Wednesday, December 05, 2012

New Water

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Trade with Dave: If you read Dave, you know that I don’t put as much stock in what George Soros says as I do in what George Soros does.  Soros started something called the Institute for New Economic Thinking, INET.  The name sounds pretty cool.  Like a cross between and Ipad and the internet.  It’s new.  Everybody loves new and in the wake of the global financial collapse and its full acceptance of responsibility by Alan Greenspan’s self-admission of his presumptive mistake (http://www.youtube.com/watch?v=bAH-o7oEiyY), we know what got us here in the first place.  Rather than throw out the Keynesian baby with the radioactive economic bathwater of a global financial meltdown, instead Soros gives the baby a good $50 million neo-Keynesian scrubbing with his self-funded launch of INET.
I watched an interview with Soros minion, Bill Janeway, in the wake of his new book release Doing Capitalism In The Innovation Economy when it struck me that there’s nothing new under the sun… including economics.  I started thinking about fracking and the fact that every drop of water that ever existed within the earth’s atmosphere still exists.  We don’t add or take away water.  Then I started thinking about the economics of pumping fresh water into the ground to extract gas and oil.  Then I thought how do you get the water back once you pump it into the earth?  To me that’s INET in a nutshell.  It’s “new” economic thinking about an idea that’s as old as water itself – values.


Take a listen to this short video interview with Bill on the basics of Keynes General Theory and then consider the following questions.
 

The fault is not in ourselves, yet we are the subjects of grave misfortune.  That will be $1 please.
1.  The second law of thermodynamics
2.  The arrow of time and its single direction
3.  Radical uncertainty (i.e. ontological uncertainty) is the state in which we all live
So, what you thought was your free will, what you thought was your freedom to express yourself through choice, is incorrect… at least according to Bill.   You are confusing freedom with chaos.  This is chaos that you, the unprofessional, are entirely unqualified to address.  Therefore, you should turn your thinking over to the professionals.  The behavioral economists are in the best position to estimate outcomes from within the radical uncertainty, so that still small voice you hear that is guiding your actions should be ignored.  That answer to prayer that is urging you to take that next step?  That’s just chaos speaking… don’t listen.  Instead, just maintain the fiat course to destination Confidence and INET will hand out the grants where it’s all about the journey not the destination.  They are the professionals and they are the source of new thoughts.  Your thoughts?  They’re old thoughts.  What good is old thinking when you can trade it in for new thinking?
When Dave says there’s nothing new in the world, I’m not talking about discovery… I’m talking about the ingredients for discovery.  Take the Space Shuttle Discovery for example.  Everything we needed to build it was here… we just had to discover it.  Nothing needed to be added or taken away, we had all the ingredients all along, but they needed to line up and it is individuals fulfilling their calling that form the basis for those results.
What about time and Bill’s mention of entropy?  Well, what about it?  What is time?  Can you describe it?  Can you measure it?  Can you validate it?  You claim it as the basis for the second law of thermodynamics, but as soon as I ask you to define it, your jaw drops like it was just subjected to the law of gravity.  You see you can’t define time because time, and its speed, only exists within your consciousness and its interpretation of a how slow time passes in a traffic jam and how quickly it passes at Disneyworld.
So when you get your time definition, drop Dave an email and I’ll accept your second law of thermodynamics as more than the mere statistical probability that it is and I’ll accept it as a law, in the spirit of gravity as a law… if you can call it that.  If this paragraph is a little too “out there” for you to deal with today, then get back with me when your days have run out and we’ll talk about it… time that is… if you have any left.  Although the gold watch you receive at your retirement party will still be running long after your body’s battery has run out.  I wouldn’t bet eternity on either one, your watch or your body.
The problem with this threat of radical uncertainty and a new ontological premise of our existence is that it would not be the case if you look around.  What you see around you is a cycle of renewal, not entropy.  Stand in the blazing sun and tell me about scarcity.  This attempt at neo-Keynesianism won’t hold up in the court of common sense any more than there is uncertainty that the sun won’t be coming up tomorrow and the moon won’t  be coming up tonight.  So the ”new” economic thinking in Bill Janeway’s book is to bake in some de-optimization into the system.  We should have some built-in waste.  What you are saying is we should have kept the local hardware store open just because we don’t have to turn every last dime over to Wal-Mart… there’s a place for Mom and Pop as long as it is just along the margins.
If you go that route, the de-optimization route, we don’t get these colossal moral hazard generated failures such as Lehman Brothers and Bear Stearns.  Who knows, if Wal-Mart stays on the path it is on it could be one of the most spectacular employee takeover/collapses in the history of “old” economic thinking.  Why do away with Too Big To Fail when there’s nothing too big to fail including that Fed balance sheet that’s loaded up with everything from toxic mortgages to its own outright monetization of its own debt.  Why insulate the biggest single profit making opportunity in the history of the planet (long silver, short CME Group) from a continuation of the long term capital mismanagement of the musical chairs meltdown in the spirit of MFG, PFG, SFG and the smartest guys in the room, namely Enron.  We’re on a roll.
If George Soros’ and team INET’s thinking is really “new”, then when does thinking get “old” exactly?  Does it get old five minutes after you thunk it?  How about an hour?  How about a century?  When is thinking old and when is thinking new and exactly how did E. W. Grove build the massive Grove Park Inn Resort & Spa by selling that snake oil one bottle at a time?  When Dave started this website, he didn’t take the name lightly.  Your time is your time whether you measure it on a Rolex Perpetual Oyster or by dividing one by zero (1/0) on your roller coaster ride through an eternal singularity.
We are free to choose and if you choose like Bill and George to describe your choice as that of “being subject to grave misfortune”, then that’s your choice.  You’re made in God’s image and if you choose to bury that image in a grave of your own digging, then whose to stop you.  The truth is you are a joint heir in the Kingdom, but no one is going to force your inheritance on you if you don’t want it.  You can either subscribe to the general theory and it’s inability “to predict the price of copper fifty years later”, or you can look out the window and consider just exactly where that copper came from in the first place.  For those of you who are pumping your water down into a hole and your gas out of the hole, I want to thank you for the price stability.  On the other hand, you may want to consider that there’s nothing new in this world… including fresh water.
On the Cassius and Brutus commentary from Mr. Janeway, I offer the following.  Outside of forgiveness, I can understand your desire to place accountability “on the stars.”  However within a framework of forgiveness, not only can we go back and change the past and how we perceive it in our time-rendering consciousness, but we can also accept that responsiblity because we don’t have to carry the burden on our own and instead we can acknowledge it, repent of it and change our ways… one person at a time… no grant money required.

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