Re: [FRIAM] The Uncertainty Tax
I know we all have our respective lenses through which we view the world and that these lenses determine the explanations to which we are most receptive, but if Mr. Friedman is talking about an inability to switch house as a reason some people aren't able to take new jobs, it would seem appropriate to also mention that many of the houses built during the last bubble were at the outer accretion layers of suburbia and not particularly close to any jobs. Its as if the people building these houses and the politicians maintaining policies that support their build assumed either (1.) oil will always be cheap and people wont mind spending 2 hours a day in their cars every working day or (2.) these houses wont ultimately be paid for by wages. One aggravating factor of the bust a few years ago which never gets as much mention as obscure financial instruments or banking malfeasance relates the spike in oil prices in 2007 to the initial wave of defaults in these outer suburbs. Granted, the people moving into these marginal outer layers were probably the most marginal credit risks, but its conceivable that any change for the worse could be all the more likely to put them over the edge and into default. I guess my bias is that I attribute too much to resource and energy scarcity. When I see an explanation for either the start of our current troubles or why we can't see an end, I expect it to ultimately reference these things. Although there are a few brief mentions of energy efficiency as it relates to productivity gains and as a possible source for new jobs in construction, this is pretty paltry when you consider how world energy production has basically flatlined, but there are many, many more consumers driving up its price (think of all the new cars sold in China each day). When I think of the U.S., I think we're almost uniquely disadvantaged by how spread out our cities have become in the last 60 years and how the only option for getting around that has been faithfully and consistently supported and encouraged is the personal car. On 20 Jun 2011, at 17:08, Owen Densmore wrote: Tom Friedman's Op Ed http://www.nytimes.com/2011/06/12/opinion/12friedman.html?_r=1partner=rssnytemc=rss He starts with shocking mortgage statistics, but then discusses unemployment and its causes via this report: http://www.mckinsey.com/mgi/publications/us_jobs/index.asp Quote: McKinsey Global Institute released a long study of the structural issues ailing the U.S. job market, entitled: “An Economy That Works: Job Creation and America’s Future.” It begins: “Only in the most optimistic scenario will the United States return to full employment before 2020. Achieving this outcome will require sustained demand growth, rising U.S. competitiveness in the global economy and better matching of U.S. workers to jobs.” Interestingly enough, they still feel education is important but stress areas of current need. BTW: The tech bubble folks are afraid of is likely NOT to be one. Marc Andreessen (admittedly a techie) has compiled P/E ratios of the new tech market and shows them to be well under traditional values. They'd please any conservative investor. Tom is concerned about the Uncertainty Tax .. our loss of production due to fear of downturn unknowns, but ends: Any good news? Yes, U.S. corporations are getting so productive and sitting on so much cash, just a few big, smart, bipartisan decisions by Congress on taxes and spending (and mortgages) and I think this whole economy starts to improve again. Workers with skills will be the first to be hired. -- Owen FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org
Re: [FRIAM] The Uncertainty Tax
our respective lenses You have your Apollonians and your Dionysians; Apollonians are your planters, your gardeners, your planners. They can defer pleasure because, for them, the future seems assured. Dionysians are your impulsive types: they grab pleasure and excitement now because the future is not assured. There are a LOT of Dionysians in the sfComplex. I think it's because advanced technology is so self-undermining and ephemeral. Opportunities come fast and are lost in a wink. Who can really plan? According to one complex sociobiological theory, these two personality types are laid down in infancy by the attachment relation. Were the circumstances that surrounding your primary caregiver (usually your mom) stable enough so that you could form a firm attachment to her? Or sufficiently unstable, that that attachment was in doubt. If the first, you are an Apollonian; if the latter a Dionysian. These two kinds of folks really cannot talk to one another because their assumptions about the future are so different. One of the most alarming features of our current political discourse in the united states is the way in which the modern Dionysians (libertarians, etc.) have tried to bridge the gap between these two personalities by asserting the Dionysian philosophy as a form of planning for the future. Ayn Rand; objectivism. It's kind of the reverse of the equally horrifying religion thing in which people without hope (who SHOULD be Dionysians) are recruited for Apollonian values by getting them to believe in an after-life. Both versions I deplore. They are confusions. Corruptions of the two basic approaches to life, both of which make Darwinian sense in their pure form. This sort of email is what happens when you put Thompson beside his weed-filled garden and then prevent him from doing anything about it by busting his knee. You probably will hear more from me in this vein. Ugh! Nick -Original Message- From: friam-boun...@redfish.com [mailto:friam-boun...@redfish.com] On Behalf Of Richard Harris Sent: Tuesday, June 21, 2011 1:02 PM To: The Friday Morning Applied Complexity Coffee Group Subject: Re: [FRIAM] The Uncertainty Tax I know we all have our respective lenses through which we view the world and that these lenses determine the explanations to which we are most receptive, but if Mr. Friedman is talking about an inability to switch house as a reason some people aren't able to take new jobs, it would seem appropriate to also mention that many of the houses built during the last bubble were at the outer accretion layers of suburbia and not particularly close to any jobs. Its as if the people building these houses and the politicians maintaining policies that support their build assumed either (1.) oil will always be cheap and people wont mind spending 2 hours a day in their cars every working day or (2.) these houses wont ultimately be paid for by wages. One aggravating factor of the bust a few years ago which never gets as much mention as obscure financial instruments or banking malfeasance relates the spike in oil prices in 2007 to the initial wave of defaults in these outer suburbs. Granted, the people moving into these marginal outer layers were probably the most marginal credit risks, but its conceivable that any change for the worse could be all the more likely to put them over the edge and into default. I guess my bias is that I attribute too much to resource and energy scarcity. When I see an explanation for either the start of our current troubles or why we can't see an end, I expect it to ultimately reference these things. Although there are a few brief mentions of energy efficiency as it relates to productivity gains and as a possible source for new jobs in construction, this is pretty paltry when you consider how world energy production has basically flatlined, but there are many, many more consumers driving up its price (think of all the new cars sold in China each day). When I think of the U.S., I think we're almost uniquely disadvantaged by how spread out our cities have become in the last 60 years and how the only option for getting around that has been faithfully and consistently supported and encouraged is the personal car. On 20 Jun 2011, at 17:08, Owen Densmore wrote: Tom Friedman's Op Ed http://www.nytimes.com/2011/06/12/opinion/12friedman.html?_r=1partner =rssnytemc=rss He starts with shocking mortgage statistics, but then discusses unemployment and its causes via this report: http://www.mckinsey.com/mgi/publications/us_jobs/index.asp Quote: McKinsey Global Institute released a long study of the structural issues ailing the U.S. job market, entitled: An Economy That Works: Job Creation and America's Future. It begins: Only in the most optimistic scenario will the United States return to full employment before 2020. Achieving this outcome will require sustained demand growth, rising U.S. competitiveness in the global
Re: [FRIAM] The Uncertainty Tax
Interesting way to parse an 'us versus them' situation. From my study and work with creatives, Dionysians are the classic artist type: great ideas, spontaneous behaviour, courting risk and adventure, off on their own and near an edge. Edges are interesting, because change happens there, and change can be good, often better than where one is in the moment. Apollonians come to people like me for help to loosen up and enjoy the unknown and find satisfaction and mastery within it. Particularly once they've realized that ultimately - and especially now - the known is fluctuating more wildly, and morphing into the unknown. Dionysians will tolerate change more easily and see it as positive, Apollonians will tolerate routine more easily and see it as positive. Victoria On Jun 21, 2011, at 12:03 PM, Nicholas Thompson wrote: our respective lenses You have your Apollonians and your Dionysians; Apollonians are your planters, your gardeners, your planners. They can defer pleasure because, for them, the future seems assured. Dionysians are your impulsive types: they grab pleasure and excitement now because the future is not assured. There are a LOT of Dionysians in the sfComplex. I think it's because advanced technology is so self-undermining and ephemeral. Opportunities come fast and are lost in a wink. Who can really plan? According to one complex sociobiological theory, these two personality types are laid down in infancy by the attachment relation. Were the circumstances that surrounding your primary caregiver (usually your mom) stable enough so that you could form a firm attachment to her? Or sufficiently unstable, that that attachment was in doubt. If the first, you are an Apollonian; if the latter a Dionysian. These two kinds of folks really cannot talk to one another because their assumptions about the future are so different. One of the most alarming features of our current political discourse in the united states is the way in which the modern Dionysians (libertarians, etc.) have tried to bridge the gap between these two personalities by asserting the Dionysian philosophy as a form of planning for the future. Ayn Rand; objectivism. It's kind of the reverse of the equally horrifying religion thing in which people without hope (who SHOULD be Dionysians) are recruited for Apollonian values by getting them to believe in an after-life. Both versions I deplore. They are confusions. Corruptions of the two basic approaches to life, both of which make Darwinian sense in their pure form. This sort of email is what happens when you put Thompson beside his weed-filled garden and then prevent him from doing anything about it by busting his knee. You probably will hear more from me in this vein. Ugh! Nick -Original Message- From: friam-boun...@redfish.com [mailto:friam-boun...@redfish.com] On Behalf Of Richard Harris Sent: Tuesday, June 21, 2011 1:02 PM To: The Friday Morning Applied Complexity Coffee Group Subject: Re: [FRIAM] The Uncertainty Tax I know we all have our respective lenses through which we view the world and that these lenses determine the explanations to which we are most receptive, but if Mr. Friedman is talking about an inability to switch house as a reason some people aren't able to take new jobs, it would seem appropriate to also mention that many of the houses built during the last bubble were at the outer accretion layers of suburbia and not particularly close to any jobs. Its as if the people building these houses and the politicians maintaining policies that support their build assumed either (1.) oil will always be cheap and people wont mind spending 2 hours a day in their cars every working day or (2.) these houses wont ultimately be paid for by wages. One aggravating factor of the bust a few years ago which never gets as much mention as obscure financial instruments or banking malfeasance relates the spike in oil prices in 2007 to the initial wave of defaults in these outer suburbs. Granted, the people moving into these marginal outer layers were probably the most marginal credit risks, but its conceivable that any change for the worse could be all the more likely to put them over the edge and into default. I guess my bias is that I attribute too much to resource and energy scarcity. When I see an explanation for either the start of our current troubles or why we can't see an end, I expect it to ultimately reference these things. Although there are a few brief mentions of energy efficiency as it relates to productivity gains and as a possible source for new jobs in construction, this is pretty paltry when you consider how world energy production has basically flatlined, but there are many, many more consumers driving up its price (think of all the new cars sold in China each day). When I think of the U.S., I think we're almost uniquely
Re: [FRIAM] The Uncertainty Tax
Tory Spoken like a Dionysian! Nick -Original Message- From: friam-boun...@redfish.com [mailto:friam-boun...@redfish.com] On Behalf Of Victoria Hughes Sent: Tuesday, June 21, 2011 2:19 PM To: The Friday Morning Applied Complexity Coffee Group Subject: Re: [FRIAM] The Uncertainty Tax Interesting way to parse an 'us versus them' situation. From my study and work with creatives, Dionysians are the classic artist type: great ideas, spontaneous behaviour, courting risk and adventure, off on their own and near an edge. Edges are interesting, because change happens there, and change can be good, often better than where one is in the moment. Apollonians come to people like me for help to loosen up and enjoy the unknown and find satisfaction and mastery within it. Particularly once they've realized that ultimately - and especially now - the known is fluctuating more wildly, and morphing into the unknown. Dionysians will tolerate change more easily and see it as positive, Apollonians will tolerate routine more easily and see it as positive. Victoria On Jun 21, 2011, at 12:03 PM, Nicholas Thompson wrote: our respective lenses You have your Apollonians and your Dionysians; Apollonians are your planters, your gardeners, your planners. They can defer pleasure because, for them, the future seems assured. Dionysians are your impulsive types: they grab pleasure and excitement now because the future is not assured. There are a LOT of Dionysians in the sfComplex. I think it's because advanced technology is so self-undermining and ephemeral. Opportunities come fast and are lost in a wink. Who can really plan? According to one complex sociobiological theory, these two personality types are laid down in infancy by the attachment relation. Were the circumstances that surrounding your primary caregiver (usually your mom) stable enough so that you could form a firm attachment to her? Or sufficiently unstable, that that attachment was in doubt. If the first, you are an Apollonian; if the latter a Dionysian. These two kinds of folks really cannot talk to one another because their assumptions about the future are so different. One of the most alarming features of our current political discourse in the united states is the way in which the modern Dionysians (libertarians, etc.) have tried to bridge the gap between these two personalities by asserting the Dionysian philosophy as a form of planning for the future. Ayn Rand; objectivism. It's kind of the reverse of the equally horrifying religion thing in which people without hope (who SHOULD be Dionysians) are recruited for Apollonian values by getting them to believe in an after-life. Both versions I deplore. They are confusions. Corruptions of the two basic approaches to life, both of which make Darwinian sense in their pure form. This sort of email is what happens when you put Thompson beside his weed-filled garden and then prevent him from doing anything about it by busting his knee. You probably will hear more from me in this vein. Ugh! Nick -Original Message- From: friam-boun...@redfish.com [mailto:friam-boun...@redfish.com] On Behalf Of Richard Harris Sent: Tuesday, June 21, 2011 1:02 PM To: The Friday Morning Applied Complexity Coffee Group Subject: Re: [FRIAM] The Uncertainty Tax I know we all have our respective lenses through which we view the world and that these lenses determine the explanations to which we are most receptive, but if Mr. Friedman is talking about an inability to switch house as a reason some people aren't able to take new jobs, it would seem appropriate to also mention that many of the houses built during the last bubble were at the outer accretion layers of suburbia and not particularly close to any jobs. Its as if the people building these houses and the politicians maintaining policies that support their build assumed either (1.) oil will always be cheap and people wont mind spending 2 hours a day in their cars every working day or (2.) these houses wont ultimately be paid for by wages. One aggravating factor of the bust a few years ago which never gets as much mention as obscure financial instruments or banking malfeasance relates the spike in oil prices in 2007 to the initial wave of defaults in these outer suburbs. Granted, the people moving into these marginal outer layers were probably the most marginal credit risks, but its conceivable that any change for the worse could be all the more likely to put them over the edge and into default. I guess my bias is that I attribute too much to resource and energy scarcity. When I see an explanation for either the start of our current troubles or why we can't see an end, I expect it to ultimately reference these things. Although there are a few brief mentions of energy efficiency as it relates to productivity gains and as a possible source
Re: [FRIAM] The Uncertainty Tax
Nick -- You may also be familiar with Charles Handy's book The Gods of Management, which expands the Apollonians and Dionysians to a couple of other dimensions: Zeus, to express the power cult of personality around a founder/visionary, and Athena, the idea of a distributed meritocracy based on creativity. http://www.oup.com/us/catalog/general/subject/Business/Management/?view=usaci=9780195096170 - Claiborne - On Jun 21, 2011, at 14:03, Nicholas Thompson nickthomp...@earthlink.net wrote: our respective lenses You have your Apollonians and your Dionysians; Apollonians are your planters, your gardeners, your planners. They can defer pleasure because, for them, the future seems assured. Dionysians are your impulsive types: they grab pleasure and excitement now because the future is not assured. There are a LOT of Dionysians in the sfComplex. I think it's because advanced technology is so self-undermining and ephemeral. Opportunities come fast and are lost in a wink. Who can really plan? According to one complex sociobiological theory, these two personality types are laid down in infancy by the attachment relation. Were the circumstances that surrounding your primary caregiver (usually your mom) stable enough so that you could form a firm attachment to her? Or sufficiently unstable, that that attachment was in doubt. If the first, you are an Apollonian; if the latter a Dionysian. These two kinds of folks really cannot talk to one another because their assumptions about the future are so different. One of the most alarming features of our current political discourse in the united states is the way in which the modern Dionysians (libertarians, etc.) have tried to bridge the gap between these two personalities by asserting the Dionysian philosophy as a form of planning for the future. Ayn Rand; objectivism. It's kind of the reverse of the equally horrifying religion thing in which people without hope (who SHOULD be Dionysians) are recruited for Apollonian values by getting them to believe in an after-life. Both versions I deplore. They are confusions. Corruptions of the two basic approaches to life, both of which make Darwinian sense in their pure form. This sort of email is what happens when you put Thompson beside his weed-filled garden and then prevent him from doing anything about it by busting his knee. You probably will hear more from me in this vein. Ugh! Nick -Original Message- From: friam-boun...@redfish.com [mailto:friam-boun...@redfish.com] On Behalf Of Richard Harris Sent: Tuesday, June 21, 2011 1:02 PM To: The Friday Morning Applied Complexity Coffee Group Subject: Re: [FRIAM] The Uncertainty Tax I know we all have our respective lenses through which we view the world and that these lenses determine the explanations to which we are most receptive, but if Mr. Friedman is talking about an inability to switch house as a reason some people aren't able to take new jobs, it would seem appropriate to also mention that many of the houses built during the last bubble were at the outer accretion layers of suburbia and not particularly close to any jobs. Its as if the people building these houses and the politicians maintaining policies that support their build assumed either (1.) oil will always be cheap and people wont mind spending 2 hours a day in their cars every working day or (2.) these houses wont ultimately be paid for by wages. One aggravating factor of the bust a few years ago which never gets as much mention as obscure financial instruments or banking malfeasance relates the spike in oil prices in 2007 to the initial wave of defaults in these outer suburbs. Granted, the people moving into these marginal outer layers were probably the most marginal credit risks, but its conceivable that any change for the worse could be all the more likely to put them over the edge and into default. I guess my bias is that I attribute too much to resource and energy scarcity. When I see an explanation for either the start of our current troubles or why we can't see an end, I expect it to ultimately reference these things. Although there are a few brief mentions of energy efficiency as it relates to productivity gains and as a possible source for new jobs in construction, this is pretty paltry when you consider how world energy production has basically flatlined, but there are many, many more consumers driving up its price (think of all the new cars sold in China each day). When I think of the U.S., I think we're almost uniquely disadvantaged by how spread out our cities have become in the last 60 years and how the only option for getting around that has been faithfully and consistently supported and encouraged is the personal car. On 20 Jun 2011, at 17:08, Owen Densmore wrote: Tom Friedman's Op Ed http://www.nytimes.com/2011/06/12/opinion/12friedman.html?_r=1partner =rssnytemc
[FRIAM] The Uncertainty Tax
Tom Friedman's Op Ed http://www.nytimes.com/2011/06/12/opinion/12friedman.html?_r=1partner=rssnytemc=rss He starts with shocking mortgage statistics, but then discusses unemployment and its causes via this report: http://www.mckinsey.com/mgi/publications/us_jobs/index.asp Quote: McKinsey Global Institute released a long study of the structural issues ailing the U.S. job market, entitled: “An Economy That Works: Job Creation and America’s Future.” It begins: “Only in the most optimistic scenario will the United States return to full employment before 2020. Achieving this outcome will require sustained demand growth, rising U.S. competitiveness in the global economy and better matching of U.S. workers to jobs.” Interestingly enough, they still feel education is important but stress areas of current need. BTW: The tech bubble folks are afraid of is likely NOT to be one. Marc Andreessen (admittedly a techie) has compiled P/E ratios of the new tech market and shows them to be well under traditional values. They'd please any conservative investor. Tom is concerned about the Uncertainty Tax .. our loss of production due to fear of downturn unknowns, but ends: Any good news? Yes, U.S. corporations are getting so productive and sitting on so much cash, just a few big, smart, bipartisan decisions by Congress on taxes and spending (and mortgages) and I think this whole economy starts to improve again. Workers with skills will be the first to be hired. -- Owen FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org
Re: [FRIAM] The Uncertainty Tax
I'm, pretty skeptical about the uncertainty argument. That seems to me to be a Republican ploy to argue for lower taxes, which in their view is the solution no matter what the problem is. For the most part companies aren't hiring or adding new production capacity because there isn't the demand to justify it. But there are some things that can be done. Here are some very ideas that Bill Clinton is suggestinghttp://www.newsweek.com/2011/06/19/it-s-still-the-economy-stupid.html?om_rid=NsjYaGom_mid=_BN-tYsB8bvt0mT. We miss him as president. *-- Russ Abbott* *_* *** Professor, Computer Science* * California State University, Los Angeles* * Google voice: 747-*999-5105 * blog: *http://russabbott.blogspot.com/ vita: http://sites.google.com/site/russabbott/ *_* On Mon, Jun 20, 2011 at 9:08 AM, Owen Densmore o...@backspaces.net wrote: Tom Friedman's Op Ed http://www.nytimes.com/2011/06/12/opinion/12friedman.html?_r=1partner=rssnytemc=rss He starts with shocking mortgage statistics, but then discusses unemployment and its causes via this report: http://www.mckinsey.com/mgi/publications/us_jobs/index.asp Quote: McKinsey Global Institute released a long study of the structural issues ailing the U.S. job market, entitled: “An Economy That Works: Job Creation and America’s Future.” It begins: “Only in the most optimistic scenario will the United States return to full employment before 2020. Achieving this outcome will require sustained demand growth, rising U.S. competitiveness in the global economy and better matching of U.S. workers to jobs.” Interestingly enough, they still feel education is important but stress areas of current need. BTW: The tech bubble folks are afraid of is likely NOT to be one. Marc Andreessen (admittedly a techie) has compiled P/E ratios of the new tech market and shows them to be well under traditional values. They'd please any conservative investor. Tom is concerned about the Uncertainty Tax .. our loss of production due to fear of downturn unknowns, but ends: Any good news? Yes, U.S. corporations are getting so productive and sitting on so much cash, just a few big, smart, bipartisan decisions by Congress on taxes and spending (and mortgages) and I think this whole economy starts to improve again. Workers with skills will be the first to be hired. -- Owen FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org
Re: [FRIAM] The Uncertainty Tax
Russ, The uncertainty arguments definitely have merit. Overly-confident people spend money like crazy and keep very little savings (in more sane times they were called manic, now they are called middle class). Even mildly-worried people spend carefully and have savings (in more sane times they were called prudent, now they are called the people killing the economy or unAmerican). If you measure the health of the economy based on the number of times the same dollar changes hands, then the more confident people are, the better the economy is doing. Ditto if you measure the health of the economy based on stock prices. The problem is that it is a pretty weird numbers game. Bubble used to be the word we used to indicate that values were out of whack, and that something was fundamentally wrong. Now bubble is the word we use to refer to the good times we wish we were in again. So... If you think the economy should be where it was during the bubble, then indeed people's otherwise totally reasonable seeming uncertainty is a problem. :- ) Eric On Mon, Jun 20, 2011 01:39 PM, Russ Abbott russ.abb...@gmail.com wrote: I'm, pretty skeptical about the uncertainty argument. That seems to me to be a Republican ploy to argue for lower taxes, which in their view is the solution no matter what the problem is. For the most part companies aren't hiring or adding new production capacity because there isn't the demand to justify it. But there are some things that can be done. Here are some very ideas that Bill Clinton is http://www.newsweek.com/2011/06/19/it-s-still-the-economy-stupid.html?om_rid=NsjYaGom_mid=_BN-tYsB8bvt0mT. We miss him as president. -- Russ Abbott _ Professor, Computer Science California State University, Los Angeles Google voice: 747-999-5105 blog: http://russabbott.blogspot.com/ vita: http://sites.google.com/site/russabbott/ _ On Mon, Jun 20, 2011 at 9:08 AM, Owen Densmore # wrote: Tom Friedman's Op Ed http://www.nytimes.com/2011/06/12/opinion/12friedman.html?_r=1partner=rssnytemc=rss He starts with shocking mortgage statistics, but then discusses unemployment and its causes via this report: http://www.mckinsey.com/mgi/publications/us_jobs/index.asp Quote: McKinsey Global Institute released a long study of the structural issues ailing the U.S. job market, entitled: “An Economy That Works: Job Creation and America’s Future.” It begins: “Only in the most optimistic scenario will the United States return to full employment before 2020. Achieving this outcome will require sustained demand growth, rising U.S. competitiveness in the global economy and better matching of U.S. workers to jobs.” Interestingly enough, they still feel education is important but stress areas of current need. BTW: The tech bubble folks are afraid of is likely NOT to be one. Marc Andreessen (admittedly a techie) has compiled P/E ratios of the new tech market and shows them to be well under traditional values. They'd please any conservative investor. Tom is concerned about the Uncertainty Tax .. our loss of production due to fear of downturn unknowns, but ends: Any good news? Yes, U.S. corporations are getting so productive and sitting on so much cash, just a few big, smart, bipartisan decisions by Congress on taxes and spending (and mortgages) and I think this whole economy starts to improve again. Workers with skills will be the first to be hired. -- Owen FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org Eric Charles Professional Student and Assistant Professor of Psychology Penn State University Altoona, PA 16601 FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org
Re: [FRIAM] The Uncertainty Tax
Great pointer to Clinton's points. In terms of uncertainty, I think there are two different kinds being discussed. - The republicans discuss certainty in regulations and new laws. - Tom discusses certainty of the job market and downturn direction. -- Owen On Mon, Jun 20, 2011 at 11:39 AM, Russ Abbott russ.abb...@gmail.com wrote: I'm, pretty skeptical about the uncertainty argument. That seems to me to be a Republican ploy to argue for lower taxes, which in their view is the solution no matter what the problem is. For the most part companies aren't hiring or adding new production capacity because there isn't the demand to justify it. But there are some things that can be done. Here are some very ideas that Bill Clinton is suggesting. We miss him as president. -- Russ Abbott _ Professor, Computer Science California State University, Los Angeles Google voice: 747-999-5105 blog: http://russabbott.blogspot.com/ vita: http://sites.google.com/site/russabbott/ _ On Mon, Jun 20, 2011 at 9:08 AM, Owen Densmore o...@backspaces.net wrote: Tom Friedman's Op Ed http://www.nytimes.com/2011/06/12/opinion/12friedman.html?_r=1partner=rssnytemc=rss He starts with shocking mortgage statistics, but then discusses unemployment and its causes via this report: http://www.mckinsey.com/mgi/publications/us_jobs/index.asp Quote: McKinsey Global Institute released a long study of the structural issues ailing the U.S. job market, entitled: “An Economy That Works: Job Creation and America’s Future.” It begins: “Only in the most optimistic scenario will the United States return to full employment before 2020. Achieving this outcome will require sustained demand growth, rising U.S. competitiveness in the global economy and better matching of U.S. workers to jobs.” Interestingly enough, they still feel education is important but stress areas of current need. BTW: The tech bubble folks are afraid of is likely NOT to be one. Marc Andreessen (admittedly a techie) has compiled P/E ratios of the new tech market and shows them to be well under traditional values. They'd please any conservative investor. Tom is concerned about the Uncertainty Tax .. our loss of production due to fear of downturn unknowns, but ends: Any good news? Yes, U.S. corporations are getting so productive and sitting on so much cash, just a few big, smart, bipartisan decisions by Congress on taxes and spending (and mortgages) and I think this whole economy starts to improve again. Workers with skills will be the first to be hired. -- Owen FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org
Re: [FRIAM] The Uncertainty Tax
This post by Brad DeLonghttp://delong.typepad.com/sdj/2011/06/collapse-of-the-chicago-school-gary-becker-edition.html talks about business investment, when it collapsed (before Obama took office), and how it's done since then, which is quite well. That's not consistent with the uncertainty story most Republican politicians are trying to sell. I'm not clear about what you (Eric) are getting at in your post. You start out by saying that the uncertainty arguments have merit, but then you seem to go on to say that spending when uncertainty is low is a bubble. So what are you saying? For the most part people are not spending money because they are too much in debt or don't have jobs. That's not a matter of what Republicans are referring to as uncertainty. With respect to uncertainty due to new regulations, I'll believe it when you can show me all the new regulations that have been put in place in the past 2 years. (Very few!) With respect to uncertainty in the job market, that certainly is the case. How can that be reduced? A good way is for the government to take on the responsibility of providing jobs when the private sector can't. But the people complaining about uncertainty are not likely to allow that any time soon. One of the functions of government is to help smooth out the uncertainty of the business cycle. The people complaining about uncertainty want to eliminate that function--thereby increasing uncertainty. And speaking of uncertainty, all this demagoguery about the debt limit isn't helping to reduce uncertainty, but it's the people complaining about uncertainty that are the primary debt-limit demagogues. In my mind, the only thing certain about the discussion of uncertainty is that it's almost all political and has virtually nothing to do with economics. *-- Russ Abbott* *_* *** Professor, Computer Science* * California State University, Los Angeles* * Google voice: 747-*999-5105 * blog: *http://russabbott.blogspot.com/ vita: http://sites.google.com/site/russabbott/ *_* On Mon, Jun 20, 2011 at 1:55 PM, Owen Densmore o...@backspaces.net wrote: Great pointer to Clinton's points. In terms of uncertainty, I think there are two different kinds being discussed. - The republicans discuss certainty in regulations and new laws. - Tom discusses certainty of the job market and downturn direction. -- Owen On Mon, Jun 20, 2011 at 11:39 AM, Russ Abbott russ.abb...@gmail.com wrote: I'm, pretty skeptical about the uncertainty argument. That seems to me to be a Republican ploy to argue for lower taxes, which in their view is the solution no matter what the problem is. For the most part companies aren't hiring or adding new production capacity because there isn't the demand to justify it. But there are some things that can be done. Here are some very ideas that Bill Clinton is suggesting. We miss him as president. -- Russ Abbott _ Professor, Computer Science California State University, Los Angeles Google voice: 747-999-5105 blog: http://russabbott.blogspot.com/ vita: http://sites.google.com/site/russabbott/ _ On Mon, Jun 20, 2011 at 9:08 AM, Owen Densmore o...@backspaces.net wrote: Tom Friedman's Op Ed http://www.nytimes.com/2011/06/12/opinion/12friedman.html?_r=1partner=rssnytemc=rss He starts with shocking mortgage statistics, but then discusses unemployment and its causes via this report: http://www.mckinsey.com/mgi/publications/us_jobs/index.asp Quote: McKinsey Global Institute released a long study of the structural issues ailing the U.S. job market, entitled: “An Economy That Works: Job Creation and America’s Future.” It begins: “Only in the most optimistic scenario will the United States return to full employment before 2020. Achieving this outcome will require sustained demand growth, rising U.S. competitiveness in the global economy and better matching of U.S. workers to jobs.” Interestingly enough, they still feel education is important but stress areas of current need. BTW: The tech bubble folks are afraid of is likely NOT to be one. Marc Andreessen (admittedly a techie) has compiled P/E ratios of the new tech market and shows them to be well under traditional values. They'd please any conservative investor. Tom is concerned about the Uncertainty Tax .. our loss of production due to fear of downturn unknowns, but ends: Any good news? Yes, U.S. corporations are getting so productive and sitting on so much cash, just a few big, smart, bipartisan decisions by Congress on taxes and spending (and mortgages) and I think this whole economy starts to improve again. Workers with skills will be the first to be hired. -- Owen
Re: [FRIAM] The Uncertainty Tax
If you go to regulations.gov and select newly posted regulations, you'll see that there's been 24,476 of them in the last year. For me, that seems quite a lot. But I'm not a trained academic, so perhaps my reading speed is abnormally low. —R On Mon, Jun 20, 2011 at 3:06 PM, Russ Abbott russ.abb...@gmail.com wrote: snip With respect to uncertainty due to new regulations, I'll believe it when you can show me all the new regulations that have been put in place in the past 2 years. (Very few!) snip *-- Russ Abbott* *_* *** Professor, Computer Science* * California State University, Los Angeles* * Google voice: 747-*999-5105 * blog: *http://russabbott.blogspot.com/ vita: http://sites.google.com/site/russabbott/ *_* On Mon, Jun 20, 2011 at 1:55 PM, Owen Densmore o...@backspaces.netwrote: Great pointer to Clinton's points. In terms of uncertainty, I think there are two different kinds being discussed. - The republicans discuss certainty in regulations and new laws. - Tom discusses certainty of the job market and downturn direction. -- Owen On Mon, Jun 20, 2011 at 11:39 AM, Russ Abbott russ.abb...@gmail.com wrote: I'm, pretty skeptical about the uncertainty argument. That seems to me to be a Republican ploy to argue for lower taxes, which in their view is the solution no matter what the problem is. For the most part companies aren't hiring or adding new production capacity because there isn't the demand to justify it. But there are some things that can be done. Here are some very ideas that Bill Clinton is suggesting. We miss him as president. -- Russ Abbott _ Professor, Computer Science California State University, Los Angeles Google voice: 747-999-5105 blog: http://russabbott.blogspot.com/ vita: http://sites.google.com/site/russabbott/ _ On Mon, Jun 20, 2011 at 9:08 AM, Owen Densmore o...@backspaces.net wrote: Tom Friedman's Op Ed http://www.nytimes.com/2011/06/12/opinion/12friedman.html?_r=1partner=rssnytemc=rss He starts with shocking mortgage statistics, but then discusses unemployment and its causes via this report: http://www.mckinsey.com/mgi/publications/us_jobs/index.asp Quote: McKinsey Global Institute released a long study of the structural issues ailing the U.S. job market, entitled: “An Economy That Works: Job Creation and America’s Future.” It begins: “Only in the most optimistic scenario will the United States return to full employment before 2020. Achieving this outcome will require sustained demand growth, rising U.S. competitiveness in the global economy and better matching of U.S. workers to jobs.” Interestingly enough, they still feel education is important but stress areas of current need. BTW: The tech bubble folks are afraid of is likely NOT to be one. Marc Andreessen (admittedly a techie) has compiled P/E ratios of the new tech market and shows them to be well under traditional values. They'd please any conservative investor. Tom is concerned about the Uncertainty Tax .. our loss of production due to fear of downturn unknowns, but ends: Any good news? Yes, U.S. corporations are getting so productive and sitting on so much cash, just a few big, smart, bipartisan decisions by Congress on taxes and spending (and mortgages) and I think this whole economy starts to improve again. Workers with skills will be the first to be hired. -- Owen FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org
Re: [FRIAM] The Uncertainty Tax
Looks like the listings under newly posted regulations include posted comments on proposed regulations and posted announcements of applications for permits under existing regulations. I've looked at 11 postings and there wasn't a new regulation to be seen. -- rec -- On Mon, Jun 20, 2011 at 4:02 PM, Robert Holmes rob...@holmesacosta.comwrote: If you go to regulations.gov and select newly posted regulations, you'll see that there's been 24,476 of them in the last year. For me, that seems quite a lot. But I'm not a trained academic, so perhaps my reading speed is abnormally low. —R On Mon, Jun 20, 2011 at 3:06 PM, Russ Abbott russ.abb...@gmail.comwrote: snip With respect to uncertainty due to new regulations, I'll believe it when you can show me all the new regulations that have been put in place in the past 2 years. (Very few!) snip *-- Russ Abbott* *_* *** Professor, Computer Science* * California State University, Los Angeles* * Google voice: 747-*999-5105 * blog: *http://russabbott.blogspot.com/ vita: http://sites.google.com/site/russabbott/ *_* On Mon, Jun 20, 2011 at 1:55 PM, Owen Densmore o...@backspaces.netwrote: Great pointer to Clinton's points. In terms of uncertainty, I think there are two different kinds being discussed. - The republicans discuss certainty in regulations and new laws. - Tom discusses certainty of the job market and downturn direction. -- Owen On Mon, Jun 20, 2011 at 11:39 AM, Russ Abbott russ.abb...@gmail.com wrote: I'm, pretty skeptical about the uncertainty argument. That seems to me to be a Republican ploy to argue for lower taxes, which in their view is the solution no matter what the problem is. For the most part companies aren't hiring or adding new production capacity because there isn't the demand to justify it. But there are some things that can be done. Here are some very ideas that Bill Clinton is suggesting. We miss him as president. -- Russ Abbott _ Professor, Computer Science California State University, Los Angeles Google voice: 747-999-5105 blog: http://russabbott.blogspot.com/ vita: http://sites.google.com/site/russabbott/ _ On Mon, Jun 20, 2011 at 9:08 AM, Owen Densmore o...@backspaces.net wrote: Tom Friedman's Op Ed http://www.nytimes.com/2011/06/12/opinion/12friedman.html?_r=1partner=rssnytemc=rss He starts with shocking mortgage statistics, but then discusses unemployment and its causes via this report: http://www.mckinsey.com/mgi/publications/us_jobs/index.asp Quote: McKinsey Global Institute released a long study of the structural issues ailing the U.S. job market, entitled: “An Economy That Works: Job Creation and America’s Future.” It begins: “Only in the most optimistic scenario will the United States return to full employment before 2020. Achieving this outcome will require sustained demand growth, rising U.S. competitiveness in the global economy and better matching of U.S. workers to jobs.” Interestingly enough, they still feel education is important but stress areas of current need. BTW: The tech bubble folks are afraid of is likely NOT to be one. Marc Andreessen (admittedly a techie) has compiled P/E ratios of the new tech market and shows them to be well under traditional values. They'd please any conservative investor. Tom is concerned about the Uncertainty Tax .. our loss of production due to fear of downturn unknowns, but ends: Any good news? Yes, U.S. corporations are getting so productive and sitting on so much cash, just a few big, smart, bipartisan decisions by Congress on taxes and spending (and mortgages) and I think this whole economy starts to improve again. Workers with skills will be the first to be hired. -- Owen FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org FRIAM Applied
Re: [FRIAM] The Uncertainty Tax
I take it back. The government does run a large bureaucracy and is constantly revising its processes and procedures. The government is particularly vulnerable to having to publish its policy and procedure changes because it's supposed to operate transparently. The real question is the extent to which these revisions impede business. I suspect it's minimal, although I can imagine that if one were concerned with having to keep up with them all, just that burden might be substantial. Are there good examples of rule changes that impose a major burden on the economy? I'd be interested in seeing them. The question then becomes whether the cost is worth the benefit. For each rule change one can certainly argue both sides. In following Robert's pointer I picked one that looked interesting. It reads as follows. SUMMARY: The Food and Nutrition Service (FNS) is proposing changes to the Supplemental Nutrition Assistance Program (SNAP) regulations pertaining to SNAP client benefit use, participation of retail food stores and wholesale food concerns in SNAP, and SNAP client participation in the Food Distribution Program on Indian Reservations (FDPIR). These changes to SNAP regulations address mandatory provisions of the Food, Conservation, and Energy Act of 2008 (hereinafter referred to as ``the 2008 Farm Bill'') to allow for the disqualification of a SNAP client who purchases, with SNAP benefits, products that have container deposits for the purpose of subsequently discarding the product and returning the container(s) in exchange for cash refund of deposit(s) and/or resells or exchanges products purchased with SNAP benefits for purposes of obtaining cash or other non-eligible items. Apparently people were using their Food benefits to buy products that came in containers for which rebates were available when the container was returned. They then threw away the food and got cash back for the container. This rule change disqualifies people who do that from the Food benefit program. Should the Food and Nutrition Service have bothered to make this regulation? Is it worth the time of a government employee to do this? I don't know. It doesn't look like it puts roadblocks in the way of economic progress, though. These are the sorts of things one must live with whenever one has a bureaucracy. I'm constantly getting notices from credit card companies, banks, and insurance companies about how their terms of service are being changed. (Normally, they just send the new terms of service and don't highlight the changes. I think that's worse.) I can't say I spend much time reading them. As a trained academic, that's my take on the steam of rules. *-- Russ Abbott* *_* *** Professor, Computer Science* * California State University, Los Angeles* * Google voice: 747-*999-5105 * blog: *http://russabbott.blogspot.com/ vita: http://sites.google.com/site/russabbott/ *_* On Mon, Jun 20, 2011 at 3:17 PM, Roger Critchlow r...@elf.org wrote: Looks like the listings under newly posted regulations include posted comments on proposed regulations and posted announcements of applications for permits under existing regulations. I've looked at 11 postings and there wasn't a new regulation to be seen. -- rec -- On Mon, Jun 20, 2011 at 4:02 PM, Robert Holmes rob...@holmesacosta.comwrote: If you go to regulations.gov and select newly posted regulations, you'll see that there's been 24,476 of them in the last year. For me, that seems quite a lot. But I'm not a trained academic, so perhaps my reading speed is abnormally low. —R On Mon, Jun 20, 2011 at 3:06 PM, Russ Abbott russ.abb...@gmail.comwrote: snip With respect to uncertainty due to new regulations, I'll believe it when you can show me all the new regulations that have been put in place in the past 2 years. (Very few!) snip *-- Russ Abbott* *_* *** Professor, Computer Science* * California State University, Los Angeles* * Google voice: 747-*999-5105 * blog: *http://russabbott.blogspot.com/ vita: http://sites.google.com/site/russabbott/ *_* On Mon, Jun 20, 2011 at 1:55 PM, Owen Densmore o...@backspaces.netwrote: Great pointer to Clinton's points. In terms of uncertainty, I think there are two different kinds being discussed. - The republicans discuss certainty in regulations and new laws. - Tom discusses certainty of the job market and downturn direction. -- Owen On Mon, Jun 20, 2011 at 11:39 AM, Russ Abbott russ.abb...@gmail.com wrote: I'm, pretty skeptical about the uncertainty argument. That seems to me to be a Republican ploy to argue for lower taxes, which in their view is the solution no matter what the problem is. For the most part companies aren't hiring or adding new production capacity because there isn't the demand to
Re: [FRIAM] The Uncertainty Tax
I am not an expert on economics by any means, but there are some economic arguments I think I understand, including the uncertainty argument. What follows will be a somewhat sloppy mix of psychology and economics: When people - individual consumers, investors, business owners, etc. - are uncertain about what is happening in the market they get worried. When they are worried, they tighten up on spending. Bizarrely (IMHO) people often tighten up beyond the level of the worst-case scenario they are worried about, because the uncertainty makes them even more worried than they would be if they were certain that the worst-case scenario was going to happen. Two examples: First example. My wife invites people over for a party. She invites 20 people, but gets only 3 RSVPs to attend, with most people not getting back to her at all. She becomes very distraught over this. At some point I interject, Well, how bad would it be if only 3 people show up? I guess that wouldn't be too bad, she replies. Well, I tell her, how about you not be more worried than you would be if you knew for sure that only those 3 people were showing up. She thinks for a bit and then gets less worried. Second example. Let's say that my brother is part owner of a company that installs solar panels. Let's say that his two work crews are pretty busy, and he is thinking about hiring a third. If he is confident the business will continue to grow at it's current rate, he would hire them in a heartbeat. But in these economic times, he needs to seriously balance the potential for future profit with a third crew vs. the risk of having to pay employees to sit around and do nothing if he can't get those jobs. The more uncertain the future seems, the less likely he is to take that risk. Note: Like the party example, the question should come down to a simple economic analysis of something like Well, if you only had the jobs you currently have contracted, how screwed could you possibly be with a third crew? Likely the answer is something like Well, that wouldn't be so bad for at least the next six months, and because we take orders well in advance we'd have a lot of advanced warning if it was going to be a problem. But most people are not that rational. The fact that things are going south in Greece, that we are bombing Lybia, that Apple stock dropped 20% in the last two weeks, that you heard unemployment jumped in some other part of the country, that Glen Beck again predicts that the dollar with be worthless in 6 months, and all sorts of other things sure seem relevant. A non-rational mind is just worried and uncertain about the ambiguous future, and when you are worried you tighten up - no new hires, no big spending, the economy slows down. (P.S. My brother is pretty rational, they hired the third crew.) So, if you assume that business inherently involves risk, then people should always be worried. But, we can also assume that most business is actually fairly predictable, at least in the medium term, so they shouldn't be too worried. This is the basis for a stable, grounded economy, one filled with prudent men of industry. How do we then judge the current situation? Well, there are two things that seem very important to me. First, by many measures things would be better if people felt more certain. People would spend more, banks would give more loans, businesses would hire more, etc., etc., etc. However, it is my personal belief that part of the reason that we keep bubbling over and making a mess of the economy is because people get too confident. My intuition is that a confident business man in 1998 or 2007 bore little resemblance to the confident business man of yesteryear. The confident business man of yesteryear thought things would go well, but was still concerned with putting on too much debt, still judged each investment carefully, etc. (Isn't my hindsight rosy?) However, the confident business man of 1998 thought anything with .com after its name had to be a billion dollar company, and a confident business man of 2007 simply thought there was no end to how many condos people would need in Florida. The former, despite the investor having little idea what the company did, how it was managed, etc. The latter, despite the investor having no information on how many people need houses in Florida, how many other houses were in construction, etc.; and especially in the latter case the investor had no problem borrowing out the wazoo to fund the investments. So, it seems to me that the current lack of confidence is a proper corrective measure that is actually moving people back towards sanity. I suspect that the recent bubbles were the result of what would, in almost any other contexts, be viewed as clinically insane overconfidence. The question that remains up for grabs is whether 1) our economy is now at a sane point, and we should just be happy that the uncertainty level is reasonable, or 2) if we are now even less confident than we should
Re: [FRIAM] The Uncertainty Tax
There are two (at least) sides to the uncertainty issue. One (the one I was reacting to) is the claim by Republicans that if only Obama would be more business friendly, businesses would feel more certain would hire more people, and would solve all our unemployment problem. I think that's a lot of BS. The other, which is what I suppose Eric is talking about, is about people acting differently depending on how certain they feel. That seems like a perfectly reasonable thing to say, almost tautological in fact. *-- Russ Abbott* *_* *** Professor, Computer Science* * California State University, Los Angeles* * Google voice: 747-*999-5105 * blog: *http://russabbott.blogspot.com/ vita: http://sites.google.com/site/russabbott/ *_* On Mon, Jun 20, 2011 at 10:11 PM, ERIC P. CHARLES e...@psu.edu wrote: I am not an expert on economics by any means, but there are some economic arguments I think I understand, including the uncertainty argument. What follows will be a somewhat sloppy mix of psychology and economics: When people - individual consumers, investors, business owners, etc. - are uncertain about what is happening in the market they get worried. When they are worried, they tighten up on spending. Bizarrely (IMHO) people often tighten up beyond the level of the worst-case scenario they are worried about, because the uncertainty makes them even more worried than they would be if they were certain that the worst-case scenario was going to happen. Two examples: First example. My wife invites people over for a party. She invites 20 people, but gets only 3 RSVPs to attend, with most people not getting back to her at all. She becomes very distraught over this. At some point I interject, Well, how bad would it be if only 3 people show up? I guess that wouldn't be too bad, she replies. Well, I tell her, how about you not be more worried than you would be if you knew for sure that only those 3 people were showing up. She thinks for a bit and then gets less worried. Second example. Let's say that my brother is part owner of a company that installs solar panels. Let's say that his two work crews are pretty busy, and he is thinking about hiring a third. If he is confident the business will continue to grow at it's current rate, he would hire them in a heartbeat. But in these economic times, he needs to seriously balance the potential for future profit with a third crew vs. the risk of having to pay employees to sit around and do nothing if he can't get those jobs. The more uncertain the future seems, the less likely he is to take that risk. Note: Like the party example, the question should come down to a simple economic analysis of something like Well, if you only had the jobs you currently have contracted, how screwed could you possibly be with a third crew? Likely the answer is something like Well, that wouldn't be so bad for at least the next six months, and because we take orders well in advance we'd have a lot of advanced warning if it was going to be a problem. But most people are not that rational. The fact that things are going south in Greece, that we are bombing Lybia, that Apple stock dropped 20% in the last two weeks, that you heard unemployment jumped in some other part of the country, that Glen Beck again predicts that the dollar with be worthless in 6 months, and all sorts of other things sure seem relevant. A non-rational mind is just worried and uncertain about the ambiguous future, and when you are worried you tighten up - no new hires, no big spending, the economy slows down. (P.S. My brother is pretty rational, they hired the third crew.) So, if you assume that business inherently involves risk, then people should always be worried. But, we can also assume that most business is actually fairly predictable, at least in the medium term, so they shouldn't be too worried. This is the basis for a stable, grounded economy, one filled with prudent men of industry. How do we then judge the current situation? Well, there are two things that seem very important to me. First, by many measures things would be better if people felt more certain. People would spend more, banks would give more loans, businesses would hire more, etc., etc., etc. However, it is my personal belief that part of the reason that we keep bubbling over and making a mess of the economy is because people get too confident. My intuition is that a confident business man in 1998 or 2007 bore little resemblance to the confident business man of yesteryear. The confident business man of yesteryear thought things would go well, but was still concerned with putting on too much debt, still judged each investment carefully, etc. (Isn't my hindsight rosy?) However, the confident business man of 1998 thought anything with .com after its name had to be a billion dollar company, and a confident
