Everyone loves a morality play. “For the wages of sin is death” is a much more satisfying message than “Shit happens.” We all want events to have meaning.

When applied to macroeconomics, this urge to find moral meaning creates in all of us a predisposition toward believing stories that attribute the pain of a slump to the excesses of the boom that precedes it—and, perhaps, also makes it natural to see the pain as necessary, part of an inevitable cleansing process. When Andrew Mellon told Herbert Hoover to let the Depression run its course, so as to “purge the rottenness” from the system, he was offering advice that, however bad it was as economics, resonated psychologically with many people (and still does).

By contrast, Keynesian economics rests fundamentally on the proposition that macroeconomics isn’t a morality play—that depressions are essentially a technical malfunction. As the Great Depression deepened, Keynes famously declared that “we have magneto trouble”—i.e., the economy’s troubles were like those of a car with a small but critical problem in its electrical system, and the job of the economist is to figure out how to repair that technical problem. Keynes’s masterwork, The General Theory of Employment, Interest and Money, is noteworthy—and revolutionary—for saying almost nothing about what happens in economic booms. Pre-Keynesian business cycle theorists loved to dwell on the lurid excesses that take place in good times, while having relatively little to say about exactly why these give rise to bad times or what you should do when they do. Keynes reversed this priority; almost all his focus was on how economies stay depressed, and what can be done to make them less depressed.

I’d argue that Keynes was overwhelmingly right in his approach, but there’s no question that it’s an approach many people find deeply unsatisfying as an emotional matter. And so we shouldn’t find it surprising that many popular interpretations of our current troubles return, whether the authors know it or not, to the instinctive, pre-Keynesian style of dwelling on the excesses of the boom rather than on the failures of the slump.

Paul Krugman, How the Case for Austerity Has Crumbled

(via stoweboyd)

(via emergentfutures)

At the moment, probably the most pressing need is simply to slow down the engines of productivity. This might seem a strange thing to say—our knee-jerk reaction to every crisis is to assume the solution is for everyone to work even more, though of course, this kind of reaction is really precisely the problem—but if you consider the overall state of the world, the conclusion becomes obvious. We seem to be facing two insoluble problems. On the one hand, we have witnessed an endless series of global debt crises, which have grown only more and more severe since the seventies, to the point where the overall burden of debt—sovereign, municipal, corporate, personal—is obviously unsustainable. On the other, we have an ecological crisis, a galloping process of climate change that is threatening to throw the entire planet into drought, floods, chaos, starvation, and war. The two might seem unrelated. But ultimately they are the same. What is debt, after all, but the promise of future productivity? Saying that global debt levels keep rising is simply another way of saying that, as a collectivity, human beings are promising each other to produce an even greater volume of goods and services in the future than they are creating now. But even current levels are clearly unsustainable. They are precisely what’s destroying the planet, at an ever-increasing pace.

A Practical Utopian’s Guide to the Coming Collapse

(via bostonreview)

Wait — are we really back to talking about capital versus labor? Isn’t that an old-fashioned, almost Marxist sort of discussion, out of date in our modern information economy? Well, that’s what many people thought; for the past generation discussions of inequality have focused overwhelmingly not on capital versus labor but on distributional issues between workers, either on the gap between more- and less-educated workers or on the soaring incomes of a handful of superstars in finance and other fields. But that may be yesterday’s story. — Paul Krugman reviving Marx in today’s column (via bostonreview)

This morning, Romney is a 2-1 dog to win the election. I wonder what impact the jobs report will have.

emergentfutures:

Unilever sees ‘return to poverty’ in Europe



Unilever will adopt marketing strategies used in developing countries in order to drive future growth in Europe, as the head of its European business warned that poverty will rise in the region as a result of the debt crisis.

Full Story: the Telegraph

emergentfutures:

Unilever sees ‘return to poverty’ in Europe

Unilever will adopt marketing strategies used in developing countries in order to drive future growth in Europe, as the head of its European business warned that poverty will rise in the region as a result of the debt crisis.

Full Story: the Telegraph

tobiasmar:

I would have expected the Mars mission to be slightly more.

tobiasmar:

I would have expected the Mars mission to be slightly more.

(via tobiasmar-deactivated20121011)

untitled-mag:

If US land were divided like US wealth

Isn’t that red dot Galveston?

untitled-mag:

If US land were divided like US wealth

Isn’t that red dot Galveston?

(via untitled-mag)

All the world is watching. The pressure is on.

All the world is watching. The pressure is on.

planetmoney:

Of each dollar the federal government spends, how much goes to defense? How much goes to Social Security? How much goes to interest on the debt? And how has this sort of thing changed over time?
This graphic answers these questions. It shows the major components of federal spending 50 years ago, 25 years ago, and last year. 
Read more here.

planetmoney:

Of each dollar the federal government spends, how much goes to defense? How much goes to Social Security? How much goes to interest on the debt? And how has this sort of thing changed over time?

This graphic answers these questions. It shows the major components of federal spending 50 years ago, 25 years ago, and last year. 

Read more here.

(via npr)