On sustainable soceity

On Meet CASSE

2011-10-26T05:36:00.000+09:00

http://steadystate.org/meet/

CASSE was founded as a U.S.-based nonprofit organization by Brian Czech in 2004 to refute the dangerous rhetoric that “there is no conflict between growing the economy and protecting the environment.” Working with colleagues in several professional scientific societies, Brian crafted a scientifically sound position on economic growth that can be signed by individuals and endorsed by organizations. With our position statement, the work of our dedicated staff and volunteers around the world, and the development of numerous information resources, CASSE has become the leading organization promoting the transition from unsustainable growth to a steady state economy.

trend researchs: 政府紙幣は、恒久的な財源になるのか？

2011-08-02T08:50:00.000+09:00

trend researchs: 政府紙幣は、恒久的な財源になるのか？

IAEA whitewashes worst nuclear disaster since Chernobyl

2011-06-11T05:38:00.000+09:00

IAEA whitewashes worst nuclear disaster since Chernobyl

StudyOnF_Soddy GooleGroup

2011-05-05T07:37:00.000+09:00

F.Soddyについての研究会が更新されています。⇒　　https://groups.google.com/forum/?hl=ja#!forum/studyonsoddy

最近のH.E.Dalyの仕事

2011-05-05T05:54:00.000+09:00

From Facebook;

桂木健次
Daly says:Physically we do not produce anything; we just use energy to rearrange matter into a more useful form. Production really means transformation of what is already here.

Not Production, Not Consumption, but Transformation « Center for the Advancement of the Steady Stat
steadystate.org
Well-established words can be misleading. In economics “production and consumption” are such common terms that it is easy to forget that they do not really mean what they literally say. Physically we do not produce anything; we just use energy to rearrange matter into a more useful form.

⇒ http://steadystate.org/learn/blog/

Google プロフィールを Google グループアカウントにリンクする（新 UI）

2011-05-04T15:50:00.000+09:00

Google プロフィールを Google グループアカウントにリンクする（新 UI）

クリオの実験室: 高橋財政下の日銀引受

2011-03-21T08:31:00.000+09:00

クリオの実験室: 高橋財政下の日銀引受

ネットワークのloop時代へ

2011-01-25T14:46:00.000+09:00

直近のネットワーク環境は、SNSの登場で一変してしまった。付いて行くのが精一杯です。

Oil and the End of Globalization

2010-11-12T18:55:00.000+09:00

by Jeff Rubin

The Oil Drum (November 08 2010)

One of the keynote speakers at the recent ASPO-USA conference was
Jeff Rubin, former Chief Economist with CIBC World Market. Rubin
talked about why he believes high oil prices caused the recent
recession. He also talked about how high oil prices are likely to
vastly reduce globalization. He views this as a positive situation,
because he expects this will change supply curves in such a way as
to make American-made products more competitive. He believes that
we will find our new smaller world much more livable and
sustainable.

The video can be viewed at ASPO.TV: http://aspo.tv/

Here is a transcript.

You know, knowing the nature of the disease is usually an essential
first step to finding a cure. And so too, it is with a recession.
Knowing the true nature of a recession goes a long way in helping
us to avoid falling into another one. Particularly when the
recession we are just coming out of happens to be the deepest
global post-war recession on record.

Conventional wisdom, as espoused by central bankers, finance
ministers, and the pundits that you watch on TV would have you
believe that the recession that we are still feeling here in
America, and, indeed, throughout the world, was all about a
financial crisis, whose roots lie in the failed sub-prime mortgage
market in the United States. In other words, a whole bunch of
boarded up, repossessed unsalable houses and depressed property
markets in places like Cleveland, all financed with easy credit and
subprime mortgages, hit financial markets like some toxic hydrogen
bomb, and then all of a sudden, a property market crash in the
United States, somehow morphed into a deep, global recession.

Gee, I never knew that Cleveland was that big. No one has to tell
me about the impact of the subprime mortgage market on financial
markets. Why do you think I am an author now? But there is a big
difference between blowing up the bonus pools of investment banks,
and blowing up Wall Street, and what happened.

If you are wondering why risk-averse institutions like the bank
that I used to work for had to write down almost $10 billion of
assets of things called Collateralized Debt Obligations that were
funded by pools of subprime mortgages, the reason is pretty simple:
they were rated AAA, which meant that rating agencies assigned the
risk of default with the same probability that the US Treasury
would default. What the banks lost sight of is how rating agencies
get paid. Rating agencies don't get paid by investors; they get
paid by issuers. In economics, we call this moral hazard problem.
In investment banking, we call it, "Shit happens".

It is easy to see how sub-prime mortgages blew up Wall Street; it
is a little more challenging to see it as the author of the global
recession. Why were there economies that had no sub-prime mortgages
that experienced even deeper recessions than the United States? Why
did those economies go into recession even before the US economy
went into recession? Maybe, just maybe, there was something more
important going on -more important to the global economy than Wall
Street or sub-prime mortgages, like $147 barrel oil, for example.
If we know anything about watching the global economy in the last
forty years, we know this: feed it cheap oil, and it runs very
smoothly. All of the sudden, give it expensive oil, and it stops in
its tracks.

Every major recession in the post-war period has oil's fingerprints
all over it. The 1973 first oil shock led to what was then the
deepest post-war recession, at the time. The second OPEC oil shock
led to no less than two recessions: 1979 and 1982. And then when
Saddam Hussein invaded Kuwait, and left half of its oil fields on
fire, and oil spiked to the then unheard-of price of $40 barrel, lo
and behold, the industrialized world again fell into recession.

Gee, I wonder what happened to oil prices before this recession. It
seems to me that oil prices went from about $30 barrel, at the
beginning of 2004, to almost $150 barrel by 2008. Even in real
terms, that is, inflation-adjusted, that price increase was over
double the price increase of either the first or the second OPEC
oil shock. If they had led to devastating recessions, why would not
the biggest oil shock of them all, be the obvious culprit for what
has been the deepest recession to date?

There are many ways in which oil shocks create global recessions.
First, the transfer of income. When oil went from $30 barrel, to
about $147 barrel, over $1 trillion of income was transferred from
the industrialized oil consuming world to OPEC. Now, that was not
neutral for the economy, because the savings rates from which money
was coming from, like the United States, was virtually zero
percent, meaning that consumers spent everything they made. And
where the money was going to, places like Saudi Arabia, or Kuwait,
or the United Arab Emirates, had savings rates of almost as high as
fifty percent, so it certainly was not demand neutral.

High prices also create recessions by crowding out non-energy
expenditures. Two years ago, when gasoline cost us $4 gallon,
low-income Americans were paying more to fill their tanks than they
were to fill their stomachs.

But by far, the most important mechanism, the most important path,
by which oil prices cause recession is through their impact on
inflation, and their impact on interest rates.

There is no shortage of people to blame for the subprime mortgage
crisis. We could start with fraudulent mortgage companies that
approved mortgages, then quickly sold them to financial
institutions. We can blame financial institutions who played
Russian roulette with depositors' money, and of course we can blame
rating agencies who assigned AAA ratings to this. And we can blame
regulators, who were asleep at the wheel, like the Securities
Exchange Commission, who were either blind or indifferent to Wall
Street's systemic risk to subprime mortgages.

However, the real culprit behind subprime mortgages was the very
low cost of capital and zero percent interest rates. All the greed
in the world could not do what the Fed's easy money made possible.
The subprime mortgage rates were created by interest rates and the
subprime mortgage market was pricked by interest rates. Everybody
would agree with that. What people don't seem to ask is, "Just why
did interest rates go from one percent to 5.5% from 2004 to 2006?"

Well, any central banker, even Alan Greenspan, will acknowledge
that your borrowing cost is a mirror image of your inflation rate.
We had one percent federal funds' rate in 2004, because we had a
one percent inflation rate. All of the sudden, in 2006, inflation
was over 5.5%, the highest it had been in America, since,
coincidentally, 1991, when we just happened to have the last oil
shock. All of the sudden, money wasn't free any more. All of the
sudden, you weren't getting credit cards in the mail any more that
you never applied for. And all of the sudden, people who held
negative amortization sub-prime mortgage rates had to start paying
seven or eight percent.

Well, if interest rates hadn't risen, that wouldn't have occurred.
Why did inflation move up? Virtually all of the increase in
inflation came from one component of the US consumer price index
basket - the energy component. By the end of 2006, energy inflation
was running at 35%, because of one price: the price of oil. The
price of oil went from $30 barrel, which incidentally, every oil
analyst at the time said it was going to stay at that level, to
over $70 barrel. If oil had stayed at $30 barrel, inflation would
never have spiked; neither would have interest rates. All of those
good folk in Cleveland would probably still be there, in their
homes financed by zero percent interest rate sub-prime mortgages.
Lehman Brothers and Bear Stearns would probably still exist, and
I'd probably still be the chief economist at CIBC.

But that is not what happened. Why did oil prices go up to $147
barrel? Somewhere where virtually every economist said it could not
go. Well, there were two reasons that economists said that oil
prices could not get into triple digit range, and that was the
cherished principles of supply and demand. First, the theory of the
upward sloping supply curve - higher oil prices would bring new
supply, just like it did after the OPEC oil shocks, where oil
gushed from Prudhoe Bay and the North Sea. And not only did that
break OPEC's strangle-hold on the market, but sent oil prices
tumbling down.

Unfortunately, as you all know, there are no more Prudhoe Bays or
North Seas to come on tap. Yes, there are tar sands, and there is
deep water, and the upward sloping supply curve did bring new
sources of supply, but only at prices that we at the end couldn't
afford to burn.

What about the cherished principle of demand? Would not triple
digit oil prices quash demand? Well, it did, in certain places. It
did in the United States. It did in Canada. It did in Japan. It did
in Western Europe. Fifteen years ago, if those economies suddenly
cut back their appetite for oil, oil prices would have fallen,
because fifteen years ago, those countries would have accounted for
almost three-quarters of world oil consumption. Today, they account
for barely half. Tomorrow, they will account for less than half. It
wasn't the US consumer that drove oil demand to $147 barrel in the
last cycle, and it certainly won't be the American consumer that
drives a barrel of oil to $147 and higher in the next cycle. We
have already seen peak demand, in this economy, and in the economy
of the other industrialized countries.

Where do you think oil demand has been growing the strongest? Many
of you will probably be saying China, and indeed it has. It's grown
from around two million barrels a day, to about nine million
barrels a day. But I know a place where the demand for oil is
growing even faster than in China. And it is the same place your
politicians have told you your supply is coming from in the future.
Last year, OPEC and two non-cartel producers, Mexico and Russia,
consumed fourteen million barrels a day. That is almost two Chinas.

What makes OPEC so thirsty for its own fuel? Well, if you ever
filled your tank up in Caracas, you would get some sense of it. It
is twenty cents a gallon. And if you go to Riad, in Saudi Arabia,
it is a little bit more - it's forty cents a gallon. And it's forty
cents a gallon, whether oil costs $20 barrel, or whether oil costs
$150 barrel.

If you think drivers have a good deal in OPEC countries, they don't
have anything as good a deal as power users. What's the coolest
thing to do in Dubai? Ski, of course. I love skiing; I'm Canadian.
But going skiing in an area where it's hot enough to fry an egg on
the pavement uses up a whole lot of energy. In fact, one day at Ski
Dubai uses the equivalent energy that a North American would
consume in a month's worth of driving. So the question isn't really
how much productive capacity that OPEC has. How much export
capacity is the real question, and every year that is less and
less, because every year, more and more is consumed at home.

Now, it's their oil and gas, and if they want to consume their oil
and gas going skiing in one of the hottest deserts in the world,
that is their right. All I'm saying is, chances are, your future
oil supply ain't coming from OPEC, and chances are, it ain't going
to be cheap.

Now sure, oil prices fell to $40 barrel during the recession. And
for many folk, that was evidence enough that it never had any
business being in triple digit range in the first place. But what a
lot of those folk forget is that in the last recession, world oil
demand actually fell. It fell for the first time since 1983. Such
was the severity that the recession was.

Peak oil is not a problem if the economy that it is powering is
shrinking. Peak oil is only a problem if the economy we are in is
starting to grow. The first thing you know about an economic
recovery is that economies start burning more oil. The next thing
you know about an economic recovery is that oil prices start
rising. Where is oil trading today? It is trading at over $80 per
barrel. With the exception of Germany and Canada, every other
economy in the G7 is still miles below the level of GDP that they
were at before the recession began.

And yet, where oil is trading today, turn the clock back to three
years ago, and that would have been a world all-time record high.
Now, it is where oil trades in the shadow of the deepest global
post-war recession. Where do you think oil prices are going?

I will tell you where I think oil prices are going. Even in this
most anemic of economic recoveries, we are going to see triple
digit oil prices. We are not going to see triple digit oil prices
in ten to fifteen years. And it is certainly not clear to me that
the global economy is better able to handle that than in 2008. Now,
a lot of people will say, "Jeff, economic history tells us that
scarcity is the mother of invention. Give us ten to fifteen years
of adjustment, and we will develop alternate technology, so we
won't be carbon-dependent".

And they are right. Give us ten to fifteen years, and we will solve
this on the supply side. But as I say, our rendezvous with triple
digit oil prices is not in ten to fifteen years; it is in ten to
fifteen months. So instead of trying to turn cow-shit into high
octane fuel, we are going to have to learn to get off the road, and
that is just what happened. In 2009, there were four million fewer
cars on the road than there were the year before. In the next ten
years, forty million North Americans will be taking the exit lanes.
The question is, "Will there be a bus to get on?" Instead of giving
$40 billon to General Motors, what we should have done is spend $40
billion on public transit, so there would be a bus to get on.

In a world of triple digit oil prices, all of the sudden the
economy's speed limit changes. And one of the problems that we have
here in America, is that we don't recognize that our economy's
speed limit has changed. What the economy could grow at when oil
was $20 to $30 barrel is a whole different speed limit than what
the US economy can grow at when oil is $80 to $150 barrel.

And that is something that I don't think the Administration
recognizes. Because what President Obama cannot bring is cheap oil.
He can get expensive oil. We can build a pipeline from the Canadian
tar sands down to the Gulf refineries, and we can get oil. But in
order to get the kind of oil that will be required, that will
require the triple digit oil prices that we can't afford to pay.
But trying to pump-prime the economy with fiscal stimulus is not a
substitute for cheap oil. It won't make the economy grow any
faster. It will just make the deficit that much bigger.

Worse than that, triple digit oil prices will not only take
millions off the road, it will send our economy right back into
recession, unless of course, the economy changes. We can't do a
whole lot about triple digit oil prices. That is where the supply
curve lies. And if you doubt that, just look at the Canadian tar
sands. Like sure, there is 170 billion barrels of it there, and
there is 500 billion barrels in the Orinoco heavy oil belt, but
that is not the issue. Depletion is not just the geological
concept, it is more fundamentally an economic concept. Because if
the cost of extracting that oil from the tar is greater than we can
afford to burn, it doesn't matter how many billion barrels of oil
there are in the tar sands.

So how do we adapt? How do we grow in an economy of triple digit
oil prices? We change the nature of our economy. In a world of
triple-digit oil prices, distance costs money. The global economy,
where we produce one thing at one end of the world, to be sold at
the other end of the world, doesn't make any economic sense,
because in too many cases, what will be penny-wise, will soon
become pound-foolish. The wage "arb", what we save on wages, we
will more than squander on bunker fuel.

Take the steel industry, for example. Just before the recent
recession, some very curious things were happening in the US
market. When oil prices got to be over $100 barrel, all of the
sudden, Chinese steel exports to the US fell at double-digit rates.
And all of the sudden, US steel production was up. And all of the
sudden, US Steel Corporation, which was one of the biggest dogs in
the market, all of the sudden its share price doubled.

What was going on? I'll tell you what was going on. For the first
time in twenty years, it was cheaper to make steel in the United
States than to import it from China. Why? Consider what China has
to do to send you steel. First, it has to ship iron ore from
Brazil, across the Pacific Ocean, turn it into steel, which is
itself a very energy-intensive process, then ship it back, across
the Pacific Ocean, to you. At $20 per barrel, that works. At $100
per barrel, that doesn't work. It added on $60 to $70 dollars, to
the cost of a ton of hot-rolled steel. How much labor time do you
think there is in making steel these days? One and a half to two
hours. The transit costs all of a sudden exceeded the labor costs.
Who would dream that triple digit oil prices would breathe new life
into our hollowed-out Rust Belt? But in a world where distance
costs money, that is exactly what is going to happen.

Take food. Last year, China exported $6 billion of food to America,
everything from apples to frozen chicken wings, bringing a whole
new meaning to having your Chinese food delivered. Steel doesn't
have to be refrigerated. Hopefully, frozen chicken wings do. What
do you think powers that refrigeration unit? Bunker fuel! The same
thing that is powering the boat. The world of triple digit oil
prices - it won't matter that farm labor is cheaper in China than
in the United States, because the cost of bringing those frozen
chicken wings to us will be too expensive.

It's not like we are going to stop using steel in America, and it
is certainly not like we are going to stop eating. What we are
going to have to do is make our own steel. What we are going to
have to do is grow more of our own food. Unfortunately, much of our
agricultural land has been paved over with suburban sprawl. Just as
triple digit oil prices will breathe new life into our hollowed out
Rust Belt, triple digit oil prices will turn those far-flung
suburbs and exurbs back into the farmland they were, thirty to
forty years ago. The very same economic forces that gutted our
manufacturing sector, that paved over our farm land, when oil was
cheap and abundant, and transport costs were incidental, those same
economic forces will do the opposite in a world of triple digit oil
prices. And that is not determined by government, and that is not
determined by ideological preference, and that is not determined by
our willingness or unwillingness to reduce our carbon trail. That
is just Economics 100.

Triple digit oil price is going to change cost-curves. And when it
changes cost curves, it is going to change economic geography at
the same time. I know that the world of triple digit oil prices has
been the domain of the apocalypse. For many people, the advent of
peak oil and triple digit oil price means the end of our economy.
For some, civilization as we know it. I don't share that pessimism.
I don't share that outlook. I'm an economist. I believe in the
power of prices.

Sure, if we continue to want to get our frozen chicken wings from
half-way around the world, where labor is cheap, if we want to get
our steel from half way around the world, if we want to commute
back and forth eighty miles to work in our SUVs, peak oil won't
just be a recession, peak oil will be peak GDP, and that will be
apocalyptic. But as I say, I am an economist, and I believe in the
power of prices. I believe we are going to change. I believe that
we are not going to end up importing food from half-way around the
world, or steel from half-way around the world. I don't think we
are committed, irrevocably, to suburban sprawl.

And we might just find that that new smaller world around the
corner is a whole lot more livable, and a whole lot more
sustainable, than the big "oily" one we are about to leave behind.

Thank you very much.

_____

Original article available at http://www.theoildrum.com/node/7095

Europe Ecologie

2010-11-11T05:47:00.000+09:00

Un nouveau mouvement pour l'écologie politique

Ce samedi à Lyon, c'est un événement historique auquel nous vous donnons rendez-vous !

Venez nombreux participer à la constitution du nouveau mouvement de l'écologie politique, pour un moment unique et fondateur qui marquera le lancement de notre parti-réseau. Des acteurs historiques de l'écologie politique autant que des nouveaux venus seront présents pour témoigner et illustrer la diversité qui fait notre force, en France comme en Europe et dans le monde, du local au global.

Ces Assises seront également l'occasion d'exprimer la solidarité qui lie les écologistes et la société, et la responsabilité qui est la notre d'écouter et répondre aux interpellations des représentants des syndicats, des associations sociales et environnementales qui seront présents.

Pour assister aux Assises, vous pouvez envoyer un mail à l'adresse inscription-assiseslyon@europeecologie.fr
L'inscription n'est pas obligatoire, mais l'accès à la salle dépendra du nombre de places disponibles.

> + d'informations
> infos pratiques (transport, hébergement)

Vous ne pouvez pas venir à Lyon ?
Les Assises seront retransmises en direct sur internet sur les sites d'Europe Ecologie et des Verts, ainsi que par la télévision sur la chaîne Public Sénat.

Quel nom pour notre mouvement ?
Samedi, nous choisirons tous ensemble le nom du futur mouvement.
Les personnes qui pourront être présentes à Lyon voteront sur place, tandis qu'une consultation par internet permettra à l'ensemble des adhérents du processus de s'exprimer.

Toutes les personnes qui disposent d'une adresse email recevront dans les prochains jours les modalités pratiques pour participer à la consultation (code confidentiel, horaires d'ouverture...).

Autres rendez-vous du samedi
[rappel] Le "projet 2012" se construit avec vous
Une première réunion de travail du Groupe Projet 2012 aura lieu lors des Assises de Lyon, samedi 13 novembre 2010, à partir de 9h30 au Centre des Congrès, salle Bellecour 1. Cette réunion est ouverte à tous, vous y êtes cordialement convié/es.

> Participez au Projet 2012 | tous les détails

Présentation des outils et sites Web en préparation
Nous vous proposons de découvrir les nouveaux outils web en préparation pour les élections cantonales et pour les régions, les comités locaux...

Rendez-vous aux candidats, aux webmestres locaux, régionaux, et à celles et ceux qui s’y intéressent pour une présentation des premiers visuels, et des premières fonctionnalités pour les futures campagnes.

Réunion à 12h dans le Centre des Congrès

> informations et pré-inscriptions

Put your money where your life is.by Michael Shuman

2010-11-05T10:04:00.000+09:00

Put your money where your life is.

Americans want to invest locally: here's how.

by Michael Shuman

yesmagazine.org (June 05 2009)

The Obama Administration believes that the best way to repair our
financial system after the Great Crash of 2008 is to improve the
performance and oversight of global banks and investment firms. A
growing number of Americans, however, would prefer to pull their
retirement savings out of these high financial fliers altogether.
They would rather invest in their communities. The problem is, they
can't. Outdated federal securities laws have left Main Street
dangerously dependent on Wall Street, and overhauling these
regulations turns out to be a hidden key to economic revitalization.

There are two reasons Americans increasingly wish to invest in
locally owned businesses. First, they understand that these
businesses are the real pillars of a prosperous, sustainable
economy. A growing body of evidence suggests that every dollar
spent at a locally owned business generates two to four times more
economic benefit - measured in income, wealth, jobs, and tax
revenue - than a dollar spent at a globally owned business. That's
because locally owned businesses spend more of their money locally
and thereby pump up the so-called economic multiplier. Other
studies suggest that local businesses are critical for tourism,
walkable communities, entrepreneurship, social equality, civil
society, charitable giving, revitalized downtowns, and even
political participation.

Second, many Americans no longer believe Wall Street's assertions
that a global, publicly traded corporation is the safest place to
invest their savings. According to data in Statistical Abstract,
sole proprietorships (the legal structures chosen by most
first-stage small businesses) are nearly three times more
profitable than C-corporations (the structures of choice for global
businesses). Moreover, a bunch of global trends, like rising energy
prices and the falling dollar, are making local businesses
increasingly competitive. Meanwhile, Americans are shifting their
spending from goods to services, a trend that promises to expand
the local business sector, since most services depend on direct,
personal, and, ultimately, local relationships.

Locally owned businesses currently generate half of the private
economy, in terms of output and jobs. Add in other place-based
institutions - nonprofits, co-ops, and the public sector - and
we're talking about 58 percent of all economic activity. So in a
well-functioning financial system, we'd invest roughly 58 percent
of our retirement funds in place-based enterprises.

Yet local businesses receive none of our pension savings. Nor do
they receive any investment capital from mutual, venture, or hedge
funds. The result is that all of us, even stalwart advocates of
community development, overinvest in the Fortune 500 companies we
distrust and underinvest in the local businesses we know are
essential for local vitality. This situation represents a colossal
market failure.

The good news is that much of the problem could be solved by
modernizing securities laws. Today these laws place huge
restrictions on the investment choices of small, "unaccredited"
investors - a category in Securities and Exchange Commission
vernacular that includes all but the richest two percent of
Americans. The regulations prohibit the average American from
investing in any small business, unless the business is willing to
spend $50,000 to $100,000 on lawyers to prepare private placement
memoranda or public offerings - thick documents with microscopic,
all-caps print that no human being has ever actually been observed
reading.

Were these reforms enacted nationally, literally trillions of
investment dollars could begin to move into the local business
economy.

One easy reform would be for the SEC to allow low-risk public
ownership of locally owned microbusinesses. By low-risk, I mean
that no person can hold more than $100 worth of any one stock -
which means that we're freeing up people to engage in the risk
equivalent of a nice dinner for two. By local ownership, I mean
that stock shares can only be bought, held, and sold by residents
within a state. And by microbusinesses, I mean any business with a
total stock valuation on issuance of under $250,000.

This legal reform would be even more effective if supported by a
few others:

* Micro-investment funds: Let's allow small investors to pool their
money in backyard investment funds (again, up to $100 per person)
that in turn create diverse portfolios of local stocks. (Only the
rich can invest in such funds now.)

* Co-op investment funds: Let's allow cooperatives, most of which
are owned by workers or consumers in a single community, to set up
investment funds empowered to make local investments on behalf of
their members. (Currently, they can only invest members' capital in
businesses owned and run by the co-op itself.)

* Local stock exchanges: Let's allow private companies to
facilitate local trading of microbusiness stock electronically,
like Prosper.com and Kiva.org do for microloans. (The SEC now bans
small, electronic exchanges like these from trading equities.)

* Pension fund participation: Let's allow any pension fund that
places as much as five percent in local securities, either directly
or through microbusiness investment funds, to meet legal standards
of "fiduciary responsibility". (Current regulations define the term
in a way that directs virtually all such investments to global
companies.)

These new community-based funds and investments, of course, need to
be overseen to prevent fraud and ensure accountability. But since
all these activities are intrastate, these new rules can be left to
the existing securities departments in the fifty states. Once
state-level laws are put into practice, many of the absurd
requirements of the SEC - like expensive audits and lengthy legal
filings - may finally disappear.

Were these reforms enacted nationally, literally trillions of
investment dollars could begin to move into the local business
economy. Entrepreneurs, hungry for new capital in the post-meltdown
credit crunch, will begin to restructure their businesses to
receive microcapital. Investors terrified of betting all their
money in the global casino will start shifting their investments to
local businesses they know, trust, and can visit and "ground-truth"
with tough questions.

The result will be a nation of stronger local economies, with
American investors placing more and more of their money into
backyard businesses rather than into the untrustworthy hands of
distant speculators.

Finally, there are two other compelling features about these ideas.
First, they cost nothing. And second, the experimentation opened up
at the state level will invite all kinds of grassroots engagement
and inventions. Instead of spending billions more in federal
taxpayer dollars to prop up dubious big financial institutions, why
not create a system that's more stable, safe, lucrative, and
democratic - for free?

_____

Michael Shuman wrote this article as part of The New Economy, the
Summer 2009 issue of YES! Magazine. Michael is director of research
and public policy for the Business Alliance for Local Living
Economies (livingeconomies.org) and author of The Small-Mart
Revolution: How Local Businesses Are Beating the Global Competition
(Berrett-Koehler, 2007).

Interested?

Jeff Golden on how community investment works.
http://www.yesmagazine.org/article.asp?id=3508

Three Ways to Invest in Your Local Community
http://www.yesmagazine.org/issues/the-new-economy/3-ways-to-invest-in-your-community

Way through on global recovery - Editors of EAST ASIA Forum

2010-11-01T07:31:00.000+09:00

EAST ASIA FORUM

Dear Reader

Way through on global recovery

The elevation of the G20 to a leaders' summit represents a change to the international system of an order that can be compared with the establishment of the great postwar international institutions. The G20 is now the premier forum for global economic governance following its elevation to leaders’ level meetings after the global financial crisis. The United States has led a smooth transition in the locus of power from the G7/8 to the G20.

The membership of the G20 is recognition of the importance of Asia in the global system. Now Asia has this global platform can it deliver on its global responsibilities?

Finding a way through — forging a consensus — on a strategy for global recovery after the financial crisis is the challenge that faces leaders in Seoul next week. Asia, and in particular, China with its current account surpluses and its huge international reserves is in the spotlight on this issue.

This week's lead, from Yiping Huang in the next issue the East Asia Forum Quarterly (EAFQ) argues that the G20 should focus on structural reform in key countries in which imbalance is a problem. Currency adjustment should be an important part of the, but not the entire, policy solution.

'The large Chinese current account surplus derives mainly from distortions in factor markets, which repress costs of production and artificially improve the competitiveness of China's manufacturing exports. Exchange rate misalignment is only a part of the picture of distortions. Elimination of the current account surplus requires liberalisation of the factor markets. Relying exclusively on currency adjustment to correct external imbalances would require an out-sized appreciation, and that would be difficult for China to accommodate at this stage, both politically and economically.

'Likewise, the exceedingly low savings rate in the US before the subprime crisis was caused by a number of factors. Simply depreciating the US dollar by a significant margin is unlikely to lift the savings rate materially. Such currency moves threaten to destabilise the economy and financial markets.'

EAFQ brings together contributions from across the Asia Pacific region to address some of the big questions that face Asia in the G20.

There are clearly Asian interests in the G20 although the region brings diverse perspectives and agendas to the global table, as it should. And how well the Asian members of the G20 can project broader regional interests and engage non-member support for those interests and agendas is another question. The legitimacy of the process will ultimately depend on getting the answer to that question right. But there is resolve in Asia to make the G20 work, since there is collective Asian interest that this global initiative succeed and continue and that encourages the G20's Asian members to define a constructive agenda through which to contribute to the international public good.

The spotlight is on Korea as the first Asian and newly emerged country to host the G20.

The remarkable achievement of the G20 in helping to steer the global economy out of the worst of the financial crisis thus far has solidified its global role. But a lot of risks remain.

The global economy remains unbalanced, because there is imbalance within major economies. The way out is difficult and requires important structural adjustments at home for most countries. Asia can help to lead by example.

Asia can help the world by helping itself in advancing vigorous structural and financial reform, strengthening domestic safety nets, rebalancing growth and showing leadership and flexibility on policies that affect others, including on the exchange rates as well as by promoting global institutional reform, for example, within the IMF and WTO.

Other recent articles in which you may be interested from the East Asia Forum are listed below. You can click the title of each one or visit www.eastasiaforum.org for daily content.

Shiro Armstrong and Peter Drysdale
Editors
1st November

The State Of Global Emergency The Worldshift 2012 Declaration

2010-09-29T06:38:00.000+09:00

http://www.worldshift.jp/で、《緊急事態にある世界》の呼びかけを知る。

私たちの世界は今、「緊急事態」にあります。　そしてこの世界的な危機は、より深刻な問題につながる兆候でもあります。気候変動、経済破綻、エコシステムの崩壊、人口過密、水と食料の不足、資源の枯渇、原子力などの脅威。遅かれ早かれ、そうした危機は私たち全員に例外無く影響を及ぼします。このまま持続不可能な道を突き進めば、今世紀の中頃までに地球の大部分は、人間をはじめ多くの生物が生息できない場所へと変わり果てることでしょう。しかしながらエコロジカルな惨事、もしくは宗教や地政、資源をめぐる衝突が引き起こす戦争の悪化などによって、総合的な体制崩壊はもっと早く訪れるかもしれません。
こうした脅威は現実のものです。この世界的危機の原因となるものは、ここ数十年、ますます勢いづいて、近いうちに取り返しがつかなくなります。そのタイムリミットは今世紀末と見られていましたが、今世紀の中頃、20年以内、10年、5年とどんどん早まっています。
今、わたしたちは、わたしたち自身と、世界についてどう考えるのか、ということが問われています。
これまでとは違う考え方が早急に求められる今、これは新しい価値観や優先権を再考するチャンスでもあります。人々と自然が調和の中で共存するために、私たちが相互連携していることを理解し、新しい方向へとシフトするチャンスなのです。

L'économie sociale et solidaire cherche sa voix

2010-08-19T18:59:00.003+09:00

Philippe Frémeaux | Alternatives Economiques n° 288 - février 2010

L'économie sociale et solidaire peine à être reconnue comme une réelle force de transformation sociale. Des initiatives récentes tentent d'y remédier, comme la création du "Labo de l'ESS" et du Mouvement des entrepreneurs sociaux.

La crise que traverse aujourd'hui le capitalisme a redonné de l'actualité à la recherche d'alternatives à l'entreprise privée classique. Parmi les candidats, les organisations de l'économie sociale et solidaire (ESS). L'économie sociale rassemble les associations, les coopératives et les mutuelles. Elles ont en commun d'être gouvernées sur un mode démocratique (une personne = une voix) et de ne pas avoir pour objectif de maximiser les revenus de leur capital. L'économie solidaire, pour sa part, regroupe les organisations qui produisent des biens et des services à forte utilité sociale, qui décident d'embaucher en priorité des personnes en difficulté, de développer des activités soutenables sur le plan écologique, ou encore de pratiquer des formes d'échange respectant des normes sociales et environnementales élevées, comme le fait le commerce équitable.

Ces deux familles se recouvrent largement - un grand nombre d'entreprises solidaires ont un statut associatif ou coopératif -, mais pas totalement: il ne suffit pas à une banque d'être coopérative pour être solidaire… et bon nombre d'entreprises de statut privé lucratif poursuivent des objectifs qui les qualifient pour être considérées comme solidaires.

En dépit de son développement et de sa puissance - l'ESS rassemblerait aujourd'hui plus de 200 000 organisations employant 2,1 millions de salariés -, ce secteur peine à s'affirmer comme une réelle alternative à l'économie dominante. Faute d'unité, faute d'apparaître comme un véritable mouvement de transformation sociale, faute aussi d'être à même de mobiliser - ou de vouloir le faire - ses adhérents, ses sociétaires ou ses associés.

Trouver des solutions aux problèmes de la société
L'ESS n'est pas une exception française. Même si les noms et les statuts diffèrent selon les histoires nationales, peu de choses la séparent de l'important non-profit sector qui existe aux Etats-Unis. De même, dans le reste de l'Union européenne, en Amérique latine comme en Asie, on trouve de nombreuses coopératives, mutuelles, associations ou fondations (1). Rien d'étonnant. Car, partout où les hommes vivent, il se trouve des personnes pour tenter de répondre aux questions économiques et sociales auxquelles l'Etat et/ou le secteur privé ne donnent pas de réponses satisfaisantes. De ce point de vue, l'ESS tire moins sa légitimité de ses statuts, de ses valeurs ou de ses principes, qui ne sont connus que d'une minorité d'initiés, que de sa capacité à innover et à trouver des solutions aux problèmes de notre société. Moins de ce qu'elle est que de ce qu'elle fait, même si les deux ne sont pas sans rapport.

Ce qu'elle fait peut être illustré par de nombreux exemples. Ainsi, quand les ouvriers créèrent les premières sociétés de secours mutuel, au milieu du XIXe siècle, ils parvinrent à accéder collectivement à un minimum de sécurité alors que les patrons se séparaient des salariés malades ou invalides sans la moindre indemnité. Quand les paysans ou les artisans et petits patrons se rassemblèrent à la fin du XIXe siècle pour créer les premières caisses de crédit agricole ou les premières banques populaires, ils trouvèrent ainsi le moyen d'accéder au crédit pour développer leurs activités, ce que les banques classiques leur refusaient. Les associations de tourisme social qui se sont développées aux lendemains de la Seconde Guerre mondiale? Elles ont permis aux employés et aux ouvriers de profiter de leurs congés payés pour partir en vacances, un luxe jusque-là réservé à une minorité aisée. Enfin, quand, dans les années 1980, des travailleurs sociaux créent des entreprises et embauchent des personnes jugées inemployables, par les employeurs du secteur public comme du privé, ils prouvent qu'il est possible de lutter concrètement contre l'exclusion produite par le chômage de masse.

On pourrait multiplier les exemples, dans le domaine social, culturel, éducatif, sportif: l'ESS joue un rôle pionnier, à la fois réparateur des maux de la société et initiateur de solutions nouvelles. A ce point de vue, elle est moins une alternative au système qu'un élément majeur de sa réforme et de sa régulation, comme en témoignent d'ailleurs les secteurs d'activité où elle joue un rôle significatif (voir graphique ci-contre).

Entre récupération, banalisation et instrumentalisation
Dans ces conditions, il n'est pas étonnant que les organisations de l'ESS n'échappent pas à un destin qui oscille entre récupération, banalisation ou instrumentalisation. La récupération peut être à l'initiative de l'Etat comme du secteur privé: historiquement, les politiques publiques, dans les domaines de l'éducation, de la santé ou de la protection sociale, sont largement issues de la société civile. Ainsi, la Sécurité sociale n'aurait jamais vu le jour si le mouvement mutualiste n'avait auparavant ouvert le chemin. La solidarité générale assurée par les systèmes d'assurance sociale obligatoire s'est développée sur le terreau des solidarités instituées par l'économie sociale au profit de groupes sociaux particuliers, réunis sur une base professionnelle ou territoriale (2).

La récupération peut aussi être le fait d'entreprises du secteur capitaliste: on le voit aujourd'hui avec le développement d'entreprises à but lucratif dans le secteur des services à la personne, en concurrence avec les associations, ce qui, en "écrémant" la partie la plus rentable de ce marché, limite la politique de mutualisation permettant d'offrir des services de qualité à des personnes ne disposant pas de moyens suffisants.

La banalisation, on l'observe partout où la réussite des entreprises de l'ESS se traduit par l'adoption progressive des règles du système dominant. L'exemple du secteur financier (banques et assurances) est ici particulièrement significatif. Les structures coopératives et mutualistes y ont un poids considérable: Crédit agricole, groupe Banque populaire-Caisse d'épargne, Crédit mutuel, dans la banque; groupes MMA, GMF, Macif, Maif ou encore Matmut, dans l'assurance… Cette réussite économique s'est cependant trop souvent traduite par une banalisation pure et simple (3). Au point que les clients d'une partie de ces banques et compagnies d'assurances ne sont pas toujours capables de dire - quand on le leur demande - en quoi elles diffèrent des banques ou des compagnies d'assurances de statut privé lucratif.

Dernier risque, enfin: l'instrumentalisation. Elle est bien souvent observée dans le secteur associatif où de nombreuses structures jouent un rôle de simples opérateurs de politiques publiques décidées en dehors d'elles; elles les assurent à moindre frais pour les collectivités territoriales ou l'Etat, qui évitent ainsi d'avoir à multiplier les postes de fonctionnaires. Leur rôle d'aiguillon de l'action publique se limite souvent, au final, à réclamer plus de moyens pour mener à bien leurs missions.

Une puissance qui peine à s'affirmer
Autant dire que l'ESS, prise dans son ensemble, n'est pas l'Alternative avec un grand A au capitalisme. On observe néanmoins en son sein de multiples initiatives qui sont autant de formes de résistance à sa logique. Une résistance qui concourt à transformer en permanence notre société. De nombreuses associations innovent ainsi en matière d'action sociale, de pratiques culturelles ou éducatives. Des banques coopératives, des mutuelles ou des institutions spécialisées développent des produits d'épargne solidaire. Dans le domaine agricole, des producteurs inventent de nouvelles filières, en rupture avec le productivisme, comme les Associations pour le maintien d'une agriculture paysanne (Amap).

Située entre le privé et le public, dans le marché tout en portant des valeurs de coopération et de solidarité, l'ESS contribue ainsi à civiliser l'économie et à la démocratiser, ne serait-ce qu'en introduisant du pluralisme dans les formes d'organisations productives. Elle rappelle que l'entreprise privée capitaliste n'est pas la seule forme possible. Et témoigne que l'enrichissement personnel n'est pas le seul motif qui peut donner envie d'entreprendre.

Il n'en demeure pas moins qu'elle recouvre des réalités disparates. Aussi n'est-il guère surprenant qu'elle peine à s'affirmer et que nulle voix ne parle avec force en son nom. Historiquement, les organisations de l'ESS se sont d'abord regroupées en fonction de leur statut et/ou de leur métier: Alternatives Economiques, en tant que coopérative de production, adhère ainsi à la Confédération des Scop, elle-même adhérente au Groupement national de la coopération (GNC), qui rassemble aussi bien les banques coopératives que les coopératives agricoles ou les coopératives de commerçants, tels les centres Leclerc.

En pratique, les différentes composantes de l'ESS comptent surtout sur les organisations qui les regroupent par statut et par métier pour défendre leurs intérêts spécifiques auprès des pouvoirs publics aux niveaux régional, national et européen. Des structures syndicales qui affirment l'utilité de leurs mandants, afin de défendre les avantages liés à leur statut ou obtenir des subventions. En outre, comme ces différentes familles opèrent dans des champs très variés, elles s'adressent à des interlocuteurs différents. Les coopératives agricoles vont d'abord frapper à la porte du ministère de l'Agriculture, les banques coopératives et les assureurs mutualistes s'inquiètent plutôt des projets de Bercy ou de Bruxelles à leur égard. Quant aux mutuelles de santé, elles débattent de leur place dans la prise en charge des soins avec le ministre chargé des Affaires sociales.

Il existe néanmoins une structure faîtière, le Conseil des entreprises, employeurs et groupements de l'économie sociale (Ceges), qui associe toutes les familles de l'économie sociale et solidaire. Mais le Ceges a une autorité d'autant plus limitée qu'il n'existe guère de consensus, au sein de ses composantes, sur la parole collective qu'il faudrait porter face aux pouvoirs publics ou à destination de l'opinion publique. Cette absence de consensus peut d'ailleurs se lire à la modestie de ses moyens: alors que le Medef occupe un immeuble de huit étages avenue Bosquet, dans le très bourgeois 7e arrondissement de Paris, le Ceges se contente de trois bureaux sous-loués près de la gare Saint-Lazare. Dans ces conditions, comment s'étonner que les pouvoirs publics ne donnent que de très faibles moyens à la Délégation interministérielle à l'innovation, à l'expérimentation sociale et à l'économie sociale (Diieses), son interlocuteur public (4)?

A l'actif du Ceges cependant, la mise en place d'une représentation commune des syndicats d'employeurs de l'économie sociale aux élections prud'homales. Leurs listes ont rassemblé 19% des voix patronales en 2008, écornant ainsi sérieusement le monopole de l'alliance Medef-CGPME. Mais ce succès est resté sans lendemain. Et si nombre de personnalités de l'économie sociale affirment aujourd'hui la nécessité pour celle-ci de parler d'une voix forte et unie, elles peinent à se mettre d'accord dès qu'il s'agit de répondre à la question: pour dire quoi?

On l'a bien vu face à la crise. Alors que l'économie sociale joue un rôle essentiel dans le secteur financier - pour le meilleur et pour le pire, comme l'ont montré les déboires de Natixis -, elle n'a pu, ou n'a pas souhaité, porter des propositions pour la régulation du secteur. Porter une vraie parole de transformation sociale supposerait donc d'oser défendre un projet en faveur d'une économie réellement alternative, plus sociale et plus soutenable sur le plan environnemental. Et d'assumer de se situer, au moins implicitement, dans le champ politique.

Un risque qui n'effraye pas les promoteurs des nouveaux regroupements qui sont en train de voir le jour, en marge du Ceges et des structures associatives qui affirment représenter l'économie solidaire spécifiquement. Ils entendent promouvoir une ESS en mouvement, celle qui porte le renouvellement du secteur. Deux initiatives méritent d'être signalées. La première est le Labo de l'ESS, un think tank créé à l'initiative de Claude Alphandéry, président d'honneur de l'association France active. Son objectif: profiter de la crise pour faire connaître et reconnaître une ESS offensive et ouverte, interroger et améliorer les pratiques de celle-ci, et oeuvrer à une transformation sociale, écologique et démocratique de l'économie globale, en alliance avec d'autres acteurs de la société. Ce vaste programme s'articule autour de cinquante propositions très concrètes, qui sont d'ores et déjà mises en débat, notamment à l'occasion des élections régionales (5).

Une autre initiative intéressante vient parallèlement de voir le jour, dont les créateurs sont en partie les mêmes: le Mouvement des entrepreneurs sociaux. Avant même d'avoir lancé une campagne d'adhésion, cette structure rassemble plus d'une centaine d'adhérents, qui entendent promouvoir l'entrepreneuriat sans exclusive, pour autant qu'il s'inscrit dans une démarche sociale et environnementale exigeante, mais dont les contours demeurent cependant encore à définir (6).

L'ESS en régions

Au-delà des formes des organisations à vocation nationale existantes, l'économie sociale et solidaire (ESS) est représentée en régions à travers le réseau des chambres régionales de l'économie sociale et solidaire (sachant que le terme "solidaire" est parfois banni). Ces chambres régionales sont regroupées en un conseil national. Le développement des chambres régionales de l'économie sociale et solidaire a accompagné la montée en puissance du rôle des régions en matière de développement économique.

L'idée est de ne pas exclure les personnes travaillant dans des sociétés de capitaux, dès lors que celles-ci satisfont aux critères définis par le mouvement. Ce parti pris le distingue du CJDES, le Centre des jeunes, des dirigeants et des acteurs de l'économie sociale, qui rassemble des cadres et des dirigeants issus des associations, des coopératives, des mutuelles et des fondations (7). Le Mouvement des entrepreneurs sociaux, comme le CJDES, veut rassembler des personnes et non des organisations. Une logique qui rompt avec la pratique habituelle de l'économie sociale où les projets individuels avancent le plus souvent masqués derrière l'ambition collective! Pourtant, l'avenir de l'ESS suppose aussi qu'elle ait la capacité d'attirer les milliers de jeunes qui souhaitent entreprendre, voir le résultat de leur travail, tout en s'investissant dans des activités porteuses de sens.

良書の薦め「成熟日本への進路　─「成長論」から「分配論」へ」

2010-06-22T05:50:00.002+09:00

波頭亮著『成熟日本への進路─「成長論」から「分配論」へ』は必読に値する。

　　　http://www.chikumashobo.co.jp/product/9784480065568/

日本は成長期を終え成熟フェーズに入ったという認識が、デフレスパイラルからの脱出戦略を考えながらも付きまとう。旧来の成長モデルの政策も制度もはや無効であることを次々と突きつけられている。改革は急務である。「想い倒れ」になった鳩山政権のあとを継いでいる菅直人首相が打ち出した「不幸最小社会」という看板にしても、国民が真に幸せだと思える国家ビジョンが求められている表れだから。

5 Must-Have LinkedIn Apps: Pump Up Your Profile

2010-05-15T10:50:00.001+09:00

5 Must-Have LinkedIn Apps: Pump Up Your Profile

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Today the CEECEC Ecological Economics Online Course is starting

2010-04-20T08:11:00.003+09:00

Today the CEECEC Ecological Economics Online Course is starting

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Today the CEECEC Ecological Economics Online Course is starting

2010-04-20T08:11:00.001+09:00

Today the CEECEC Ecological Economics Online Course is starting

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An Open Letter to G. Soros

2010-04-16T09:33:00.001+09:00

http://unifr.ch/econophysics/feature/strhttp://unifr.ch/econophysics/feature/str

Dear Mr. Soros,

Several leading economists, including several Nobel Prize winners, have recently made their dissatisfaction with their own field clear. In doing this they have confirmed the same criticisms of the Neoclassical Paradigm that econophysics researchers have been making for more than a decade. Early on, they have warned of the pitfalls of mechanical analogies from the 19th century, which current economic theory is built on. Physicists have pointed out that “Economy needs a revolution” and diagnosed the lack of robustness of the financial system, in some cases before the recent crisis (see attachments). Their criticism concerns the pillars of established economics:

Markets are not efficient by nature.
Economics can be driven far from equilibrium (as bubbles and crashes illustrate).
The system behavior is dominated by interactions between the market participants, and is hard to regulate.
Network interactions can change the behavior of markets dramatically.
Science needs to be driven by empirical data, not ideologies and preconceived mathematical formalisms.
Their new approach allows us to understand markets as ecosystems, in which extreme events are the result of systemic instabilities. This is based on the theory of complex dynamical systems, considering randomness and strong interactions as fundamental features.

The financial crisis has not only created huge financial losses. It has damaged the economic system to an extent that several countries are at the verge of bankruptcy, and social systems have become dangerously vulnerable. The problems we have seen may just be the beginning of a larger crisis. The situation may totally get out of control, endangering social peace and cultural achievements.

It may interest you that the European Union is currently building scientific “Flagships” to address the grand challenges of the future. With a budget of 100 million EUR per year, over a period of ten years, they want to foster unprecedented scientific discoveries and radical innovation by transdisciplinary research. The FuturIcT flagship initiative aims at developing a realistic theory of economics and concepts for a sustainable world, involving scientists from a large range of fields. Hundreds of experts in mathematic, physics, economics, sociology, psychology, ecology, computer science, etc. will be working together to combine the best of human knowledge. We would like to invite you to be a galleon figure of this Flagship.

The FuturIcT flagship fits perfectly the goals of your Institute of New Economic Thinking. We hope that you can join us, and that in any case you will add econophysicists to the advisors of your institute. Joining forces could largely accelerate the required paradigm shifts and the development of solutions to the challenges humanity is facing.

Sincerely yours,

Jean-Philippe Bouchaud, Doyne Farmer, Dirk Helbing, Imre Kondor, Rosario Mantegna, Matteo Marsili, and Yi-Cheng Zhang.

Multidisciplinary Approach to Finance and Economics, a Sample of Research by Scientists

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Dirk Helbing
Dirk Helbing studied physics and mathematics at the University of Göttingen. He completed his doctoral thesis at Stuttgart University, on modeling social processes by means of game-theoretical approaches, stochastic methods and complex systems theory. In 1996, he received a Heisenberg scholarship following the completion of his habilitation on traffic dynamics and optimization. From 1997 on, he spent two years in total at international research institutions in various countries. In 1998 he became Managing Director of the Institute for Transport & Economics at Dresden University of Technology. In 2000, he was appointed full professor for Traffic Modeling and Econometrics In 2008, Helbing was elected as a member of the German Academy of Sciences Leopoldina. He has edited several special issues on material flows in networks and on cooperative dynamics in socio-economic and traffic systems. He heads the ETH Zurich Competence Center "Coping with Crises in Complex Socio-Economic Systems" and the "Physics of Socio-Economic Systems" Division of the German Physical Society (Deutsche Physikalische Gesellschaft, DPG).

Important Publications
Network-induced oscillatory behavior in material flow networks and irregular business cycles
Volatility Clustering and Scaling for Financial Time Series due to Attractor Bubbling
Growth, innovation, scaling, and the pace of life in cities

More information
Imre Kondor
Imre Kondor is professor of physics at Eotvos University, Budapest, honorary professor of finance at Corvinus University, Budapest, and permanent fellow (previously rector) of Collegium Budapest - Institute for Advanced Study. He obtained his degrees in physics from Eotvos University, resp. the Hungarian Academy of Sciences (HAS), and had various teaching and research positions in Hungary, as well as visiting positions at ICTP, Trieste, Italy (1972-73), Goethe University, Frankfurt, Germany (1981), CEN, Saclay, France (1982), and Victoria University, Manchester, UK (1984-86). In 1992 he founded the Bolyai College in Budapest, a school of excellence for science students, where he served as director until 1998. From 1998 to 2002 he was the head of the Market Risk Research Department of Raiffeisen Bank, Budapest. He has published over 70 research papers, 2 books and one e-volume. He is coeditor of Fractals, JSTAT, and from 2005 to 2007 was the review editor of Journal of Banking and Finance. His research experience includes the theory of condensed Bose systems, critical phenomena, complex systems and spin glasses, and, since 1997, the application of statistical physics methods to problems in economics and finance (especially the theory of portfolios, risk management and regulation).

Important Publications
I. Kondor, A. Szepessy and T. Ujvárosi: Concave risk measures in international capital regulation, in: Risk Measures for the 21th Century, Ch. 4., pp. 51-59, ed. G. Szego, John Wiley & Sons (2004)
I. Kondor, Sz. Pafka, G. Nagy: Noise sensitivity of portfolio selection under various risk measures, Journal of Banking and Finance, 31, 1545-1573 (2007).
I. Varga-Haszonits and I. Kondor: The instability of downside risk measures, J. Stat. Mech. P12007 doi: 10.1088/1742-5468/2008/12/P12007 (2008)

More information
Rosario Nunzio Mantegna
Rosario Mantegna was originally trained as a physicist. Just after the completion of his PhD. In 1990 he was a pioneer in the developing of the new interdisciplinary research area of econophysics. Econophysics uses concepts and tools of statistical physics, theoretical physics, statistics, probability theory, theory of stochastic processes, economics, econometrics and finance. Within econophysics he has investigated different topics. Among them it is worth citing (i) the stylized facts of univariate time dynamics of high frequency price returns, (ii) the hierarchical structure and correlation based networks associated with the multivariate time dynamics of a portfolio of stocks simultaneously traded, (iii) the cross sectional analysis of price returns, (iv) the presence of an Omori law during the periods of time just after a financial crash, (v) the microstructure aspect of the price impact and of the order book dynamics and (vi) the empirical detection of resulting strategies in the trading action of market members of a financial market.

Important Publications
Master curve fro price impact function
A tool for filtering information in complex systems
Specialization and herding behavior of trading firms in a financial market
Comments:

Kenji Katsuragi said on 16 April 2010:
The point under discussion that has been shown above are important. The pioneer is Frederick Soddy, and I have already made the following paper: http://www.hotdocs.jp/file/253358

Our world without economic growth

2010-04-15T13:12:00.001+09:00

Our world without economic growth
by Christopher Doll on April 14, 2010

　　⇒ http://ourworld.unu.edu/en/the-end-of-the-growth/

Maybe what we really need is more space and time to reflect on these issues. Interestingly, Clay Shirky coined the term cognitive surplus to describe the little free time that our structured working lives allow.

This vast cognigitve surplus could be better employed, he argues, by using our time creatively rather than consumptively. The creative awakening enabled by the internet is transforming some of us from consumers to producers and sharers of music, video, knowledge and so on.

So markets continue to ignore natural capital as if it's of no economic consequence.

2010-04-09T06:55:00.000+09:00

Should We Put A Dollar Value on Nature?

http://www.uvm.edu/giee/

Release Date: 03-06-2010

Author: Judith D.

In a recent article in the online version of Time Magazine, Time.com, Gund Director Robert Costanza was interviewed extensively about the direction the world of economics has taken and needs to take if we are to save to environment. The article begins with this opening paragraph and continues on from there.

"The challenge is that our business institutions evolved at a time when nature seemed limitless; the idea of endless natural bounty is embedded within our national identity. "In the past, natural resources were abundant," says Robert Costanza, Director of the Gund Institute for Ecological Economics at the University of Vermont. "We've used up all the frontier. Those days are gone. People are recognizing this, but our institutions haven't caught up." So markets continue to ignore natural capital as if it's of no economic consequence."

What kind of growth is sustainable?

2010-01-13T22:13:00.001+09:00

What kind of growth is sustainable?
http://www.growthintransition.eu/

Just now – in the light of the current financial and economic crisis and intensive efforts for achieving economic growth – the question emerges which kind of growth we want for the future and which goals are targeted with it. The project “Growth in Transition” intends to trigger a dialogue among institutions and people about how we can shape this transformation process towards sustainability. It also aims at contributing to current EU and international processes and at informing the Austrian public about them (e.g. the EU initiative “Beyond GDP”).
The project operates under the umbrella brand “Growth in Transition”. This brand covers different institutions that organize activities that all focus on the same core issue but from different angles. The outcomes of all bottom-up designed activities will feed in an international conference in January 2010.
SERI and Karuna Consult developed a presentation of arguments called “What kind of growth is sustainable?” that forms the basis for deeper and on-going discussion.

Visions of Herman E Daly

2010-01-13T20:31:00.001+09:00

　　Visions of Herman E Daly

　　http://groups.google.com/group/studyonsoddy/web/visions-of-herman-e-daly

新年のはじめに

2010-01-01T08:37:00.003+09:00

この正月、富山に住み着いて32度目の正月、深々と降り続ける雪の音に白けて夜明けを覚えました。昨年は、37年の教職生活を終えて戸惑いながら年金生活にはいり、女房を泣かせてしまう振る舞い。しかし、いい事もあった。大学時代から手がけた息子のオペラ演出が天地人の直江兼続を取り上げた興行が新潟県文化振興事業財団の助成事業として成果をあげたことです。また、曲がりなりとはいえ、民主政権が生誕したこと。社民が連立に加わったことに想いがつながった。1960年安保闘争を総括して、私はブントから社会党傘下の社会主義青年同盟の一角に福岡地方本部派を連ねる仲間入りをした。そのとき心密かに思想転換、戦艦ポチョムキン型から社会ヘゲモニー革命（投票による革命）。

残された課題は、持続可能な地球社会。1980年に私はマルクス主義を完全に放棄してエコロジー主義に転じたのである。そのときの論考が何方かの手で国立国会図書館に収蔵されていたことを知ったのであるが、いま改めて読み直してみて、まさに30年先の現代的課題を走っていたと自任できる。その稿を直後に出会ったHerman E.Daly博士との交信のときに頂いたFrederick Soddyについて傍ら研究を進めてきたのだが、今年中に何らかのとりまとめを企画している。

Question

2009-12-26T06:46:00.001+09:00

Click here to download:

katuragi@live.jp.vcf (1 KB)

There is the person whom I want to remove who registered sheself without permission. How will you be all right?

Kenji Katsuragi
Prof.Emeritus of Toyama Univ.

Posted via email from 富山's posterous

Study group on Frederick Soddy

2009-12-25T08:55:00.001+09:00

URL: http://groups.google.com/group/studyonsoddy

Posted via web from 富山's posterous

100 Incredible Lectures from the World’s Top Scientists

2009-12-13T19:17:00.000+09:00

100 Incredible Lectures from the World’s Top Scientists

Muddle Through, Japanese Disease

2009-10-18T12:35:00.002+09:00

Muddle Through, R.I.P?
Savings Equal Investments
Japanese Disease
Who Will Buy the Debt?
The New Muddle Through Economy

I first wrote about the Muddle Through Economy in 2002, and the term has more or less become a theme we have returned to from time to time. In 2007 I wrote that we would indeed get back to a Muddle Through Economy after the end of the coming recession. If you Google the term, at least for the first four pages more than half the references are to this e-letter. I get a lot of flak from both bulls and bears about being either too optimistic or too pessimistic. Being in the muddle through middle is comfortable to me.
Last week I expressed my concern that we as a country are taking actions that could indeed “Kill the Goose” of our free-market economy. I rightly got letters asking me how I could maintain Muddle Through in the face of that letter. I have given it a lot of thought and research. How likely are we to muddle through in the face of $1.5 trillion and larger deficits? Today we take another look at Muddle Through. It should be interesting.
But first, two housekeeping items. I want to welcome the 150,000 members of the National Association of the Self-Employed to this letter. They have asked me to be a special consulting economist to their group, and they will send this letter each week to their members. Since its beginning in 1981, the National Association for the Self-Employed has pioneered support for micro-businesses and the self-employed, and been a forceful advocate for small business in this country. (www.nase.org) I am honored. I am pleased to add you to my 1 million closest friends. I hope you find it useful.
Second, I will be going to South America at the end of next week, to Buenos Aires, Montevideo, Sao Paulo and Rio. I will be speaking in those cities and traveling with my new Latin American partner, Enrique Fynn of Fynn Capital (based in Uruguay). If you would like to find out about this tour or what services he can help you with, you can go to www.accreditedinvestor.ws and sign up and Enrique will get in touch with you. And as always, if you are an accredited investor, you can go to that website and one of my partners in the world will get back to you. (In this regard, I am president of and a registered representative of Millennium Wave Securities, LLC, member FINRA.) And now to the letter.
Muddle Through, R.I.P.?
I defined a Muddle Through Economy in the past as one of slow growth (in the area of 1-2%) and a slack employment environment, such as we had in 2002 and the early part of 2003. In early 2007, I suggested we would return at some point to such an environment at the end of the recession I was predicting.
I am not surprised about the response of the Fed to the current recession and credit crisis, whether it’s the large monetization of debt or the low interest rates. Assuming they more or less remove the monetary easing in a reasonable manner, there is nothing that would make me think we do not eventually recover, albeit at a very slow Muddle Through pace, with a jobless recovery that lasts for several years. It will not be pleasant, but we’ll survive.
However, gentle reader, never in my wildest dreams did I think we could be looking at government deficits of $1.5 trillion dollars and actually budgeting future deficits of over $1 trillion as far as the eye can see. And there is real reason to think that under current plans, $1 trillion deficits are optimistic. Look at the graph above from the Heritage Foundation. They suggest that current policy would bring us closer to a $2 trillion deficit by 2019.
And that assumes nominal growth that is north of 3% and unemployment dropping back below 5% in reasonably short order. If you make less optimistic assumptions, the number can become much larger rather quickly. Where do we find that much money to finance that large a deficit? We will look at what might be the answer, but first we need to look at a basic concept in economics.
Savings Equal Investments
GDP (Gross Domestic Product) is defined as Consumption (C) plus Investment (I) plus Government Spending (G) plus [Exports (E) minus Imports (I)] or:
GDP = C + I + G + (E-I)
(For the wonks out there, GDP is usually termed “Y”.)
You can calculate national savings as GDP minus consumption and government spending. That means that investment equals savings plus net exports. If there are no net exports, then money must come back into the US from outside the country to finance investments, along with savings.
This equation is known as an identity. An identity is an equality that remains true regardless of the values of any variables that appear within it. That means it is not a guess or an approximation. It is simple reality.
Thus, if there is a government deficit, there must be savings by both consumers and businesses, plus capital flows from outside the country, to offset that deficit in order for there to be any money left over for investments.
In the short run, an increase in government spending can offset a decline in consumption (a recession), but absent savings a government deficit crowds out investment in the long run. There must be savings in order for there to be investment. And without investment, you do not get job growth or economic growth.
Japanese Disease
Some readers wrote this week telling me I am far too worried about a rising government deficit. Right now we are at roughly 42% of debt to GDP. In 1989, at the start of the lost decades, Japan had a debt-to-GDP ratio of 51%. Now it is at 178%, and the world has not come to an end for them. In fact, they are running massive government deficits today and plan to do so for a long time. Why, I am asked, can’t we be like Japan? And my answer is that it is possible, but the cost that Japan has paid has been high.
In 1989, private Japanese debt (businesses and consumers) was at a debt-to-GDP ratio of 212%. Now it is at 110%. And the total of both government and private debt is roughly the same (within 5%) of where it was 20 years ago. Along with running large trade surpluses, private debt has been exchanged for government debt. Savings have fallen from the mid-teens to about 2% today, as the country is rapidly aging and now using its savings to live on. And how much has all that government spending helped the country? Before I answer that, read these paragraphs from Hoisington Asset Management’s latest letter (last week’s Outside the Box):
“The federal government’s promise to extricate the U.S. economy from this recession involves more spending (increasing public debt) and more subsidies for consumers, such as car rebates and home buying incentives (more private debt). In other words, more debt is supposed to solve the problem of over-indebtedness. The truth is that this policy merely indentures its citizens further without providing any income for repayment of debt. In previous letters we have discussed the fact that the government spending multiplier is zero (read Professor Robert Barro’s book, Macroeconomics – a Modern Approach, p. 370).
“This means there is no long term income benefit from stimulus programs. According to the latest academic research, the most recent $800 billion stimulus plan will boost economic activity in the short run, but will surely depress economic activity over time. The government problem is complicated by the fact that the tax multiplier is 3, meaning that a 1% change in taxes will change GDP by about 3% over time. More recent research (Barro & Redlick, September 2009, “NBER Working Paper 15369″) suggests that a 1% cut in the marginal tax rate would raise GDP in the ensuing year by 0.6%. With the deficit rising due to a zero spending multiplier, the tendency will be to try to raise taxes to pay for this higher level of expenditures, which will further depress aggregate spending and output.”
For all intents and purposes, Japan has had no growth for almost two decades. Their nominal GDP is where it was 17 years ago, and the number of employed people is at 20-years-ago levels. An aging population has masked their unemployment problems, as older citizens retire. Their savings went to government debt. Taxes were raised numerous times. Since government deficit spending has no long-term multiplier effect, growth has been nonexistent. (By the way, that research about multiplier effects has also been done by Christina Romer, the chairman of the current President’s Council of Economic Advisors, and further explored by European economists. There is general agreement on these facts.)
In 1998, the US had a total debt- (government plus private) to-GDP ratio of 260%. Today it is 373%. We have added over $15 trillion in debt, yet total employment today is roughly where it was 9 years ago. But the current economic leadership wants to solve the problem of too much debt with even more debt. I am sympathetic with the idea that in the short run the government should step in and the Fed should print (within limits) money to keep us from deflation. But the equation we spent time on earlier suggests that if we continue to run massive deficits, we run the risk of catching Japanese disease – a decade-long (or longer) period of slow growth and high unemployment, especially since our population is growing and our Boomers are going back to work (and surveys suggest they intend to work longer).
Large government deficits choke off the very investment that we need to create jobs. In the name of doing good, the unintended consequence is to make it more difficult for small businesses to start up and create jobs. And we all know that small business is the engine for job creation.
The way out of the current morass is to create jobs and increase productivity. But if the government runs deficits of $1.5 trillion, that means whatever savings (corporate and consumer) we have will not go into the investments we need, but into government debt.
Who Will Buy the Debt?
Now, let’s go back to the problem of who will buy the debt. How can we find $1.5 trillion each and every year? Some of it will come from foreign central banks, as we continue to run a trade deficit. Once those dollars leave our shores, they do not disappear. They can only go back into a dollar-denominated investment. Up to now, that has typically been US government debt. If China decides to use its dollars to buy commodities or other assets, whoever sells them the assets now has the dollars and must decide what to do with them. So give or take a few billion, about $400 billion will come back to the US from our trade deficit next year. That still leaves $1.1 trillion.
Upon reflection, and cutting to the chase, I think that the buyers of the debt could be US banks for quite some time. The next graph shows commercial and industrial loans at US banks falling precipitously. Banks have (correctly) tightened lending standards, but that means that small and medium-sized businesses, which account for over 85% of all jobs, have been cut off from the life blood of growth. Is it any wonder they are cutting jobs at a prodigious rate?
The next graph shows bank credit (of all types), going back to 1974. Notice that even during recessions (gray shaded areas) bank lending either grows or at the most goes flat. But now we are experiencing something new: bank lending is falling. Notice the sharp increase in lending in 2008 as corporations decided to draw down their banks’ lines of credit, afraid that the banks might cut back. And with good reason, as banks did exactly that.
So where do banks put their cash and reserves they are not lending? At the Fed and in Treasury debt. If you can leverage capital at ten to one (as banks can) and if you get 2% (for longer-term debt) and if you only have costs of, say, 50 basis points (or 0.5%), you can make a return on equity of 15% with no risk.
And that is what we are seeing. Banks are taking the money the Fed is printing and the government is giving them and putting it back at the Fed. Bank reserves at the Fed are exploding. And they are likely to continue to do so, since bank balance sheets are still deteriorating, especially at smaller and regional banks exposed to commercial real estate loans. Banks own 45% of commercial real estate loans, compared to only 21% of single-family loans. Banks (in general) are going to have to raise capital and reduce their loan portfolios in order to keep within the guidelines for adequate reserve capital. Small wonder that my friend Chris Whalen (one of the real experts on banks) thinks we will see over 400 banks fail in this cycle.
One quick chart to further highlight the problem that banks are facing. I have been writing for several years that commercial real estate loans will be the next shoe to drop. Moody’s calculates that commercial real estate prices have dropped 30%. Over a trillion dollars in commercial real estate loans are coming due in the next few years. Banks are going to continue to reduce their loan portfolios in order to deal with the massive write-offs they are going to have to make. And my bet is they put those reserves they are not lending into government debt.
Given that the current Congress is hell bent on massively raising taxes in 2011, we are likely to dip back into recession by then, if not before. Remember, taxes have a multiplier effect of three. That means tax cuts increase GDP (over time) by three times their amount. But tax increases reduce GDP by three times the increase. That will make deficits worse, and unemployment will again start to rise from already high levels. Twenty states have already raised sales taxes, and more are raising other taxes. It is a vicious spiral.
The New Muddle Through Economy
This is not a prescription for a return to normal growth. We are headed for a New Normal that is less than what the market currently believes. Unless the deficit comes under control at some point, we face the real prospect of catching Japanese Disease and suffering yet another lost decade. Can we Muddle Through? We have no choice but to do so. But it will not be fun. It will not be long-term 2% growth and employment going back to 6% any time soon. Can we reverse the course? With a different attitude and leadership in Congress, maybe we can. But it won’t happen next year, and it’s unlikely in 2011.
I am afraid we will have to put my old friend Muddle Through, as I previously defined him, back in his box for a while. But wait, if my friend at PIMCO, Mohammed El-Erian, can tell us we are going to a “New Normal,” then I can decide that we are going to a “New Muddle Through Economy.” Just not one as benign as I used to think.
In the end, that is what we will do. We will figure out how to deal with the environment in which we find ourselves. That is what free markets and entrepreneurs do. Things will sort out, but not before we have what could be an even more difficult crisis, which will force us to make hard choices.
As an aside, I am not expecting that we will see the crisis I am thinking of any time soon. We can move along with positive GDP for some time. I am thinking of the longer term, 1-3 years out. We will become complacent. I will get letters telling me I am too pessimistic. Just as I did in late 2006 when I said we would be in a recession by late 2007. But I firmly believe we will see a double-dip recession within another 18 months (at the most). Stock markets drop on average about 40% in a recession. Adjust your portfolios accordingly.
On the Road Again
I am writing tonight from Detroit. Tomorrow I will be in New York watching the Yankees/LA game. I will be the guy in the second row behind home plate in the Dallas Cowboys jacket. I will be on Yahoo Tech Ticker on Monday morning, so you should be able to go to Yahoo and see me later that afternoon. Then Philadelphia on Tuesday, speaking at my partner Steve Blumenthal’s CMG conference for investment advisors. They have a very interesting platform of trading advisors. You can see them at http://cmgfunds.net/public/mauldin_questionnaire.asp
I had a great deal of fun at the New Orleans conference, being with old friends and meeting new ones. David Tice (of the Prudent Bear Fund) was an exceptional host for dinner at Emeril’s. I was surprised that Karl Rove actually remembered me after nine years. I thoroughly enjoyed spending some quality time with my friend Ron Paul. We share a lot of concerns about the future of the Republic. I was pleasantly surprised by how thoughtful Howard Dean was. And very personable.
I go to Houston on Wednesday, Orlando on Thursday, and then South America on Saturday. I will be doing a lot of writing from hotel rooms, but all in all it will be fun. You have a great week, and remember that in 10 years none of us will look back and want to return to 2009. 2019 will be better than we can possibly imagine. We just have to make sure we all get there!
Time to hit the send button and find an adult beverage. All the best,
Your going to miss the Old Muddle Through analyst,
John MauldinJohn@frontlinethoughts.com
Copyright 2009 John Mauldin. All Rights Reserved
If you would like to reproduce any of John Mauldin’s E-Letters you must include the source of your quote and an email address (John@FrontlineThoughts.com) Please write to info@FrontlineThoughts.com and inform us of any reproductions. Please include where and when the copy will be reproduced.

Muddle Through,R.I.P ?

2009-10-18T12:25:00.001+09:00

Muddle Through, R.I.P?
Savings Equal Investments
Japanese Disease
Who Will Buy the Debt?
The New Muddle Through Economy
I first wrote about the Muddle Through Economy in 2002, and the term has more or less become a theme we have returned to from time to time. In 2007 I wrote that we would indeed get back to a Muddle Through Economy after the end of the coming recession. If you Google the term, at least for the first four pages more than half the references are to this e-letter. I get a lot of flak from both bulls and bears about being either too optimistic or too pessimistic. Being in the muddle through middle is comfortable to me.
Last week I expressed my concern that we as a country are taking actions that could indeed “Kill the Goose” of our free-market economy. I rightly got letters asking me how I could maintain Muddle Through in the face of that letter. I have given it a lot of thought and research. How likely are we to muddle through in the face of $1.5 trillion and larger deficits? Today we take another look at Muddle Through. It should be interesting.
But first, two housekeeping items. I want to welcome the 150,000 members of the National Association of the Self-Employed to this letter. They have asked me to be a special consulting economist to their group, and they will send this letter each week to their members. Since its beginning in 1981, the National Association for the Self-Employed has pioneered support for micro-businesses and the self-employed, and been a forceful advocate for small business in this country. (www.nase.org) I am honored. I am pleased to add you to my 1 million closest friends. I hope you find it useful.
Second, I will be going to South America at the end of next week, to Buenos Aires, Montevideo, Sao Paulo and Rio. I will be speaking in those cities and traveling with my new Latin American partner, Enrique Fynn of Fynn Capital (based in Uruguay). If you would like to find out about this tour or what services he can help you with, you can go to www.accreditedinvestor.ws and sign up and Enrique will get in touch with you. And as always, if you are an accredited investor, you can go to that website and one of my partners in the world will get back to you. (In this regard, I am president of and a registered representative of Millennium Wave Securities, LLC, member FINRA.) And now to the letter.
Muddle Through, R.I.P.?
I defined a Muddle Through Economy in the past as one of slow growth (in the area of 1-2%) and a slack employment environment, such as we had in 2002 and the early part of 2003. In early 2007, I suggested we would return at some point to such an environment at the end of the recession I was predicting.
I am not surprised about the response of the Fed to the current recession and credit crisis, whether it’s the large monetization of debt or the low interest rates. Assuming they more or less remove the monetary easing in a reasonable manner, there is nothing that would make me think we do not eventually recover, albeit at a very slow Muddle Through pace, with a jobless recovery that lasts for several years. It will not be pleasant, but we’ll survive.
However, gentle reader, never in my wildest dreams did I think we could be looking at government deficits of $1.5 trillion dollars and actually budgeting future deficits of over $1 trillion as far as the eye can see. And there is real reason to think that under current plans, $1 trillion deficits are optimistic. Look at the graph above from the Heritage Foundation. They suggest that current policy would bring us closer to a $2 trillion deficit by 2019.
And that assumes nominal growth that is north of 3% and unemployment dropping back below 5% in reasonably short order. If you make less optimistic assumptions, the number can become much larger rather quickly. Where do we find that much money to finance that large a deficit? We will look at what might be the answer, but first we need to look at a basic concept in economics.
Savings Equal Investments
GDP (Gross Domestic Product) is defined as Consumption (C) plus Investment (I) plus Government Spending (G) plus [Exports (E) minus Imports (I)] or:
GDP = C + I + G + (E-I)
(For the wonks out there, GDP is usually termed “Y”.)
You can calculate national savings as GDP minus consumption and government spending. That means that investment equals savings plus net exports. If there are no net exports, then money must come back into the US from outside the country to finance investments, along with savings.
This equation is known as an identity. An identity is an equality that remains true regardless of the values of any variables that appear within it. That means it is not a guess or an approximation. It is simple reality.
Thus, if there is a government deficit, there must be savings by both consumers and businesses, plus capital flows from outside the country, to offset that deficit in order for there to be any money left over for investments.
In the short run, an increase in government spending can offset a decline in consumption (a recession), but absent savings a government deficit crowds out investment in the long run. There must be savings in order for there to be investment. And without investment, you do not get job growth or economic growth.
Japanese Disease
Some readers wrote this week telling me I am far too worried about a rising government deficit. Right now we are at roughly 42% of debt to GDP. In 1989, at the start of the lost decades, Japan had a debt-to-GDP ratio of 51%. Now it is at 178%, and the world has not come to an end for them. In fact, they are running massive government deficits today and plan to do so for a long time. Why, I am asked, can’t we be like Japan? And my answer is that it is possible, but the cost that Japan has paid has been high.
In 1989, private Japanese debt (businesses and consumers) was at a debt-to-GDP ratio of 212%. Now it is at 110%. And the total of both government and private debt is roughly the same (within 5%) of where it was 20 years ago. Along with running large trade surpluses, private debt has been exchanged for government debt. Savings have fallen from the mid-teens to about 2% today, as the country is rapidly aging and now using its savings to live on. And how much has all that government spending helped the country? Before I answer that, read these paragraphs from Hoisington Asset Management’s latest letter (last week’s Outside the Box):
“The federal government’s promise to extricate the U.S. economy from this recession involves more spending (increasing public debt) and more subsidies for consumers, such as car rebates and home buying incentives (more private debt). In other words, more debt is supposed to solve the problem of over-indebtedness. The truth is that this policy merely indentures its citizens further without providing any income for repayment of debt. In previous letters we have discussed the fact that the government spending multiplier is zero (read Professor Robert Barro’s book, Macroeconomics – a Modern Approach, p. 370).
“This means there is no long term income benefit from stimulus programs. According to the latest academic research, the most recent $800 billion stimulus plan will boost economic activity in the short run, but will surely depress economic activity over time. The government problem is complicated by the fact that the tax multiplier is 3, meaning that a 1% change in taxes will change GDP by about 3% over time. More recent research (Barro & Redlick, September 2009, “NBER Working Paper 15369″) suggests that a 1% cut in the marginal tax rate would raise GDP in the ensuing year by 0.6%. With the deficit rising due to a zero spending multiplier, the tendency will be to try to raise taxes to pay for this higher level of expenditures, which will further depress aggregate spending and output.”
For all intents and purposes, Japan has had no growth for almost two decades. Their nominal GDP is where it was 17 years ago, and the number of employed people is at 20-years-ago levels. An aging population has masked their unemployment problems, as older citizens retire. Their savings went to government debt. Taxes were raised numerous times. Since government deficit spending has no long-term multiplier effect, growth has been nonexistent. (By the way, that research about multiplier effects has also been done by Christina Romer, the chairman of the current President’s Council of Economic Advisors, and further explored by European economists. There is general agreement on these facts.)
In 1998, the US had a total debt- (government plus private) to-GDP ratio of 260%. Today it is 373%. We have added over $15 trillion in debt, yet total employment today is roughly where it was 9 years ago. But the current economic leadership wants to solve the problem of too much debt with even more debt. I am sympathetic with the idea that in the short run the government should step in and the Fed should print (within limits) money to keep us from deflation. But the equation we spent time on earlier suggests that if we continue to run massive deficits, we run the risk of catching Japanese disease – a decade-long (or longer) period of slow growth and high unemployment, especially since our population is growing and our Boomers are going back to work (and surveys suggest they intend to work longer).
Large government deficits choke off the very investment that we need to create jobs. In the name of doing good, the unintended consequence is to make it more difficult for small businesses to start up and create jobs. And we all know that small business is the engine for job creation.
The way out of the current morass is to create jobs and increase productivity. But if the government runs deficits of $1.5 trillion, that means whatever savings (corporate and consumer) we have will not go into the investments we need, but into government debt.
Who Will Buy the Debt?
Now, let’s go back to the problem of who will buy the debt. How can we find $1.5 trillion each and every year? Some of it will come from foreign central banks, as we continue to run a trade deficit. Once those dollars leave our shores, they do not disappear. They can only go back into a dollar-denominated investment. Up to now, that has typically been US government debt. If China decides to use its dollars to buy commodities or other assets, whoever sells them the assets now has the dollars and must decide what to do with them. So give or take a few billion, about $400 billion will come back to the US from our trade deficit next year. That still leaves $1.1 trillion.
Upon reflection, and cutting to the chase, I think that the buyers of the debt could be US banks for quite some time. The next graph shows commercial and industrial loans at US banks falling precipitously. Banks have (correctly) tightened lending standards, but that means that small and medium-sized businesses, which account for over 85% of all jobs, have been cut off from the life blood of growth. Is it any wonder they are cutting jobs at a prodigious rate?
The next graph shows bank credit (of all types), going back to 1974. Notice that even during recessions (gray shaded areas) bank lending either grows or at the most goes flat. But now we are experiencing something new: bank lending is falling. Notice the sharp increase in lending in 2008 as corporations decided to draw down their banks’ lines of credit, afraid that the banks might cut back. And with good reason, as banks did exactly that.
So where do banks put their cash and reserves they are not lending? At the Fed and in Treasury debt. If you can leverage capital at ten to one (as banks can) and if you get 2% (for longer-term debt) and if you only have costs of, say, 50 basis points (or 0.5%), you can make a return on equity of 15% with no risk.
And that is what we are seeing. Banks are taking the money the Fed is printing and the government is giving them and putting it back at the Fed. Bank reserves at the Fed are exploding. And they are likely to continue to do so, since bank balance sheets are still deteriorating, especially at smaller and regional banks exposed to commercial real estate loans. Banks own 45% of commercial real estate loans, compared to only 21% of single-family loans. Banks (in general) are going to have to raise capital and reduce their loan portfolios in order to keep within the guidelines for adequate reserve capital. Small wonder that my friend Chris Whalen (one of the real experts on banks) thinks we will see over 400 banks fail in this cycle.
One quick chart to further highlight the problem that banks are facing. I have been writing for several years that commercial real estate loans will be the next shoe to drop. Moody’s calculates that commercial real estate prices have dropped 30%. Over a trillion dollars in commercial real estate loans are coming due in the next few years. Banks are going to continue to reduce their loan portfolios in order to deal with the massive write-offs they are going to have to make. And my bet is they put those reserves they are not lending into government debt.
Given that the current Congress is hell bent on massively raising taxes in 2011, we are likely to dip back into recession by then, if not before. Remember, taxes have a multiplier effect of three. That means tax cuts increase GDP (over time) by three times their amount. But tax increases reduce GDP by three times the increase. That will make deficits worse, and unemployment will again start to rise from already high levels. Twenty states have already raised sales taxes, and more are raising other taxes. It is a vicious spiral.
The New Muddle Through Economy
This is not a prescription for a return to normal growth. We are headed for a New Normal that is less than what the market currently believes. Unless the deficit comes under control at some point, we face the real prospect of catching Japanese Disease and suffering yet another lost decade. Can we Muddle Through? We have no choice but to do so. But it will not be fun. It will not be long-term 2% growth and employment going back to 6% any time soon. Can we reverse the course? With a different attitude and leadership in Congress, maybe we can. But it won’t happen next year, and it’s unlikely in 2011.
I am afraid we will have to put my old friend Muddle Through, as I previously defined him, back in his box for a while. But wait, if my friend at PIMCO, Mohammed El-Erian, can tell us we are going to a “New Normal,” then I can decide that we are going to a “New Muddle Through Economy.” Just not one as benign as I used to think.
In the end, that is what we will do. We will figure out how to deal with the environment in which we find ourselves. That is what free markets and entrepreneurs do. Things will sort out, but not before we have what could be an even more difficult crisis, which will force us to make hard choices.
As an aside, I am not expecting that we will see the crisis I am thinking of any time soon. We can move along with positive GDP for some time. I am thinking of the longer term, 1-3 years out. We will become complacent. I will get letters telling me I am too pessimistic. Just as I did in late 2006 when I said we would be in a recession by late 2007. But I firmly believe we will see a double-dip recession within another 18 months (at the most). Stock markets drop on average about 40% in a recession. Adjust your portfolios accordingly.
On the Road Again
I am writing tonight from Detroit. Tomorrow I will be in New York watching the Yankees/LA game. I will be the guy in the second row behind home plate in the Dallas Cowboys jacket. I will be on Yahoo Tech Ticker on Monday morning, so you should be able to go to Yahoo and see me later that afternoon. Then Philadelphia on Tuesday, speaking at my partner Steve Blumenthal’s CMG conference for investment advisors. They have a very interesting platform of trading advisors. You can see them at http://cmgfunds.net/public/mauldin_questionnaire.asp
I had a great deal of fun at the New Orleans conference, being with old friends and meeting new ones. David Tice (of the Prudent Bear Fund) was an exceptional host for dinner at Emeril’s. I was surprised that Karl Rove actually remembered me after nine years. I thoroughly enjoyed spending some quality time with my friend Ron Paul. We share a lot of concerns about the future of the Republic. I was pleasantly surprised by how thoughtful Howard Dean was. And very personable.
I go to Houston on Wednesday, Orlando on Thursday, and then South America on Saturday. I will be doing a lot of writing from hotel rooms, but all in all it will be fun. You have a great week, and remember that in 10 years none of us will look back and want to return to 2009. 2019 will be better than we can possibly imagine. We just have to make sure we all get there!
Time to hit the send button and find an adult beverage. All the best,
Your going to miss the Old Muddle Through analyst,
John MauldinJohn@frontlinethoughts.com
Copyright 2009 John Mauldin. All Rights Reserved
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Uncategorized credit crisis of Lehman Brothers

2009-09-16T15:59:00.000+09:00

Reuters Blogs
MacroScope
Shining a light on the dismal science« Previous Post06:54 September 15th, 2009
Insider recalls the day that Lehman died
Post a comment (4)Posted by: Joseph Tibman
Tags: Uncategorized, bank of america, credit crisis, joseph tibman, lehman, Lehman Brothers, Merrill Lynch

Joseph Tibman was a senior banker at Lehman Brothers for 20 years and is now the author of “The Murder of Lehman Brothers, An Insider’s Look on the Global Meltdown”. Tibman writes under a pseudonym to preserve his ability to work in finance. The views expressed are his own.

September 12, 2008 was a Friday like no other.

Just one day earlier, I was somewhat concerned about the hammered Lehman Brothers share price and the persistent rumors about my firm, but I had been here before. Well not exactly here. But I was sure Lehman would survive as an independent firm.

Had I overdosed on the Lehman-distributed talking? Soon after I arrived at my office in the Lehman headquarters at 745 Seventh Avenue on the north end of Time Square, it was clear my world, and that of all those around me, was spinning off its axis. The word was out. The Federal Reserve Bank and U.S. Treasury were in the building. So were Bank of America and Barclays Capital. Or were they?

What did it matter where they were? This was it. Two of our competitors, far weaker in investment banking, were negotiating to buy us. All I can remember, even after just a couple of months, is obsessively trading Blackberry messages with restless colleagues and perpetually scanning television general and business news channels for just one more sliver of incremental info, for hope. My world had stopped rotating.

Throughout the weekend, our Blackberries continuously hummed, expressing the collective freak-out. Then a bombshell dropped. Merrill Lynch was to be acquired by Bank of America in a government-brokered deal. We were toast. We would fail. If there were to be a Lehman deal, it would have been announced at the same time. Fail. This was surreal. On Sunday, many of us rushed to the office to retrieve personal possessions, just in case we were locked out on Monday. The firm had not yet been pronounced dead, but the Lehman I had long made my second home was teetering on the brink.

It deeply troubles me that my second home for twenty years was the lynchpin that detonated a global meltdown. I anticipated a slew of tabloid books that would over-simplify. I felt I had to do something. So I decided to write my account of the events — one that lets no one off the hook, but also tells the world in plain English what really went down and what we need to fix.

the measurement of economic performance and social progress

2009-09-15T11:22:00.002+09:00

The Commission on the measurement of economic performance and social progress has been created at the beginning of 2008 on French government's initiative.

view videos of September 14, 2009 meeting

http://video.minefi.gouv.fr/dynamic/catal/datasheet.php?clef=AlHglQQiEPaztE6BDTkq&idProg=ucMr2OKNeeasr7J0Tuvy&idSess=0i74brj4o1vj356x7rn97&lang=Fr

Presentation of the final report from the Commission on the Measurement Of Economic Performance and Social Progress by Joseph E. Stiglitz, chairman of the Commission.

Frederick Soddy 共同研究グループウエア

2009-08-26T07:55:00.002+09:00

昨秋来の金融・実体経済大恐慌（クライシス）にともなって、OMF国際金融体制の有様が問われており、１９３０年代における問題関心を再検証する地道な研究が始められている。その大きな関心のひとつは、Frederick Soddy がはじめた研究であるのは当然の成り行きであろう。

　　http://groups.google.co.jp/group/studyonsoddy　をはじめたのでご関心の向きはどうぞ。

Opening

2009-08-10T21:37:00.002+09:00

In this BLOG, I would like to write over various topics on environmental economics in the miscellaneous notes-like tone.

On sustainable soceity

On Meet CASSE

trend researchs: 政府紙幣は、恒久的な財源になるのか？

IAEA whitewashes worst nuclear disaster since Chernobyl

StudyOnF_Soddy GooleGroup

最近のH.E.Dalyの仕事

Google プロフィールを Google グループ アカウントにリンクする（新 UI）

クリオの実験室: 高橋財政下の日銀引受

ネットワークのloop時代へ

Oil and the End of Globalization

Europe Ecologie

Put your money where your life is.by Michael Shuman

Way through on global recovery - Editors of EAST ASIA Forum

The State Of Global Emergency The Worldshift 2012 Declaration

L'économie sociale et solidaire cherche sa voix

良書の薦め「成熟日本への進路 ─「成長論」から「分配論」へ」

5 Must-Have LinkedIn Apps: Pump Up Your Profile

Today the CEECEC Ecological Economics Online Course is starting

Today the CEECEC Ecological Economics Online Course is starting

An Open Letter to G. Soros

Our world without economic growth

So markets continue to ignore natural capital as if it's of no economic consequence.

What kind of growth is sustainable?

Visions of Herman E Daly

新年のはじめに

Question

Study group on Frederick Soddy

100 Incredible Lectures from the World’s Top Scientists

Muddle Through, Japanese Disease

Muddle Through,R.I.P ?

Uncategorized credit crisis of Lehman Brothers

the measurement of economic performance and social progress

Frederick Soddy 共同研究グループウエア

Opening

Google プロフィールを Google グループアカウントにリンクする（新 UI）

良書の薦め「成熟日本への進路　─「成長論」から「分配論」へ」