Would a byproduct of this systemmatic void be the lack of vehicle that doesn’t run on fuel? Surely we’ve got the brainpower to create something, yet perverse incentives, or lack there of, have prevented us from doing so.

Though, here: “The elephant that is not in the room is a financial system. By a financial system, I don’t mean the tottering cartel of banks and insurers loudly sucking newly printed cash into “collateral postings” and “deleveragings” and other meaningless nonactivities. That is no financial system at all. It is an ecology of intestines and tapeworms, tubes through which dollars flow and are skimmed en route to destinations about which the tripe-creatures have little interest or concern.

No, a financial system would be forward-looking. A financial system would be interested in the world, rather than fascinated by the patterns that formed behind its own mathematical eyelids. A financial system would hunger for information. It would leave no human preference overlooked and no technological possibility unconsidered. A financial system would embrace us all, would want to learn from us all. It would not be something external, something outsourced to specialists in London or Manhattan. It would want “savers” to express what they plan to do, how they hope to live, rather than offering generic claims on money along a disembodied spectrum of “risk”. It would thirst for proposals, ideas, business plans designed to meet the preferences thus expressed, or to achieve possibilities not widely considered. A financial system would be creative. No stock exchange could contain the vast and multifarious tapestry of investable ideas a financial system would educe. A financial system would offer us opportunities to invest not in distant opportunities where we are disadvantaged, but in projects that are informationally, if not physically, near to us. A financial system would be ruthless. It would allow us to have a voice in the most important decision we collectively make, but would force us each to bear the costs of our errors.

We simply do not have such a system. We don’t have anything remotely like such a system.”

I think it would be very helpful if he split his terms.

towit, with this: “The elephant that is not in the room is a financial system. By a financial system, I don’t mean the tottering cartel of banks and insurers loudly sucking newly printed cash into “collateral postings” and “deleveragings” and other meaningless nonactivities. That is no financial system at all. It is an ecology of intestines and tapeworms, tubes through which dollars flow and are skimmed en route to destinations about which the tripe-creatures have little interest or concern.”

He is, in Fact, describing the Financial System/Schema we have in place, currently. As opposed to: ” That is no financial system at all.” Worse, this: “an ecology of intestines and tapeworms, tubes through which dollars flow and are skimmed en route to destinations about which the tripe-creatures have little interest or concern.”, is The Goal of the Creature.

Here: “No, a financial system would be forward-looking. A financial system would be interested in the world, rather than fascinated by the patterns that formed behind its own mathematical eyelids. A financial system would hunger for information…” Contra to a Financial System, he is describing a functioning Economy/Economic System.

We lose our way when we conflate Finance and Economics. For, where ever found, alone, Finance, is severing the thinking head of Economics.

Past that, as I said, this was a fine post, I hope that Waldman, in the Future, discerns, and expounds upon, the distinction..

I thought at first that you wrote this. You still rock, but Steve Waldman kicks ass. Thanks for sharing.

That is hands down, the most poignant, thought provoking post that I have read on your blog. Too bad it was so hard for me to find… I’m just now digging through the new tabs. I hope the commentators come back, because its posts like this one that keep us fulfilled and engaged with each other, and the site.

I have a few ideas for government spending a la New Deal that I suppose could do alot for our productivity and enhancement as a country:

1. Revitalizing the Railroad system. Use existing tracks primarily for freight. Build a new magnetic levitation rail system for coast to coast travel, beginning in densely populated areas like the North East, and then between major cities, ie: LA to SF, NY to DC, ATL to MIA, CHI to STL… We need hi speed trains in this country!!!

2. Drastic enhancements to existing automobile transportation infrastructure: The interstate Highway system, Bridges, Tunnels, ensuring that car traffic flows in major urban areas are efficient, and not conducive to sitting in a car in traffic for 90 minutes a day going from suburbs to cities.

3. A complete renaissance of the agricultural system. Give farmers incentives to adopt smaller scale, organic, sustainable agriculture in place of mass production farming by dumping a shit ton of fertilizer on the ground year after year. Encourage people to be farmers, and make it possible for them to make an honest living doing so. Current agricultural farm subsidies are ridiculous and inept.

4. Revitalize the trades. Invest in the trades. People should be proud to be carpenters, electricians, masons, mechanics, etc. The trades should not be looked upon as some default you do if you didnt go to college or do well in high school. We should have a post high school “college” system for the trades just like we do for everything else.

5. Invest in financial education… IN SCHOOL from elementary to high school. Its fucking ridiculous that kids in college receive credit card apps in the mail before they even know how to write a check… let alone balancing an account. Every high school graduate should be able to tell you what the difference is between an asset and a liability, know the basics of accounting, and be prepared to maintain their own investments, be they stocks, bonds, or real estate.

6. Invest in clean tech. Period. Windfarms, Solarfarms, Tidal Power, Geothermal, CELLULOSIC ethanol… We need it all, and we need the jobs that widespread implementation of clean tech will bring. We need to fuse the technology with the grid, to ensure that power is captured and utilized as efficiently as possible.

I’ll cut it there for now and see what others have to say.

Regards,
TDL

I take this to mean that Krugman will soon be calling for ending the Fed? No?

Frank Shostak does a good job of explaining why more Keynesianism at a time when Keynesianism has failed, is clearly the wrong path:

http://mises.org/story/3169