Technical Failure

Labor has been working more for less because productivity has been gained with fewer workers. The derivative is consolidated income (value "lost") needed to demand the supply.

The value derived (the detriment exacted) has created our too-big-to-fail banks that the President says we need to provide capital world wide even after demonstrating derivative practices that still threaten global economic stability. Both the Obama administration and Congress support the accumulation of risk (value fully intended to be "lost") that comes with the use of efficient-markets theory.

Support for the theory predicts technical failure. The administration wrongly thinks bigger is better, explaining that unemployment is best reduced by eliminating subsidies that export jobs and import low-wage goods, which explains why regulatory authority has not been used to curtail speculative demand in futures markets (because it provides capital world wide to demand cheap labor) and why prices continue to rise against declining demand. Demand is so slack that even low-wage goods are becoming unaffordable, however, and the Chinese experience what it means to be capitalist--the crisis of overproduction.

When goods and services can't be bought at any price because income is too consolidated from exporting jobs (reducing demand against rising prices), reducing subsidies that support the export of labor value assumes the export will be reduced enough to increase demand. Instead, what will happen, because income is so consolidated, prices will be pushed up in speculative markets with the anticipated demand, which will reduce demand against rising prices.

By technical objective, high prices against a rising supply stagflates the economy (the problem to be solved in the aggregate) to resist the declining rate of profit. Paradoxically, when capital is allowed to consolidate into a too-big-to-fail (gamma-risk), aggregate proportion to resist deflation (a declining rate of profit), the more support the problem to be solved gets.

The more the fully assumed risk of loss (the alpha risk) is resisted and accumulated, the more probable it will occur in a gamma-risk proportion, and this catastrophic accumulation of risk is technically indicated by an accumulating supply against rising prices. (Notice it was just the opposite for consumers in the USSR. Shortages occurred against low prices with the result being an accumulation of political, gamma risk. Notice that in both cases alpha risk has been allowed to consolidate in order to avoid the direct accountability of free-market economics that requires less need--less demand--for government.) The result is high inflation and unemployment--the problem we have now.

Reducing the problem of overproduction to job-export subsidies lacks good analytical skill. We have these subsidies because power is too consolidated to resist it, and this power derives from consolidating capital into a too-big-to-fail proportion. Again, the problem is not that value is surplussed to avoid shortages, the problem is that the value is consolidated as productivity rises. The "change we really need" is resistance to consolidation, not support, and the problem expresses at the micro as well as the macro level.

Economists tend to ignore macro risk because "it just happens" as the result of micro-risk assessments. Objectively, however, macro risk is ignored because it is the primary means of exacting the detriment.

Risk is micro managed into a macro-risk proportion to, supposedly, avoid it. The result, however, is the crisis of overproduction, which is nonsensically attributed to low productivity and why analyses technically fail on a regular basis.

Macro risk is considered largely a function of probability. Since it is not a risk proportion that we can predict or control (time and transfer in the aggregate), it is a function of statistical probability that essentially measures the level of our ignorance. What we cannot know is attributed to randomness which, of course, explains the frequency of technical failure and the "surprise" reversals that, despite being ignored, are anticipated well in advance to produce value (accumulated wealth and power) from the detriment.

Since, remember, random events are by definition beyond our means of technical direction, the outcome is non-retributive (non-anthropogenic). The best we can do is analyze micro events, but that does not necessarily indicate the probable risk in the aggregate like when we consolidate the risk to efficiently manage markets to hedge the macro risk.

Instead of being reinvested to support the capacity to demand the supply, consolidation of capital (storing value to prevent shortages and the large-scale, macro risk associated with it) is used, for example, to parabolically over-price shares of facebook's IPO on demand. Technically, this "makes" a few people exceedingly rich with "new money" to demonstrate that capitalism really does work in the face of rising prices and slow, consumer demand.

Interesting that facebook's value is priced on a service consumers don't have to pay to use. If it was, the demand would not exist to support the price because it has been systematically disintegrated and the value derived consolidated into a volatile risk dimension that demands the value by fiat, not by the invisible hand of aggregated, collective, consumer power on demand.

Collective power on demand is akin to communism. It is the opposite of capitalism, so we have to be sure to ignore aggregate, collective power (the alpha-risk dimension of the invisible hand) and focus on the power of the individual hand.

Capitalism focuses on the entrepreneur that consolidates power and elegantly traps liquidity (the power to collectively self-determine) in dark markets in the guise of the invisible hand (i.e., with the constant perpetration of a fraud). A demand legitimacy operating within the command dimension is the gamma risk--it is the opposite of a free market, relying on government intervention to manage the aggregation of risk post hoc, which is then falsely reasoned to be the cause of the aggregate detriment that is really the natural effect (the empirically verifiable result) of the value accumulated.

Attributing risk to value accumulated on demand in a command dimension is fundamentally unstable and requires the force and legitimacy of public authority. The attribution transforms alpha risk into gamma risk by technical objective, and because of the inherent contradiction, whether capitalist or communist (destroying freedom in order to have it or conserve it), the working model will technically fail in the aggregate when the risk goes fully gamma.

(Understand that the gamma risk is more than just policy uncertainty that results from government intervention. The gamma dimension is where the fully assumed risk of loss occurs. It is not a probability, it is a sure thing that capitalism wants to ignore with the attribution of inculpable, aggregated value. The value, however, is fully culpable, and ignoring it is, technically, what accumulates the alpha into a gamma-risk dimension.)

Disintegration of the productive value (labor's integral value to the formation of the capital invested that is not retributed) presents as systemic risk that economists say we cannot control, and so it is always out of control, which demands markets be efficiently managed, post hoc, to control the externalities. Systemic risk (the aggregate sum of micro motives liberally pursued) is described as a naturally occurring, free-market phenomenon that is not caused by making markets, but markets are made, instead, to control, or efficiently manage, the effect (risk that accumulates with disintegration of the value). Objectively, then, the macro trend is stagflationary because productivity is high against declining demand.

High productivity against falling demand yields the objective value of unemployment. This value is consolidated to form the systemic risk (high profits against a slow economy) that modern economics technically considers to be, in the aggregate, ontologically derived.

Technically, the value consolidated is not derived, however. It is integral value that has been dis-integrated (destroyed) to yield (create) the value consolidated by technical objective. It is the creative-destruction that Romney, Ryan, and Rand describe as our natural condition, and so not resisting it is categorically imperative because nature demands it whether we like it or not. Letting too-big-to-fail firms like GM fail is the right thing to do because it consolidates the risk proportion to be efficiently managed.

Private equity firms, and banks that are too big to fail, reactionaries generally agree, are not immoral monsters feeding on the misery of others. The capital accumulated turns the detriment into surplus value--it turns the loss into profit, which resists shortages, but not with a disinflationary trend that would reduce the supply and increase productive incentive. Instead, the resistance is in the form of an inflationary trend (oversupply at high prices) that has a deflationary, macro effect that we tend to ignore (because we, supposedly, can't control it) until the numbers verify it, like we have now.

Currently, for example, we have a sharp correction in oil prices because it is overproduced at the relative price, but according to mainstream, market analysts, the price is falling because the dollar is rising against the Euro. While weak demand at high prices will account for the correction to the penny, analysts will not admit to overproduction being the problem with the result being technical failure and a stagflationary economy ad infinitum.

(If you recall, back in '09 after oil crashed to around $40 per barrel under deflationary pressure, and the Fed pumped in a load of money to resist the declining rate of profit, pop, technical analysis touted a rising oil price as a signal for economic recovery. Of course, like I said, this is wrong, and the Obama administration later said the economy was really worse than it had expected when the technicals failed to predict the direction of the trend.

The technicals fail to predict the trend because the capital is too consolidated for the laws of supply and demand to behave as expected. Instead, like I said then, because the risk proportion is going fully gamma, a falling oil price signals recovery...something that a Recovery Act will not do, what a JOBS Act will not do, but what expansion of the monetary supply to deconsolidate the risk will do in short order.)

Temporal fallacy is critical for maintaining technical failure. When too-big-to-fail banks operate unregulated and bankrupt millions of Americans (with no liability because it is an uncontrollable, aggregate effect described as market efficiency), regulation is legislated to make the market more efficient. When regulation does not cure the problem, but may in fact support it because it is a symptomatic treatment, the lack of resistance is attributed to the effect (regulation) and not the cause.

The marketplace is then deregulated, rather than deconsolidated, to solve the problem with the efficiency of markets. With regulation again in demand to make markets more efficient (Dodd-Frank, for example), the value of the risk proportion (the too-big-to-fail tautology) is conserved.

Conservation of the risk in a catastrophic (aggregative) proportion demands command authority. It demands, for example, the regulatory authority (the bureaucratic model) of the Federal Reserve (manipulation of the money supply). Reducing deflationary risk to prevent a declining rate of profit requires adding to the money supply (aggregating risk on command) with the result being the stagflation we have now, which can, of course, be blamed on the Fed acting (by fiat, or non-market means) to treat the symptoms (the effects) to conserve the cause. With this kind of deductive reasoning (the tautology), considering that the problem persists whether we regulate or deregulate, consolidation is never the problem but always considered to be the regulated or unregulated solution.

With weak demand the Fed will naturally keep interest rates at record lows, and the funds available (the supply of money added) will be used to bid up the oversupply, which weakens demand against high prices. Technically, the marketplace is being efficiently managed into failure, parlously perched on the precipice, just one nudge away from being pushed into a full-blown deflationary trend.