Archive for August, 2013

Ratcheting You Down

Monday, August 12th, 2013

 

Have you ever wondered why conventional macroeconomic dogma says that if the economy gets overheated and inflationary, the cure is to (raise interest rates to) cause a recession, so people will be laid off, so wages will be held down?

Or that a little inflation (say, up to two or three percent) is okay because it lowers the real (after-inflation) cost of labor, unless labor can demand pay raises to keep up?

Is it really necessary that economic stability be built on keeping the working people down?

Labor, by the way, doesn’t refer just to unloading boxcars, but to any wage or salaried work by people. If you get a W-2 or a 1099 to report your annual earnings, you’re labor.

The answer is “no”, it is not necessary to throw workers under the bus to keep the economy properly lubricated. That’s just one of the ways that the system is stacked– by human law, not natural law– against workers.

Nobel Laureate economist Paul Krugman discussed this and more in a recent (August 8, 2013) New York Times Op-Ed:

Phony Fear Factor

 

 


Know You Don’t Know

Friday, August 9th, 2013

 

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

I learned that quote as an undergrad from an EE professor. It’s widely attributed to the usual amusers: Mark Twain, Will Rogers, Artemis Ward, and others.

I don’t know who said it first. I only know who said it to me, for the first time that I can remember.

Investing is overflowing with things we know that ain’t so, things we may have known but forgot, and things we think we can surmise but can’t possibly know.

In his The BIG Picture blog, Barry Ritholtz elaborates and clarifies:

On the Value of Not Knowing