Austerity Lecture - Revision history

Adamcolton: /* Other */

2013-06-12T14:43:53Z

Other

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	== Other ==		== Other ==
	This came from another Blyth video I was watching, but I wanted to make note of it: "Growth rates and taxed are extremely uncorrelated - ask the Swedes". Shortly after, "The top marginal tax rate under Eisenhower was 91%, we've been cutting ever since and the economy has gotten smaller and weaker".		This came from another Blyth video I was watching, but I wanted to make note of it: "Growth rates and taxed are extremely uncorrelated - ask the Swedes". Shortly after, "The top marginal tax rate under Eisenhower was 91%, we've been cutting ever since and the economy has gotten smaller and weaker". The bottom 40% hasn't had a real wage increase since 1979.

	[[Category:Notes]]		[[Category:Notes]]

Adamcolton: /* Other */

2013-06-12T14:38:26Z

Other

← Older revision		Revision as of 14:38, 12 June 2013
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	== Other ==		== Other ==
	This came from another Blyth video I was watching, but I wanted to make note of it: "Growth rates and taxed are extremely uncorrelated - ask the Swedes".		This came from another Blyth video I was watching, but I wanted to make note of it: "Growth rates and taxed are extremely uncorrelated - ask the Swedes". Shortly after, "The top marginal tax rate under Eisenhower was 91%, we've been cutting ever since and the economy has gotten smaller and weaker".

	[[Category:Notes]]		[[Category:Notes]]

Adamcolton at 14:36, 12 June 2013

2013-06-12T14:36:47Z

← Older revision		Revision as of 14:36, 12 June 2013
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	Brazil? They had the highest Gini co-efficient for years. So people were spending a fortune on kidnap insurance and private security. Then they move to "democracy as asset insurance". The state bank helped finance Brazilian multinationals, which it now taxes on its earnings abroad, bringing it back into the country to finance it's welfare system. Income as gone up, but become more equal. This made the country a great investment opportunity, which is bad for a export dependent country. So incoming investments pay a transaction tax and deposit to make sure they stay for longer periods, not day trading.		Brazil? They had the highest Gini co-efficient for years. So people were spending a fortune on kidnap insurance and private security. Then they move to "democracy as asset insurance". The state bank helped finance Brazilian multinationals, which it now taxes on its earnings abroad, bringing it back into the country to finance it's welfare system. Income as gone up, but become more equal. This made the country a great investment opportunity, which is bad for a export dependent country. So incoming investments pay a transaction tax and deposit to make sure they stay for longer periods, not day trading.

			== Other ==
			This came from another Blyth video I was watching, but I wanted to make note of it: "Growth rates and taxed are extremely uncorrelated - ask the Swedes".

	[[Category:Notes]]		[[Category:Notes]]

Adamcolton: /* Testing Predictions */

2013-06-11T18:29:43Z

Testing Predictions

← Older revision		Revision as of 18:29, 11 June 2013
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	=== Testing Predictions ===		=== Testing Predictions ===
	Hume, one of the originators of the above problems, predicted the massive growth of debt and collapse of the British economy by ~~1718~~. Debt did grow to 240% of GDP at the end of the Napoleonic wars, but the British empire experienced it's enormous expansion.		Hume, one of the originators of the above problems, predicted the massive growth of debt and collapse of the British economy by the late 1700s. Debt did grow to 240% of GDP at the end of the Napoleonic wars, but the British empire experienced it's enormous expansion.

	=== Two Liberal Stories ===		=== Two Liberal Stories ===

Adamcolton: /* Questions */

2013-06-11T18:24:56Z

Questions

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	Australia? Still in the pre-collapse bubble driven by mining boom that China is the buyer. You can see this because the Australian dollar and Chinese yuan move perfectly in tandem. "People say China owns the US, actually we've been giving them bits of paper that yield 2% annually and they've been giving us TVs - it's a really sweet deal. But it's actually true in Australia - they really do own your assets", assets delivered with a slight pause in the middle.		Australia? Still in the pre-collapse bubble driven by mining boom that China is the buyer. You can see this because the Australian dollar and Chinese yuan move perfectly in tandem. "People say China owns the US, actually we've been giving them bits of paper that yield 2% annually and they've been giving us TVs - it's a really sweet deal. But it's actually true in Australia - they really do own your assets", assets delivered with a slight pause in the middle.

			Brazil? They had the highest Gini co-efficient for years. So people were spending a fortune on kidnap insurance and private security. Then they move to "democracy as asset insurance". The state bank helped finance Brazilian multinationals, which it now taxes on its earnings abroad, bringing it back into the country to finance it's welfare system. Income as gone up, but become more equal. This made the country a great investment opportunity, which is bad for a export dependent country. So incoming investments pay a transaction tax and deposit to make sure they stay for longer periods, not day trading.

	[[Category:Notes]]		[[Category:Notes]]

Adamcolton: /* Questions */

2013-06-11T18:20:09Z

Questions

← Older revision		Revision as of 18:20, 11 June 2013
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	== Questions ==		== Questions ==
			How to earn profits in a positive inflationary cycle? Take the Abudabi investment strategy "We own half a percent of everything that isn't nailed down" because you don't know where the growth is coming from. Stay away from debt market.

			How can an individual state like Ireland try to fix things in their country? They can't, they're kind of screwed. Also, Argentina is the graveyard of all bad economic policies. Countries like Ireland actually run into a logistics problem that they don't have the physical money.

			What about Iceland? Iceland is an example of "No good dead goes unpunished". We should have let the banks fail. Even though they are de-leveraged now, they are more concentrated. As to-big-to-fail as they were then, they are even too-bigger-to-fail now. UBS was fined 1.2B$ for funding terrorism and drug cartels. They weren't charged with a crime, US investments are required to with draw. So they weren't charged. Iceland let their banks fail. The number-crunchers in the banks had to go get real jobs. The domestic economy ended up being fueled by start-ups (particularly online gaming). Their unemployment is 1% higher than Germany. People didn't like this so they were voted out of power and the people running the banks in the first place are back in.

			Australia? Still in the pre-collapse bubble driven by mining boom that China is the buyer. You can see this because the Australian dollar and Chinese yuan move perfectly in tandem. "People say China owns the US, actually we've been giving them bits of paper that yield 2% annually and they've been giving us TVs - it's a really sweet deal. But it's actually true in Australia - they really do own your assets", assets delivered with a slight pause in the middle.

	[[Category:Notes]]		[[Category:Notes]]

Adamcolton at 17:56, 11 June 2013

2013-06-11T17:56:10Z

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	=== The Theory ===		=== The Theory ===
	If the government cuts spending, then everyone calculates their lifetime aggregate gain from lowered taxes which translates to them needing to save less now to pay taxes later so we all go to Ikea and buy a couch. This is ludicrous.		If the government cuts spending, then everyone calculates their lifetime aggregate gain from lowered taxes which translates to them needing to save less now to pay taxes later so we all go to Ikea and buy a couch. This is ludicrous.

			=== The Reality ===
			Cutting in a slump produces a bigger slump. You want to cut during growth - but good luck with that.

			The IMF now calculates that when you cut 1 dollar from government budgets you lose 1.5-1.7 of spending.

			== Questions ==

	[[Category:Notes]]		[[Category:Notes]]

Adamcolton at 17:50, 11 June 2013

2013-06-11T17:50:01Z

← Older revision		Revision as of 17:50, 11 June 2013
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	=== What We Learned ===		=== What We Learned ===
	* Fallacies of composition and non-scalability in labor and money markets		* Fallacies of composition and non-scalability in labor and money markets - there are systemic non-linearities
	* ~~Investment expectations as a social multi-person PD???~~		* People following each others investment signals leads to feedback oscillations
	* "Consumption, to repeat the obvious, is the sole end of economic activity"		* "Consumption, to repeat the obvious, is the sole end of economic activity"

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	* Redistribution and Debt is reinsurance for Democracy		* Redistribution and Debt is reinsurance for Democracy
	* Austerity is Anorexia for the Economy		* Austerity is Anorexia for the Economy

			Liquidity Trap: In a depression, everyone want to remain liquid so that when things start to get better, people can move their money to the best places. But the recovery doesn't start while everyone stays liquid.

			=== Germany ===
			1873 - founders crisis, their stock market crashed and discredited liberal economic ideas (liberal as in market liberal). This caused re-evaluation. One scholar looked at England (from whom they were taking financial advice) and realized that if England followed their own advise, they'd be focusing on wool production. Instead they were focusing on running the world. So they developed a big government to drive growth fueled by external demand - Keynseianism breaks down. You don't want to stabilize consumption if you're export dependent.

			This is the foundation of the Euro. Generalized "Ordoliberalism". But when the credit bubble pops, everyone is dependent on exports, which doesn't work for countries running an export deficit.

			=== The Theory ===
			If the government cuts spending, then everyone calculates their lifetime aggregate gain from lowered taxes which translates to them needing to save less now to pay taxes later so we all go to Ikea and buy a couch. This is ludicrous.

	[[Category:Notes]]		[[Category:Notes]]

Adamcolton at 17:31, 11 June 2013

2013-06-11T17:31:52Z

← Older revision		Revision as of 17:31, 11 June 2013
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	This produced a theory that banks produce too much credit - entrepreneurs get confused by price signals, and produce too much. Then the credit dries up. The classic boom-bust cycle.		This produced a theory that banks produce too much credit - entrepreneurs get confused by price signals, and produce too much. Then the credit dries up. The classic boom-bust cycle.

	An important historical note, both the nazi party and the ruling party in Japan in WWII came to power by opposing austerity. Some will oppose it and gain a populist movement (we're seeing the same thing in Greece with Golden Dawn).		An important historical note, both the nazi party and the ruling party (military) in Japan in WWII came to power by opposing austerity. Some will oppose it and gain a populist movement (we're seeing the same thing in Greece with Golden Dawn).

			=== What We Learned ===
			* Fallacies of composition and non-scalability in labor and money markets
			* Investment expectations as a social multi-person PD???
			* "Consumption, to repeat the obvious, is the sole end of economic activity"

			Also
			* Democracy is asset insurance for the Rich
			* Redistribution and Debt is reinsurance for Democracy
			* Austerity is Anorexia for the Economy

	[[Category:Notes]]		[[Category:Notes]]

Adamcolton at 17:27, 11 June 2013

2013-06-11T17:27:41Z

← Older revision		Revision as of 17:27, 11 June 2013
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	=== Testing Predictions ===		=== Testing Predictions ===
	Hume, one of the originators of the above problems, predicted the massive growth of debt and collapse of the British economy by 1718. Debt did grow to 240% of GDP at the end of the Napoleonic wars, but the British empire experienced it's enormous expansion.		Hume, one of the originators of the above problems, predicted the massive growth of debt and collapse of the British economy by 1718. Debt did grow to 240% of GDP at the end of the Napoleonic wars, but the British empire experienced it's enormous expansion.

			=== Two Liberal Stories ===
			# "Can't live with it, can't live with out it, don't want to pay for it".
			# "Accepting the need for it and to pay for it" - John Stewart Mill

			This produced a theory that banks produce too much credit - entrepreneurs get confused by price signals, and produce too much. Then the credit dries up. The classic boom-bust cycle.

			An important historical note, both the nazi party and the ruling party in Japan in WWII came to power by opposing austerity. Some will oppose it and gain a populist movement (we're seeing the same thing in Greece with Golden Dawn).

	[[Category:Notes]]		[[Category:Notes]]