Shaky Danny

  Inflation wins. We have already had severe capital inflation. Eventually, when rich people spend money, it impacts wage earners. Trickle down becomes a torrent of prices. The pressure for wage inflation was held in check by undocumented immigrant labor, destruction of unions, imports and, until recently, interest rates. Then DJT and Steven Miller terrorized the undocumented immigrants. Terror works, particularly institutional terror. Mexicans love their kids and they quit coming. Fruit rots on the ground. Stores are closed on Monday. We still get immigrants, but they are refugees, and they have status. Undocumented immigrants set the marginal wage rate low. A documented immigrant is less likely to endanger their status by driving the truck or recycling shipping containers. Without our slaves we have to be more rational and that is expensive. There have been multiple economic shocks and we are no longer as cushioned. There is also demographic. A lot of us are retired and index...

Many people in Oak Park, a suburb of Chicago, are installing sewer valves for their homes. Some years back we had an impressive deluge and this is a reaction. Your stack or stand pipe may drain directly out to the street sewer. Putting a check valve or flapper in the way means that when the system hits load those houses refuse service and the overall pressure on the system will increase precisely at the time it is stressed. If you don’t have a flap then super tough on you, the effluent has to go somewhere. A product that creates its market. Once everyone has flaps there should be popped flaps or broken pipes. Flaps are necessary on flood plains. As flood plain construction is common it is difficult for other municipalities, such as Oak Park, to deny their use. Chicago used to require a basement floor drain. You were expected to share your suffering with your neighbors. Most people have their stack drain into their own sewer that then drains into the street sewer. This is a nice fea...

Historical Materialism was once all the rage. Freakonomics is historical materialism without Marx. I am giving an overview and then showing how Marx and basic questions about material conditions can enlighten. Review of Marx Wading through the invective and gossip of three or four volumes of Marx’s Capital to find the nuggets is tedious: dictatorship of the proletariat labor theory of value class struggle money isn’t capital failure of colonialism Centralization of production leads to unions. business cycle Competition drives down margins in investment and production. Profit requires disaster and  disruption. You’re welcome. Sorry if I missed any. These ideas have been absorbed into common use. Occasionally an economist makes a living inveighing against or rediscovering one. Bernanke’s bad asset class or Tom Peter’s excellence, for instance. Here is a list of some other market issues:    Winners change the rules.   Pa...

Usually historical inevitability means the king is great, the empire will last forever and I want to keep my job. The counter story, Noah, Gilgamesh or Ur, is that when you live on a delta surrounded by mountains things may change, someone building a boat in the middle of a plain may not be ridiculous and you should be nice to the hill kids. The first to directly disagree with inevitability as permanence was Adam Smith. Smith liked explanations. Smith said empires inevitably fall because they are inefficient.   He attempted to convince England to abandon empire, particularly the American colonies. Wealth of Nations , Smith’s book, is not taught despite its central place in political and economic philosophy. I think the fall of civilizations is more basic. I was in Cahokia, Illinois at the Native American trash heaps. The museum said that this town only lasted about two or three hundred years and they didn’t know why. Two or three hundred years is a decent run. How long can pe...

There are two classes of economists:    the apologists and the ones concerned with market place paradoxes. Adam Smith is the most readable economist.   His use of the word corn is confusing, corn meant grain, or animal feed which now would correspond to gasoline.    Otherwise, he wants to give you the grand tour and show you why the market place is such a great thing.    The reason is that his paradox is unanswerable: the one who wins the game gets to change the rules.    He desperately wants to convince us to stop being such chumps, in particular stopping colonialism, tariffs and government borrowing, good luck with that. All economics after Smith is embroidery. Marx’s  Capital  is the Koran of economic writing, much harder to wade through than Smith’s  Wealth of Nations .    Unfortunately, although Marx referenced Smith in other writing he did not preface  Capital  by saying you should read Smith first. ...