Category: A Rationale
Posted by: Admin
The most general and the most pervasive way I make sense of the world is through economics. Concepts inspired by the great economic thinkers and philosophers applied to business and life. Here are their stories and my stories......
See also my blog Eye2theLongRun
See also my blog Eye2theLongRun
Greg Mankiw provides an interesting answer via this blog, to this question about Keynes - someone people seem determined to resurrect right now....
Was Keynes really a savvy investor?
An excerpt from Scott Sumner's thought-provoking blog:
See what you make of this:
“In early 1920, he [Keynes] set up a syndicate, with his brother, some of the Bloomsbury circle, and a financier friend from the City of London. By the end of April 1920, they had made a further $80,000. Then suddenly, in the space of 4 weeks, a spasm of optimism about Germany briefly drove the declining currencies back up, wiping out their entire capital. Keynes found himself on the verge of bankruptcy and had to be bailed out by his tolerant father. Nevertheless, propped up by his indulgent family and by a loan from the coolly acute financier Sir Ernest Cassel, he persevered in his speculation”
Translation.......
Was Keynes really a savvy investor?
An excerpt from Scott Sumner's thought-provoking blog:
See what you make of this:
“In early 1920, he [Keynes] set up a syndicate, with his brother, some of the Bloomsbury circle, and a financier friend from the City of London. By the end of April 1920, they had made a further $80,000. Then suddenly, in the space of 4 weeks, a spasm of optimism about Germany briefly drove the declining currencies back up, wiping out their entire capital. Keynes found himself on the verge of bankruptcy and had to be bailed out by his tolerant father. Nevertheless, propped up by his indulgent family and by a loan from the coolly acute financier Sir Ernest Cassel, he persevered in his speculation”
Translation.......
09/06: Fatal conceit???
I notice this morning that Prof Krugman now can estimate with accuracy to within a quarter "when" the recession will end. Why is it that I and my colleagues of quasi Austrian / Chicago roots have all assiduously avoided "guessing" this particular moment and warned others who are tempted.... and yet Krugmanites are there.
Possibly the same reason this group feels they can discern the level of knowledge necessary to guide, nudge and policy whip society into equitable and optimal states of social well being - as Hayek warned so long ago.
Possibly the same reason this group feels they can discern the level of knowledge necessary to guide, nudge and policy whip society into equitable and optimal states of social well being - as Hayek warned so long ago.
03/06: How Not to Run G.M.
Obama's environmental and employment goals could undermine profitability.
Jacob Sullum | June 3, 2009
On Monday, after President Obama unveiled his plan to nationalize General Motors, G.M. Vice Chairman Robert Lutz exulted, "Their No. 1 goal is to make us successful." But Obama seems to have three No. 1 goals: turning a profit, building cleaner cars, and creating American jobs. These priorities clash with each other, with the president's professed desire to "get out quickly," and with his promise of "a hands-off approach."
On March 30, Obama assured a wary public that....
Jacob Sullum | June 3, 2009
On Monday, after President Obama unveiled his plan to nationalize General Motors, G.M. Vice Chairman Robert Lutz exulted, "Their No. 1 goal is to make us successful." But Obama seems to have three No. 1 goals: turning a profit, building cleaner cars, and creating American jobs. These priorities clash with each other, with the president's professed desire to "get out quickly," and with his promise of "a hands-off approach."
On March 30, Obama assured a wary public that....
Bjorn Lomborg, The Skeptical Environmentalist
By GENE EPSTEIN
AN INTERVIEW WITH BJORN LOMBORG: This global-warming expert emphasizes sensible solutions to an often-sensationalized issue.
THE NEXT TREATY TO CURB GLOBAL WARMING WILL BE negotiated this December in Copenhagen, Bjorn Lomborg's home city. Called by The Guardian (U.K.) "one of the 50 people who could save the planet," Lomborg, a statistician, is the author of The Skeptical Environmentalist (2001) and Cool It: The Skeptical Environmentalist's Guide to Global Warming" (2007). He also maintains a Website on environmental issues at www.lomborg.com.
Contrary to widely held belief, Lomborg isn't at all skeptical of the fact that global warming is a problem, or that humanity is contributing to it. To get some idea of his real message, Barron's recently caught up with him at an event hosted by the Manhattan Institute for Policy Research, in which he presented his views on the major priorities for helping the world's poor. Afterward, he sat down to answer our questions in clear, unaccented English, marshalling facts and figures with stunning ease.
By GENE EPSTEIN
AN INTERVIEW WITH BJORN LOMBORG: This global-warming expert emphasizes sensible solutions to an often-sensationalized issue.
THE NEXT TREATY TO CURB GLOBAL WARMING WILL BE negotiated this December in Copenhagen, Bjorn Lomborg's home city. Called by The Guardian (U.K.) "one of the 50 people who could save the planet," Lomborg, a statistician, is the author of The Skeptical Environmentalist (2001) and Cool It: The Skeptical Environmentalist's Guide to Global Warming" (2007). He also maintains a Website on environmental issues at www.lomborg.com.
Contrary to widely held belief, Lomborg isn't at all skeptical of the fact that global warming is a problem, or that humanity is contributing to it. To get some idea of his real message, Barron's recently caught up with him at an event hosted by the Manhattan Institute for Policy Research, in which he presented his views on the major priorities for helping the world's poor. Afterward, he sat down to answer our questions in clear, unaccented English, marshalling facts and figures with stunning ease.
14/05: Voltaire
Notable & Quotable
WSJ 4-28-09
Voltaire on capitalism and religious toleration, from his 18th century "Letters on the English"
Take a view of the Royal Exchange in London , a place more venerable than many courts of justice, where the representatives of all nations meet for the benefit of mankind. There the Jew, the Mahometan [Muslim], and the Christian transact together, as though they all professed the same religion, and give the name of infidel to none but bankrupts. There the Presbyterian confides in the Anabaptist, and the Churchman depends on the Quaker's word.
At the breaking up of this pacific and free assembly, some withdraw to the synagogue, and others to take a glass. This man goes and is baptized in a great tub, in the name of the Father, Son, and Holy Ghost: that man has his son's foreskin cut off, whilst a set of Hebrew words (quite unintelligible to him) are mumbled over his child. Others retire to their churches, and there wait for the inspiration of heaven with their hats on, and all are satisfied.
If one religion only were allowed in England , the Government would very possibly become arbitrary; if there were but two, the people would cut one another's throats; but as there are such a multitude, they all live happy and in peace.
WSJ 4-28-09
Voltaire on capitalism and religious toleration, from his 18th century "Letters on the English"
Take a view of the Royal Exchange in London , a place more venerable than many courts of justice, where the representatives of all nations meet for the benefit of mankind. There the Jew, the Mahometan [Muslim], and the Christian transact together, as though they all professed the same religion, and give the name of infidel to none but bankrupts. There the Presbyterian confides in the Anabaptist, and the Churchman depends on the Quaker's word.
At the breaking up of this pacific and free assembly, some withdraw to the synagogue, and others to take a glass. This man goes and is baptized in a great tub, in the name of the Father, Son, and Holy Ghost: that man has his son's foreskin cut off, whilst a set of Hebrew words (quite unintelligible to him) are mumbled over his child. Others retire to their churches, and there wait for the inspiration of heaven with their hats on, and all are satisfied.
If one religion only were allowed in England , the Government would very possibly become arbitrary; if there were but two, the people would cut one another's throats; but as there are such a multitude, they all live happy and in peace.
The worst of the climate change debate is its illustration of what we generally don't know - or refuse to accept - of the scientific process... to wit:
1. the apparently widespread belief that science and the understanding it seeks to reveal is a matter of consensus.
2. the belief that somehow the media - in whatever guise - is of some importance in the process.
3. the belief most prevalent amongst politicians that "policy", "motions" and "resolutions" are important.
I understand the priests waging war on Galileo "had a view" on gravity.
1. the apparently widespread belief that science and the understanding it seeks to reveal is a matter of consensus.
2. the belief that somehow the media - in whatever guise - is of some importance in the process.
3. the belief most prevalent amongst politicians that "policy", "motions" and "resolutions" are important.
I understand the priests waging war on Galileo "had a view" on gravity.
10/05: The Two Sages Speak.....
Recently after the Berkshire Hathaway AGM.... the comments are not necessarily new but the passion is fired here by losses!!!!
By Erik Holm and Andrew Frye
May 4 (Bloomberg) -- Berkshire Hathaway Inc. Vice Chairman Charles Munger listed leverage, stupidity, “gross immorality,” and accounting practices among the causes for the current financial crisis.
Munger and Berkshire Chairman Warren Buffett spoke yesterday at a press conference one day after the Omaha, Nebraska-based firm’s annual shareholder meeting at the city’s Qwest Center. Excerpts from the press conference are below.
By Erik Holm and Andrew Frye
May 4 (Bloomberg) -- Berkshire Hathaway Inc. Vice Chairman Charles Munger listed leverage, stupidity, “gross immorality,” and accounting practices among the causes for the current financial crisis.
Munger and Berkshire Chairman Warren Buffett spoke yesterday at a press conference one day after the Omaha, Nebraska-based firm’s annual shareholder meeting at the city’s Qwest Center. Excerpts from the press conference are below.
06/05: The Perils of Caution
Tonight a senior Health Ministry Official explains in respect of Pig Flu that it is better in these situations to be very cautious and take great care. It is better apparently to go overboard because we can always "ease back".
Sounds plausible and sounds like common sense. As usual always mistrust so called "common sense". Over reaction creates a "cry wolf" situation which is truly dangerous. Since the turn of the century we have specialised in these.... Y2K, SARS and onward to the latest.
Over reaction is costly, feeds the next over reaction as we count the cost of the last burst of irrationality and risks a "so what" response when a genuine threat emerges.
Sounds plausible and sounds like common sense. As usual always mistrust so called "common sense". Over reaction creates a "cry wolf" situation which is truly dangerous. Since the turn of the century we have specialised in these.... Y2K, SARS and onward to the latest.
Over reaction is costly, feeds the next over reaction as we count the cost of the last burst of irrationality and risks a "so what" response when a genuine threat emerges.
What if other innovators had given up?
By L. GORDON CROVITZ WSJ April 20 2009 wsj
Modern cities were built through trial and error. As architects reached upward, there was the trial of inventing a safe elevator so that buildings could become skyscrapers. Early contraptions were used in factories and mines, but when cables broke they plummeted to the bottom of the shaft. In the 1850s, Elisha Graves Otis developed a safety device to keep elevators from falling, eventually giving people the confidence to use them.
By L. GORDON CROVITZ WSJ April 20 2009 wsj
Modern cities were built through trial and error. As architects reached upward, there was the trial of inventing a safe elevator so that buildings could become skyscrapers. Early contraptions were used in factories and mines, but when cables broke they plummeted to the bottom of the shaft. In the 1850s, Elisha Graves Otis developed a safety device to keep elevators from falling, eventually giving people the confidence to use them.
