Sunday, October 17, 2010

Benoit Mandelbrot: Fractals and the art of roughness | Video on

Benoit Mandelbrot: Fractals and the art of roughness | Video on

Saturday, October 16, 2010

Very interesting article by one of the major innovators of Blogs Winer

Reagan's imagery might have worked when we lived on a mostly unexplored planet, without computers, and our complex computer-managed systems. If you didn't like having neighbors, you could just pick up and go somewhere and be by yourself, rugged and individual, and get some peace and freedom. If that world ever existed, and I wonder if it really did, it sure doesn't exist today. Not if you want your kids to go to school, and get proper health care, and get on the Internet and listen to your iPod, etc etc. Sure it sounds nice in a commercial, but you're not actually going to do it, even if you could, and you probably (almost certainly) can't.
Scripting News: Our civilization doesn't scale

Brilliant article on modern society by one of the people who made it.

The Facebook Movie: its shit

Since there is no character development in Social Network, no drama and no human interest, the film becomes a post-modernist obsession with the babble of Internet jargon as it takes the place of our reality around us. I found the experience of the film deeply painful and could not sit through it.

Zuckerburg is some nightmare out of Star Trek, from one of the episodes when the super efficient technology nerds is taken over by some evil force and uses his or her mental powers to do pure evil.

Perhaps the most disturbing side of the film is how structured by American prejudice it is. Hell in a film set among computer nerds in Harvard they even manage to make a black male seem threatening in one section. The film is full of fit children of wealth who are actually clueless and incapable, utter dorks obsessed with sex but unable to relate to women, Jews as super nerds, Asian sex dolls, bitchy Jewish co-eds at BU, hell the entire film is a flow of stereotypes and insults.

And how the films tries to make you interested is perhaps the most pathetic. Did the writer think simply because the maker of Napster and the maker of Facebook are rich I would really care when the maker of Napster first saw the Facebook page?

Worst scene in the film? Hard to say having walked out? The lame Jewish Frat party and the fact that Zuckerburg (who I know had friends in that frat) was ashamed to go (I don't think Zuckerburg is a self hating Jew), the china doll blowjob scene with Asian "students" who look like Thai prostitutes that Zuckerburg meets at a Bill Gates talk, how about the fact that every figure in the film is an disgusting, greedy stereotype, usually a racial or gender stereotype.

Its not so much that the film is false, but because it is ugly, it shows how much the Internet has act made much of our life ugly, turned us in to passive jargon spilling shit heads. Yes that is the worst part of the film. Well if the director had intended that it might be cool, but its clear the director is playing the audience like the Internet tries to play us, thinking we will find these people cool simply because we now know they are rich.

Thursday, October 14, 2010

China must loan money to the west

However, the CSJ, citing a (Chinese) government investigation, says adequate repayments are being made on only 24% of the debt owed by these local government financing vehicles.

And about half of the total loans went to projects run by local authority investment vehicles that are now unable to fully meet their repayments.

These must now be covered by the local governments or with collateral.

And the final 26% of cash may never be repaid.

This is where money went to projects that failed to meet official regulations, faced "serious default risk", or was embezzled, the CSJ report said.

BBC News - Loans to China local authorities 'at risk'

Let me make this perfectly clear, there is no danger at all of the US or EU government in the near term not being able to borrow money from China or other Asian countries until the Private sector can start borrowing again.

Firstly let me make it clear what is behind "sovereign debt". The United States and much of Europe is utterly dependent on debt. This is how the economy works. With the labour movement destroyed in the 1980s real wages have dropped for almost 2 generations. This has been particularly bad in the past 10 years. To keep the "Capitalist" system going working have been given access to easy money to extend their consuming beyond their wages. This is entirely underpinned by rises in housing prices.

But this money in consumption was going to Asia, where people actually do save, and probably save too much. So a kind of relationship relationship between the East and West developed, with underpaid US and EU workers spending their income and borrowing money to buy goods, and the people who make those goods than investing more and more money in the US. Like it or not this pointless circulation of money is all that Capitalism every was or ever will be. It is the full and total nature of Capitalism. Capitalism as a concept is not in the Bible (though Slavery is) or in the US Constitution (where Slavery was also). Capitalism is no moral system, and it has no fixed outcomes, no magic to the market. Capitalism is simply the rapid movement of money from person to person, institution to institution.

If this flow does not work Capitalism does not work. If the players are States or Companies or Charities makes no difference, as long as circulation of money and goods happens the system continues. Is it long term sustainable? Probably not. Is it short term transformable? Definitely no.

The crisis of a few years ago was due to the collapse of the banks which had done precisely what markets always do, they boomed and busted. Anyone who has any questions about this any longer is simply an idiot. Markets are unstable not stable. Some Right Wingers say "well that was not a real free market" is simply playing word games with real people's lives.

When the collapse came the Government of the world had to step in to insure the system simply did not fall in on itself. For the most part they were highly effective. The world so a collapse of the global banking system and yet there were no runs on banks, no collapses of major currencies, and unemployment rose but remained at bad recession levels. Again the current level of borrowing is not sustainable, but it is also not sustainable to keep some one in the emergency room for 20 years. Sometimes crisis situations require massive government debt.

Now some people who for purely ideological reasons want to see government pulled back. Essentially they are saying pull the plug and see what happens. These groups can be broken in to different groups depending on the degree to which they have lost touch with reality. The vast majority are "Post-Soviet Male Syndrome", they simply can not accept that the system of Reagan and Thacher didn't work forever and God would let Capitalism enter crisis. This is the basis for sudden voter demands that government spending be cut,, as long as it is not spending that touches them.

But there are some reasoned positions that play with the fact that this is unsustainable. True the governments of the West can not go on living like this. But the first thing that should tick you off about the its "unsustainable" crowd is that they have just learned this argument. They were not making it about the housing boom 5 years ago in the US and they find it hard to make about the environment. When I hear someone who will say the entire thing, pre-crash and post-crash is unsustainable and we need to learn to live with less I have to say I agree. But that is not what we are hearing.

What we are hearing is that government debt is unsustainable and nothing else. No comments about regulation of banks, market complexity, changed global conditions, or even the climate.

Well actually in response to this the answer is fairly simple: Where else is China going to put its money? It won't invest it in the "free market" right now because the private sector is too weak. It won't invest it in its own local governments because they are too risky. They might buy gold but Asian government like investing in governments, and the best governments to invest in are in the US and the EU.

Really both nations have a advantage they should fully embrace: democracy and the rule of law. These two factors, which are mostly absent in the developing world make US-EU government debt a very attractive option for Asian investors, actually in a time of risk the best investment they have. Asian banks are sitting on trillions of dollars and Euros. They have no where else to safely invest that kind of money right now and they have no interest in watching those currencies lose their value.

There is a risk of our governments becoming to indebted to Asia, but essentially the private sector already did that and any forced movement from public to private right now would just make that situation worse. We would be borrowing money from Asia to drive our economy at higher interest rates and lets be fully honest, in the end the tax payers will have to cover it in the end.

Better to continue the current levels of debt as the economies in the West continue weak growth. The current situation of weak growth is far better than the utter collapse of 2008-2009, a collapse that a US tax cut did nothing to prevent I recall. When the private sector has gotten its debt worked out a bit better than the process of reducing public sector spending can be considered.

Though I don't really think we should be looking at saving via cuts to the public sector. Like it or not the age of actual Socialism is here. The present world economy is underpinned by China's state managed economy. Older populations in the West grow more and more dependent on state pensions and state health care. We are entering a more normal period after a friend flirtation with radical free markets, and that period is over.

A key case to watch will be the UK. The current Conservative government has, for some strange reason, decided to act as if the IMF had inflicted huge austerity on it. Probably because the rich in the UK are treating the rest of the nation the way the rich nations treat poor nations in the IMF. The UK shows that the global condition is repeated again and again at local levels. London's relationship to Manchester is the same as to India. I think that actually the UK economy will not only face 2 years of low growth, even recession, and massive job loss, but at the end of it nothing will be accomplished. Tax revenues will be further down because of the loss of jobs and the cut back of consumer spending, and it the end the UK economy will have a smaller public sector what it destroyed its private sector under Thacher. Under the Tory and New Labour governments the Private Sector became the service sector, which produced few good jobs. Only public sector spending is keeping millions of British out of total poverty. The process of destruction of most of England will continue and go faster but at the end a UK with less public services and spending and a strong pound is not going to attract investment in to factories and other businesses that make jobs, since the pound will be too strong and consumer spending too low.

BBC News - Schwarzenegger drops in on David Cameron

BBC News - Schwarzenegger drops in on David Cameron

Best Quote, that Schwarzenegger was going to help Cameron "terminate" the debt.

Despite Gov. Arnold Schwarzenegger's promises to reduce California's indebtedness, the state's debt has nearly tripled during the seven years he has been governor.

In fact the numbers of countries that have effectively managed to control debt are few. Most notable was Bill Clinton, who did it in the United States during the 1990s. Key factors that made it possible for Clinton were 1. that the economy was growing, 2. that he was a Democrat and not locked in to "Free Market" ideas of the GOP that tax cuts would result in budget surpluses. 3. Also very key to Clinton's success was that he didn't make this a main issues. People were a bit surprised by Clinton's attention to the debt and during his entire term the GOP attacked him as a big spender. This gave him the screen to implemented policies needed without overly concerning the public about potential loss of benefits.

Cameron has none of Clinton's political skills and is probably utterly unsuited for the task. The comment Cameron made is almost a Bushism, for it wrote the political cartoons itself. An image of the Terminator coming to No 10 to help deal with benefits, a relentless mindless killing machine created by big business that has an immoral obsession with destruction of human life. Cameron again is carried away with the PR moment and failed to see the big picture. He had a conservative visit him who had not only been unable to deal with debt but that seen it explode over the 8 years of his term. California is in reality facing the situations that Cameron scares the British public with might happen in the UK. And yet he is calling on him to help "terminate" the debt making reference to a film in which Schwarzeneggar played a threat to human existence. It was very much like Bush Crusade, when the full slowness of a ruler in a crisis situation was obvious.

Monday, October 11, 2010

Why Liberal Democracies have Federal Deficits


"Do you want your representative in Congress to fight for more government spending in your congressional district, in order to create jobs; or do you want your representative to fight to cut government spending, even if it means fewer jobs in your district?"

Fight for
more spending
Fight to
cut spending

9/22 - 10/3/10


So 18% more people want more money spending in their districts than cuts. If you want to get elected its better to try and bring home the bacon rather than try to cut spending. But asked about the entire nation:

"In general, would you rather have the federal government provide more services, even if it costs more in taxes, OR, the federal government cost less in taxes, but provide fewer services?" Options rotated

More services,
more in taxes
Fewer services,
less in taxes

9/22 - 10/3/10


So suddenly 8% who want more spent in their district change their opinions.

And that is the problem, this unprincipled 8% are enough to throw the entire election system in chaos. They want both more spending and less spending, as long as they get more spending and the nation as a whole gets less spending. If you can ration voting by race, gender or social class you can keep this 8% happy. White people or males can get more benefits and spending while the entire nation has to carry cuts.

The problem is that this is no longer possible, the Tea Party is probably a final breath of a long movement since the 1960 to hold power in the White Male heartland. But over time there are going to be too many different groups all able to vote to win elections by taking from the all and giving to the few.

Saturday, October 02, 2010

BBC - Stephanomics: A Tale of Two Borrowers

As it happens, governments can't go bankrupt - they can only default on their debt. But I'm not just being pedantic. The facts are that on the eve of the election, the UK still had an uncontested triple-AAA credit rating, and the market was demanding an interest rate of just 3.9% to lend the government money, compared to 3.7% for US bonds and 3.1% for Germany. (That UK rate might have been higher had investors not been expecting a Tory victory, but the average yield for the previous 12 months was about the same.) Whatever you think about the fiscal mess that the coalition inherited, these are not the characteristics of a country on the "brink" of bankruptcy or default.

BBC - Stephanomics: A Tale of Two Borrowers

Don't tell a Brit, they all seem to think the government is about to fold.