming than it is because it started from a low base.

2/ in the second graph you'll see that corporate debt as a percentage of China's GDP is much greater than government and household debt. We don't know from the graph though where Chinese corporations are borrowing from - are they borrowing from overseas or from Chinese banks? What are the corporations putting the money they borrow into - is the money being used to invest in local projects or to buy back shares or take over other companies? What are the interest rates on the loans as well?

Posted by: Jen | Sep 3 2021 0:53 utc | 111


Corruption is merely a nasty word for the autumn of a people.
https://twitter.com/Nietzsche_Daily/status/1401130683012161536

Facism
https://twitter.com/RudyHavenstein/status/1382463596874059777

Posted by: Anon | Sep 3 2021 0:53 utc | 112

Thanks for the great article, comment and links.
My only comment is that impact of (negative interest rates/forced cashless) doesn't seem to be mentioned.

Posted by: Dim sim | Sep 3 2021 1:04 utc | 113

Jen @ 109

While there's blame to had by the corporates at Boeing, at their wanting to pocket more and more, it's all connected to the growth paradigm. Lurking below are the pensions, pensions that can't happen without those "growth forecasts" landing on the tarmac. We are ALL complicit in one way or another. It's easy to blast the corporatists, and proper, but they're only playing the same system that we all are. Again, it's The System!

BIG means more control. More control means there are less multiples of eyes, eyes that would otherwise spot problems: computers programmed by faulty minds produce faulty code and faulty products. But let's not fool ourselves as though folks are interested in correcting problems- we have many whistle-blowers locked up who are testaments to this.

When Boeing moved corporate to Chicago I wrote to a paper where Boeing had/has a big plant and told them that Boeing was no longer a local stock and shouldn't be listed in their "Local stocks" section. Haven't looked recently, but many years after that there had been no change: I suspect that it's still the same. Sometimes reality can't be dealt with...

People will defend whatever it is that provides them with their "life." V.P. Dick Cheney once said: "The American way of life is non-negotiable." (or very close to that) So, no matter how f*d up, it will continue to be what is, until that is, it is not.

Back to the money train issue... Funny money accounting is only possible because it's built on a funny/flawed premise: perpetual growth on a finite planet. We don't see it as funny, though people are starting to smell the rat (Gordog is helping in this regard), because we don't see the strings attached to the [never-talked about] premise. I like Michael Hudson, but he fails to account for the basic concept of human growth: I don't think that anyone really can, so it's not necessarily a dig at him; it's just that we can't possibly create a usable solution if we don't understand what the problem IS.

Posted by: Seer | Sep 3 2021 1:15 utc | 114

Jen, thanks for your comment and question.

The Boeing 737 MAX is literally a CATASTROPHE from a technical point of view---both engineering and piloting.

The MCAS system that caused the problem is nothing but a band-aid, where computer automation has been slapped on inappropriately.

There was, and is, an aerodynamic fix to the aerodynamic problem created by simply putting on those bigger engines. That aerodynamic fix is quite simple really: a bigger horizontal tail!

That should have been a no-brainer for the previous Boeing culture, which was engineering dominated. In fact, they would have said, 'well, if we're going to redesign the tail, then why not a new wing, taller landing gear so the big engines don't have to be mounted so excessively forward and up etc...in fact a clean sheet airplane!'

This kind of catastrophe NEVER should have happened. Not in this day and age, where passenger jets are so highly evolved and remarkably fault-tolerant machines that can survive just about anything.

I will just expand also on my initial statement about civil aviation being the last real leadership industry for the US. This actually should include the military aviation sector as well, although this industry has declined even more precipitously in terms of engineering quality. [F35]!

The MIC in general is still a very robust industry [but steeply declining in engineering quality]. Building ships and subs and missiles etc is still a huge plus for the US industrial economy, which has very little left otherwise, the car industry being one other exception.

Industries like that used to be a HUGE part of the American Dream if you will. Because they employed skilled workers at decent wages and were the backbone of prosperity and upward mobility for ordinary folks.

That this kind of industrial America is maybe one tenth of what it once was tells you all you need to know about the conscious decisions that have been made to turn America into a land of financial 'engineering' rather than industrial engineering.

Posted by: Gordog | Sep 3 2021 1:24 utc | 115

@ Gordog | Sep 3 2021 1:24 utc | 114:

In other words, the 737 Max is a success. Granted, there was some regulatory kerfuffle and a few hundred dead brown people, but Boeing wins the day by pushing all that aside and forcing its deathcraft on airlines worldwide. That US regulators and airlines would roll over and play dead (or, if not playing dead, exerting pressure to adopt the 737 Max) was a foregone conclusion. And just today Malaysia knuckled under. Plenty more national airlines will follow, no doubt, thanks to our worldwide benevolent influence.

Posted by: corvo | Sep 3 2021 1:30 utc | 116

"There are many ways in which the US economy is unhealthy and the fincancial service certainly plays a key role in this development. Just not in this hyper-simplistic manner." - m @ 44

Were I to grant you all of that I would still have the same pig but with more lipstick on it.

Let's try an example. My construction services created houses as an output. That seems just a function of the former assuming they all live somewhere. That's the point about construction right?

Posted by: David G Horsman | Sep 3 2021 1:58 utc | 117

Tom_Q_Collins | Sep 2 2021 18:42 utc | 49
It is important to mathematics, or generally so, and terms are important.

But it's not important to reading the graph so much as very important when describing growth of any sort.

Posted by: David G Horsman | Sep 3 2021 2:08 utc | 118

Gordog @Sep2 21:57 #89

JR @ 78: I say that that the financial 'industry' is designed to DEFRAUD just as much as the Ponzi Scheme.

You said that interest was the same as ponzi. I disagreed. Now you're pretending that you had it right all along.

=
Consider the graphs about wealth share I just put up. They are taking money from us ordinary folks, simply based on the the fact that they have the POWER to do that! No difference from armed robbery in my book!

Those Wealth share charts are based on the economy as a whole. They say little about the excesses of the financial industry. This is just one of many ways you show us that you're out of your depth.

"ARMED robbery" is yet another exaggeration.

=
As for your thoughts about capital being 'scarce' and this being a reason for having a financial 'industry.'

I completely disagree. Others here have pointed out that a sovereign government can create its own credit. So it's not 'scarce.'

Your appeal to the authority of "others here" is specious as those "others" don't necessarily know what they are talking about. They are just people that are frustrated, like you and many of us.

If governments just printed unlimited money and handed it out without interest then nobody would need/want to work. Hurray! That is what you are arguing for.

=
China has been doing exactly this! If the government creates money to build a road or housing for people or any other kind of industry or infrastructure then this is most definitely not the same as what we have going on with financial 'engineering.'

No, China hasn't. For example, they don't hand out money without interest. Take a look at China's 'Prime' Interest Rate.

Project Finance gets as much 'financial engineering' in China as it does in USA. Mostly hedging risk. It just makes sense to use the tools that are available to contain risk.

=
Did Stalin have a financial 'industry'? Yet the massive growth of the Soviet economy in those decades has not even been equaled by China in its recent spurt!

I gather that you are now claiming that markets are unnecessary for an efficient allocation of resources.

This is easily countered by the fact that, despite their history with command economies, both Russia and China make use of markets today. Apparently they don't see the 'magic' of Stalin's economy in the same way you do.

=
What I have described is completely correct.

You insist that you are "completely correct" when I've shown that you aren't. You call interest a ponzi scheme without understanding either. You mix apples and oranges: railing against ponzis then decrying the 1%'s slice of the pie.

You're angry like everyone else, and you have a right to be. But you're out of your depth. You're an engineer, not an economist. It was unwise of b to make your comment into a post. Hudson would not make the mistakes that you do.

=
We have been boiled slowly like the proverbial frog, by becoming indebted more and more. This is by design, and in fact necessity, as the underlying math makes clear.

Yes, it is similar to the boiling frog.

But it's not "the underlying math" that ran up $29 billion of debts. It's not "the underlying math" that tightened bankruptcy laws. It's not "the underlying math" that gave tax cuts to the rich during a war (the Bush tax cuts, made permanent by Obama). It's not the underlying math that drove USA to waste more than 2 trillion dollars fighting the Afghan war.

Let me reword: We have been pushed, as the underlying science makes clear (gravity). You see the problem? People need to be convinced that they have been pushed, not that they are falling.

=
It is simply the choice that our ruling elite has made.

I'm unsure of which bad choice you're referring to here. Allowing huge wealth inequality? Failing to ban the financial industry? Not printing money and giving it away at 0% interest?

=
It is the biggest Ponzi Scheme of all!

No. Ponzi is a certain type of fraud with well defined characteristics. What you are railing against is different.

<> <> <> <> <>

You really should consider the comments that caution that you're analysis is not quite right and/or doesn't move the needle.

You should also consider that we have had these discussions at moa, on and off, for YEARS. There are moa readers that have a strong understanding of finance, economics, and markets who have weighed in. For a start, you might reconsider some of the critical comments in this thread.

You might also want to tackle this question: if the FRAUD is as clear, evident, and pressing as you say, then where is the outrage? Why haven't people risen up? Why do they accept it? And it's NOT because they don't understand exponential growth or don't have a sense that they are being 'had'.

PS I'm not being difficult or throwing shade. I've been a critic of finance and government for years. And I'm actually looking forward to your Space post.

!!

Posted by: Jackrabbit | Sep 3 2021 2:34 utc | 119

"That this kind of industrial America is maybe one tenth of what it once was tells you all you need to know about the conscious decisions that have been made to turn America into a land of financial 'engineering' rather than industrial engineering."

Engineering looks at the scientific data on the product vs political and finance industry looking at perception management data.

Posted by: Peter AU1 | Sep 3 2021 3:09 utc | 120

Tom_Q_Collins @ 61. In Canada our equivalent system is known as "welfare". Yeah... people just stay home.

And on the bright side at least you make something... War and stuff.
That's the joke about that up here.

Others please note this goes a long way towards explaining Bernie Sanders' FP and longevity in politics.

Posted by: David G HorsmanDavid | Sep 3 2021 3:16 utc | 121

"But the REAL results cannot be papered over. The US is a third-world dump across vast swathes of its living terrain. Look at a comparison of the Moscow and New York subways, for instance."

To borrow a felicitous phrase from that great American sage Donald J. Trump: America is a Shithole Country.

Actually, though, it would be more correct to say that America is a Shithole Empire.

Indeed, the American Shithole Empire is nearing the point where it will implode spectacularly like a massive star collapsing into a blackhole in outer space.

Most Americans have no real idea of the economic and political destruction that awaits them, which will likely make Hurricane Ida, Covid-19, or the Great Recession seems like a tea party.

In many ways, however, America will only be reaping what it has sown around the world.

Like the Imperialist West in general, America's way of life, economy, and thus it's hallowed "democracy" are based on upon the rapacious exploitation of workers in the Third World and even in what used to be called the 2nd World--from Mexico to the Congo to India to China. This is the great unspoken issue that Americans and their apologists cover up, when they disingenuously whine about "outsourcing" or "foreigners stealing American jobs."

This is not to mention American Dollar Imperialism, which enables Americans to live beyond their means and devour enormous amounts of goods from the rest of the world by running up a debt that the USA will never pay off.

American wars of aggression are ultimately waged to enforce this system of planetary plunder, which the United States and its war criminal allies of Europe, the Anglosphere, and so-called Free World jealously defend.

But what happens when this criminal system ends?

The oh-so-precious American Way of Life itself--and with it, the Big Lie called (Western) Liberal Democracy, which is materially dependent on this malignant economic system--will also implode.

Grab your popcorn.

In a supreme example of karmic justice, the self-proclaimed "Leader of the Free World" will become the leading shit show on planet earth.

The hellscape the U.S. plans to bring to its own people
https://rainershea.com/f/the-hellscape-the-us-plans-to-bring-to-its-own-people

Mercenaries in U.S. borders: a sign of a rapidly declining empire
https://rainershea.com/f/mercenaries-in-us-borders-a-sign-of-a-rapidly-declining-empire

Posted by: ak74 | Sep 3 2021 4:03 utc | 122

Thanks to everyone for the generous food for thought regularly found here.

This thread has me thinking deeply about whether or not Covid-19 and/or the response to it are somehow related to preserving usury as the dominant controlling force of the world. In any event I am too indebted myself to do anything about it but muse.

Posted by: Rutherford82 | Sep 3 2021 4:21 utc | 123

Taiwan is not a country, just the main chip hub.

Posted by: Lbanu | Sep 3 2021 4:35 utc | 124

@50 Tom_Q_Collins
Sure is that the point. When Gordog thinks of money he sees a heap of gold and silver coins, when he thinks of economy he sees a factory. A bank doesn't produce precious metal (that would be a mining company).

A financial service is somethimg he can't see, touch or feel. He doesn't understand it's economic purpose.

Since banks produce "nothing" all they produce must be just a Ponzi scheme.

Posted by: m | Sep 3 2021 4:37 utc | 125

Gordog @Sep3 1:24 #114

The Boeing 737 MAX is literally a CATASTROPHE from a technical point of view---both engineering and piloting.

b wrote a number of excellent posts about the 737MAX after the second plane crash.

=
The MCAS system that caused the problem is nothing but a band-aid, where computer automation has been slapped on inappropriately.

From what I understand, the MCAS system didn't "cause the problem", it attempted to fix the problem of the larger engines.

And some say that MCAS wasn't the problem, it was the MCAS implementation that was faulty.

=
There was, and is, an aerodynamic fix to the aerodynamic problem created by simply putting on those bigger engines. That aerodynamic fix is quite simple really: a bigger horizontal tail!

How would this help? Bigger tail = more weight = nose lift = more stall risk?

=
That should have been a no-brainer for the previous Boeing culture, which was engineering dominated. In fact, they would have said, 'well, if we're going to redesign the tail, then why not a new wing, taller landing gear so the big engines don't have to be mounted so excessively forward and up etc...in fact a clean sheet airplane!'

But they were never going to redesign the tail because management didn't want a recertification. They would've meant pilot retraining. Boeing had promised customers that would not happen.

I find it strange that you are mooting something that was never in the cards.

=
This kind of catastrophe NEVER should have happened. Not in this day and age, where passenger jets are so highly evolved and remarkably fault-tolerant machines that can survive just about anything.

This is an empty statement. Everyone knows it never should have happened.

=
I will just expand also on my initial statement about civil aviation being the last real leadership industry for the US. This actually should include the military aviation sector as well, although this industry has declined even more precipitously in terms of engineering quality. [F35]!

1) I think you are talking here of technical leadership. And I think you are maybe too focused on aviation to see advancements in other industries. USA has led the world in IT innovation until maybe very recently (they are still a contender because of built-in advantages). USA oil & gas sector leads in fracking technology, though it has clearly been misused. Judging by the 'healty' venture capital funding of healthcare innovation (driven by USA over-spending for healtcare), I think we're a leader there too. I won't belabor the point.

2) F35 business leaders were very successful at fleecing the US taxpayer. I don't think the failure was in engineering. I think true costs were purposely hidden/lessened/obscured until the project became too big to fail because too many important people would be embarrassed if it did fail.

I recently wrote a comment about the F35 here. The F35 program was recognized as a 'calamity' in 2012. Yet, with enough important people behind it, it was unstoppable.

Did Pentagon procurement really fall for this "In for a penny, in for a pound" scam? I think so - with some encouragement, no doubt, from highly paid ex-generals/admirals/etc, on MIC payroll.

=
The MIC in general is still a very robust industry [but steeply declining in engineering quality]. Building ships and subs and missiles etc is still a huge plus for the US industrial economy, which has very little left otherwise, the car industry being one other exception.

It is a "robust industry" because of the fleecing of the US government/tax payer.

Too often, we find industry participants don't care much about how THEIR industry's abuses.

=
Industries like that used to be a HUGE part of the American Dream if you will. Because they employed skilled workers at decent wages and were the backbone of prosperity and upward mobility for ordinary folks.

USA has effectively been 'printing money' for MIC - just as you have proposed (in this thread) that they do for all of America.

=
That this kind of industrial America is maybe one tenth of what it once was tells you all you need to know about the conscious decisions that have been made to turn America into a land of financial 'engineering' rather than industrial engineering.

But no lessons to be learned about MIC/militarism/Empire?

!!

Posted by: Jackrabbit | Sep 3 2021 5:02 utc | 126

I saw Gordogs name and I thought I would get a translation of a technical reading of some aeronautics .
Nope.
I got some zerohedge economics duh article.
Should I buy gold, Gordog?

Posted by: Cadence calls | Sep 3 2021 5:12 utc | 127

From Mike Hudson's excerpt of his new book:

The industrial capitalism that Marx described in Volume I of Capital is being dismantled. He saw the historical destiny of capitalism to be to free economies from the legacy of feudalism: a hereditary warlord class imposing tributary land rent, and usurious banking.

He thought that as industrial capitalism evolved toward more enlightened management, and indeed toward socialism, it would replace predatory “usurious” finance, cutting away the economically and socially unnecessary rentier income, land rent and financial interest and related fees for unproductive credit.

Adam Smith, David Ricardo, John Stuart Mill, Joseph Proudhon and their fellow classical economists had analyzed these phenomena, and Marx summarized their discussion in Volumes II and III of Capitaland his parallel Theories of Surplus Value dealing with economic rent and the mathematics of compound interest, which causes debt to grow exponentially at a higher rate than the rest of the economy.

Obviously the exponential math of usurious finance was of interest to Marx and the other classical economists mentioned here by Prof Hudson.

So I will conclude that it is indeed a subject worth discussing. Those who 'opine' otherwise are of course free to take it or leave it.


Posted by: Gordog | Sep 3 2021 5:19 utc | 128

JR, about the 737 MAX:

The bigger engines had to be mounted farther forward of the wing, and also raised higher, on account of ground clearance.

This placement caused an aerodynamic anomaly that was discovered in flight testing. A very serious matter having to do with 'stick force gradient.'

This means that as the pilot pulls back on the control yoke [stick] to raise the nose, the FORCE required must continuously INCREASE.

This is a very key handling characteristic that tells the pilot he is nosing up the airplane too far---and nearing the wing stall.

This required gradient was disrupted on the MAX, and when pulling back at high nose-up angles, the stick actually started going SOFT.

This is a key tactile input that the pilot relies on to signal a dangerous imminent nose-up condition.

The reason this happened on the MAX is because the big engines were contributing ADDITIONAL LIFT to that made by the wing.

The horizontal tail has the function of BALANCING the wing lift, by actually creating a DOWNFORCE. That is why the tailplane is there.

The amount of balancing downforce available is called tail 'authority' and is a function of the size of the tail, and its distance from the wing, which is in effect a lever arm.

The MCAS is a terrible idea in principle. It is meant to COMPENSATE for the lacking tail authority, by activating the tail TRIM.

Trim is increasing or decreasing tail downforce, as needed to BALANCE the airplane at different flight speeds. It was never meant to be used to compensate for inadequate tail authority. You do that by increasing the tail size, or mounting it farther aft to increase its lever arm, or a combination of the two.

So the supposedly 'fixed' MCAS is still a very bad idea. It is a jury-rigged bandaid. Not a proper solution by any means.

Posted by: Gordog | Sep 3 2021 5:54 utc | 129

@Gordog

But the REAL results cannot be papered over. The US is a third-world dump across vast swathes of its living terrain. Look at a comparison of the < Moscow and New York subways, for instance.

Indeed, Moscow's subway system is clean and beautiful, and even quite artistic in many places; and the US system is disgusting.

I note that much of Moscow's subway system must have been built in Soviet times; we can see the Lenin statues, hammer-and-sickle motifs, and CCCP symbols. The lovely decor in many stations seems to indicate that Soviet wealth was far greater than Western propaganda would have us believe.

Of course, the Moscow subway system may have been treated as a symbol of the nation, and a disproportionate amount of wealth may have been lavished on it. However, subway systems are for the people to use, not for elites. I think the Moscow system, clearly designed with much love, and maintained with care and pride, says something about the Soviet government's priorities, and the appalling state of New York's subway speaks quite differently of the US government's priorities.

Posted by: Cyril | Sep 3 2021 5:57 utc | 130

Gordog @Sep3 5:19 #127

Yes, it was known to Marx and has been discussed ever since. However, I know of no revolution sparked by anger over "compound interest".

"Compound interest" is like a gun. It is dangerous only when handled by the unscrupulous. We don't blame the gun, we blame the person(s) who pulled the trigger.

The danger of compound interest is so well known that it draws scrutiny. That makes it somewhat difficult (not impossible) for fraud - except when sanction by the government like in credit card interest rates and payday loans.

Today we have a proliferation of frauds that have nothing to do with compound interest: insurance frauds, arbitrage frauds (immigrant wages; information, etc.), political frauds ("the fiscal cliff" to justify making the Bush Tax Cut permanent); military frauds (procurement, "forever war", etc.) - did you know that after the oil spill in the Gulf the Pentagon bought Gulf seafood that no one else would buy eat and fed it to the troops? Tax frauds ... and the list goes on.

!!

Posted by: Jackrabbit | Sep 3 2021 6:10 utc | 131

Cyril, yes. My thoughts exactly! 👍

Posted by: Gordog | Sep 3 2021 6:12 utc | 132

Gordog #Sep3 5:54 #128

Thanks for the reply but some things are still not clear:

'stick force gradient.' ... was disrupted on the MAX ... because the big engines were contributing ADDITIONAL LIFT to that made by the wing.

Was this it the engines or the speed trim function? As described in Boeing manuals:

The stall detection circuit monitors the flap position and the angle of airflow. Near stall, the speed trim function trims the stabilizer to a nose down condition to allow for trim above the stick shaker AOA and idle thrust.

=
The MCAS is a terrible idea in principle.

And yet a similar device was used by 737NG without incident.

And instead of citing MCAS as a "terrible idea in principal" critics have focused on the demands that Boeing placed on pilots - especially when those pilots have been told that the plane will operate virtually the same as other 737's. Suddenly they are faced with a situation that they don't expect and the plane acts in a way that is confusing to them:

=
MCAS ... Not a proper solution

Yes, of course. The proper solution was a redesign which was specifically forbidden by management due to competitive pressure (the Airbus 320).

However, while I'm no expert, it seems that it could've been a workable solution. If the engineers didn't think it was workable then I think they would've resigned in droves.

!!

Posted by: Jackrabbit | Sep 3 2021 6:50 utc | 133

Cyril @Sep3 5:57 #129:

Indeed, Moscow's subway system is clean and beautiful, and even quite artistic in many places; and the US system is disgusting.

But it has ALWAYS been like that. So it's hardly an example of USA/West's recent decline and imminent fall of the Empire.

In case you missed it, the Soviets LOST the Cold War despite having the best-looking subway system this side of the Urals.

!!

Posted by: Jackrabbit | Sep 3 2021 6:57 utc | 134

JR, the speed trim system on the NG is not remotely comparable to MCAS.

It is a small step in that direction though, where you have flight automation jumping in to 'help' the pilot in certain flight speed regimes. But it is a very very small step with nowhere near the authority of MCAS. It could NEVER nose the plane down by itself, like MCAS was designed to do.

The lift from the engine nacelles had nothing to do with that. Practically any shape of body will create LIFT, provided it is at an 'angle of attack' to the oncoming airflow, ie tilted UP.

That includes a cylindrical engine nacelle. The problem stemmed from the new engines being forward of the wing, which is again a LEVER ARM that multiplies the lift force produced. That additional lift overwhelmed the tail authority.

Look, you can believe whatever you choose, but I am telling you as a qualified test pilot and flight test engineer that stick force gradient is a HUGE handling and safety issue. IT HAS TO BE FIXED.

And you ALWAYS want to fix those kinds of aerodynamic anomalies by AERODYNAMIC means. So no, I don't consider MCAS an appropriate fix at all. And I am far from alone in that.

As for engineers resigning in droves, well, that is your 'logic'. Some did resign. There were several whistleblowers.

Look, obviously you have a problem that I cannot help you with.

Posted by: Gordog | Sep 3 2021 7:29 utc | 135

Jackrabbit 133

Soviets couldn't create a consumer economy, but neither did they fiddle the books as with the petro dollar scam. History may have been different after US ran out of gold if not for the petro dollar. Look at the historical chart of US debt and it becomes clear that the petro dollar was nothing more than a credit card. Since then, the US have lived high off a credit card but that is now coming to and end too.
Unlike the soviets, it is becoming clear the US intends to keep going in any way possible with no plan b for a soft landing. I think when it comes, the US ending will be quite spectacular compared to the soviet collapse. Neither ideology was or is sustainable.


Posted by: Peter AU1 | Sep 3 2021 8:19 utc | 136

@128 Gordog: "You do that by increasing the tail size,"

That's one of the things that gets me about the Max.

I understand that the engine had to be propped forward-and-up because the wing is mounted low (unlike the A-320), and this caused serious aerodynamic problems.

But, honestly, what stopped Boeing from simply increasing the size of the tail to compensate?

Any number of WW2 warplanes were redesigned with bigger tails when more powerful engines were fitted - including a number that were built by them - so it's not as if Boeing were unaware of that concept.

So why use MCAS when the more elegant solution is simply to design a bigger tail for the damn aircraft?

Posted by: Yeah, Right | Sep 3 2021 8:21 utc | 137

The difference between government and private DEBT?

Only one is an actual debt - the private sector one.

The government one is actuall SAVINGS of the prvate sector.
——————
An individual and a business, as a commercial entity can have debt and an obligation to repay it - through an IOU , a promise, a contract etc.
Frequently backed by some asset - car, house etc or just the legal liability to pay as in a overdraft or credit card

If that repayment cannot be made it results in default and a claim on the assets of the borrower by the debt holder - what is understood as bankruptcy.

Such personal bankruptcy used to mean not only a loss of all ones assets, which were than sold off to repay the creditors (any surplus being returned to the debtor). but also liberty - Jail - yes such people were incarcerated too! Until their families or friends could raise enough to repay their remaining debts.
The great Charles Dickens wrote of such iniquity of the Victorian era through personal experience and is worth reading still.

In contrast government ‘debt’ in the form of Treasury Bills owned by banks and major corporations and small scale holders through savings in National Savings and Premium Bonds (in the U.K.) - is NOT a debt that the government can ever go bankrupt over.
It is infact the SAVINGS of these people and entities which they have chosen to deposit with the government - rather than in a investment fund, physical gold , silver Jewellery, art or even bricks and mortar etc - WHY?

Because it is the safest savings of ALL.

The values of all other investments can and often goes DOWN.
There is no guarantee that the house you paid 100k for will find a buyer for 100k when you want to resell it. Or indeed any other of the list of investments above.
The value of any such thing is the price someone is prepared to pay for it at the time you want to sell it.

That is what all it has always been and why markets have always existed throughout history in every part of the world where humans exchanged stuff between themselves.

The Government can never go bankrupt if it issues debt notes to such savers in its own currency which PROMISE to pay the holder that amount in the government currency.

It is why these major institutions clamour to buy up all and any Treasury Bills at WHATEVER. Interest the Government wishes to sell them!

Note that interest rates have been close to zero - so with even the minimal inflation the real rate of return is NEGATIVE.

eg 100k deposited with a government today will when it is redeemed give back less in real terms than what it is worth today.!!

Why - because these savings guarantee to be able to repay exactly the amount that was paid for them.

Banks can’t do that and to stop them having a run on them - the government even GUARANTEES - savers deposits upto a certain amount of banks themselves go bankrupt!

All because the government can create money in its own currency at ANYTIME for ANYTHING and is therefore the safest place for cash deposits.

Posted by: DG | Sep 3 2021 8:29 utc | 138

Yeah, Right

From what I know of current Boeing, bean counters have final say. FAA was in their pocket to a reasonable extent but more extensive modifications meant more approval/certification had to be obtained. Cost and time.

Posted by: Peter AU1 | Sep 3 2021 8:31 utc | 139

@Jackrabbit | Sep 3 2021 6:57 utc | 133

But [the good Moscow subway versus the disgusting NY subway] has ALWAYS been like that. So it's hardly an example of USA/West's recent decline and imminent fall of the Empire.

No, the NY subway must have been rather decent at one time. Else why the Guastavino tiles on walls everywhere; the tiles must have been more expensive than bare, brutal concrete. The NY subway's current horrible condition is an excellent metaphor for the Empire's decline. I wanted to take a shower after viewing the NY video; the scenes were that disgusting.


In case you missed it, the Soviets LOST the Cold War despite having the best-looking subway system this side of the Urals.

As I said, the NY subway must have been decent at one time. Similarly, the US must have been decent at one time, as it managed to attract the world's majority to its side. So the Soviet Union was opposing not America alone but also the bulk of the world. That was an immense burden; I'm not surprised the USSR lost.

These days, the situation is almost reversed. Something like 160 of approximately 200 nations in the UN are now in China's Belt And Road (BRI); this is evidence that most of the world hates the US. The rotting NY subway, hidden underground, is like the hidden mirror showing Dorian Gray's true condition, contradicting his apparently fine surface, and is a fitting symbol for the rotting Empire.

The subway contrast is also evidence of something else, which I mentioned previously. A subway system is for the people's use; the beautiful condition of Moscow's system is good evidence that Russia cares about its people; and the dreadful condition of New York's system is a similarly good indication that the US does not care about its people.

Posted by: Cyril | Sep 3 2021 8:46 utc | 140

Ponzi schemes keep going until' they can't. You just need to find a new way to keep the fraud going? Some new form of kool aid to keep everyone in thrall? Something like a rent on the human body? Something that would require everyone in the whole world to have regular infusions? What on earth might they come up with, I wonder?

Posted by: ADKC | Sep 3 2021 9:05 utc | 141


@Gordog | Sep 3 2021 5:19 utc | 127

I am going to get a little philosophical if I may on here.

There is a difference of time between Adam Smith and JS Mills/Marx

It is my contention, based on my personal self education over the last decade , that Capitalism/Anti-Capitalism was ‘created’ as a new religion as the previous fairytale had fallen to pieces under the unstoppable progress of scientific method which was uncontrollable as the previous religion was by seminaries, bishops , popes and the kings who were supposedly anointed by God!
You were a heretic if you interpreted their religion for anything except what they said.

All with its own textbook that must never be questioned - The Bibles.
(Other religions and texts also)

The same old Powers that have lurked and pulled strings behind the European landscape and over the planet since the end of the C15th - were forced to create the new religion - they chose JS Mill/Marx to be the figureheads - the PROPHETS of profit if you will 🙂.

The ready made new cosmic order was able to dispense with a God that no longer could be believed , as neither could the concept of the Earth being the centre of the Universe! (They held that off by killing scientists) or that it was a mere 6,000 years old!

The trouble with science was that they couldn’t take a child at 6 and mould them into the adult they needed to keep the lies alive in populations across the planet.

Scientific/mathematical geniuses sprout independently across all classes races and geographies and ages.
I guess the more humans the more geniuses! (On that bases by the end of this century most future geniuses will be African)

It threatened the control of the only force that matters to them - MONEY.

Concepts cemented into the creation of Economics as the new religion by its various figure head prophets.

Capitalism = the new God
Anti-Capitalism = the new Satan
Or vice versa!
Created as the new lies (religious certitudes) of the last 200 years - by the agents of the Ancient Powers who always laid claim of ownership of the worlds lands and the peoples.

Money is their proxy for Power.
With which to buy praetorians, mercenaries and terror and death to insulate themselves from the rest of humanity that they consider to be their slaves.

Adam Smith was like Copernicus and others threatening that world order and had to be neutralised by his message and philosophy being taken over and subverted.

We are finally throwing off that lie as we threw off the lie of a God and the infallibility of Gods representatives on Earth and the fake hell and heaven rather than equality here while we are alive!

Posted by: DG | Sep 3 2021 9:50 utc | 142

UBI IUS BELLI IBI IUS USURAE

Posted by: luca | Sep 3 2021 10:23 utc | 143

RE: Posted by: DG | Sep 3 2021 9:50 utc | 141


“There is a difference of time between Adam Smith and JS Mills/Marx”

As in “statistics” restriction in frames restricts perception, including but not limited to, assigning a notion of similarity to the phenomena “incorporated” there-in thereby obfuscating difference. .

Let me suggest a larger difference of time may expand perception even within a linear methodoly such as framing.

There is a difference in time between Adam Smith, Karl Marx, JS Mill, Alfred Marshall, John Maynard Keynes, Paul Samuelson, Milton Freidman and Anders Aslund.

There are differences between the purposes of Adam Smith and Karl Marx and the purposes of JS Mill, Alfred Marshall, John Maynard Keynes, Paul Samuelson, Milton Friedman and Anders Aslund.

There are differences in framing and methods of studies of Adam Smith, Karl Marx, and John Maynard Keynes with the framing and methods of studies of JS Mill, Alfred Marshall, Paul Samuelson, Milton Freidman and Anders Aslund.

The former studied political ecomomy in order to change it, whilst the latter used “economics” to obscure agency in attempting to sustain and expand it.

Posted by: MagdaTam | Sep 3 2021 10:43 utc | 144

Posted by: Cyril | Sep 3 2021 8:46 utc | 139

I just want to add a little.

NYC subway actually has a decent budget, but a terrible cost structure. I am lazy to search for a source, but the Empire mastered the construction of black holes for money. Incredibly large expenses attributed to the Afghan misadventure are not an anomaly.

Moscow Metro had ca. 60 km track length by the end of Stalin era, 225 when Communism collapsed in Russia, and this year it reached 414. Like with Russian military, costs are much smaller than in USA, where NYC transit is a high cost outlier (Empire State within the Empire, one should expect that!).

Overlords of Moscow apparently made a financial/populist decision: to have millions of people move around the metropolitan area one can expand mass transit to save on even more expensive highways. Moscow highways may be OK, but are notorious for traffic jams, and ALL tourist guides strongly recommend mass transit. It also helps that Moscow is the capital: Washington D.C. subway is not that bad. That said, apart from Moscow and St. Petersburg, subway systems in Russia are quite small, put mass transit is present if not always as reliable.

I have seen a movie posted on YouTube by a German tourist who is a freak about low temperature. Cold winter day in Yakutsk: -40 C (= -40 F), smog, you can't see faces of people because of hood and scarfs. The narrator waits for his bus and comments, and finally adds "my bus never came". Warm winter day in Yakutsk: -25 C, sunny, happy crowds in the street, young children energetically playing in a playground, a grandma walks with a tiny grandchild riding a reindeer... Skipping his adventures in a really cold place (- 54 C on a regular winter day), buses are not totally reliable in Yakutsk.

Posted by: Piotr Berman | Sep 3 2021 11:46 utc | 145

As a guy with an accounting degree who was the senior auditor at a finance institution, I agree in the broadest sense with Gordog's analysis.

A couple of things every commenter has missed strike me as diminishing the general level of understanding. First, the distinction between asset backed and fiat currency should be reflected on so modeling can accommodate the limits each construct imposes on monetary growth. I'll let you do your own research.

Second, there are distinctions of "money." One of the reasons Central Banks struggle with monetary supply is that Private Banks have usurped money creation in exactly the way Gordog describes so the M2 supply is variable at a rate that escapes centralized control differently than could happen with an asset backed currency. This is a feature not a bug. Clinton's repeal of the Glass-Steagall Act was fundamental to removing an insightful check against the exponential function i.e. f(x)^(n-y) rather than f(x)^n.

Not that it matters in the long run, it just slows the slew rate of the initial part of the curve and kicks the hockey stick down the road.

As an aside, I suspect a large part of the West's hatred towards Muslims comes from their prohibition on lending at interest.

Posted by: New Guy | Sep 3 2021 11:57 utc | 146

Gordog @Sep3 7:29 #134:

I don't consider MCAS an appropriate fix at all.

I agreed with you that the "appropriate fix" was a redesign.

But that was out of the question.

The logical next question is: was MCAS a workable solution. If it wasn't, then the engineers are to blame much more than management's focus on the bottom line.

When you say that "The MCAS is a terrible idea in principle", it appears that you are believe that it was unworkable. Such a statement from an experienced aerospace engineer is damning.

=
... obviously you have a problem that I cannot help you with.

The problem is that your expert opinion suggests that 737MAX with MCAS is a public danger. Yet that view doesn't appear to be shared by other engineers.

The FAA has allowed MCAS to remain on the plane with changes:

In late 2020, an FAA Airworthiness Directive[8] approved design changes for each MAX aircraft, which would prevent MCAS activation unless both AoA sensors register similar readings, eliminate MCAS's ability to repeatedly activate, and allow pilots to override the system if necessary. The FAA began requiring all MAX pilots to undergo MCAS-related training in flight simulators by 2021.

It appears that other experts believe that MCAS is workable. And that likely includes many that, like you, would prefer an aerodynamic solution (a redesign). In fact, as I pointed out, the 737NG has a similar system that has not had an issue.

This is not an idle question, it's a question of public safety. If MCAS is an unworkable solution that is "terrible in principle" (not just flawed in its original implementation) then allowing it to continue to operate on an aircraft is a problem for all of us.

=
Some [engineers] did resign. There were several whistleblowers.

Links? I haven't found online info about engineers resigning over MCAS.

There were some that complained. One of these is mentioned in coverage of the Congressional hearings:

In one of the biggest revelations of the House hearing, in 2015, more than a year before the planes were certified by federal regulators, a Boeing engineer asked whether a flight-control system that was involved in both deadly crashes was safe because it relied on a single sensor.

His concern wasn't MCAS itself but the reliance on a single sensor for such a critical system. And there is no mention of his having resigned in protest.

!!

Posted by: Jackrabbit | Sep 3 2021 12:06 utc | 147

Gordog @144

"There was, and is, an aerodynamic fix to the aerodynamic problem created by simply putting on those bigger engines. That aerodynamic fix is quite simple really: a bigger horizontal tail!

"That should have been a no-brainer for the previous Boeing culture, which was engineering dominated. In fact, they would have said, 'well, if we're going to redesign the tail, then why not a new wing, taller landing gear so the big engines don't have to be mounted so excessively forward and up etc...in fact a clean sheet airplane!' "

But that would have amounted to a new class of plane, far more investment and a far more rigorous certification process. It could have been 10-20 years (perhaps even longer) before a new plane was flying.

Just like Boeing, Airbus fitted new type engines to an existing design, the difference was that their existing design was better able to incorporate the new larger/heavier engines.

If Boeing had decided to design a new plane, then Airbus would have had to do the same thing. Airbus didn't want to make such an investment, so they, effectively, compelled Boeing to create their botch job (because otherwise, Airbus would seriously threaten Boeing's market share).

Airbus didn't really want Boeing's market share but they didn't want want to make an investment in a new plane either - they wanted things to remain the same. Airbus were happy that what Boeing decided to do (which was effectively the same thing as Airbus) because market shares remained and no huge investment was required in a new plane. Despite the disasters, Boeing is still persisting with the 737-MAX? The only reason for this must be the reasons already outlined.

It seems obvious to me that, in time, both Boeing and Airbus will lose out to the new Russian and Chinese planes. In the 737-MAX and 320neo class that would be the Irkut MC-21 and COMAC C919 (I understand both are new design planes) - it would be interesting to have your assessment of these planes.

Posted by: ADKC | Sep 3 2021 12:10 utc | 148

New Guy @Sep3 11:57 #145

One of the reasons Central Banks struggle with monetary supply is that Private Banks have usurped money creation ...

There are safeguards around the money creation that are ignored by many critics.

Once again: the fundamental problems are frauds, regulatory capture, and unaccountable government in general. Those that pound the table about PONZI FINANCE are generating more heat than light.

!!

Posted by: Jackrabbit | Sep 3 2021 12:11 utc | 149

Cyril @Sep3 8:46 #139:

... the NY subway must have been rather decent at one time.

Apparently you are not very familiar with the NYC subway system. It was in decay since at least the 1960's. In the 1970's it was in horrible condition and crime made riding the subways at certain times into a dangerous proposition.

=
The NY subway's current horrible condition is an excellent metaphor for the Empire's decline.

The subway is actually greatly improved after the low point of the 1970's. It got new stations, new tracks, a new generation of train cars (air conditioned!), an entire new subway line, and surveillance equipment that has helped to reduce crime.

So once again: it's not a good metaphor for the Empire's decline.

!!

Posted by: Jackrabbit | Sep 3 2021 12:23 utc | 150

So once again: it's not a good metaphor for the Empire's decline.

Posted by: Jackrabbit | Sep 3 2021 12:23 utc | 149

Yep. I think Mad Max, Beyond Thunderdome is probably the best metaphor for the empire's decline.

"Beyond Thunderdrone". Making fancy metaphors for what is at bottom stupid and obsessed behavior is not a productive activity anyway.

Posted by: Bemildred | Sep 3 2021 12:55 utc | 151

@Jackrabbit | Sep 3 2021 12:23 utc | 149

Apparently you are not very familiar with the NYC subway system. It was in decay since at least the 1960's. In the 1970's it was in horrible condition and crime made riding the subways at certain times into a dangerous proposition.

What was the NY subway's condition in the 1940s, when the US's prestige was highest? The Empire has been decaying since then, and according to you the subway has similarly been rotting. So the subway's horrible condition today is an excellent metaphor for the state of the Empire (not to be confused with the Empire State Building).


So once again: [the noisome NY subway is] not a good metaphor for the Empire's decline.

Have you seen the video on NY's subway? If you saw it and you didn't almost throw up, you may be a third-worlder in disguise.

Posted by: Cyril | Sep 3 2021 12:57 utc | 152

Well as far as I am concerned, the entire financial system, including the gold fixation, and the bitcoins, and the funny cyber money borrowed into existence at interest, etc, is all merely window dressing.

The things that really matter include possession of a complete productionality system, and energy availability to power it. If you can only produce airliners you certainly do not have a productionality system. You must produce steel, manufacture circuit boards, and screwdrivers, and so on. And you must have people who have been provided with the technical training to support such a vast, totally synergistic system. Having only a partial system will lead to complete failure. The US off-shored most components of its productional system, a move that was suicidal.

And that is the major piece of the debacle right there. It's not hard to figure out. The US dictators are insane psychopaths who have no deep concerns about the future.

Posted by: blues | Sep 3 2021 13:09 utc | 153

Wow the US economy is bad? Is this why China is scouring the internet silencing anyone who criticizes their economy?

RT had a link about that a few days ago. You know your economy is healthy and strong when you can't handle criticism. True story.

The PRC is tied into the American stock exchange that it has a vested interest to keep it floating.

Gordog, when was the last time you visited the PRC?

Posted by: HereWeGoAgain | Sep 3 2021 13:18 utc | 154

@ Posted by: Gordog | Sep 3 2021 5:19 utc | 127

Marx's Capital is a general theory of capital. It explains capital, therefore, capitalism, in every possible version. Therefore, Mr. Hudson is wrong when he states Marx was the theoretician of "industrial capitalism" (a term which doesn't even exist in Marx, it's a retcon attributed to Marx by later bourgeois economists).

I said this many times here and I'll repeat again: I don't consider Mr. Hudson a legitimate scientist. He's a snake oil salesman, one of those that exist and flourish to the thousands when an empire is in difficult times.

--//--

@ Posted by: Cyril | Sep 3 2021 5:57 utc | 129

You're right: the Moscow subway is 100% communist.

But it was not a corruption scheme as you imagine it is. Stalin had a plan to make Moscow fully integrated, and the metro system was in the plans. The intention was to make Moscow a model socialist city that could be followed by other cities.

It's not surprising the Moscow metro is ornamented with many artworks of various types: the USSR didn't have, for obvious reasons, an art market. The Soviet artists had only one "client" to serve: the State (people). That's why what to liberal eyes is a waste of art was actually just plain common sense to the common Soviet citizen.

--//--

@ Posted by: Jackrabbit | Sep 3 2021 6:10 utc | 130

Compound interest doesn't change the economic nature of interest in the capitalist economy: it is still a deduction of the profit rate. You still have only three categories: profit rate, interest rate and profit of enterprise.

--//--

@ Posted by: Peter AU1 | Sep 3 2021 8:19 utc | 135

A "consumer economy" is only feasible when you have its counterpart: a producer economy. In order to force another nation-state to be a producer economy, you have to establish a colonialist-like system, i.e. an imperial system.

Since the USSR wasn't an empire (the socialist system ensured the richer republics were in deficit with the poorer republics), there was no way it could ever become a "consumer economy" - that is, unless it achieved the stage of Communism; but then the USSR wouldn't exist, as Communism is a stateless system by definition (i.e. there would be no nation-states, only humanity).

--//--

@ Posted by: Cyril | Sep 3 2021 8:46 utc | 139

You correct. In the aftermath of WWII, the USA was the undisputed new cradle of Western Civilization. Western Europe was on its knees.

--//--

@ Posted by: New Guy | Sep 3 2021 11:57 utc | 145

It doesn't matter because the central bank is still the lender of last resort. It decides the base interest rate. ZIRP and NIRP only exist because of the central bank.

There can not be a fiat currency system without a central bank. The central bank is the substitute of the gold mines in the fiat currency system.

Posted by: vk | Sep 3 2021 13:28 utc | 155

Gordog @134 (my comment at @147 should also have addressed to @134)

The COMAC C919 uses the same engines (CFM International LEAP - American/French) as the Airbus 320neo but China are (not surprisingly) also developing their own engines. The C919 has been in development since 2008 (13 years of development so far).

The Irkut MC-21 uses Pratt & Whitney PW1000G engines (American) which is also used on the 320neo but have developed their own engine (Aviadvigatel PD-14). The MC-21 has been in development since 2006 (15 years of development so far).

I don't think the Russian engine is as good as the western equivalent and the Chinese one is still under development but the planes as a whole are designed for this kind of engine and the Russian and Chinese engines are likely to have ongoing development (so in a short space of time they could surpass the western
engines).

These planes seem to be a real threat to the western civil aircraft industry and, if the west are compelled to design new (competing) planes, just look at the development years required!

Posted by: ADKC | Sep 3 2021 13:30 utc | 156

DG @ 137

Nice post.

It makes a big difference to an individual if she gets her $1000 as a loan from a bank or as a social security check.

Governments do spend money into existence. An important MMT principle. Government deficits equal personal savings.

But MMT people don’t say deficits don’t matter.

It makes a big difference if government money is invested in propping up real estate and the stock market instead of many more productive pursuits.

Also inflation matters and resources matter. Also important MMT principles. There needs to be enough productive capacity.

Posted by: financial matters | Sep 3 2021 13:33 utc | 157

JackRabbit wrote:

Once again: the fundamental problems are frauds, regulatory capture, and unaccountable government in general. Those that pound the table about PONZI FINANCE are generating more heat than light.
_________________________________________________________________________________

Ponzi finance is very much real and is a fundamental problem. Its particularly bad since often this fraud has been made legal or hidden by legal structures. This makes the govt a party to the fraud.

However, the claim that deposit creation is a Ponzi scheme is Wall Street disinformation. It is a story that you see plastered on the internet by controlled opposition sites like Zerohedge. The story is designed to hide and detract attention from the real Ponzi finance which is enormous and very real.

One of the best examples of Ponzi finance is the financing of the fracking industry. It relies on constantly attracting new investment to provide profits to old investors.
Another classic example of a Ponzi finance is the gold markets. In order to keep the price of gold growing requires ever increasing inflow of financing. When the money stops flowing in the price of gold collapses.
Buying Google stock is another example. The only benefit to owning Google stock is your belief that in the future other people will want to pay more for it. Now you can argue this is not fraud because the investors understand the scam, but do they really?
The stock markets in general are a form of Ponzi finance. Most stocks pay some dividends but a significant portion of the perceived value of stocks is that future new investment will go to paying the profits of old investment.

Posted by: jinn | Sep 3 2021 13:55 utc | 158

@by: vk | Sep 3 2021 13:28 utc | 156

But [Moscow's subway] was not a corruption scheme as you imagine it is. Stalin had a plan to make Moscow fully integrated, and the metro system was in the plans. The intention was to make Moscow a model socialist city that could be followed by other cities.

Um, you must be confusing me with someone else. I certainly do not believe that Moscow's subway was a corruption scheme. What did I say to make you think so?

Posted by: Cyril | Sep 3 2021 14:33 utc | 159

>an economy can only grow linearly
https://hbr.org/resources/images/article_assets/2013/11/nominalgdp.gif

so you're saying China is in a bubble too?

Posted by: Anon | Sep 3 2021 14:59 utc | 160

"RE: Posted by: Gordog | Sep 2 2021 17:56 utc | 43

“This is one of his fundamental insights from his study of antiquity and the finance of ancient civilizations, where periodic debt forgiveness was an ESSENTIAL answer to the problem of the exponential growth of debt. “

Jubilees are essential in certain types of social relations where debt exists.

However it is not essential in a certain type of social relations based on sharing where the notion and practice of debt do not exist.

Posted by: MagdaTam | Sep 3 2021 15:11 utc | 161

RE: Posted by: Gordog | Sep 3 2021 1:24 utc | 116

“The Boeing 737 MAX is literally a CATASTROPHE from a technical point of view---both engineering and piloting. “

It was also an illustration of design/manufacturing/QA techniques as a function of purpose of the breeding of money throughout the Boeing range not restricted to the 737 MAX, or Boeing.

Posted by: MagdaTam | Sep 3 2021 15:24 utc | 162

The power growth law is actually a little more complex.
In the exponential phase, growth indeed doubles every period. Nutrients, supplies, money, whatever, is essentially unlimited so there is no competition. We can term this the Imperial phase.
When the nutrients run out--when the empire runs out of places to conquer and consume--growth plateaus. Cells can only grow and reproduce when an existing cell dies and releases its nutrients. This we may term the Civil War phase, since the cells are competing against each other for survival.
But the plateau phase is itself unstable, because nutrients continue to decrease and unusable metabolites, poisons, accumulate. Competition no longer avails the survivors because they are drowning in their own sewage. Cells grow fewer and fewer in number and eventually become extinct. This is the Death phase. It's along drawn out affair, characterized by cannibalism, desperate and ruthless struggles, and hopeless endeavors amid a rising tide of toxic waste.
Which stage then is the Empire of Stupid currently in?

Posted by: pasha | Sep 3 2021 15:37 utc | 163

@vk #102
a) The robot automation revolution is bullshit.
b) Marx didn't distinguish between sovereign power and private capital.
c) Marx also didn't understand well that increased productivity also means increased consumption. What was considered a high standard of living in the 1860s is now considered abject poverty.

Thus while Marx should be given full credit for attempting scientific analysis of economics - the sad reality is that his work is outdated and inaccurate.

Similarly, the main problem today is not automation - it is that the gains of the productivity increases enabled through automation are being captured by the 1% as opposed to being shared throughout society. Let's not forget that the main part of the Industrial Revolution occurred well after Marx died - but the labor struggles of the 1900s was converted into prosperous middle classes by 1960.

Nowhere in the West, the industrialized centers of the world, did the Marxist vision of Capital causing Labor to revolt, happen.

That's a major fail.

Posted by: c1ue | Sep 3 2021 15:47 utc | 164

What are the core problems with our monetary-financial system?

Based on the discussion here and reality, the core problems are:
– Private Monetary System
– Ponzi Finance
– Perpetual Growth...

Please feel free to add.

Gordog, will appreciate you taking the lead to sum up the key takeaways from the discussion here. Maybe “Takeaways” can be a new feature, so many can learn.

B, please consider this idea.

@ jinn (#159), good points about Ponzi finance. Thank you.

Additional topics:
He who controls the money, controls the economic system itself: its activity, its politics, its arts, and its sciences. Everything.

Private One Party Monetary System
The Monetary system is under private control. The regulation of the issue of money, of the interest and the exchange rate, of the credit policy, and of the bank sector got totally out of the control of the elected representatives. The financial oligarchy controls the monetary power. Why this monopoly position? Most of our problems are rooted in the monetary system.

Nobody can intervene in the questions that are important for the monetary policies. Money issuing, crediting, interest and currency rate regulation, i.e. the whole of the monetary policy is the territory of the Private Money Power (international money oligarchy). From the point of the exertion of the monetary power, there is still a one-party system in nations.

The bankers are collecting tribute from the community on the community's credit... Commercial banking and issuing of credit should be exclusively a government function. Private financiers are not entitled to any profit on the public credit. The levers of command of a modern democracy are not operated from its ministries, but from its financial network.

We need a public (sovereign) monetary system. There is no sovereignty without monetary sovereignty. Monetary policies needs to be defined by the elected representatives and in the best interest of the nation and people, not Oligarchy.

Follow the money you will always trace the power behind the politicians.

"The true equation is ‘democracy’ = government by world financiers.”
– J.R.R. Tolkien

Why do many not question the fact, that the nation’s money supply being in the hands of private coterie is effectively prima facie evidence that the administration is already under the thumb of the private Money Power?

Driving Global Adoption of the Private Monetary System
This interest-yielding private monetary system didn’t appear by itself. It didn’t become the dominant paradigm by itself. Who has been driving its ADOPTION? The name of the game was to corner the supply of money and monopolize the circulation of money.

Why is this bad monetary system spreading in the world? Who is spreading? Why is the functioning of this bad monetary system not a subject of public debates? Also, it is not an election topic in any of the electoral campaigns?

What is the purpose of a civil war or revolution or (world) war? To determine the next paradigm, system, structure, regime, values,... that will rule the country...? Who funds these conflicts?

Conflicts under any pretext are exploited by the Global Ruling Clans to capture and control a region. The Clans have been exploiting internal challenges to further their hidden agenda to build a global empire. This modus operandi has been the Clans way to capture countries:
– Create a civil war or revolution to steal a region
– Create a Private Central Bank - Private Money - credit (First Bank of the USA, BOE-1694)
– Fund & control new rich individuals (Kleptocrats)
– Fund & control political parties and media
– Nationalize the central bank & create majority of money through private banks (the Fed, BOE-1946)

To understand a nation, comprehend its monetary system, central bank’s history and kleptocrats. Here is how these central banks have been established:
– UK: Civil War (1651)—> Bank of England (1694)
– U$A: American Revolution (1776)—> First Bank of the US of A (1791)
– France: French Revolution (1799) —> Bank of France (1800)
– Russia: Russian Revolution (1917) —> People’s Bank of USSR (1917)

Would WWI have started without the founding of the Fed in 1914? How about WWII without private BIS (1933)? What comes next?

Why should a small private Clans of people (Money Power) profit by renting humanity its money supply?

Why be enslaved by monetary imperialism and live fake values? Get real!

Posted by: Max | Sep 3 2021 15:55 utc | 165

@ Posted by: c1ue | Sep 3 2021 15:47 utc | 165

Not only everything you put on your post is a lie, but the polar opposite of what you stated is the truth.

Posted by: vk | Sep 3 2021 15:55 utc | 166

Fatal Error - Schwerer Fehler

The interest paid to to the bank, otherwise than the repayment part of the credit, is always remaining in circulation.
The banks use the interest to pay their employees, their rent, their computers and at the end, if there is any money remaining, they will pay their shareholders. So it will be able to reach another borrow, who can repay his credit and interest with that money.
Because of that, there is no need, to borrow always more money in existence.

Sorry to say, but the article is totally wrong. I would recommend to delete it.

Hallo b, ich habe gerade wenig Zeit, ich könnte hier zum Thema Geld einiges beitragen. Falls du Interesse hast, melde Dich bitte unter der angegeben E-Mail-Adresse.

Posted by: Michael | Sep 3 2021 16:03 utc | 167

@Gordog | Sep 2 2021 23:02 utc | 101

I am still working on a tech article that I hope will be ready sooner rather than later.

This article was good, but I will be most interested in the upcoming tech article!

Posted by: Norwegian | Sep 3 2021 16:12 utc | 168

Jackrabbit @ 120

You might also want to tackle this question: if the FRAUD is as clear, evident, and pressing as you say, then where is the outrage? Why haven't people risen up? Why do they accept it? And it's NOT because they don't understand exponential growth or don't have a sense that they are being 'had'.

Occupy Wallstreet

pasha @ 164

Thank you! THIS is exactly the direction that this conversation has to go: money is a good primer for understanding the exponential function (compounding interest being an easy instructable), but it's only a layer on top of the fundamental of basic human growth [activities]. NOTE: I have a feeling that you might already know about it, but if not, seek out Sir John Glubb's "Fate of Empires" for a trenchant analysis (though Glubb failed to realize that THE commonality in all collapses was that of the inability to maintain indefinite growth [the entire picture can be painted in Glubb's writing AND Dr. Albert Bartlett's writings; Marx and others are merely superficials, they fail to understand/describe the flawed premise we operate by/under]).

clue @ 165

Similarly, the main problem today is not automation - it is that the gains of the productivity increases enabled through automation are being captured by the 1% as opposed to being shared throughout society. Let's not forget that the main part of the Industrial Revolution occurred well after Marx died - but the labor struggles of the 1900s was converted into prosperous middle classes by 1960.

I disagree. In-depth counter, and, IMO, THE gold standard for any such rebuttal, lies in Lewis Mumford's "The Myth of the Machine" (two book series).

Prosperous middle class by 1960 was obtained because the US had been off and running post WWII (everyone else was still dusting themselves off) AND it was the world's largest oil exporter. Read Glubb's book [noted above] to understand the stages that empires go through: I'd state that the stages are also applicable to most any country, though most, being NOT empires, experience phases less spectacularly.

Posted by: Seer | Sep 3 2021 16:23 utc | 169

Regarding who is in the technological lead, there seem to be more Chinese engaging in industrial espionage in the US than cases of the US stealing technology from China.

The recent landing of China’s first spacecraft on Mars was essentially the same methodology used by the Spirit and Curiosity spacecraft of over a decade ago. A tribute to the manufacturing discipline of the Chinese to do it successfully on the first attempt but hardly a technological breakthrough.

Posted by: Kevin | Sep 3 2021 16:38 utc | 170

Seer @Sep3 16:23 #170: Occupy Wallstreet

And ...?

!!

Posted by: Jackrabbit | Sep 3 2021 16:48 utc | 171

@Kevin | Sep 3 2021 16:38 utc | 171

The recent landing of China’s first spacecraft on Mars was essentially the same methodology used by the Spirit and Curiosity spacecraft of over a decade ago.

I don't think so. Spirit and Opportunity (not Curiosity) used a balloon system and bounced around on the surface. No such thing with the Chinese landing.

Posted by: Norwegian | Sep 3 2021 16:52 utc | 172

jinn @Sep3 13:55 #159

You're defining ponzi finance in a way that makes all markets into a fraud.

For example: paying for order flow (the infamous example being RobinHood and Citadel). Order flow is more valuable as more investors/traders are entrapped. But that isn't "ponzi finance" it's just the fraud known as 'front-running'.

!!

Posted by: Jackrabbit | Sep 3 2021 17:01 utc | 173

vk @156: "Therefore, Mr. Hudson is wrong when he states Marx was the theoretician of "industrial capitalism" ..."

This proliferation of assertions about different "kinds" of capitalism is nothing more than capitalism apologetics. "Industrial" capitalism and "financial" capitalism and "crony" capitalism and what have you are just descriptions of the same thing by blind people grabbing different parts of that elephant. It does get tiring and the only reason people do it is to justify their continued servility to capitalism and excuse their own insufficient fortitude to embrace real change.

This is something people will have to work through before we can fix things in the West.

Posted by: William Gruff | Sep 3 2021 17:11 utc | 174

Cyril @Sep3 12:57 #153

What was the NY subway's condition in the 1940s, when the US's prestige was highest? The Empire has been decaying since then ...

Twenty years ago nobody was talking about the decline of the Empire. Now you want to date the decline to the 1940's.

=
... and according to you the subway has similarly been rotting.

That's not what I said.

=
Have you seen the video on NY's subway?

Even better, I've live in NYC since the 1970's so I know the current state of the subway through direct experience. And I've lived here here since the 1970's so I know the history very well.

But I have question for you too: do you have any understanding of logic? or do you just enjoy making things up?

!!

Posted by: Jackrabbit | Sep 3 2021 17:24 utc | 175

OMG! China's engaging in "Ponzi Finance"!?!?!

Huarong Is Deleveraging By Selling $58.8 Billion In "Bad Assets " In An Online Debt Sale

Half of moa readers will now be dumbstruck with cognitive dissonance. Making bad loans ... and selling them .. that's Western "Ponzi finance". Bu .. but .. "the math"! Bu .. but "Socialism with Chinese characteristics"!

LOL.

So, as you recover from your WTF? scrambled-mind-fuck, consider once again: maybe the problem isn't "the math" as much as the devious, unaccountable asshats at the top. And maybe the solution is more about self-control than self-pity. We need to stop should allowing ourselves to be distracted and directed to dead ends like the inscrutable "ponzi finance". We need to start focusing on the numerous 'control frauds' that lead to those devious unaccountable asshats. Then we can start to change the corrupt system that they have established to rule us.

!!

Posted by: Jackrabbit | Sep 3 2021 17:52 utc | 176

c1ue @165: "...[Marx`] work is outdated and inaccurate."

Newtonian physics is "outdated and inaccurate" and has been superseded by the work of Einstein, Niels Bohr, and Max Planck. Does that make Newton wrong? Only someone who doesn't understand physics, and how science works in general, would ever say so. The same can be said for Darwin's work.

With that said, there has been no equivalent of Einstein, Niels Bohr, and Max Planck in the social sciences to supersede Marx (everyone does understand that economics is a social science, right? The root social science, actually), other than perhaps Lenin, Trotsky, and Mao. The primitive state of contemporary social sciences is not the fault of Marx as he left a very solid foundation to build on. It cannot be blamed on Marx if almost all of those who came after him and professed to study the social sciences built their understanding of the field as if suspended in a void.

Posted by: William Gruff | Sep 3 2021 18:04 utc | 177

I feel bad for whoever it was whose leg was being humped by the bunny. That stain will be a tough one to explain to the dry cleaners.

Anyway, so the Chinese state is passing the hot potato. Good for them! I wonder how many big investors will be buying themselves some of that toxic waste using their US Treasury bailout money? It's discounted 40%, so how can they pass it up? lol

Posted by: William Gruff | Sep 3 2021 18:26 utc | 178

PS: many people think that ANY (strictly) convex function, such as the blue line in the graph above is an exponential function - it is not. It is a power function.

Posted by: spudski | Sep 2 2021 16:19 utc | 5

Please elaborate on why this distinction is important. Yes, an exponential function means the variable is in the exponent and a power function has the variable in the base. But compound interest rates yield exponential growth. Hence the blue line is the exponential function and the green line is a power function. Did I miss something?

Posted by: Tom_Q_Collins | Sep 2 2021 18:42 utc | 51

________________________________________________________________________________________________________________

Notwithstanding current popular usage, they are not the same.

1. Some people are interested in using technical terms precisely: exponential growth is precisely defined mathematically as is power growth - and, they are different. If you care about precision in your use of language this might matter to you. If this is of no concern to you, please note;

2. Exponential growth rate (i.e., in percentage terms) exceeds power growth rate (in %); and

3. The doubling every fixed time period property (e.g., "cases are doubling every 8 days") only applies to exponential growth.

Thanks for asking.

Posted by: spudski | Sep 3 2021 18:26 utc | 179

@ Jackrabbit (#177), like good and bad apples, there will be good and bad investment decisions. Haven’t come across an investor who only makes good decisions and no mistakes. Even God isn’t perfect. However, fraud and crimes need to be prosecuted. Why was Lehman allowed a leverage ration of 70+? How many financiers have gone to jail for the 2008 Financial crisis? Did the Fed put in regulations to end the systemic fraud and leverage? A Shadow Banking system has emerged that is worse than the past. Please talk to the Fed employees with integrity. They will explain how the Dollar system is a house of cards. Why isn’t MSM exposing these crimes?

CHINA
China has a debt based monetary system and will encounter similar challenges if it doesn’t act prudently. It wouldn’t have survived if it had pursued a different monetary paradigm. The Empire won’t have transferred manufacturing there. It has outsmarted and outperformed the Financial Empire. If you can explain its foreign currency game play well, then you understand China’s external game.

However, internally, China’s administrators understand its challenges and have reigned in bad allocation and extensive leverage at Alibaba, state banks, private banks,... Yes, China will have problems if it doesn’t act prudently. It has a sovereign monetary system. The Financial Empire is still trying to open it, so it can capture China financially.

The biggest fraud is the “private monetary system.”
The single biggest problem is the Money As Debt system, aka money creation by private banking at interest using their central banking system. Under the present insane system, RULERS are allowed to create ALL money out of thin air, and they're allowed to LEND that money to governments, businesses & individuals, forcing us into debt, forcing us to pay interest, when the government could simply create the exact same money debt free and interest free.

This is THE issue... everything else pales in comparison. The totally unnecessary and fraudulent Money As Debt monetary system is what enables the Global Financial Syndicate to control politicians, the government, and public policy to their advantage. It enables all other problems, including economic crashes and unnecessary wars based on lies.

If the public is unable to grasp this core issue, then nothing else will matter... we're doomed, headed straight for the bankster-run authoritarian tyranny of the New World Order, a fascist nightmare in which they will own and control everything and everyone, and which they have been planning for well over a hundred years.

On the other hand, if the public can somehow come to understand this very basic concept and then come together to end the private creation of money at interest by the banks, then all other problems can be solved... history has proven that.

America needs a sovereign monetary system that works for all Americans.

Posted by: Max | Sep 3 2021 18:43 utc | 180

Jackrabbit @ 170

And ...?

!!

Oh, I'm not disagreeing that there's insufficient outrage. Just pointing out that even the amount of push-back that swelled up under Occupy Wallstreet (it saw folks from across the political spectrum- it was more of a class-based protest, one that just doesn't seem to happen, something that TPTB make sure to avoid [divide and conquer) couldn't put a dent in things. This is why there's no backlash: TPTB worked it all to perfection. The masses don't have the financial means to counter the financial mess: those controlling things will always have lackeys getting their food and doing all the daily menial stuff that regular people have to do on a daily basis, which is, therefore, why one group is able to continue to dominate. NOTE: one way of wiping out this lopsided advantage is to nullify inheritances: the US is becoming like Great Britain, "royals" all inbreeds.

The addiction to distractions [in the US] is too great. Going to be hell when everything collapses. Have to wonder how much forewarning the general Russian population had of the USSR's impending collapse: unlike their collapse, the US's collapse won't have anyone else to help pick up the pieces (I'll note that the US stepped on rail-holding Russian fingers rather than help [Russians are pretty familiar with dealing with tragedies on their own]), or a global economy to help buffer.

Posted by: Seer | Sep 3 2021 19:58 utc | 181

Max @ 181

I totally agree. There's no other way than using a picket stake to tie currencies to. USD, and many other currencies, are detached from reality, detached from the physical world. WAY too many in the Western world believe that growth is/can be perpetual. This "thinking" (or more readily, "non-thinking") is greatly linkable to how our currencies operate.

US signaled the start of its decline in 1971 with the complete detachment of the USD from gold. In the early 80s the US, under Reagan, ushered in the beginning of financial wizardry (read: "economic shenanigans") and it's been one compounding scam after the other (blowing growth bubbles).

The "end" will come with the collapse of the the petro-dollar. I suspect this to be a lot closer than most realize: in a pay-back-is-a-bitch department, Russia holds the keys to this as they can start pushing more oil/gas trade outside the USD, which will put a ton of pressure on the ME oil producers to do the same. Pretty sure that all of this is understood by those at the "top." I have suspected that a lot of the green stuff, as in "renewables," is mostly a weak attempt to break up this potential squeeze: drop reliance on oil and Russia's hand is pretty much wiped out; problem is is that this still wouldn't resolve the issue of the petro-dollar collapsing, but it would provide for some rallying flag I suppose; at best it's an attempt to buy more time (sadly, I don't hold out any hope that the time will be used wisely).

Posted by: Seer | Sep 3 2021 20:17 utc | 182

JR @ 148, about the 737 Max:

Okay, this will be my last comment on the subject. I don't have the time to do an in-depth technical dive here. But you are kicking up a lot of dust for the sake of being argumentative. And you are repeating WRONG information.

You say that the 737 NG had a 'similar' system to MCAS. NO IT DID NOT!

I already stated that very clearly.

In fact no airplane EVER has had a system where the tailplane trim is used for anything other than what it is designed for: TRIMMING THE AIRPLANE!

In brief, whenever the airplane changes speed, the tailplane needs to be RETRIMMED. That can be done manually by the pilot, AND it has been done automatically on just about every airplane for a very long time, including small prop airplanes. That's what the 737 had, in fact from the time of the Classic, previous to the NG and the MAX. That's called the Speed Trim System.

That is simply automating the use of the trim control in its INTENDED PURPOSE!

MCAS was something completely new, CONCEPTUALLY. It is using the trim to increase the stick force!

Quoting the FAA Joint Authorities Technical Review:

MCAS used the stabilizer to change the column force feel, not trim the aircraft. This is a case of using the control surface in a new way that the regulations never accounted for...

Now I have said already that the airplane MUST ABSOLUTELY meet stick force gradient regulations. This is very important. AND, like everything else in civil transport aviation, these requirements are spelled out in minute detail.

In the case of stick force gradient, it is Federal Aviation Regulation 25.173 C:

The average gradient of the stable slope of the stick force versus speed curve may not be less than 1 pound for each 6 knots.

The MAX did not meet this requirement and never would have been certified and allowed to fly!

It would have FLUNKED OUT on a very fundamental handling requirement that is specifically spelled out!

Here is a graph. And here is a decent, but not fully satisfactory article by an aero engineer that attempts to explain some of this.

So what you have is Boeing doing something that has NEVER BEEN DONE BEFORE. As the above FAA quote makes clear. Using the trim system for something completely different than TRIMMING THE AIRCRAFT!

Imagine a car that does not meet braking requirements. But instead of putting on bigger brakes, the manufacturer decides to put in a computer system that takes control of the steering wheel and swerves the car to avoid hitting the object in front of it!

That's what MCAS amounts to. Now you tell me if that sounds 'workable'?

If the FAA technical staff had been fully aware of the details of the MCAS function, the JATR team believes the agency likely would have required an issue paper for using the stabilizer in a way that it had not previously been used; this [might have] identified the potential for the stabilizer to overpower the elevator.

Now I'm trying to link to that FAA document, where this is quoted, but it appears to have been scrubbed by the FAA. You can find those snippets from above in the wiki article here.

All they have up on the FAA website now is the 'return to service' documents where the MAX with the 'fixed' MCAS has been cleared to go back to service. Draw your own conclusions about why that telling information seems to have disappeared.

In any case, the FAA has cleared the 'fixed' MCAS, so it would seem that having the steering wheel substitute for brakes has been somehow been 'made to fit.'

BUT, last December we got news that Boeing 'Inappropriately' coached test pilots during the RECERTIFICATION procedure.

The report citing a whistleblower who alleged Boeing officials encouraged test pilots to “remember, get right on that pickle switch” prior to the exercise that resulted in pilot reaction in approximately four seconds, while another pilot in a separate test reacted in approximately 16 seconds.

The account was corroborated during an FAA staff interview, the committee added.

So that confirms my own take as a TRAINED TEST PILOT familiar with human factors issues. It is not an appropriate solution in my view.

Note: This doesn't mean the aircraft is 'unstable.' That is not the meaning of inadequate stick force gradient. They are separate technical issues. But either one can flunk the airplane from certification.

So yes, anything can be 'made to work.' Or 'workable' to use your terminology. But this is meaningless.

I'm not here to pass judgement on whether the MAX is 'safe' like you are asking me to do. That is impossible for me to do without actually flying the simulator in a methodical FLIGHT TEST PLAN.

Even then, I could only give my own opinion, because there is no specific FAR regulation on this.

Now please, I hope you are able to appreciate the time, effort and goodwill I have put in here for the benefit of the readers.

I'm not here to argue for the sake of argument. The only reason I am posting this is to clear up the nonsense you have insisted on pasting up here, for no apparent reason other than your own axe-grinding.

Posted by: Gordog | Sep 3 2021 20:26 utc | 183

Gordog @Sep3 20:26 #184

Thanks for your reply.

I'm not trying to be difficult. And I have no axe to grind as I don't blame you for not being expert in finance. I've made that clear in a previous comment that said that it was unwise for b to pull a comment about finance from someone that is not a financial expert.

Despite your saying that you're "not here to pass judgement on whether the MAX is 'safe'", your assessment of the 737MAX makes me believe that it remains a danger. It has crystalized my uneasiness about flying the 737MAX and I think many others will feel the same way.

!!

Posted by: Jackrabbit | Sep 3 2021 20:38 utc | 184

Jackrabbit wrote:

You're defining ponzi finance in a way that makes all markets into a fraud.
____________________________________________________________

I can't see how one could apply what I said to "all markets"
I'm defining ponzi finance as a scheme where old investment is paid off by new investment.
Fracking has been operating as a Ponzi scheme. The frackers pay off old loans with new loans.


Posted by: jinn | Sep 3 2021 22:11 utc | 185

jinn @ 186

I'm defining ponzi finance as a scheme where old investment is paid off by new investment.
Fracking has been operating as a Ponzi scheme. The frackers pay off old loans with new loans.

Is this absolutely the case/true? Rolling over loans is a Ponzi? Is it not OK to do this in any case? I can understand having a business model that relies on this all the time (which, as you note, is pretty common with the fracking industry), but I don't see that the basic notion of rolling over a loan is a Ponzi on its own.

Posted by: Seer | Sep 3 2021 23:30 utc | 186

jinn, Seer

When I sell my home, am I engaging in ponzi? Is that only when the buyer pays more than I did? Or is all cases in which a bank provides financing? What if the financing comes from crowdsourcing/PTP lending? Is it ponzi if *any* interest is charged?

<> <> <> <>

IMO the problem is conspiracy around 'control fraud'. Whether that is "wars of choice", or riskless arbitrage (like immigrant labor, outsourcing to China, etc.), or ursury (payday loans, credit card interest). There may be some things that might qualify as "ponzi finance", but that is only a subset of the control frauds that we see time and time again.

TPTB love when critics chase their tail. They hate it when you correctly identify the problem and inform others.

!!

Posted by: Jackrabbit | Sep 3 2021 23:57 utc | 187


@ MagdaTam | Sep 3 2021 10:43 utc | 145

@158 - I don’t believe MMT understands the role of fiscal policy for achieving human goals. This may help in terms of why ‘classic Economics’ is as suspect as any.

I like your responses

I think that there is a significant gap between Adam Smith and the invention of the RELIGION of Economics. I also don’t believe that invention to be a SCIENCE at least In our understanding of what scientific means.

I’ll quote this from someone who everyone may find to be an expert as much anyone.


Four questions to ask of any economic policy, following in the tradition of Adam Smith
Posted on August 29 2021
One of the questions within economics is on whose behalf should it be assumed that a person acts, and with what motivation?
The answer was actually answered before economics really began when this was written:
HOW selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.
This next quotation seems to me to be the perfect explanation of this text and follows shortly after the above sentence:
As we have no immediate experience of what other men feel, we can form no idea of the manner in which they are affected, but by conceiving what we ourselves should feel in the like situation.
For the record, the first quote is the first sentence of Adam Smith's Theory of Moral Sentiment, written in 1759, and to which The Wealth of Nations is usually considered a footnote. The second sentence is the one that opens the second paragraph. It was written to interpret the first”

Follow the link for the analysis of that it is worth it. A great a blogger as MoA.

I leave it for the barflies to ponder.

Posted by: DG | Sep 4 2021 0:20 utc | 188

For all you arguing exponential versus power...what looks like what:

Plot the two curves y=2^x (exponential) and y=x^20 (power function) together on the interval (1/2, 3/2).

Moral: eyeball measurement not very useful in math

Posted by: Platero | Sep 4 2021 0:34 utc | 190

i think you all overwhelmed gordog!! he is not on the payroll and you don't see b having to answer for the posts he makes... if he did, he would never write a post!! so, i hope gordog has left the building for some needed respite!!! otherwise if he has to answer everyones inquiry here, he will never have a moment to himself!!

but, please do continue the conversation!!!

Posted by: james | Sep 4 2021 1:11 utc | 191

@Jackrabbit | Sep 3 2021 17:24 utc | 176

Twenty years ago nobody was talking about the decline of the Empire. Now you want to date the decline to the 1940's.

As I said, American prestige was highest in the 1940s; the United Nations was a glorious achievement. From that peak, the Empire's decline has been quite noticeable.

Similarly, I suspect that NY's subway was in rather decent shape in 1948, and then its condition worsened. The subway's noisomeness today is a nearly perfect metaphor for the similarly decaying Empire. The subway, hidden underground, shows the true condition of the US, contradicting Times Square's glitzy image -- just as the hidden mirror of Dorian Gray reflected the man's true condition, contradicting his attractive outward aspect.


I wrote: and according to you the subway has similarly been rotting
You replied: That's not what I said.

You said, the subway "was in decay since at least the 1960's". If the subway was looking somewhat dilapidated by the 60s, then its decline had probably started much earlier. Similarly, after a towering accomplishment like the United Nations in the 1940s, the US's prestige has declined. The NY subway is indeed a nearly perfect metaphor for the rotting empire.


Even better, I've live in NYC since the 1970's so I know the current state of the subway through direct experience. And I've lived here here since the 1970's so I know the history very well.

Fine.


But I have question for you too: do you have any understanding of logic? or do you just enjoy making things up?

I certainly didn't make up the contrasting videos that Gordog posted, one of Moscow's lovely subway, and one of NY's nauseating system.

Posted by: Cyril | Sep 4 2021 2:01 utc | 192

james

I used to bullshit to my youngest daughter a bit when I was flying, one time telling her I could fly to the moon and back on zippy ties and silastic.
We were laughing about all that a couple of years back and she said she had been a bit doubtful about that one, then conjured up a picture of me as superdad. Durry in the mouth, jocks worn over the top of greasy jeans, silastic in one hand and zippy ties in the other.
With this thread, the picture that comes to mind for me is b the military officer giving gordog basic training by throwing him in the deep end of a pool filled with sharks, piranhas and assorted parasites that argue about money.

Posted by: Peter AU1 | Sep 4 2021 2:04 utc | 193

Cyril @Sep4 2:01 @193

American prestige was highest in the 1940s ...

Well, this is very subjective. isn't it? Others might say the peak was the 1920's. Or, the moon landing. Still others might say the period between the end of the Cold War and the end of Obama's first term (2012). Obama's election restored prestige that was lost during Bushes second term but that hope was dashed by the end of his first term. During that 1990-2012 period US-led information technology and internet was an international sensation and USA was the sole superpower (hegemon).

And there have also been several lows over the 70+ year time frame that your comments encompass. A major low occurred in the late 60's/early 70's with the increasing Civil Rights and Anti-war protests then the end of the gold standard and Watergate. Yet the Empire survived.

So the perception that you are trying to convey - that the Empire been experiencing a "noticeable" declined since 1948 is specious. It lacks a logical basis. Furthermore, even now the Empire is alive, it is still powerful and dangerous, and it is working to recover from/mitigate the rise of its adversaries. Any perception to the contrary leads to a false sense of security.

=
... the United Nations was a glorious achievement.

An achievement that was preceded by the League of Nations. How does copycat and necessary become 'glorious' in your mind?

=
From that peak, the Empire's decline has been quite noticeable.

Considering what they have been able to accomplish during what you INSIST is a period of "quite noticeable" decline, I'd say "phooey". That's a technical term for LMFAO.

=
I suspect that NY's subway was in rather decent shape in 1948, and then its condition worsened.

You pretend, once again, that the subway decay and the Empire decay go hand-in-hand and was continuous over time. "Quite noticeable" decade to decade.

I have already told you, from first-hand knowledge that is false. For that helpfulness, I am rewarded with your cherry-picking of my comments:

You said, the subway "was in decay since at least the 1960's".

Once again, you ignore the larger and more important point: that the low point for the NYC subway was in the 1970's and there has been massive investment since that low.

=
The NY subway is indeed a nearly perfect metaphor for the rotting empire.

No it is not.

For one thing - which is obvious to every American - States and local governments have much power and leeway over investment in infrastructure. The Federal government - which is most closely connected to EMPIRE, doesn't generally invest its prestige in local projects with the exception, perhaps, of Washington D.C. Here you will find government buildings, monuments, historical sites and even the subway kept up to a high standard. The DC subway, being smaller and newer that the NYC subway is also easier to maintain.

One might make numerous argument as absurd as your 1948-2021 subway-Empire crap. An example, that might hit home with you, might be to argue that Moscow's pretty subways show their leaders to be too concerned with appearances and control. Such leaders fail their people and that's why they have pretty old subways and China has dozens of new gleaming skyscrappers. The Soviets LOST the cold war due to such nonsense and Putin has inherited their insecurities.

=
I certainly didn't make up the contrasting videos that Gordog posted

Videos don't always tell the whole story. They provide a snapshot in time, they focus on certain things to the exclusion of others, etc.

You argue that a recent subway video reflects a 70-year old decline in the Empire.

You have a problem with logical thinking. I think it may well be because you're biased as indicated by your name (Cyril) and your persistence.

!!

Posted by: Jackrabbit | Sep 4 2021 4:04 utc | 194

No offence to Gordog but I don't come to MoA to lectured in bold and caps about the way money, finance and economy work (I'll scroll to vk's comments for that...;) ). Is there a particularly reason why Gordog takes over from time to time? The braying, abrupt and patronising tone is a bit off-putting after b's neutral and respectful reportage.

Posted by: Patroklos | Sep 4 2021 4:18 utc | 195

Taxation is meant to cover the repayment of public debt.

Taxation is brought to bear through legislation and regulation.

Eventually therefore, as governments spend always greater amounts and as electoral politics guarantees ever greater public outlays, individuals are, at once, kept out of the economy by fiscal and legislative barriers and/or brought under the thumb of government by welfare that becomes progressively more necessary.

Posted by: guidoamm | Sep 4 2021 4:21 utc | 196

@galerking = #100

You omit to take into account that when money is given to chosen economic entities on an arbitrary basis and/or at preferential rates and, eventually, at zero interest, your assumptions go out the window and overcapacity is dialled in.

Posted by: guidoamm | Sep 4 2021 4:29 utc | 197

Patroklos

"No offence ".... you seem like a bit of a bullshitter.

Posted by: Peter AU1 | Sep 4 2021 4:51 utc | 198

@ Peter AU1 | Sep 4 2021 2:04 utc | 194.. lol! that was funny peter.. thanks for that... and yes - a good analogy of what appears to be happening here with some like @ Patroklos | Sep 4 2021 4:18 utc | 196 oblivious to the whole process, or unwilling to see who is doing what here.. maybe it is a language barrier, or people don't understand this is b that has put gordogs post in highlight, and not the other way around.. oh well... more storytelling from you! thanks...

Posted by: james | Sep 4 2021 5:17 utc | 199

@Jackrabbit | Sep 4 2021 4:04 utc | 195

I wrote: American prestige was highest in the 1940s
You replied: Well, this is very subjective. isn't it?

Prestige grows largely from the strength of economy. When World War 2 ended, the US had roughly 50% of global GDP (and this is an objective measurement). The Empire has never been so dominant again.


[The UN was an] achievement that was preceded by the League of Nations. How does copycat and necessary become 'glorious' in your mind?

Before the United Nations, there were two World Wars in like twenty years. Since the United Nations was founded, there have been zero major conflicts in seventy years. Yes, wars in Korea and in Vietnam happened, but in my opinion the international organization has been very successful in preventing another global conflagration. I've no doubt: the UN was a great achievement.

Since creating the towering monument of the UN, the Empire has declined. At first quite slowly, but now at dizzying speed.


You pretend, once again, that the subway decay and the Empire decay go hand-in-hand and was continuous over time. "Quite noticeable" decade to decade ... the low point for the NYC subway was in the 1970's and there has been massive investment since that low

Dorian Gray's mirror needn't be precisely accurate to yield a generally true impression of the man's ongoing decay.

Posted by: Cyril | Sep 4 2021 6:18 utc | 200

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