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Perverse Transparency

Is sunlight the best disinfectant? Well, it is the best CEO compensation fertilizer…

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Lest We Forget

We live in the Age of Enron,  Thomas Frank remind$ us.

Components of increasingly frequent scandals as per the Enron template, to wit:

  1. “relentless hostility to regulate”,
  2. “capture of the private sector’s oversight mechanisms”,
  3. “distinctively truculent culture of the trading floor”
  4. “a sort of unconscious journalistic perversity”,
  5. we will not get it” and “convince ourselves that these terrible things happened to us because markets are not free enough“.

Banking crisis, anyone?

Worth Reminding

It’s you vs. the corporations. No, really.

Oops

Spanish left-leaning voters punish mightily ruling PSOE government by hitting themselves in the head with a huge hammer. Punishment and ensuing democratic headache is expected to last for at least four years. Most welfare state arrangements are expected to end much sooner.

Spanish revolutionaries can’t make up their minds whether they want the Spanish Senate to disappear, or control tax havens and financial transactions, thereby changing a letter, from “m” to “b”, in the public revenue figure,  and the whole bloody global political economy with it.

“[…] A lot of people think we were facing our last century as a viable civilization, maybe even as a species. Global warming, overpopulation, the death of the seas, the loss of arable land, the proliferation of disease, the threat of nuclear or biological warfare…”
“We might have destroyed ourselves, but at least it would have been our own fault.”
“Would it, though? Whose fault exactly? Yours? Mine? No, it would have been the result of several billion human beings making relatively innocuous choices: to have kids, drive a car to work, keep their job, solve the short-term problems first: When you reach the point at which even the most trivial acts are punishable by the death of the species, then obviously, obviously, you’re at a critical juncture, a different kind of point of no return.”
Robert Charles Wilson, Spin.

On Your Marks

How Goldman Sachs was ahead of the market, or perhaps led the market to a very dark place. No Tahrir squares where to stand against this?

The Age of Innocence

The naïve environmentally-minded sociologist said: “in the end, your pyramid of derivatives is tied to things like pig manure and oil in the Arctic”.
The seasoned, self-assured Hayekian economist replied: “We don’t deal in physical reality anymore. Actually, we do not need it anymore”.
DerivArt pre-exhibition debate, La Casa Encendida, Madrid, june 2006.

The Silence of the Models

Economic models of climate change impacts cannot cope with planet-sized shocks. Say, if the thermohaline circulation shuts down, what’s the predicted next year GDP? There is no GDP. Well, the model just remains silent and stares blankly into its algorithms.

When economists run into the limitations of their models, they tend to heed the Wittgensteinian injunction: Whereof one cannot speak, thereof one must be silent. They don’t feel comfortable making policy recommendations without solid modeling to back it up. Giving counsel in the face gigantic, unquantifiable risks starts to feel less like science and more like an exercise in politics or ethics. Heaven forbid.

As David Roberts puts it, “when I see scientists panicking and economists telling me not to panic … my palms start sweating”.

Could the striking strike-stricken French petrol stations portend the post-peak oil future?

Say It Isn’t So

…the market is a robot combat arena where algorithms battle for supremacy of the feedback loops, felicitously says Kunstler here.