antiquary

Why Macroeconomists Are Particularly Obtuse

"I have never understood how the ability of a rich person to buy ever more extravagant goods changes the inclination or ability of the poor to buy more or worse quality oatmeal or laundry soap."

A bad comparison. What the rich mainly spend their money on is not lifestyle (and let's also point out that many of their main capital luxury purchases, like vacation homes, are resaleable, usually at a profit) but on staying rich or becoming richer. They buy income producing property (tangible and not) and they buy political influence. Live on less than you take in, invest the rest, and when you reach the point at which your day-to-day expenses are paid by investments, your income takes off, so long as your expenses are kept constant. By this, wealth inequality becomes income inequality.

By contrast, poor people, who are often stupider, poorer educated and-- this is key-- more incapable of looking past the immediate, don't have the desire or ability to live on less so as to invest the rest in income producing property. They have emotion, which brings both pride, a quality so manipulable by advertising, and children. And the closer they are to the subsistence level, the more power their employers have over them, for they can't say no. Which means they won't get raises. Their ignorance is, in effect, money in the bank for everyone higher up.

All of which is not to say I'm anti-capitalist. Capitalism as we practice it is the greatest evoker of overall virtue in history. I'm a distributist (see en.wikipedia.org/wiki/...). The great G.K. Chesterton said it best: "Too much capitalism does not mean too many capitalists, but too few capitalists." This has to be solved by real teaching of financial education in schools.

The Fine Line Between Profits and Theft

This line looks about as fine as a two-by-four. It's more like "The Intentionally, Profitably Blurred Line Between Profits and Theft."

Wall Street Breakfast: Must-Know News

Doubleguns, contracts have been breakable for centuries, contrary to your statement, and many economists argue that they should be if that's the economically sensible thing to do. Our bankruptcy laws have reflected that for centuries, too. It's neither anyone's business nor their duty to validate or even respect anyone else's unilateral expectations, in or out of business. You pays your money and you takes your chances. The old fishing adage comes to mind-- "that's why it's called fishing, not catching."

A Tale of Two Economies: U.S. vs. China

I'm strongly reminded of the doom-mongers of the 1980s who said many, many similar things about Japan. Where is Japan now? You talk a confident game, but I strongly suspect it won't shake out that way, despite our debt level.

The Virtue of the Republic

"So essentially, by artificially lowering the price of capital (interest rates) supply dries up, as it does in every market where price fixing is allowed. If you can't earn a decent return on your money, why would you take it out of your wallet?"

The posit you take as granted is that the ceiling set by the Fed is below a decent return. This is not necessarily true; what a "decent return" is will depend on what the alternatives are in the current economy. The general level of paranoia is not a legitimate factor. I think the way you get banks to lend is by showing them that they're being outcompeted by other people or entities who are lending, even if that has to be the Federal government for a time to prime the pump.

Which Vehicle Is Best for a Long Bet on Oil?

Canadian energy trusts, for my money. Not least because we import more from them than from any other country, and transportation costs, lower for us than for, for example, China, don't mean nothing.

Though as to the "stupidity" of the government in not allowing more domestic production-- despite the offshore possibilities, there just isn't any way to make a significant difference with our own oil reserves. We have no serious untapped fields. ANWR, for example, contains even in the most optimistic estimates about 7 billion barrels, or about a fourteen-week supply at world usage rates.

Credit Card Catastrophe: Congress Can't Help

It's pretty basic that the foolishness of some is wealth itself to the wise. There's nothing wrong with profiting from one's own wisdom. But it's deeply immoral to go out of one's way to evoke foolishness for one's own profit. Some idiots might call me a socialist, but capitalism and a sense of morality are in no way mutually exclusive.

This is in part Congress's fault, for not having acted to overturn the Supreme Court decision Marquette National Bank (1978) which took financial regulation, including usury laws, away from the states when dealing with federally chartered banks, which-- surprise!-- all the credit card companies then rushed to form.

$200 Oil Is Coming While We Waste a Perfectly Good Crisis (Part 3)

An excellent article, one of the best I've seen on SA. But I would have liked a discussion on coal liquification-- the conversion of coal to gasoline using the Fischer-Tropsch technology. The break-even point most often seen out there is between $30 and $40 a barrel for oil prices. Any higher oil price makes coal liquification theoretically worth it. I have not seen any analysis, however, of initial costs of building coal liquification plants, nor any of coal's and gasoline's likely prices should this become widespread-- that is, if gasoline production becomes a serious competitor with electrical production and other current major users of coal. Your next article, perhaps?

Canadian Energy Trusts: The Best Long Term Income and Dollar Hedge? (Part 2)

Judging by the size of some of these comments, you could add the remainder of your article in a comment and avoid the 2500 word restriction, though I imagine SA would not be amused.

Could the Dow Sink Another 50% by 2012?

"As Harry Dent...pointed out"?

One cannot "point out" an opinion. Pointing out something is reserved for facts, and facts only. Fifty years ago it may be possible to say that Mr. Dent pointed out these things, assuming they come true, but certainly not today. You have two strikes against you in my mind when you can't use language correctly.

Mr. Dent's conclusion is suspect, as well, and smacks of the Rush Limbaugh effect-- of taking extreme positions for the sake of getting attention. (The fact that his books have sold many copies says very little in his favor; should we give Danielle Steele the Pulitzer prize for literature on that basis?) This kind of book comes out every so often, and tends to smack of the predictions of the arrival of the Rapture in A.D. 1000, A.D. 2000 and in many other years. "Surviving the Great Depression of 1990", anyone? The fact that Mr. Dent's previous books have come out more or less as these things were occurring, not several years before like Daniel Arnold's "The Great Bust Ahead" (2002), makes Dent rather like someone offering to sell you the winning lottery ticket number the day after it has been drawn.

The truth is, even if someone's worldview successfully encompasses the astounding complexity of the economy, it is an example of the best use of the metaphor inherent in the Heisenberg Uncertainty Principle. The position of electrons cannot be discovered by shining light at them because the photons affect the electrons and skew the results. Similarly, the market can't be well predicted in an era of keyword-triggered automatic trading because commentary itself skews what it is describing.

For myself, I plan to ignore the rending of garments and gnashing of teeth, and simply get on with the business of life.

G20 Protesters Break into RBS

"People everywhere else are angry, and may have had enough"?

You're right; they may have had enough of being remotely competitive. Let them do whatever feel-good, instinctive, populist things they wish, and get outcompeted left, right and center in the future by those who take economics and anything similarly beyond the scope of the comprehension and conscience of the average shmoe seriously.

We Should Be Fighting a Trade War with China, Not Mexico

If people only had to pay something like that for those products, perhaps they'd actually stop throwing out repairable or perfectly good but now-inconvenient products, which in my neighborhood of Philadelphia they do with shocking regularity. Stop this blind worship of low prices, please.

On Mar 19 09:28 PM DHH wrote:

> You want to start a trade war with China? Smart move. I'm sure in
> this time of economic crisis Americans want to pay $10 dollars for
> a pair of socks instead of $2. $150 for a pair of shoes instead
> of $75.

The End of (Most) Newspapers

Conservatives, every time you open your mouth about the "liberal media," you shoot yourselves in the foot yet again. It amazes me how people who sincerely believe in capitalism and desperately want more conservative voices in media are still completely incapable of using the one to try to accomplish the other. You can't start your own media outlets? Or take over an existing one?

What you're actually against is the fact that the media have until recently prospered with the approach they have now, because most people aren't as conservative as you, and that the only reason they're not prospering now is due to changing societal communication and information consumption patterns, not to the unattractiveness of their editorial approaches. You're like an ugly person who claims all mirrors must be flawed.

Atlas Pipelines: I'm Out of Here

Thanks for turning me off a company I'd been considering. The truth of the matter is that for some companies, obfuscation is their main goal. It's their main shield against regulation and perceptive investors.

Stewart vs. Cramer: A Cheap Shot

Unless Cramer continually told people to get out after the DOW 10500 point, and why, he's not exactly any Meredith Whitney. A used-car salesman, was how he struck me; visibly out of his depth when not on a show he controlled, constantly shifting position and blindly repeating stock phrases. Give me real thinking.