Arnold Kling attempts to define the differences between Fresh, Salty, and the Real Business Cycle. I calculate that Recalculation is not as polished a process as Repeat programs on a computer. Remember that wrapping function of Sines and Cosines which they tried to implant in my head as a child? That there was no real difference between one wrap and the next fifty? Still don’t believe it, but that is another story; my Mother always loved her father more than me as well, I got over it. We now come to Arnold, with his elves, helicopters, and a Real Business Cycle which also thinks that a wrapping function makes sense; somehow I think these people didn’t have enough Toys as children. What I dislike about the new wrapping functions is the destructive Salt thrown in the gears of the Stable Income population, who are denuded of Buying capacity just when they most need it; don’t even ask me what it does for Those trying to package domestic debt, and sell it in on foreign markets. Stimulus has begun to engender a bitter taste in my mouth, as I conceive it does not do more than recharge the Vibrators for some people; a Product which I do not use. I would like to specify, though, the Post has a very good Point developed, and should be read carefully.
My Readers must read this thing because this guy is really smart; at least, in terms of traditional economics. There is a renegade class of economist who insist that assets cannot be attributed to be assets until they have developed a Resale price. This somewhat contracts the argument utilized, just as the Profits of a Garage sale never lives up to expectations. The Assets Ideal is further tarnished by the fact that increased sale of used equipment will vastly reduce the Sale value of this Product. We should understand that debt acquisition has some relationship to Resale value, and that value lessens upon Resale (Everyone will protest this one, but think of Credit Default Swaps and foreign sale of domestic debt as Resale items). My only real Comment must be that Debt and Assets are far closer to one to one (1:1), than they are in the spread described.
Remember back to the days when I said that the EU would be about as effective as the Articles of Confederation in the United States, where a weak central administration was left shouting at powerful States, who would ignore any unpleasant suggestions coming from the center. I hope you don’t, else you might be old enough to comment that I am full of it. The current Crisis, though, will be a crucible which will temper the EU into a powerful unit, or it will limp along like the League of Nations throughout its history. Fractures are beginning to appear also among the membership of the WTO, and there will probably not be a repeat of Koyoto. Are We at the ‘Peace on Earth, Good Will towards Men" yet? lgl