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Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
Port: Lake Pleasant, AZ
26 September 2016 | Pago Pago, American Samoa
24 September 2016 | Pago Pago, American Samoa
17 September 2016 | Pago Pago, American Samoa
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28 August 2016 | Pago Pago, American Samoa
28 August 2016 | Pago Pago, American Samoa
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The Causes of Income Inequality Primarily Include --

26 September 2016 | Pago Pago, American Samoa
Kimball Corson
--the rigging of the economy in favor of the rich and wealthy by congress, the Fed and government in myriad ways
-- the off shoring of American jobs by the rich with congress allowing it
--the smarter and better educated rich and wealthy
--the theft of the value of labor's increased productivity by corporate America since 1973
--the falling real minimum wage (part of first item)
--capital grows more quickly than wages do (Piketty)
--the declining quality and rising cost of education for the middle class
--the declining percentage of working age people fully employed
--the shift of income from workers to top management by top management
--the rise of robotics
--the relative decline in higher paying jobs relative to earlier
--the lack of any government policies to address these problems

<strong>Why the Fed Can't Hike Rates and Stop Increasing the Money Supply</strong>

25 September 2016 | Pago Pago, American Samoa
Kimball Corson
With the massive income inequality we have, as long as the rich keep hoarding a large portion of their current income -- by squirreling it offshore and in secondary stock and bond markets, instead of spending it on current consumption and real investment -- the velocity of money will continue to fall, growth will stall or decline, and the Fed will have to counteract both by lower rates and easy money to avoid recession, where MV=GDP. Lower rates and easy money in turn prop up the stock and bond markets and encourage borrowing. We have a catch 22 and the Fed knows it.

With higher rates and tight money in the face of falling velocity from hoarding, recession and declining secondary financial markets are the only possibility and the Fed also knows that. Inflation is not a prospect unless the hoarding or high liquidity preference stops (or the Fed over does it) and the velocity of money consequently starts to rise.

Don't hold your breath. The problem is massive income inequality where the top 10 percent get almost 50 % of all national income and have almost 75% of all wealth. The top 1% get 22% of all income, double the 11% that the bottom 50% of all income recipients get. Only the rich and wealthy can afford to hoard income.

The Deceitful and Fraudulent US Drug Industry

24 September 2016 | Pago Pago, American Samoa
Kimball Corson
Its benefactors argue that it labors tirelessly and spends billions in research on new drugs some of which a capricious FDA approves or disapproves based on the industry's own testing. The industry needs extraordinary profits, we are told, to fund expensive, risky and innovative research and development for new drugs that save lives.. If anything is done to moderate prices or profits, the creation of new drugs will suffer, and, as PhRMA's president recently claimed, "it's going to harm millions of Americans who have life-threatening conditions."

The truth is a bit different.

In truth, the drug industry's spent 30 percent of its revenues on advertising and marketing -- much more than the 12 % it spent on R&D in the year 2000. Much research and development expense is actually incurred by the US government from which the industry profits. Increases in drug industry advertising budgets have averaged almost 40 percent a year since the government relaxed rules on direct-to-consumer advertising in 1997.

In 1999-2000 the drug industry spent $262 million on federal lobbying, campaign contributions and ads for candidates thinly disguised as "issue" ads, using more than 625 Washington lobbyists. Expense data are hard to come by because the industry fought, and won, a nine-year legal battle to keep congressional investigators in the General Accounting Office and others from seeing the industry's complete expense records. Only congress can subpoena those records but -- surprise -- it has failed to do so. The drug industry also obtained legislation that blocked Medicare's and other's efforts to engage in the collective purchasing of drugs. The industry also successfully lobbied for laws that permit them to pay generic drug makers not to sell competing generic drugs when their patents expire, all to maintain higher prices.

Shocked by the volume of drug industry advertising on TV (I just started watching a bit and have much to say about it), I monitored CBS for three evenings starting with the evening news through the Stephen Colbert Show and I also included CBS and the local news in the morning. Almost half of all the ads where for drugs. Putative viewer-patients were urged to ask their doctors if those drugs "were right for them". The pitch was formulaic: do you have pains or symptoms A, B or C (e.g, tired too much of the time), then see your doctor about using drug Z. The invariable aftermath is the user or patient engaged in some healthy, frolicking outdoor activity and never, just a bit or not at all better, all followed by a very rapidly spoken litany of possible side effects and precautions.

Our US congress is complicit in this drug industry deceit and fraud so don't expect any help from that quarter. Just more shabby American capitalism.

How the Rich Have Held the Fed Hostage to Get More Money for Themselves

17 September 2016 | Pago Pago, American Samoa
Kimball Corson
Here is the short version.

In the necessary context of huge income inequality, the Fed has been forced to increase M or the money supply and to lower interest rates to counteract the huge decline in V or velocity due to hoarding by the rich -- that is, their not spending most of their current income on current real investment or current consumption -- where MV=GDP.

The rich have held the Fed and the economy hostage by their hoarding. Hoarding, reflecting a high liquidity preference, reduces the average velocity of money. The Fed has had to react to the situation by increasing the money supplied by open market operations, QE and through those who borrow -- mostly the rich -- and by lowering interest rates (supposedly to induce lacking investment) which mostly just make borrowing cheap for the rich and increases secondary market stock and bond prices thereby further lining the pockets of the rich who hoard with and hold those assets. The rich are holding the Fed and the economy hostage in order to have the Fed enrich them.The rich don't do this consciously, but implicitly at a subconscious level they "understand" what is going on, just as a successful billiards player solves second order differential equations without consciously realizing it.

This could not happen without excessive income inequality creating those who can afford to hoard money in large enough quantities to matter. Most people live paycheck to paycheck or too close to it and spend almost all of their income on consumption. They cannot afford to hoard or hold anyone hostage to make them wealthier.

A heavy tax on cash, stocks and bonds would go a long way to stop this, as would income redistribution (perhaps using the proceeds of that tax). But few dare to be interested in any real economic solution.

Why Negative Interest Rates Might Not Be a Good Idea

03 September 2016 | Pago Pago, American Samoa
Kimball Corson
Consider interest payable or chargeable on a short term treasury --

---> 1 % interest with zero inflation
Holding a bond is better than cash or a demand deposit, although cash or a demand deposit is more liquid. Depends of degree of liquidity preference
---> 0 % interest with zero inflation
Holding cash or demand deposit is better because it is more liquid
---> -1 % interest with zero inflation
Holding cash or demand deposit is much better, i.e., hoarding is desirable.

But the question is negative interest rates on what? Savings deposits? The federal funds rate? The rate paid on bank deposits at the Fed? Or does it matter?

Four decades ago, Milton Friedman recommended that central banks like the Federal Reserve pay interest to depository institutions on the reserves they are required to hold against their deposit liabilities. This proposal was intended to improve monetary policy by making it easier to hit short-term interest rate targets. However, the Fed didn't have the authority to pay such interest until 2008. Then it acquired authority to pay interest on both required and excess reserves. Negative interest raises a legal problem because the legislative presumption was clearly positive interest rates.

Negative interest on reserves are intended to induce banks to lend more at lower rates and reduce their excess reserves. The three month treasury note is already at zero % percent yield. It is arguably better to hold or hoard cash, depending on liquidity preference.

There are three reasons negative rates on reserves might be ill considered.

First, they would increase private hoarding and off-shoring of cash by increasing liquidity preference.

Second, if negative rates were paid on total or excess bank reserves at the Fed, banks would have a greater incentive to lend and thereby compromise on lending standards. Alternatively, they might try to hold their own excess reserves which are the bulk of them. When the Fed started paying interest on total reserves held at the Fed, the ratio of excess to required reserves shot up hugely. The goal now is to reverse that and increase lending.

Finally, negative rates would spill out of reserves interest and that could push people out of notes and short term paper and into cash. Arbitrage and similar effects tend to equalize interest rates across like risk and similar considerations.

Kenneth Rogoff at Harvard is aware of the first and third of these problems and has just published a book, The Curse of Cash, proposing we eliminate cash from our monetary system or at least most of it, especially large denomination bills. His reasons are myriad, but his core motivation is his belief that negative interest rates will "give money that has been hibernating in the banking system a kick in the pants to get it out into the economy to stimulate demand thereby pushing up inflation and output." Assuming of course lending standards hold and we don't drown again in bad loans and again have a private debt liquidy crisis.

We might learn why negative rates could be a bad idea. We are treading into dangerous territory. The world of economic inter-meddling is historically overwhelmed with unintended consequences, as Friedman argued well. Negative rates and the elimination of cash are two major proposals. Negative rates are also arguably against the law.

Why Banks Do Not Create and Destroy Money by Lending

30 August 2016 | Pago Pago, American Samoa
Kimball Corson
As Chris Cook explains, US banks do not create money by making loans which money is then destroyed when those loans are paid back, the conventional view on money creation. What actually happens is when a bank makes a loan, it "credits" the loan amount in dollars to the borrower's demand account as additional dollars the borrower has to spend and the credit is then mistakenly viewed as a part of the money supply. In truth, it is only a credit amount denominated in dollars until it is actually spent by the borrower. Then it becomes additional dollars of demand flowing against goods and services which the Fed has to then fund with expansive open market operations or QE. Only the Fed creates and destroys money per se, not banks. Banks are simply in the credit business. This means Banks do not create and destroy money by lending, and this is a shocking conclusion with far reaching implications.

When a bank loan is paid back, the Fed should then reverse the process, but it usually does not, seeking to encourage further investment spending instead by keeping that money in circulation. Because of income inequality and now differential propensities to spend and hold money as wealth, we then have liquidity preferences by the rich and wealthy which have created a liquid trap because much of that now "excess" money in circulation is simply hoarded by the wealthy and not spent on consumption or real investment, preventing undue inflationary pressure and slowing the velocity of money, as the quantity of it is increased by the Fed.

The similar thing happens when the federal government "borrows." It does not crowd out private borrowing for investment to get that money because it is not really selling a competing debt product per se. It is really just acquiring a credit to spend and have the Fed fund once the dollar amount enters the flow of money against goods and services. it is really selling a consol or stock share in the USA for credit which pays the equivalent of a fixed dividend and is redeemable by the USA according to a schedule. The public debt is a fiction. There is no link at all between revenues of the government and its expenditures.

The idea government borrows dollars from the public by selling treasuries and then spends that money is wrong. For example, taxes and borrowing proceeds paid in cash result in that cash being destroyed and removed from circulation. Again, there is no real link between government revenue and government expenditure. Like banks, the government can create its own credit for its expenditures which is not money until it moves into circulation and must be funded by the Fed. Such credit is often simply a credit against taxes owing to become due in the future. The idea there is this massive public debt that must be repaid is nonsense. The Fed similarly funds government credit after it becomes federal dollar expenditure.

Only the Fed can create money because only the Fed acquires or buys something in doing so with actual money. Banks don't do that. Like the government, they deal only in credit and buy or acquire nothing to create that credit per se. although the government uses its credit to then buy things just like borrowers do.

Most simply don't understand these matters or the distinction between credit and money, including most officials at the fed and in government. Money creation and its supply are affirmatively misunderstood. The consequences for policy are considerable.

On Sentient Life Forms

28 August 2016 | Pago Pago, American Samoa
Kimball Corson
Sentient

ˈsɛnʃ(ə)nt/
adjective
able to perceive or feel things.
"she had been instructed from birth in the equality of all sentient life forms"
synonyms: feeling, capable of feeling, living, live

Undoubtedly, the notion of sentiency reaches well beyond human life forms and well into the animal kingdom. Our perception here is limited by animals inability to speak and communicate, but our observations of cats and dogs makes it clear they have great sentiency. Alex, the pet store African Grey Parrot that does math and Suda, the elephant that paints realistic depictions make that very clear for those segments of the animal kingdom as well. Yet, arrogantly enough, we are biased against these notions and animals in regard to sentiency.

Even our language reflects that bias. The pronoun who is limited to persons and people whereas sentient animals are designated by the pronoun that. Our sensibilities are the limitation here for higher order animals as much or more than animals inability to speak or write.Therefore our perception of sentiency is self specie centered and warped. That has significant implications for how animals are treated that reaches well beyond prohibitions on basic cruelty to (higher order) animals.

Do we doubt that such animals can feel affection, trust, loyalty and slight and demonstrate the same sensibilities across an even broader range of sensibilities and sentiments? Our revealed behavior and our laws do not reflect that. Blacks and others are protected by laws on discrimination, hate speech and other abuses. Not so for what we discriminatorily call "animals." Animals have no legal standing to sue, although they can be legally represented in regard to their interests. We refer to us as people and animals as animals, although biologists tell us that is nonsense. Religionists claim we have souls to distinguish us from animals, but the point cannot be demonstrated. Our bias is systematic and egregious against animals. It undermines the intelligence claimed for our sensibilities and creates a world of slights for many if not most sentient beings.

So just how far advanced as a specie are we? We don't draw these lines very well. In our own self-centeredness, perhaps we don't wish to. Perhaps we just can't abide the notion that sentience reaches across so broad a range of disparate looking creatures. Look at the fuss we make over just skin color, even though our genomes belie much in the way of differences. I suggest we are seriously out of whack here.

On the Quality of Minds

28 August 2016 | Pago Pago, American Samoa
Kimball Corson
I heard or read a notion in early adulthood and over my life since then have been impressed with its accuracy. It is lesser minds are preoccupied with mostly gossip regarding people; better minds focus mostly on people and events and the very best of intellects deal in ideas, concepts and their relationships.

Since then, I have developed regard for its accuracy and have used it as a measure on friends and acquaintances, to determine with whom I wish to cultivate better friendships and spend more time. But problems attend: many good minds are too busy working, whereas I am retired. Also, many apply their own good minds well only vocationally and regretfully not much more generally.

I guess genuine intellect really is scarce. I am not sure how well even quality higher educations focus, implicitly or not, on this notion. Good and interesting thought is truly hard to come by.

The Death of Pause and America’s Neurosis

19 August 2016 | Pago Pago, American Samoa
Kimball Corson
The American psyche is split along financial wealth and income lines, but there is overlap. The top half of the country is insecure and therefore greedy, but it is also anxious and defensive. The bottom half is in recession and therefore insecure and desperate. It too is anxious, but it is also very angry. Anxiety in both segments is further fed by the media and television programming, by cable and air. Here is how.

Because of advertising costs and the press for revenue, programming content, like advertising itself, entails seriously disjointed content and highly accelerated speech. Verbiage is accelerated, unmoderated and badly pressed. We observe the "death of pause," moderation and variable meter in the spoken word. Breathlessness and out of time are the hallmarks of what is fed to us. It infects programming, the news and talk programs. People interrupt and talk over each other because of it. We drown in flack, a wall of useless information and a lack of reflectiveness and moderation of the kind William F Buckley gave us on Firing Line.

The impression created by all of this is acute disjointedness, moderate incomprehensibility and serious anxiety. Programmed youth, as actors and commentators, are too intelligent and experienced for their years. Viewers feel they are too slow, the world is accelerating and they are very anxious about it, especially on top of their economic anxieties. An acquaintance here in the South Pacific on sabbatical -- a professor at a bottom edge top tier American university-- who is working on three books simultaneously, exudes all these characteristics in spades. My observation is he would be interesting and fun to talk with if he would slow down, relax and be more interactive and reflective, as people here are, outside of the US. US programmed visual and verbal stimuli exude apprehension and anxiety.

Economic insecurity abounds in the American psyche. America's decline and depressed bottom half worry everyone. The rich worry about losing, by taxation or fortuity, the wealth and income they have. They have mounted a huge protective economic propaganda war, full blown in the media and now, American universities, on the evils of economic progressivism and the general welfare. The poor worry about not having enough, and the need to choose what essentials to go without. They know they are being ripped off, the economy is rigged against them and that they are being disenfranchised and left out in the cold. The economy works only for the rich and their minions and the lower half of America is very angry about it. Not yet pitch-fork-and-guillotine furious, but seething, resentful and seriously angry; enough to act like Britexiters and throw a Trump into the political monkey works to gum it up.

Almost no one in America realizes that economic insecurity will almost totally evaporate when all of us care enough to reasonably address all of the needs of everyone. How far we are from that true measure of economic success can be seen in the two edged sword that is money. It can be used as a medium of exchange to maximally lubricate the economy for all, by flowing against the counter-flow of widely distributed goods and services -- toward the end I describe -- or it can be hoarded as a store of value by the rich to keep the production of goods and services suppressed and keep that money out of commerce and the hands of everyone else, excepting of course, the mega crumbs tossed to the minions who serve the rich and man the machinery of the economic propaganda war and the media attending it. The great insecurity of the rich fuels their voracious greed.

As a nation, we have gotten it almost precisely backwards from what it should be, that is, where all of us care enough to use money to reasonably address all of the needs and problems of everyone. It is becoming our downfall and we just don't have a large enough view and so we don't get it.

More on Photography

02 August 2016 | Pago Pago, American Samoa
Kimball Corson
Is there a point, even with a quality lens, where the pixel resolution of the camera exceeds the lens resolution?

Yes.

Most modern lenses today are about as good as the better sensors -- at least in the center of the image and at their best f/ stop. Maybe not in the corners and not wide open. But for the camera, the higher the pixel density the greater becomes the problem of diffraction for the lens.

Already, we are encountering diffraction limitations on lens at some higher f/ stops (e.g., f/11 and up) on cameras with high resolution sensors. We are getting closer to the day -- somewhere between 150 and 250MP of camera resolution -- where every lens will be diffraction limited at every useful aperture.

It is not only the camera that can improve resolution. Whatever the focal length you have, a lens of the same quality but twice the focal length will double the resolution of your images. That is why pro wildlife photographers all have those excessively expensive heavy 600mm f/4 telephotos!

A Note on (Nikon) Photography

01 August 2016 | Pago Pago, American Samoa
Kimball Corson
There is much nonsense published on cameras, and Nikon cameras in particular, especially in reviews. Nikon and reviewers talk about the current entry level, mid-level, semi-professional and professional level cameras in ascending price without pointing out that in terms of image quality, matters have almost been flipped on their head, so it is the case now that many of the current lower end cameras bodies have better IQ or image quality or capability than the top or high end cameras.

The real difference with the top models is more weather sealing, more features available by pushing buttons instead of crawling through a menu and better general durability or the ability to withstand abuse.

The real issue, sliding up the price scale now, is what bells and whistles do you want. Good still photographs rarely depend on bells and whistles and much more need photographic talent and good image quality. Many pros now use mid and lower levels Nikon cameras because of 1) their better IQ and uniformity in that regard, across many models, and because 2) they are much lighter to carry around all day. These facts are not well understood or accounted for, especially by reviewers.

The second set of facts not understood turn on the importance for lenses of high center sharpness for good image quality, and again, the idea that many of Nikon professional lenses have IQ no better than some new, lower level, consumer lenses with high center area sharpness, especially when coupled with better IQ lower level cameras.

Why?

Because processing programs such as DxO Optics Pro, can correct for virtually all other optical faults, including various distortions, aberrations, vignetting and even softness or a lack of sharpness in the corners. Again, durability, weight, often speed and the ability to withstand abuse are the differentiating qualities for the professional lenses, not now so much optical quality and certainly not with corrective optical processing programs for the latter.

Being light weight is important to me and I do not at all abuse my equipment or expose it to the weather. I use DxO Optics, and its various corrective modules tailored to my specific lens and camera combinations, to correct optical faults, in addition to doing what regular photographic processing I want.

Lens reviews often consider correctable faults and down grade a high center area sharpness lens for them, not realizing with programs like DxO Optics Pro, they can be corrected and take excellent advantage of such high center area sharpness for much better overall image quality. There is a real lack of understanding here. Much money being made off of it.

These two set of errors account for much foolishness and misunderstanding. They compromise on results and empty pockets at the same time.
___

A shot of a TV screen with D7100 and a Sigma 17-50 lens.

An Economic Lament

01 August 2016 | Pago Pago, American Samoa
Kimball Corson
We are irretrievably lost. Millions of words pour forth daily on matters economic, without good understanding or any consensus or any sensible prescription. We are awash in misinformation, affirmative disinformation and economic ignorance. All economics has been politicized. We cannot even agree on the causes of the 2007 financial crisis. See the Financial Crisis Inquiry Report of the Financial Inquiry Commission, as an example.

Conservative economic disinformation is the current order of the day. Good economic analysis has been garbled, waylaid and dispersed by economic disinformation and truly bad judgments propagated by bogus think tanks, many funded by the Koch brothers and their followers. We are reeling under the oppressive load of propaganda which many have now come to believe is true.

Those who might knowledgeably speak out against the current state of affairs are too often themselves bought off -- into silence or worse, to become themselves promulgators of misinformation and disinformation as consultants. The deck is stacked in every direction. Bogus consultancies and corporate research grants have corrupted the academy through and through on economic matters. Business schools and economics departments are bought off, especially at the top universities. They are of no help. Neither is the Fed, which is too busy serving and being controlled by Wall Street and its attending interests. Few others who know anything are left.

The effect - implicitly understood by many - is a mindset of doom and gloom. That there is no real hope, no good prospect. Being stalled out and stalemated - like our aggregate economy itself - is the forecast. The output gap is huge but conservative thinking is because we never had it, it can't be a real loss. Misunderstanding abounds. Our congressmen are self-serving clowns and ignoramuses, but they have a lock on the nation's fiscal policy which is also stalled out and stalemated. Monetary policy has been sucked dry by Wall Street and it too is stalled out and grasping.

Because of this ideological presence and intellectual void, there is no longer any real economic truth to be understood. One man's opinion is as good as another's. Experts abound without real expertise and they have fouled everyone's nest. We are adrift in a large sea in a rudderless ship and with no prospect. I am disinclined to write much more on economics, feeling there are too few of us who care about truth. We are whistling in the wind aboard that ship.

Nothing short of a revolution in thinking will change things, I believe. And I see no prospect of that. Not even those friends on Facebook who comment on my economic posts can agree and they are, with exceptions the brighter, less ideological side of the public. What prospect can there be for the public, with declining educational standards, rising economic illiteracy and a corrupt academy? The outlook really is, as the bears put it, doom and gloom, but not from the prospect of a collapsed economy, except for the bottom half of Americans, but from our public economic ignorance.

The Schools of Economic Thought: a Hasty Overview

29 July 2016 | Pago Pago, American Samoa
Kimball Corson
Three Schools of Economic Thought: a Hasty Overview

Neo-Classical economic thought is what is taught as mainstream economics. It focuses on micro economic thought about how price theory determines quantities and prices of factor inputs and outputs through competitive markets by supply and demand.

Consumers proceed by a hypothesized maximization of utility subject to income-constraints and firms maximize profits using competitively priced factors of production, both in accordance with rational choice theory. It is called Neo-Classical because Keynes is included in a rarefied way such that interest rates adjust to equalize savings and investment and have national income become equal to GDP. It is very tidy and wrong on too much, especially its Keynesianism.

Opposed to this orthodoxy are two dominate schools of heterodox thinking, the New Keynesians and the Post Keynesians. The new Keynesians believe wage and prices are sticky and don't adjust properly so income has to instead. Because income has to adjust where wages and prices don't, markets do not yield proper competitive results and the economy often fails to attain full output and employment. Therefore, New Keynesians argue that macroeconomic stabilization by the government (using fiscal policy) and by the central bank(using monetary policy) can lead to a more efficient macroeconomic outcomes than a laissez faire policy would.

The theoretical foundation of Post-Keynesian economics, on the other hand, is the principle of aggregate demand which has less to do with the market problems envisioned by the new Keynesians and more to do with problems of income distribution, liquidity preference and hoarding so that economy has no natural or automatic tendency towards full output and employment. Contrary to the views of new Keynesians, post-Keynesians do not think the economy does not tend to full output and employment because of rigid or sticky prices and wages but because of liquidity preferences which slow or stop the velocity for some money and make saving very unequal to investment.

The contribution of Post-Keynesian economics has extended beyond the theory of aggregate demand to theories of income distribution, growth, trade and development in which money demand plays a key role, whereas in neoclassical economics these things are determined by the forces of technology, preferences and endowment.

Like the New Keynesians, Post Keynesians agree that macroeconomic stabilization by the government (using fiscal policy) and by the central bank(using monetary policy) can lead to a more efficient macroeconomic outcomes than the laissez faire policy of the Neo-Classical economics would.

Neoclassical economics lives in too much of a vacuum and is only a crude first order approximation to reality. I incline toward Post Keynesianism.
_____

There seems to be little interest in or understanding of economics in the media world of finance. Aside from a few, there is only a real interest in finance, as though that is the entire economy, instead of 15 percent of it (in lieu of what realistically should be about 4 % of it).

I must say in passing that economic understanding is very limited and poor in finance, and I also observe much such knowledge is displaced by financial doom and gloom and hand-wringing, and by misunderstandings about different kinds of debt and the different kinds of problems they pose or don't in conjunction with other factors.

Too many are being sucker punched by the financial media and its misunderstandings of economics. The world of economics is NOT at all just the world of finance or even close to it as this note should make clear. Indeed, much of the world of economics (mistakenly, I think) just ignores finance as a "bubble world unto itself," including too many economists.

The Central US Economic Problem We Can't Face

19 July 2016 | Pago Pago, American Samoa
Kimball Corson
Larry Summers has resurrected the Depression-era phrase "secular stagnation" to describe a chronic deficiency of current investment relative to savings that has trapped the world in a state of low economic growth largely resistant to monetary policy. But is this just a pandering and political way of looking at just part of the problem. I think so.

It is not just reduced real investment as a percentage of savings or absolutely that is the problem, but reduced relative and current consumption as well (which drives investment), both due to massive hoarding from current income -- an extreme preference for liquidity by the rich -- coupled with massive income inequality, so our bottom half lives in recession and the top 10% hoards excessively, sticking such income, not held as cash, in other liquid assets off shore and in US financial secondary markets, instead of spending it on current real investment and for consumption.

This is what Keynes taught us that no one seems to realize in part because they don't understand Keynes and in part because it is politically incorrect to conservatives to say so, including for mainstream economists like Summers, who strikes me as being a bit slow and ignorant about it anyway, in addition to pandering.

The solution is obvious but too abhorrent to many. A 100% tax on liquid hoards from current income not spent on current consumption or invested currently in real productive assets, with such tax revenues so raised being redistributed to the bottom half in proportion to their relative poverty.

A real jolt cola for the economy -- but dare I say it with so many conservatives about? We aren't even supposed to think, much less talk this way. And then we wonder why our stock market is so high and our economy is in the toilet on real growth. Silly, ignorant us.

Wheel Spinning in an Theoretical Economic Void.

17 July 2016 | Pago Pago, American Samoa
Kimball Corson
Huge quantities of data are regurgitated and churned in the financial press, but aside from only some, to what good and useful end is all of it?

The end certainly can't be prediction or forecasting, because the track record here is a largely a huge disaster for most all of it. Uselessness prevails almost always as to what matters.

It is a turgid exercise of the financial media awaiting a falling sky. Sitting on one's hands is almost as useful, given what they know about economics and data,

Worse, uselessness also prevails almost always as to what matters when we look at aggregated data with no sense at all of its distribution or variance. We blithely and typically assume that if the numbers are high or rising that all is well.

An example is household income. If we have three data points of say $1,000,000,000, $1,000 and $100, the total of $1,000,001,100 looks very good (especially if the total grew by say 10% because the largest number did even better). The average of $333,333,700 still looks great, too, even if the $1,000 median doesn't. We are in the dark about what is really going on looking only at the aggregate numbers.

We are also clueless about bad data, with aggregate unemployment data being a key example.

The truth is we just don't understand data or economics or how to use them, and are just throwing misused and bogus numbers around in the financial media all the time, to no good or useful end.
Vessel Name: Altaira
Vessel Make/Model: A Fair Weather Mariner 39 is a fast (PHRF 132), heavily ballasted (43%), high-aspect (6:1), stiff, comfortable, offshore performance cruiser by Bob Perry that goes to wind well (30 deg w/ good headway) and is also good up and down the Beaufort scale.
Hailing Port: Lake Pleasant, AZ
Crew: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
About:
Kimball Corson: I am a 74 year old solo sailor, by choice. However, I did take on a personable, but high maintenance female kitten, now a full grown cat, named KiKiPoo when she is sweet, or KatKatPo after she has just killed something like a bird or bat. [...]
Extra:
Although I was a lawyer and practiced law with good success for thirty years, creating significant new law, I never really believed in the law, the politics of law or in the over reaching self-interest of most lawyers I met. Too much exposure to Nietzsche and other good and seriously thoughtful [...]
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Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
Port: Lake Pleasant, AZ