The idea that every economy can be hyper-competitive is absurd. There are winners and losers, those who produce surplus and those who produce deficits. The question is what to do with the "losers"?
Look at America. The American economy is not competitive. It is not efficient and there is no plan. What you have are a few faboulously wealthy and productive economies (the wealthiest and most productive economies the planet has ever known) and a lot of very uncompetitive localities. What ties it all together and makes it "work" is a surprisingly efficient but very opaque transfer union[1] which is, for purely legacy reasons, called the federal government and controlled by the largely un-educated legislative. Seriously, look at the numbers. Transfer payments to what is generously called "non-metro America" constitute 20-25% of income in some counties.
So ultimately Varoufakis was right. He understood -- despite being an economist, this is just plain old common sense -- that a Euro-dependent Greece is always going to suffer mightily against Germany. No amount of tinkering or restructuring the economy is going to fix this. The only "plan" was to play chicken with the Germans and potentially let Greece crash but at least take the euro with it. (This only works because, as indicated in the article, everybody was loathe to "force" Greece out of the union. It's not even clear whether this is legally possible.) Thus there was in fact a lot of money to be made watching Greece and the euro burn for a while there. Eventually order was restored but only at great pain to all parties and that order is hardly going to be lasting or stable. Such is politics. In the end while it looks like Varoufakis may have been doing nothing... he probably got Greece a much better deal than they deserved in the minds of the Germans. And the next time Greece needs a bail-out -- and it'll happen soon because Greece is literally shrinking as everybody who can flees -- the same game of chicken will need to be played and they'll need to find an outsider like Varoufakis to play it and take the fall.
That's the narrative the media is pushing only in your head. It's obvious you have no respect for the truth but please don't insult the rest of us by misrepresenting easily googleable news stories. Given that your baseless allegations about "the media' who here really needs to be more critical?
Really, you've got to wonder why, for such "hardscrabble," "salt of the earth" people we keep getting thousands of words and photographs that blame all their problems on the "urban folk." The entire setup is a fantasy and it's a very stupid fantasy at that. We never hear about why these towns are so poor. We never hear about the decades of malinvestment (see the relentless drive to increase the military budget and rollback health access) or the pervasive racism that makes any kind of social welfare impossible. Not one word about the decades of shitty, under-funded schools or the culture that actively denigrates intellectualism. It's like magic -- these people just rose out of the earth, poor and bitter, through no fault of their own or anybody else's. And then we get the noble command, "Just listen" -- as if these people have anything worthwhile to say except vile hate and bitter recriminations (see comments above). It's so laughable. A bunch of shitty writing about a shitty place that manages to say absolutely nothing worthwhile, nothing interesting, nothing verifiable, nothing actionable and nothing real. Again, it's a bad fantasy.
Because nobody but dumb people on the internet actually cares where the gold is stored. Since 1971 gold, along with every other commodity, has been optionalized. It doesn't matter where or how it exists because what actually gets traded are options on the commodity. Now every once and a while somebody does actually take delivery but delivery is very, very costly and complicated for physical goods. Physical delivery involves not just the conveyance and storage fees but also the costs of integrity checks -- that is, literally going through each unit and verifying that what's delivered satisfies some standard.
What the Federal Reserve has always been doing since it let foreign nations deposit gold for safe keeping is running a very inefficient options market. Gold is transferred in and very modest storage fees are assessed each year (essentially the gold is stored for free [1]). Note that there are no real provisions for transferring the gold back out, this must be negotiated on a case-by-case basis. It is by all accounts a costly and tiresome thing to do.
Now the real question is -- why would any foreign government participate in such a scheme? And the answer is because it's very beneficial for them. They get free gold storage in the safest vault in the world. And they don't "lose" that wealth -- the NY Federal Reserve's word is in fact "good as gold" and so that wealth can be leveraged much more efficiently than lugging around and cutting up actual gold bars. What does the United States get out of it? In fact it's not so clear. Some politicians have reasonably asked why we're paying a bunch of money to store ~7,000 tons of other people's gold below Manhattan. It doesn't really make much sense except that, well, it's now been "policy" for 50 years and changing is very difficult and expensive.
In the end nobody really cares. There's nothing suspicious going on. The author's "reading" that Germany has forfeited 1200 tons of gold because they're not allowed to "count the gold" is beyond ridiculous. The rationale for leaving gold in the Fed and moving slips of paper around is pretty sound -- it's called modern banking. It's mostly worked for 500 years. And the idea that gold will act as a reasonable substitute when the dollar collapses is just dumb. Because this is the thing that gold bugs never seem to understand: when/if the dollar collapses it won't be an isolated event. The implication is that the productive capacity of the USA has been zeroed out. Think about what events might cause this and ask yourself if, at this point, Germany (or anybody's) biggest problem will be missing gold.
The article is painfully ignorant. The idea that it's the gold buried under Manhattan that makes the dollar the reserve currency is not even wrong.
That said, if Germany does really want its gold the right thing to do would be for the Fed to make them pay standard market rates plus a Fed premium. Considering some banks charge as much as $300 an oz for such a delivery such a transaction would actually knock quite a bit off the national debt.
As usual, "the right" likes to speak of "incentives" like they are these magical fairies that overdetermine human behavior.
Let's look at some actual facts in the real world. Compare the internet infrastructure of Britain, France and South Korea to the US. In all of these countries the internet backbone and especially the last mile of local networks is largely owned and maintained by the government. And in all of these countries the internet is generally faster, more widely available, and cheaper than what you see in the US. In fact when you compare broadband penetration in the OECD you find that (1) the US barely makes it into the top 20 and (2) every country ahead of the US employs the government lease model.
It's gotten to the point that even a few conservatives who are honest enough will admit what is the very obvious reality [1].
Ebook prices are set to be artificially high by publishers in order to prop up the paper business. It's a strategy that has strongly diminishing returns and doesn't make much sense but I suppose it does slow the decline.
> Its very surprising that people argue about these businesses in the hypothetical.
I think this is standard operating procedure for conservatives. They provide extremely speculative theoretical arguments based on over-simplified and over-determined models to justify their policies. They don't ever point to real-world, historical data to demonstrate their thesis. When your committed to good ideology rather than good policy you have to be willing to make trade offs.
> And these players have a long history of hugely anti consumer moves, laziness, deceit, cabal like behavior
Yes, there is plenty of actual historical data pointing out the tendency of US telecoms to seek risk-free profits. The US probably has the least competitive telecom market in the world. This is common knowledge [1]. The idea that these extremely non-competitive firms can be given more power and they'll "innovate" is laughable.
There's very little evidence that tax cuts stimulate economic growth. If there was meaningful evidence the investigators would receive the Nobel Prize -- every year. And while economists can be relied upon to provide all sorts of elaborate theoretical "evidence" the actual empirical evidence tends to confirm the opposite: significant tax cuts have zero to negative impacts on growth [1].
It will be interesting though to see what tax cuts do in such a low-growth environment. In the end it seems Wall St. will be the big winner. There's plenty of actual evidence that tax cuts (a) eventually make it back to investors once finance takes its cut and (b) tax cuts lead to most firms adopting a much higher risk profile [2]. Ironically we could see lots of mergers and overseas expansion.
The article has some good points but the whole "crowd" thing was never a serious idea.
Crowds are not intelligent. Democracies are what are intelligent. Having lots of intelligent people who care deeply about something discuss it thoroughly in good faith and then vote will almost always produce optimum outcomes for all involved. This basic principle underlies everything from global capitalism to modern science to even modern military strategy (network-centric warfare).
The problem is that more often than not you don't have lots of people discussing a topic in good faith. In fact this is a might even be a rare and fragile scenario. It's very, very easy for the discussion or the voting system to be corrupted and subverted. The logical conclusion is that the "crowd" is only intelligent and able to reach good conclusions in a well-defined environment. There must be rules, institutions and ultimately reputational accountability to ensure that all actors are actually acting in good faith. Capitalism needs well-regulated markets, science needs its prestigious institutions and even the military needs civilian oversight and international conventions.
I think once people appreciate this it becomes obvious why suggestion boxes is a waste of time and why highly compressed mass referendums are almost certainly disaster.
I kind of marvel at such comments. You don't understand a single sentence so you give up on the whole article? And then you feel the need to announce your ignorance?
The entire article is very much about "bigness" and it is interesting to see how a non-tech person views the state of the web. The reality is companies like Google and Facebook can and do leverage enormously powerful network-effects. This makes it very easy for them to completely and utterly dominate various ecosystems and turn them into mono-cultures. Especially with Facebook what we're seeing isn't any kind of real diversity but simply a cesspool of propaganda [1]. It's not really good for anybody.
But then it's not clear that information monoculture that Google and Facebook produce could be broken up even if one were to break up the companies. Even if Facebook were regulated out of the "news business" competitors would emerge that leveraged Facebook's graph and you'd get the same issues.
The problem is on the demand side. People want fake news, they want to be lied to, and they certainly don't want to hear any kind of in-depth, reasoned, factual analysis. Google and Facebook are just giving people the tools to create such toxic information ecosystems. This wasn't an issue a long time ago when everybody simply consumed their regional information sources but with the rise of cable news it can hardly be said that this is a new issue.
In the long run rather than breaking up these companies they should be pressed to develop technological solutions. Similar to the way email was saved from the never-ending tsunami of spam by Bayesian filters and DNS-based black-lists and white-lists, Google and Facebook should be encouraged to develop measures that can at least identify and warn somebody when they enter a toxic information eco-system.
Exactly. This article is naive to think there's something special about IT. All the mental gymnastics in the world can't avoid what is a pretty obvious truth: women in Eastern Europe never suffered a lost century of labor prejudice while women in the West did. Since 1917 (and even a bit before then) advanced labor and education institutions in Eastern Europe did not systematically exclude women the way these institutions did in the West. Free of systemic prejudice, women in Eastern Europe have historically been equal to men in terms of participation in the labor force and in education. The numbers on this are very clear if people are willing to look.
(What makes this all doubly ironic is that in these same areas "feminism" has, until recently, not taken off and they were somehow viewed as backwards by feminists in the West.)
You seem to have a very rosy idea of Russian society which is no doubt colored by your opinions of Western culture. At least the Russians I know would laugh at the idea of "calling out BS" or even "service to community."
My own experience is simply that it's a culture where everybody is expected to work. Concepts like "house wife," "stay at home parent", "work-life balance", "trust-fund kid", "socialite" and "sabbatical" were completely alien until very, very recently. Everybody works. And while not everybody works hard, those that do, do it expecting a payoff.
It's also important to understand that women were never not part of the workforce in Russia. It's hard to say for sure because the numbers were fudged but there are estimates that even in the 60s as many as 80% of women in the USSR were gainfully employed. (See this interesting CIA report for one estimate [1].) In the US, during the 60s, you had a female labor force participation rate of about 40%. It's not like Russian girls grow up being told they have to "lean in" -- it's literally laughable, like somebody telling you that you have to breathe.
Maven is great. Not perfect but it's far better than the alternatives. And every single time I've seen somebody come along and insist they have a better alternative the result is always worse or requires significant custom development.
As for the idea that Java IDEs like Eclipse and IntelliJ are these "big heavy tools" -- it's just silly and outdated. It might've been true 15 years ago. (Flashback to 2004 and getting a cup of coffee while Eclipse starts.) These days Eclipse and IntelliJ launch instantly and feel just as lightweight as the command line. I'm often running multiple IDEs at the same time with no performance impact.
Any Java shop that's any good doesn't depend on an IDE. The idea that you can't do anything without an IDE is wrong. A team doing continuous integration and deployment is damn well going to make sure that everything that needs to be done can be done from the command line. Nobody cares what you use to edit code on your own computer as long as you don't use tabs!
It's another way of saying the labor market is weak. (I can imagine certain economists might use this language because they don't want to be mistaken for labor advocates.)
As long as the labor market is so weak (and it's much, much weaker than many realize) you'll see the widespread dysfunction suggested in the article and more. It acts as a severe economic drag due to decreasing competition everywhere. See [1] and [2].
The problem is not capitalism. We know exactly how to deal with weak labor markets. It is really no mystery at all and you can open up even notoriously simplified Econ101 books and find the answer[3].
But it won't happen. It's difficult to understand exactly why it doesn't happen but it seems like (based on my own, ongoing research) that for many powerful actors a weak labor market is overall a pretty good thing and these same actors have now acquired virtually complete political power. So I would say the problem isn't capitalism, it's just politics as usual.
This idea that government is responsible for the scarcity of housing is dishonest. It's called democracy. The government is made up of the people who live there. The citizens of San Francisco (and to some extent, New York and Boston) have made it pretty clear they don't want a lot of new housing and they're quite happy with the way things are now. Given this, blaming the housing prices on "the government" is pretty silly, isn't it?
Living with your parents is the norm. Countries like France and the USA are abnormal in that virtually nobody lives with their parents and doing so is widely regarded as some kind of personal failure.
My suspicion is that as the world becomes more and more competitive (due to increasing automation, decreasing quality jobs, more connectivity, etc) these sorts of group-living arrangements -- up to and including full-on group marriage eg the polyamory movement -- will become increasingly more common even in WEIRD[1] countries.
That article is long and completely without substance. I don't know why I didn't turn back sooner but lesson learned.
Anybody who thinks the drug industry charges so much for "innovation" is just dumb. Like all sellers the drug industry charges exactly what buyers are willing to pay. When the buyer is the federal government (and make no mistake, the federal government is indeed the biggest purchaser of healthcare and healthcare has been thoroughly "medicalized" [1][2]) then there's absolutely no limit to what you can charge. This situation thoroughly accounts for the high drug prices unique to the US and there is no need to crap out a bunch of words about innovation.
Um, no, the tax payers pay for it through Medicaid.
People seem to have very strange ideas about how the healthcare industry actually works. But it's not a secret, you can go look at their SEC filings and see the numbers in black and white. Most insurance companies are enjoying record profits because of ever-expanding government funded health programs like Medicare [1]. This is just a fact. Now combine the "limitless pockets" of the Federal government with the total lack of price controls and you get exactly what you would expect in the USA -- prices going straight to the moon.
I very much expect this is not going to change any time soon. There is no political desire or will to limit Medicaid and/or institute price controls. This makes investing in health insurers very lucrative. The industry has been enjoying record profits since 2009 [2] and this will continue until the American public learns to do math...
America needs to embrace "local government." That means devolving budgetary power to the states. The federal model has failed. The current system is broken. The people who pay the most into the system (highly productive cities) are the people who actually have the least voting power. Once people wake up and begin to understand what's really going on this will not last. 'Taxation without representation' tends to rub people the wrong way.
End the Federal Highway/Farm/Energy Acts. Heck, even blow up Medicaid and Obamacare. Cut the military budget by 2/3. All of these enormously expensive federal "programs" are just elaborate means to extract hundreds of billions of dollars from the wealthy and efficient urban counties and distribute them to the relatively poor and inefficient rural counties. None of it is fair and none of it is sustainable.
This is one good thing that will come out of runaway polarization in America. As all trust dissolves and the two (highly geographically correlated) classes move apart this illusion of "one republic" acting in everybody's interests will fall away.
It's weird. This article is so poorly informed and, frankly, straight-up dumb that I'm surprised that the author would put it out there under his real name. But what's more surprising is how every time a startup geek shows up and insists he alone understands an enormous, extremely complicated, century-old distributed market system better than those who have been studying it for decades -- everybody actually stops and takes it seriously. I mean, we're supposed to take hearsay like this:
> Even fifteen years ago at an Ivy League school I did not like to say things too far outside the zeitgeist in section, because it just wasn’t worth the risk of making someone in class angry. And I hear the problem is even worse now.
and a bunch of literally made up numbers (ahem, "subjective assessment") seriously?
So yeah. That's the question. Why does nobody listen to the actual experts on the American education system? The people who've been studying this for decades? And when people aren't willing to do the hard work (that requires expertise)... how do you even talk about solutions in a serious manner?
Look at America. The American economy is not competitive. It is not efficient and there is no plan. What you have are a few faboulously wealthy and productive economies (the wealthiest and most productive economies the planet has ever known) and a lot of very uncompetitive localities. What ties it all together and makes it "work" is a surprisingly efficient but very opaque transfer union[1] which is, for purely legacy reasons, called the federal government and controlled by the largely un-educated legislative. Seriously, look at the numbers. Transfer payments to what is generously called "non-metro America" constitute 20-25% of income in some counties.
So ultimately Varoufakis was right. He understood -- despite being an economist, this is just plain old common sense -- that a Euro-dependent Greece is always going to suffer mightily against Germany. No amount of tinkering or restructuring the economy is going to fix this. The only "plan" was to play chicken with the Germans and potentially let Greece crash but at least take the euro with it. (This only works because, as indicated in the article, everybody was loathe to "force" Greece out of the union. It's not even clear whether this is legally possible.) Thus there was in fact a lot of money to be made watching Greece and the euro burn for a while there. Eventually order was restored but only at great pain to all parties and that order is hardly going to be lasting or stable. Such is politics. In the end while it looks like Varoufakis may have been doing nothing... he probably got Greece a much better deal than they deserved in the minds of the Germans. And the next time Greece needs a bail-out -- and it'll happen soon because Greece is literally shrinking as everybody who can flees -- the same game of chicken will need to be played and they'll need to find an outsider like Varoufakis to play it and take the fall.
[1] https://en.wikipedia.org/wiki/Transfer_payment [2] http://www.bbc.com/news/world-europe-33507802