A Grand Theory of Our Present Dilemma
For the last month, I have been gripped by the gnawing sensation that all of the conventional wisdom about our current economic crisis is wrong. I think we are facing a crisis of capitalism, not just a periodic bout of market failure. What was most startling about yesterday’s GDP drop, was that consumer spending literally stopped. We have been riding in a vehicle turbo-charged with leverage and we just hit a brick wall.
“The drop in spending was so fast, so rapid, that production could not be cut fast enough,” said Nigel Gault, chief domestic economist at IHS Global Insight. “That is happening now, and the contraction in the current quarter, as a result, will probably exceed 5 percent.”
As I have said before, we are entering an Interregnum. Now the reason there was so much uproar about the Wall Street Bonuses this week is that the bankers didn’t realize this. The election of Barack Obama reintroduced the notion of a social contract. This is a very old notion as Karl Polanyi notes in his landmark book, The Great Transformation
Take the case of a tribal society. The individual’s economic interest is rarely paramount, for the community keeps all its members from starving unless it is itself borne down by catastrophe, in which case interests are again threatened collectively, not individually. The maintenance of social ties on the other hand is crucial. First, because by disregarding the accepted code of honor, or generosity, the individual cuts himself off from the community and becomes an outcast; second, because in the long run, all social obligations are reciprocal, and their fulfillment serves also the individual’s give-and-take interests best.
Of course these notions of community and honor have long since vanished from the canyons of Wall Street, but that does not mean they have vanished from our society. But this leads me to the question of the crisis of capitalism. What I want to uncover is if there is some inherent flaw with the system that caused the Wall Street traders to push it to a breaking point?
There are very few things that Adam Smith and Karl Marx agreed upon–but one was the “tendancy of the rate of profit to fall”. This term is so well known by economists that they use TRPF as the acronym. Here’s Adam Smith from The Wealth of Nations 
It may be laid down as a maxim, that wherever a great deal can be made by the use of money, a great deal will commonly be given for the use of it; and that wherever little can be made by it, less will commonly be given for it. According, therefore, as the usual market rate of interest varies in any country, we may be assured that the ordinary profits of stock must vary with it, must sink as it sinks, and rise as it rises. The progress of interest, therefore, may lead us to form some notion of the progress of profit.
And here is a description of Marx’s TRPF theory.
Even as investment in constant capital (factories, technology,etc) increases productivity (i.e. the margin of surplus labor relative to regular labor, and thus of surplus value relative to variable capital), it reduces profits (i.e. the margin of surplus value relative to total capital). The capitalist then responds by investing more in raising productivity, which in turn reduces profits further, and so on and so forth, in a vicious cycle of diminishing returns.
This tendency, in concert with the other dialectically interrelated crisis factors developed in the course of Marx’s overall critique of capital, eventually leads to a catastrophic breakdown in the capital cycle.
So what do the theories of these two philosophers from the 18th and 19th Centuries have to do with our current crisis? When I arrived on Wall Street as a Merger and Acquisitions VP at Merrill Lynch in 1984, the age of the corporate raider and the leveraged buyout was just beginning. Up to that point debt to equity ratios in the S&P 500 companies were fairly conservative and the average investor was happy to collect dividends and hope for overall share appreciation (chart below)
But men like Henry Kravis, Boone Pickens and Ron Perlman were not satisfied with these steady returns and Mike Milken, the junk bond king showed how with a lot of leverage they could “juice” those 4% returns into the mid 20% level. So in 1985 when Kravis’ KKR bought the Beatrice Companies (Tropicana, Samsonite) for $6.1 billion, most of the money used was junk bond debt. They then sold off individual brands, retired the debt and made a 30:1 return on their investment. Now everyone wanted in on the leverage game. Pension funds, college endowments and private investors battled their way to get in on these deals. The new normal was that money should earn 10%+ per annum. Like Adam Smith said, this was unsustainable.
Next, this mentality began to affect the CFO’s of even the most successful business. Joseph Schumpter in his classic text, Capitalism, Socialism, and Democracy
So here’s my conclusion. If modern market capitalism can only be sustained through the “juice” of such leverage, then we are in a crisis. Just as the average consumer has now realized that her home equity is no longer an ATM and that carrying 10 credit cards is bad for your health, the whole economy is going to have to return to being content with a reasonable return on investment. Because for years our GDP was”juiced” in the same way that hedge fund returns were hyped, I imagine that total output will continue to drop for many quarters until we reach a sustainable level of debt to equity ratios on both corporate and personal balance sheets. And that is why groups like The Club for Growth, originally financed by Mike Milken and his ilk are so up in arms over the Obama election that they are running this contest.
Here are the proposals from the Club for Growth on how to solve our crisis.
Making the Bush tax cuts permanent
Death tax repeal
Cutting and limiting government spending
Social Security reform with personal retirement accounts
Expanding free trade
Legal reform to end abusive lawsuits
Replacing the current tax code
School choice
Regulatory reform and deregulation
It somehow escapes the pea-brains of these dinosaurs, that these are the very policies that have brought us to this crisis. So when a New York Times reporter has the temerity to question a Wall Street bank lawyer on Obama’s anger at his bonus, we get this.
“I think President Obama painted everyone with a broad stroke,” said Brian McCaffrey, 55, a Wall Street lawyer who was on his way to see a client. “The way we pay our taxes is bonuses. The only way that we’ll get any of our bailout money back is from taxes on bonuses. I think bonuses should be looked at on a case by case basis, or you turn into a socialist.”
This logic is so twisted it’s comical. If we don’t pay Mr. McCaffrey his bonus, then he won’t pay his taxes, so we won’t have the money to recover all the cash we put in his bank. OMG! And of course if we complain–We’re socialists.
It seems to me we are going to have a really interesting conversation about the nature of capitalism in the next few months. Regular readers of this blog know that I am not a fan of centralization and so classic notions of Socialism have no appeal for me. However the basic question of TRPF, vanishing investment opportunity and need for outsized returns depending on leverage juice remain. One of the questions we may find our selves wrestling with is the allocation of resources in a mixed economy. What if the states and cities take on the task of investing in our basic productivity infrastructure–roads, trains, broadband, electricity grid (solar, wind and geothermal) thus freeing private capital to provide the “value added” services where higher returns can be generated? Any investor in Google knows that their returns are not juiced by leverage. But on the other hand, Google could not succeed without a commodity broadband infrastucture. There is no reason that government run infrastructure should need the kinds of high returns that Wall Street demands.
All of these are questions I’m going to try to grapple with in the next few months. I don’t pretend to have the answers. What I do know is that the conventional wisdom is wrong and name calling from the The Club for Growth and Rush Limbaugh is not going to help us find a solution.
Jon–your theory is that consumer spending stopped–but your facts are wrong– you really need to check out the data–
Doug- The 5.1% decline was in final sales to consumers, not GDP. You still are not answering my question about our addiction to leverage.
Doug- The 5.1% decline was in final sales to consumers, not GDP. You still are not answering my question about our addiction to leverage.
Doug- The 5.1% decline was in final sales to consumers, not GDP. You still are not answering my question about our addiction to leverage.
Doug- The 5.1% decline was in final sales to consumers, not GDP. You still are not answering my question about our addiction to leverage.
Potable water is so precious, only us idle rich bastards can afford to piss and shit in it. We let others die from the lack of it. Many others, every second. And still – we flush.
There is no greater arrogance than thinking our waste is more important than other human lives. You folks see what appears to you as greater arrogance.
The finer points of wealth amuse the wealthy, the poor just die as soon as possible.
Not soon enough.
And I will flush whenever I please.
In the long ago 1960′s, I was a Humanities major in a fine University.
Not a proper one, I was sent to Viet Nam. We were giving a war – at their place. It stank. Many died, a bit early. Many of us got medals and citations. Many more got new kinds of VD. We brought our medals and diseases home with us, if we came home at all. Some did not.
Humanity is not human, it is a silly idea. Like wealth and fine moral convictions.
You cannot flush a toilet with ideas.
And becoming dead again is everyone’s only common fate.
See, it is quite simple.
Even us wealthy bastards are just gonna die.
Our piss and shit never left us, we just chose not to notice where it went.
Here.
Surprised?
Why??
I just play with old technology. Music brings me comfort. I know it is an illusion I cannot sustain, but, I do the best I can with these lousy cards I was dealt … you know?
May our illusions hide the shark as long as possible.
Do not worry, we may die lost in our illusions, but, the shark is swimming and swimming and getting hungry, again, and again.
Many sailors drown and sink to the bottom to rot. Sharks are the big ride at this theme park, but, even they can’t eat all of us … sigh.
Rot is not very good story board material, so we pretend the sharks await us all.
We pretend a lot.
I quite enjoy it, sometimes.
Potable water is so precious, only us idle rich bastards can afford to piss and shit in it. We let others die from the lack of it. Many others, every second. And still – we flush.
There is no greater arrogance than thinking our waste is more important than other human lives. You folks see what appears to you as greater arrogance.
The finer points of wealth amuse the wealthy, the poor just die as soon as possible.
Not soon enough.
And I will flush whenever I please.
In the long ago 1960′s, I was a Humanities major in a fine University.
Not a proper one, I was sent to Viet Nam. We were giving a war – at their place. It stank. Many died, a bit early. Many of us got medals and citations. Many more got new kinds of VD. We brought our medals and diseases home with us, if we came home at all. Some did not.
Humanity is not human, it is a silly idea. Like wealth and fine moral convictions.
You cannot flush a toilet with ideas.
And becoming dead again is everyone’s only common fate.
See, it is quite simple.
Even us wealthy bastards are just gonna die.
Our piss and shit never left us, we just chose not to notice where it went.
Here.
Surprised?
Why??
I just play with old technology. Music brings me comfort. I know it is an illusion I cannot sustain, but, I do the best I can with these lousy cards I was dealt … you know?
May our illusions hide the shark as long as possible.
Do not worry, we may die lost in our illusions, but, the shark is swimming and swimming and getting hungry, again, and again.
Many sailors drown and sink to the bottom to rot. Sharks are the big ride at this theme park, but, even they can’t eat all of us … sigh.
Rot is not very good story board material, so we pretend the sharks await us all.
We pretend a lot.
I quite enjoy it, sometimes.
Jon,
This is just convoluted. It isn’t logically valid.
The fact the government is willing and able to do the bailout, MEANS that it should have set terms on financing – like say NO bonuses.
That’s all fine and logical, I have suggested to you a way to try and claw them back – that’s even supportable.
BUT, seriously it doesn’t follow, that a company shouldn’t buy back it’s stock when it believes its shares are undervalued. That’s good business.
It also doesn’t follow, the the government SHOULD have done the bailout at all.
And most to the point, it doesn’t get you out of the box of your own making – the juice is still totally doable. It just isn’t gong to be doable, until prices and inventories settle down, and inflation starts to kick back in. Until we see inflation, all of these theories on both sides are bullshit – because both sides will spend and cut taxes with abandon to stave off deflation.
But inflation will rear it’s ugly head, and then and only then, will we know who comes down where, what everyone really believes. Policy is being made in a vacuum right now, printing money has no consequence because we over valued everything for the past couple years (with bullshit), so as long as prices are falling, and jobs are being cut… we don’t see it. Less actual milk is being made, less actual gas is being processed, less actual clothes are being sewn.
If you think we can “live without the juice,” that there is going to be a job for everyone, and food for everyone with productivity down and staying down, then I want some of what you are smoking.
Big cuts in government spending are right around the corner. Half of these new programs will not be able to be funded after 18mos, because raising taxes will bring less receipts, and government deficit spending will be causing inflation. You should be thinking a head.
You can’t get blood from a stone.
Jon,
This is just convoluted. It isn’t logically valid.
The fact the government is willing and able to do the bailout, MEANS that it should have set terms on financing – like say NO bonuses.
That’s all fine and logical, I have suggested to you a way to try and claw them back – that’s even supportable.
BUT, seriously it doesn’t follow, that a company shouldn’t buy back it’s stock when it believes its shares are undervalued. That’s good business.
It also doesn’t follow, the the government SHOULD have done the bailout at all.
And most to the point, it doesn’t get you out of the box of your own making – the juice is still totally doable. It just isn’t gong to be doable, until prices and inventories settle down, and inflation starts to kick back in. Until we see inflation, all of these theories on both sides are bullshit – because both sides will spend and cut taxes with abandon to stave off deflation.
But inflation will rear it’s ugly head, and then and only then, will we know who comes down where, what everyone really believes. Policy is being made in a vacuum right now, printing money has no consequence because we over valued everything for the past couple years (with bullshit), so as long as prices are falling, and jobs are being cut… we don’t see it. Less actual milk is being made, less actual gas is being processed, less actual clothes are being sewn.
If you think we can “live without the juice,” that there is going to be a job for everyone, and food for everyone with productivity down and staying down, then I want some of what you are smoking.
Big cuts in government spending are right around the corner. Half of these new programs will not be able to be funded after 18mos, because raising taxes will bring less receipts, and government deficit spending will be causing inflation. You should be thinking a head.
You can’t get blood from a stone.
“Big cuts in government spending.” Well. Other than the the power to take a percentage of all the Real (and Imaginary) Wealth via taxation, and the ability to mint and print “money” which is only a token that marks the exchange of, sometimes, real value, and blow it into the neck of the balloon that used to be labeled “M1,” “the government” does not have “money” to spend. “The government” through all its branches just ALLOCATES the incomprehensible sums that are collected, to those who have the most effective way of pressing their claims.
rhbee says it’s all about jobs. Which jobs? ones that grow food and build mass transit and make steel and bridges? Or the ones the Aerospace Industry Association tells us “we” ‘can’t live without?’ Or the ones that result in the death-spitting Multiple Kill Vehicle featured in an earlier blog entry here? Or the ones that produced THIS?
Seems to me that one main missing or at least under-considered ingredient in a healthy, homeostatic social mix is the location of the intersection of self-reliance, self-interest, and altruism. I think a lot of Whole-Earthers in their teepees and yurts and geodesic domes and earth-sheltered homes had no qualms about using food stamps and unemployment and other social-welfare support, when the going got tough. And having achieved the physical environment they spent so much doctrinal energy defining and building, what did they do from there? Was it ever enough to just work to grow one’s sustenance and gather and prep the flax stems, shear the sheep and card and spin and knit and loom, enjoy the change of seasons and a bird’s song at sunrise on the way to the fields and the night sky? Jerry Rubin was maybe not the archetypical Whole-Earther, but he was counter-culture, and look where he ended up.
I wonder if Freud, who in my mind was wrong about so many other things, was at least heading in the right direction with his line about Liebe und Arbeit being all you need (John Lennon, of course, would have made it even simpler.)
Is there any agreement on who gets to keep on living, as things get tighter and rougher? Or will it be every man for himself? Humans can make a pretty broad range of social structures, with more or less respect for the wisdom of their elders and more or less tendency to leave the weak to freeze and starve in the snow. I hope to be around for maybe one more turn of the wheel, to see what Pogo’s observation elicits from the parched and depleted soil our locust-like indulgences have left for the next round. I am still betting on the almost inevitable success of a franchise chain of suicide parlors…
But hey, what do I know?
“Big cuts in government spending.” Well. Other than the the power to take a percentage of all the Real (and Imaginary) Wealth via taxation, and the ability to mint and print “money” which is only a token that marks the exchange of, sometimes, real value, and blow it into the neck of the balloon that used to be labeled “M1,” “the government” does not have “money” to spend. “The government” through all its branches just ALLOCATES the incomprehensible sums that are collected, to those who have the most effective way of pressing their claims.
rhbee says it’s all about jobs. Which jobs? ones that grow food and build mass transit and make steel and bridges? Or the ones the Aerospace Industry Association tells us “we” ‘can’t live without?’ Or the ones that result in the death-spitting Multiple Kill Vehicle featured in an earlier blog entry here? Or the ones that produced THIS?
Seems to me that one main missing or at least under-considered ingredient in a healthy, homeostatic social mix is the location of the intersection of self-reliance, self-interest, and altruism. I think a lot of Whole-Earthers in their teepees and yurts and geodesic domes and earth-sheltered homes had no qualms about using food stamps and unemployment and other social-welfare support, when the going got tough. And having achieved the physical environment they spent so much doctrinal energy defining and building, what did they do from there? Was it ever enough to just work to grow one’s sustenance and gather and prep the flax stems, shear the sheep and card and spin and knit and loom, enjoy the change of seasons and a bird’s song at sunrise on the way to the fields and the night sky? Jerry Rubin was maybe not the archetypical Whole-Earther, but he was counter-culture, and look where he ended up.
I wonder if Freud, who in my mind was wrong about so many other things, was at least heading in the right direction with his line about Liebe und Arbeit being all you need (John Lennon, of course, would have made it even simpler.)
Is there any agreement on who gets to keep on living, as things get tighter and rougher? Or will it be every man for himself? Humans can make a pretty broad range of social structures, with more or less respect for the wisdom of their elders and more or less tendency to leave the weak to freeze and starve in the snow. I hope to be around for maybe one more turn of the wheel, to see what Pogo’s observation elicits from the parched and depleted soil our locust-like indulgences have left for the next round. I am still betting on the almost inevitable success of a franchise chain of suicide parlors…
But hey, what do I know?
“Big cuts in government spending.” Well. Other than the the power to take a percentage of all the Real (and Imaginary) Wealth via taxation, and the ability to mint and print “money” which is only a token that marks the exchange of, sometimes, real value, and blow it into the neck of the balloon that used to be labeled “M1,” “the government” does not have “money” to spend. “The government” through all its branches just ALLOCATES the incomprehensible sums that are collected, to those who have the most effective way of pressing their claims.
rhbee says it’s all about jobs. Which jobs? ones that grow food and build mass transit and make steel and bridges? Or the ones the Aerospace Industry Association tells us “we” ‘can’t live without?’ Or the ones that result in the death-spitting Multiple Kill Vehicle featured in an earlier blog entry here? Or the ones that produced THIS?
Seems to me that one main missing or at least under-considered ingredient in a healthy, homeostatic social mix is the location of the intersection of self-reliance, self-interest, and altruism. I think a lot of Whole-Earthers in their teepees and yurts and geodesic domes and earth-sheltered homes had no qualms about using food stamps and unemployment and other social-welfare support, when the going got tough. And having achieved the physical environment they spent so much doctrinal energy defining and building, what did they do from there? Was it ever enough to just work to grow one’s sustenance and gather and prep the flax stems, shear the sheep and card and spin and knit and loom, enjoy the change of seasons and a bird’s song at sunrise on the way to the fields and the night sky? Jerry Rubin was maybe not the archetypical Whole-Earther, but he was counter-culture, and look where he ended up.
I wonder if Freud, who in my mind was wrong about so many other things, was at least heading in the right direction with his line about Liebe und Arbeit being all you need (John Lennon, of course, would have made it even simpler.)
Is there any agreement on who gets to keep on living, as things get tighter and rougher? Or will it be every man for himself? Humans can make a pretty broad range of social structures, with more or less respect for the wisdom of their elders and more or less tendency to leave the weak to freeze and starve in the snow. I hope to be around for maybe one more turn of the wheel, to see what Pogo’s observation elicits from the parched and depleted soil our locust-like indulgences have left for the next round. I am still betting on the almost inevitable success of a franchise chain of suicide parlors…
But hey, what do I know?
“Big cuts in government spending.” Well. Other than the the power to take a percentage of all the Real (and Imaginary) Wealth via taxation, and the ability to mint and print “money” which is only a token that marks the exchange of, sometimes, real value, and blow it into the neck of the balloon that used to be labeled “M1,” “the government” does not have “money” to spend. “The government” through all its branches just ALLOCATES the incomprehensible sums that are collected, to those who have the most effective way of pressing their claims.
rhbee says it’s all about jobs. Which jobs? ones that grow food and build mass transit and make steel and bridges? Or the ones the Aerospace Industry Association tells us “we” ‘can’t live without?’ Or the ones that result in the death-spitting Multiple Kill Vehicle featured in an earlier blog entry here? Or the ones that produced THIS?
Seems to me that one main missing or at least under-considered ingredient in a healthy, homeostatic social mix is the location of the intersection of self-reliance, self-interest, and altruism. I think a lot of Whole-Earthers in their teepees and yurts and geodesic domes and earth-sheltered homes had no qualms about using food stamps and unemployment and other social-welfare support, when the going got tough. And having achieved the physical environment they spent so much doctrinal energy defining and building, what did they do from there? Was it ever enough to just work to grow one’s sustenance and gather and prep the flax stems, shear the sheep and card and spin and knit and loom, enjoy the change of seasons and a bird’s song at sunrise on the way to the fields and the night sky? Jerry Rubin was maybe not the archetypical Whole-Earther, but he was counter-culture, and look where he ended up.
I wonder if Freud, who in my mind was wrong about so many other things, was at least heading in the right direction with his line about Liebe und Arbeit being all you need (John Lennon, of course, would have made it even simpler.)
Is there any agreement on who gets to keep on living, as things get tighter and rougher? Or will it be every man for himself? Humans can make a pretty broad range of social structures, with more or less respect for the wisdom of their elders and more or less tendency to leave the weak to freeze and starve in the snow. I hope to be around for maybe one more turn of the wheel, to see what Pogo’s observation elicits from the parched and depleted soil our locust-like indulgences have left for the next round. I am still betting on the almost inevitable success of a franchise chain of suicide parlors…
But hey, what do I know?
JT, what a card! Can I have the last dance with you?
JT, what a card! Can I have the last dance with you?
JT, what a card! Can I have the last dance with you?
JT, what a card! Can I have the last dance with you?
Ha, the guys a national treasure…
Ha, the guys a national treasure…
Ha, the guys a national treasure…
Ha, the guys a national treasure…
Jon—commerce dept shows december sales down 1.4%–check out the data—they are the official source for US consumer spending–as to leverage I think that it’s really very simple–people have not lost their desire to spend long term but need to right size their personal balance sheet–when they have and have a comfort level with thier own job they will borrow and spnd again—but clearly the leverage fest of the recent past is over and that does have real effects on the economy– right now the concern is deflation but the smartest guys I know are concerned long term with inflation but cannot call the turning point—dn
Jon—commerce dept shows december sales down 1.4%–check out the data—they are the official source for US consumer spending–as to leverage I think that it’s really very simple–people have not lost their desire to spend long term but need to right size their personal balance sheet–when they have and have a comfort level with thier own job they will borrow and spnd again—but clearly the leverage fest of the recent past is over and that does have real effects on the economy– right now the concern is deflation but the smartest guys I know are concerned long term with inflation but cannot call the turning point—dn
Jon—commerce dept shows december sales down 1.4%–check out the data—they are the official source for US consumer spending–as to leverage I think that it’s really very simple–people have not lost their desire to spend long term but need to right size their personal balance sheet–when they have and have a comfort level with thier own job they will borrow and spnd again—but clearly the leverage fest of the recent past is over and that does have real effects on the economy– right now the concern is deflation but the smartest guys I know are concerned long term with inflation but cannot call the turning point—dn
Rick, you wouldn’t want to dance with me — I’d be stepping all over your toes.
Other than the “Mad Max” musings of this old Tieresias, any substantive comment on whether the “Aerospace Industry” ought to get pride of place at the glutton’s table we are shorthanding as “the bailout stimulus package?”
In the nursing biz, if you want to get someone going, one of the best nostrums is a “black and white:” prune juice and milk of magnesia, 50-50, served warm. Any application to the folks in Congress who are so busily earmarking for their “special friends,” with butrillions of “dollars” that somebody, someday, is going to actually have to produce some Real Wealth to underwrite?
Inflation? Hey, if it was good enough for Weimar Germany and Brazil, it’s good enough for us!
Rick, you wouldn’t want to dance with me — I’d be stepping all over your toes.
Other than the “Mad Max” musings of this old Tieresias, any substantive comment on whether the “Aerospace Industry” ought to get pride of place at the glutton’s table we are shorthanding as “the bailout stimulus package?”
In the nursing biz, if you want to get someone going, one of the best nostrums is a “black and white:” prune juice and milk of magnesia, 50-50, served warm. Any application to the folks in Congress who are so busily earmarking for their “special friends,” with butrillions of “dollars” that somebody, someday, is going to actually have to produce some Real Wealth to underwrite?
Inflation? Hey, if it was good enough for Weimar Germany and Brazil, it’s good enough for us!
The dirty little secret of inflation, is all those foriegn reserves… we’ll be ok destroying their value (and putting oil rich nations and china down a notch), for a tad… but the inevitable result of reducign the money supply will be a mutually exclusive choice between government spending and keeping short term interest rates low for business growth.
Since Obama is well aware higher taxes are only acceptable if they actually lead to more revenues, that’s when we’ll see what’s what.
The dirty little secret of inflation, is all those foriegn reserves… we’ll be ok destroying their value (and putting oil rich nations and china down a notch), for a tad… but the inevitable result of reducign the money supply will be a mutually exclusive choice between government spending and keeping short term interest rates low for business growth.
Since Obama is well aware higher taxes are only acceptable if they actually lead to more revenues, that’s when we’ll see what’s what.
The dirty little secret of inflation, is all those foriegn reserves… we’ll be ok destroying their value (and putting oil rich nations and china down a notch), for a tad… but the inevitable result of reducign the money supply will be a mutually exclusive choice between government spending and keeping short term interest rates low for business growth.
Since Obama is well aware higher taxes are only acceptable if they actually lead to more revenues, that’s when we’ll see what’s what.
Swarming theory has been popular among the social network pundits, both how to start them, how to stop them and are they controllable. From Scientific American comes the following on locust swarming and the potential of serotonin stimulation to cause this:
http://www.sciam.com/article.cfm?id=when-grasshoppers-go-bibl
Note the potential of density to engender desperation and fear and the effects on serotonin production. As an amplifier, the web is a great way to simulate density (see Facebook connections) and stimulate fear. Toss in a little environmentally mediated desperation and voila.
Swarming theory has been popular among the social network pundits, both how to start them, how to stop them and are they controllable. From Scientific American comes the following on locust swarming and the potential of serotonin stimulation to cause this:
http://www.sciam.com/article.cfm?id=when-grasshoppers-go-bibl
Note the potential of density to engender desperation and fear and the effects on serotonin production. As an amplifier, the web is a great way to simulate density (see Facebook connections) and stimulate fear. Toss in a little environmentally mediated desperation and voila.
Swarming theory has been popular among the social network pundits, both how to start them, how to stop them and are they controllable. From Scientific American comes the following on locust swarming and the potential of serotonin stimulation to cause this:
http://www.sciam.com/article.cfm?id=when-grasshoppers-go-bibl
Note the potential of density to engender desperation and fear and the effects on serotonin production. As an amplifier, the web is a great way to simulate density (see Facebook connections) and stimulate fear. Toss in a little environmentally mediated desperation and voila.