Psychology of Bivariation
Flip-flopping between Democrat and Republican regimes poses as political change. This artificial pluralism presents a psychological condition known as cognitive dissonance: believing one thing and saying or doing another.
As the president faced his party's bivariate with reciprocating recriminations, was it a political polemic toward a practical understanding of fundamental differences, confirming a bivariate party system is a credible mechanism for continuous improvement, or the expression of a psychological condition that presents as a debilitating dilemma symptomatic of being ideologically conservative but practically liberal?
The debilitation presents with the inability of the two parties to agree on how to control costs and deliver services. Being the essential variables for the conflicted psychological state, the dissonance reaches a point of inflexion with the president's unusual confrontation with his counter party being a micro manifestation of a macro trend.
Cultural pressure to believe conservative values, chief among them that laissez-faire capitalism provides the greatest good, is very strong. Practical experience, however, demonstrates a strict adherence results in crises, like The Great Depression, and now The Great Recession.
The polemic essentially revolves around the dissonant values of theory and practice, and the president's expression of the dissonance indicates what the psychosis demands--the need to decide and relieve the dissonance.
Bivariation functions to ensure the decision is liberal or conservative, which perpetuates the dissonance to a point of apathetic and anomic distraction. The distraction is interpreted to be the verified consent of the governed (or, as Republicans are now saying, "bringing power closer to The People").
Depth of the crisis has driven the distraction to a point of inflexion. The president has demonstrated a broader need to dispell the dissonance with an appropriate cognition.
Independents will be at the forefront of a pragmatic ontology unfolding in an age of reason and the scientific method. It is an inevitability that ideologues knowingly fear will depose the psychological benefit of feeling powerful by denying the consent of the governed and depriving the promise of a peaceful prosperity to the point of dissonance and distraction.
The only "hope" for ideologues is, for example, the recent Supreme Court decision that affirmed money is protected speech. It will take a lot of money to persuade The People that resolving the cognitive dissonance is a bivariate choice.
With a sense of lost investment, dissonance tends to abate with how much The People have sacrificed, or suffered, for false beliefs and disconfirmed legitimacies. Since, however, the source of corporate money and the accumulative size of the public debt to abate the suffering and secure the distribution of wealth and power is the cumulative source of the dissonance, neither buying it out or starving it out will prevent, but abet, the inevitable.
A persistent third element, the independent element, will break the bivariate and the psychological barrier to change we really need.
Saturday, January 30, 2010
Thursday, January 28, 2010
Confirming the Corporate
While the Republican party is touting its role to now lead the way of bringing government closer to The People, the Supreme Court has given more confirmation that the corporation is a person with inalienable rights, like the right to free speech expressed through purchasing power in the media markets.
As we proceed with a clear need for bureaucratic power to cut through the stasus of bivariate politics, the corporate will be annointed with the task. Both devil and savior, it will be the continued tautology of the good and efficiently benevolent private sector versus the evil and disfunctionally malevolent public sector always looking to rob us all of our wealth.
There is nothing new about this conservative narrative turned into deliberate reality. What is new is a comedic convergence of the two parties into a bogus competition for the populist element.
The neo-conservative element, now gaining support from the highest echelon of the judiciary, is becoming the well-established standard for deviation. The old conservative way of assuaging populist sentiment with the always failed expectation of trickle-down economics is completely passe'.
Arguing that the call for a reduced budget deficit is largely a function of reduced spending, or less government, rather than the need for tax increases is recognizably old-school conservative, but independents recognize its lack of credibility.
In order to gain credibility, the conservative message has to merge with a populist message like President Obama's. His State of the Union speech tends to support the hypothesis.
The president declared amnesty for corporate bureaucrats that have engaged in a clearly criminal-like behavior. Combined with the support of the Supreme Court, this is the formula for injustice and an arrogant impunity to the extreme.
As a too-big-to-fail corporate continues to consolidate, all this government support will prove to be inimical to civil society with the civil service in Ivy-League to administer a legitimacy of power neo-conservatively transformed. The promise of both parties to bring power closer to The People will be accomplished with a corporate crush regarded as the right to self-determination with the power of The People reduced to an inalienable predestination.
As we proceed with a clear need for bureaucratic power to cut through the stasus of bivariate politics, the corporate will be annointed with the task. Both devil and savior, it will be the continued tautology of the good and efficiently benevolent private sector versus the evil and disfunctionally malevolent public sector always looking to rob us all of our wealth.
There is nothing new about this conservative narrative turned into deliberate reality. What is new is a comedic convergence of the two parties into a bogus competition for the populist element.
The neo-conservative element, now gaining support from the highest echelon of the judiciary, is becoming the well-established standard for deviation. The old conservative way of assuaging populist sentiment with the always failed expectation of trickle-down economics is completely passe'.
Arguing that the call for a reduced budget deficit is largely a function of reduced spending, or less government, rather than the need for tax increases is recognizably old-school conservative, but independents recognize its lack of credibility.
In order to gain credibility, the conservative message has to merge with a populist message like President Obama's. His State of the Union speech tends to support the hypothesis.
The president declared amnesty for corporate bureaucrats that have engaged in a clearly criminal-like behavior. Combined with the support of the Supreme Court, this is the formula for injustice and an arrogant impunity to the extreme.
As a too-big-to-fail corporate continues to consolidate, all this government support will prove to be inimical to civil society with the civil service in Ivy-League to administer a legitimacy of power neo-conservatively transformed. The promise of both parties to bring power closer to The People will be accomplished with a corporate crush regarded as the right to self-determination with the power of The People reduced to an inalienable predestination.
Wednesday, January 27, 2010
State of the Union
After having been diverted by a Pelosi-Emanuel agenda, President Obama restated the platform he was elected on: reversing the policies and programs that caused the current economic trend that is still getting worse despite the getting-better rhetoric.
While there are plenty of signals for a recovery, the economy is still getting worse and directly correlates with a Pelosi-Emanuel agenda.
Until the causal factors are reversed, the economy will continue to trend deflationary. Republicans will favor a top-down stimulus program despite the pro-populist State of the Union critique.
Consistent with the effect of a bivariate organizational technology, the Democratic majority will be blamed for a top-down, socialist, government planning program that supports the deflationary trend.
Who or what is to blame for the state of the union will be confused by design. The bivariate accountability will be conserved along with the current deflationary trend.
Whether the independent voter is actually swinging right or not is not critical. It does not matter because the system is bivariate.
What will stop and reverse the deflationary trend in a most timely and efficient manner is being sidetracked with a Pelosi-Emanuel agenda and a bivariate gaming strategy that invariably results in unpopular mandates.
Until we see, not just hear about, adminstrative resolve to reverse the deflationary trend from the bottom up financed from the benefit accumulated from the top down, the trend will not reverse without gigantic budget deficits and an accumulating debt burden. Populist sentiment (the gamma risk) is calling for a technical correction by non-political, bureaucratic, administrative means in genuine public service, not an endless bivariate harangue that conserves the top-heavy distribution of power at middle class expense.
Without recognizing that the current deflationary trend is a cost that created a benefit, the trend will be slow to reverse and, of course, impossible to prevent.
Reinvestment of the accumulated benefit from the bottom up, like writing down the principle of devalued home foreclosures with the TARP funds, would effectively reverse the deflationary trend, the accumulative debt burden (the empirical value of the gamma risk), and the accumulative size (the need) for government.
While there are plenty of signals for a recovery, the economy is still getting worse and directly correlates with a Pelosi-Emanuel agenda.
Until the causal factors are reversed, the economy will continue to trend deflationary. Republicans will favor a top-down stimulus program despite the pro-populist State of the Union critique.
Consistent with the effect of a bivariate organizational technology, the Democratic majority will be blamed for a top-down, socialist, government planning program that supports the deflationary trend.
Who or what is to blame for the state of the union will be confused by design. The bivariate accountability will be conserved along with the current deflationary trend.
Whether the independent voter is actually swinging right or not is not critical. It does not matter because the system is bivariate.
What will stop and reverse the deflationary trend in a most timely and efficient manner is being sidetracked with a Pelosi-Emanuel agenda and a bivariate gaming strategy that invariably results in unpopular mandates.
Until we see, not just hear about, adminstrative resolve to reverse the deflationary trend from the bottom up financed from the benefit accumulated from the top down, the trend will not reverse without gigantic budget deficits and an accumulating debt burden. Populist sentiment (the gamma risk) is calling for a technical correction by non-political, bureaucratic, administrative means in genuine public service, not an endless bivariate harangue that conserves the top-heavy distribution of power at middle class expense.
Without recognizing that the current deflationary trend is a cost that created a benefit, the trend will be slow to reverse and, of course, impossible to prevent.
Reinvestment of the accumulated benefit from the bottom up, like writing down the principle of devalued home foreclosures with the TARP funds, would effectively reverse the deflationary trend, the accumulative debt burden (the empirical value of the gamma risk), and the accumulative size (the need) for government.
Bivariate Analysis
Americans expect pluralistic process to ontologize a legitimate outcome. The result is intended to be government and business (political-economy) by consent in which conflict is resolved by peacefully cooperative effort.
Psychologically there is a multifarious order of intention that creates a highly complex environment that tends to reduce to a manageable, directable, controllable, number of variables which also reduces to an ontology of legitimacy (the notion that things are just naturally the way they are despite the best or worst intentions). A binomial organizational technology is intended to accomplish that reduction.
The reduction, however, does not reduce the complexity. It shifts it to another part of the equation outside an area isolated for manipulation. A gamma risk then accumulates outside the isolated area.
Although bivariate reduction is a good way to conserve the stakes in the guise of change and legitimate pluralistic process (two-party politics for example), the gamma risk will emerge to affect the isolated variables because the actual, practical, span of control is not sufficient to maintain the isolation. Thus there is the tendency for an authoritarian regime to become progressively more autocratic and dystopic despite the best original order of intention, and thus the need to always ensure an ontological legitimacy in priority (in the prior order of intention), preferably a pluralistic one.
The third-party element that has emerged into our binary party system with the intention of plurality (a beta-risk volatility) is a complexity that the new administration and congressional leadership is not sophisticated enough to plan for or manage.
The planned effect of a bivariate system is to conserve the stakes through the appearance of pluralistic process and soften the thrid party element by captive co-optation. Instead, the effect has been to harden and strengthen the resolve of a genuine opposition.
Deviation from the planned bivariate effect may be beyond the clever capabilities of both parties to manage without having to actually share power. The probable result is a progressively more autocratic aspect to public process in order to control the progressive march of genuine pluralism.
Despite the obvious limitation of a bivariate system to be genuinely representative by design, the new congressional leadership nevertheless made it quite clear that their agendae is mandated, imperative, by the consent of the governed, with a clearly, categorically binomial, winner and loser. Apparently not, however, and they will continue to struggle without the simplicity of what they consider consent for the autocracy of there better, progressive judgement and authority.
Since the bivariate party system is recurrent by design, the latest imperative is reminiscent of Newt Gingrich's social contract theory. The "contract with America" following the realignment of 1994 is the archetype of an authoritarian resistance to a genuine consent and what a bivariate system is designed to do. It is necessary to construct a contract-like legitimacy in addition to the guaranteed Constitutional legitimacy of government by consent. The implication, of course, is that whatever the new congress mandated was binding with the public's trust of its better judgement. These modifications to inherent rights are nothing but the product of deceit and immediately indicates a bad intent that earns the public's distrust.
On the economic side of the macro equation is, as well, a categorical imperative that is reduced to a simplified span of control. Firms that are categorically too big to fail are the clear and uncontrovertible winners whose government support for command and control is clearly imperative despite the consent of the governed. This is where intentions render with the highest order of complexity. Strange inversions appear as unintended ontologies and the variables reduce to the gamma risk. The risk is managed with all manner of rhetorical device to explain the contradiction between theory (like tax breaks for big business always leads to general prosperity) and practice (The Great Recession).
For the analyst, recognizing the organized ontology beyond the teleology of any ideological bias provides high predictive utility.
For example, going forward, the investor should expect the gamma risk to present as both high political and economic volatility. The risk was always there (and if you follow these articles, I have been tracking the risk), but it is constantly being methodically (algebraically) isolated. While it appears, then, to be minimized, it is not. It is being maximized and accumulated until it reaches a crisis proportion.
The motive toward crisis and resolution is an ontology: the struggle for dominance mitigated by the necessity for cooperation to solve common problems. If the problem is the distribution of rewards and deprivations (the political-economic equation), resolution reduces to the assessment of the gamma risk. The amount of value gained, or rewarded, on that risk can be safely repressed or expressed (the degree of allowable, observable presence) without relinquishing the goal of dominance. The binomial calculus of winning or losing is still reflected in the reduction to binary management of systemic risk (a bivariate analysis), like being too big to fail in which both business and government cooperate to conserve, or stabilize, the cost to benefit and the distribution of rewards and deprivations.
Being able to dictate market preferences by operation of government without consent of the governed is what bivariate party leadership is intended, and likely, to accomplish.
Independents are providing the pluralism necessary to correct for value in the marketplace that is accumulatively retributive (what causes the need for government empirically expressed with an accumulating burden of debt, like a budget deficit). The gamma risk on that accumulated value does not have to present as more autocratic command and control of free markets (monetizing the debt and consolidating industry and markets with middle class, discretionary income, reducing the ability to choose). Instead, it can be to ensure a free-market mechanism in priority by government authority (by consent of the governed).
Rather than selected by systematic default of legislative mandate and administrative authority, be it public or private, winners and losers are elected by popular consent (by the force and empirically ontological legitimacy of democratic process).
If the political marketplace remains bivariate (and teleological), industry and markets that consolidate to support an inelasticity will benefit at the expense of everyone else (the accumulated value at risk). Interjection of a third element reduces the probability of sustaining that benefit. The value is retributive and presents in the form of an increased gamma risk.
Managing the gamma risk and conserving the accumulation of retributive value is, therefore, a function of keeping the system bivariate.
The retributive value continued to accumulate after the so-called realignment of 2008-09. The increasing gamma risk presents as uncertainty. Events like the Massachusettes realignment of the open senate seat was a predictable indication of an impending reduction of the gamma risk and a distribution on the value that supports it--a secular recovery.
The tendency to bi-variate fulfills the natural tendency to both dominate in conflict and cooperate toward the practical application and legitimacy of that end. There is also a psychological dimension to the practical legitimacy that presents analytically. If that dimension is not included, events present with unexpected inversions.
Predictive accuracy is easily diminished within the psychology of an analytical technique. The added complexity of that dimension to analyses can be reduced to an assessment of the gamma risk. That risk is most likely bivariately reduced with a third element containing all the value of that risk predictably present at any particular time.
Extrapolating, then, from the psychology of analytical technique, the probability the leadership of the two parties will be responsive to the third, independent element is nearly zero.
There is significant security in the bivariate structure of power to conserve the stakes and "avoid" the risk of an additional distribution of power. The expectation for change we really need will fail. The gamma risk will then default (isolate) to its intended place in the bivariate equation. The values on that distribution will be conserved disproportionately and will re-present in the next election cycle as a strangely inverted populist conservatism. The gamma will then be accumulated to a point of inflexion. The risk is more likely to then be taken than avoided causing the necessary distribution on the consolidated value.
Psychologically there is a multifarious order of intention that creates a highly complex environment that tends to reduce to a manageable, directable, controllable, number of variables which also reduces to an ontology of legitimacy (the notion that things are just naturally the way they are despite the best or worst intentions). A binomial organizational technology is intended to accomplish that reduction.
The reduction, however, does not reduce the complexity. It shifts it to another part of the equation outside an area isolated for manipulation. A gamma risk then accumulates outside the isolated area.
Although bivariate reduction is a good way to conserve the stakes in the guise of change and legitimate pluralistic process (two-party politics for example), the gamma risk will emerge to affect the isolated variables because the actual, practical, span of control is not sufficient to maintain the isolation. Thus there is the tendency for an authoritarian regime to become progressively more autocratic and dystopic despite the best original order of intention, and thus the need to always ensure an ontological legitimacy in priority (in the prior order of intention), preferably a pluralistic one.
The third-party element that has emerged into our binary party system with the intention of plurality (a beta-risk volatility) is a complexity that the new administration and congressional leadership is not sophisticated enough to plan for or manage.
The planned effect of a bivariate system is to conserve the stakes through the appearance of pluralistic process and soften the thrid party element by captive co-optation. Instead, the effect has been to harden and strengthen the resolve of a genuine opposition.
Deviation from the planned bivariate effect may be beyond the clever capabilities of both parties to manage without having to actually share power. The probable result is a progressively more autocratic aspect to public process in order to control the progressive march of genuine pluralism.
Despite the obvious limitation of a bivariate system to be genuinely representative by design, the new congressional leadership nevertheless made it quite clear that their agendae is mandated, imperative, by the consent of the governed, with a clearly, categorically binomial, winner and loser. Apparently not, however, and they will continue to struggle without the simplicity of what they consider consent for the autocracy of there better, progressive judgement and authority.
Since the bivariate party system is recurrent by design, the latest imperative is reminiscent of Newt Gingrich's social contract theory. The "contract with America" following the realignment of 1994 is the archetype of an authoritarian resistance to a genuine consent and what a bivariate system is designed to do. It is necessary to construct a contract-like legitimacy in addition to the guaranteed Constitutional legitimacy of government by consent. The implication, of course, is that whatever the new congress mandated was binding with the public's trust of its better judgement. These modifications to inherent rights are nothing but the product of deceit and immediately indicates a bad intent that earns the public's distrust.
On the economic side of the macro equation is, as well, a categorical imperative that is reduced to a simplified span of control. Firms that are categorically too big to fail are the clear and uncontrovertible winners whose government support for command and control is clearly imperative despite the consent of the governed. This is where intentions render with the highest order of complexity. Strange inversions appear as unintended ontologies and the variables reduce to the gamma risk. The risk is managed with all manner of rhetorical device to explain the contradiction between theory (like tax breaks for big business always leads to general prosperity) and practice (The Great Recession).
For the analyst, recognizing the organized ontology beyond the teleology of any ideological bias provides high predictive utility.
For example, going forward, the investor should expect the gamma risk to present as both high political and economic volatility. The risk was always there (and if you follow these articles, I have been tracking the risk), but it is constantly being methodically (algebraically) isolated. While it appears, then, to be minimized, it is not. It is being maximized and accumulated until it reaches a crisis proportion.
The motive toward crisis and resolution is an ontology: the struggle for dominance mitigated by the necessity for cooperation to solve common problems. If the problem is the distribution of rewards and deprivations (the political-economic equation), resolution reduces to the assessment of the gamma risk. The amount of value gained, or rewarded, on that risk can be safely repressed or expressed (the degree of allowable, observable presence) without relinquishing the goal of dominance. The binomial calculus of winning or losing is still reflected in the reduction to binary management of systemic risk (a bivariate analysis), like being too big to fail in which both business and government cooperate to conserve, or stabilize, the cost to benefit and the distribution of rewards and deprivations.
Being able to dictate market preferences by operation of government without consent of the governed is what bivariate party leadership is intended, and likely, to accomplish.
Independents are providing the pluralism necessary to correct for value in the marketplace that is accumulatively retributive (what causes the need for government empirically expressed with an accumulating burden of debt, like a budget deficit). The gamma risk on that accumulated value does not have to present as more autocratic command and control of free markets (monetizing the debt and consolidating industry and markets with middle class, discretionary income, reducing the ability to choose). Instead, it can be to ensure a free-market mechanism in priority by government authority (by consent of the governed).
Rather than selected by systematic default of legislative mandate and administrative authority, be it public or private, winners and losers are elected by popular consent (by the force and empirically ontological legitimacy of democratic process).
If the political marketplace remains bivariate (and teleological), industry and markets that consolidate to support an inelasticity will benefit at the expense of everyone else (the accumulated value at risk). Interjection of a third element reduces the probability of sustaining that benefit. The value is retributive and presents in the form of an increased gamma risk.
Managing the gamma risk and conserving the accumulation of retributive value is, therefore, a function of keeping the system bivariate.
The retributive value continued to accumulate after the so-called realignment of 2008-09. The increasing gamma risk presents as uncertainty. Events like the Massachusettes realignment of the open senate seat was a predictable indication of an impending reduction of the gamma risk and a distribution on the value that supports it--a secular recovery.
The tendency to bi-variate fulfills the natural tendency to both dominate in conflict and cooperate toward the practical application and legitimacy of that end. There is also a psychological dimension to the practical legitimacy that presents analytically. If that dimension is not included, events present with unexpected inversions.
Predictive accuracy is easily diminished within the psychology of an analytical technique. The added complexity of that dimension to analyses can be reduced to an assessment of the gamma risk. That risk is most likely bivariately reduced with a third element containing all the value of that risk predictably present at any particular time.
Extrapolating, then, from the psychology of analytical technique, the probability the leadership of the two parties will be responsive to the third, independent element is nearly zero.
There is significant security in the bivariate structure of power to conserve the stakes and "avoid" the risk of an additional distribution of power. The expectation for change we really need will fail. The gamma risk will then default (isolate) to its intended place in the bivariate equation. The values on that distribution will be conserved disproportionately and will re-present in the next election cycle as a strangely inverted populist conservatism. The gamma will then be accumulated to a point of inflexion. The risk is more likely to then be taken than avoided causing the necessary distribution on the consolidated value.
Tuesday, January 26, 2010
Failed Expectations
A policy platform that relies on the hope for change will more than likely result in a failed expectation. The Obama administration has not failed the probability.
Throughout his campaign President Obama did, however, qualify the hopeful rhetoric with practical policy alternatives that were described as socialist by the opposition. Now that those alternatives have, for the most part, not been executed, the hope is lost, the expectation failed. It is a simple analytic. It has nothing to do with the failure of policy. It was not executed. Policy was conserved, which now defines the independents that voted for him as the opposition.
The evidence suggests a neo-conservative gaming strategy perpetrated by the Democratic leadership.
Since a populist Republican party, renewed with a "compassionate conservatism," is something only the most credulous could possibly believe, it is incumbant on the opposition to provide that credibility. The Republican party is now poised to take up the populist mantle (having gone full circle, from tragedy to farce).
The strategy, gaming the Republican opposition into isolation, cleverly gives a cooperatively conservative program an adversarial appearance, also giving what the voters voted for a false empirical confirmation. It is, at this point, a failed confidence game that is not confirmed by the evidence of an improved economy or any change of the factors that are identifiably causal. That element of the scheme is not very clever and is now in damage control. The result is to force the president into applying the gamma risk, suggesting the timing of the recovery.
The stakes are only marginally at risk at this point with the failure being mainly a failed strategy in a game of strategy between ideological opponents with the same primary goal in mind--accumulating power and keeping it. Obama's middle class task force will likely reduce the gamma enough to keep the risk contained within a safe proportion. A distribution on the accumulation must occur in the short term to maintain the proportion of accumulated power to consent.
Analyses of why the Obama administration has nominally "failed" is a dizzying maelstrom of endless possibility that mirrors the strangely inverted image of its real success.
A useful reduction to the fundament is in order.
While Obama clearly identifies reducing the rising cost of healthcare being critical to economic welfare and a sustainable recovery, independents do not consider rendering a mandatory policy a reliable means of controlling costs. If costs keep rising even when the demand has been falling throughout the Great Recession, what happens when it is mandatory?
Dispense with all the noise and the political gaming and get down to the realpolitique of increasing the "discretionary" spending that control costs in a free-market fashion instead of commanding (mandating) costs in an auhtoritarian fashion. Supporting what is too big to fail over the discretion of the populace is an indiscretion that is not difficult to calculate either politically or economically.
The Hamiltonian model is in a serious challenge here. Obama's approach has a clearly Federalist aspect that supports the conservative element rather than resists it.
It will be interesting to see how the logic of independents collectively acts to control public policy in a more Jeffersonian fashion, rendering political gaming a function of popular expression rather than an emblem of ruling class power with the risk of failed expectaton practically assured to an endless sea of debate.
Throughout his campaign President Obama did, however, qualify the hopeful rhetoric with practical policy alternatives that were described as socialist by the opposition. Now that those alternatives have, for the most part, not been executed, the hope is lost, the expectation failed. It is a simple analytic. It has nothing to do with the failure of policy. It was not executed. Policy was conserved, which now defines the independents that voted for him as the opposition.
The evidence suggests a neo-conservative gaming strategy perpetrated by the Democratic leadership.
Since a populist Republican party, renewed with a "compassionate conservatism," is something only the most credulous could possibly believe, it is incumbant on the opposition to provide that credibility. The Republican party is now poised to take up the populist mantle (having gone full circle, from tragedy to farce).
The strategy, gaming the Republican opposition into isolation, cleverly gives a cooperatively conservative program an adversarial appearance, also giving what the voters voted for a false empirical confirmation. It is, at this point, a failed confidence game that is not confirmed by the evidence of an improved economy or any change of the factors that are identifiably causal. That element of the scheme is not very clever and is now in damage control. The result is to force the president into applying the gamma risk, suggesting the timing of the recovery.
The stakes are only marginally at risk at this point with the failure being mainly a failed strategy in a game of strategy between ideological opponents with the same primary goal in mind--accumulating power and keeping it. Obama's middle class task force will likely reduce the gamma enough to keep the risk contained within a safe proportion. A distribution on the accumulation must occur in the short term to maintain the proportion of accumulated power to consent.
Analyses of why the Obama administration has nominally "failed" is a dizzying maelstrom of endless possibility that mirrors the strangely inverted image of its real success.
A useful reduction to the fundament is in order.
While Obama clearly identifies reducing the rising cost of healthcare being critical to economic welfare and a sustainable recovery, independents do not consider rendering a mandatory policy a reliable means of controlling costs. If costs keep rising even when the demand has been falling throughout the Great Recession, what happens when it is mandatory?
Dispense with all the noise and the political gaming and get down to the realpolitique of increasing the "discretionary" spending that control costs in a free-market fashion instead of commanding (mandating) costs in an auhtoritarian fashion. Supporting what is too big to fail over the discretion of the populace is an indiscretion that is not difficult to calculate either politically or economically.
The Hamiltonian model is in a serious challenge here. Obama's approach has a clearly Federalist aspect that supports the conservative element rather than resists it.
It will be interesting to see how the logic of independents collectively acts to control public policy in a more Jeffersonian fashion, rendering political gaming a function of popular expression rather than an emblem of ruling class power with the risk of failed expectaton practically assured to an endless sea of debate.
Politicizing the Fed
Being a quazi-public/private technical bureaucracy, the Federal Reserve is already fully politicized.
While being both public and private is supposed to give the Fed a balanced, independent quality that achieves objective results in the interest of the general welfare, the call for re-mandating its policy agenda certainly does indicate that the benefit of its enterprise is skewed.
The Fed's power is limited to achieving maximum growth while "controlling" inflation by technically correcting the money supply; a function that is anything but apolitical.
The Fed's function, growth with low inflation, is politically indicated by priority. Jobs, Main Street's interests, will follow, or lag as an indicator of prosperity.
Inflation is controlled by command of the money supply, and especially the velocity of that supply. When money becomes consolidated, the velocity (demand) slows and unemployment occurs, controlling inflation. The sequence of events, the priority, is highly political and entails a risk (the gamma risk) that must be commanded and controlled.
Inverting the hypothesis (increased velocity therefore decreased inflation) results in crisis. So, like it is now, we continue to operate with the consolidated model to keep inflation (employment) and interest rates low to finance the recovery. The evidence, however, is that the financing is being consolidated. So, for example, China tightens credit to keep capital from leveraging into monetary expansion (inflation) without growth (stagflation). The resulting slow-to-no growth controls inflation but accumulates gamma risk (accumulating at the leveraged rate) designed to present as a tradeoff--inflation or unemployment.
Since inflation depreciates the value of the accumulated capital, maintaining unemployment, by variously circuitous technical means that cuts across all jurisdictional boundaries of government, gets priority with the Fed ultimately controlling the externalities (the gamma risk presentations like a burgeoning populist sentiment that demands a legitimacy of popular consent, something that ensuring a free-market economics in priority will provide with the risk fully applied and presented, retributed, to the source).
If it is the objective charge of the Fed to promote a purely economic agenda (what political scientists refer to as a "genuine" civil service), it is powerful beyond the means of Constitutional balance of power. That, of course, is exactly what the Federalists have always wanted--for the executive to have unchecked power. The other branches are in service, or support of that executive power.
Unchecked power is hardly apolitical. It is, rather, genuinely political with an agendae of those who stand to benefit from a more centralized, non-Jeffersonian form of government.
Federalists, favoring the Hamiltonian model of government from the top down, prefer government (the consent of the governed) enterprise only by and for the pleasure of the elite. (The justice of this logic is, of course, considering it is completely illiogical, the object of that secret knowlege conservatives have that the non-elite lack. Empirically, however, income, and the means to sufficiently accumulate it, to be in the elite class is all that is lacking, and what the Fed has always been prepared to support.) The legitimacy of power is throughly political and is fully reflected in the current debate over the function and independence of the Federal Reserve in particular and the bureaucratic model of power in general.
See the article, "The Bureaucratic Model of Power and Political Economy."
While being both public and private is supposed to give the Fed a balanced, independent quality that achieves objective results in the interest of the general welfare, the call for re-mandating its policy agenda certainly does indicate that the benefit of its enterprise is skewed.
The Fed's power is limited to achieving maximum growth while "controlling" inflation by technically correcting the money supply; a function that is anything but apolitical.
The Fed's function, growth with low inflation, is politically indicated by priority. Jobs, Main Street's interests, will follow, or lag as an indicator of prosperity.
Inflation is controlled by command of the money supply, and especially the velocity of that supply. When money becomes consolidated, the velocity (demand) slows and unemployment occurs, controlling inflation. The sequence of events, the priority, is highly political and entails a risk (the gamma risk) that must be commanded and controlled.
Inverting the hypothesis (increased velocity therefore decreased inflation) results in crisis. So, like it is now, we continue to operate with the consolidated model to keep inflation (employment) and interest rates low to finance the recovery. The evidence, however, is that the financing is being consolidated. So, for example, China tightens credit to keep capital from leveraging into monetary expansion (inflation) without growth (stagflation). The resulting slow-to-no growth controls inflation but accumulates gamma risk (accumulating at the leveraged rate) designed to present as a tradeoff--inflation or unemployment.
Since inflation depreciates the value of the accumulated capital, maintaining unemployment, by variously circuitous technical means that cuts across all jurisdictional boundaries of government, gets priority with the Fed ultimately controlling the externalities (the gamma risk presentations like a burgeoning populist sentiment that demands a legitimacy of popular consent, something that ensuring a free-market economics in priority will provide with the risk fully applied and presented, retributed, to the source).
If it is the objective charge of the Fed to promote a purely economic agenda (what political scientists refer to as a "genuine" civil service), it is powerful beyond the means of Constitutional balance of power. That, of course, is exactly what the Federalists have always wanted--for the executive to have unchecked power. The other branches are in service, or support of that executive power.
Unchecked power is hardly apolitical. It is, rather, genuinely political with an agendae of those who stand to benefit from a more centralized, non-Jeffersonian form of government.
Federalists, favoring the Hamiltonian model of government from the top down, prefer government (the consent of the governed) enterprise only by and for the pleasure of the elite. (The justice of this logic is, of course, considering it is completely illiogical, the object of that secret knowlege conservatives have that the non-elite lack. Empirically, however, income, and the means to sufficiently accumulate it, to be in the elite class is all that is lacking, and what the Fed has always been prepared to support.) The legitimacy of power is throughly political and is fully reflected in the current debate over the function and independence of the Federal Reserve in particular and the bureaucratic model of power in general.
See the article, "The Bureaucratic Model of Power and Political Economy."
Friday, January 22, 2010
Making the Market
Shorts got burned in the rally since March '09 because the gamma risk to business interests of government intervention was fully expected to be high.
Instead of intervening in financial markets, most of the focus has been on the health care sector. Market makers (who are now the focus of gamma risk) were clear to "make" the market. Big financial entities have been trying to sucker investors in since March '09 with bullish trends despite bad fundamentals and a high gamma-risk probability indicator all-be-it not really priced in till now.
Now that the gamma is indicating higher probable risk to earnings along with the alpha risk of a systemic declining rate of profit as valuations become more fundamental, the time is nigh for recovery.
Too much money has been consolidated over the past ten years for the declining rate of profit and the gamma-risk variable to present significant resistance. The recent spike in the gamma, having been accumulated beyond a reasonable support, found the resistance level.
The shorts failed to properly track the gamma-risk indicator. One of the values in that indicator is, for example, the level of failed expectations which has been trending higher for at least ten months. It is a short sell indicator in this kind of short-wave deflationary phase of the cycle.
Accumulation and concentration of capital over the past ten years is still more than capable of making market trends and sudden reversals that confound the indicators and render strange inversions. The gamma-risk indicator, however, as the name suggests, is much more resolved and difficult to manage. It does not rely on options and futures strategies that effect, or "make," the market. It is not likely to be bought or sold in a sudden reversal and it is in a highly visible public domain.
The gamma can be as much a causal factor as the concentration of the capital, so it is a reliable indicator of future trends and valuations both short and long. It can, and will, determine who "makes" the market which is the larger determinant of what valuations, and the timing, will be.
Instead of intervening in financial markets, most of the focus has been on the health care sector. Market makers (who are now the focus of gamma risk) were clear to "make" the market. Big financial entities have been trying to sucker investors in since March '09 with bullish trends despite bad fundamentals and a high gamma-risk probability indicator all-be-it not really priced in till now.
Now that the gamma is indicating higher probable risk to earnings along with the alpha risk of a systemic declining rate of profit as valuations become more fundamental, the time is nigh for recovery.
Too much money has been consolidated over the past ten years for the declining rate of profit and the gamma-risk variable to present significant resistance. The recent spike in the gamma, having been accumulated beyond a reasonable support, found the resistance level.
The shorts failed to properly track the gamma-risk indicator. One of the values in that indicator is, for example, the level of failed expectations which has been trending higher for at least ten months. It is a short sell indicator in this kind of short-wave deflationary phase of the cycle.
Accumulation and concentration of capital over the past ten years is still more than capable of making market trends and sudden reversals that confound the indicators and render strange inversions. The gamma-risk indicator, however, as the name suggests, is much more resolved and difficult to manage. It does not rely on options and futures strategies that effect, or "make," the market. It is not likely to be bought or sold in a sudden reversal and it is in a highly visible public domain.
The gamma can be as much a causal factor as the concentration of the capital, so it is a reliable indicator of future trends and valuations both short and long. It can, and will, determine who "makes" the market which is the larger determinant of what valuations, and the timing, will be.
Back to Controlling the Futures
Gaining Indicators of a Double Dip Recession
Gamma-Risk Asessment and Probable Market Trends
As gamma-risk gains, pop analysts see financial markets settling into more fundamental valuations with the level of support at previous resistance. It is a bearish sentiment fully supported by gamma-risk indicators.
In a short-term inverse wave, valuation wanes as gamma gains. Rather than reversing, however, gamma-risk trends (like non-fundamental price peaks), volatility and unemployment, continue to gain in support of the relative valuations. The values are varying directly rather than inversely with the gamma-risk accumulating to a crisis proportion.
Advent of a more populist sentiment with the new president and congress should increase the risk to large capital flows that distort the bid and command market trends. The risk should wane as the value of that risk is redeemed. Instead, it is still gaining along with an inversely waning alpha risk. In this period there is a short-term increase of beta-risk volatility both politically and economically, like we have now, not being exactly sure what the proper valuation is. Are we Democrat or Republican? Are we liberal or conservative? Are we capitalist or socialist?
Despite all the uncertainty there are reasonably accurate indicators outside the usual trend indicators, like the gamma-risk indicator which in any particular analysis can be given a relative value assignment to help indicate a probable trend. (An analyst can, for example, construct a stupidity-risk indicator based on known values that indicate stupidity, and so on....)
While there is more recognition by the Obama administraton, for example, that the ability to control energy prices effectively controls the macro trend, the probability the CFTC will act to allow more fundamental pricing of commodity futures to direct the macro trend is highly unlikely. It certainly would not be soon enough, or with enough reslove if it were, to prevent a double dip.
Controlling commodity futures activity was something to have been executed by the new administration in priority. Instead, congress and the administration focused on a regressive tax burden to finance health care for poor people, supporting the deflationary trend. Raising taxes and applying the revenue to drive up costs is disfuntional unless, of course, you are a health care provider.
Disfunctional progressivism is surely not the cure for command-and-control "market makers" that drive up costs for everyone without increasing supply (economic expansion). It just exacerbates the problem.
The risk of a double dip is vastly undervalued in this disfunctional public-policy environment.
We need administrative technicians that resist parboiled progressives that cause more problems than they solve and support the need for government. We cannot have less government and more freedom to choose without reducing the need.
Empirically, reducing the need for government is not what progressive public policy does as we could once again confirm with new health care legislation. The most significant failure is to expect public policy to reduce the cost by supporting the inelasticity of demand with a government mandate. Earmarking the funds for a specific purpose does not resist, but supports rising costs--just exactly what The People do not want.
The revenue accumulated from the SCHIP's tax did not expand supply, but did reduce discretionary income. Discretion is the key term here. It was removed with the income. Freedom to choose has been removed in the public interest?
Accumulated revenue, reduced discretonary spending and inelasticity of the funds causes both inflation and deflation at the same time (stagflation). The accumulated revenue becomes accumulated income that supports a deflationary trend and rising prices. The health care sector confirms the hypothesis.
The result will be runaway health care costs financed by the public till and runaway energy costs driven by an uninhibited consolidation of capital. If you want to make the double dip a sure thing, that's how you do it.
As the populist sentiment accumulates with significant failure of expectation, the Democratic congress and administration is moving to act on the gamma risk. That it is late in coming is a conservative measure that has allowed the Republican opposition to take a populist aspect that signals resistance to redemption of the relative value (the retributive value) associated with the risk.
While the political will to apply the gamma risk has gained strength and signals the probable timing of recovery, it is relatively weak in proportion to the accumulating risk. The disproportion indicates conservation of relative valuations and the macro distribution of costs and benefits.
Despite the populist rhetoric and policy proposals, the systemic risk, and the reward, will be conserved which, of course, takes us "back to controlling the futures."
Gamma-Risk Asessment and Probable Market Trends
As gamma-risk gains, pop analysts see financial markets settling into more fundamental valuations with the level of support at previous resistance. It is a bearish sentiment fully supported by gamma-risk indicators.
In a short-term inverse wave, valuation wanes as gamma gains. Rather than reversing, however, gamma-risk trends (like non-fundamental price peaks), volatility and unemployment, continue to gain in support of the relative valuations. The values are varying directly rather than inversely with the gamma-risk accumulating to a crisis proportion.
Advent of a more populist sentiment with the new president and congress should increase the risk to large capital flows that distort the bid and command market trends. The risk should wane as the value of that risk is redeemed. Instead, it is still gaining along with an inversely waning alpha risk. In this period there is a short-term increase of beta-risk volatility both politically and economically, like we have now, not being exactly sure what the proper valuation is. Are we Democrat or Republican? Are we liberal or conservative? Are we capitalist or socialist?
Despite all the uncertainty there are reasonably accurate indicators outside the usual trend indicators, like the gamma-risk indicator which in any particular analysis can be given a relative value assignment to help indicate a probable trend. (An analyst can, for example, construct a stupidity-risk indicator based on known values that indicate stupidity, and so on....)
While there is more recognition by the Obama administraton, for example, that the ability to control energy prices effectively controls the macro trend, the probability the CFTC will act to allow more fundamental pricing of commodity futures to direct the macro trend is highly unlikely. It certainly would not be soon enough, or with enough reslove if it were, to prevent a double dip.
Controlling commodity futures activity was something to have been executed by the new administration in priority. Instead, congress and the administration focused on a regressive tax burden to finance health care for poor people, supporting the deflationary trend. Raising taxes and applying the revenue to drive up costs is disfuntional unless, of course, you are a health care provider.
Disfunctional progressivism is surely not the cure for command-and-control "market makers" that drive up costs for everyone without increasing supply (economic expansion). It just exacerbates the problem.
The risk of a double dip is vastly undervalued in this disfunctional public-policy environment.
We need administrative technicians that resist parboiled progressives that cause more problems than they solve and support the need for government. We cannot have less government and more freedom to choose without reducing the need.
Empirically, reducing the need for government is not what progressive public policy does as we could once again confirm with new health care legislation. The most significant failure is to expect public policy to reduce the cost by supporting the inelasticity of demand with a government mandate. Earmarking the funds for a specific purpose does not resist, but supports rising costs--just exactly what The People do not want.
The revenue accumulated from the SCHIP's tax did not expand supply, but did reduce discretionary income. Discretion is the key term here. It was removed with the income. Freedom to choose has been removed in the public interest?
Accumulated revenue, reduced discretonary spending and inelasticity of the funds causes both inflation and deflation at the same time (stagflation). The accumulated revenue becomes accumulated income that supports a deflationary trend and rising prices. The health care sector confirms the hypothesis.
The result will be runaway health care costs financed by the public till and runaway energy costs driven by an uninhibited consolidation of capital. If you want to make the double dip a sure thing, that's how you do it.
As the populist sentiment accumulates with significant failure of expectation, the Democratic congress and administration is moving to act on the gamma risk. That it is late in coming is a conservative measure that has allowed the Republican opposition to take a populist aspect that signals resistance to redemption of the relative value (the retributive value) associated with the risk.
While the political will to apply the gamma risk has gained strength and signals the probable timing of recovery, it is relatively weak in proportion to the accumulating risk. The disproportion indicates conservation of relative valuations and the macro distribution of costs and benefits.
Despite the populist rhetoric and policy proposals, the systemic risk, and the reward, will be conserved which, of course, takes us "back to controlling the futures."
Wednesday, January 20, 2010
Government by Consent
A binomial organizational technology that always conserves the stakes in the guise of change, like a two-party system (A therefore B, B therefore A ad infinitum), achieves a false legitimacy with the appearance of pluralistic mechanics.
The third-party element that emerged in the Massachusettes senate election will be interpreted as being either pro-Republican or anti-Democrat. That will conserve the stakes (the bivariate technology).
Both parties want to conserve the benefit of what the demand for health care, for example, provides--inelasticity, or the relative inability to consent to one's fate.
Consent is the Constitutional legitimacy at the cornerstone of our republican form of government. It is, however, intentionally organized into a bivariate, dummy variable that is really no choice at all. The freedom to self-determine is reduced to a function of autocratic compliance, just exactly what our Constitution is very strictly intended to prevent.
Independents are providing the pluralism necessary to add the value of consent back to the front of the equation of power so that, representation plus consent equals power, rather than, representation equals power of consent.
The misattributed value of consent results in a retributive value, and a gamma risk associated with it, that signals a probable resistance to binomial distributions both politically and economically.
Mr. Brown's election does not indicate less gamma risk to an accumulated benefit (like the current bubble-value of equities), it signals more. It indicates a trend that demands support for more fundamental valuations--a recovery ironically feared to pull equity markets off current levels.
However, equities have prepared for the recovery phase of the business cycle. Mergers and acquisitions will mitigate the negative effect of a more fundamental valuation, which is what China is looking for to strengthen the dollar.
Positive equity value will follow another deflationary dip (another opportunity to merge and acquire) signaled, for example, by China's resolve to control bubbles with less liquidity. Commodities will deflate, a recovery will occur and there will be less pressure for a gamma-risk distribution that either deconsolidates power, or retributes accumulated value, politically or economically.
China's autocratic, deflationary, monetary hardening defends the dollar investment.
China needs to support the recovery of American consumers. While monetary hardening deflates the commodities bubble it also supports the Fed's policy of monetary easing that, without growth, resists a stronger dollar (more buying power) and adds speculative-demand support to commodities at the same time, resisting the effort to support American consumers and their dollars. China must be reasonably sure the American economy will recover the service sector, protecting it from the probability of increased alpha risk to its industrial base and gamma risk to its political base that naturally defaults to the consent of the governed whether oligarchs like it or not.
The probability the Fed's continued monetary easing will result in non-service sector investment is virtually none. The investment will not be used to push employment costs in the U.S. with China being reasonably sure the gamma-risk distribution--the recovery--will have a fundamentally minimal alpha effect.
Surplus capital made available for investment by cheap Chinese labor markets is not likely to be used to achieve a competitive advantage except by technological means that resists full employment (which is why analysts portend a tech bubble). This will generally support the bubble effect on U.S. equities and the probability for a protracted "jobless recovery" despite the emergence of populist, gamma-risk variables like "consent of the governed."
The third-party element that emerged in the Massachusettes senate election will be interpreted as being either pro-Republican or anti-Democrat. That will conserve the stakes (the bivariate technology).
Both parties want to conserve the benefit of what the demand for health care, for example, provides--inelasticity, or the relative inability to consent to one's fate.
Consent is the Constitutional legitimacy at the cornerstone of our republican form of government. It is, however, intentionally organized into a bivariate, dummy variable that is really no choice at all. The freedom to self-determine is reduced to a function of autocratic compliance, just exactly what our Constitution is very strictly intended to prevent.
Independents are providing the pluralism necessary to add the value of consent back to the front of the equation of power so that, representation plus consent equals power, rather than, representation equals power of consent.
The misattributed value of consent results in a retributive value, and a gamma risk associated with it, that signals a probable resistance to binomial distributions both politically and economically.
Mr. Brown's election does not indicate less gamma risk to an accumulated benefit (like the current bubble-value of equities), it signals more. It indicates a trend that demands support for more fundamental valuations--a recovery ironically feared to pull equity markets off current levels.
However, equities have prepared for the recovery phase of the business cycle. Mergers and acquisitions will mitigate the negative effect of a more fundamental valuation, which is what China is looking for to strengthen the dollar.
Positive equity value will follow another deflationary dip (another opportunity to merge and acquire) signaled, for example, by China's resolve to control bubbles with less liquidity. Commodities will deflate, a recovery will occur and there will be less pressure for a gamma-risk distribution that either deconsolidates power, or retributes accumulated value, politically or economically.
China's autocratic, deflationary, monetary hardening defends the dollar investment.
China needs to support the recovery of American consumers. While monetary hardening deflates the commodities bubble it also supports the Fed's policy of monetary easing that, without growth, resists a stronger dollar (more buying power) and adds speculative-demand support to commodities at the same time, resisting the effort to support American consumers and their dollars. China must be reasonably sure the American economy will recover the service sector, protecting it from the probability of increased alpha risk to its industrial base and gamma risk to its political base that naturally defaults to the consent of the governed whether oligarchs like it or not.
The probability the Fed's continued monetary easing will result in non-service sector investment is virtually none. The investment will not be used to push employment costs in the U.S. with China being reasonably sure the gamma-risk distribution--the recovery--will have a fundamentally minimal alpha effect.
Surplus capital made available for investment by cheap Chinese labor markets is not likely to be used to achieve a competitive advantage except by technological means that resists full employment (which is why analysts portend a tech bubble). This will generally support the bubble effect on U.S. equities and the probability for a protracted "jobless recovery" despite the emergence of populist, gamma-risk variables like "consent of the governed."
Wednesday, January 13, 2010
Organized Ontologies ("Waiting for Godot")
Unexpected Inversions and Predictable Trends
Weird, unpredictable, inversions are fully intended consequences providing a level of predictable uncertainty (managed risk) that solicits the need for command-and-control organizational modeling.
A strangely inverted quality immediately presents itself. "Predictable uncertainty" is an oxymoron. The descriptive elements are inverted yet accurately describe the antinomies built into our political economy, rendering it the analytical domain of highly trained elits prepared to make sense of deliberate inscrutibility.
While the reason for, or the cause of, conflicting indicators can be inferred, the causal factors are deliberately black boxed to attain an elitist quality to manage what appear to be unintended consequences, or organizational ontologies.
When the analyst attempts to gauge market sentiment to predict price direction, for example, there is an attempt to turn teleological consequences into a predictable ontology. Strange inversions are then to be explained as unintended consequences--an analytical error to be back tested and regressed into a predictable, algorythmic ontology that reduces to an organizational typology.
From the inside, the inscrutible inversions appear logically consistent with intended strategies within some tolerance of error that produces unintended consequences. Error reduction is the domain of the specialist so that the bonused employee of a too-big-to-fail bank, for example, very narrowly, analytically, applies the derivatives desk without regard to the big-picture, wholistic, consequences, which will appear to be unintended and exculpatory. Both the bonused employee and the employer can disclaim any intention to cause a systemic-risk detriment by applying the self-interest of the firm and cannot, therefore, justifiably suffer punitive damages either legislatively (by means of the tax code) or judicially (by determination of civil or criminal liability). The goal (the telos) of legitmately accumulating wealth and power and keeping it is organizationally applied with highly predictable consequences.
It is critical for risk to be systematically organized to suggest an ontology: so that the legitimacy of the outcome (the cause-effect relatonship) has not been rigged to produce a benefit from an intended detriment.
Financing the declining rate of profit, for example. The decline is a detriment to capital gained in a free market system and a benefit to labor. Reversing the detriment by overleveraging the capital accumulated into a deflationary trend of unemployment cannot be legitimately considered intentional if it is an ontological consequence (the inherent risk) of the system that cannot be transcended. Resisting the natural, ontological tendency toward organized consolidation to hedge the risk, like a declining rate of profit, is considered a fool's task by both the left and the right. Politically, the result is a spectral fusion--a convergence of divergent elements--that is an observable, empirically predictable, historical dialectic, or a predictable, macro-dynamic ontology.
On the left, the dialectic presents a synthesis of the benefit for both capital and labor as the organized convergence of public and private enterprise is formed into a legitimate public benefit, or the general welfare. State capitalism eventually evolves into a purer, more genuine form of legitimacy--state socialism--in which labor is not at all alienated from the value it produces in the form of capital. Competition--the micro-motive (the telos) that causes the systematic-risk ontology of a declining rate of profit--is converged, transformed, into the ontological benefit of full cooperation with the risk having been intentionally, teleologically, organized out of the system.
Remember that if the systematic, competitive-risk ontology is removed, there is less incentive to innovate to control costs or improve quality, performance and efficiency with the profit margin being the measure (the reward) of that success. If capital, industry and markets are allowed to consolidate (converge) to eliminate all the competitive market risk (the alpha risk converted to a mostly beta and gamma risk), the capacity to innovate has already been organizationally diminished. Socialists then, of course, argue that diminshed innovative capacity is a moot argument, as it well is.
The argument for maintaining an organized pluralism in priority over a false organized efficiency of consolidation has both theoretical and demonstrated practical strength. The argument, however, does not advance from the right wing of the political spectrum. It is more an independent, non-partisan argument that favors pragmatism over ideology.
A non-ideological pragmatism is more likely to minimize the probable dystopian results (the unintended consequences?) of hopeful utopian visionaries that invariably tend to fascist, practical models of bureaucratic power (the slogan over the gate at Auschwitz is, for example, "Work Will Set You Free"). Practical reduction to elitist models renders the masses ("We The People") incapable of sovereignty. It becomes a self-fulfilling prophecy of fully intended consequences (an organized ontology that produces stable, predictable, routine tasks).
While the cyclical trend we are experiencing now is described as systemic instability, it is a stable, routine outcome. It has been organized to do exactly what we have by elitist, consolidated control; and while you may not have lost your job this time around, you may in the next cycle.
That a pluralistic market system legitimately determining tastes and preferences (freedom) must be traded off for risk reduction (stability) is a false argument. Reducing the alpha risk (the freedom to choose) encourages investment, and without the trade off, so the argument goes, investment will be sub-optimal.
The efficiency argument is false. Reduction of alpha risk by consolidation of industry and markets does not allow for more risk to be taken, thereby providing the incentive for optimal economic growth, as the argument purports, but less.
The hypothesis contained in the efficiency argument is not only logically inconsistent, but as a basis for public policy it is an empirical failure as well.
Encouraging consolidation of industry and markets through the tax code and regulatory reform in conformity with the hypothesis of ensuring market efficiency resulted in The Great Recession. Not only did slow growth to no growth result in negative growth, but we face the high risk of it several years out, being strangely referred to as "a jobless recovery" (another one of those weird, logical inversions). That the efficiency hypothesis is disconfirmed is the only reasonable conclusion.
While the right wing of the spectrum argues being the champion of free markets maintaining a system of maximizing tastes and preferences, losing your job to a cyclical, supposedly legitimate, ontological trend does little to maximize preference. It maximizes the profit margin without growth (what we have now). The effect is to trade off what a free-market system is to ensure (freedom to choose) for maximizing the profit (i.e., to finance the declining rate of profit inherent to a highly innovative free-market pluralism that wins market share and makes a profit).
The "trick" of the large, modern corporate is to gain market share without "winning" it. Share is gained by capital investment to gain capital without economic growth (remember that growth increases supply and disinflates prices, causing a declining rate of the profit). The resulting, reliably predictable, cyclical trend (recession--deflation--like we have now) gains (wins by organized default) the market share and capital (the recovery--inflation--sure to follow), not by expanding the pie, which is the legitimacy of capital formation (accumulation) for investment, but by contracting (consolidating) it.
We hear pop analysts at this point of the cycle saying, for example, that the reduction of inventory will result in jobs created to replace the supply. No, quite the contrary (inversely), the recovery will be "jobless." It will be inflationary with strangely low interest rates because of joblessness.
Understanding the nature of the inversions is kind of like understanding the concept of gravity. Like Einstein said and Newton suspected, instead of gravity pulling us to the mass of the earth, space is really pushing us into it, and we call the effect gravity. The concept of the model--of the way things work (from a strong, localized attractive force to a more pervasive, universally expansive force)--has changed.
Newton realized his concept of gravity did not quite make sense although the mathematical expression of his physical "laws" had high predictive utility. Even his own descriptive law of motion inverted his hypothesis: objects do not move unless something is pushing them.
In the natural world of political-economy, steeped in telological reasoning, the discrepancy between theory and observation is much more pronounced. The stakes are the telos of gaining wealth and power and keepimg it by means of one's own devices. Extreme complexity is the result with strange inversions of logic to be resolved by a combination of narrative and mathematical modeling much like the natural sciences in which things are only what they appear to be until the empirical evidence is re-cognized with fits of Kantian imagination. The complexity surrounding the mystery of unknown causes and unintended, supposedly unexpected, effects are suddenly rendered simple, predictable, and verifiable by a casual sense of conventional wisdom that is less about what we believe, but what we know as a guide for public policy.
For example, if an economic sector becomes so consolidated in a free marketplace that the consumer has no choice but to do business with it, maximizing the firm's individual, private utility has become the public interest. Application of the firm's self-utility has become a function of public utility much like we have experienced with the financial sector in which firms were allowed to become too big to fail.
There is a direct relationship between the elasticity of the demand curve, the tendency to consolidate into entities too big to fail, and the gamma risk of being considered a public utility. The gamma risk is minimized, rather than maximized, if these markets are not allowed to consolidate. Despite, for example, healthcare providers thinking consolidation of its provision into a government mandate renders an inelastic demand, and therefore an inelastic price, it also increases the gamma risk. The price can be just as easily mandated so that the providers wished it were a free-market economics.
Instead of a direct relationship, free-market economics allows the relationship between demand elasticity and the tendency to consolidate a market to be beneficially inverted for everyone (the more inelastic, the less consolidated). The benefit includes a market's providers whose gamma--if the price can be arbitrated at a non-market value either higher or, maybe, lower--is minimized and the risk of investment (labor or capital) reliably predictable. With the free-market inversion, reduction of the gamma risk then becomes an end in itself which is the pursuit of power (self-determination) and the categorical demonstration (the empirical measure) of success.
Keeping markets unconsolidated spreads the risk. What is lost is the accumulation of power that always verifiably results in crises--a quantifiable gamma risk that presents as inflation, unemployment, and high profit margins, just like what we have now.
There is no "disconnect" between Wall Street and Main Street. The relationship is organized into a detrimental reliance (an inverse relationship) in which one's loss is the other's gain. That is why bailing out the system from the top down was "necessary to prevent economic collapse."
Now that the would-be (unverified) collapse has been averted (and so we will always be bailing out financial "fat cats" first as the successful business model that averts crises), the Fed and Treasury will focus on consolidating and enhancing the profit margin by applying funds to Main Street. Recovery will be the source of funds to both support the profit margin (finance the declining rate of profit) and pay the public debt.
Bailing out Main Street first, allowing financial firms that are "toxic" to fail instead of the intoxicated public-at-large, would have provided the funds the financial sector needed to sober up their troubled assets, declaring bankruptcy protection if necessary, until the benefit trickles up. That prevents a lot of public suffering (a retributive value that measures power and categorizes status into those that sacrifice and suffer and those who accumulate the benefit in the form of that value).
The reason the call was not for Main Street first is because that would have inverted the working, practical means of the Hamiltonian model (the hierarchical "trickle-down" effect that validates who "should be" the elite of power by determining it from the top down rather than confirming it from the bottom up).
The Hamilitonian model of finance from the top down hypothesizes a direct, positive relationship: the more benefit the elite at the top receive, the more benefit "The People" at the bottom receive. Inverting the relationship, supposedly, causes crises, like the financial instability we have recently experienced.
According to Hamiltonians, the crash of 2008 is the result of public-sector programs, government intrusion in the free marketplace, like welfare and social security, that finance (inflate) the system from the bottom up. Therefore, the technical correction for the crisis is to finance the recovery from the top down, and that action was taken with the predictable and fully intended benefit of a jobless recovery.
While Main Streeters bankrupted by the crash of of 2008 are literally left hungry and homeless, Wall Streeters are receiving bonuses. Just exactly where did the bonus value come from? Where in the popular media do you find an accounting that identifies the source of the benefit?
The direct relationship between the cost and the benefit (the more cost, the more benefit) is not clearly identified because it is considered destabilizing (retributive in value). It would empirically challenge the legitimacy (the distributive justice) of the outcome.
Inverting the money flow to finance the recovery from the crash of 2008 from the bottom up would invert the relationship of the cost-to-benefit (the mode, or model, of finance). Financing the recovery from the top down both obfuscates ("a disconnect" as pop media describes it) the direct relationship and validates inversion of the model as a moral hazard.
Validation of the moral hazard is a false empiric: not financing the recovery from the bottom up did not prevent another Great Depression. Recovery from the top down (the jobless recovery) allows firms to succeed that, without bottom-up financing, would be confirmed failures.
Financing from the bottom up provides the distribution required on the accumulation that otherwise presents as a retributive value. An indignant public sentiment about the bonus value, the practice of saving wealthy corporates while letting everyone else fail, and regression of the cost so that the victims are literally paying the perpetrators to victimize them is the political will for converting to a public utility. It empirically represents both the value to be retributed and a genuine moral hazard.
For example, if BIB (Bigger Is Better) Bank forecloses your home and charges usurious overdraft fees after losing your job to The Great Recession, the retributive value is a product of your losses. So you sanction BIB in the marketplace by doing business with SIB (Smaller Is Better) Bank. BIB experiences the alpha risk associated with the retributive value distribution in the marketplace. However, you notice SIB, influenced by the bigness of BIB, is just as usurious, and because smaller banks are progressively more scarce due to The Great Recession, the alpha risk is diminishing.
Rather than being diminished, the retributive value accumulates under the organized, ontological influence of BIB Bank et. al.. The "invisible hand" is a macro ontology falsely argued to be free-market economics, or pluralism, and the outcome is, therefore, legitimate and exculpatory--not worthy of sanction.
Cumulative resistance to the alpha risk also affords resistance to beta risk, but supports the gamma risk, which continues to accumulate, and is "toxic."
What is "toxic" about the troubled assets of The Great Recession is that they have a huge gamma risk associated with them that are retributively valued. Instead of the value being retributed (inverted), the value has been attributed (directed) to the source of the risk and consolidated as a benefit with the source of the benefit holding the risk. Instead of being pluralistically shared, the retributive value accumulates into a gamma risk with firms holding the accumulated benefit inversely facing the accumulated risk of being regulated as a public utility based on that empirical value.
Thus we have, as in the example of BIB and SIB banks, the need for growth. Not to just expand the pie so that the rich can be rich wthout a zero-sum inverse relationship of accumulated value, but to keep the system pluralized. Displeased customers are only likely to do business with BIB or SIB because they have to, not because they want to. A firm can be as greedy, selfish and narcissistic as it wants as long as it pleases the customer.
Economic growth in a free-market environment is less about the impetus to plunder the planet of its resources than to ensure sufficient plurality of the marketplace so that we do business with who we want to (choice) and not who we have to (tyranny). As long as income is sufficiently distributed to demand (alpha risk), rather than command (gamma risk) the bid, the probability for successful innovation to increase supply, rather than to innovate the organized means of creating scarcity and inelasticity of demand in the name of an economy-of-scale efficiency, approaches 100 percent. The profit, and the declining rate of profit, is, then, a measure of who is innovative enough to survive the alpha risk rather than always consolidating to avoid the beta and gamma risks (the extortionist behavior of being too big to fail--the "command" function of the elitist model).
Consolidating industry and markets only avoids the beta and gamma risks, it does not eliminate them. They accumulate in a directly positive relationship: the more consolidated the more potential beta and gamma risk accumulated until the probability of being considered a public utility approaches 100 percent. While the firm's beta is stable throughout consolidation, it becomes highly unstable as its risk-status becomes evermore gamma.
It would be in a firm's best interest to never become too big to fail if it means being a categorical public utility with the firm's self-interest subordinate to the public's interest like, maybe, controlling both inflation and unemployment without inversely trading them off. The only resistance to the clear and convincing, categorically empirical confirmation of a public utility would be the ideology, the belief, that conserving the accumulation of the benefit to the elite and distribution of the cost to the non-elite (what the modern, corporate conglomerate is organized to routinely do) is in the public's best interest. We then have two competing models, elitist and pluralist, competing for an empirical proof that will, by nature, resolve into a nulled hypothesis in which one alternative is so logically absurd (disconfirmed) that the only thing left for practical application is a conceptual model yet to be tested. The change is the next best step by default and it is critical to keep a binary system of choice in place, like a two-party system, to ensure conservation of the stakes is always the next best step in the historical dialectic.
Despite the resistance to pluralism with organizational technologies like a two-party system, there is an empirical ethic at work, a method of continuous improvement that can be deliberately applied or ignored. We can choose to ontologically improve or teleologically retrench. The political will to choose an organized ontology of pluralism will avoid the lengthy and painful process of what nature will ontologically provide as categorical truth always potentially imperative by the freedom to choose.
The morality we do not freely choose nature will technically correct. On the one hand, for example, firms in business to consolidate the marketplace, like private equity firms that buy companies to merge and sell for a capital gain, create a big payoff that is proportionate to the cost (inflation and unemployment). The agents of consolidation, the beneficiaries, however, describe the gain as disproportionate and is reported as an asset with no liability on the balance sheet. The liability (the cost) is latent and categorically imperative. It will empirically present off the balance sheet in the form of a gamma risk that must be constantly managed to retain the value accumulated without bearing the cost, which is what the corporate is organized to do.
Ivy-League economists (the elite of society whose analyses are valued the most) are claiming that their profession has failed to understand how the economy works on a macro scale. (In other words, now that their hypothesis that consolidated industry and markets achieves a macro-efficiency of scale is one huge, glaring empirical failure, the liability is being reduced to a misfeasance and not a malfeasance. In effect, these economists are saying they do not understand economics.... Hmmm...something I've been saying all along.) They claim they have not properly understood how the economy is integrated, or equilibriates; that is, they were not trained or hired to identify or present analyses indicating that consolidation of industry and markets is good for the integrators and bad for everyone else (an inverse, zero-sum relationship instead of the direct, positive relationship they espouse), and where you "know" something, there is culpability that leads to punitive (gamma risk) measures that are more difficult to avoid.
Managing the latent cost (be it deliberately hidden or ignored) without retributing the value is the source for all manner of descriptive and predictive complexity. It produces strangely inverted technical relationships that require the highest expertise to divine (like Tyco Brahe's theory and mathematical model of retrograde motion). The cause is disassociated with the effect so that empirical failure is not failure at all but a natural ontology of unintended consequence that cannot be corrected. The only thing that can be realistically done (what is categorically imperative) is constant management of the empirical effect and all manner of complexity that pluralistically presents as a relative truth that can be neither categorical (identifiable) or imperative (a necessary condition). Empirical truth--the unrecognized but managed cost--is strangely inverted into uncategorical and unimperative. Truth is, then, reduced to the power, the virtue, to impose it. Natural processes are what is left to retribute the value--the cost-to-benefit always conserved.
Global warming, for example, is dismissed by much of the right wing as empirical nonsense because it empirically correlates the cost with the benefit. The hypothesis presents a retributive value that can be categorically acted on with an imperatively empirical measure. It presents a level of certainty (knowlege) that cannot be ignored without clear culpability and consequence.
On the other hand of the political-economic spectrum, ideological, rather than an organizational, opposition to conservatism presents as a spectral fusion. The expected opposition, upon closer inspection, presents a strange inversion with the opposing hands joined to agree on the means to the ends of power--the gamma-risk distribution, which is an end unto itself. The opposition stands to determine who is going to be categorically powerful by imperative.
On the one hand, the gamma-risk distribution is accumulatively managed into cylical distributions that conserves the distribution of power. On the other hand, the gamma risk is accumulatively managed to conserve the distribution of power by managing the effects of cyclical trends in order to eliminate the cause. The alternatives (the thesis and antithesis) are organizationally fused.
In addition to the practice of managing the effects toward eliminating causal factors of accumulated gamma risk being empirical nonsense, conservation of the elitist model suggests the distribution of risk and reward will also be conserved. Who is powerful is defined by a willingness to manage the effects, which tends to conserve the problem the affected seek to cure by popular demand and consent. While an observable evolution of power occurs--from survival of the fittest being legally free of gamma risk to applying that risk by popular consent of the governed--the crisis accumulation of risk is nevertheless conserved.
The accumulation is not necessary and we need not be always "Waiting for Godot" or some ontological change of state that disparages our freedom to choose. The means to ends we are all looking for is well in hand.
Weird, unpredictable, inversions are fully intended consequences providing a level of predictable uncertainty (managed risk) that solicits the need for command-and-control organizational modeling.
A strangely inverted quality immediately presents itself. "Predictable uncertainty" is an oxymoron. The descriptive elements are inverted yet accurately describe the antinomies built into our political economy, rendering it the analytical domain of highly trained elits prepared to make sense of deliberate inscrutibility.
While the reason for, or the cause of, conflicting indicators can be inferred, the causal factors are deliberately black boxed to attain an elitist quality to manage what appear to be unintended consequences, or organizational ontologies.
When the analyst attempts to gauge market sentiment to predict price direction, for example, there is an attempt to turn teleological consequences into a predictable ontology. Strange inversions are then to be explained as unintended consequences--an analytical error to be back tested and regressed into a predictable, algorythmic ontology that reduces to an organizational typology.
From the inside, the inscrutible inversions appear logically consistent with intended strategies within some tolerance of error that produces unintended consequences. Error reduction is the domain of the specialist so that the bonused employee of a too-big-to-fail bank, for example, very narrowly, analytically, applies the derivatives desk without regard to the big-picture, wholistic, consequences, which will appear to be unintended and exculpatory. Both the bonused employee and the employer can disclaim any intention to cause a systemic-risk detriment by applying the self-interest of the firm and cannot, therefore, justifiably suffer punitive damages either legislatively (by means of the tax code) or judicially (by determination of civil or criminal liability). The goal (the telos) of legitmately accumulating wealth and power and keeping it is organizationally applied with highly predictable consequences.
It is critical for risk to be systematically organized to suggest an ontology: so that the legitimacy of the outcome (the cause-effect relatonship) has not been rigged to produce a benefit from an intended detriment.
Financing the declining rate of profit, for example. The decline is a detriment to capital gained in a free market system and a benefit to labor. Reversing the detriment by overleveraging the capital accumulated into a deflationary trend of unemployment cannot be legitimately considered intentional if it is an ontological consequence (the inherent risk) of the system that cannot be transcended. Resisting the natural, ontological tendency toward organized consolidation to hedge the risk, like a declining rate of profit, is considered a fool's task by both the left and the right. Politically, the result is a spectral fusion--a convergence of divergent elements--that is an observable, empirically predictable, historical dialectic, or a predictable, macro-dynamic ontology.
On the left, the dialectic presents a synthesis of the benefit for both capital and labor as the organized convergence of public and private enterprise is formed into a legitimate public benefit, or the general welfare. State capitalism eventually evolves into a purer, more genuine form of legitimacy--state socialism--in which labor is not at all alienated from the value it produces in the form of capital. Competition--the micro-motive (the telos) that causes the systematic-risk ontology of a declining rate of profit--is converged, transformed, into the ontological benefit of full cooperation with the risk having been intentionally, teleologically, organized out of the system.
Remember that if the systematic, competitive-risk ontology is removed, there is less incentive to innovate to control costs or improve quality, performance and efficiency with the profit margin being the measure (the reward) of that success. If capital, industry and markets are allowed to consolidate (converge) to eliminate all the competitive market risk (the alpha risk converted to a mostly beta and gamma risk), the capacity to innovate has already been organizationally diminished. Socialists then, of course, argue that diminshed innovative capacity is a moot argument, as it well is.
The argument for maintaining an organized pluralism in priority over a false organized efficiency of consolidation has both theoretical and demonstrated practical strength. The argument, however, does not advance from the right wing of the political spectrum. It is more an independent, non-partisan argument that favors pragmatism over ideology.
A non-ideological pragmatism is more likely to minimize the probable dystopian results (the unintended consequences?) of hopeful utopian visionaries that invariably tend to fascist, practical models of bureaucratic power (the slogan over the gate at Auschwitz is, for example, "Work Will Set You Free"). Practical reduction to elitist models renders the masses ("We The People") incapable of sovereignty. It becomes a self-fulfilling prophecy of fully intended consequences (an organized ontology that produces stable, predictable, routine tasks).
While the cyclical trend we are experiencing now is described as systemic instability, it is a stable, routine outcome. It has been organized to do exactly what we have by elitist, consolidated control; and while you may not have lost your job this time around, you may in the next cycle.
That a pluralistic market system legitimately determining tastes and preferences (freedom) must be traded off for risk reduction (stability) is a false argument. Reducing the alpha risk (the freedom to choose) encourages investment, and without the trade off, so the argument goes, investment will be sub-optimal.
The efficiency argument is false. Reduction of alpha risk by consolidation of industry and markets does not allow for more risk to be taken, thereby providing the incentive for optimal economic growth, as the argument purports, but less.
The hypothesis contained in the efficiency argument is not only logically inconsistent, but as a basis for public policy it is an empirical failure as well.
Encouraging consolidation of industry and markets through the tax code and regulatory reform in conformity with the hypothesis of ensuring market efficiency resulted in The Great Recession. Not only did slow growth to no growth result in negative growth, but we face the high risk of it several years out, being strangely referred to as "a jobless recovery" (another one of those weird, logical inversions). That the efficiency hypothesis is disconfirmed is the only reasonable conclusion.
While the right wing of the spectrum argues being the champion of free markets maintaining a system of maximizing tastes and preferences, losing your job to a cyclical, supposedly legitimate, ontological trend does little to maximize preference. It maximizes the profit margin without growth (what we have now). The effect is to trade off what a free-market system is to ensure (freedom to choose) for maximizing the profit (i.e., to finance the declining rate of profit inherent to a highly innovative free-market pluralism that wins market share and makes a profit).
The "trick" of the large, modern corporate is to gain market share without "winning" it. Share is gained by capital investment to gain capital without economic growth (remember that growth increases supply and disinflates prices, causing a declining rate of the profit). The resulting, reliably predictable, cyclical trend (recession--deflation--like we have now) gains (wins by organized default) the market share and capital (the recovery--inflation--sure to follow), not by expanding the pie, which is the legitimacy of capital formation (accumulation) for investment, but by contracting (consolidating) it.
We hear pop analysts at this point of the cycle saying, for example, that the reduction of inventory will result in jobs created to replace the supply. No, quite the contrary (inversely), the recovery will be "jobless." It will be inflationary with strangely low interest rates because of joblessness.
Understanding the nature of the inversions is kind of like understanding the concept of gravity. Like Einstein said and Newton suspected, instead of gravity pulling us to the mass of the earth, space is really pushing us into it, and we call the effect gravity. The concept of the model--of the way things work (from a strong, localized attractive force to a more pervasive, universally expansive force)--has changed.
Newton realized his concept of gravity did not quite make sense although the mathematical expression of his physical "laws" had high predictive utility. Even his own descriptive law of motion inverted his hypothesis: objects do not move unless something is pushing them.
In the natural world of political-economy, steeped in telological reasoning, the discrepancy between theory and observation is much more pronounced. The stakes are the telos of gaining wealth and power and keepimg it by means of one's own devices. Extreme complexity is the result with strange inversions of logic to be resolved by a combination of narrative and mathematical modeling much like the natural sciences in which things are only what they appear to be until the empirical evidence is re-cognized with fits of Kantian imagination. The complexity surrounding the mystery of unknown causes and unintended, supposedly unexpected, effects are suddenly rendered simple, predictable, and verifiable by a casual sense of conventional wisdom that is less about what we believe, but what we know as a guide for public policy.
For example, if an economic sector becomes so consolidated in a free marketplace that the consumer has no choice but to do business with it, maximizing the firm's individual, private utility has become the public interest. Application of the firm's self-utility has become a function of public utility much like we have experienced with the financial sector in which firms were allowed to become too big to fail.
There is a direct relationship between the elasticity of the demand curve, the tendency to consolidate into entities too big to fail, and the gamma risk of being considered a public utility. The gamma risk is minimized, rather than maximized, if these markets are not allowed to consolidate. Despite, for example, healthcare providers thinking consolidation of its provision into a government mandate renders an inelastic demand, and therefore an inelastic price, it also increases the gamma risk. The price can be just as easily mandated so that the providers wished it were a free-market economics.
Instead of a direct relationship, free-market economics allows the relationship between demand elasticity and the tendency to consolidate a market to be beneficially inverted for everyone (the more inelastic, the less consolidated). The benefit includes a market's providers whose gamma--if the price can be arbitrated at a non-market value either higher or, maybe, lower--is minimized and the risk of investment (labor or capital) reliably predictable. With the free-market inversion, reduction of the gamma risk then becomes an end in itself which is the pursuit of power (self-determination) and the categorical demonstration (the empirical measure) of success.
Keeping markets unconsolidated spreads the risk. What is lost is the accumulation of power that always verifiably results in crises--a quantifiable gamma risk that presents as inflation, unemployment, and high profit margins, just like what we have now.
There is no "disconnect" between Wall Street and Main Street. The relationship is organized into a detrimental reliance (an inverse relationship) in which one's loss is the other's gain. That is why bailing out the system from the top down was "necessary to prevent economic collapse."
Now that the would-be (unverified) collapse has been averted (and so we will always be bailing out financial "fat cats" first as the successful business model that averts crises), the Fed and Treasury will focus on consolidating and enhancing the profit margin by applying funds to Main Street. Recovery will be the source of funds to both support the profit margin (finance the declining rate of profit) and pay the public debt.
Bailing out Main Street first, allowing financial firms that are "toxic" to fail instead of the intoxicated public-at-large, would have provided the funds the financial sector needed to sober up their troubled assets, declaring bankruptcy protection if necessary, until the benefit trickles up. That prevents a lot of public suffering (a retributive value that measures power and categorizes status into those that sacrifice and suffer and those who accumulate the benefit in the form of that value).
The reason the call was not for Main Street first is because that would have inverted the working, practical means of the Hamiltonian model (the hierarchical "trickle-down" effect that validates who "should be" the elite of power by determining it from the top down rather than confirming it from the bottom up).
The Hamilitonian model of finance from the top down hypothesizes a direct, positive relationship: the more benefit the elite at the top receive, the more benefit "The People" at the bottom receive. Inverting the relationship, supposedly, causes crises, like the financial instability we have recently experienced.
According to Hamiltonians, the crash of 2008 is the result of public-sector programs, government intrusion in the free marketplace, like welfare and social security, that finance (inflate) the system from the bottom up. Therefore, the technical correction for the crisis is to finance the recovery from the top down, and that action was taken with the predictable and fully intended benefit of a jobless recovery.
While Main Streeters bankrupted by the crash of of 2008 are literally left hungry and homeless, Wall Streeters are receiving bonuses. Just exactly where did the bonus value come from? Where in the popular media do you find an accounting that identifies the source of the benefit?
The direct relationship between the cost and the benefit (the more cost, the more benefit) is not clearly identified because it is considered destabilizing (retributive in value). It would empirically challenge the legitimacy (the distributive justice) of the outcome.
Inverting the money flow to finance the recovery from the crash of 2008 from the bottom up would invert the relationship of the cost-to-benefit (the mode, or model, of finance). Financing the recovery from the top down both obfuscates ("a disconnect" as pop media describes it) the direct relationship and validates inversion of the model as a moral hazard.
Validation of the moral hazard is a false empiric: not financing the recovery from the bottom up did not prevent another Great Depression. Recovery from the top down (the jobless recovery) allows firms to succeed that, without bottom-up financing, would be confirmed failures.
Financing from the bottom up provides the distribution required on the accumulation that otherwise presents as a retributive value. An indignant public sentiment about the bonus value, the practice of saving wealthy corporates while letting everyone else fail, and regression of the cost so that the victims are literally paying the perpetrators to victimize them is the political will for converting to a public utility. It empirically represents both the value to be retributed and a genuine moral hazard.
For example, if BIB (Bigger Is Better) Bank forecloses your home and charges usurious overdraft fees after losing your job to The Great Recession, the retributive value is a product of your losses. So you sanction BIB in the marketplace by doing business with SIB (Smaller Is Better) Bank. BIB experiences the alpha risk associated with the retributive value distribution in the marketplace. However, you notice SIB, influenced by the bigness of BIB, is just as usurious, and because smaller banks are progressively more scarce due to The Great Recession, the alpha risk is diminishing.
Rather than being diminished, the retributive value accumulates under the organized, ontological influence of BIB Bank et. al.. The "invisible hand" is a macro ontology falsely argued to be free-market economics, or pluralism, and the outcome is, therefore, legitimate and exculpatory--not worthy of sanction.
Cumulative resistance to the alpha risk also affords resistance to beta risk, but supports the gamma risk, which continues to accumulate, and is "toxic."
What is "toxic" about the troubled assets of The Great Recession is that they have a huge gamma risk associated with them that are retributively valued. Instead of the value being retributed (inverted), the value has been attributed (directed) to the source of the risk and consolidated as a benefit with the source of the benefit holding the risk. Instead of being pluralistically shared, the retributive value accumulates into a gamma risk with firms holding the accumulated benefit inversely facing the accumulated risk of being regulated as a public utility based on that empirical value.
Thus we have, as in the example of BIB and SIB banks, the need for growth. Not to just expand the pie so that the rich can be rich wthout a zero-sum inverse relationship of accumulated value, but to keep the system pluralized. Displeased customers are only likely to do business with BIB or SIB because they have to, not because they want to. A firm can be as greedy, selfish and narcissistic as it wants as long as it pleases the customer.
Economic growth in a free-market environment is less about the impetus to plunder the planet of its resources than to ensure sufficient plurality of the marketplace so that we do business with who we want to (choice) and not who we have to (tyranny). As long as income is sufficiently distributed to demand (alpha risk), rather than command (gamma risk) the bid, the probability for successful innovation to increase supply, rather than to innovate the organized means of creating scarcity and inelasticity of demand in the name of an economy-of-scale efficiency, approaches 100 percent. The profit, and the declining rate of profit, is, then, a measure of who is innovative enough to survive the alpha risk rather than always consolidating to avoid the beta and gamma risks (the extortionist behavior of being too big to fail--the "command" function of the elitist model).
Consolidating industry and markets only avoids the beta and gamma risks, it does not eliminate them. They accumulate in a directly positive relationship: the more consolidated the more potential beta and gamma risk accumulated until the probability of being considered a public utility approaches 100 percent. While the firm's beta is stable throughout consolidation, it becomes highly unstable as its risk-status becomes evermore gamma.
It would be in a firm's best interest to never become too big to fail if it means being a categorical public utility with the firm's self-interest subordinate to the public's interest like, maybe, controlling both inflation and unemployment without inversely trading them off. The only resistance to the clear and convincing, categorically empirical confirmation of a public utility would be the ideology, the belief, that conserving the accumulation of the benefit to the elite and distribution of the cost to the non-elite (what the modern, corporate conglomerate is organized to routinely do) is in the public's best interest. We then have two competing models, elitist and pluralist, competing for an empirical proof that will, by nature, resolve into a nulled hypothesis in which one alternative is so logically absurd (disconfirmed) that the only thing left for practical application is a conceptual model yet to be tested. The change is the next best step by default and it is critical to keep a binary system of choice in place, like a two-party system, to ensure conservation of the stakes is always the next best step in the historical dialectic.
Despite the resistance to pluralism with organizational technologies like a two-party system, there is an empirical ethic at work, a method of continuous improvement that can be deliberately applied or ignored. We can choose to ontologically improve or teleologically retrench. The political will to choose an organized ontology of pluralism will avoid the lengthy and painful process of what nature will ontologically provide as categorical truth always potentially imperative by the freedom to choose.
The morality we do not freely choose nature will technically correct. On the one hand, for example, firms in business to consolidate the marketplace, like private equity firms that buy companies to merge and sell for a capital gain, create a big payoff that is proportionate to the cost (inflation and unemployment). The agents of consolidation, the beneficiaries, however, describe the gain as disproportionate and is reported as an asset with no liability on the balance sheet. The liability (the cost) is latent and categorically imperative. It will empirically present off the balance sheet in the form of a gamma risk that must be constantly managed to retain the value accumulated without bearing the cost, which is what the corporate is organized to do.
Ivy-League economists (the elite of society whose analyses are valued the most) are claiming that their profession has failed to understand how the economy works on a macro scale. (In other words, now that their hypothesis that consolidated industry and markets achieves a macro-efficiency of scale is one huge, glaring empirical failure, the liability is being reduced to a misfeasance and not a malfeasance. In effect, these economists are saying they do not understand economics.... Hmmm...something I've been saying all along.) They claim they have not properly understood how the economy is integrated, or equilibriates; that is, they were not trained or hired to identify or present analyses indicating that consolidation of industry and markets is good for the integrators and bad for everyone else (an inverse, zero-sum relationship instead of the direct, positive relationship they espouse), and where you "know" something, there is culpability that leads to punitive (gamma risk) measures that are more difficult to avoid.
Managing the latent cost (be it deliberately hidden or ignored) without retributing the value is the source for all manner of descriptive and predictive complexity. It produces strangely inverted technical relationships that require the highest expertise to divine (like Tyco Brahe's theory and mathematical model of retrograde motion). The cause is disassociated with the effect so that empirical failure is not failure at all but a natural ontology of unintended consequence that cannot be corrected. The only thing that can be realistically done (what is categorically imperative) is constant management of the empirical effect and all manner of complexity that pluralistically presents as a relative truth that can be neither categorical (identifiable) or imperative (a necessary condition). Empirical truth--the unrecognized but managed cost--is strangely inverted into uncategorical and unimperative. Truth is, then, reduced to the power, the virtue, to impose it. Natural processes are what is left to retribute the value--the cost-to-benefit always conserved.
Global warming, for example, is dismissed by much of the right wing as empirical nonsense because it empirically correlates the cost with the benefit. The hypothesis presents a retributive value that can be categorically acted on with an imperatively empirical measure. It presents a level of certainty (knowlege) that cannot be ignored without clear culpability and consequence.
On the other hand of the political-economic spectrum, ideological, rather than an organizational, opposition to conservatism presents as a spectral fusion. The expected opposition, upon closer inspection, presents a strange inversion with the opposing hands joined to agree on the means to the ends of power--the gamma-risk distribution, which is an end unto itself. The opposition stands to determine who is going to be categorically powerful by imperative.
On the one hand, the gamma-risk distribution is accumulatively managed into cylical distributions that conserves the distribution of power. On the other hand, the gamma risk is accumulatively managed to conserve the distribution of power by managing the effects of cyclical trends in order to eliminate the cause. The alternatives (the thesis and antithesis) are organizationally fused.
In addition to the practice of managing the effects toward eliminating causal factors of accumulated gamma risk being empirical nonsense, conservation of the elitist model suggests the distribution of risk and reward will also be conserved. Who is powerful is defined by a willingness to manage the effects, which tends to conserve the problem the affected seek to cure by popular demand and consent. While an observable evolution of power occurs--from survival of the fittest being legally free of gamma risk to applying that risk by popular consent of the governed--the crisis accumulation of risk is nevertheless conserved.
The accumulation is not necessary and we need not be always "Waiting for Godot" or some ontological change of state that disparages our freedom to choose. The means to ends we are all looking for is well in hand.
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