The Zero Room

I'm ranting altogether too much over local "journalism", and this comment introduces nothing new to what I've posted many times before, but since the Advocate won't publish it:

Again I have to wonder why drivel produced by the seething hive mind of News Corp is being syndicated by my local newspaper. This opinion comes from somebody who appears to be innumerate (eight taxpayers out of ten doesn't necessarily - or even very likely - equal eight dollars out of every ten) economically illiterate, and empirically wrong.

Tax dollars do not fund welfare, or any other function of the federal government. Currency issuing governments create money when they spend and destroy money when they tax. "Will there be enough money?" is a nonsensical question when applied to the federal government. As Warren Mosler puts it, the government neither has nor does not have money. If you work for a living, it is in your interest that the government provides money for those who otherwise wouldn't have any, because they spend it - and quickly. Income support for the unemployed becomes income for the employed pretty much instantly. Cutting back on welfare payments means cutting back on business revenues.

And the claim that the "problem" of welfare is increasing in scale is just wrong. Last year's Household, Income, and Labour Dynamics in Australia (HILDA) report shows dependence on welfare payments by people of working age declining pretty consistently since the turn of the century. This opinion piece is pure class war propaganda. None of us can conceivably benefit in any way from pushing people into destitution in the moralistic belief that they must somehow deserve it.

This week, my academic performance has delivered a crushing blow to my self-confidence, so to reassure myself that I'm still capable of abstract thought, I have been mostly reading:

• Nature is priceless, which is why turning it into ‘natural capital’ is wrong — Bram Büscher and Robert Fletcher: The move from nature to natural capital is problematic because it assumes that different forms of capital - human, financial, natural - can be made equivalent and exchanged. In practice - and despite proponents’s insistence to the contrary - this means that everything must potentially be expressed through a common, quantitative unit: money. But complex, qualitative, heterogeneous natures, as these same proponents acknowledge, can never adequately be represented in quantitative, homogenous money-units. […] Natural capital is therefore inherently anti-ecological and has little to do with giving value to nature, or rendering this value visible. It is the exploitation of nature to inject more value, and seeming legitimacy, into a faltering capitalist growth economy.
• The true cost of our insanely low Newstart allowance — Peter Martin: This week, at the National Press Club, Social Services Minister Christian Porter dismissed suggestions that it needed to lift the Newstart unemployment benefit of just $264.35 per week. "The fact that people who find it challenging to subsist on Newstart do so for short periods of time might actually speak to the fact that that's one of the design points of the system," he said. The low rate was "working okay because the encouragement is there to move off those payments quickly".
• Reducing income inequality — Bill Mitchell: […] financial market deregulation provided capital with ‘all its Christmases at once! – it could have a higher profit share and suppress real wages growth and keep profits high by realising the increased sales and productivity improvements. How? The trick was found in the rise of so-called ‘financial engineering’, which pushed ever increasing debt onto the household and corporate sectors. The capitalists found that they could sustain purchasing power and receive a bonus along the way in the form of interest payments. This seemed to be a much better strategy than paying higher real wages.
• Why credit card interest rates are high — Peter Martin: The best guess as to why most of us don't much care about rates comes from studies that find that alongside the sizeable proportion of the population that pays off its cards on time (and so doesn't care about rates) is a larger group of "deluded optimists" who believe they will pay their cards off on time. They're not concerned about rates either because they falsely believe they won't have to pay them. Psychological tests show the more likely people are to select cards with high rates, the more optimistic they are about all things.
• The current system of knowledge dissemination isn’t working and Sci-Hub is merely a symptom of the problem — Iván Farías Pelcastre and Flor González Correa in the LSE Impact Blog: Some scholars consider that, by removing barriers to access to knowledge, Sci-Hub is actually promoting the widest possible dissemination and use of academic research for the benefit of the entire scientific community. For instance, Masoud Shahnazar, Iran-based independent literary researcher, states that “we Iranians really owe [Sci-Hub] a lot” for providing access to the materials Iranian scholars require for their research. How researchers are able to access paywalled papers in a country faced with economic sanctions which prevent international payments is one of many questions that the current model cannot effectively answer.
• Time To Treat Bank CEOs Like Adults — Dean Baker in HuffPo: Regardless of the exact motives, the real question is what will be the consequences for [Wells Fargo CEO John] Stumpf and other top executives. Thus far, he has been forced to stand before a Senate committee and look contrite for four hours. Stumpf stands to make $19 million this year in compensation. That’s almost $5 million for each hour of contrition. Millions of trouble-making high school students must be very jealous.
• Stupefied: How organisations enshrine collective stupidity and employees are rewarded for checking their brains at the office door — André Spicer in Aeon: One well-known firm that Mats Alvesson and I studied for our book The Stupidity Paradox (2016) said it employed only the best and the brightest. When these smart new recruits arrived in the office, they expected great intellectual challenges. However, they quickly found themselves working long hours on ‘boring’ and ‘pointless’ routine work. After a few years of dull tasks, they hoped that they’d move on to more interesting things. But this did not happen. As they rose through the ranks, these ambitious young consultants realised that what was most important was not coming up with a well-thought-through solution. It was keeping clients happy with impressive PowerPoint shows. Those who did insist on carefully thinking through their client’s problems often found their ideas unwelcome. If they persisted in using their brains, they were often politely told that the office might not be the place for them.

This week, I have been feeling guilty about skipping a month, and mostly reading:

• Why Do Anything? A Meditation on Procrastination — Costica Bradatan in the New York Times: The drama of procrastination comes from its split nature. Just like the architect from Shiraz, the procrastinator is smitten by the perfect picture of that which is yet to be born; he falls under the spell of all that purity and splendor. What he is beholding is something whole, uncorrupted by time, untainted by the workings of a messed-up world. At the same time, though, the procrastinator is fully aware that all that has to go. No sooner does he get a glimpse of the perfection that precedes actualization than he is doomed to become part of the actualization process himself, to be the one who defaces the ideal and brings into the world a precarious copy, unlike the architect who saves it by burning the plans.
• China’s Army of Global Homebuyers Is Suddenly Short on Cash — Bloomberg News: Less than a month after China announced fresh curbs on overseas payments, anecdotal reports from realtors, homeowners and developers suggest the restrictions are already weighing on the world’s biggest real estate buying spree. […] “If it’s too difficult, I’m out,’’ said Mr. Zheng, 66, a retired civil servant in Shanghai who declined to give his first name to avoid attracting regulatory scrutiny. He may abandon a 2.4 million yuan ($348,903) home purchase in western Melbourne, even after shelling out a 300,000 yuan deposit last August. He’s due to make another big payment next month. [Tick… tick… tick…]
• Why Trump's Staff Is Lying — Tyler Cowen, Bloomberg View: By requiring subordinates to speak untruths, a leader can undercut their independent standing, including their standing with the public, with the media and with other members of the administration. That makes those individuals grow more dependent on the leader and less likely to mount independent rebellions against the structure of command. Promoting such chains of lies is a classic tactic when a leader distrusts his subordinates and expects to continue to distrust them in the future. Another reason for promoting lying is what economists sometimes call loyalty filters. If you want to ascertain if someone is truly loyal to you, ask them to do something outrageous or stupid. If they balk, then you know right away they aren’t fully with you.
• The Private Debt Crisis — Richard Vague: When too high, private debt becomes a drag on economic growth. It chips away at the margin of growth trends. Though different researchers cite different levels, a growing body of research suggests that when private debt enters the range of 100 to 150 percent of GDP, it impedes economic growth. When private debt is high, consumers and businesses have to divert an increased portion of their income to paying interest and principal on that debt—and they spend and invest less as a result. That’s a very real part of what’s weighing on economic growth. After private debt reaches these high levels, it suppresses demand.

(via Boing Boing)