28 June 2010

Daily Digest, 2010.06.28

Today: Stiglitz and Krugman on the wrong-headedness of austerity policies; current housing indicators (bad); Wilkins on the problem of God's "foreknowledge" in a quantum universe (personally, I think this would be a problem in any universe); the MIT Energy Initiative on the prospects for natural gas; the importance of rhythm in culture; David Toop on silent sound; Geertz clarifies Foucault; whistleblowers as heroes.


Two prominent economists on why the current fad for governmental austerity is the wrong thing at the wrong time, and potentially dangerous for the recovery of the world economy:

Paul Vallely interviews Joseph Stiglitz for The Independent. Some quotes:
Fiscal stimulus is out of fashion now. World leaders embarked on that strategy – injecting money to re-energise the economy – after the banking crash three years ago. It was widely perceived not to have worked because the money governments pumped into the banks was not passed on to ailing businesses or individuals in trouble with their mortgages.
"The problem was that, in the US, the stimulus wasn't big enough," [Stiglitz] says. "Too much of it was in tax cuts. And when they gave money to the banks they gave it to the wrong banks and, as a result, credit has not been restored – we can expect a couple of million or more homes to be repossessed this year than last year – and the economy has not been restarted." Instead of producing a consensus that the government should have done more, it has created disillusion that the government can do anything, Stiglitz says.
The result is that, following the attacks by the financial markets on Greece and then Spain, everybody is now in a mood of retrenchment. "It's not just pre-Keynesian, it's Hooverite," he says. By which he means governments are not just refusing to stimulate, they are making cuts, as Herbert Hoover did in the US in 1929 – when he turned the Wall Street Crash into the Great Depression. "Hoover had this idea that, whenever you go into recession, deficits grow, so he decided to go for cuts – which is what the foolish financial markets that got us into this trouble in the first place now want."
"The old story is still true: you cut expenditures and the economy goes down. We have lots of experiments which show this, thanks to Herbert Hoover and the IMF," he adds. The IMF imposed that mistaken policy in Korea, Thailand, Indonesia, Argentina and hosts of other developing countries in the 1980s and 1990s. "So we know what will happen: economies will get weaker, investment will get stymied and it's a downward vicious spiral. How far down we don't know – it could be a Japanese malaise. Japan did an experiment just like this in 1997; just as it was recovering, it raised VAT and went into another recession."
So what should we be doing? "The lesson is not that you cut back spending, but that you redirect it. You cut out the war in Afghanistan. You cut a couple of hundred billion dollars of wasteful military expenditure. You cut out oil subsidies. There's a long list of things we can cut. But you increase spending in other areas, such as research and development, infrastructure, education" – areas where government can get a good return on the investment of public money. "I haven't done the calculation for Britain, but, for the US, all you need is a return on government investment of 5 to 6 per cent and the long-term deficit debt is lowered."

And Paul Krugman has an op-ed piece in yesterday's NYT, in which he points to the danger of current austerity policies leading to a "third depression" (the first two being the "Long Depression" following the panic of 1873, and the Great Depression). Some quotes:
We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.

And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.

But future historians will tell us that this wasn’t the end of the third depression, just as the business upturn that began in 1933 wasn’t the end of the Great Depression. After all, unemployment — especially long-term unemployment — remains at levels that would have been considered catastrophic not long ago, and shows no sign of coming down rapidly. And both the United States and Europe are well on their way toward Japan-style deflationary traps.
In the face of this grim picture, you might have expected policy makers to realize that they haven’t yet done enough to promote recovery. But no: over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy.
So I don’t think this is really about Greece, or indeed about any realistic appreciation of the tradeoffs between deficits and jobs. It is, instead, the victory of an orthodoxy that has little to do with rational analysis, whose main tenet is that imposing suffering on other people is how you show leadership in tough times.
And who will pay the price for this triumph of orthodoxy? The answer is, tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again.

And for a summary of just one small category of bad news, a table of various current housing supply metrics, from Calculated Risk. Statistics that immediately catch the eye:
Total delinquent loans         7.3 million
Seriously delinquent loans   5.0 million
This is just the U.S., of course.  No, I'd say we aren't out of the woods yet....


John Wilkins at Evolving Thoughts continues with the second installment of his series on theism and science, "The problem of foreknowledge"; as Wilkins puts it:  "How could God know what would occur if the universe is fundamentally, by which we mean at the quantum mechanical level, indeterminate?"

I'm not persuaded that it is coherent to think of a being or consciousness that is "outside of time," and yet can think and plan (Wilkins touches on this issue, yet seems to me not really to come to grips with it).  Yet if God were "in time," then what would it mean for him (or her or it) to "know" everything that was ever going to happen in the history of the universe?  Would this be a kind of simultaneous knowing?  But what could that possibly mean? 

(It occurred to me that the human notion that a god might have this ability may come from our ability to "know that we know" something, even if we can't immediately recall it.  But God, of course, would be able to recall everything instantly and completely, or at least so one imagines. Or, more accurately, God wouldn't actually recall anything, because he (or she or it) would always know everything. But then wouldn't this make God "out of time"?  So perhaps the notion of a God "in time" is inherently paradoxical. I think I would maintain, in fact, that both notions—God "in time" and God "out of time"—may both be inherently paradoxical, and thus another reason that the notion of God is incoherent.)

The first installment of Wilkins' series is here.

The MIT Energy Initiative has released an 83-page report, "The Future of Natural Gas," on the potential use of the United States' natural gas supply as a potential "bridge" to a low-carbon future; 80beats summarizes.

I haven't yet read the report, but I was struck by the following passage from the summary at 80beats:
Total Natural Gas Supply
The report estimates the United States’ natural gas deposits at about 2,000 trillion cubic feet (15,000 trillion gallons), including  “unconventional sources” such as natural gas produced from shale. Given current domestic consumption rates, the researchers expect that this could last the country for 92 years.
The report also looked at the total amount of natural gas available beyond North America. They estimate this supply at 16,200 trillion cubic feet (121,000 trillion gallons), excluding the US and Canada and unconventional sources. The report’s authors believe the global supply could last for 160 years given current global consumption.
The "current consumption rates" trope is a staple of reports of this type, but is, it seems to me, meaningless and even dangerous (given the stakes in this debate). For it is extraordinarily unlikely that the rates of consumption will remain stable, because the population of the earth is still growing quite rapidly. Any projections that fail to take this into account are more or less useless.


 Edmund Blair Bolles at Babel's Dawn writes on a new study by Charles Whitehead, "The Culture-Ready Brain," in Social Cognitive and Affective Neuroscience. According to Bolles, Whitehead "proposes that culture, or at least cultural display, began with 'dance and role play,' timing, and performance."

The key notion here (to me) is that the evolution of the ability of humans to synchronize behavior (to behave rhythmically, whether in dance, song, or speech) is crucial to the development of human culture.

The abstract of Whitehead's article is here. The article itself is behind a paywall at Oxford Journals, and costs $32.00 for one day's access to the pdf.

At 3quarksdaily, Colin Marshall interviews David Toop about his new book, Sinister Resonance, which considers the "silent" world of sound in painting and literature.  Fascinating.


A quote on The Browser occasioned my first visit to the interesting looking site, UnderstandingSociety, to read a post on a collection of Clifford Geertz's essays for the New York Review of Books.  I was especially struck by this quote on Foucault from Geertz's 1978 essay "Stir Crazy":
Foucault's leading ideas are not in themselves all that complex; just unusually difficult to render plausible.  The most prominent of them, and the one for which he has drawn the most attention, is that history is not a continuity, one thing growing organically out of the last and into the next, like the chapters in some nineteenth-century romance.  It is a series of radical discontinuities, ruptures, breaks, each of which involves a wholly novel mutation in the possibilities for human observation, thought, and action....  Under whatever label, they are to be dealt with "archaeologically,"  That is, they are first to be characterized acording to the rules determining what kinds of perception and experience can exist within their limits, what can be seen, said, performed, and thought in the conceptual domain they define.  That done, they are then to be put into a pure series, a genealogical sequence in which what is shown is not how one has given causal rise to another but how one has formed itself in the space left vacant by another, ultimately covering it over with new realities.  The past is not prologue, like the discrete strata of Schliemann's site, it is a mere succession of buried presents. ("Stir Crazy," 1978, 30)
If only Foucault could have been that clear.

A meditation by Quinn O'Neill at 3quarksdaily on whistleblower, and especially on Wikileaks, with links to some important documents I hadn't seen, such as a confidential document on Big Pharma's machinations inside WHO and the report by The Center for Public Integrity on the Bush Administrations systematic program of deception about the threat posed by Saddam Hussein.

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