Curt Doolittle

Category: Economics, Finance, and Political Economy

  • UKRAINE’S ECONOMY IS A MESS IMHO: Ukrainians have the Highest IQ per dollar and

    http://www.economist.com/blogs/freeexchange/2014/03/ukraine-and-russiaWHY UKRAINE’S ECONOMY IS A MESS

    IMHO: Ukrainians have the Highest IQ per dollar and best work ethic outside of the USA. An incredible piece of real estate and natural gas reserves. They are just broken from generations of peasantry, generations of communism, and a generation of economic uncertainty. Victims of a predatory post-soviet government. But they still soldier onward. (I love them),

    WHY DO THEY SUFFER?

    –“Dodgy economic policy, distaste for reform and endemic corruption have brought the country to its knees.”–

    –“Corruption and poor governance…”–

    –“The Ukrainian shadow economy is one of the biggest in the world—at around 50% of GDP, according to IMF research. Businesses operating underground tend not to pay taxes, further depriving the government of funds. And last week Ukraine’s new prime minister estimated that $37 billion had gone missing during Viktor Yanukovych’s rule.”–

    –“Protecting the currency drained the central bank’s reserves, which tumbled from a high of $40 billion in 2011 to about $12 billion today. Last month the central bank admitted defeat and let the currency go. Currency depreciation, while necessary, will be an economic headache for Ukraine in the short term. About half of its public debt is in foreign currencies: as the hrvynia loses value, Ukraine’s debt burden rises.”—

    –“The state gas company, Naftogaz, only charges consumers a quarter of the cost of importing the gas. Cheap gas discourages investment: Ukraine is one of the most energy-intensive economies in the world and domestic production has slumped by two-thirds since the 1970s.”–

    Source date (UTC): 2014-03-06 05:06:00 UTC

  • Curt, I have read this guy on and off since the 1990’s on the investment side. H

    Curt, I have read this guy on and off since the 1990’s on the investment side. His models were spot on for the end of the 2000 market, tech bust and, later, economic declines when he was at Princeton Economics. However, he went to jail in a murky case where he, along with Republic Bank, was accused by the SEC of misdeeds against the Japanese. He fought it as his own attorney (claiming Republic was blaming him for their losses) and lost and is now out. I cannot figure out now if he is a genius or completely delusional. However, I think you will enjoy this piece he just published.

    Source date (UTC): 2014-03-05 14:57:00 UTC

  • Is Social Security A Ponzi Scheme?

    Contrary to rhetoric it is, indeed, a ponzi scheme, which is defined as early entrants are paid by later entrants under the assumption that there will always be enough new entrants to pay for each person exiting. 

    It’s not insurance because Insurance works by a lot of people giving a little bit of money to an investor who invests the money at a reasonable rate of return, then pays out to some small percent of people in the event that a few of them actually need a lot of money.   That is not the case, since all of us both enter and leave.

    When social security was conceived, people didn’t live very long. It was in fact, at that time, insurance.  But as we have lived much longer, we are confronted with the problem that old people are still not very useful in the work force, and it’s hard for them to work at even small jobs as they age, and we have smaller population growth and a smaller population who must sacrifice more and more of their incomes to pay for aged people who live much longer and have very high health care costs.

    To compensate for this problem, western countries have brought in large numbers of immigrants in order to increase the number of working people, But this has in turn created cultural friction as the only people that can be brought into the country are largely the poor from the third world, who are much less productive per person than the prior generations. 

    The counter argument is that people should be forced to save, even if we redistributed money via taxation to people’s savings accounts. Then this money could be insured by the government, and people could actually plan.

    There are numerous arithmetic arguments to suggest that it is possible to perpetuate this scheme indefinitely, but they are heavily biased with assumptions. The reason is that most of our economic data starts with the postwar era, And economic data before that time, with the colonial period. And it is not certain that our country can remain competitive.

    https://www.quora.com/Is-Social-Security-a-Ponzi-scheme

  • Is Social Security A Ponzi Scheme?

    Contrary to rhetoric it is, indeed, a ponzi scheme, which is defined as early entrants are paid by later entrants under the assumption that there will always be enough new entrants to pay for each person exiting. 

    It’s not insurance because Insurance works by a lot of people giving a little bit of money to an investor who invests the money at a reasonable rate of return, then pays out to some small percent of people in the event that a few of them actually need a lot of money.   That is not the case, since all of us both enter and leave.

    When social security was conceived, people didn’t live very long. It was in fact, at that time, insurance.  But as we have lived much longer, we are confronted with the problem that old people are still not very useful in the work force, and it’s hard for them to work at even small jobs as they age, and we have smaller population growth and a smaller population who must sacrifice more and more of their incomes to pay for aged people who live much longer and have very high health care costs.

    To compensate for this problem, western countries have brought in large numbers of immigrants in order to increase the number of working people, But this has in turn created cultural friction as the only people that can be brought into the country are largely the poor from the third world, who are much less productive per person than the prior generations. 

    The counter argument is that people should be forced to save, even if we redistributed money via taxation to people’s savings accounts. Then this money could be insured by the government, and people could actually plan.

    There are numerous arithmetic arguments to suggest that it is possible to perpetuate this scheme indefinitely, but they are heavily biased with assumptions. The reason is that most of our economic data starts with the postwar era, And economic data before that time, with the colonial period. And it is not certain that our country can remain competitive.

    https://www.quora.com/Is-Social-Security-a-Ponzi-scheme

  • CHARLES HUGH SMITH ON THE NET EFFECT: RUSSIA’S LOSS OF MARKET (Smith is one of t

    CHARLES HUGH SMITH ON THE NET EFFECT: RUSSIA’S LOSS OF MARKET

    (Smith is one of the few analysts I look up to. He finds the demographic and economic reasons for everything.)

    “The net effect will be the same as that of china’s strategic abuse of rare-earth metals, (and russias 2009 abuse of gas markets): rare earth metals are not rare or from china now, and the rest of the world has developed alternatives to Russian oil and gas.”

    The world does not operate by empires any longer. It operates by economic cooperation and coordination.

    I want a strong Russia. I’d love a new Russian empire. But only if it suppresses corruption as a means of ENTICING membership, rather than using VIOLENCE and DECEPTION as a means of forcing it.

    (I’m telling you. Putin was f_king STUPID as hell. )

    The only reason Russia is not as poor as Ukraine is oil and gas. An the producer just killed it’s market. Set us back 50 freaking years. What a moron. For nothing. FOr nothing at all. All he had to be was HONEST and say “hey, we got a lot here, and we’re not losing it” so please tolerate our strategic interests not being taken by NATO.”

    Apologize profusely. But just say the truth. It would have been FINE. He’d have INCREASED his world political capital rather than ruining all he’s worked for.

    At least he restored 10% of the value of the Ukrainian currency.

    Source date (UTC): 2014-03-04 14:58:00 UTC

  • THE FUTURE OF ECONOMICS AND COOPERATIVE SCIENCE (interesting) I doubt that econo

    THE FUTURE OF ECONOMICS AND COOPERATIVE SCIENCE

    (interesting)

    I doubt that economics will ever evolve to be predictive, since we would adapt to any prediction. I do not doubt that economics will evolve to be almost universally descriptive. or at least sufficiently so that further inquiry won’t provide additional knowledge about mankind and human behavior.

    I **DO** believe that we can construct a science of COOPERATION instead of a science of ‘economics’. I think this categorization of cooperation as economic has taken root, and it may be impossible to fix at this point. However, the study of economic activity is the use of easily recorded economic data to capture the demonstrated behavior and preferences of human beings better than any other form of test can possibly do.

    But the science we are constructing through economics, cognitive science, and experimental psychology, is the the science of COOPERATION.

    That science, for all intents and purposes has yielded, and will yield, only one fundamental set of principles. And that single fundamental set of principles will undoubtably be categorized as what we USED to call, “POLITICAL ECONOMY”.

    Because all human cooperation requires institutions that facilitate organization of invention, production, distribution and consumption by voluntary means, while at the same time prohibiting free riding in all it’s forms: criminal, unethical, immoral, conspiratorial and conquest.

    As such, the science of cooperation, including:

    a) The formal logic of human organization (reproduction/family/production)

    b) The formal logic of ethics (voluntary exchange)

    c) The formal logic of cooperation ( law, contract)

    d) The formal logic of institutions. (commons via extra-market exchange)

    The major shifts will be:

    a) the abandonment of universalism and the universalizabiltiy of morals.

    b) abandonment of majoritarianism in favor of government of exchanges.

    c) The adoption of the Austrian theory of the business cycle as preservation of the integrity of monetary information.

    d) The adoption of Propertarian constraints on political argument and action.

    d) The segmentation of economics into the study of policy across specific time spectra.

    e) Abandonment of employment as the objective of policy, and instead the emphasis on the productivity of human capital, and the development of employment into a preference for increasing one’s standard of living.

    f) Abandonment of open immigration.

    g) Adoption of Self Determination as a human right.

    I do not know if we can obtain secession without using violence. However, we can popularize and probably enforce nullification such that secession is not as necessary as it is today.

    (More to come)

    Source date (UTC): 2014-03-04 11:57:00 UTC

  • MONEY DRIVES OUT GOOD

    http://www.washingtontimes.com/news/2013/nov/13/bill-would-outlaw-us-dollar-russia/BAD MONEY DRIVES OUT GOOD

    Source date (UTC): 2014-03-03 12:41:00 UTC

  • FAREWELL TO ALMS – PROSPERITY FOR ALL REQUIRES THE SUPPRESSION OF THE BREEDING O

    http://www.amazon.com/Farewell-Alms-Economic-History-Princeton-ebook/dp/B001EQ4OLA/ref=la_B001I9OM4W_1_2?s=books&ie=UTF8&qid=1393721299&sr=1-2A FAREWELL TO ALMS – PROSPERITY FOR ALL REQUIRES THE SUPPRESSION OF THE BREEDING OF THE UNDERCLASSES.

    As the germans keep demonstrating, the quality of your human capital determines your quality of life. Period. End. Of. Story.

    We are not equal. And increasingly, the bottom is dead weight on mankind, and the planet.

    Deal with it.

    Progressivism is suicide.

    Source date (UTC): 2014-03-01 19:58:00 UTC

  • DOES THE SKYSCRAPER HYPOTHESIS OF ECONOMICS APPLY TO THE WARSHIP AND WAR? I bet

    DOES THE SKYSCRAPER HYPOTHESIS OF ECONOMICS APPLY TO THE WARSHIP AND WAR?

    I bet it does. In fact I think Im sure it does.

    World’s largest aircraft unveiled and hailed ‘game changer’ – Telegraph http://www.telegraph.co.uk/earth/greenertransport/10667081/Worlds-largest-aircraft-unveiled-and-hailed-game-changer.html

    Source date (UTC): 2014-03-01 10:10:00 UTC

  • ECONOMISTS IN CHINA –“For most academics not in China, it is difficult for them

    http://marginalrevolution.com/marginalrevolution/2014/02/the-life-of-a-western-economist-in-china.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+marginalrevolution%2Ffeed+%28Marginal+Revolution%29#sthash.BTYhY3GZ.dpufWESTERN ECONOMISTS IN CHINA

    –“For most academics not in China, it is difficult for them to understand the level of scrutiny and monitoring we face on regular basis. Most professors have students assigned to monitor them and security officials approaching many people to report on our behavior. Our email is widely acknowledged, even by students, as being read. While there are some overt obvious forms of intimidation as I have detailed, much of it is also the “deal you can’t refuse” variety. There are no overt threats but the message is clear.”–

    See more at:

    Source date (UTC): 2014-02-21 09:18:00 UTC