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March 20, 2022



Who is your (real) constituency?


"Generations of leaders from Margaret Thatcher to Tony Blair to Theresa May have believed that the City is the goose that lays Britain’s golden eggs, to be prioritised, pampered and protected. But the finance curse analysis shows an oversized City to be a different bird: a cuckoo in the nest, crowding out other sectors."

Having served your real constituents, you are free to 'virtue signal' as a (former) politician.

The 700-odd PFI schemes in Britain had an estimated capital value of less than £59.1bn in 2017, yet taxpayers will end up paying out more than £308bn for them, well over five times that sum. PFI is a gift to the City which has resulted in, as the PFI expert Allyson Pollock acidly put it, "one hospital for the price of two"."


«David Cameron’s boasting of volunteering at a food bank; and Natalie Elphicke’s attempt to join a protest against P&O’s mass sackings. Both are trying to repair the damage they themselves have done. Acute poverty, and hence the need for food banks, is the direct result of Cameron’s own austerity policies. And P&O can only replace its staff with agency workers because Elphicke and her fellow Tory MPs voted against Barry Gardiner’s bill to outlaw the practice. [...] for them, politics is about abstractions independent of real lived experience»

Giving these examples the conceit of our author that these are examples of Conservative cognitive biases is particularly ridiculous:

* An important goal of David Cameron was to switch from mandatory social insurance through the state to private charity through voluntary organizations, so to give Conservative sponsors and voters the freedom to opt out of a large chunk of taxation. For Conservatives food banks are an essential part of achieving that goal.

* An important goal of Conservative policy is to ensure that that there is "freedom of contract", that is the government does not interfere in private contracts, so does not ban fire and rehire. When N. Elphicke said of the story in her own constituency that "This is bad business behaviour and should be reversed by DP World right away" she was entirely coherent with that: employers should have the right to fire and rehire, and should just voluntarily avoid it, at their sole discretion.

In the end the practical consequences of a switch from social insurance to optional private charity and from legal limits to fire-rehire and optional avoiding it, are to save money and give more power to Conservative sponsors and voters, and that is very much about “real lived experience” rather than “abstractions”.

I keep wondering why our blogger keeps making these ridiculous arguments that policies are designed by naive politicians who don't realize because of cognitive biases (here for “abstractions”) that their outcomes are not consistent with their own principles...


Critical Race Theory
Climate Change

Cost of living crisis.

Which side you are on:
They are at best careless of the consequences of their greed.

From Greenfell to Boeing to P&O to the decline of Western Civilisation.

Perhaps they should consider Chestertons Fence, before the bull does any more damage.

"A core component of making great decisions is understanding the rationale behind previous decisions. If we don’t understand how we got "here," we run the risk of making things much worse."

First order morons.

Let's start with resurrecting Glass-Stegal to restrain finance.

More later...


This seem appropriate:


"For him, our country’s secret mechanisms comprise the Chap State, an old boys’ network of estate agents, PR professionals, accountants, bankers, lawyers, newspaper owners, architects, wealth managers, private-school headmasters, civil servants and politicians, cemented into their class positions and trained from an early age to understand that "chaps don’t tell other chaps how to behave, and as a rule most chaps don’t need telling"."

Corruption is tolerated and class determines interests.


This has been addressed befoe in working less.


"It’s time to call time on a 50-year argument"

For all the Mathuusians

Green Grownth:
"They point to evidence, notably from the Nordic nations, that economies can continue to grow even as carbon emissions start to come down."

"A parallel research movement, known as ‘post-growth’ or ‘degrowth’, says that the world needs to abandon the idea that economies must keep growing"

The solution is a dash for growth! or at least technology.

Fusion offers use unlimited energy (unlimited ability to do work, e.g. Desalinate and transport Water.

K. Eric Dexler has nano-technology (Atomicly Precise Manufacture) using abundant materials and localised manufacture to reverse globalisation and resource shortages.

And automation can reduce the need for human labour including in services.

Even if Drexler is wrong Science and Technoloogy can deliver a physical utopia. And Fusion is not fifty years away anymore.

Now the Greens, Economists, and Power hungry need to stop obstructing the future. And we need to invest in science and technology.

After all some goods are already intangible and infinitely reproducible, now we need to apply that to our physical (and energy) needs.


Meanwhile back in 2022. (Rather than 2050)

Unlike their current neoliberalism, if only the Labour party had a programme like the Union Populaire.

Please read full text.


"governing according to need."

"According to Union Populaire projections, the poorest tenth of the population will gain 14 percent in average living standards over five years. The gains gradually diminish and become losses from the richest 30 percent upward, but are concentrated on the very richest, who would see their standard of living fall by 6.3 percent. Here again, the coherence of the program is clear: redistributing wealth promotes "popular consumption" and employment, in turn ensures that this consumption level is maintained."


"Neoliberal policies have produced widening public and trade deficits; they have thus proven ineffective, and this alone ought to discredit them."

If wishes were horses beggars would ride. Hopefully in France beggars will ride again!


While I am getting my retaliation in first!

For the windy millers, the grid is made unstable by intermittent sources of energy (e.g. wind mills) so it is not easy to add more wind capacity. In fact while new wind is cheaper than Gas (when the wind blows), existing wind generation is more expensive than Gas due to the over generous feed in tariffs. But Gas is used to balance the intermittent supply and when windy the grid can't accept the electricity, but has to pay not to be supplied.

Gas supplies a huge amount of energy through the Gas pipe network, this cannot be substituted for by Electricity.
And Heat Pumps, and Battery Cars, and not drop in replacements for boilers and combustion engines.

Also there is the issue of diversity of sources of supply (Gas, Liquid, Electricity (inc Nuclear).

But my biggest issue isn't climate change akin to discredited economic models, from the micro foundations, to the simplifications and omissions. Also the sensitivity to the assumptions and the non-linear line fitting and the exponential growth.

Bad Climate Models = Bad Economics.


In reality, "efficiency" is hardly the objective measure so many take it to be. Coyle’s discussion of digital economies offers a case in point. By official accounting, the Internet made a negative contribution to U.S. GDP growth in the early 2010s, the very moment when broadband and mobile technology exploded—an observation that should clue us in to the social construction of supposedly "neutral" economic facts. Whether it’s economic indicators or key model parameters like discount rates, the further the black box is prised open, the less natural and objective efficiency calculations begin to look—as any government economist under political pressure to “stack the deck” of a cost-benefit exercise can tell you."

How long will the public support the Greens when the hair shirt is imposed by people who can still afford and wear silk?

Clouds exist, but apparently not in the met-office climate model.

I have seen clouds and even been rained on! Such simplifications and assumptions, as shown above discredit to output of the climate models. You need better evidence to justify the changes you advocate.

For example Forrest Fires may be due to not burning off undergrowth, but every thing is grist to the climate change mill.

N.B Rain was detected by radar for the weather forecast.

Colour me a sceptic.

Climate models: Black Boxes without change control or complexity, adjusted fit the historical data.


The conclusion from Bad Economics

"What is to be done? How can the state be liberated from the prison house of efficiency? If history is any guide, change is unlikely to be driven from within the discipline, despite the best intentions of reform-minded economists. Instead, some hope for a more radical transformation may lie in the repoliticization of expertise already underway. The technocratic ideal that turned economics into a value-free “science” of government appears to be collapsing. To be sure, the terrain opening up has been occupied by a great deal of paranoia, conspiracy, and irrationalism, yet the radical economization of public life bears considerable responsibility for the social dislocation that brought such dark forces into being. As Berman helps us understand, this transformation was shaped by political choices, and institutions are never carved in stone. Altering course will require the most comprehensive reengineering of governance in more than fifty years, but there is little alternative: the monsters are already here."

Climate models are econometric models repurposed.

"When it became orthodoxy in the 1930s, this prohibition on interpersonal comparison effectively ruled out any discussion of income redistribution. As Coyle writes, "economics has hamstrung its ability to evaluate social welfare by deeming situations where there are winners and losers—which is almost all policy contexts—to be out of scope.""

Ditto: climate change, only 28 years to save the world, (Tintin) the poor be dammed! Let them eat insects.


Share buybacks.

I commented on three world class companies: IBM, Intel, and Boeing as examples of a problem.

This is not a new problem as this article from 2019 documents.

When the firm pursues only shareholder value, everyone else—customers, suppliers, society—tends to get shortchanged. It thus became apparent over several decades what should have been obvious from the start: shareholder capitalism is an unacceptable form of institutionalized selfishness."


"By 2019, the evidence is in. The shift in power in the marketplace has taken effect and the Fourth Industrial Revolution is well underway. Firms that focus on continuous innovation for customers and are organized to be nimble, adaptable, and able to adjust on the fly to meet the shifting whims of a marketplace driven by end-users are flourishing, and have become the largest firms in the world. By contrast, firms focused on shareholder value and being run in the manner of the lumbering industrial giants of the 20th century, are struggling."

So to IBM (also from 2019)


"Going back further, one can see that revenues are now at levels seen in 1999!" (In 2019)

"We see tons of investors double counting by giving IBM credit for its low P/E and its buybacks. To us, the buybacks are just the treadmill that the company has to run on to keep a semblance of normalcy in its numbers. This brings us to the second pillar."
First, IBM's dividend payout ratio should be considered alongside its buybacks, as those buybacks are critical to keep EPS flat. To put in another way, if IBM has not bought back shares over the last 6 years, its payout ratio would be much higher and approaching 75-80% based on 2011 share counts. Based on current revenue trends, the company will need to spend about 30% of cash flow to keep EPS neutral. So, we have a total payout ratio of close to 80% already."

"A large part of IBM's charm for investors comes from the high dividend yield and large buybacks. As we have pointed out, the buybacks are necessary to maintain status quo, and until the company can show organic growth over a multi-year period, we have to completely ignore the buybacks."" (Remember 2019)

Now Intel (2021)


"The problem is that Intel is engaged in two types of competition, one with companies like TSMC and SEC in cutting-edge fabrication technology and the other within Intel itself between innovation and financialization."

"The pressure on a U.S. publicly listed company such as Intel to do buybacks comes not only from senior executives as "value-extracting insiders" but also from the threat of attack by hedge-fund activists as "value-extracting outsiders.""
That legislation can then be a first step in Congress rescinding the Securities and Exchange Commission’s Rule 10b-18—corporate America’s license to loot.[26] With a critically important company like Intel focused on innovation rather than financialization, the United States can get back to the business of building a world-class semiconductor-fabrication industry – one that leads rather than lags advances in technology."

Recreating the fence prohibiting buy backs (1982 in the US) is necessary to prevent stock manipulation by managers and hedge funds, and encourage providing value to the customer not just the shareholder.
Bad news for IBM?

Boeing also engaged in financialization, and that other Wall St/City innovation "Return on Equity."

Can it be true that finance (the love of money) is the root of all evil?


Is finance rather a tool that can be used for good, by (for example) selling ecosystem services assets to the Bezos Earth Fund at higher prices than logging revenues can bring?

Why wouldn't Bezos want an eco services NFT to boast about when petitions circulate to keep him in space, or Warren comes after him for climate change?


I see finance as like Gambling almost always undesirable, their must be a better way to allocate resources.

Jeff Bezos should not control so much wealth, but he could purchase the the land directly to control or disallow logging, but this should be a function of the society that controls the resource. NFT's have no value!


Can we realistically stop people been mean to him? Or observing that Amazon and Jeff Bezos use Finance to avoid to avoid intended taxes (even receiving a tax credit).


Aragon, I would like to better understand your writing and would appreciate a brief introduction or summary now and then.

Thank you.


ltr: So would I this is just a dump/fusion of material I have read at the moment. More on how Finance is responsible for the decline of the West sometime.

Finance is destroying the West with creation of money ex-nilho, the Maximising of Share Holder Value/Returns on Equity etc...

But Neoliberalism is failing by the metric of growth and a better future for all.

Who would have thunk it...

Many of these voters may be receptive to the traditional, economic-centred social-democratic message of the Democrats. But they are less enthused about the priorities of the now dominant progressives – especially the loudest and most pervasive among them, namely, the climate-change activists. Backed by the media and numerous celebrities, and funded generously by tech and Wall Street oligarchs, they have asserted their dominance since the very beginning of the Biden administration, and appear to have further solidified their control over energy policy, even in the wake of Russia’s invasion of Ukraine and its numerous after-effects.

Climate change and Wokeness are not popular, and Paul Mason is advocating Corbyn era policies.


"The demands of decarbonisation and of looming conflict mean we’re going to need a bigger state, not an income tax cut in 2024. We’re going to need a more directive state, that owns and controls the energy core of the country, and can rapidly invest in a mixture of nuclear and renewables. Price control – half-hearted and ineffective in the domestic energy market – may have to become full blown across rents, food and energy. And real wages will have to rise."

But not as radical enough:

Union Populaire backing Mélenchon’s candidacy


"The only alternative, then, would be to act on the nature of demand and to completely reorganize the mode of production. The post-Keynesian logic will then no longer suffice. Mélenchon’s program has many tools to deal with this, notably planning, a reduction in working hours or a job guarantee (very limited, as it is reserved for the long-term unemployed).
But, in this case, we must leave behind the fetishism of financing at the heart of this costing exercise."

Neoliberalism is dead...


The quote forllow the who would have thunk it, was from Spiked-Online. Joel Kotkin.



"Cultural issues represent another fault line between the bulk of the electorate and the tin-eared elites of the party."

If you close you eyes, he might be describing Labour.


《I see finance as like Gambling almost always undesirable, their must be a better way to allocate resources.》

Why do you need state enforcement of gambling bans? What if the only real harm from gambling comes from its prohibition? If your way is so much better, can you not demonstrate by your example and persuade others to follow using nonviolent discourse?

《he could purchase the the land directly to control or disallow logging》

What if state land cannot be sold, only the timber growing on it?

《use Finance to avoid to avoid intended taxes (even receiving a tax credit).》

Is it too heterodox to see taxes as just another control mechanism that relies on s zero-sum theory of money, from which finance liberates us? Why tax, when you can just sell new bonds at higher prices to redeem old and pay for a basic income, too?


Aragon, that was a fine and valuable statement of intent which shows me how to read your comments. The problems you are looking to resolve are obviously not going away for quite a while, so you will have much more thinking to do.


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