False & True Philosophical Utopias...

(Anyone wishing to follow these dabates as they take place: cleck here)(click image for larger view)

“Two things here are all-important to assure oneself of and to remember. The first is that a person is not absolutely an individual. His thoughts are what he is "saying to himself," that is, is saying to that other self that is just coming into life in the flow of time. When one reasons, it is that critical self that one is trying to persuade; and all thought whatsoever is a sign, and is mostly of the nature of language. The second thing to remember is that the man's circle of society (however widely or narrowly this phrase may be understood), is a sort of loosely compacted person, in some respects of higher rank than the person of an individual organism." C.S. Peirce

The above quote is the central premises of explanation of my graphic, in my first post this month. If one studies the depth of Peirce’s statements related to my graphic, the truths are represented by the three center circles, which can actually be the three conceptual/perceptual and non-perceptual selves, as one fades, one is present ‘I’/being, and the third is the self “coming into life in the flow of time”. The reason I’ve chosen conflexivity is I didn’t feel the present terms actually covered all the actions taking place in our mental processes. Others have chosen the words, ‘Abduction’, ‘Reflexivity’ and ‘Reflexive Control’, but it’s more than a mere reflexive system__The deepest mind states are a truly conflexive process. By conflexivity, I mean, as an analogy, say an epiphany, which is a split second lucid vision into the super-consciousness of one’s own mind, or as some would believe, into the super-consciousness of all minds or even a universal mind. The reason I choose ‘con-’ is it has the meaning, when added to ‘flexivity’, of being two or many processes in one, especially as relates to a small split second’s epiphany, having the massive power of vision to reveal such a large amount of information, it’s often over-whelming to retrieve at that moment. It may take years or even decades to understand the entire meaning of such epiphanies, as I’m sure many of you have experienced, and for this reason and the explanation’s complexity, I’ve chosen the word conflexivity. If one looks up ‘con’ in the online etymology dictionary at; http://www.etymonline.com/index.php?search=con&searchmode=none one will quickly see the utility of the many meanings, which suits my purpose well, as I intend, over the next 6 months, to relay an entire system of philosophy, by a method I’ll later explain. For now, it’ll be from a universal standpoint of eclectic genericity. By using a general method, it allows me to take in all the breadth of universal facts and beliefs, and at the same time allows a perspective of the depths of particular facts and individual beliefs, desires, habits and ambitions…

So as not to become bogged down in constant extreme debates between others varied views and ideas, and my own, I’ll be responding with general impersonal expositions of my ideas, as loosely relates to others’ ideas. My methods have their main foundations in the early Jains, Nyaya, Heraclitus, Pythagoras, Socrates, Plato, Euclid, Eudoxus, Nicomachus, Archimedes, Apollonius, A.Biruni, Avicenna/Ibn Sina, A.Magnus, F.Bacon, Boole, De Morgan, W.Clifford, A.Schopenhauer, C.S.Peirce, T.Veblen, W.Durant and L.Kolakowski. The three I’m most impressed with are Ibn Sina, C.S.Peirce and L.Kolakowski, as all three offer eclectic universal genericity perspectives. Both Ibn Sina and C.S.Peirce offered complete philosophical systems, including all views of human thought, i.e., Logic, Physics, Metaphysics, Spiritism and complete category systems to boot. These two are the only ones who offered all of human thought in one person, and respected all aspects of these diverse mentalities of history, therefore I have a great deal of respect for them, especially as offering a great helping hand to unite the many dis-united schools of thought, mentalities and ideas of our present ‘crazy’ world.

As to the ‘False & True Philosophical Utopias’, this will be an ongoing discussion about “The Mentalities of Histories” as Kolakowski has named them. This ‘mentalities’ has far greater conceptual representational power than say, ‘The History of Ideas’, ‘The Intellectual History of Eras’ or ‘The History of Concepts’, as ‘The History of Mentalities’ can represent anything from the smallest personal individual in depth idea, to the largest universal open conceptual ideas of the planet’s evolutional mental state, as expressed by people such as P.T de Chardin, E.Schrodinger, D.Bohm and even J.Lovelock. I intend to discuss most all the false utopias of leftists and rightists, i.e., Marxism, socialism, communism, the Heinz 57 totalitarianisms, the Heinz 57 capitalisms and anything else that comes up as relates to social philosophy, social justice and a possible evolution to a true state of pure liberty, based on the complete ‘Inversity’ of present state law system understandings, through full explanations of what ‘Inverse Greed’ truly consists of. This may sound like a tall order, but I assure you I have simplified the process greatly over the last two years, by graphing, tabling and charting these processes and methods with an analogical/visual representation that’ll become obvious as we progress. I’ve named my entire philosophical system ‘Aneology’, which means ‘One Visual Logic…’

Not to make this post any longer, I’ll end here for now…

P.S.
The Q, C, and X, as represented above stand for Q = quantum states(though all 3 are quantum change states), C = biological cells, and X = foreign exchange markets, as so emplaced. These letters can be replaced to represent all central actions of brain/mind states, or other states of complexity of the nations' systems and world systems, where complexities yet unsolved exist. In other words I could have the letters, M = minds, P = photons, and C = concepts, etc., etc. Just as in all algebras, the letters are interchangable as per the topics of discussions proceed. As per the drawing's box informations, they are all chiralling cycloid motions of photons, as photons are the family of bosons, which allow super-positioning/cloning, etc., as per Einstein, which allows concepts to merge from lesser states to greater vision states, then fade to emplaced memory states. Future diagrams and explanations of the mechanics will form the entire picture of a working brain/mind model and possible and necessary probable world mechanics of...

The reason foreign exchange is included is it represents one of the largest areas of incomplete complexity(and many others will be shown in future posts), similar or symmetrical, information wise, as that of deep brain/mind mechanics of hypotheses formations, and possibly a clearer method of future explanations, since any internal mind states, not completely understood, can more easily be represented by symmetrical relationships of external real world states(I'm drawing the symmetries of actions from E.Noether and her statements of physical states in relation to the symmetries of the laws of physics and nature, and the required conditions of her theorems_She's one of our most important global resources of unifying thought). Just as morality can not be agreed to internally(the epistemic dilemma of 'free will and responsibility'), other than our individual prejudices learned by age 18, as per Nietzsche, this same internal moral state can be understood through its symmetrical external relationship of the desires, ambitions and habits of entire communities' esthetic liberty actions, as represented by the real world accomplishments we see around us, which actually exists by the original moral desires and ambitions of individual choices, and this way morality is actually externally/objectively, scientifically measurable_over time. As an example, we all enjoy living in comfortable houses, as per living in cold, damp caves_that's a moral/happiness personal choice we all make. Though some may not see it as a moral choice, one only has to think about the more compassionate condition of wife and children's comfort of house compared to cave, then one sees the moral/happiness implications. This will also be given through future graphs, tables and graphics, with their related explanations, and showing how to measure not only morality, but a closing of many of philosophy's epistemic and ontological gaps...

Hope that helps...

And as per logic of, logic simply tells us the true and false condition states of our reasoning, and no more, i.e., reason asks/contemplates the questions/doubts, and logic answers the condition states of... Of course, many conflate logic states with Aristotle's syllogistic 3 laws of logic__I use Ibn Sina's, Boole's, Lobachevsky's, Grassmann's, De Morgan's, Clifford's, Peirce's and Vasiliev's much extended logics, over Aristotle's less extensive reasonings...

The Blind ‘Black Box’__Ergodicity...

Sandia National Laboratories Peircean Induction Graphic
John Pollock __ The Mystery Link _ Embodied Perception
Bourdieu’s Three Relations of Knowledge Claims
The Economic Mind of Charles Sanders Peirce, by James R. Wible
Complete Economics, Physics, Philosophy Image Library...
What's A Trillion Dollars Look Like...?

History has many blind spots, but none so great as exists in political economic science, or the author should say, the non-science of political economics. Let it be stated right from the start; ‘methodological individualism’, or ‘rational choice theory’ fails to scientifically produce any viable logical syllogistic conclusions, due to the facts not existing in epistemic individualism(the individual must look out, as well as in, for the total truth)__unless the whole is also considered in the initial premises. This theory has a long history of claiming more than is even possible of an epistemic agent of rational choices, and due to more than any other factor, of ignoring ‘irrational choice theory’, ‘uncertainty’ and the many mathematical statistical unknowns of and in the social sciences domain, especially as logically relates to the greater aggregates of outside influences(which simultaneously exist) of other and most often opposing nations of epistemic and ontological competitors, as whole states and aggregates of greater magnitude states, of actions upon not only one’s own ontic nation’s facts, but every epistemic individual agent’s facts as well. In logic theories of the above, the greater aggregates of outside states rational and irrational epistemic and ontic actions, can obviously over-whelm any epistemic rational choice actions of the primary state, as she is simply mathematically outnumbered and out-powered by said ontic actions and outside epistemic intelligences. (Continued...)

The Logic of Self, Creating Self, Within The Greater Self…

Epistemology, Rationality, and Cognition, by J. Pollock
VISION, KNOWLEDGE,AND THE MYSTERY LINK, by John L. Pollock & Iris Ovid

"Two things here are all-important to assure oneself of and to remember. The first is that a person is not absolutely an individual. His thoughts are what he is "saying to himself," that is, is saying to that other self that is just coming into life in the flow of time. When one reasons, it is that critical self that one is trying to persuade; and all thought whatsoever is a sign, and is mostly of the nature of language. The second thing to remember is that the man's circle of society (however widely or narrowly this phrase may be understood), is a sort of loosely compacted person, in some respects of higher rank than the person of an individual organism." C.S. Peirce

"Truth is that concordance of an abstract statement with the ideal limit towards which endless investigation would tend to bring scientific belief, which concordance the abstract statement may possess by virtue of the confession of its inaccuracy and one-sidedness, and this confession is an essential ingredient of truth."CSP

Everyone has traveled the tumultuous emotional and intellectual path of life, in search of the great ‘Riddle of the Sphinx’__few have succeeded__most are still searching__many have given up. This author is no exception, yet having traveled a longer and more varied journey than most, may have stumbled across the great secret of homunculus. Philosophers and intellectuals of all ages have trekked the shores of this knowledge and wisdom, of self and others, in search of the magical metaphysical and logical keys to the universe__the philosopher’s stone, as it’s been called__but where does it hide? Have you looked directly before your very eyes…? There’s a space there you may not have realized__It’s called ‘Habitus’. It’s a tricky space, not small, not large, but humongous in size, compared to all the other possible thoughts, excepting infinity, that is. Many have named this space, but few have truly investigated its depths of clear waters. This area, of the logical metaphysics of habits, will be thoroughly investigated, to reveal a truth system so simple and obvious, one will be amazed they hadn’t thought of it themselves...

Some 2300 years ago Aristotle, in his metaphysics and ethics, delved into the continuum of mind and thought, but not as deep as he could have, had he recognized the importance of his retroductions’ full possibilities. Socrates and Plato had earlier also investigated the same area, but interpreted the continuum into forms, ideals, ideas and archetypes, which most investigators falsely took to be a synthetic transcendentalism, when in fact it was actually one of the closest attempts of pure explication. Had Aristotle looked deeper into his aesthetic rationalism creating the highest virtuous states of mind, and instead of laying it off to ‘god’, he may have discovered the truth to his deeper investigations of the metaphysics of rational habits. About two millennia later, Kant also came very close with his metaphysics of law, liberty and morality, to discovering the full actions of mind, but concentrated too heavily on the synthetic and moral aspects instead of the aesthetics and esthetics of habits. And finally, Peirce developed the metaphysics of habits as fully as anyone to date, except possibly Bakhtin, Bourdieu and Lefebvre. Though many of history’s greatest minds have investigated the depths of mind and thought, none have yet closed the epistemic, teleological and ontological gaps between feelings and actions, completely. This author is stating, this can and will be done…

One of the most important figures to mention is a little known Russian logician, Nicolai A. Vasiliev, due to these statements;

Logic is based, according to Vasiliev, on geometrical intuition. The basic logical relation, as in geometry, is the relationship between whole and the parts of the whole, reduced to the relation between foundation and its consequences. Foundation is a whole and consequences are its parts. This relation in essence should be assessed as mathematical and it lies at the basis of the syllogistic principle. Logic and mathematics enrich each other. That is why "non-Aristotelian logic is not merely an application to logic of non-Euclidian geometry method; we may argue that non-Euclidian geometry is a special case of the application of the non-Aristotelian method of logic."

“The pseudosphere is in some sense an ideal construction, but under certain physical conditions in the universe, Lobachevsky's imaginary geometry becomes the geometry of real space. "If the world or our sensory faculties are organized in a particular manner, logic must be non-Aristotelian" [Vasiliev 1912a, 238, reprinted 1989, 85]. “Our world and sensory faculties are arranged in such a manner that all immediate sensations are positive. "Negative" sensations actually are negative; they are secondary if compared to positive sensations, and appear when one feature replaces another one that is incompatible with the first one. In a world in which living beings have two kinds of sensations, non-Aristotelian logic surely reigns. To put it another way, the logical laws and principles are determined in the first place by nature of cognitive objects and of the experiences open to the subject, i.e. they are EMPIRICAL”. N.A.Vasiliev

This allows one to see that a non-Aristotlean logic is necessary for modern understanding to take place, just as a non-Euclidian geometry is. It further reinforces the facts already known by many about C.S. Peirce’s non-Aristotlean logics, as all these figures thus far mentioned, except Aristotle, used and or advocated a triadic logic, or polyadic, over the dyadic logics of others, as is shown in Vasiliev’s above quotes… Continued...

One Lucid Diamond...

(Early preview of Paul Davidson's new book; 'The Keynes Solution, The Path To Global Economic Prosperity')
(New) Global Financial Crisis__Placebo Effects, by Satyajit Das
(New, Aug. 15) Lunch with the FT: Larry Summers, By Chrystia Freeland

America’s seminal economist, Dr. Paul Davidson, has written the clearest vision of money and math mechanics, to date. Not since the 18th century’s true mathematical logicians, De Morgan, Jevons, Clifford, Peirce and Veblen, have scientific ideas of logic, money and math mechanics been laid so clearly before our eyes. Mr. Davidson begins with a simple explanation of a true scientific method, any high school student can easily understand, then exposes the fallacies in relation to and of the classical economists’ and mathematicians’ mistakes, of economic model mis-applications and mis-interpretations of. He reveals his entire thesis in a simple dialectic method any gifted 5th grade student could understand, by keeping the technicalities to his other 22 published books, and some 200 articles. Never before, in the history of economics, has so much been revealed by such a simple, yet scientific, method.

As an example, Mr. Davidson, shows how the ‘universal’ facts, habits and ambitions of money, control the ‘particular’ events of all economic history. He does this by revealing Keynes’ true vision of how all nations’ balance of payments’ imbalances and hoarding, actually starves the world of its productive employment potential. This is truly where all macro-economic theses should start, yet sadly almost all other classical macro-economists see not the forest for the trees. It’s taken America’s yet unrecognized genius, Paul Davidson, to point this very fact out. He further exposes this first and foremost generating problem, creating the other unrecognized problems’ mechanics with and in ‘the ergodic theory’, ‘the neutrality of money theory’, ‘comparative advantage theory’, ‘free-trade theory’, ‘efficient market theory’, ‘the incompatibility theory of mobile money and full employment’, and all really generated from the fundamental ‘balance of payments’ imbalances and hoarding theory and facts’, just as Keynes originally stated and implied them, in his total works, published and unpublished, private and governmental letters, etc.

After clearly and succinctly showing the relationships between true Keynesian theories and facts, against classical mis-interpretations of the same theories and facts, Davidson easily explains his extended Keynesian solution, to the world’s present problems. This is done through his recognition of the world’s need for not only a new ‘re-regulation of financial markets and trade’, but also his, as it was Keynes’, call for a new ‘international financial architecture’, to rebalance the world’s prices, money and currency contracts. Davidson has updated Keynes’ ideas to a 21st century feasible plan of fundamental economic and highly possible political actions, the world sorely needs.

Never before has an economic book impressed me as much as this little treatise, as I see it having the potential of reaching not only the academic economists, but most all political, academic and intellectual elites, along with many private citizens. This is what the nation and world really and truly needs__a clear and concise manual to explain and solve the world’s massive problems. Davidson has succeeded as no other in accomplishing this job…

L.A.Gillespie
…autodidactic, polymathic economist, logician, etc…

The Great Mathematical Instincts__P=NP

The Keynes Solution, The Path To Golbal Economic Prosperity, by Paul Davidson
IS “MATHEMATICAL SCIENCE” AN OXYMORON WHEN USED TO DESCRIBE ECONOMICS? by Paul Davidson
The Great Mathematical Instincts__P=NP

"Two things here are all-important to assure oneself of and to remember. The first is that a person is not absolutely an individual. His thoughts are what he is "saying to himself," that is, is saying to that other self that is just coming into life in the flow of time. When one reasons, it is that critical self that one is trying to persuade; and all thought whatsoever is a sign, and is mostly of the nature of language. The second thing to remember is that the man's circle of society (however widely or narrowly this phrase may be understood), is a sort of loosely compacted person, in some respects of higher rank than the person of an individual organism." (5.423)2 C.S.P. Continue...

Equilibrium /|\ Efficiency /|\ Ergodicity...

Tell me, what do you think it’s going to take to reach the ‘Washington Consensus’, etc., crowd about the realities of the Equilibrium, Ergodic and EMT Theory fallacies?

(NEW TRUTH) The Great American Bubble Machine, by Matt Taibbi

ALTERNATIVE EXPLANATIONS OF THE OPERATION OF A CAPITALIST ECONOMY: EFFICIENT MARKET THEORY VS. KEYNES’S LIQUIDITY THEORY, by Paul Davidson

Thanks to Mr. Davidson the world may still have a chance to awaken from its long classical economics slumber. It's truly a shame that the information to right the world's wrongs has existed since Plato, yet the world chooses to listen to defunct ideological classical, orthodox conflation mongers, instead of a sound mathematical economist like Paul Davidson. He started his career as a mathematical chemist, so he certainly understands better the real world mathematics underlying our economic problems.

I've often asked why the world can't understand the simple concepts of 'equilibrium', 'efficiency' and 'ergodicity' maths. It seems that when philosophers, physicists and economists take hold of these simple mathematical ideas, they thoroughly conflate their true meanings to a complete inversity of the realities involved. It's truly time for de-conflation.

Davidson and many others have been trying to right this capsized boat for many years, with little understanding from the mainstream communities, of the seriousness of the issues involved. It's really not to difficult to study mathematical history to uncover the truths of what Mr. Davidson speaks, compared to what the "Washington Consensus" herd bleats out. We need more minds of the soundness of Paul Davidson...

Equilibrium /|\ Efficiency /|\ Ergodicity
/|\ = Logic symbol for 'not same, yet related'
"Truth tends toward itself, til it tends away". My quote for true ergodicity.
_____________________________________________________________________
The Triadic Maxim___Any Idea; “Arithmetically check all possible effects, against all possible premeses, and the combined results will be the total actions of the idea.” me

Risk of Major Social Upheaval Likely if Bank Bonanza Continues...

(NEW) ALTERNATIVE EXPLANATIONS OF THE OPERATION OF A CAPITALIST ECONOMY: EFFICIENT MARKET THEORY VS. KEYNES’S LIQUIDITY THEORY, by Paul Davidson

(NEW) CHIPS is shrinking more than in its history. Half year numbers...

A little economic and financial truth by my favorite economist, Marshall Auerback...(full article here)

...Obama, Geithner, and Summers misguided...

...My issue with Obama and his fiscal package is the same as Rob Johnson's: taxpayer money is being deployed in hugely inefficient ways like Citi, BofA, AIG, and GM and discrediting fiscal policy in the process. Contrast this with the achievements of the New Deal. As Adam Cohen in his new book, 'Nothing to Fear'.

"[WPA] workers constructed or repaired more than 125,000 buildings, including 83,000 schools; 800 aiports; 950 sewage plants; and 650,000 miles of roads. They built or improved 78,000 bridges and 25,000 playgrounds; terraced 271,000 acres of eroded land; and taught two million people to read. They also ran a famous Federal Art Project, which hired destitute artists to create murals for public buildings, posters, and paintings. The WPA produced a highly regarded series of state guidebooks and an acclaimed collection of interviews with former slaves, and it played a major role in building the San Antonio Zoo, New York City's LaGuardia and Washington's Reagan airports, and the presidential retreat at Camp David. In 1965, on the program's thirtieth anniversary, The New York Times quoted a dispossessed North Carolina tenant farmer living in an abandoned gas station, who had been rescued by a WPA job. 'I'm proud of our United States, and everyting I hear The Star Spangled Banner I feel a lump in my throat,' he said. 'There ain't no other nation in the world that would have had the sense enough to think of WPA."...

Ponzi Prosperity – Built-to-Fail Economic Models...

(NEW) Excellent pbs 4hr. free video of 'The Ascent of Money', by Niall Ferguson

Satyajit Das has done an excellent job of describing the 'Global Financial Crisis' in this brilliant article. I highly recommend reading it HERE.

To Fareed Zakaria at CNN___The World’s Last One-Hundred Years, Most Important Event

I'm republishing this post of June 23, 2008, as I feel it's so important to be thoroughly understood:

(New June 29) The World Finance Crisis & the American Mission, By Robert Skidelsky

To Fareed Zakaria at CNN___The World’s Last One-Hundred Years, Most Important Event

Hi Fareed, thanks for the program, it’s great___Keep up the fine work… As to your question; “What’s the world’s last one-hundred years, most important event?” That, transactions’ mathematically factually, would definitely be Nixon’s `71 and `73 decisions to end the gold std. and the Bretton Woods system, and replace them with the longest era of currency tariff manipulations of nations’ trading systems, the world has ever known___Almost all the world’s excess off-shoring, excess arbitraging, hedging and speculation, is controlled by this one famous inane, freely-floating exchange’s, decision era. This has evolved into the system of extreme currency tariffs and subsidies, of between 400% and 800% actual ppp(actual purchasing price parity, and not the false purchasing power parity) exchange rate differences, between the developed world and the under-developed world, especially when Japan’s over-valued, and the BRIC’s(Brazil, Russia, India, China), and satellites, under-valued currency tariffs and subsidies are considered, at the extremes. The extreme economic senility, of trillions of dollars, of capitalist system costs added, by this “Kabuki Shadow Banking” mafia-capitalism’s imbalanced system, hasn’t been seen since China and Japan, some 600 and 400 years ago had such imbalanced currency systems’ standards, with China at 10 to 1, and Japan at 6 to 1, silver to gold ratios, when the West was at 14.5/15 to 1. History clearly records the devastating results of these collapses, when just semi-free, yet vastly imbalanced currency systems’, trade was first, large scale, tried, between the East and West. It wasn’t pretty…

Extremely imbalanced currencies, ARE, Extremely High Trade Tariffs, and opposite direction Trade Subsidies…!

The world can handle 10% and 20% imbalanced currencies. It can not handle 400% to 800% true PPP Currency Imbalances. The Derivatives $596(now $592, down from a high of $684) trillion markets(now fast expanding, notional transactions turnover trading value, per year___BIS numbers) simply put far too much financial pressure on Capitalism’s Aggregate System Operations’ Costs, as is now being clearly witnessed in our financial markets…

Unless we take down the extreme global currency tariffs and subsidies systems, by instituting a new “International Financial Architecture” re-balancing system, of sliding time scaled, self-balancing laws, capitalism is mathematically transactions guaranteed, to fully collapse, with all the system and currency raiding, taking place, by none other than Nixon’s, originating and now fully grown, Corporate Currency Raiding Mafia-Economists & Co... The show continues…

Dr. Paul Einzig’s complete works, some 65 books, verify the above facts, along with hundreds of other historical financial economists’ books and facts …

It’s time for America to awake…

Lloyd Gillespie
(a polymath, autodidact economist)

p.s.
As you'll have noticed, I wrote this warning before the Sept. collapse...

A Universal Philosophy of Pure Liberty, Natural Money, Aesthetic Ecology, and Value Validity Proofs of Peirce’s Pragmaticism and Abduction…

(NEW) Krugman's Nostalgianomics, by Brink Lindsey I agree more with Paul Krugman than Brink, but this paper offers many facts, otherwise...

“CHARLES SANDERS PEIRCE” by Josiah Royce, with W. Fergus Kernan

(Note)Extremely clear and concise ideas and graphs’ explications presented. (Exact Logic = Numbers = Analogical Graphs = A Universal Analogical Language of Genericity = Possibility of A Perceptual Wisdom of Analogical Pragmaticism)

“The upshot of the first phase of the proof(pragmaticism) is that logical goodness is goodness of inference and goodness of inference, which is validity, is to be understood as conformity to an ultimate end. This advances the proof because Peirce is interested in the nature of belief or assent insofar as it is voluntary. Voluntary belief is belief that is subject to the check of logical criticism through the criticism of inference. Since inference is a purposive activity which controls belief, belief in general must have a purpose. A reasonable conjecture, which Peirce makes, is that the nature of belief can be uncovered by finding out its purpose [36] and that its purpose can be understood by investigating the aim of reasoning in general.” Jeremiah McCarthy

Many following this blog may ask, “Why is he tying so much philosophy and physics in with his economics?” That’s a reasonable question and here’s the answer. Twenty-five years ago, I discovered an entirely new economic model possibility, for our ailing world. After several years of relaying my ideas, I came to realize I possessed no real(exact logic) mathematical proofs for my system, so I started searching, but where was I going to look, as I knew the world’s mathematics systems were so corrupted? Thinking it over, I decided physics may offer the best shot, because I could see the graphical models of their maths, but this proved a dead end as well, just as economic maths had, earlier. Then I decided to return to my much earlier studies of philosophy, as I knew they contained the largest library of laws and mathematical ideas’ histories. Since I knew I couldn’t find the information elsewhere, I started re-stumbling through the past’s greatest and not-so-greatest philosophers. Continue...

Are we citizens? Or peasants?

(New)The Greatest Swindle Ever Sold By Andy Kroll
"Can Future Systemic Financial Risk Be Quantified? Ergodic Vs. Nonergodic Stochastic Processes" by Paul Davidson

Fabius Maximus | May 21, 2009 This financial crisis has revealed much about America. About the operation of our government. About our ruling elites, and what they consider important — and who they believe should pay for their mistakes. And about the American public. Our passivity and ignorance (don’t know, don’t care).

If we choose to be sheep the best we can hope to get is a shepard. More likely we will get wolves. This is the natural order of things, and neither shepards or wolves are criminals. The most common reaction to these hard facts has been to whine about it. Perhaps instead we should consider not being sheep.

Some prominent conservatives analyze the situation

Perhaps the most astonishing aspect of the crisis has been that of prominent conservatives. As we see in this conclave talking on the Glenn Beck Program: “Destined to Repeat“, Fox News, 10 April 2009 — Red emphasis added. Excerpt:

GLENN BECK, HOST: There are undeniable parallels between what has happened in the past on our planet and what is going on today. And tonight, we’re going to cover a lot of them. I hope that you come away from tonight’s program with a deeper understanding of how some of the most infamous events in history started with the best of intentions. …

BECK: All right. Our country is not being controlled by jackbooted fascists. But like I said, during George W. Bush’s term, the groundwork is continuously being laid to take us there if the train goes off the tracks. History shows us that it only takes two simple things for fascism to rear its ugly head, and it can happen virtually overnight: fear and hunger. A temporary crisis is almost always a precursor to a much, much more permanent one.

So, with that in mind, let me show you the four main things that we’re going to be talking about tonight. First, we’re going to take you to Russia, where under communists like Lenin and Stalin, their revolution pitted peasants against the rich, the poor against the wealthy. They were basically saying, “Eat the rich! They did this to you! Get them! Kill them!”

These days, the comparison, demonstrators are rioting in front of the G20, unions protesting in front of AIG, an organized mob, buses showing up at the houses of the evil AIG executives. It’s a different style, but the sentiments are exactly the same — find ‘em, get ‘em, kill ‘em! They did this to you!

…

RGELLATELY, AUTHOR, “LENIN, STALIN & HITLER”: Well, the Russian Revolution came at the end of disastrous First World War, and the people were hungry and there was a great desire to get out of the war. Lenin came back to Russia — brought there by the Germans, incidentally — to try to bring about a revolution, and he did it cunningly by offering poor peasants land, people bread, and the army peace. And with those three slogans, he managed to obtain rather quickly and easily victory for the Bolshevik Revolution in October — old style, October 1917.

Now, what happened after that, of course, is that there was a war was in the countryside and basically he promised the land to the poor peasants, who were then invited to take land from the churches, from nobility that were better off. And what they did, of course, was think actually that the communists were going to let them keep the land. So, they became firm backers of the Russian Revolution, the poor peasants believing that now the land that they thought was rightly theirs for so long now was theirs finally to keep.

But of course, that was complete illusion, and within no time at all, the situation went from bad to worse. So, think what would happen if you draw off the best farmers, you kill off the best farmers — what do you think is going to happen next? What happens next is a famine.

BECK: And that’s exactly what happened. And I see this parallel with AIG and then the bankers and everything else — hate them, hate them, they did this to you, you’ve got to get them, you know, kill them off, put them in jail, take their money, whatever. Who is going to run these things? There are — they have expertise that most don’t.

Let me — let me go to Amity. Do you have any or anybody — is anybody watching the news today and seeing things that don’t have to repeat? But when you, as a historian, and you know history, don’t you look at today and go — wait, wait, wait? Everybody knows what we’re doing, right? Everyone is aware this is dangerous territory that we’re — that we’re walking down.

AMITY SHLAES, AUTHOR, “THE FORGOTTEN MAN”: Yes, Glenn, there is a variant of what you said before — politicians who can’t remember the past condemn the rest of us to repeat it. So, you get the feeling in Washington, they haven’t thought about what government can do before. I prefer to call it “statism,” the ever-expanding state what we’re talking about, which then corrupts, when then sometimes leads to war. And yes, I see, when we look at companies and blame them, no good outcome because those companies are also often the source of our prosperity and our return to prosperity.

So, you can be mad at certain AIG executives that they didn’t forego their bonus or that they were too lawyerly in writing it all out this winter and tricking people with Congress. And yes, there are bad people at all companies, but if we blame AIG, we also hurt a lot of other companies.

For an analysis of Amity Shlaes brand of economics see An important and politically significant guide to the Great Depression (30 April 2009).

I recommend reading the complete transcript to take a full measure of its nuttiness. We have gone through the greatest financial crisis since the 1930’s — the first global recession (wars do not count) — and there these people show no awareness of the need for fundamental reforms. Also, comparing America to the last days of the Czars is nuts.

Most bizarre: in response to tepid discussion of changes, they invoke the ghosts of Communism and Fascism. Revolution and famine. If we jail some senior bankers, our system will collapse because nobody else can run those institutions. This is too crack-pot for serious analysis, but Matt Taibbi does find important meaning in it for all of us.

A reasonable person’s remarks about these conservatives’ analysis

Excerpt from “The peasant mentality lives on in America“, Matt Taibbi, posted at The Smirking Chimp, 14 April 2009:

This must be a terrible time to be a right-winger. A vicious paradox has been thrust upon the once-ascendant conservatives. On the one hand they are out of power, and so must necessarily rail against the Obama administration. On the other hand they have to vilify, as dangerous anticapitalist activity, the grass-roots protests against the Geithner bailouts and the excess of companies like AIG. That leaves them with no recourse but to dream up wholesale lunacies along the lines of Glenn Beck’s recent “Fascism With a Happy Face” rants, which link the protesting “populists” and the Obama adminstration somehow and imagine them as one single nefarious, connected, ongoing effort to install a totalitarian regime.

This is not a simple rhetorical accomplishment. It requires serious mental gymnastics to describe the Obama administration — particularly the Obama administration of recent weeks, which has given away billions to Wall Street and bent over backwards to avoid nationalization and pursue a policy that preserves the private for-profit status of the bailed-out banks — as a militaristic dictatorship of anti-wealth, anti-private property forces. You have to somehow explain the Geithner/Paulson decisions to hand over trillions of taxpayer dollars to the rich bankers as the formal policy expression of progressive rage against the rich. Not easy.

… It’s been strange and kind of depressing to watch the conservative drift in this direction. In a way, actually, the Glenn Beck show has been drearily fascinating of late. It’s not often that we get to watch someone go insane on national television …

After all, the reason the winger crowd can’t find a way to be coherently angry right now is because this country has no healthy avenues for genuine populist outrage. It never has. The setup always goes the other way: when the excesses of business interests and their political proteges in Washington leave the regular guy broke and screwed, the response is always for the lower and middle classes to split down the middle and find reasons to get pissed off not at their greedy bosses but at each other. That’s why even people like Beck’s audience, who I’d wager are mostly lower-income people, can’t imagine themselves protesting against the Wall Street barons who in actuality are the ones who fucked them over.

… But actual rich people can’t ever be the target. It’s a classic peasant mentality: going into fits of groveling and bowing whenever the master’s carriage rides by, then fuming against the Turks in Crimea or the Jews in the Pale or whoever after spending fifteen hard hours in the fields. You know you’re a peasant when you worship the very people who are right now, this minute, conning you and taking your shit.

Whatever the master does, you’re on board. When you get frisky, he sticks a big cross in the middle of your village, and you spend the rest of your life praying to it with big googly eyes. Or he puts out newspapers full of innuendo about this or that faraway group and you immediately salute and rush off to join the hate squad. A good peasant is loyal, simpleminded, and full of misdirected anger.

And that’s what we’ve got now, a lot of misdirected anger searching around for a non-target to mis-punish — can’t be mad at AIG, can’t be mad at Citi or Goldman Sachs. The real villains have to be the anti-AIG protesters! After all, those people earned those bonuses! If ever there was a textbook case of peasant thinking, it’s struggling middle-class Americans burned up in defense of taxpayer-funded bonuses to millionaires. It’s really weird stuff. And bound to get weirder, I imagine, as this crisis gets worse and more complicated.

Conclusion

This puts America in a tough spot. The core of the loyal opposition has gone crazy. The Administration in power continues the policies of the old Administration. To whom do we turn if the economy fails to recover in the second half of 2009? To ourselves. It’s our government. It’s our nation. It’s our responsibility.


--------------------------------------------------------------------------------
Originally published at Fabius Maximus and reproduced here with the author's permission.

The Growing "Bubble" In Government Debt Markets...

This is an excellent article of our financial mess. I fully agree with Satyajit Das...

Second Lesson of the GFC: Whatever It Takes!
Satyajit Das | May 18, 2009
Socialist WIT

The severity of the crisis was underestimated initially. Ben Bernanke, Chairman of the US Federal Reserve in March 2007 stated during Congressional Testimony: "At this juncture, the impact on the broader economy and financial markets of the problems in the sub-prime market seems likely to be contained." In April 2007 US Treasury Secretary Henry Paulson delivered an upbeat assessment of the economy: "All the signs I look at show the housing market is at or near the bottom… The U.S. economy is very healthy and robust."

The grande mal seizure of financial markets in September and October 2008, with the bankruptcy of Lehman Brothers, a large US investment bank and near collapse of AIG, the world’s largest insurance group, highlighted the seriousness of the problems. Since then national and international "committees to save the world" have implemented a bewildering and ever changing array of measures to try to stave of economic collapse.

The actions – dubbed WIT ("What it Takes") by Gordon Brown, the English Prime Minister - have been focused on trying to stabilise the financial system and maintaining growth in the real economy.

Governments and central banks have moved to remove toxic debt from bank balance sheets, inject share capital to cover losses from bad debts and also guaranteed the bank’s own borrowings to allow them to continue to raise deposits and borrow. Bank of England Governor Mervyn King recently summed up the nature of the UK’s support for the banking system memorably: "The package of measures announced yesterday by the Chancellor are not designed to protect the banks as such. They are designed to protect the economy from the banks."

Governments have provided large amounts fiscal stimulus and support for the housing market (in the US). In addition to the normal "automatic stabiliser" effects of reduced tax income and higher social welfare spending in a recession that push budgets into deficit, governments have launched new spending initiatives focused on infrastructure and direct payments to those most affected by effects of the GFC. Central banks have cut interest rates to levels not seen for decades.

It is not clear whether the actions taken will have the intended effect. As John Kenneth Galbraith noted: "In economics, hope and faith coexist with great scientific pretension".

King Canute Addresses the Waves

The pretence of global co-ordination in policy responses, reiterated at increasingly frequent G20 summits, does not accord with the reality of individual actions.

Ireland’s anxious reaction to a "run" on Irish banks prompted a blanket government guarantee on bank deposits. This, in turn, led to a flight to Irish banks forcing the implementation of similar arrangements in other countries. The "electronic herd" did not notice that Ireland was guaranteeing deposits totaling over 200% of its own gross domestic production ("GDP") calling into question its ability to honour these commitments if called.

There have been constant shifts in policy. TARP might well stand for Temporary Asset Relief Program (rather than its real name - Troubled Asset Relief Program) as there have been a succession of wholesale changes in the strategy.

The financial initiatives have not led to a significant easing of credit conditions. This reflects the fact that the capital provided is only sufficient to cover continuing losses but insufficient to restore normal lending and financial activity.

Money supplied to banks is not flowing into the real economy. Banks need funds to pay off maturing borrowings of their own as well support assets coming back onto their balance sheet (known by another three letter acronym - IAG - involuntary asset growth). Companies have also drawn down debt facilities, as their own financial position has deteriorated, requiring the banks to finance these requirements.

Governments and central bankers have become frustrated at the failure of policy actions to help the resumption of normal financial activity. Where governments have taken substantial stakes in banks, there is a noticeable drift to "directed lending". Central banks and governments are increasingly bypassing the banking system and providing finance directly to businesses. The Federal Reserve may soon issue credit cards to all Americans under its own brand.

The debates miss the point that debtors still have too much debt and are not able to service it. Until the debt is written down and restructured, credit growth may not resume.

In the TARP Oversight Panel Report of 8 April 2009, Professor Elizabeth Warren observed: "Six months into the existence of TARP, evidence of success or failure is mixed. One key assumption that underlies Treasury’s …. approach is its belief that the system-wide deleveraging resulting from the decline in asset values, leading to an accompanying drop in net wealth across the country, is in large part the product of temporary liquidity constraints resulting from non-functioning markets for troubled assets. On the other hand, it is possible that Treasury’s approach fails to acknowledge the depth of the current downturn and the degree to which the low valuation of troubled assets accurately reflects their worth".

The stimulus packages create different challenges. Well-intentioned infrastructure spending will take some time to have any meaningful effect. Skill shortages in key areas of expertise may slow down implementation. The need to avoid "leakage" where spending flows to overseas recipients in a globalised world is also paramount politically. The return on inadequately targeted infrastructure investment is also not necessarily high

Governments must also borrow to finance their spending. Many countries implementing fiscal stimulus packages already have large budget deficits and also substantial levels of outstanding public debt.

In 2009, governments around the world will have to issue US$3 trillion in debt. The US alone will need to issue around US$ 2 trillion in bonds (a staggering US$40 billion a week!). This compares to around US$400-500 billion of annual debt that the US has issued in recent years. This debt must be issued at record low interest rates.

China, Japan, Europe and other emerging countries have been major buyer of this debt. It is not clear whether they will continue to buy US government bonds, at least at previous levels. Wen Jiabao, China’s prime minister, provided a reminder of the importance of this issue in February 2009: "Whether China will continue to buy, and how much to buy, should be in accordance with China’s needs, and depend on the safety and protection of value of foreign exchange." Yu Yongding, a former adviser to the Chinese central bank, recently sought guarantees that the value of China’s US$682 billion holdings of US government debt won’t be eroded by "reckless policies". He asked that the US "should make the Chinese feel confident that the value of the assets at least will not be eroded in a significant way."

At best, the tsunami of government debt may crowd out other borrowers exacerbating existing financing problems. At worst, there is a risk of a collapse of the growing "bubble" in government debt markets as investors refuse to purchase debt at current rates triggering additional losses. In January 2009, long-term interest rates moved up sharply as markets started to absorb the import of government initiatives. As James Carville, Bill Clinton’s campaign manager, once noted: "I want to come back as the bond market. You can intimidate everybody."

Current initiatives resemble the "hair of the dog that bit you" cure where ingestion of alcohol is the treatment for a hangover. The current problems can be traced to high levels of debt accumulated by banks, consumers and companies. In effect, this debt is now being replaced by government debt. Simultaneously, the debt fueled consumption of consumers and companies is being replaced by debt funded government expenditure.

Adjustment in the level of debt and asset prices is part of process of through which the global economic system re-establishes itself. Governments and central banks can smooth the transition but they cannot prevent the necessary adjustments taking place. Like King Canute, central bankers and finance ministers cannot hold back the tide.

Multiplication by Zero

Like an athlete using drugs to enhance performance, the global economy used debt and financial engineering to enhance global growth. Increasing stimulus was needed to maintain performance in an unsustainable Ponzi scheme. The removal of performance enhancing drugs has exposed fundamental weaknesses.

A simple way to think about value in the global economy is in terms of Irving Fisher’s transaction equation:

Real Economy = Financial Economy

Where

Real Economy = Quantity of Good times Price of Goods

Financial Economy = Money Supply times Velocity of Money
Therefore:

Quantity of Good times Price of Goods = Money Supply times Velocity of Money
The financial economy represents claims on the earnings and cash flows (both current and future) from producing and selling real goods and services. The financial economy consists of the money available and how rapidly the money can be circulated through the global economy (velocity). Banks provide much of the velocity of money in the economy through its borrowing and lending activities where a small amount of capital is leveraged to create larger amounts of money in the form of debt.

Recent economic prosperity was primarily driven by growth in the financial economy – increased money supplied by central banks augmented the rapid growth of and innovation of financial techniques within the banking system that increased the velocity of circulation. This increased the value of the real economy by increasing prices and also stimulating the expansion in the supply of goods and services.

The GFC has sharply reduced the financial economy, specifically it has decreased the velocity of money. As any student of mathematics knows anything multiplied by zero is itself zero.

The reduction in the financial economy necessitates a corresponding reduction in the real economy, initially in prices and ultimately by reducing the quantity of real goods and services. Falling prices of financial assets (claims on real goods and services) and, more recently, reductions in production volumes reflect the required economic adjustment process.

Government actions, however well intentioned, seem primarily to be based on the recognition that Ponzi or pyramid games are only bad if they end. All efforts are now seemingly directed at keeping the game going for as long as possible!

In 1976, James Callaghan, the Prime Minister, delivered the following grim assessment of Britain’s economic situation that is still relevant today: "We have been living on borrowed time. We used to think you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candor that that option no longer exists."

Government actions, however well intentioned and significant, may entail pouring water into a bottomless bucket.

© 2009 Satyajit Das All Rights reserved.

Satyajit Das is a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives (2006, FT-Prentice Hall).

This article draws on the ideas first published in Satyajit Das "Built to Fail" in The Monthly (April 2009) 8-13

The History of History___Eclecticism___Where Is It?

“We should chiefly depend not upon that department of the soul which is most superficial and fallible (our reason), but upon that department that is deep and sure, which is instinct.” - Charles Sanders Peirce

Far too much about history has been stated in narrow analytical diatribe, inconcise nonsense, and pure empty rhetoric… Why? Are we really that dense? A simple first example; Aristotle___Most think he’s great because he wrote about a beautiful system of ethics, true enough, but what about his non-sensical silly-gistic proposition/predicate logic, or whatever you want to call it? Then along comes Kant with another beautiful system of ethics and arithmetic liberty, but what about his wedge driven between the “logica utens” and the “logica docens”? Was there any need of these two great minds dividing our natural senses so miserably? So nefariously? Then, just as the world is starting to come out of its stupidity, with Boole, DeMorgan, Jevons, Peirce and Shroader, along comes Frege with more of the same old divisions of logical sense/nonsense(and conflation), which has continued through Cantor, Piano, Russell, Wittgenstein, Carnap, Quine and Chomsky, ruling most of modern intellect. Oh, and don’t let me forget Hegel___That wonderful over-worshiper of state. Neitzsche? Another life hater. Beautiful story, ‘ain’t’ it…?

Is it true? How would you tell truth? Really, tell me… Napolean existed___True. Stalin existed___True. Hitler existed___True. Mooselini existed___True. Hussein and Bin Ladin existed/exist___True. Is this the type of truth the world really believes? Is there any real truth of “Power”? Does anyone on Earth know what the truth of “Power” really is? Is power logical to itself? Yes. Is power ethical to itself? Yes. Is power truthful to itself? Yes. Is power honest to itself? Yes. Is power all the above to a majority of its citizens? Yes, more often than we care to think about. Believe me, Caligula and Machiavelli have no one-up-ness on most of the modern world, it’s just that now, we do it all with the power systems of money___The Corporate Military Industrial Complexes.

Let’s take an eclectic look at historical power, through the eyes of logic, math, philosophy and money, Ok? What made it all go wrong? Simple question___Complex answer. Let’s rephrase it. What made it all go mathematically so wrong? That can be answered. Let’s look at the actors and players, mainly from history’s most influencial source___The academics. At least, most of them think they’re the most influencial source of change and refinement. Why is it we have such genius arithmetic scientists, and yet such meager philosophers of the mathematical sciences? Is it accidents of history, the complexity and time study constraints of history, or possibly the laziness of philosophers to truly learn the requisite maths, to more effectively describe mathematical histories’ and meta-histories’ truths?

Looking back at the early Greeks, we find great advancements by the geometers and the Pythagorean Schools, up until Aristotle. Then___What happened? The Pythagoreans had developed a most advanced triadic math and logic, with a necessary “mean terms”. They had the “Triadic Law of Mean Terms”___“The Triadic Principle”. This was a very pragmatic system of math and logic as attributed to them by Socrates, and much of Plato’s dialogues. Even Aristotle’s early work on the Nicomachean Ethics was excellent work, when he was still influenced by Plato and the Pythagoreans, but things shortly changed. The change, due to much critical Greek antagonism, may have forced Aristotle to try and sure up his philosophy, but without the genius influence and help of Plato, Aristotle went down a very confusing and false road. He separated the “logica utens” and the “logica docens” into two entirely distinct schools of thought, with his three laws of logic, and the main fault being the “Excluded Middle”. This put his logic in direct opposition with Pythagorean Triadic Logic and Math, with a new less powerful Dyadic Logic and Math. Archimedes tried to salvage it, as did Eudoxas, Nicomachus and Apollonius, and later the Arabic speaking nation-states, with their “Houses of Wisdom”, also tried to salvage the early Greek ideas, yet to no avail, when Averroes came along. Aristotle’s logic won the day, over the more able Triadic Logics of the early Pythagoreans, as the early Greek and Byzantine knowledge systems slowly crept into Europe. Could this have been different? Why was it so disasterous?

We all know the history by now. The “Port Royal Logic” School accepted the less capable and confusing “Dyadic Logic” and “Math Systems” of the Aristotle influenced schools. Even Galen had clearly shown the faults of much of Aristotle’s system, and the Arabic peoples, up to Biruni and Avicenna, clearly tried to right the wrongs, to no avail, so we finally ended with two distinct logic and math systems and schools of thought, right down to this day, but more of the history needs mentioning. Many mathematicians and true working scientists, through the years , always followed the true Pythagorean, Euclidian and Archimedean Schools, but most philosophers of, and many more falsely influenced scientists and mathematicians followed the more confused logic, arithmetic and (modal schools, which the Byzantine’s had created). Then along comes the enlightenment, to pull the wool fully over everyone’s eyes, for many years to come, with Descarte’s further separation of mind and body, etc., etc., and finally to the point everything was so confusing, Kant came along to try and straighten it all out. But, he ended separating the “Utens” and “Docens” even further___Nice try, but no ringers. Oh, there was his excellent mathematical ethics and liberty papers, but the true philosophical and final sense separation was devastating for logic and math systems for the next 150 years. You see, math and true mathematical logic are of the “logica utens” and most philosophers describe this true a priori ground as though it’s of the “logica docens”, and herein lies all the confusion.

Now, was this accidental or pure laziness, on the part of the philosophers and historians? I can’t truly answer this, but if life’s experiences are any guide, there’s a good percentage of all trades, crafts and professionals that are just plain lazy and downright slackers, so my money is on history really being controlled by this lazy-slacker element of all societies___Period…! The bad runs both up and down hill. No matter how brilliant anyone wants to think the professional classes are, that’s not my experience of life, at near 64 years of age, and this is why the human element of any system’s success is dubitable, unless we can turn much of society’s bad elemental powers over to properly algorithmatized computers___I have no faith in humanity changing, even if they realize their lives are at stake. I think there’s just far too many lazy-slackers who just wouldn’t believe it if the “Bear” were staring them in the face. They’d say, “Nice Bear”.

Well anyway, after Kant got through trashing the system, along came Hegel kissing up to the state, and a metaphysical “Notion”, after Kant had already created the “Thing In Itself” boogy-man. There’s really a ‘lotta’ interpretation in those two ideas, kinda like Wittgenstein’s “Private Language”. Yeah, I admit we all do have private self-languages, but that’s not what ‘Witt’ meant, and we all know that. As I mentioned earlier, others came along in time to straighten the world mess out, but America’s invasion by Europe’s WWI and WWII hoards of professional miscreants clobbered us, and down to the bottom of the barrel went Peirce, and his student Veblen, to only be replaced by English and European mediocrity, ending the only true and valid “Triadic Systems” revival, at that time possible.

Luckily, the last few decades have begun to change the world intellectual picture, even if it’s still but in the periphery, Peirce’s, Jevons’, Veblen’s and Keynes’ views are coming back into vogue, through the new heterodox schools. It only takes a quick Google search to verify this___millions of hits, thank ‘god’, when all epistemic and cognitive searches are done. So let’s take a quick look at the possible revival of “Triadic Ideas” as relates to the “Semantic Web” possibly not being so parasitic on the “Pragmatic Web” in our highly possibly better future.

How can we best represent global power systems? Capitalism? Socialism? Communism? Social Contracts? Contractarianism? Nationalism? Or Social Democratic Capitalism mixes? Taking an eclectic view, allowing a triadic isomorphic systems logic, which would recognize our better nature’s priority over our higher nature’s ego, we may have a shot at a new and total understanding. Are any of these systems true? Are any of these systems value validity preserving___sustainable? We’re certainly going to have to admit the present system has failed, or at the least terribly mis-fired. Are we going to have to rebuild it? Replace it? Coddle it? Or outright change the entire system for something entirely new? Does anyone really know about Keynes’ total system of “International Exchange Clearing, Bancor and Emergency Jobs Banks?” Does anyone even truly realize we have the computational ability to figure new systems from a future model’s arithmetic completion position? Can anyone even believe this? There’s lots of talk of adopting amalgamations of old tried and failed systems, but not much of Keynes’ true “Middle Way.” What if there’s an even better “Middle Way” compatible with the yearnings of entire generations’ better nature’s and higher natures? Surprise___There is, and has been for years. I, Paul Davidson and Jane D’Arista have been offering just such systems for years, but where’s the eclectic understanding, high enough, to see the possibility of a “Semantic Web” evolving the “Pragmatic Web” to a really new and true “Knowledge Web?” Not just more of the same, but a full-fledged, benign, algorithmic computerized system, capable of eliminating the un-necessary parasitic powers, that now rule the world economies to madness. I’d suggest studying Macromouse, The Awakening of the American Mind, Paul Davidson’s massive body of academic work, or Jane D’Arista’s ideas, then maybe we’ll have a chance.

There’s no sense me re-writing it all here again, as it’s all been posted at these sites. Charles Sanders Peirce, and his relational quantification logic, is the key mind to putting together all the “Triadic Isomorphic Logic” necessary to accomplish the above…

Hey Paul Krugman___A Song___A Plea...

A Song___A Plea...

The economic and mathematical truth___Paul Davidson; http://econ.bus.utk.edu/davidson.html
The deflationary debt truth___Irving Fisher; http://fraser.stlouisfed.org/docs/meltzer/fisdeb33.pdf
The historical economic truth___Robert Skidelsky; http://www.skidelskyr.com/books/

Imagination___There’s More to `Utens’ Than First Meets the Eye…

Imagination___There’s More to `Utens’ Than First Meets the Eye…

Geithner’s ‘Dirty Little Secret’: The Entire Global Financial System is at Risk

When the Solution to the Financial Crisis becomes the Cause, by F. William Engdahl

The Realities of Understanding Capitalist Free-Trade, vs., Communist Controlled Trade, Intents and Practices…
National Security Alert #3___The Republic Destroying Democracy, Fix…

[Note], (Realize these are trading transactions turnover values. Total, possibly real/notional, values are about $54 trillion globally, a bit more than real global GNP, but then how much real GNP is, % wise, derivatives? That's the real question?)

US Treasury Secretary Tim Geithner has unveiled his long-awaited plan to put the US banking system back in order. In doing so, he has refused to tell the ‘dirty little secret’ of the present financial crisis. By refusing to do so, he is trying to save de facto bankrupt US banks that threaten to bring the entire global system down in a new more devastating phase of wealth destruction.

The Geithner Plan, his so-called Public-Private Partnership Investment Program or PPPIP, as we have noted previously is designed not to restore a healthy lending system which would funnel credit to business and consumers. Rather it is yet another intricate scheme to pour even more hundreds of billions directly to the leading banks and Wall Street firms responsible for the current mess in world credit markets without demanding they change their business model. Yet, one might say, won’t this eventually help the problem by getting the banks back to health?

Not the way the Obama Administration is proceeding. In defending his plan on US TV recently, Geithner, a protégé of Henry Kissinger who previously was CEO of the New York Federal Reserve Bank, argued that his intent was ‘not to sustain weak banks at the expense of strong.’ Yet this is precisely what the PPPIP does. The weak banks are the five largest banks in the system.

The ‘dirty little secret’ which Geithner is going to great degrees to obscure from the public is very simple. There are only at most perhaps five US banks which are the source of the toxic poison that is causing such dislocation in the world financial system. What Geithner is desperately trying to protect is that reality. The heart of the present problem and the reason ordinary loan losses as in prior bank crises are not the problem, is a variety of exotic financial derivatives, most especially so-called Credit Default Swaps.

In 2000 the Clinton Administration then-Treasury Secretary was a man named Larry Summers. Summers had just been promoted from No. 2 under Wall Street Goldman Sachs banker Robert Rubin to be No. 1 when Rubin left Washington to take up the post of Vice Chairman of Citigroup. As I describe in detail in my new book, Power of Money: The Rise and Fall of the American Century, to be released this summer, Summers convinced President Bill Clinton to sign several Republican bills into law which opened the floodgates for banks to abuse their powers. The fact that the Wall Street big banks spent some $5 billion in lobbying for these changes after 1998 was likely not lost on Clinton.

One significant law was the repeal of the 1933 Depression-era Glass-Steagall Act that prohibited mergers of commercial banks, insurance companies and brokerage firms like Merrill Lynch or Goldman Sachs. A second law backed by Treasury Secretary Summers in 2000 was an obscure but deadly important Commodity Futures Modernization Act of 2000. That law prevented the responsible US Government regulatory agency, Commodity Futures Trading Corporation (CFTC), from having any oversight over the trading of financial derivatives. The new CFMA law stipulated that so-called Over-the-Counter (OTC) derivatives like Credit Default Swaps, such as those involved in the AIG insurance disaster, (which investor Warren Buffett once called ‘weapons of mass financial destruction’), be free from Government regulation.

At the time Summers was busy opening the floodgates of financial abuse for the Wall Street Money Trust, his assistant was none other than Tim Geithner, the man who today is US Treasury Secretary. Today, Geithner’s old boss, Larry Summers, is President Obama’s chief economic adviser, as head of the White House Economic Council. To have Geithner and Summers responsible for cleaning up the financial mess is tantamount to putting the proverbial fox in to guard the henhouse.

The ‘Dirty Little Secret’

What Geithner does not want the public to understand, his ‘dirty little secret’ is that the repeal of Glass-Steagall and the passage of the Commodity Futures Modernization Act in 2000 allowed the creation of a tiny handful of banks that would virtually monopolize key parts of the global ‘off-balance sheet’ or Over-The-Counter derivatives issuance.

Today five US banks according to data in the just-released Federal Office of Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activity, hold 96% of all US bank derivatives positions in terms of nominal values, and an eye-popping 81% of the total net credit risk exposure in event of default.

The five are, in declining order of importance: JPMorgan Chase which holds a staggering $88 trillion in derivatives (€66 trillion!). Morgan Chase is followed by Bank of America with $38 trillion in derivatives, and Citibank with $32 trillion. Number four in the derivatives sweepstakes is Goldman Sachs with a ‘mere’ $30 trillion in derivatives. Number five, the merged Wells Fargo-Wachovia Bank, drops dramatically in size to $5 trillion. Number six, Britain’s HSBC Bank USA has $3.7 trillion.

After that the size of US bank exposure to these explosive off-balance-sheet unregulated derivative obligations falls off dramatically. Just to underscore the magnitude, trillion is written 1,000,000,000,000. Continuing to pour taxpayer money into these five banks without changing their operating system, is tantamount to treating an alcoholic with unlimited free booze.

The Government bailouts of AIG to over $180 billion to date has primarily gone to pay off AIG’s Credit Default Swap obligations to counterparty gamblers Goldman Sachs, Citibank, JP Morgan Chase, Bank of America, the banks who believe they are ‘too big to fail.’ In effect, these five institutions today believe they are so large that they can dictate the policy of the Federal Government. Some have called it a bankers’ coup d’etat. It definitely is not healthy.

This is Geithner’s and Wall Street’s Dirty Little Secret that they desperately try to hide because it would focus voter attention on real solutions. The Federal Government has long had laws in place to deal with insolvent banks. The FDIC places the bank into receivership, its assets and liabilities are sorted out by independent audit. The irresponsible management is purged, stockholders lose and the purged bank is eventually split into smaller units and when healthy, sold to the public. The power of the five mega banks to blackmail the entire nation would thereby be cut down to size. Ooohh. Uh Huh?

This is what Wall Street and Geithner are frantically trying to prevent. The problem is concentrated in these five large banks. The financial cancer must be isolated and contained by Federal agency in order for the host, the real economy, to return to healthy function.

This is what must be put into bankruptcy receivership, or nationalization. Every hour the Obama Administration delays that, and refuses to demand full independent government audit of the true solvency or insolvency of these five or so banks, inevitably costs to the US and to the world economy will snowball as derivatives losses explode. That is pre-programmed as worsening economic recession mean corporate bankruptcies are rising, home mortgage defaults are exploding, unemployment is shooting up. This is a situation that is deliberately being allowed to run out of (responsible Government) control by Treasury Secretary Geithner, Summers and ultimately the President, whether or not he has taken the time to grasp what is at stake.

Once the five problem banks have been put into isolation by the FDIC and the Treasury, the Administration must introduce legislation to immediately repeal the Larry Summers bank deregulation including restore Glass-Steagall and repeal the Commodity Futures Modernization Act of 2000 that allowed the present criminal abuse of the banking trust. Then serious financial reform can begin to be discussed, starting with steps to ‘federalize’ the Federal Reserve and take the power of money out of the hands of private bankers such as JP Morgan Chase, Citibank or Goldman Sachs.

F. William Engdahl is author of A Century of War: Anglo-American Oil Politics and the New World Order; and Seeds of Destruction: The Hidden Agenda of Genetic Manipulation (www.globalresearch.ca). His newest book, Full Spectrum Dominance: Totalitarian Democracy in the New World Order (Third Millennium Press) is due out at end of April. He may be reached through his website, http://www.engdahl.oilgeopolitics.net

Flying Money___“Big Strong Dollar, Make Big Weak Nation…!”

New, Important; Must read A Tale of Two Depressions, by Barry Eichengreen, Kevin O'Rourke
{New, Important} Can Future Systemic Financial Risks Be Quantified? Ergodic VS Nonergodic Stochastic Processes, by Paul Davidson

The Pragmatic Maxim___“Consider what effects, that might conceivably have practical bearings, we conceive the object of our conception to have. Then, our conception of these effects is the whole of our conception of the object.” C.S. Pierce

The Triadic Maxim___Any Idea; “Arithmetically check all possible effects, against all possible premises, and the combined results will be the total actions of the idea.” Me

“The Eclectic Ontological Geometry of Global Markets and Transactions…”

Fabius Maximus___On Cue As Ever...

Fetters of the mind blind us so that we cannot see a solution to this crisis
Fabius Maximus | Apr 1, 2009

We know so little. This is one of the major themes of this site, hence the frequent rebukes to those speaking with great confidence about things far beyond our ken — based on the available data and tested theories. In the realm of public policy that is nowhere more salient than economics. Which brings us to what might be the primary similarity between our situation today and the Great Depression.

Contents;

1.History
2.That is was; what about now?
3.Afterword and for more information

History;

Back then policy makers were bound by what economist Barry Eichengreen called “golden fetters.” For reasons too complex to discuss here, nations could not take the necessary stimulus measures until they unplugged from the gold standard. That is, going off the gold standard was a necessary (not sufficient) prerequisite for recovery. They did so fearfully, not knowing what lay beyond this step into the unknown — under the force of events.

“As a result, individual countries were able to escape the deflationary vortex only by unilaterally abandoning the gold standard and re-establishing domestic monetary stability, a process that dragged on in a halting and uncoordinated manner until France and the other Gold Bloc countries finally left gold in 1936.” — Ben Bernanke, Essays on the Great Depression (2005)

“What E&T show is that circa 1930 key decision-makers had spent so many years equating adherence to gold not just with prosperity, but with morality, decency, civilization itself, that they couldn’t even contemplate breaking with that orthodoxy - even in the face of total catastrophe.” — Paul Krugman, “What’s our gold standard?“, blogging at the New York Times, 27 March 2009 ……….”E&T” refers to ”The Gold Standard and the Great Depression“, Eichengreen and Peter Temin, June 1997

What was mysterious to them, we can see this with the clarity of hindsight. As in this graph from Brad Delong’s site, “The Earlier You Abandon the Gold Standard and Start Your New Deal, the Better“, 26 March 2009: (Check link for graph, "The Great Slump Revisited")

The Earlier You Abandon Gold Standard, and Start Your New Deal, The Better...

Paul Krugman’s blog has a similar graph showing that the gold standard constrained monetary policy.

What about now?

In 1930 mainstream economists were confident they knew what to do. Now we know that most were wrong. If this were 1930, today’s economists would know exactly what to do. But that was then; this is now. The world has changed since then. Some share the confidence of their predecessor in 1930.

{W}e know what to do and how to do it to keep the world economy out of a depression. — Brad Delong, “Are We Handcuffed by Golden Fetters?“, posted at his blog, 27 March 2009

Our leaders have implemented the conventional remedies. Over the next 6 - 9 months we will see the results (lags are long in complex modern economies). They seek to restore the status quo ante-Depression, the post-WWII financial regime. Perhaps they will be successful.

Or — might there be an equivalent set of cognitive fetters, so that we cannot see the systemic factor that must be changed to end the downturn?

Paul Krugman speculates that “the mystique of finance is playing a somewhat similar role” (i.e., like the gold standard in the 1930’s), expanding on his thoughts in “The Market Mystique“, op-ed in the New York Times, 26 March 2009.

I believe there is an obvious candidate, one similar to that of the 1930 gold standard: the US dollar as the reserve currency. This is a foundational element of the post-WWII world. Just as the US is the global hegemon, the US currency is the primary medium of trade and store of value. But that era is ending. As we move to a multi-polar world, the US can no longer maintain the twin burdens of hegmony: monetary and militarily.

We do not want to let go that role. Nor does most of the world want us to do so. Almost every nation has adapted to the current world order and fears the large, unknown changes that will follow its ending. The last such transition was 1914 - 1945; nobody enjoyed it.

The clock is running on the “developed world” — Japan, Europe, and America. All face some combination of demographic decline, bankrupt social retirement systems, and unsustainable government debt loads. A new world looms ahead. We close our eyes to this transition, hoping that it will go away — and we’ll open our eyes to the old world, shiny and new again.

Afterword — and an important note about comments to this post

This is not a post about the gold standard, and comments about its wonderfulness are off-topic and will be deleted.

Aneology___A New Isomorphic Logic

“Consider what effects that might conceivably have practical bearings you conceive the objects of your (best possible liberty)conception to have. Then, your conception of those effects is the whole of your conception of the (best and highest possible)object(a priori arithmetic liberty).” The pragmatic maxim, C.S. Peirce plus my bolded additions...

The Isomorphic Gates of Perception

“His maxim will be this: ...The elements of every concept enter into logical thought at the gate of perception and make their exit at the gate of purposive action; and whatever cannot show its passports at both those two gates is to be arrested as unauthorized by reason. " Charles Sanders Peirce

P=NP Incomplete___The Maximal Triadic Axiomatic Truths, And Un-Truths

"To develop the skill of correct thinking is in the first place to learn what you have to disregard. In order to go on, you have to know what to leave out; this is the essence of effective thinking." Kurt Godel
"Time and space are modes in which we think and not conditions in which we live." Albert Einstein
"A priori arithmetic is the greatest philosophy knowable to humanity."
“There exists no mind or machine, sufficiently powerful, to process finity and infinity, simultaneously!”___Proofs below…
“The highest probability, of the highest possibility, is the only possibility.”

Tri-Chronic Dimensional Geometric Logic, and Tri-Chronic Spatial Perception…

“Logic is rooted in the social principle.” Charles Sanders Peirce

“No man can communicate the smallest item of information to his brother-man unless they have … common familiar knowledge; where the word `familiar’ refers less to how well the object is known than the manner of knowing … Of course, two endless series of knowings are involved.” C.S. Peirce