economics
aardvarchaeology | March 7, 2016One of the best pieces of economic advice I know is ”Don't throw good money after bad”. Or in other words, when you consider whether you should continue to invest in a project, don't let the sum you've already invested figure into your decision. To do so is known as the ”sunk cost fallacy”, and leads to ”escalation of commitment”. A good way to avoid this is to decide beforehand what your exit conditions will be, and then stick to them. A bit like saying “I'm going to play the slot machines until six o'clock or until I've lost $50, whatever comes first”.
Google Maps offers a beautiful real-…
illconsidered | August 24, 2015August 13th was Earth Overshoot Day. The correct date, if calculated precisely, would come earlier and earlier each year, the current choice is just an approximation.
This year, the year 2015, by sometime around August 13th, humanity had consumed as much of what we require from the lands and seas as our planet can sustainabley provide in an entire year. That is another way of expressing the fact that at current consumption rates, humanity requires 1.6 planet earth's worth of fruits and vegetables, meat, fish, wood and other organic materials. It is a remarkable annual deficit, and if it is…
catdynamics | August 22, 2014Science had a very interesting special section this spring: The Science of Inequality - basically doing a summary and review of issues related to the stuff in Piketty's book Capital in the Twenty-First Century
The section has a series of very interesting articles on a range of related topics:
"Inequality in the Long Run" by Piketty and Saez
"The ancient roots of the 1%" by Pringle
"Our Egalitarian Eden" by Pennisi
"Physicists say it's simple" by Cho
"Tax man's gloomy message: the rich will get richer" by Marshall
"A World of Difference" by Underwood
"Can Disparities by Deadly?" by…
illconsidered | July 15, 2014Aside from the climate blogosphere, Paul Krugman's "Conscience of a Liberal" is my most regular blog visit. He does not usually have a lot to say on climate change (which is mildly disappointing) and I have seen only very shallow and casual dismissals of the, to me compelling, notion that perpetual growth as a requirement for economic prosperity is problematic (which is very disappointing). It is however, usually very interesting and I have learned a lot about economics, something very apropos given the ongoing global crisis. I do enjoy the political snark as well, as long as it is reality…
catdynamics | April 25, 2014Why you might sometimes care about the sex lives of strangers.
A snarky comment over on an evanescent social media site lead me to shoot back from the hip, but on reflection, unusually enough, I decided I liked the retort enough to preserve it in more permanent intertoobz form.
The discussion was on oligarchy and extremes of wealth, and the comment was essentially that this was a private matter, and that the income, or wealth, of an individual was not a matter of public interest - that it was a prurient obsession of no more relevance than the identity of their sexual partners or preferences…
stoat | August 3, 2013An interesting article from Timmy, who makes clearly a point I've glimpsed muddily recently. Notice that the point stands, even if you happen to like regulation (I think there is far too much). Permit me to quote (fair use, I'm sure):
Big business positively delights in much regulation... Capitalism... is indeed all about making profit. Get the most out of whatever it is that you're doing. It's the market, the competition that it allows, which is what tempers this [] profit gouging. You can't charge what you like for a pint of beer because there's another pub around the corner... What…
stoat | July 26, 2013Non-beardy says “I’ve met the head of Wonga and I’ve had a very good conversation and I said to him quite bluntly we’re not in the business of trying to legislate you out of existence, we’re trying to compete you out of existence” (see-also the Gruan). When I first heard this while driving into work I mis-heard it (or slightly more accurately, at that point the news was new, and exactly what he meant by this wasn't clear): I thought the CofE were intending to actually loan out money, on a commercial-but-nicer basis. Thankfully they aren't going to do that: it would most certainly have been a…
illconsidered | April 15, 2013Via Planet3.0 I see there is a declaration of the need, and competitive advantage it would bring, for action on climate change signed by a not insignificant number of major (non-fossil fuel) corporations. As Michael Tobis points out, it is, rather strangely, presented as an image only.
So my contribution is running it through an OCR tool, formatting and presenting it below:
Tackling climate change is one of America's greatest economic opportunities of the 21st century
(and it's simply the right thing to do)
What made America great was taking a stand. Doing the things that are hard. And…
stoat | March 25, 2013 I'm sure my headline is over-optimistic. But its certainly looking good, compared to the doom-laden view mid week. And (insofar as I can tell, not having any specialised insight) the correct solution has been found - so much so, that you might wonder why it wasn't found immeadiately. And that solution, in brief, is to honour the guarantees for deposits of less than 100k euro, close the most broken bank, and impose losses on those with more than 100k euro.
The bit I find interesting is the Russian perspective. The original bad deal - losses on accounts above 100k limited to 10% - was clearly…
stoat | March 15, 2013What could possibly be a more coherent, convincing and above all evidence-based argument than this?
SIR – You were wrong to attack the financial-transactions tax (FTT) that is being implemented by 11 European Union states (“Bin it”, February 23rd). You dragged up the bad experience of Sweden, which ditched its own FTT in 1991. But even the IMF has accepted that the Swedes had simply failed to design their tax well enough. As Algirdas Semeta, the EU commissioner on tax, recently said, Sweden invented a bicycle with square wheels.
We are campaigning to get the financial industry to pay for some…
stoat | March 1, 2013I'm referring to the fools trying to p*ss around with how banks pay their staff. It am all over de noos, and to spare the blushes of some of my more delicate readers I won't refer you to Timmy, you can have the Graun instead: Don't cap bank bonuses, scrap them. The EU's plan to cap bonuses sounds like good news – but it may simply lead to banks jacking up salaries. Yes, you idiot, that's exactly what will happen. And notice the follow-on idiocy: capping bonuses leads to increases in basic pay, so lets cut bonuses entirely! That will surely lead to... yes, that's right, yet more increases in…
illconsidered | October 23, 2012Just thinking about a previous look at Roy Spencer:
We believe Earth and its ecosystems—created by God’s intelligent design and infinite power and sustained by His faithful providence —are robust, resilient, self-regulating, and self-correcting, admirably suited for human flourishing, and displaying His glory. Earth’s climate system is no exception.
in the context of this recent post of his that finishes with this similarly fact-free gem:
It’s time for the 99% to start supporting the 1% a little better, because in the end it is the 1% who enables the 99% to maximize their standard of living…
stoat | July 10, 2012The question, which is the better man, is determinable only in the estate of government and policy, though it be mistaken for a question of nature, not only by ignorant men, that think one man's blood better than another's by nature; but also by him, whose opinions are at this day, and in these parts of greater authority than any other human writings (Aristotle). For he putteth so much difference between the powers of men by nature, that he doubteth not to set down, as the ground of all his politics, that some men are by nature worthy to govern, and others by nature ought to serve. Which…
stoat | July 6, 2012 There has been an awful lot of fluff written about the LIBOR fixing stuff in the past week or so. Which is why I looked forward to my friday afternoon at home reading the Economist - in a brief patch of sunshine even - and getting a more considered opinion, and perhaps even some facts. They seem to take it all very seriously, whereas it seems to me there is an element of moral panic in the air (hey, you're here because you want my opinions - if you want informed opinion, go read an economist).
First, a throwaway thought: Barclays is suffering from having "come out" of the closet first. This…
stoat | May 8, 2012Reading P3 and mt I got stuck at
...economics makes grandiose claims to be the science of collective behavior, or even the science of collective happiness. Yet it dismisses any philosophically interesting aspects of these questions in favor of counting dollar-denominated transactions. Nevertheless, it claims for itself a unique position among the sciences, as the crux, the central weighing mechanism, for all public decision-making.
Leaving to the side, if I can for the moment, the "philosophically interesting" aspects I'm interested in the "central weighing mechanism" point.
It isn't clear to…
sastyk | April 23, 2012Note, I'm horrified to realize I inadvertantly left out the link to Rhagavan's piece - SO SORRY about that, and please do click through - it is well worth a full read.
Barath Rhagavan has a superb article about the conversion of many climate scientists to support of nuclear power and the reasons this is problematic. These match my own major objections to nuclear as a response. As serious as the environmental impact of failure is, that's not the single biggest issue I see. Even if I thought the siting would avoid any future climate related disasters (I don't), the main issue is the…
sastyk | March 20, 2012Richard Heinberg has a nice piece about drawing conclusions from present trends. Among his observations:
If current economic trends continue . . .
China's economy will be 8 times as big as it is today by 2040.
China's economy will surpass the size of the present global economy before 2050.
The US federal debt will double--from $14 trillion to $28 trillion--by 2022.
In 2072, the federal debt will amount to $896 trillion, or $1,629,091 for each American (assuming a US population then of 550 million).
By the end of the century, each American will "owe" over a billion dollars.
Thanks to the…
stoat | February 7, 2012Subtitle: Rupert Neate is a tosser, since I don't seem to have done one of my "is a tosser" series recently.
Having assailed the nutters yesterday, I feel inclined to have a go at the handwringing going on at the Grauniad; I really do despair sometimes. As Timmy puts it "Fund to buy grain buys grain from grain wholesaler" (and lest you think I'm being to nice to Timmy, it looks like he stuffed up over the Greek debt).
There are any number of things wrong with that piece, but the headline "How £50m in UN food aid for starving went to buy wheat from Glencore" pretty well sums it up. Its a lie…
stoat | December 22, 2011There is a fascinating article from Bronte Captial about the Euro Fix.
The story so far, if you've forgotten: the ECB can't be a lender-of-last-resort to governments, because it isn't allowed to (from memory, the Krauts say No). But in a transparent fix, it is allowed to lend to banks, if those banks put up suitable collateral. And it has said, lo, government debt, that is good collateral. And so 500 bn has been loaned.
Why, as a bank, would you want to buy shonky govt debt? Because dodgy Italian debt yields 6% or so at the moment, and lord knows what the Greek stuff provides. But the ECB…
stoat | November 4, 2011Or rather, drops euro referendum plan1 but the effect is much the same.
When the referendum was announced a few days ago, some thought he had played a blindingly good political hand. Which just goes to show that economists aren't so great at politics and the cobbler should stick to his last. Which is why I'm commenting, obviously. But the argument - that he had magically got out of a difficult position (the Greek public didn't like the deal that was struck, this was he evaded responsibility, and maybe the need to buy off the public might result in a better deal) sounded quite plausible to me…