The Angry Bear

More evidence of increasing deflationary pressure on wages One of my pet peeves is that economics as a discipline needs to import the entirety of learning theory from psychology, not just parlor tricks like the endowment effect.  For example, learning from models. To wit, once Jack Welch was successful in using a pay scheme at GE that ensured that a given percentage of employees would not get a raise in any given year, it was inevitable that other...

When Big Sur Met Silicon Valley: Remembering The Santa Cruz Nonlinear Dynamical Systems Collective I spent Memorial Day weekend with extended family members in Santa Cruz, near where many of them live, but with none of them right there  It was most pleasant, but explaining the nature of the place and the University of California branch there led me to think more deeply about the place.  I am not aware of anybody else saying this before, but it struck me...

My plan for Europe. In comments JackD asked me what I thought of Italy leaving the Eurobloc. The problem is that it is easier said than done — the instant it becomes a serious possibility there will either be the mother of all bank runs or a banking holliday. Everyone (including your humble blogger) will want to get our hands on paper Euros which can’t be converted into Lire or Italos or whatever. So it has to be done quickly and by surprise — oh and...

The extreme conflict between the establishment and the new natonal populist majority in Parliament has spooked investors. The difference between the Italian and German 10 year treasury rates just jumped up about 100 basis points. This isn’t a crisis yet. I recall back when Italia caught a bit of Greek contagion (before ECB president Mario Draghi said “whatever it takes”) that the experts at the tesoro said they could handle interest rate spreads up to...

I don’t believe in intellectual property… I don’t believe in compound interest… Nobody believes in the lump-of-labor fallacy. Mr. Nadella is engaging in a game of projection and disavowal that is as old as capitalism. He is affirming the reality of an event that only happens in the imagination — the production of something out of nothing. To perform this usurious hat trick, one must assume something one knows is not true — that money is fertile. The...

Updated This past weekend, I was in North Adams, Ma.  We did some exploring of the area and came across a company started in 1837 that still exists today in Buckland.   It no longer produces there, as it has moved to Westfield, Ma.  It’s only move in 178 years.   However, it has not survived the trend of Capital Investment companies.  Though, their being purchased does not appear to be a bad thing based on their website. This picture I took is why I am...

Carlo Cottarelli was asked to try to form an Italian government by President Sergio Mattarella. There is no chance that Cottarelli will obtain the confidence of Parliament (parties including a majority of deputies have brought up the possibility of impeaching Mattarella for nominating Cottarelli). Mattarella is using his extraordinary powers to fight populist nationalists who disrespected the Euro. Cottarelli is an odd choice for an anti-anti-globalist —...

(literally the surrender of Conte but a reference to The Big Gundown). updated to comply with the Italian criminal code (which forbids vilifying the President of the Republic) I have to write about Italian politics, because everyone is (and I live in Rome) but you don’t have to read it. I will try one paragraph of background. In the last election angry Italians gave a very thin majority to two extremist parties the movimento 5 stell and La Lega Nord is...