Follow Slashdot stories on Twitter

 



Forgot your password?
typodupeerror

Comment: Re:Germany should pay war reparations for WWII (Score 1) 739

If the economic modelling you use does not have a recession as one of it's possible states. It is not a model of the economy.

If your model of how individual agents interact is not consistent with the rules of double entry book-keeping, you do not have a model of the economy.

If your model of a firms profits don't line up with empirical evidence... you get the idea.

When you impose that model on an actual economy, and it fails to follow your expectations. It isn't the real world that is at fault.

Paraphrasing Hyman Minsky; The natural instability of capitalism is upwards. When firms take small risks and they pay off, they learn to take bigger and bigger risks. Bankers have an incentive to fund larger and larger risks. Asset prices climb. It becomes profitable to speculate on assets without having the income to cover your interest payments. Until the debt level peaks and the whole process works in reverse. A boom becomes a slump. There's a period of pain, when bankers and firms reduce their willingness to take risks. The economy recovers, firms take small risks and they pay off....

But everyone starts the next cycle, still carrying some of their debts from the previous cycle. If there's high inflation, who cares. You can easily pay off your debts with your increased income. But when the mountain of debt in the system gets too large, inflation is impossible.

Once inflation turns to de-flation, the cycle is broken. What starts as a period of tranquility. A "Great Moderation" if you will. Suddenly turns into a crisis. Debtors go bankrupt, money is destroyed. Distressed sellers discover the market is much smaller than they thought it was. Even low risk projects fail as the economy suddenly shrinks.

But if the government sector taxes more in the good times, and runs a deficit during a slump. They can dampen the cycle. They can lessen the pain of the inevitable crash. But do you really think that the people will allow high taxation during a long period with very little trouble?

Do you really think the government caused this? A government run by economists who haven't learnt the right lessons from history. Economists who misunderstand and ignore the role of money and credit. Economists who codified their model of a perfect economy into law. A model which has nothing to do with how the real economy actually works.

Comment: Re:They're bums, why keep them around (Score 1) 739

If you want to understand the situation, you have to study the role of credit and money in the economy. Both of which, mainstream economics will mistakenly tell you are irrelevant. If you've got an hour, I'd recommend watching one of Steve Keen's recent lectures on YouTube.

When banks lend, they create money and spending power with every loan. When you repay a loan, or go bankrupt, that money you didn't spend doesn't flow around the economy. It didn't become someone else's income.

The people of Greece, have less money that's travelling slower around their economy. They're in a depression. It's not like they're all hoarding it under a mattress. The Maastricht treaty places limits on both the annual government deficit and the total government debt. So at this time, when their people are out of work, the government can't pay them welfare. Making a bad problem so much worse.

The Maastricht treaty is a failed economics experiment. Perpetrated by fools, who turned their economic ideology into law. Giving nations like Greece no way to soften the impact of a financial crisis. Turning an inevitable recession, into a much greater depression.

Comment: Re:They're bums, why keep them around (Score 1) 739

the "austerity measurements" are just measurements to make the government not use more money than they have

FTFY. This isn't about the country, it's about the government. When money is leaving the country because the private sector is repaying (or defaulting on) debts, the government is powerless to stimulate the economy. When their tax receipts are reduced during a downturn, they can't increase welfare payments to reduce the misery of the population.

Comment: Re:Minimum Wage (Score 1) 1090

by complete loony (#49733469) Attached to: Los Angeles Raises Minimum Wage To $15 an Hour

it doesn't raise the amount of money in the system unless more money is printed

That's not what he said.

increases the amount of money flowing in the economy

Don't confuse the stock of money, which might be sitting idle, with the flow of money. It's the difference between measuring distance or velocity.

Comment: Re:pay no attention to the man behind the curtain. (Score 1) 335

Economics, in it's current form, is not much better that Ptolemy's vision of an Earth centric universe. Sure you can add cycles to explain the observations of planets, but the paradigm is not useful for making predictions.

Economists need to learn how to model the economy as it actually is, instead of making so many simplifying (and wrong) assumptions as to make their models useless. They need to learn from fields like weather forecasting, where complex dynamics have been embraced.

Comment: Re:better reasons (Score 1) 386

by complete loony (#49678095) Attached to: Criticizing the Rust Language, and Why C/C++ Will Never Die
Internally rust uses the LLVM compiler toolchain so there are a number of features in LLVM that they could use.

No tail call optimization

If it looks like a tail call, there's a pass that will turn it into a tail call. I think there's even a pass that can turn recursive code into a state machine.

Regex library is slow.

I hope they do something like redgrep. Using the LLVM backend to compile the regex state machine into actual machine code.

Comment: Re:Great news! (Score 2) 125

The housing bubble did actually stimulate the economy. Not because of construction, but because we borrowed all of that money from the banking sector, then spent it to keep the economy going.

But what goes up, must come down. It's inevitable that when we collectively try to pay back (or are forced to default on...) our mortgages, our income and money supply will shrink. Austerity policies will hasten the inevitable.

"It is easier to fight for principles than to live up to them." -- Alfred Adler

Working...