I've never been quite sure why the church views gluttony as a sin. Makes you unhealthy and unattractive, but it seems mostly a personal failing. On the other hand, it might be viewed as a sign when the consequence of one person's gluttony is his neighbor's hunger.
We may be moving away from that into a new era, where gluttony is an economic sin as well. We've known for a long time that the American eating habits could not be sustained worldwide without some incredible, and probably physically impossible, increase in food production. This was not a problem as long as the rest of the world was sufficiently poor that they couldn't compete economically for the foodstuffs.
Unfortunately for Americans, the rest of the world is getting rapidly more prosperous and they are developing a taste for more, better, and less efficient (e.g. meat) diets. In addition, there have been some droughts and stuff, but mostly it's demand rather than supply.
If Americans had a lot of self-discipline, this would be an opportunity. We could cut down on our excess consumption of calories and increase our exports, thereby paying for the manufactured goods we love and don't manufacture anymore. More likely, we'll continue to overeat and drive up the cost of our food.
It's time to put food and energy back into the "core" inflation rate. There were taken out, years ago, in order to have a number that changed less month-to-month, but this only works if the fluctuations in food and energy average out. They aren't doing this. Oil going from $30 to $115 is not a fluctuation, it's a sea change.
Sunday, March 09, 2008
Has the Surge Worked?
It seems clear to Paul Greenberg that it's working. Has restored his faith, it has. Glory be!
What we seem to have actually proved is that with virtually every available American serviceman on the ground there, we can hold down the death squads. We've been able to reduce suicide bombers.
Meanwhile, with oil revenues estimated at up to $57 billion for 2008, Iraq has become one of the most corrupt countries on the planet and one of the least able to translate its wealth into meeting the needs of its citizens. Perhaps more effective than Nigeria, but definitely near the bottom. I'm a bit of a cynic. I think some of the political good will now being seen, what little there is, results from politicians recognizing that there is so much money that they can divide it up among themselves and all get rich. It will be necessary to provide some cover story for the masses, who will not do as well, but that's always possible, as George Orwell told us decades ago.
However, I'm dubious that the factions will ever trust one another enough that the U.S. can leave. The kleptocracy probably appreciates that degree of stability that having the U.S. Army constantly around the corner provides. For the U.S. taxpayer, the situation is pretty grim. It will get much worse if McCain wins in November.
Long ago, I figured the worst case for Iraq was 500 billion. How naive I was! We are now in a situation where the armed factions will agree not plunder the country rather than massacre one another if we kick in a quarter trillion a year forever. A trillion dollars is still a lot of money.
What we seem to have actually proved is that with virtually every available American serviceman on the ground there, we can hold down the death squads. We've been able to reduce suicide bombers.
Meanwhile, with oil revenues estimated at up to $57 billion for 2008, Iraq has become one of the most corrupt countries on the planet and one of the least able to translate its wealth into meeting the needs of its citizens. Perhaps more effective than Nigeria, but definitely near the bottom. I'm a bit of a cynic. I think some of the political good will now being seen, what little there is, results from politicians recognizing that there is so much money that they can divide it up among themselves and all get rich. It will be necessary to provide some cover story for the masses, who will not do as well, but that's always possible, as George Orwell told us decades ago.
However, I'm dubious that the factions will ever trust one another enough that the U.S. can leave. The kleptocracy probably appreciates that degree of stability that having the U.S. Army constantly around the corner provides. For the U.S. taxpayer, the situation is pretty grim. It will get much worse if McCain wins in November.
Long ago, I figured the worst case for Iraq was 500 billion. How naive I was! We are now in a situation where the armed factions will agree not plunder the country rather than massacre one another if we kick in a quarter trillion a year forever. A trillion dollars is still a lot of money.
Saturday, March 08, 2008
Elliott Waves -- The Delphic Oracle Approach to Investing
I am amused by the interest in Elliott Waves, particularly with respect to foreign exchange rates. The adherents of this nonsense are enamored with the possibility of discovering trends through systematic waves in charts of essentially anything. The arguments against are the same as rational people use in many circumstances. For example,
1) If true, this analysis would be self-defeating once discovered. If everybody could make money following the pattern, everybody would anticipate the pattern, destroying the pattern.
2) If true, then the practitioners would not be blogging about it. They would be sitting on the beach in the Bahamas, soaking up the sun. The exchange rate between the Euro and the US Dollar (known as EURUSD to the cognoscenti) has jumped so much in six months that anyone who could use Elliott Waves to predict the trend would now be rich. Many of these people appear not to be rich.
3) If true, there would be no reason, discarding the possibility of altruism, for anyone to spread the word for peanuts. You would not have people selling books or DVDs for $19.95, for Elliott Waves any more than making money from home for a small price, available at the address on your TV screen.
4) Correlation is not causation. It's a common error to try to fit a straight line through a graph of two variables and then discover a causal relationship. It is less often done with respect to wavy patterns, because they are so much more difficult to quantify. But mathematicians know that you can approximate any regular pattern with a series based on sine waves. If you allow enough slop, you can do this with a modest number of them.
History examines the past and offers explanations. It's interesting, but won't make you rich. Science examines the past through experiments and predicts future behavior. The Elliott Wave folks think they have science, but they just have history. Maybe not bunk, but close.
1) If true, this analysis would be self-defeating once discovered. If everybody could make money following the pattern, everybody would anticipate the pattern, destroying the pattern.
2) If true, then the practitioners would not be blogging about it. They would be sitting on the beach in the Bahamas, soaking up the sun. The exchange rate between the Euro and the US Dollar (known as EURUSD to the cognoscenti) has jumped so much in six months that anyone who could use Elliott Waves to predict the trend would now be rich. Many of these people appear not to be rich.
3) If true, there would be no reason, discarding the possibility of altruism, for anyone to spread the word for peanuts. You would not have people selling books or DVDs for $19.95, for Elliott Waves any more than making money from home for a small price, available at the address on your TV screen.
4) Correlation is not causation. It's a common error to try to fit a straight line through a graph of two variables and then discover a causal relationship. It is less often done with respect to wavy patterns, because they are so much more difficult to quantify. But mathematicians know that you can approximate any regular pattern with a series based on sine waves. If you allow enough slop, you can do this with a modest number of them.
History examines the past and offers explanations. It's interesting, but won't make you rich. Science examines the past through experiments and predicts future behavior. The Elliott Wave folks think they have science, but they just have history. Maybe not bunk, but close.
Oregonians are Math Challenged
It's not difficult. If you need a certain amount of money every year, which equals what you expect the long term average to be, then you can't discard the surplus in those years that exceed the average, because mathematically, there will be years below the average.
We didn't see it coming with PERS, and consequently told public employees when we had good years that they could keep the excess for their pensions and that the taxpayers would make it up during the bad years, i.e. when earnings dipped below 8%. The legislature passed the rules in the early 1990's when the money was relatively small and apparently just didn't work out the consequences.
Neither have they figured out the implications of having an almost entirely income-tax based general fund and no serious reserves. In the previous recession, the state was flushing out its treasury with "kicker" checks just as the projections for tax revenues were going south. We ended up with some schools becoming the butt of Doonesbury jokes.
Here we are again. We've sent out record kicker checks in the fall and now in winter, the handwriting on the wall is becoming evident again. The first decline in the revenue forecast was under $200 million. It was, however, enough to essentially eliminate the unappropriated amount in the state's ending fund balances. There are still some reserves, but those will be mostly wiped out with the next estimate.
This may just be the Republicans' blunt tool to achieve control of total government spending, but since it is likely to seriously impact schools, community colleges, universities, highways, and law enforcement, you'd think they would devise something more targeted.
We didn't see it coming with PERS, and consequently told public employees when we had good years that they could keep the excess for their pensions and that the taxpayers would make it up during the bad years, i.e. when earnings dipped below 8%. The legislature passed the rules in the early 1990's when the money was relatively small and apparently just didn't work out the consequences.
Neither have they figured out the implications of having an almost entirely income-tax based general fund and no serious reserves. In the previous recession, the state was flushing out its treasury with "kicker" checks just as the projections for tax revenues were going south. We ended up with some schools becoming the butt of Doonesbury jokes.
Here we are again. We've sent out record kicker checks in the fall and now in winter, the handwriting on the wall is becoming evident again. The first decline in the revenue forecast was under $200 million. It was, however, enough to essentially eliminate the unappropriated amount in the state's ending fund balances. There are still some reserves, but those will be mostly wiped out with the next estimate.
This may just be the Republicans' blunt tool to achieve control of total government spending, but since it is likely to seriously impact schools, community colleges, universities, highways, and law enforcement, you'd think they would devise something more targeted.
Where is John Maynard Keynes when we need him?
The prevailing political view on economics up until 1932 was that discipline and hard work would cure all that might ail us. After Roosevelt came to power, he changed his mind and adopted the Keynesian view that the economy needs discipline in good times and largesse during recessions and depressions.
We have a new theory, as wacky as the earlier views, which is that profligacy is the key to prosperity. We are now on the verge of recession and the politicians are simply recommending more hair of the dog that bit us. We're here because we didn't want to consider either that running a war would involve some domestic sacrifices, or that running out of petroleum would require us to change out consumption patterns. The consequence is that we are caught unprepared by oil at $105/barrel and the fact that foreigners regard U.S. debt as increasingly problematic.
We need to raise, not lower taxes, and spend the money where needed. We need to invest in infrastructure to employ some of those who were formerly building too many too large houses. We need to invest in research to develop energy-saving technologies. We need to hire bands of shiftless teenagers to accost people at Interstate rest stops and offer to check their tire pressure.
We do not need to write checks to people who are frightened for their futures. Those people, and by May that's going to be most people, will just put the money in the bank or use it to pay down credit cards. There will be a large transfer of debt from the private sector to the public, but there will be no surge in spending. Keynes advocated spending by government, not transfer to individuals who might not spend. This is nuts.
We have a new theory, as wacky as the earlier views, which is that profligacy is the key to prosperity. We are now on the verge of recession and the politicians are simply recommending more hair of the dog that bit us. We're here because we didn't want to consider either that running a war would involve some domestic sacrifices, or that running out of petroleum would require us to change out consumption patterns. The consequence is that we are caught unprepared by oil at $105/barrel and the fact that foreigners regard U.S. debt as increasingly problematic.
We need to raise, not lower taxes, and spend the money where needed. We need to invest in infrastructure to employ some of those who were formerly building too many too large houses. We need to invest in research to develop energy-saving technologies. We need to hire bands of shiftless teenagers to accost people at Interstate rest stops and offer to check their tire pressure.
We do not need to write checks to people who are frightened for their futures. Those people, and by May that's going to be most people, will just put the money in the bank or use it to pay down credit cards. There will be a large transfer of debt from the private sector to the public, but there will be no surge in spending. Keynes advocated spending by government, not transfer to individuals who might not spend. This is nuts.
Fortunately there are political minor leagues
It's unfortunate that Obama has lost an advisor who may have had good intentions and perhaps talents, but just wasn't ready for the discipline of actual power. It's bad enough for him that she was unable to curb her tongue during the campaign. How much worse would it have been if she'd stayed out of sight until January and then somehow became a high government official!
Maybe there is a benefit from long campaigns, because it exposes both the candidate and a lot of potential advisors to a lot of inconsequential scrutiny. Whether some Obama campaigner said something indiscreet to a Canadian official is a tempest in a teacup now. Rather like the Eugene Emeralds losing a baseball game. Not a big deal in itself and it serves to weed out those who don't have what it takes.
I'm actually not that distressed to see Obama ditch Samantha Powers since she seems to come from the "moral obligation to fix the world" school of international relations. That's what got us into Iraq and Afghanistan. We don't need to do it again in Darfur.
I accept the idea that bad outcomes are often inevitable and it isn't admirable to spend time and treasure vainly attempting to delay that fact. The people of Afghanistan are not going to have happy lives because there are 25 million of them, squatting in the middle of a stinking desert, with no export product to speak of apart from heroin. Iraqis might, since they have wealth, if we left them alone but it can't be forced on them.
Instead, we have intervened. A half decade later, they are less happy, we are less safe, and we're a trillion dollars poorer (including deferred costs). Knowing this, there are those who want us to save Darfur, militarily since there are no other options. Just goes to show that a fancy university education isn't always enough.
Maybe there is a benefit from long campaigns, because it exposes both the candidate and a lot of potential advisors to a lot of inconsequential scrutiny. Whether some Obama campaigner said something indiscreet to a Canadian official is a tempest in a teacup now. Rather like the Eugene Emeralds losing a baseball game. Not a big deal in itself and it serves to weed out those who don't have what it takes.
I'm actually not that distressed to see Obama ditch Samantha Powers since she seems to come from the "moral obligation to fix the world" school of international relations. That's what got us into Iraq and Afghanistan. We don't need to do it again in Darfur.
I accept the idea that bad outcomes are often inevitable and it isn't admirable to spend time and treasure vainly attempting to delay that fact. The people of Afghanistan are not going to have happy lives because there are 25 million of them, squatting in the middle of a stinking desert, with no export product to speak of apart from heroin. Iraqis might, since they have wealth, if we left them alone but it can't be forced on them.
Instead, we have intervened. A half decade later, they are less happy, we are less safe, and we're a trillion dollars poorer (including deferred costs). Knowing this, there are those who want us to save Darfur, militarily since there are no other options. Just goes to show that a fancy university education isn't always enough.
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