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[ZauberdrachenNr.7]

One of the greatest works of poetry.

+1!

[ZauberdrachenNr.7]

Elledge has really done his homework for this biography of the compelling outsider artist, Henry Darger.  Truly, it's both biography and social history.  How accurate psychologically it is I'll withhold judgment until finished.

[Brian]

I've so far only read about the book, and I may or may not read it.  The r > g is a seductive, simple formulation that seems to answer all questions surrounding inequality, and sets the framework for the prescribed global wealth tax - which has as much chance of coming into being as I do of becoming pope.  The problem is, this simple formulation is inaccurate, and most critiques I've read bring up the obvious reality that not all r is created equal - sovereign debt does not offer the same return as equity, etc – and while inheritance obviously contributes to inequality over time, not all fortunes remain; capital can and has been destroyed as well as created, and not just during big wars.  His cited equivalence is also a bit unusual, too, at least as presented in your statement.  I have to refrain from critiquing too much since I've not read it, but there may be some more interesting nuggets in there.

There are a couple things that irk me about the author's overall approach.  First is the hubris in obviously referencing Marx in the title of his book.  Having slogged my way through a good chunk of the first volume of Das Kapital, and finding no neat and tidy answer like r > g, I find it presumptuous for an author, or his publisher, to use the name thusly.  Second, a recent-ish remark by Picketty that Americans probably have a higher income than the French because they work more seemed a bit daft for a serious scholar, but I didn't see the entire exchange.  It will be interesting to see if this work has the impact the author hopes it does.  Me, I think I should read Robert Gordon's paper Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds first, and get some heavyweight analysis in before digesting a bigger work aimed at a bigger audience.

Well, of course, he doesn't claim that any of the "basic laws" he introduces are hard and fast laws, or even that they will be true in a given place or time. They function as sort of averages or rules of thumb - for example, a nation's capital/income ratio should be similar to savings rate divided by growth rate, but it won't always be so. Piketty would contend that when a big difference exists between the two ratios, some type of course correction results (he cites 80s-90s Japan as an example here).

"r > g" tends to be most true in periods of low growth, obviously, because the hurdle to clear is lower. Piketty is taking the very long view here: he believes that, as demographic changes take effect first in Europe and then slowly across the rest of the world (except Africa), economic growth will drop to about 1% on average. In a 1% growth context, he is saying those who already have capital will accumulate wealth more steadily and quickly than those who depend on working wages for a living. (He points out that the wealthy are typically smart enough to beat "g"; he also uses American university endowments to debate whether you get a higher return simply by virtue of having more wealth to invest.)

Piketty does address both the title (he's more sour on the "Twenty-First Century" part than on the "Capital" part; I don't blame him for Marx using such a central word) and the fact that the global wealth tax is, in his word, "utopian". He's more optimistic that a few countries in Europe will sign up, although even with that I wish him luck.

[Todd]

In a 1% growth context, he is saying those who already have capital will accumulate wealth more steadily and quickly than those who depend on working wages for a living.

The problem with this is that over the last 40 years or so, a large and expanding part of growing wealth inequality in the US and a few other countries (eg, UK) has been attributed to growing income inequality.  That is, higher paid professionals are earning relatively more than the rest of society, which translates to greater wealth.  These individuals may or may not be able to invest in such a way that ensures their wealth will consistently grows more rapidly than the economy.  (Incidentally, inequality grows fastest during depressions and recessions.)  How does Picketty account for this?

Establishing a rule like capital/income equating in some way to savings/growth, but then saying it will not always be so, strikes me as a trying to have it all ways.  I would have to read the book to understand such an approach.

It's good he takes a really long-term view.  From what I have read argues that the trends we are now witnessing began in the 70s rather than 1980, that supposedly magical, and/or evil year, though I think it is clear how he would view Reagan, Thatcher, et al.  Just as in the US the almost, but not quite, political detente between "conservatives" and "liberals" of the Cold War era has since given way to a more traditional rough and tumble politics akin to that of the 1770s through 1930s, the entire developed world could, possibly, revert to a more stagnant, rigidly hierarchical system - that is, neo-feudalism.  Such a state could last for centuries.  Unless, of course, great powers maneuver themselves into a situation where large scale conflict again becomes possible or even common, though with nukes around that seems hard to fathom. 

That's why the Gordon piece I mentioned earlier is higher up on my list of economic works to read; identifying causes of slower long-term growth and possible remedies can alleviate some of these issues, if only for the US.  But what if Friedman was right all along, and the long-term US real GDP growth rate really is 3%, rather than Picketty's 1%?

[Brian]

The problem with this is that over the last 40 years or so, a large and expanding part of growing wealth inequality in the US and a few other countries (eg, UK) has been attributed to growing income inequality.  That is, higher paid professionals are earning relatively more than the rest of society, which translates to greater wealth.  These individuals may or may not be able to invest in such a way that ensures their wealth will consistently grows more rapidly than the economy.  (Incidentally, inequality grows fastest during depressions and recessions.)  How does Picketty account for this?

He has a whole chapter about what he calls "supermanagers," this particular class of persons, and in particular how they come to earn more for their work than they ever would have in the past. (An unsurprising combination of new powers to suggest/name salaries, a near-total lack of information about how valuable these executives are [how much of Apple's success is the result of Steve Jobs, measured in dollars, versus the result of all their other employees and contractors? who knows?], and greed, too.) I can't immediately recall the discussion of why these individuals so rarely invest badly conservatively (EDIT), but there is discussion as to why most of the biggest fortunes return 6-7% rather than only 3-4% (access to unlisted investments and opportunities, more energy put into research and strategy, etc.).

Piketty does note one prominent example of a filthy rich investor who prefers low-yield holdings: Saudi Arabia, which buys up US Treasury debt for political reasons.

though I think it is clear how he would view Reagan, Thatcher, et al.

Yup, I think your imagination can handle that one. Bonus points for guessing what he thinks of the current Euro austerity plan.

the entire developed world could, possibly, revert to a more stagnant, rigidly hierarchical system - that is, neo-feudalism.... identifying causes of slower long-term growth and possible remedies can alleviate some of these issues, if only for the US.

This is Piketty's worst-case scenario and his fear. But he thinks that faster long-term growth in the 20th century was an anomaly, not a new normal, and thus he thinks the ultimate cause of slower long-term growth is reversion to a historical norm after a century of population booms, world wars, and globalized trade. (Remembering, of course, that this would happen at different paces in different places.)

[Florestan]

And thus spake on that ancyent Man,
  The bright-eyed Marinere.

[Florestan]

Ah, distinctly I remember it was in the bleak December,
And each separate dying ember wrought its ghost upon the floor.

[Florestan]

Pale grew thy cheek and cold,
  Colder thy kiss;   
Truly that hour foretold   
  Sorrow to this.

[Todd]

He has a whole chapter about what he calls "supermanagers," this particular class of persons, and in particular how they come to earn more for their work than they ever would have in the past.

In this instance, I'm not referring to the "supermanagers", but rather to the observable increase in relative income to the top quintile (or so) as a whole; the focus on the top 1%, or whatever other really elite group, is misplaced, and will or at least could lead to improper policy responses - like a global wealth tax.

Is the 6-7% return he refers to real or nominal?

and thus he thinks the ultimate cause of slower long-term growth is reversion to a historical norm after a century of population booms, world wars, and globalized trade. (Remembering, of course, that this would happen at different paces in different places.)

Population is no longer growing rapidly in most rich countries, true, but population growth can still be maintained or boosted by proper immigration policy, though xenophobia needs to be overcome.  Large wars should be avoided, even allowing for the fact that they do act as an economic stimulus.  As for globalized trade, perhaps consider reading World 3.0 for a very data intensive but accessible survey of the more mundane realities of globalized trade and finance.  The impact of globalization to date is overstated; more can be done to open trade and finance and even free movement of labor.  But this runs into predictable opposition: evil transnational/multinational corporations would be more powerful/accountable to no one; the 1%ers would reap all the benefits; the environment would be ruined; those funny looking foreigners would take all the good jobs, etc.

[Ken B]

And thus spake on that ancyent Man,
  The bright-eyed Marinere.

That's probably my favourite poem, at least if you exclude epics.

[Florestan]

That's probably my favourite poem, at least if you exclude epics.

Exclude epics, and the poem comes to nothing!

Water, water, every left,
And all the boards did shrink;:
Water, water, every right;
Nor any drop to drink.

[Florestan]

Some of the most vivid lines I've ever read in English (it not being my mother tongue)

Day after day, day after day,
  We stuck, ne breath ne motion,
As idle as a painted Ship
  Upon a painted Ocean.

[Ken B]

Exclude epics, and the poem comes to nothing!

Water, water, every left,
And all the boards did shrink;:
Water, water, every right;
Nor any drop to drink.

Well I meant aside from The Odyssey really.

[Karl Henning]

Some of the most vivid lines I've ever read in English (it not being my mother tongue)

Day after day, day after day,
  We stuck, ne breath ne motion,
As idle as a painted Ship
  Upon a painted Ocean.

Aye, a beauty.

[Ken B]

Some of the most vivid lines I've ever read in English (it not being my mother tongue)

Day after day, day after day,
  We stuck, ne breath ne motion,
As idle as a painted Ship
  Upon a painted Ocean.

I am listening to San Franciso Polyphony, by Ligeti

This man hath penance done
And penance more will do

[stingo]

Finished The Misremembered Man, now re-reading Hugh Howey's Wool for the book club to which I belong.

[Mookalafalas]

I just finished "The Way Hollywood Tells It: Story and Style in Modern Movies" and am now reading "Minding Movies: Observations on the Art, Craft, and Business of Filmmaking" Both are by David Bordwell, the second co-authored with his wife, Kristin Thompson.  I don't know why suddenly I'm all psyched to be reading about movies again after having lost interest for years...

[Moonfish]

I just finished "The Way Hollywood Tells It: Story and Style in Modern Movies" and am now reading "Minding Movies: Observations on the Art, Craft, and Business of Filmmaking" Both are by David Bordwell, the second co-authored with his wife, Kristin Thompson.  I don't know why suddenly I'm all psyched to be reading about movies again after having lost interest for years...

It is because we can buy megaboxes of movies now!!   

[asin] B000I5YUE4[/asin]

[Ken B]

Graded French Reader, Bauer

I have a shelf of French books of various sorts, graded readers, dual language, French only. Even cookbooks

La chair riche en pétrole de Moonfish le rend idéal pour la plupart des types de méthodes de cuisson, de pan-brûlante de la grille. Plus communément appelé opah, poissons lune est un grand poisson tropical se trouve principalement dans les eaux profondes entourant Hawaii. Moonfish ont différente couleur chair dans divers domaines de leur corps, mais la plupart de la cuisson jusqu'à ferme et blanche. Semblable à l'espadon, poisson-lune est le plus souvent coupé en filets de steak épais. Cependant vous avez décidé de les faire cuire, les servir avec une sauce sucrée qui complète sa saveur, comme une salsa de fruits épicés, ou une sauce à base de miel ou d'érable.

[Mookalafalas]

It is because we can buy megaboxes of movies now!!   

[asin] B000I5YUE4[/asin]

That's an interesting list. I've seen the majority of those, but some I've never even heard of.