Thursday, February 24, 2011

sale of the century

Newsweek | In my favorite spaghetti Western, The Good, the Bad and the Ugly, there is a memorable scene that sums up the world economy today. Blondie (Clint Eastwood) and Tuco (Eli Wallach) have finally found the cemetery where they know the gold is buried. Trouble is, they’re in a vast Civil War graveyard, and they don’t know where to find the loot. Eastwood looks at his gun, looks at Wallach, and utters the immortal line: “In this world, there are two kinds of people, my friend. Those with loaded guns … and those who dig.”

In the post-crisis economic order, there are likewise two kinds of economies. Those with vast accumulations of assets, including sovereign wealth funds (currently in excess of $4 trillion) and hard-currency reserves ($5.5 trillion for emerging markets alone), are the ones with loaded guns. The economies with huge public debts, by contrast, are the ones that have to dig. The question is, just how will they dig their way out?

The conventional wisdom holds that, aside from resorting to inflation or default, debts can be reduced only through belt-tightening austerity measures—some mixture of higher taxes and spending cuts. And yet politicians are notoriously leery of proposing hikes or cuts big enough to make a real dent in the debt. President Obama’s latest budget proposal includes a five-year freeze on nondefense discretionary spending and tax increases on higher earners. But even if all goes according to plan, the gross debt will still rise above 105 percent of gross domestic product—and stay there.

The root of the problem is, of course, a lack of political will, extending down from the president himself to the lowliest Tea Party activist living on Social Security and Medicare. But a convenient excuse for ongoing borrowing is also provided by Keynesian economic theory, which states that a fiscal squeeze will tend to reduce economic growth, thereby widening the gap between revenues and expenditures. Fiscal hawks respond that a bond-market panic induced by excessive borrowing could be even nastier.

Yet there is another fiscal option that neither party seems to be considering. The U.S. needs to do exactly what it would if it were a severely indebted company: sell off assets to balance its books.


CNu said...

I like her just fine, thanks. It's not a repeat, and it's entirely consistent with the view of ethology espoused hereabouts.

My question for you, what do you think it means for the human species when we can observe in theory and in fact that the only other highly complex social organism - with a social system vastly and exponentially more sustainable than our own - is leaf cutter ants?

ProfGeo said...

In the sense of awareness of what we're about, this will mean little to the human species if only the few, the proud... will entertain such a comparison in the first place. (Interesting reading but dammit we're individuals.) Rather, the consequences are huge for the human species in that we're less sustainable than we (collectively) believe, and aren't necessarily the species that will survive and dominate over the long term. We're full enough of hubris to be upset about cross-species comparisons and so, save the myrmecologists, we may not learn valuable lessons from our friends the leaf-cutters. Maybe a way into this discussion is (as expressed elsewhere) a look at social networks, both electronic and non-. People do seem to be willing to look at human networks with the veneer of the Internet over it. I'm parochial about that due to personal bias, so it's just an example and not "the" way.

The first part of the Wired column you linked also talked about the parasites actually being in control of the fish, and I know you've posted about that as well. ([micro-]organisms steering, for their own ends, the larger, supposedly independent individual, whether fish or human)

So, difficult to juggle all those mental balls at once but thanks for keeping us hopping.

CNu said...

That is PRECISELY the elite establishment "narrative" that this way comes......,

ProfGeo said...

Hm, yes, I probably did mean "to look at" though all my posts are quick responses. That's not one I would rephrase. I have several visual colleagues (artist-scholars) who will never be bloggers reading or writing lengthy text-based posts or anything else. Wasn't thinking of them in particular but associating with them must have an effect. I have knock-down drag-outs with one of them who is probably a polymath of sorts. Starts everything with the visual, is all about people being visual with miniscule attention spans, and then spouts off wisdom verbally and at length, and sometimes I admit he has a point. Two others are brilliant designers/artists but one would not say "language acquisition faculty is the prime directive" though it can be argued they have found a way to communicate.

So... the language structure as the only "individual" that matters? We exist and evolve to support creating/defining that structure? [Flashback: Clarke's "The Nine Billion Names of God"]

the bottom-up hairless simian feedback processors acquired a core defect several thousand years ago by the erroneous instantiation of a self-checking subjective metaphor "I" or "me"?

Self-checking subjective metaphor "I" as a core defect? really?!?

CNu said...

The obvious and easy answer is that in 99.9999999% of cases, you're right - there IS no directed evolution, just a lot of verbal outgassing.

The less obvious and more onto answer is that there is no evolution "directed" by the little word-bot (language construct) that "you" know of...which is precisely why we're headed into a Great Filter.