Thursday, March 24, 2011

Tsumami Economics

The current status of the American economy can be attributed in part to crony capitalism. Take General Electric and tie that into the green markets, with wind turbines, solar panels and even nuclear power. Without federal subsidies, there would not be a market for our friends or fiends, at the place where good things come to life. Is there really a free market for nuclear reactors? GE is into transportation, energy, public utilities as a supplier of equipment, the medical device industry.

Who supported Obama care, not I said the little man, but GE, said the Hobbsion gadfly. So he who rides on my plane so to tell, yet he must still remain, if we are to refrain in , said the prince of all that is Machiavellian. Why Mr. Immelt, I should say; but nave, is it not so, that I am for the forgotten man. No my prince, whom rules over all that is less then thou, it is truly in your best interest, to be feared, and not loved to distraction, in order to disguise the fear, with the need for a redeemer. Alas, then all shall love you as the great emancipator of the common ignorant, and perhaps, just maybe, you'll be the next emancipator of the constitutionaly chained, and done so with homage and utility .

Pull us up by the bootstraps and settle the score, as America is settled, and you my prince settled the score. Prop up the housing market with subsidies, with glee, and programs that are funded by the second QE. Who needs the basement he said with a sigh, when we have GSE to raise the risks to on high. To be brilliant or right, to be clever with facility, with data, intellectual cleverness, supported with quickness, less with fact, that is the persuasion.

Soren Kierkegaard once said, " Life can only be understood backward, but it must be lived forward." Take the notion that systemic risk can be somehow regulated through the bureaucracy, is likened to the Dodd-Frank act, as being a reefer of fiscal sanity. Economist Frank Knight once stated, that knowing in no uncertainty that you know the odds of future events, but in turn you cannot know the odds. So is uncertainty uncertain, of course not, it is as certain as not knowing the odds of knowing, the odds of certainty.

Take Sir Isaac Newton's rule, as it relates to the South Sea company of 1720 and its conjoined bubble. Mr. Newton purchased stock, doubles his investment and then sold out. Systemic risk, sure, uncertainty, why yes, ingenious, maybe not, a genius, not exactly. Well timed, sure at that moment before the bubble burst! Sir Isaac Newton, genius in his field, absolutely! A transferable genius in understanding systemic risk in market ventures, no way! Newton buys stock in the South Sea company again, as it's value rises, the market tanks, the bubble cooks off, and Isaac is left holding his Newtonian brilliance. In the aftermath, Sir Isaac Newton reflects on his understanding of the occasion as stated, "I can calculate the motions of the heavenly bodies, but not the madness of people."

To use intellect as a substitute for the practical, and cleverness as a gauge for reading the financial tea leafs, is dangerous at best. The dangers of good intention and persuasion, leads us to the micro encroachments of vested interests, and in turn contribute to the exaggeration of those ideas. Green energy, urban utopias, clean living via education and collective conditioning. GSE housing exchanges, the promise of an intellectual immortality, through science and technology. Clever as it may seem, the techno-sophisto has even suggested, that artificial intelligence has a place in reducing Systemic Risk.

Really: A.I. The intellectual seems to have with clever temptress, found another solution to quickly install a modem in which the argument can be made, based on persuasion alone. By affirming the affirmative, the sophisto, uses a modus ponens to establish so called fact, by branding the affirmed idea as fact. In fact, they argue that to be brilliant is to be right, in the fact that their premise forms the affirmation, that they must be right. Right; to play to the ideas of persuasion as Mr. Keynes once professed, " after a certain interval, soon or late, it is ideas, not vested interests which are dangerous, for good or evil." It is the Newton rule, that plays to the vested interests, that ride the economic wave of a Machiavellian brilliance that most certainty is, not always right.

No comments:

Post a Comment