santa…

I’ve been puzzling through this for some time. Some economics commentators, in my opinion, have trouble seeing past what they wantto happen versus what is actually likely to occur.

Reviews…

table…

and…

The question isn’t why people who are looking for jobs aren’t finding them. It’s trying to determine why attitudes have changed, and if they have indeed changed.

It’s a mistake to ignore the massive dis-incentives built into commerce. Time, attention, and capital are apparently flowing to less-impeded areas of activity. That, I find interesting. As for rising standards of living… I’m not sure that it counts as a “rising living standard” for kids to be moving back in with their parents, and for housing to be so incredibly expensive relative to wages compared to earlier in history.

That’s an interesting trading strategy. But bonds are not always low-risk, especially when compared against real rates of inflation.

There are some good biological reasons for wanting the average kid to be fairly independent by their early 20’s. For men it’s less relevant, but if women continue to delay marriage and reproduction, it becomes implausible for the average woman to get married and have kids at above the replacement rate. (And of course the frequency of birth defects goes way up as the mother ages, and slightly up as the father ages.)

Macro factors are a rounding error compared to individual performance. In bad recessions, around 85% of the people who want jobs have them; in good times, it’s about 95%.

If you’re really worried about getting wiped out, there’s a solution; put more of your net worth in bonds, and periodically buy puts on whatever index is making people giddiest at the moment.

Although when reading that Rolling Stone article about McChrystal, it reminded me of Rubicon by Tom Holland (http://www.amazon.com/Rubicon-Last-Years-Roman-Republic/dp/1400078970). It’s odd for military leaders to be so openly contemptuous of the civilian government. I’m not saying that there will be a coup – because I have no idea – but that this situation is not politics as usual.

There are many things that keep public finances and the dollar together (at least for now). I have a long post in draft that explains this. You would think, just from the perspective of basic economics, that it would all fall apart rapidly, but that neglects to take into account the tremendous power of the Federal Reserve and its member banks to manipulate prices. The role of foreign trade, regulation, and tax policy in terms of how it props up the value of the dollar is also little-understood.