Mystery Economic Theater 2010

[garo]

Great post by Steve Waldmann here:

I think the austerity debate is unhelpful. There are complicated trade-offs associated with government spending. If the question is framed as “more” or “less”, reasonable people will disagree about costs and benefits that can’t be measured. Even in a depression, cutting expenditures to entrenched interests that make poor use of real resources can be beneficial. Even in a boom, high value public goods can be worth their cost in whatever private activity is crowded out to purchase them. Rather than focusing on “how much to spend”, we should be thinking about “what to do”. My views skew activist. I think there are lots of things government can and should do that would be fantastic. A “jobs bill”, however, or “stimulus” in the abstract, are not among them. If we do smart things, we will do well. If we do stupid things, or if we hope for markets to figure things out while nothing much gets done, the world will unravel beneath us. We have intellectual work to do that goes beyond choosing a deficit level. The austerity/stimulus debate is make-work for the chattering classes. It’s conspicuous cogitation that avoids the hard, simple questions. What, precisely, should we do that we are not yet doing? What are the things we do now that we should stop doing? And how can we make those changes without undermining the deep social infrastructure of our society, resources like legitimacy, fairness, and trust?

[R.D. Silverman]

Originally Posted by ewmayer

It`s even worse than that - Denninger explains, and calls for HFT to be banned:

Solving the HFT Dilemma

My Comment: KD makes a good case that the "price sniffing" practices employed by the HFT algos are in fact illegal under the SEC`s own ;longstanding anti-market-manipulation rules ... a good read [as are most of KD`s pieces which are not foam-at-the-mouth rants ... problem is, he is too prone to the latter].

.

I would argue that it also violates (in spirit) the laws against insider
trading because HFT's are trading on information not available to the
entire market.

I applaud the suggested solutions:

(1) Force all orders to be valid for one second.

I would make it longer than 1 second. I lack expertise to suggest
an appropriate length of time. But I think 1 second is too short.


(2) Impose a exponentially-increasing cancellation fee as the number of cancels rises against the number of executions for a given market participant in a reasonably short period of time (e.g. 10 minutes.)


Both of these should be required.

An alternative solution would be to impose a mandatory 1 DAY delay
before an order can be cancelled.

[R.D. Silverman]

Originally Posted by garo

Great post by Steve Waldmann here:

I agree.

Currently, the market is totally UNFAIR, and traders/insiders are totally
UNTRUSTWORTHY.

[ewmayer]

Good article, garo...

I would've taken some of that money that ended up supporting record Wall Street bonuses in 2009 and used it to initiate the largest Green Energy R&D (and a 2nd "D" as well, namely deployment) initiative in history - a kind of "Green energy New Deal", if you will. There is a powerful threefold benefit from greening one`s economy: [1] Enhanced national security and long-term-reduced defense outlays from having to "defend our interests" in every oil-producing region on earth, as well as having to defend ourselves from the hatred our global-policeman behavior engenders; [2] Environmental & quality-of-life; [3] Economic growth and sustainability.

I would have extended unemployment benefits as needed until the Great Recession abated, but I would require recipients to do useful (even if menial - but making use of any skills they have, insofar as possible) public works for their benefits.

With respect to the latter point, There was a rather telling piece on the local news last night illustrating the kind of entitlement monster we have created in the U.S. The piece was about how the latest holding-up in congress of a spending bill [by definition a deficit-spedning bill because we are living so wildly beyond our budgetary means] by Republicans and fiscal-conservative "blue dog" Democrats is causing hardship and uncertainty for millions of long-term unemployed folks. As part of the piece they interviewed the director of a local unemployment agency and 2 unemployment-aid recipients .The first of the latter was a middle-aged fellow who`s been out of work for 2 years, who complained bitterly about "how am I gonna pay the rent and eat?" - he was quite obese - and concluded with "they owe me that money...I`m entitled to it." So get off your fat ass and work for it like the rest of us, buddy - I`m sure there`s plenty of local public parks which could use maintenance, or - if you really have no useful skills in that regard - plenty of roadside trash needing to be picked up. The exercise would do you good. The second out-of-work interviewee was a single mother of 2 who had similarly been OOW for nearly 2 years - best part there was that her youngest child is 3 months old! Let`s see - you`ve been out of work for a year with no prospects - what to do? Hey, I`m sure you were bored - why not bring another mouth to feed into the world? Again, that`s entirely her choice - but do we as a society need to pay for her upkeep without getting a single thing whatsoever in return for our outlay?

Edit: I see Barry Ritholtz and I are of like mind about a massive green-energy initiative.

[R.D. Silverman]

Originally Posted by ewmayer

The second out-of-work interviewee was a single mother of 2 who had similarly been OOW for nearly 2 years - best part there was that her youngest child is 3 months old! Let`s see - you`ve been out of work for a year with no prospects - what to do? Hey, I`m sure you were bored - why not bring another mouth to feed into the world?

I have advocated for some time that we should require a LICENSE for
people to pro-create. We require one for marriage after all.

One should be required to prove that one has the means
to support any children.

We should also do something similar to what China does: limit the number
of children one is allowed to have. I would suggest a limit of 2 (even though
I admit I have 3). We could even follow Larry Niven's suggestion: allow
people to have more children at a cost: A donation of $1million to the
public treasury, with an exponentially increasing scale for additional children.

[xilman]

Originally Posted by ewmayer

Again, that`s entirely her choice - but do we as a society need to pay for her upkeep without getting a single thing whatsoever in return for our outlay?

Fair enough, but do you propose paying for the child's upkeep? In more biblical language, do you punish the children for the sins of their parents, even unto the seventh generation?


Paul

[only_human]

Instead of this looking so closely at the problem, consider children (as a whole) to be a fungible commodity. Rather than evaluating each case carefully, harness market forces and human motivations of selfishness and greed as best as possible to solve the problem. Cap and trade is one possibility. I don't think a modest proposal is necessary.

[Uncwilly]

Originally Posted by only_human

Instead of this looking so closely at the problem, consider children (as a whole) to be a fungible commodity. Rather than evaluating each case carefully, harness market forces and human motivations of selfishness and greed as best as possible to solve the problem. Cap and trade is one possibility. I don't think a modest proposal is necessary.

Turning on the wayback machine ~3 years back.

Originally Posted by Uncwilly

True believers in global warming should take personal action and stop having children, and advocate for population limits in the industrialised countries. They should carry DNR orders with them.

Originally Posted by ewmayer

As I've stated before, I believe there are all sorts of extremely good reasons to reduce our GG emissions (and in the long-term, the root cause of all these problems, our bloated population)

[ewmayer]

Originally Posted by xilman

Fair enough, but do you propose paying for the child's upkeep? In more biblical language, do you punish the children for the sins of their parents, even unto the seventh generation?

We're already paying for the child's upkeep - current social-welfare spending mandates it. I'm just saying she, like every other able-bodied welfare recipient, should work for her paycheck. I'm sure her municipality could find some part-time job she could do which would not interfere with the task of mothering.

It's not about "punishment" ... it's about ending the free-lunch entitlement mentality.

[fivemack]

The world does not have as many jobs that need doing as it has humans.

In what way is inventing unnecessary jobs for people to do for pay preferable to simply giving them the money, unless the motive is essentially punishment?

[ewmayer]

Originally Posted by fivemack

The world does not have as many jobs that need doing as it has humans.

Bullshit - there is *always* something useful that needs doing, at every skill level - you just have to look around. Many local libraries could surely use an extra pair of hands, as could animal shelters, daycare centers, nursing homes, etc. Local parks - especially in many urban areas - could use fixing-up, cleanup, groundswork. I suspect many of the folks engaged in this "radical experiment" might be surprised to actually find themselves enjoying it, both in the keeping-busy and social-interaction aspects. I've had friends who were made to do community service as part of a legal judgment who said they actually ended up enjoying it quite a bit - and in such cases it was for no pay at all.

In what way is inventing unnecessary jobs for people to do for pay preferable to simply giving them the money, unless the motive is essentially punishment?

Spoken like a true welfare queen [or apologist for the kinds of systems that produce them]. Preventing the kind of lazy aw-just-throw-money-at-them-and-keep-them-out-of-sight mentality from taking hold is perhaps the #1 reason for "inventing unnecessary jobs". The discipline needed to get up every weekday morning and go out and do even an unnecessary job is far preferable to doing f*ck-all and collecting a check one "is entitled to".