WELCOME TO BRAD DELONG’S GRASPING REALITY: My attempt to make my readers—and myself—smarter, while keeping all of you out there in SubStackLand interested and entertained..
Wow, I cited you in my Econ dissertation on 19th century business cycles. Spent years running models using the Miron Romer Pig Iron data set among others. 🍻
Hence the outrageous GDP figures of Luxembourg, a banker’s paradise in Europe. GDP is also easily distorted by taking on debt, as pointed out by Tim Morgan in every one of his articles. Printing money, however, is a poor substitute for making goods and growing food. As he explains:
“Those who understand the critically-important concept of the two economies will recognize this process as a rapid divergence between the “real” economy (of material products and services) and the parallel “financial” economy (of money, transactions and credit).
We’re now very close to the point at which this self-deception ceases to convince. Globally, debt — and government debt in particular — is growing at rates so unsustainable as to lead inexorably to the monetization (“printing”) of debt, and a precipitate slump in the purchasing power of money.
The reality of higher-than-reported inflation has broken through as the “cost of living crisis” which continues to undermine political cohesion around the World.
This inflationary trend is weighted towards the costs of necessities, so has had a particularly adverse effect on people at the lower end of the income scale, who have to spend a large proportion of their incomes on staples.
At the same time, the ultra-low rates necessary to prop up the illusion of continuity have inflated asset prices dramatically, to the disproportionate benefit of an already-wealthy minority.”
Hi Brad, Have you seen "Buy Now!" on Netflix? It's a great documentary on planned obsolescence and corporate waste. The economics of this subject would make a great topic for "Grasping Reality." I know planned obsolescence goes back at least to the 1960s in regards to automobiles. But in fairness to the U.S. auto companies, the body of a car back then used to rust out after about four years, so they saw no point in making other components last longer.
Also, when I was in college back in the 1970s my history professor told our class that after WWII the navy collected up thousands of bulldozers, tractors, and other construction equipment and drove these vehicles off the edge of aircraft carriers and dumped them into the Pacific Ocean. Apparently this was required by the contracts the manufacturers had signed with the government during the war. The manufacturers were worried they couldn't compete with the government and would be driven out of business if the government could sell sell used equipment after the war. Of course I have no source for this story. The 1970s were long before the Internet.
But anyway the economics of planned obsolescence and deliberate waste would make a good topic for your website.
Thesis. Economics needs to be expanded with a general theory of non-market organization that describes traits and benefits which are compared and contrasted to market organization. Non-market organization (here called “groups”) subsumes institutions, business firms, kinds of capital, social groups and agglomerations. In particular, institutional economics is given a general set of principles. The method is graphical and qualitative, not quantitative, because “rule sets” are a higher logical type from the transactions they cover, and also are incommensurate with each other.
Just finished: #5 Knowledge.
This video briefly develops a visual representation of the limits to individual cognition, then uses it to show how the “knowledge problem” is solved differently by market and non-market organization:
Wow, I cited you in my Econ dissertation on 19th century business cycles. Spent years running models using the Miron Romer Pig Iron data set among others. 🍻
:-) Brad
Hi Brad. Here's another idea for a column:
Hence the outrageous GDP figures of Luxembourg, a banker’s paradise in Europe. GDP is also easily distorted by taking on debt, as pointed out by Tim Morgan in every one of his articles. Printing money, however, is a poor substitute for making goods and growing food. As he explains:
“Those who understand the critically-important concept of the two economies will recognize this process as a rapid divergence between the “real” economy (of material products and services) and the parallel “financial” economy (of money, transactions and credit).
We’re now very close to the point at which this self-deception ceases to convince. Globally, debt — and government debt in particular — is growing at rates so unsustainable as to lead inexorably to the monetization (“printing”) of debt, and a precipitate slump in the purchasing power of money.
The reality of higher-than-reported inflation has broken through as the “cost of living crisis” which continues to undermine political cohesion around the World.
This inflationary trend is weighted towards the costs of necessities, so has had a particularly adverse effect on people at the lower end of the income scale, who have to spend a large proportion of their incomes on staples.
At the same time, the ultra-low rates necessary to prop up the illusion of continuity have inflated asset prices dramatically, to the disproportionate benefit of an already-wealthy minority.”
Hi Brad, Have you seen "Buy Now!" on Netflix? It's a great documentary on planned obsolescence and corporate waste. The economics of this subject would make a great topic for "Grasping Reality." I know planned obsolescence goes back at least to the 1960s in regards to automobiles. But in fairness to the U.S. auto companies, the body of a car back then used to rust out after about four years, so they saw no point in making other components last longer.
Also, when I was in college back in the 1970s my history professor told our class that after WWII the navy collected up thousands of bulldozers, tractors, and other construction equipment and drove these vehicles off the edge of aircraft carriers and dumped them into the Pacific Ocean. Apparently this was required by the contracts the manufacturers had signed with the government during the war. The manufacturers were worried they couldn't compete with the government and would be driven out of business if the government could sell sell used equipment after the war. Of course I have no source for this story. The 1970s were long before the Internet.
But anyway the economics of planned obsolescence and deliberate waste would make a good topic for your website.
• An Open Letter to Trump Voters •
The True Cost of Your Ignorance and Idolatry
https://open.substack.com/pub/patricemersault/p/an-open-letter-to-trump-voters?r=4d7sow&utm_medium=ios
Still miss the world's funniest dog and its overweight owner. Also the posts by his wife and son.
You may enjoy a new series.
“New Addition to Economic Theory and Method”
(New playlist, of work in progress :)
https://www.youtube.com/@ecolanguage
Thesis. Economics needs to be expanded with a general theory of non-market organization that describes traits and benefits which are compared and contrasted to market organization. Non-market organization (here called “groups”) subsumes institutions, business firms, kinds of capital, social groups and agglomerations. In particular, institutional economics is given a general set of principles. The method is graphical and qualitative, not quantitative, because “rule sets” are a higher logical type from the transactions they cover, and also are incommensurate with each other.
Just finished: #5 Knowledge.
This video briefly develops a visual representation of the limits to individual cognition, then uses it to show how the “knowledge problem” is solved differently by market and non-market organization:
https://www.youtube.com/watch?v=ZEaPv1k3BTk
Thx... -B.