Bitcoin—Troll's Gold

It's troll's gold—a curse to the holder, and to those who desire it. It's deflationary, which means it's an inherently poor currency to do business in; it comes with a built-in sales tax. It provides an incentive for employers and debtors to delay payment as long as possible. It's money that comes with a built-in discouragement to exchange, and half the work of money is as a medium of exchange.

Science fiction writer Charlie Stross brought this up on his blog, and the post jumped the science fiction ghetto wall—it got cited on /., and David Atkins over at Hullabaloo picked it up.

And, yes, Bitcoin could become a problem. It was intended, after all to implement both the crypto-anarchist and goldbug agenda. But, really, isn't this what the biggest global banks have already done? Finance, beyond the control of the most powerful governments, and corrupting those governments. I do not think Bitcoin could make matters much worse, in that regard. Yet…

There's a dark side to Keynesian economics. Keynes-Hicks models provide tools which hold out the promise of an economy without booms and busts, without bubbles and depressions, without a 1%. Conversely, though, Keynesian management can be used to enable an aristocracy, to insure that money will only be a store of value for people who are connected with the people who run the system. A new tool of class oppression, in other words.

But there's a deeper darkness. Without the "somewhat comprehensive socialization of investment" that Keynesian economic management requires, a money economy is like a climate system, with arbitrary and unpredictable weather, vast storms, freezes, booms and busts. And that is what crypto-anarchists want to make a permanent condition.

Well. I do not think that is too likely. But a new aristocracy? Is that not what a faction of the world's very wealthy are working to create?

The Budget Deal: Not Even A Fight

My unemployment insurance will expire on my birthday. The budget deal that I am hearing praised? The Democrats didn't even put up a fight on unemployment. Now, if it had been the Republicans losing on one of their policy goals, we'd have heard about it 24x7 on the news. There would have been a filibuster and hostage-taking. Instead, the Democrats just rolled over, letting the Republicans avoid doing something that would cost them hugely in public standing and perhaps even votes.

I feel like I'm living in an abusive family, where the violent alcoholic father beats us routinely, and the beaten-down mother doesn't even raise a protest, and the neighbors all complement the mother on keeping the peace. Abuse survivors will often tell you they hate the complicit parent as much as the openly abusive one. The Democrats could have the vast majority of the public on their side if they just stood up, but they never do.

And what is this stuff with parents anyway? The parties are supposed to be working for the people, not the other way around. They're supposed to be our sons and daughters, not our parents, not our rulers.

No. This is not what the Framers fought for, in that long-ago time when they created the first modem democracy. No.

On the Landrieu/Obama "keep your bad insurance" plan

Wouldn’t it be better to fix the PPACA cost issues? I don’t think there would be many objections if the cancelled plans were replaced with reasonable plans at similar costs. The problem is that many people are facing financial hardship because of the requirements of the PPACA, not that people want to keep their junk insurance.

(This is a retitled repost—sorry.)

On the LAX Shootings, to a libertarian

Originally posted elsenet:

If the country is saturated with ideas like "Taking up arms against an authoritarian government is a moral thing" and "The US government is authoritarian," then sooner or later some crazy person is going to put the two together and do something crazy like bomb the Murrah building or shoot TSA agents.

Don't throw gasonline on the flames and then claim you didn't know there was a risk.

Pooch, Screwed?

Have the ACA implementation problems and high costs for a minority of the public (perhaps nine five million) destroyed the chances of the Democrats in the 2014 and 2016 elections?

Nucking Futz! Stark Staring Bonkers!

Did you know? Obama will start quartering soldiers in people's homes!

And a gnu group plans a gnu appreciation day on the anniversary of Newtown, which seems to me sort of like Jacobins planning guillotine appreciation day.

And, we have the leader of Heritage Action saying, "Look, Democrats usually win these fights because they do a better job of not cracking." Um, guy, never heard of "no organized party?"

Thermodynamics and Microfoundations

"In a long discussion over on Brad Delong's blog, Robert Waldmann commented, "For years I have been trying to find a demonstrably empirically useful idea in macroeconomics introduced after 1937," and I responded:

I'm a dilettante bird, but it seems to me the hard question is "Why do the Keynes-Hicks models work?"  (If I understand correctly, this is another version of "What are the microfoundations?")   And no-one seems to know.  We already know how to devise laws, customs, and regulatory practices that work fairly well in maintaining a productive, equitable economy.  But if we could explain why they worked, we could make the case for those in language that everyone could understand, instead of just saying, "Do it this way.  We don't understand why, but it works."

That said, big insights don't come along that often; 50 or 100 years between discoveries of fundamental laws is pretty typical in the history of science.  I am somewhat reminded of the history of thermodynamics.  Between the first designs of workable heat engines in 1700 or so, through Carnot's famous 1824 paper, Maxwell's, Boltzmann's, and Gibbs work in the 1870s, is nearly 200 years.  Carnot, broadly, formulated the macroscopic theory of thermodynamics, and Maxwell, Boltzmann, and Gibbs who finally explained it in turns of what Gibbs called the statistical mechanics of molecules—microfoundations.  (Though Gibbs also made important contributions to the macro theory.)

So we wait for the next insight, and try to figure out how to make the politics work.

But that wasn't the end of the discussion. A few posts and days later, Brad Delong put up a post entitled, "You Don't Need a Rigorous Microfoundationeer to Know Which Way the—Well, to Know Much of Anything, Really," in which he pointed out that it is still not possible to derive chemistry from quantum mechanics, and this isn't important.

Hunh.