Today's Buggy Topic

The subject-heading captures the current bugged-out analysis --- which can be found at Economist's View, the admirable economic web-site run  by Professor Mark Thoma of the University of Oregon --- as effectively as any other would . . . the prof bug ruminations set out, as usual, with a lot of hard evidence, but this time entailing a fair amount of speculation.  No help for it.  Can't talk about the future --- say, the next decade ahead of us --- without speculating on several different trends at work: economic, financial, political, and diplomatic. 

Click here for the thread, including the stimulating article that starts it  and later prof bug's long spun-out analysis.   (Please keep in mind.  Prof bug bangs out those linked commentaries in sustained bursts of breakneck speed, with no time left --- other than running a spelling check --- to review the syntax.)

Today's 2nd Buggy Topic

The prof bug answer, filled with hard data, is set out in a thread at Economist's View.  It may surprise many of you.  Click here.  Please be sure to run a search three or more times for buggy, including the hilarious assault on him by a radical zealot named Anne . . . a self-chosen gate-keeper of ideological purity of a puerile name-calling sort.   I always get a laugh out of her attacks on me, the laughter ranging from a chuckle to a guffaw to bursts of explosive delight. 

Today's First Buggy Topic

The topic is captured pretty faithfully in the subject-title, with the buggy prof posting in two different threads on it.   The threads were started b Professor Mark Thoma of the University of Oregon and are found at his commendable web-site, Economist's View.  As usual, leaving aside Prof. Thoma comments, the buggy prof was the only poster in the thread who offered a rigorous argument full evidence --- quantitative and qualitative --- that showed a much larger underground economy in the EU as a result of the use of a regressive consumption tax known as VAT . . . a value-added tax that is imposed on end-consumers.  It ranges from about 18 to 19% on the average in the EU to 25% or more.   In the US, which has the smallest underground economy among rich countries, the equivalent figure is a touch over 8.0%.  Click here

When queried about the underground economy,  prof bug clarified his views on the underground economy --- using lots of examples --- in a second thread.  Click here.   It refers to all cash-value transactions that are either concealed from the tax authorities or fraudulently reported.  The studies of the underground economy go back two decades or more, with a use of increasingly improved methodologies that include cross-checking criteria.

Today's 2nd Buggy Topic

Daniel Kahneman, a social psychologist, won the Nobel Prize in economics in 2002.  For decades, he and his colleagues ---- especially another Israeli-born social psychologist (Amos Tversky), and later several economists --- showed through a variety of experiments that humans don't behave in conformity with rational-choice theory, a finding that conflicts with much of micro- and macroeconomic theorizing.  Click here for a lengthy buggy commentary on his achievements, including their utility in prof bug's own field --- international relations, and especially in military policies and arms control. 

Not the testy tone used by most of the other posters in the thread.

Today's Buggy Topic

The "surprise" would be aimed at the general public, which thinks the US economy has so de-industrialized that it no longer produces much of anything in the way of "real goods" except for agriculture.  In fact, as you'll see if you click here --- a link to a data-filled buggy commentary left at Economist's View, an admirable economic blog ---- US manufacturers produce $2.50 worth of goods for every $1.00 that Chinese manufacturers, usually working in multinational corporate factories, happen to produce.  On the other hand, as you'll also see, US manufacturing employment has declined from about 35% of total US employment in the late 1960s to around 12% today . . . a trend, though, at work since the end of the sixties found as well in the UK, France, Germany, and Japan.

Today's Buggy Topic

The subject-title above does a decent job of capturing the topic, except for one thing: are these desirable goals for any central bank, not just the Federal Reserve, all compatible . . . or, alternatively, are their some trade-offs among them that can't be easily side-stepped?  It's the lengthy answer to this query, prompted by some facile, ideologically driven drivel in a thread at Economist's View --- a laudable economic web-site run by Professor Mark Thoma --- that prompted the evidence-driven, closely analyzed commentary by prof bug there late last night. 

A Buggy Revelation or Two

For ideologues of either the left or the right, remember, all good things go together.  Yep, no trade-offs ever between all the desirable changes that their carefully protected belief-systems lead them to embrace --- an intellectual and psychological pathology reinforced by the Internet, where the ideologues gather around one another at this or that blog-site and self-chosen gate-keepers seek to repel all those who challenge the dominant group-think pathology that infests the site.  

Not prof bug's cup of honeyed tea, these self-delusive bunco-games of the mind.  A militant moderate --- a chr0nic, buzzing type --- he knowns good-things don't all go together easily; knows, too, that we live in a highly complex, highly institutionalized country of 300 million people; knows, therefore, that all changes and reforms are heavily path-dependent; is skeptical consequently of ideologically driven criticisms and nostrums that ignore these complexities --- aggravated at economic and political blogs by group-reinforcing posts and commentaries that unfold by assertions and counter-assertions, but little else (certainly, little in the way of hard evidence); and enjoys, in the process, of taking on these ideologues and revealing the core of their smoldering orthodoxies. 

Oh, One More Thing 

A need for a comparative perspecitve --- almost always when your faced with a puzzling problem about the performance of American political or economic performance.  With few exceptions, it helps to place this problem and your analysis in a comparative cross-country perspective.  Sometimes these other democratic and industrial countries do things better than us, sometimes less well.  It all depends.  And hence all the comparative data and evidence that you'll find in the buzzy post today at Economist's View.

The methodological aim is to pin down what explains their better or worse performance compared to the equivalent institution, policy, or long-term trends in American life that you're trying to explain.   Assuming you've done this decently --- and the comparisons could be qualitative, using judgment, rather than data-driven (modeling which requires subjective judgments anyway) --- you can then determine, if you're hoping to change or improve the American performance by policy-oriented advice, whether what they're doing better abroad can be politically feasible in the US.   The meaning of the state in the United States is different from what West Europeans on the Continent or the Japanese understand it to mean . . . cultural differences, highly institutionalized as well in state-economy, state-society, and state-legal systems, play a big difference here. 

Britain, Observe Quickly, Is . . .  

 . . . more like the United States on these scores.  Even so --- largely because of a much more explicit class-structured society, where politics, economic and financial life, and culture were dominated into the current post-WWII period by a socially prestigious, differently educated upper class --- the role of central government has been more intrusive in British life for a long time compared to the situation here.   This is still partly the case, please note, despite the growth of central government in the US since 1945 and the lesser dominance of political, administrative, financial, and legal life by the graduates of prestigious "public schools" like Eton and especially Oxford and Cambridge.

Enough Said For the Moment

Click here for the long buggy analysis, which ranges widely over politically charged economic matters  with lots of supporting data and other evidence . . . plus, at times, an honest confession of uncertainty.  Note that it's post 59, though conceivably there might be a need for some bugged-out replies later on.

Today's Buggy Topic . . .

. . . deals with two important and closely related questions, both of more than just theoretical concerns for social scientists.  The bugged out answers to those questions are set out at length by prof bug in three posts in a thread found at Economist's View, the admirable economics web site run by Professor Mark Thoma of the University of Oregon.  Click here for the thread, then run a buggy search for the three posts.  

Today's Buggy Commentary Is . . .

. . . a continuation of the previous bugged out article on the US health care system, focused on comparisons with other systems --- especially France's, criticisms of which are apparently considered sacrilege by prof bug's fellow posters at Economist's View.  Even if you read the link to the relevant thread at the laudable economic web-site, you might find it informative or possibly just amusing to read the three follow-up buggy posts that tried --- in a reasonable, logical, fully evidence-based manner --- to deal with the witless personal attacks directed at the amused prof bug by fired-up furiosos. 

Click here for the first page of buggy comments, running a buggy search.   At the bottom of the thread you'll find a "Next Page" link.  Click on it for the next several posts, including a long one by prof bug.

Today's Buggy Topic:

The strengths and weaknesses of the US health care system --- most of them anyway --- are compared with those of other advanced rich countries in a thread found at Economist's View.  Prof bug posted three times in that thread, attacked in all three by not very informed but very cocksure people.

Click here for the bugged-out stuff.

Today's 2nd Buggy Topic

It deals with China's economic development and its neo-mercantilist orientation of keeping domestic consumption unusually low --- yes, even by East Asian standards --- and relying mainly on export-led growth, plus some shoddy governmental public investment.  No need to say more.  The lengthy buggy analysis is easy to follow.  Click here, then run a search for "the buggy professor".

Today's First Buggy Topic

It was posted yesterday at Economist's View, the commendable economic web-site run by Professor Mark Thoma, a macroeconomist at the University of Oregon.  He started the thread with a link to a lengthy commentary by Ricardo Cabarello, a gifted economist at MIT who, among other things, has analyzed in depth --- at any rate, with the help of two other economists --- the banking problems that plagued Japan in the 1990s and way into this decade, resulting in a major financial crisis, deflationary price drops in the economy, and stagnant growth.  For that matter, though the Japanese economy started to grow steadily after 2004 until last spring (2008), the growth in real GDP was anemic and depended almost entirely on an export surge during the booming global economy that collapsed last year. 

In fact, prof bug --- who has read some of Cabellero's earlier work on Japan --- links in his initial post in the thread to an important article of Cabarello and two other US economists (one of Japanese origins) that appeared last year in the American Economic Review

Prof Bug's Rejoinder . . .

did not gladden many hearts among the dozens of posters in that thread . . . most of them not noticeably knowledgeable about economic theories, and leaning noticeably to the left-wing of the political spectrum: so much so that a fair number have already written off President Obama's financial rescue programs at captive of the financial oligarchy and his fiscal stimulus policy as markedly insufficient.  No matter.  Prof bug isn't posting there or elsewhere to win popularity contests; knows how to set out a coherent, closely argued analysis; knows too the need to back it up with good evidence; and is willing to acknowledge if others in that and other threads have show him to be wrong --- either about an important factual matter, or omitted important counter evidence, or made a theoretical or logical mistake. 

Click here for how prof bug seeks to show that parallels drawn between the current US financial and economic crisis and Japan's 18-year long crisis --- which is institutional and cultural, not just a matter of bad or tardy policymaking --- are simply wrong . . . however often those parallels appear all over the web and in print. 

A Reminder

To find prof bug's posts --- two of them in the Economist's View thread --- run a search for "the buggy professor" . . . and don't confuse other posters who sign on as gordon or mg.

Oh, one more point.  What really irked a few of the posters wasn't the initial buggy post yesterday --- rather, his second post that praised the Geither PIPP program --- Private and Public Partnership Investment Program, set out in March.  He does, however, think there is at least one alternative program sketched out by an investment manager and adjunct law professor at the University of Chicago, and cited that prof's work at length . . . the two Gordon-embraced policies calculated to evoke howls of denunciation from his fellow posters.