|
Although this thread does not function under the same strict guidelines as the USPMT, it is still a general practice on TL to provide a source with an explanation on why it is relevant and what purpose it adds to the discussion. Failure to do so will result in a mod action. |
On April 17 2015 14:32 IgnE wrote:Show nested quote +On April 17 2015 10:03 cLutZ wrote:On April 17 2015 09:43 IgnE wrote:On April 16 2015 03:15 Makro wrote:On April 16 2015 01:36 JonnyBNoHo wrote:Protester at ECB Press conference today: ![[image loading]](http://i.imgur.com/KFDuGEX.gif) + Show Spoiler + world class security level, if she was crazy and had a weapon like a knife he would have been seriously injured Europe has the most attractive protesters. What happens when dollar gets devalued as European and Asian money migrates to China anyway? US housing market collapses? Well, the US Dollar is appreciating right now, but assuming it did devalue, that would just make US exports more competitive and reduce the trade deficit until an equilibrium was reached. You make it sound like a good thing. Why is Larry Summers so upset then? http://www.businessinsider.com/larry-summers-the-us-has-lost-its-role-as-the-worlds-economic-leader-2015-4Maybe because when the dollar collapses the real estate market (a source of investment tied up in the American dollar) collapses and then everything goes? What do you think he means by "demand will be in short supply"?
Are we really surprised by any of this? The past 6 years have been a disaster in terms of where U.S. stands in the international setting.
we can only know that there is no choice, because one of two things will happen if we don't lead. Either no one will lead and there will be chaos, or someone will fill the vacuum who does not share our values. -Condi Rice
|
WhiteDog I think the forum would benefit if you left the ad hominems out. Please tone it down.
Notice how I didn't make a sweeping statement:
"I think the reality is that many of the policies described" and not "All policies described".
I will give you that it may be possible with specific actions to help national firms become dominant in specific fields and that that can be beneficial to a specific country on aggregate. I imagine one example would be Samsung. Here's why I think this shouldn't be adopted as a widespread practice:
- It's one step into a prisoners' dilemma. What may be beneficial to one country may not lead to an aggregate global well-being so it's preferable to have frameworks where these sort of unilateral protectionisms are limited. The WTO sort of does that to some extent;
- As you said, such actions require vision: politicians have anything but. Their primary motive is the next electoral cycle, not the long-term well-being of the country. Which is why Iowa gets shit-ton of irrelevant farming subsidies which on aggregate are damaging to the US;
- Even if you have a politician with vision - perhaps he's a despot and can think long-term, but then he's also susceptible to sponsor his backers - it's extremely difficult to get these visions right. Notice how around Europe politicians have tried to create "the next Silicon Valley" in pretty much every corner of each country. Notice the massive economical and financial blunders with governments sponsoring of clean energy, high speed rail and others. Creating industries by decree is very very very difficult and increasingly so.
I'll promise to be as skeptical as you are regarding markets and corporations if you promise to apply that same skepticism to the motives and competence of politicians and bureaucrats.
|
On April 17 2015 15:51 warding wrote:
WhiteDog I think the forum would benefit if you left the ad hominems out. Please tone it down.
Notice how I didn't make a sweeping statement:
"I think the reality is that many of the policies described" and not "All policies described".
I will give you that it may be possible with specific actions to help national firms become dominant in specific fields and that that can be beneficial to a specific country on aggregate. I imagine one example would be Samsung. Here's why I think this shouldn't be adopted as a widespread practice:
- It's one step into a prisoners' dilemma. What may be beneficial to one country may not lead to an aggregate global well-being so it's preferable to have frameworks where these sort of unilateral protectionisms are limited. The WTO sort of does that to some extent;
- As you said, such actions require vision: politicians have anything but. Their primary motive is the next electoral cycle, not the long-term well-being of the country. Which is why Iowa gets shit-ton of irrelevant farming subsidies which on aggregate are damaging to the US;
- Even if you have a politician with vision - perhaps he's a despot and can think long-term, but then he's also susceptible to sponsor his backers - it's extremely difficult to get these visions right. Notice how around Europe politicians have tried to create "the next Silicon Valley" in pretty much every corner of each country. Notice the massive economical and financial blunders with governments sponsoring of clean energy, high speed rail and others. Creating industries by decree is very very very difficult and increasingly so.
I'll promise to be as skeptical as you are regarding markets and corporations if you promise to apply that same skepticism to the motives and competence of politicians and bureaucrats.
1) I didn't make any ad hominems, I criticized your comments.
2) prisonners dilemma really ? What would happen if any country helped a firm get over Samsung ? Samsung that represented, at some point, 17 % of Korea's GDP ? Nothing is a prisonner dilemma in this case, like in everything related to international trade, it's an undefined nash equilibrium : bureaucrats and politicians, which are most of the time idiots and defender of the dominant class, are basically forced to defend specific firms.
3) Even the idea of "agregate" global well-being is difficult to accept : can we really agregate ? Is it not a poor cosmopolitan philosophical stance that negate everything that distinguish us ? Is it really acceptable to believe that we are all united in our economic desire for consumption and production - everything equal (whatever our culture and our social bonds) ? Can a system defined by competition really create a situation were the "agregate" global well-being (measure through consumption as always, which is stupid as fuck but let's not talk about that) is the political goal ?
Again it's poor, even if I accept your (false) assumption that international trade always lead to increase of the agregate GDP.
Creating industries by decree is very very very difficult and increasingly so.
No it's not ?????? Look at history, plenty of huge firms used to be completly public. It's actually really easy : you just decreate that a specific firm have monopole... The problem is that it usually comes with inefficiencies, and is not really a solution aside from a set number of situation that are, by nature, monopolistic.
In relation to europe, you again make the same mistake : I proved to you that ALL european countries spend way less than the US in R&D ? How can you really believe that eurocrats, with no visions, will be able to create an area that will compete with the "Silicon Valley" when they spend less and have no preexistant infrastructure / firms ?
Edited to make it clearer.
|
Could you tell me what your academic background is? I'm having a hard time understanding the way you think.
2) You don't know game theory. That Nash equilibrium is the outcome of the prisoner's dilemma model. You are precisely describing a prisoner's dilemma when you say:
"bureaucrats and politicians, which are most of the time idiots and defender of the dominant class, are basically forced to defend specific firms because they don't know if others will not defend their firms."
That is precisely the problem with prisoner's dilemma, both sides choose a strategy that leads to the worst outcome on aggregate. An outcome that can be described as a Nash equilibrium.
3) If you don't accept the idea of aggregates then how the hell do you model economic problems? Seriously, if you don't take into account overall well-being then how do you make public policy decisions? I'm not even a full-throttle utilitarianist but to disregard it completely seems absurd. To answer you, yes I do believe that potable water, electricity, housing, mobility, internet connectivity, clothing, food are universally desirable goods desirable and that it should be a political goal to create a system that maximizes chances of giving access to these consumption goods to everyone.
I'll give you the last point. It's relatively easy to create national monopolies which in 99% of the cases are terrible for national aggregate well-being. I meant creating actual competitive industries that somehow benefit a country on aggregate like (maybe) Samsung.
I don't think Silicon Valley vs EU has anything to do with aggregate R&D spending but I don't really feel like starting this discussion as it's far less objective and thus much more difficult to reach common understandings given our vastly different worldviews.
|
Yeah thinking back I a wrote stupid comment without thinking. Shouldn't have talkd about notions of micro that I didn't use since five or more years.
3) Agents ? there are different agents with different interests and customs ? You can maybe find a situation where the agregate well being is maximized (and this might even be free market), but it's not necessarily the situation where the utility of all specific agents is individually maximized. Question of redistributions become relevant again. Why would American politicians take into consideration Greeks interests in their policy making ? Competition ? Why would I care that my opponent's horse goes faster when I slow myself ?
4) You "don't think" Silicon Valley vs EU has anything to do with aggregate R&D spending.
And I meant creating actual competitive industries that somehow benefit a country on aggregate like (maybe) Samsung.
I don't see how Samsung is better for aggregate well being than EDF was in its prime ?
"bureaucrats and politicians, which are most of the time idiots and defender of the dominant class, are basically forced to defend specific firms because they don't know if others will not defend their firms."
Yep I wrote without thinking because I laughed as soon as I read prisoners' dilemma. Seems like the quick and easy answer for a student in econ that cautiously absorbed its textbook.
Seriously, if you don't take into account overall well-being then how do you make public policy decisions? I'm not even a full-throttle utilitarianist but to disregard it completely seems absurd. To answer you, yes I do believe that potable water, electricity, housing, mobility, internet connectivity, clothing, food are universally desirable goods desirable and that it should be a political goal to create a system that maximizes chances of giving access to these consumption goods to everyone.
Are you saying french don't have potable water, electricity, housing, mobility, internet connectivity, clothing and food ?
|
3) I agree, agents have different interests and customs. The big question in economics is how to create systems that are both fair - in the sense that merit is rewarded - and try to maximize global utility/well-being. If we agree on those goals then the solution becomes a technical problem we can address without bickering and moralization.
So my point was that in the interest of maximizing global utility, we should reach frameworks that inhibit national policies that protect national industries and industries at the expense of global utility. For example, when the US subsidizes its sugar industries, not only is it hurting US consumers and the government budget, it hurts sugar cane producers in countries that are actually much better suited for the production of sugar - in the end the aggregate effect of that protection is overwhelmingly negative, benefiting only a small set of sugar producers. That is the work of many trade agreements, the WTO, the EU, and is actually in line with what phil.ipp is complaining about (national interests corrupting free trade).
4) I don't know much about EDF at its prime, much less if it was a positive player in the French economy or not. I tend to distrust utilities, in Portugal EDP monopolized a market running an inefficient organization, paying millions to a politicized board and we had to pay more for energy than the EU average. The telecoms were the same thing. So while in some cases - assuming you're right about EDF - national champions may be good, in many other cases they are not. My personal preference is to not take the gamble.
About potable water and other consumption, I was replying to your point about measuring consumption being stupid as fuck, and how we should our shouldn't believe in an universal desire for consumption.
EDIT: I'd also note that Samsung is more likely to be a net-positive for the world's aggregate well-being for the amount of innovation and the price-war pressure on displays that led to a very quick and sharp decline in costs and increase in quality of displays in the last 10 years.
|
On April 17 2015 07:16 oneofthem wrote:...you guys would really be fucked.
European nations don't spend money on a military apparatus because there is zero popular support to go and play world police like the US is doing. After two terrible world wars in the first half of the 20th century, as well as the cold war standoff in the second half (or the hundreds of internal wars following the fall of the Roman Empire in the fifth century A.D. - yes, that is how long Europe has actually been at war: 1500 years), we would actually like to live in peace for a while.
The fact that Europe has been at peace since 1945, i.e. for 70 years, is a historic anomaly. Practically all Europeans would like to extend that anomaly by as many decades as possible.
And forgive me for having doubts that a nation that couldn't even subjugate third world countries like Afghanistan, Iraq or Vietnam would have a chance of subjugating a whole continent that actually has largely the same military toys the US has, including nukes, plenty of submarines and aircraft carriers.
|
On April 17 2015 18:32 maartendq wrote:
we would actually like to live in peace for a while.
A peace that for much of the 20th century was afforded by the US, lets not forget that part.
|
3) I agree, agents have different interests and customs. The big question in economics is how to create systems that are both fair - in the sense that merit is rewarded - and try to maximize global utility/well-being. If we agree on those goals then the solution becomes a technical problem we can address without bickering and moralization.
And a system based on competition does not create that, but quite the opposite it force people to play for their interests, as the exemple of the race suggested.
So my point was that in the interest of maximizing global utility, we should reach frameworks that inhibit national policies that protect national industries and industries at the expense of global utility. For example, when the US subsidizes its sugar industries, not only is it hurting US consumers and the government budget, it hurts sugar cane producers in countries that are actually much better suited for the production of sugar - in the end the aggregate effect of that protection is overwhelmingly negative, benefiting only a small set of sugar producers. That is the work of many trade agreements, the WTO, the EU, and is actually in line with what phil.ipp is complaining about (national interests corrupting free trade).
You're saying the same nonsense over and over again. I specifically pointed out a problem that you discarded, which is the existance of imbalance. You don't seem to understand what it mean, but imbalance mean some country gain more than other from competition, and more than that that some countries can, in the long run, own others. You continue in pulling me in your cathechism that is only completly theorical : just take the european union into consideration, we've increased trading and facilitate competition for the last 20 years and all it did was to INCREASE differencies and divergences between european countries, not the contrary.
Even in the economist sense, you are neglecting all possible externalities, all possible market deficiencies, to make your discurse right. You are also putting aside the question of employment, because a pure and perfect international trade needs people (and capital) to be completly mobile (labor factor - and everything negative that comes with immigration, unemployment and whatnot) when in reality people are bound to their land, to their countries, to their cultures : it's human nature (which is why consumption as the goal of everything is stupid). I'll not even go in deep about arrow, debreu and shonnenschein, or how the idea of equilibrium (or maximum utility) is an illusion (arrow and debreu) and impossible to really didentify (shonnenschein), but that's the gist of it.
The state act, or react, everytime such situations are ahead, and (sadly for you) it is at least a third of what is happening on a market, and yes most of the time it leads to "imperfect" situations (which is why economist says all state actions are second best) where a - theoric and impossible to define - "better" situation is possible on agregate, but this situation usually ask for an agent to sacrifice himself for the greater good (tell that to the germans ?).
4) I don't know much about EDF at its prime, much less if it was a positive player in the French economy or not. I tend to distrust utilities, in Portugal EDP monopolized a market running an inefficient organization, paying millions to a politicized board and we had to pay more for energy than the EU average. The telecoms were the same thing. So while in some cases - assuming you're right about EDF - national champions may be good, in many other cases they are not. My personal preference is to not take the gamble.
EDF was a public firm that distributed energy to every french through a huge work ethic and attachment to public service as a value. Europe destroyed this firm in its desire for competition (privatising and splitting the firm in two : the production aspect, and the distribution aspect which is a natural monopoly), but when the storm catherina (or whatever the name) hit France around 2000, it's the old retired EDF workers that came back - unpaid - to repair and reassure distribution to everyone.
Samsung created (maybe, EDF is still a huge firm) more money, but I'm not sure cell phone gives more utility and well being, especially when you consider that cell phones needs electricity to function.
About potable water and other consumption, I was replying to your point about measuring consumption being stupid as fuck, and how we should our shouldn't believe in an universal desire for consumption.
You are being a little hypocrite here, because measuring consumption is not the same as defining specific vital consumption that needs to be taken care of : there are study on poverty called "study of privation" that do exactly that (defining specific vital consumption needs and making a survey to know how many people do not have that) but it's entirely different with measuring (in monetary value most of the time) the quantity of goods produced overall, with no regards on the distribution of said goods, and no regards on the fact that above a certain point, you don't care about producing MORE potable water than needed.
|
theoretical economics vs applied economics.
theoreticians should refrain themselves from testing said theories outside their labs.
or, after preliminary tests(closed beta), there should be a regulatory agency that approves such plans/ideas/theories before they go live.
|
On April 17 2015 14:32 IgnE wrote:Show nested quote +On April 17 2015 10:03 cLutZ wrote:On April 17 2015 09:43 IgnE wrote:On April 16 2015 03:15 Makro wrote:On April 16 2015 01:36 JonnyBNoHo wrote:Protester at ECB Press conference today: + Show Spoiler + world class security level, if she was crazy and had a weapon like a knife he would have been seriously injured Europe has the most attractive protesters. What happens when dollar gets devalued as European and Asian money migrates to China anyway? US housing market collapses? Well, the US Dollar is appreciating right now, but assuming it did devalue, that would just make US exports more competitive and reduce the trade deficit until an equilibrium was reached. You make it sound like a good thing. Why is Larry Summers so upset then? http://www.businessinsider.com/larry-summers-the-us-has-lost-its-role-as-the-worlds-economic-leader-2015-4Maybe because when the dollar collapses the real estate market (a source of investment tied up in the American dollar) collapses and then everything goes? What do you think he means by "demand will be in short supply"?
Well, because this was the Euro thread I only presented the international part. Domestically a high devaluation is not great because it creates equities bubbles, creates distortions within interest rate markets (particularly if it happens quickly or unexpectedly), reduces the value of savings for retirees, and acts as a tax on anyone who is holding dollars.
I think what he was talking about is that we import a lot of key components of things that are purchased in America, and those would increase in price, thus demand would also go down.
|
On April 17 2015 18:08 warding wrote:
So my point was that in the interest of maximizing global utility, we should reach frameworks that inhibit national policies that protect national industries and industries at the expense of global utility. For example, when the US subsidizes its sugar industries, not only is it hurting US consumers and the government budget, it hurts sugar cane producers in countries that are actually much better suited for the production of sugar - in the end the aggregate effect of that protection is overwhelmingly negative, benefiting only a small set of sugar producers. That is the work of many trade agreements, the WTO, the EU, and is actually in line with what phil.ipp is complaining about (national interests corrupting free trade).
there are so many weird things you say in this.
1. who has an interest of maximizing global utility? please show me the political program of only one party anywhere in the world where this is a goal of the party.
2. the frameworks/policies/trade agreements are made out of a single purpose to maximize the national economy, if it happens to be that the global utility rises with it thats just a mere byproduct. but not in the slightest a pre condition.
3.
it hurts sugar cane producers in countries that are actually much better suited for the production of sugar - in the end the aggregate effect of that protection is overwhelmingly negative
they are much better suited maybe, but if you take a way the jobs of your own producers they will stand with guns on your doorstep someday - i wait for the day when a politician makes the argument, "i know you lost your jobs, but some farmers in africa are better suited, and you can buy the sugar now for a dollar less." i think american politicians would actually be murdered, if they would make this argument.
no politician would get elected if he places global interests over national, especially in economic topics.
this world where everyone works to maximize global efficiency doesnt exist, and like whitedog pointed out, with the current system you would need labor to be mobile, or at least disconnect the income of a person from how much "work" he is doing. that would of course only be possible if countrys who produce a lot transfer money to countrys who produce less. but thats not going to happen.
|
we've increased trading and facilitate competition for the last 20 years and all it did was to INCREASE differencies and divergences between european countries, not the contrary.
Prove that the divergence is caused by competition and not institutional quality for example. As for the rest of your retort, you seemed to dive into an uncalled for diatribe against free markets and whatnot. I think there's been enough back and forth on that matter.
Phil.ipp:
1. I do. I know that politicians don't, that's why I don't like them or trust them.
2. These frameworks/policies/trade agreements exist at an international level in the WTO and the EU, among other trade agreements like NAFTA. They're not made out to maximize one single national economy.
3. Same problem with Global Warming.
BTW, I also believe restrictions to human mobility are immoral. There should be more of it.
|
"we can only know that there is no choice, because one of two things will happen if we don't lead. Either no one will lead and there will be chaos, or someone will fill the vacuum who does not share our values."
-Condi Rice
Values? What values? Please explain.
On April 17 2015 18:40 warding wrote:Show nested quote +On April 17 2015 18:32 maartendq wrote:
we would actually like to live in peace for a while.
A peace that for much of the 20th century was afforded by the US, lets not forget that part.
Wow. You easily earn 10/10 on the sinister cynic scale.
|
On April 17 2015 22:43 warding wrote:Show nested quote +we've increased trading and facilitate competition for the last 20 years and all it did was to INCREASE differencies and divergences between european countries, not the contrary. Prove that the divergence is caused by competition and not institutional quality for example. As for the rest of your retort, you seemed to dive into an uncalled for diatribe against free markets and whatnot. I think there's been enough back and forth on that matter. Phil.ipp: 1. I do. I know that politicians don't, that's why I don't like them or trust them. 2. These frameworks/policies/trade agreements exist at an international level in the WTO and the EU, among other trade agreements like NAFTA. They're not made out to maximize one single national economy. 3. Same problem with Global Warming. BTW, I also believe restrictions to human mobility are immoral. There should be more of it.
I'll not "prove" that here (it's a problem of imputation), but you can read the vast litterature on the subject (still an on going debate, but factually we see a correlation). But just a note here, the only criteria that effectively converged with the euro creation are the interest rate on national debt, and it was only permitted because it is the only actual situation for which we created a common institution, the ECB. As soon as the ECB said "fuck it" during the euro crisis, the interests rate became vastly different again, until the ECB said that it will do "anything" it can to save Greece, which permitted a convergence of the interests rate. So, all in all, the only actual convergence we've had since the euro creation within the euro zone is a convergence that was/is permitted and assured by the only common institution we created, the ECB (the most powerful institution in europe).
You can believe that restrictions on human mobility are immoral, but this is actually irrelevant to my point. What I said was that people are bound to their land by something else that just the desire to maximize utility : culture, history, custom, and even - but that's my point of view - a certain sense of belonging, like you are "owned" by the land in which you grew up (and not the other way around like we usually believe). Of course it's partially false, and it depend on plenty of things, but let's say this feeling exist enough to state that mobility cannot be entirely defined by economic necessities. This create, naturally, unemployment and social problems : in a trading situation, an area that is growing and who has an edge in competitiveness, no unemployment, rising wage (due to a lack of workers) should receive (least productive, since the most productive should find work in their home countries) immigrants from countries with unemployment and lack of competitiveness.
But in reality, since people are in fact attached to their land, they don't follow this simple modelisation of labor mobility : first it doesn't happen, or it does but not at the scale required for the markets to equilibrate (not to mention it's mostly the most productive and educated that usually leave their home country) and secondly immigration comes with plenty of cultural and social problems that are pretty obvious (I'm not saying immigration is a problem, but the way it is perceived by the native of a country is usually negative, which literally mean, by definition, that it is a source of desutility for the native - we go back to oppositions of interests).
|
I am glad UKIP will finally be taking its rightful place at the top. All the other parties are in cahoots to prevent their rise to power. But the people have spoken and will speak again come election day. When that day comes I will enjoy the tears of the politicians who have long sold the UK out for foreign interests. THERE WILL BE A RECKONING.
|
you have a fitting username, if you want to be cancer, do it somewhere else. i dont think anyone want to here about your fantasies about a reckoning.
EDIT: seems he is already banned.
|
Ahh i wanted to hear which RECKONING he meant there. Very far right or left wing nationalism...
|
|
|
Obvious growth : lower cost for energy, due to the huge drop in petrol price, and a weaker euro that sustain exports.
|
|
|
|
|
|
EPT![[image loading]](http://ftalphaville.ft.com/files/2015/04/CColzUrWEAA07mb.jpg)
![[image loading]](https://pbs.twimg.com/media/CConh-RVEAAGWfR.jpg:small)
![[image loading]](https://pbs.twimg.com/media/CCo0l8rVAAAKYVa.jpg)
![[image loading]](https://pbs.twimg.com/media/CConh5YUsAAFk9C.jpg:small)
![[image loading]](https://pbs.twimg.com/media/CConh6pVAAAi_9O.jpg:small)
