[PEN-L:418] Fund flows
To whom..., Why is it that practically every month for the past couple years CNBC et al have been reporting net inflows into the stock market, both into equities and into mutual funds? How have I been missing all this net outflow? peace
[PEN-L:419] Understanding capitalism dialectically
A while back, on both PEN-L and Doug Henwoods's LBO-Talk list, I tried to explain how impossible it is to evaluate the performance of capitalism in a single country in comparison to a socialist country. The 2 Koreas and the 2 Germanys in the 1960s and 70s often were compared one against the other, for example. The problem with this is that unless you include the full totality of political and economic relations that the countries have globally, then the comparisons become meaningless. South Korea was the beneficiary of huge credits from the West, while West Germany started off as much more industrialized nation than the East. The analogy I used was that of a fishbowl. A country is not a fishbowl and advice that North Korea suffered because of a planned economy was advice that approximated observations such as you need to change the water more often, or you need a more powerful filter. This was my homespun way of calling for a more dialectical approach. Although in recent months I had taken to bashing David Harvey, he does remain one of my favorite thinkers with respect to the need to see things dialectically, especially from the spatial perspective. In the chapter on Dialectics in "Justice, Nature and the Geography of Difference," Harvey says: "Dialectical thinking emphasizes the understanding of processes, flows, fluxes, and relations over the analysis of elements, things, structures, and organized systems. The citations already given are quite explicit on that point. There is a deep ontological principle involved here, for dialecticians in effect hold that elements, things, structures, and systems do not exist outside of or prior to the processes, flows, and relations that create, sustain, or undermine them. For example, in our contemporary world, flows of capital (goods, and money) and of people give rise to, sustain, or undermine places such as factories, neighborhoods, and cities understood as things.. Epistemologically, the process of enquiry usually inverts this emphasis: we get to understand processes by looking either at the attributes of what appear to us in the first instance to be self-evident things or at the relations between them. We typically investigate flows of goods, money, and people by examining relationships between existing entities like factories, neighborhoods, and cities. Newton, likewise, did not start with gravity, but with the apple, his head, the earth, and the moon." Since Harvey is a geographer by trade, he naturally tends to focus on the spatial dimensions of the dialectic. I, of course, agree with this. What has to factored in, however, is the temporal dimensions, especially with respect to the current economic mess capitalism is in. This has been driven home to me as I continue reading Harry Shutt's superb "The Trouble With Capitalism" (Zed, 1998) which essentially makes the point that the capitalist system is dealing with insoluble contradictions related to the failure to deliver growth at the same rate as the post-WWII years of the 1950s and 60s. Going back in time, you will of course recognize that WWII was a response to insoluble contradictions that were posed by the Great Depression. The Great Depression itself was ultimately caused by the failure of economic policies of the roaring 20s that were themselves a product of the particular outcome of WWI. You would have to trace all this back to the growth of imperialism in the late 1800s, which were prefigured by the explosive growth of Western European capitalism in the industrial revolution. Which goes back to the mercantile system of the 1500s and 1600s. Which is rooted in the "discovery" of the Americas. The reason that it has been so difficult for socialists to take stock of the collapse of the Soviet Union and the rather ersatz victory of capitalism Fukuyama-style is that we have tended to not see this event dialectically. Instead of understanding the underlying weakness of the capitalist system, we only saw its "invincibility." If we had taken into account both the spatial and temporal aspects of the full dialectic, we would have understood that capitalism was entering the deepest crisis in its crisis-ridden history. Returning to the historical dialectic, the most challenging problem for us becomes one of how to assess the prognosis of such a system in crisis. We know from historical experience that war is one way that capitalism uses to resolve its contradictions, as the evidence of the 20th century gives ample testimony to. So, as socialists, how do we respond. I would understand if many of us, including those inclined to social democracy, would go into a state of denial, ostrich-like. But if we are facing the possibilities of war, fascism and revolution, it is incumbent on those of us who take Marxism seriously to steel ourselves to the task. Most of all, this means making an intellectual adjustment, which for intellectuals is the hardest thing to do. But necessary. Louis Proyect (http://www.panix.c
[PEN-L:423] Re:Fund flows
boddhisatva wrote, > Why is it that practically every month for the past couple years CNBC >et al have been reporting net inflows into the stock market, both into >equities and into mutual funds? How have I been missing all this net >outflow? There's another dimension to this, which Doug Henwood has mentioned several times, and that is corporations buying back their stocks. So x amount of money is chasing x-n amount of stocks. It may be timely for me to call a pause in the dispute about how much money is flowing into or out of the markets and review my original purpose in raising the issue. Back in August, I started feeling increasingly uneasy with the way that people were embracing (and effacing) the metaphor of the stock market "bubble". If a bubble is really -- not just metaphorically -- a bubble, it could be expected to burst when it had outgrown its structurally sustainable dimensions. But if it is not really a bubble, one has to examine its unique characteristics in order to answer the question "what next?". Using the terminology of financial accounting, one might say that the skin of the metaphorical bubble is the investors' collective "present value of expected future returns"(PV). But PV is a subjective function that hinges on a presumed choice between present and future consumption and a time preference for money. What happens if we substitute an automaton investor for the flesh and blood one? PV becomes a meaningless abstraction because the automaton doesn't care about present consumption. Getting philosophical about it, the automaton has no sense of its own mortality. PV is only meaningful in the face of death. A cyborg market has no subjective time preference for money and has no subjective aversion to risk. The flow of funds question, in my view, isn't a question about quantity. It is about quality. It is about a process of wringing human subjectivity out of the market. Without that subjectivity, the market has no inherent limit. It also ceases to perform any human purpose. The architecture of the cyborg market mitigates against collapse because it syphons funds into the market to compensate for whatever losses occur. But where does it syphon funds from? Hypothetically, from an exogenous real economy (a "real economy" that it has, incidentally, ruthlessly colonized). The calls for "saving" social security by privatization can more properly be seen as calls for propping up the market by syphoning social security funds into it. This is where I agree with Max Sawicky and Doug Henwood. But the other side of that coin is still that the viability of social security itself relies on assumptions about growth in a hypothetically exogenous economy. If that economy was really all that exogenous, the market mavens wouldn't be drooling so conspicuously over the prospects of a social security injection. And, presumably, if Oroboros had something else to eat, it wouldn't be consuming its own tail. Regards, Tom Walker ^^^ #408 1035 Pacific St. Vancouver, B.C. V6E 4G7 [EMAIL PROTECTED] (604) 669-3286 ^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
[PEN-L:429] Re: Cyber-Sawicky
Max wrote, >Or perhaps it just knocks the >stuffing out of your premise. Let's be civil. >but I don't see a metaphor problem. >Bubbles filled with animal spirits >and prone to random gyrations float >on the sea of the real economy. A >metaphor problem is that when they >burst, the effects on the economy >defy the characterization. It is an _inescapable fact_ that there's a metaphor problem when you have to mix three metaphors in a desperate effort rescue one. Speaking of threes, I'm envisioning a three ring circus. In ring number one: the real economy In ring number two: the New Deal (tattered and torn, but hanging on for dear life) In ring number three: Wall Street "Laugh hysterically as a thousand clowns emerge from the social securimobile in ring number two!" "Gasp as Alan Greenspan walks the interest rate tightrope high above ring number three!" "Thrill as Michel Camdessus tames the Asian tigers in ring number one!" The amazing thing about this three ring circus is that the events in any one particular ring go on unaffected by the events in the two other rings. Sure. Get me some peanuts, Max. I've gotta to go feed the elephant in the back lot. Regards, Tom Walker ^^^ #408 1035 Pacific St. Vancouver, B.C. V6E 4G7 [EMAIL PROTECTED] (604) 669-3286 ^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
[PEN-L:432] California Economists opposed to Fong Flat Tax?
This message is for economists living and working in California -- I apologize for the inconvenience to others. If you are interested in signing an open letter opposing Matt Fong's "revenue-neutral flat tax" contact the Barbara Boxer campaign at: Los Angeles: 310-575-9880 -- Ask for Lyle Canceko. San Francisco: 415-292-1460 They will fax you a copy of the Open Letter. The deadline is this Friday, October 9th. Larry Shute Laurence Shute Voice: 909-869-3850 Department of Economics FAX: 909-869-6987 California State Polytechnic University, Pomona e-mail: <[EMAIL PROTECTED]> -
[PEN-L:434] Re: Kagarlitsky responds....
(From Robert Naiman:) > Boris Kagarlitsky's response to Fred Hiatt's "Who Lost Russia?" in the Post, > which the Post declined to run. > - > America, Please Leave Us Alone To Solve Our Problems > > by Boris Kagarlitsky, Senior Research Fellow at the Institute for > Comparative Political Studies of the Russian Academy of Sciences .. You're so polite, Boris, but you know very well that at this stage of its fever America can no more leave Russia alone than a wolf pack can pass up a crippled horse, so what comes next? valis
[PEN-L:435] Re: Re: Re: Re: Cyber-Sawicky
Eugene P. Coyle wrote: > When an individual goes into a 401 k or similar contrivance, reported >income for tax purposes goes down. Is the amount deducted "saving"? And >is that (or any other $$ figure for saving) in a ratio with income for tax >purposes, or the total income before the 401 k deduction? Pension plan contributions count as income, so they're counted as personal savings (defined as income less expenditures). >Second question: In the national saving rate calculation, is >corporate "saving" (i. e. depreciation, retained earnings, other free cash >flow) added in somehow? If not, what would the USA saving rate be if it >were? Here you go, from table 5.1 of the NIPAs. The net figure is the result of subtracting the consumption of fixed capital entries from the gross savings figures. U.S. SAVING & INVESTMENT, % OF GDP gross savings government -- cons ofnet total perscorp total fed st/loc fixed K savings 1929 18.5% 3.4% 3.0% 3.7% 1.3% 2.3% 9.2% 9.3% 1930s 12.1% 1.9% -1.4% 1.8% -1.3% 3.1%11.0% 1.0% 1940s 19.6% 9.5% 2.7% 1.1% -0.8% 1.9% 9.6%10.0% 1950s 21.1% 5.2% 2.8% 5.3% 3.1% 2.2%10.5%10.6% 1960s 21.4% 5.2% 3.6% 5.1% 2.2% 2.9%10.1%11.3% 1970s 19.8% 5.8% 2.8% 2.6% -0.5% 3.1%10.9% 8.9% 1980s 18.0% 5.1% 2.2% 0.8% -2.1% 2.9%12.0% 6.0% 1990s 16.0% 2.7% 2.9% 1.2% -1.1% 2.5%11.1% 4.9% 1998 17.5% 12.9% 3.7% 4.7% 2.8% 2.7%10.7% 6.8%
[PEN-L:437] Mainstream economics and the current crisis
(Harry Shutt, "The Trouble With Capitalism," Zed Books, 1998, pp. 206-212) An important role in fostering this new consensus has clearly been played by the powerful mass media, which are inevitably in thrall to the same dominant interest groups. This is not to suggest that there is no argument in the press or broadcast media on issues of economic and social policy. Yet for a long time the debate has been conducted within a very limited ideological spectrum, so that typically the impression is created that the choice is essentially between two broad economic models (the Neo-Classical and Keynesian), even though each has a proven record of failure. Increasingly conscious of the sterility of this inhibited discourse, the political establishment can seemingly find no better alternative idea than the essentially meaningless concept of the 'stakeholder economy'. In contrast, despite the clearly unmanageable scale of the economic problems now engulfing the world, it is still possible to dismiss any suggestion that the capitalist system might after all need to be fundamentally reshaped, if it is to survive at all, as an example of old-fashioned Marxist thinking unworthy of serious consideration. In this vacuous debate the economics 'profession' has been conspicuous by the inadequacy of its response. Its failure to come up with more rational solutions to the chronic weaknesses of the economic system is seemingly ascribable to two linked causes: (1) Its material dependence on institutions which have an in-built tendency to support the status quo. Thus a high proportion of the most able economists are employed by major financial institutions, which typically pay them high salaries. Yet in Britain and the United States particularly they are the 'experts' most commonly called on by the broadcast media to comment on the economic situation, the prospects for the financial markets, and the policy changes which may be needed to correct any perceived adverse trends. Very often, moreover, their views are implicitly presented as entirely objective without any suggestion that there might be a sustainable contrary opinion -- despite the fact that a moment's reflection would suggest that they have a powerful motivation for saying nothing contrary to the vested interests of their masters. It is true that the other main category of economists who pronounce through the media -- the academics -- are in principle less institutionally bound to reflect establishment views, and indeed have in the past been a significant source of dissent. However, it has been noticeable in recent years that very few have shown any sign of departing significantly from one or other of the approved orthodoxies -- Keynesian or free market. Given the growing financial strictures placed on universities (particularly in Britain) because of the state fiscal squeeze, and their consequently greater dependence on private-sector funding, it is plausible to suppose that this may have affected their intellectual independence and capacity for more radical analysis. (2) The limitations of conventional theory. Despite a long-standing critique and recognition of the oversimplification inherent in much of traditional economic theory, it is still common to find uncritical acceptance of models and policies based on remarkably crude assumptions as to the uniformity and constancy of human behaviour (whether individual or corporate). There could be no better example of this than the notion -- which underpins the theories of the supply-side school -- that reducing marginal tax rates results in higher investment and output, notwithstanding the copious empirical evidence that it is just as likely to have the opposite effect. This traditional tendency to present bigotry as science is increasingly compounded by the chronic propensity of the discipline either to discount any factors (such as human life or the environment and other important 'externalities') which cannot be readily quantified, or else to give them arbitrary values which cannot sensibly be based on purely economic criteria. Another powerful influence constraining free discussion of economic problems is the very practical consideration of the need to maintain confidence in the financial markets. Any suggestion that a radical switch in government policies might be contemplated -- involving, for example, large increases in corporate taxation or tighter control of capital movements across frontiers -- would be liable to provoke a substantial sell-off of financial securities and a corresponding drop in their market value. This in turn would tend to undermine the balance sheets of the more overextended institutions, thus raising a 'systemic' threat to the entire financial system. Likewise, even a hint that any national government was contemplating taking such measures in isolation from the rest of the world would engender an immediate and damaging run on its currency -- to the extent that this was not pre-empted by th
[PEN-L:436] Re: Kagarlitsky responds to Hiatt
On Wed, 7 Oct 1998, Robert Naiman crossposted: > America, Please Leave Us Alone To Solve Our Problems > > by Boris Kagarlitsky, Senior Research Fellow at the Institute for > Comparative Political Studies of the Russian Academy of Sciences > > Does he really think that Russia was a Third World country? Soviet industry > was certainly inefficient and badly needed technological modernization. > However, with all the problems it had Russia managed to export the products > of its manufacturing. Only after the "reformers" came to power did Russia > become totally dependent on the export of raw materials. Boris the K. usually has some cool things to say, but I'm not sure if this will really fly. Russia exported lots of goods to Eastern Europe during the Soviet era, but was already running huge trade deficits with those countries (mostly because it didn't charge world prices for its oil); what exports did make it onto world markets were mostly military equipment and semiprocessed materials, not South Korean-style consumer goods. The Soviet Union sold a hell of a lot of oil and gas on world markets, but that's all it was able to sell. Still, it's a good sign that Belarus is getting its act together. Looks like the Visegrad export boom is finally kicking into gear; if the EU ever decided to really lower interest rates and install some serious infrastructure in the East, the Russian economy could take off like a rocket. -- Dennis
[PEN-L:433] FW: Assessment
-- From: Bove, Roger E. To: ECON_CHAIR-owner Subject: Assessment Date: Wednesday, October 07, 1998 4:48PM We are currently under mandate to develop assessment mechanisms for our majors. We are working with three major goals ; to develop economic reasoning and problem-solving, to develop the ability to use current technology in economic problem solving and to develop the ability to communicate clearly and effectively. Have any of you developed documents or assessment mechanisms that you could share with us, especially in the technology area? If you can send anything on this subject we would be grateful. Please reply to [EMAIL PROTECTED] Please do not email encoded documents as part of messages, since our mail system butchers them. I'm hoping that enclosures will work, though I haven't tried them from off-campus sources. Web-site references are great too. Roger Even Bove, Ph.D. Dept. of Economics and Finance West Chester Univ. W. Chester PA 19383-2214
[PEN-L:431] Kagarlitsky responds to Hiatt
Boris Kagarlitsky's response to Fred Hiatt's "Who Lost Russia?" in the Post, which the Post declined to run. - America, Please Leave Us Alone To Solve Our Problems by Boris Kagarlitsky, Senior Research Fellow at the Institute for Comparative Political Studies of the Russian Academy of Sciences I read Fred Hiatts "Who Lost Russia?" [Washington Post, September 20, 1998] with dismay. Though Mr. Hiatt agrees that the policies of IMF and G7 in Russia failed, he says that "to acknowledge the failure is not quite the same as saying the policy was wrong." One wonders how policies are to be judged, if not by their effects. According to Mr. Hiatt, Russia before the "reforms" had an advanced space and nuclear sector, but almost everything else was Third World; most of its factories produced goods worth less than the raw materials that went into them; many cities were built in remote and frozen areas where they were guaranteed to be forever wards of the state. Does he really think that Russia was a Third World country? Soviet industry was certainly inefficient and badly needed technological modernization. However, with all the problems it had Russia managed to export the products of its manufacturing. Only after the "reformers" came to power did Russia become totally dependent on the export of raw materials. Not only industrial exports declined but enterprise performance and ability to compete internationally or on the domestic market declined after privatization. The Russian economy became technologically even more backward and the scientific community is in chaos. The Russian companies which are still able to export anything now are those which were not privatized. Mr. Hiatt doesn't know or pretends not to know that the Russian population before 1991 had a very high level of education. That was our main asset and our chance to grow, assimilating modern technologies. It is Russia that is now "exporting" its specialists to the US, not the other way round. The people we "imported" from America were exactly those arrogant IMF advisors who new nothing about Russia and, as it turned out, knew very little about the real workings of financial markets, but who were willing to teach the Russian "barbarians" about everything. The educational level of Russian population is now lower than 10 years ago, and our chances to rebuild the country are also lower. Living standards of the majority of people collapsed, life expectancy declined, infant mortality increased. We blame Stalin for killing people in the camps. What about people starving to death in a "liberalized" economy? What about hundreds of thousands of people who died because in the process of "reform" the health system collapsed? The communists at least acknowledged their crimes under Khruschev and Gorbachev. The IMF has never acknowledged the destruction they caused and probably never will. Now look at the countries where IMF advisors were not allowed to dictate policies. One of them is China, another is Belarus. China has had one of the largest growth rates in world history over the last 20 years. Belarus had 10% growth in 1997 (for Russia 1997 was its best year since 1989 with 0% growth). Industry in Belarus had been much the same as we had in Russia, but Belarus had no oil or gas to get easy money from abroad. Belarus didn't privatize their industry but restructured it and modernized it. Now they are exporting to the same markets to which the USSR had previously exported its industrial products. Russia lost these markets. Belarus is exporting to Russia and competing successfully with Western products. Of course Belarus is a police state and not a democracy. But there is one problem: its political system is identical with that of Russia! The only difference is that their police and bureaucracy are less corrupt. Have you ever heard of "Belarusian mafia"? Those who blame Russian corruption for the failure of the "reforms" fail to acknowledge that it was during the process of rapid privatization when corruption started to flourish. The Soviet system had a lot of corruption as well but this was multiplied by the "liberalization". The real story of what happened to Russia is very simple. There were tremendous problems and the Soviet system was in crisis. But the "reforms" did not address the real problems. They actually made things worse. And that is natural because so called reformers and their Western friends never intended to rebuild the country or to improve the performance of industry. Nor were they interested in democracy. What they wanted was just to use the crisis of the Soviet system as an opportunity to loot the country. In that sense the "reforms" were a total success. Not only did "New Russians" loot their own country; American companies did so as well. So don't be surprised that after 10 years of such "friendship" more and more Russians are becoming anti-American (which was nev
[PEN-L:430] Re: Understanding capitalism dialectically
Louis, When are you referring to when you say that West Germany "started out" as more industrialized than East Germany? They were about even in 1939, with, if anything, the East slightly ahead of the West. The point in time at which there was a big difference was about 1953 after Marshall Plan aid to the West (and demand for German goods during the Korean War) had propped it up and at the end of the time that Stalin was punishing the East for Hitler and the removal of capital stock and general downgrading of the East by the USSR came to an end. Barkley Rosser On Wed, 07 Oct 1998 10:54:53 -0400 Louis Proyect <[EMAIL PROTECTED]> wrote: > A while back, on both PEN-L and Doug Henwoods's LBO-Talk list, I tried to > explain how impossible it is to evaluate the performance of capitalism in a > single country in comparison to a socialist country. The 2 Koreas and the 2 > Germanys in the 1960s and 70s often were compared one against the other, > for example. The problem with this is that unless you include the full > totality of political and economic relations that the countries have > globally, then the comparisons become meaningless. South Korea was the > beneficiary of huge credits from the West, while West Germany started off > as much more industrialized nation than the East. The analogy I used was > that of a fishbowl. A country is not a fishbowl and advice that North Korea > suffered because of a planned economy was advice that approximated > observations such as you need to change the water more often, or you need a > more powerful filter. > > This was my homespun way of calling for a more dialectical approach. > Although in recent months I had taken to bashing David Harvey, he does > remain one of my favorite thinkers with respect to the need to see things > dialectically, especially from the spatial perspective. In the chapter on > Dialectics in "Justice, Nature and the Geography of Difference," Harvey says: > > "Dialectical thinking emphasizes the understanding of processes, flows, > fluxes, and relations over the analysis of elements, things, structures, > and organized systems. The citations already given are quite explicit on > that point. There is a deep ontological principle involved here, for > dialecticians in effect hold that elements, things, structures, and systems > do not exist outside of or prior to the processes, flows, and relations > that create, sustain, or undermine them. For example, in our contemporary > world, flows of capital (goods, and money) and of people give rise to, > sustain, or undermine places such as factories, neighborhoods, and cities > understood as things.. Epistemologically, the process of enquiry usually > inverts this emphasis: we get to understand processes by looking either at > the attributes of what appear to us in the first instance to be > self-evident things or at the relations between them. We typically > investigate flows of goods, money, and people by examining relationships > between existing entities like factories, neighborhoods, and cities. > Newton, likewise, did not start with gravity, but with the apple, his head, > the earth, and the moon." > > Since Harvey is a geographer by trade, he naturally tends to focus on the > spatial dimensions of the dialectic. I, of course, agree with this. What > has to factored in, however, is the temporal dimensions, especially with > respect to the current economic mess capitalism is in. > > This has been driven home to me as I continue reading Harry Shutt's superb > "The Trouble With Capitalism" (Zed, 1998) which essentially makes the point > that the capitalist system is dealing with insoluble contradictions related > to the failure to deliver growth at the same rate as the post-WWII years of > the 1950s and 60s. > > Going back in time, you will of course recognize that WWII was a response > to insoluble contradictions that were posed by the Great Depression. The > Great Depression itself was ultimately caused by the failure of economic > policies of the roaring 20s that were themselves a product of the > particular outcome of WWI. You would have to trace all this back to the > growth of imperialism in the late 1800s, which were prefigured by the > explosive growth of Western European capitalism in the industrial > revolution. Which goes back to the mercantile system of the 1500s and > 1600s. Which is rooted in the "discovery" of the Americas. > > The reason that it has been so difficult for socialists to take stock of > the collapse of the Soviet Union and the rather ersatz victory of > capitalism Fukuyama-style is that we have tended to not see this event > dialectically. Instead of understanding the underlying weakness of the > capitalist system, we only saw its "invincibility." If we had taken into > account both the spatial and temporal aspects of the full dialectic, we > would have understood that capitalism was entering the deepest crisis in > its crisis-ridden history. > > Retur
[PEN-L:427] BLS Daily Report
This message is in MIME format. Since your mail reader does not understand this format, some or all of this message may not be legible. -- =_NextPart_000_01BDF21A.B7E81800 BLS DAILY REPORT, TUESDAY, OCTOBER 6, 1998 The National Association of Business Economists forecasting panel reiterates its May prediction that the economy will grow at a 2.2 percent rate in 1999. Of the 36 professional forecasters who make up the panel, only six predict that the Asian crisis will reduce U.S. growth next year by more than one percentage point. Seven predict that the Asian crisis will boost U.S. growth. ... (Daily Labor Report, page A-7). Business in the non-manufacturing sector of the U.S. economy continued to grow during September, according to the latest report from the National Association of Purchasing Managers. Among features of the NAPM report are: The non-manufacturing business activity index registered an increased rate of growth, indicating continued strength in the sector, and new orders grew at a higher rate in September than in August. The backlog of orders decreased. Employment grew at the same rate as in August, and supplier deliveries decelerated at a slower rate. Inventories increased slightly, and use of imports grew more slowly in September than in August. Prices paid by non-manufacturing organizations for materials and services decreased at a faster rate in September. ... The non-manufacturing sector includes a very wide range of activities, such as retail and wholesale trade, real estate, business services, transportation, and communications. ... The report is based on data compiled from monthly replies to questions to more than 370 purchasing executives in over 62 industries. ... (Daily Labor Report, page A-7)_Business activity at non-manufacturing companies grew in September at a faster pace than in August, posting the first increase in four months. NAPM's index of non-manufacturing business activity rose to 59.0 in September after dropping to 52.0 in August. A reading above 50 is intended to mean business is expanding, while a reading below 50 means business is contracting (Washington Post, page C1). Deflation has two faces, and one of them isn't pretty, says Louis Uchitelle writing in the "Economic View" feature of The New York Times (Oct. 4, page BU5). ... Deflation means a general decline in prices. ... Deflation is not yet happening in the United States, but prices are dropping for a growing number of goods. ... The CPI index for goods alone rose by only two-tenths of a percent in the 12 months ended in August, the smallest gain in nearly 40 years. ... Deflation, unfortunately, is not limited to falling prices. It can mean falling wages, too, and it becomes painful when incomes fall faster than prices. In fact, there is a good deflation and a bad deflation, and something in between, says Uchitelle. Good deflation was the American experience from 1870 until 1896. Prices fell almost every year, but wages and profits, instead of being squeezed out, climbed. The reason was rapidly rising productivity. ... The Depression featured the classic bad deflation. A stock market crash, unexpected bankruptcies, defaults, bank runs, and bank failures dried up the credit on which any economy depends. With prices and wages falling rapidly, people and companies found themselves without enough income to repay debts. That produced more defaults, and even harder times. Something like that is happening in Asia today, and could spread to the United States. But governments today have the policy tools and knowledge to prevent this. What's more, they know how to get a stagnant economy moving again. ... DUE OUT TOMORROW: Extended Mass Layoffs in the Second Quarter of 1998 -- =_NextPart_000_01BDF21A.B7E81800 b3NvZnQgTWFpbC5Ob3RlADEIAQWAAwAOzgcKAAcADQAvAAgAAwAtAQEggAMADgAAAM4HCgAH AA0AMAAoAAMATgEBCYABACEAAABFQkJCQkIxQkNFNUREMjExODg4RTAwMjBBRjlDMDMwOABYBwEE gAEAEQAAAEJMUyBEYWlseSBSZXBvcnQAkAUBDYAEAAICAAIAAQOQBgC0CwAAHEAAOQDg GfWAGvK9AR4AcAABEQAAAEJMUyBEYWlseSBSZXBvcnQAAgFxAAEWAb3yGn6t G7u78l3OEdKIjgAgr5wDCAAAHgAxQAENUklDSEFSRFNPTl9EAAMAGkAAHgAw cSNpBv8ACgEPAhUCpAPkBesCgwBQEwNUAgBjaArAc2V0bjIGAAbDAoMyA8UCAHDccnESIAcTAoB9 CoAIzx8J2QKACoENsQtgbmcxODAzMwr7EvIB0CBCgkwF8ERBSUxZB/AARVBPUlQsIFQoVUVTGMBZ GYBPQ4BUT0JFUiA2GYAwMTk5OAqFCoVUaOJlB7BhdGkCIAdAE9AZBBBvYwcwHGIgb2a1GHB1AJBu B5AEIEUFoHZuA3AEAHQEIAIQFTBj5mEewAuAZyAKsB4AAyD5FTBpdASQHFAHkSBAD9FMYXkfsBUx aWMdQ3T/EcAFQCIAHCAFkR6BITAD8DZsAyAJwG8H4CIhYSDUMi4SIHAEkGMJ8AVAjyByIMADoBrh OS4gGiDzHaAiUjM2IUEdkB4RHHSHHwYEkAQgd2hvIADA8mscIHVwIkMfwxmAAiD2bCEwAJB4IUYh +BzQBzC/A6AFAQCQJ8EjIhUxdSRwcCBVLlMlgCNiIgAgpR4AeAVAeWUKwWIhMD8EYBUwIfIdcR4A JDZhZ7UowW8LgHQlgQZgdgnw7ynfKu8DIAbgbx7ALHolgGYuM+AlkChEC3ApcUzzAaAFsVJlL6AA IBmACrDhL3FBLTcpJYEbLB3HJyURIlIegG4tA4F1Zv0A0HQIcR+REfAhoAWxHZG/IlIsgyKWHmEf cQpQZCHwvygAI2MsMDjzBmAFMGUG0P8EkBmAANAFoSGAH5E7kSJS/wtgIJEkoTUTHvADYSJDHE/9 Hdb5OLFpdiBAITALgA2wKcD9FTBnHrEEkDt
[PEN-L:428] Re: RE: Re: Cyber-Sawicky
Max Sawicky wrote, >The State can declare by fiat property titles or >financial instruments null and void by forcing >write-downs and bankruptcies. For all Max's skepticism about the dictatorship of the proletariat, he would have us believe that if we simply call it something else, the bourgeoisie will eagerly clamber on board. Tell that to the oysters, my dear Walrus. Regards, Tom Walker ^^^ #408 1035 Pacific St. Vancouver, B.C. V6E 4G7 [EMAIL PROTECTED] (604) 669-3286 ^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
[PEN-L:426] RE: Re: Cyber-Sawicky
>Max Sawicky wrote, > >>Without getting immersed >>up in the Flow of Funds stuff, the inescapable >>fact is that, as Doug says, NIPA savings trends >>do not support the BBB(Baby Boom Bulge) theory. > >Whenever I hear tell of an "inescapable fact", I suspect a retreat from reasoned argument into dogma. . . . > Perhaps so. Or perhaps it just knocks the stuffing out of your premise. >>Financial bubbles have an autonomous character, >>relative to individual and corporate decisions >>on the amount of income and receipts, respectively, >>not to spend. > >That's an intriguing tease, Max. My last message argued that the metaphor of the bubble is inapplicable precisely because of its autonomy from subjective time preference for money and risk aversion.> I agree with the words after "because", but I don't see a metaphor problem. Bubbles filled with animal spirits and prone to random gyrations float on the sea of the real economy. A metaphor problem is that when they burst, the effects on the economy defy the characterization.
[PEN-L:425] Russia: Nation-Wide General Strike
THOUSANDS TURN OUT FOR NATIONWIDE PROTEST. According to Interfax, initial reports from the Interior Ministry suggest that more than 60,000 people turned out for public protests in the Far East on 7 October--a much smaller turnout than organizers had expected. In Vladivostok only 3,000, rather than the expected 5,000 citizens, participated, AP reported. ITAR-TASS estimated that turnout in Novosibirsk was some 35,000 people. Nakhodka witnessed one of its largest protest meetings the previous day when about 3,000 gathered in the city's main square. An RFE/RL correspondent in Novosibirsk noted that the centerpiece of protesters demands was the payment of back wages but that they also called for the resignation of President Boris Yeltsin. An RFE/RL correspondent in Irkutsk reported that cold weather thinned the ranks of protesters in that Siberian city, with mostly pensioners and Communist Party activists showing up. JAC -- Gregory Schwartz Department of Political Science York University 4700 Keele St. Toronto, Ontario M3J 1P3 Canada Tel: (416) 736-5265 Fax: (416) 736-5686 Web: http://www.yorku.ca/dept/polisci
[PEN-L:424] Re: Cyber-Sawicky
Max Sawicky wrote, >Without getting immersed >up in the Flow of Funds stuff, the inescapable >fact is that, as Doug says, NIPA savings trends >do not support the BBB(Baby Boom Bulge) theory. Whenever I hear tell of an "inescapable fact", I suspect a retreat from reasoned argument into dogma. On my side of the debate, there are no such inescapable facts. I can't "prove" my hypothesis, which is really more of a question than an answer. But I'm goaded on by the impression that my tentative formulation makes Max and Doug uncomfortable enough to invoke "definitive" dismissals and "inescapable facts". Is the Pope infallible? Does a bear shit on the Street? >Financial bubbles have an autonomous character, >relative to individual and corporate decisions >on the amount of income and receipts, respectively, >not to spend. That's an intriguing tease, Max. My last message argued that the metaphor of the bubble is inapplicable precisely because of its autonomy from subjective time preference for money and risk aversion. Regards, Tom Walker ^^^ #408 1035 Pacific St. Vancouver, B.C. V6E 4G7 [EMAIL PROTECTED] (604) 669-3286 ^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
[PEN-L:422] Re: news from SLATE Magazine
Valis posted something about this to pen-l. I wrote to the Senior Senator from Utah to request a copy of the pamphlet. He responded that he shared my concern about our President's sexual misdeeds, and that he would do all that he could to pursue justice. I probably missed something in the logic of the illustrious solon, but I am sure that it was worthy of great consideration. James Devine wrote: > >The WP's [Washington POST's] Al Kamen points to an odd passage in an > anti-drug pamphlet with a forward by Sen. Orrin Hatch. The book claims to > help parents look for the warning signs that their children are using > marijuana or other drugs. These signs include, says the pamphlet, such > obvious ones as staying out all night and unexplained needs for money. But > there's also this unobvious one: Beware your child's "excessive > preoccupation with social causes, race relations, environmental issues, etc."< > > light one up for me. > > Jim Devine [EMAIL PROTECTED] & > http://clawww.lmu.edu/Departments/ECON/jdevine.html -- Michael Perelman Economics Department California State University [EMAIL PROTECTED] Chico, CA 95929 530-898-5321 fax 530-898-5901
[PEN-L:421] news from SLATE Magazine
>The WP's [Washington POST's] Al Kamen points to an odd passage in an anti-drug pamphlet with a forward by Sen. Orrin Hatch. The book claims to help parents look for the warning signs that their children are using marijuana or other drugs. These signs include, says the pamphlet, such obvious ones as staying out all night and unexplained needs for money. But there's also this unobvious one: Beware your child's "excessive preoccupation with social causes, race relations, environmental issues, etc."< light one up for me. Jim Devine [EMAIL PROTECTED] & http://clawww.lmu.edu/Departments/ECON/jdevine.html
[PEN-L:420] RE: Re: Cyber-Sawicky
>>We're playing word games here. If there were a real bulge in savings as boomers prepared for retirement, it should show up in the aggregates.> >Instead of playing word games, then, let's try singing from the same hymnbook: Flow of Funds Accounts of the United States Annual Flows and Outstandings, 1991-1997, page 7, table F9, "Derivation of Measures of Personal Savings".> A virtue, nay a purpose of the NIPA accounts is to rise above all the double-counting that results from the use of purely empirical, accounting figures. Without getting immersed up in the Flow of Funds stuff, the inescapable fact is that, as Doug says, NIPA savings trends do not support the BBB(Baby Boom Bulge) theory. Financial bubbles have an autonomous character, relative to individual and corporate decisions on the amount of income and receipts, respectively, not to spend. Searching for a bright side, one could imagine that this separation suggests some basis for useful, nontrivial reform via regulation. The State can declare by fiat property titles or financial instruments null and void by forcing write-downs and bankruptcies. The problem for the sustainability of the system would thus seem to be one of coordination in such a process. From this standpoint, there is not inherent infeasibility of the survival of capitalism forever. That may not be good news, but the prior question is whether it is true. MBS Fabian Chowder Society
