Notes January 20, 2008

January 20, 2008 § Leave a comment

Two article to follow up on.

Ben Bernanke – Federal Reserve Bank – Interest Rates – United States Economy – Recessions – Bank

Weak on what the Fed IS, able tt create money that earns interest – form -instead of the US government printing the money, which the Constitution allows.

and Analog VLSI Systems Lab, ISL, Stanford see “this copy”on the illegitimacy of arithmetic rigor in economics, since it can’t be done.


Crooked Timber » » Robust Action in the Topkapi Palace, good discussion of the “intent” of the Bush administration.

and Easily Distracted  DiGRA paper

The concept of “emergence” and associated ideas about autonomous agents, complex adaptive systems, artificial life and complexity theory are important underpinnings in two discrete academic projects, work on “artificial societies” on one hand and the study of “virtual worlds” on the other. The two research programs seemingly share a good deal in common but presently have almost no contact or overlap with each other. This is partly because the coalescing of both groups of researchers is relatively recent, partly because the two groups are coming out of radically different disciplinary histories and contexts, but also partly because the two groups have so far have different experiences of research and the place of concepts like emergence within it. In this paper, I argue that both groups potentially have a great deal to learn from one another.

These, artificial worlds and emergence, will be important in GardenWorld, provided energy remains to run computer networks. I was in a discussion yesterday that raised good questions about the future of computing under very high energy costs and pollution problems.

And in track of an idea (you need to follow the links to get at the originals. I am interested just in the idea that organizational communication is not very good.)

Easily Distracted » Blog Archive » One-A-Day: John Lewis Gaddis, The Cold War: A New History: [I]n Zimbabwe… there is first a disconnect between what imperial leaders did and what actors on the colonial periphery did, and that the actions of the latter sometimes drove the former, and that decisions made at either (or both) levels often were internally contradictory, improvisational as well as pre-determined, based on fragmentary or patchwork kinds of knowledge, and frequently opaque to the actors themselves….

(Brad) When Lloyd Bentsen became Secretary of the U.S. Treasury, he scattered his–loyal–senate staff throughout the Treasury Department at all levels, and used them as a second, separate, parallel web of communication in order to gauge the distortions that were being introduced into the paper that crossed his desk by the game of bureaucratic telephone. When Kangxi became Emperor of China, he scattered the–loyal–hereditary bondsmen of his Manchu clan throughout the imperial Chinese bureaucracy at all levels, with instructions to write to him regularly through secret channels to tell him what was really going on, as a second, separate, parallel web of communication so that he could gauge who was telling him what he needed to know and who was telling him what they thought he wanted to hear.

On the fed Federal Reserve System – Wikipedia, the free encyclopedia

Progressive Democrats instead favored a reserve system owned and operated by the government and out of control of the “money trust”, ending Wall Street’s control of American currency supply.[5] Conservative Democrats fought for a privately owned, yet decentralized, reserve system, which would still be free of Wall Street’s control

Seen as a “Money Trust” plan, the Aldrich Plan was opposed by the Democratic Party as was stated in its 1912 campaign platform, but the platform also supported a revision of banking laws that would protect the public from financial panics and “the domination of what is known as the “Money Trust.” During the 1912 election the Democractic Party took control of the Presidency and both chambers of Congress. The newly elected President, Woodrow Wilson, was committed to banking and currency reform, but it took a great deal of his political influence to get an acceptable plan passed as the Federal Reserve Act in 1913. [6] Wilson thought the Aldrich plan was perhaps “60-70% correct”.[4] When Virginia Rep. Carter Glass, chairman of the House Committee on Banking and Currency, presented his bill to President-elect Wilson, Wilson said that the plan must be amended to contain a Federal Reserve Board appointed by the executive branch to maintain control over the bankers.[7]

However, the former point was also made by Rep. Charles Lindbergh Sr., the most vocal opponent of the bill and a member of the House Banking and Currency Committee, who on the day before the Federal Reserve Act was passed told Congress:

“This is the Aldrich bill in disguise…The worst legislative crime of the ages is perpetrated by this banking bill…The banks have been granted the special privilege of distributing the money, and they charge as much as they wish…This is the strangest, most dangerous advantage ever placed in the hands of a special privilege class by any Government that ever existed. The system is private…There should be no legal tender other than that issued by the government…The People are the Government. Therefore the Government should, as the Constitution provides, regulate the value of money.” (Congressional Record, 1913-12-22)

Bryan and the agrarians wanted a government-owned central bank which could print paper money whenever Congress wanted, and thought the plan gave bankers too much power to print the government’s currency.Critics of the time (later joined by economist Milton Friedman) suggested that Glass’s legislation was almost entirely based on the Aldrich Plan that had been derided as giving too much power to elite bankers.

The other main tool available to the Open Market Desk is the outright transaction. In an outright purchase, the Fed buys Treasury securities from primary dealers and finances the purchases by depositing newly created money in the dealer’s reserve account at the Fed. Since this operation does not unwind at the end of a set period, the resulting growth in the monetary supply is permanent. That is to say that the principal growth is permanent but a yield on maturity of the security is still charged—this is usually at 12 – 18 months on outright transaction

But, this is obscure, though it sounds clear and clean. To investigate.

Total capital represents the profit the Fed has earned which comes mostly from the assets they purchase with the deposit and note liabilities they create. Excess capital is then turned over to the Treasury Department and Congress to be included into the Federal Budget as “Miscellaneous Revenue”.

Friedman also believed that, ideally, the issuing power of money should rest with the Government instead of private banks issuing money through fractional reserve lending.[41]

Congressman Ron Paul (ranking member of the House Subcommittee on Domestic Monetary Policy), for example, argues that: “The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.”[53]

One major area of criticism focuses on the failure of the Federal Reserve System to stop inflation; this is seen as a failure of the Fed’s legislatively mandated duty[54] to maintain stable prices. These critics focus particularly on inflation’s effects on wages, since workers are hurt if their wages do not keep up with inflation.[55] They point out that wages, as adjusted for inflation, or real wages, have dropped in the past. [56] But other economists argue that the Fed is too much focused on inflation, which is effectively a contractionary policy that keeps the unemployment rate too high and suppresses wages, as a result.

And, on bureucracy JSTOR American Journal of Sociology Vol. 98, No. 6, p. 1259


This concept of robust action is one in which the actors at the center of the network never want to disclose their absolute interests and desires, because this would limit their options. Instead, they prefer to make others disclose their desires. Crucial for maintaining discretion is not to pursue specific goals, for:

“in nasty strategic games like Florence or chess, positional play is the maneuvering of opponents into the forced clarification of their (but not your) tactical lines of action. Locked-in commitment to lines of action, and thence to goals, is the product not of individual choice but at least as much of others’ successful “ecological control” over you.” (Padgett and Ansell, p. 1264)

About US casualties. Given this, think of brain injuries among Iraq civilians.

On the Chris Matthews Show this morning, Time magazine Managing Editor Richard Stengel discussed a new Pentagon report that says “1 in 5 American servicemen and women who have been in Iraq are coming back with brain injuries.” Stengel called it the “real toll” of the war, adding that “the legacy of that will last all of our lifetimes and it’s incalculable.”

In total, according to Stengel, “more than 250,000 people” are affected by “mild traumatic brain injuries” sustained in Iraq.

Iraq from Juan Cole

Andrew Bacevich eviscerates the Iraq War party with this passionate and clear-sighted essay on ‘the Surge to Nowhere’ in WaPo. He points out that the real motivation behind last year’s troop escalation was to avoid popular outrage building in the US electorate to the point where the troops were pulled out. He observes that the argument for the ‘success’ of the ‘surge’ is purely a tactical one. When viewed from the vantage point of grand strategy, the Iraq War is as much a failure as it has always been.

Poem: “The Jumblies” by Edward Lear, Public Domain.
The Jumblies

They went to sea in a Sieve, they did,
   In a Sieve they went to sea:
In spite of all their friends could say,
On a winter’s morn, on a stormy day,
   In a Sieve they went to sea!
And when the Sieve turned round and round,
And every one cried, “You’ll all be drowned!”
They called aloud, “Our Sieve ain’t big,
But we don’t care a button! we don’t care a fig!
   In a Sieve we’ll go to sea!”

Sounds like Bushco.

On situational learning

Situated cognition is a movement in cognitive psychology which derives from pragmatism, Gibsonian ecological psychology, ethnomethodology, the theories of Vygotsky (activity theory) and the writings of Heidegger. However, the key impetus of its development was work done in the late 1980s in educational psychology. Empirical work on how children and young people learned showed that traditional cognitivist ‘rule bound’ approaches were inadequate to describe how learning actually took place in the real world. Instead, it was suggested that learning was “situated”: that is, it always took place in a specific context (cf contextualism). This is similar to the view of “situated activity” proposed by Lucy Suchman, “social context” proposed by Giuseppe Mantovani, and “Situated Learning” proposed by Jean Lave and Etienne Wenger.

Situated cognition emphasises studies of human behaviour that have ‘ecological validity’: that is, which take place in real situations (i.e. outside the laboratory). In more traditional laboratory studies of (for example) how people behave in the workplace, real-world complications such as personal interruptions, office politics, scheduling constraints, private agendas and so forth, are generally ignored, even though these necessarily change the nature of the activity. Situated cognition attempts to integrate these complexities into its analytic framework.

Recently, situated cognition theorists have been pushing for more authentic research. They argue that situating their students and research participants in authentic situations will help them achieve better research results and ultimately enhance their understanding of educational theories.

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You are currently reading Notes January 20, 2008 at Reflections on GardenWorld Politics Douglass Carmichael.


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