Zero Interest Math

This post will cover a lot, but in a shallow way, because I think a lot of things are connected.  Each idea discussed involves a deeper line of thinking that I could explain in depth. The relativity of interest and inflation I was tempted to say that price indexes are "arbitrary", in the sense that you can choose any one. But the term arbitrary is not quite right.  Price indexes are relative.  If you switch from one index to another, you get the exact same information, it is only framed differently.  This is exactly how classical Newtonian relativity works, you can use any frame of reference, so long as you transform information properly between them.  Calculations can be done in any frame, for the most part. But given our human experiences are what we use to understand and interpret the world, it helps to have a consistent frame of reference.  Sometimes things can be so muddied that this is impossible. So the point here is, calling something interest or inflation is complete

 Every increase in the policy rate must be followed by a future decrease, or the rate must remain elevated.  So if one believes that rate hikes decrease inflation, and rate cuts increase inflation, then you are essentially relying on "sticky deflation" for rate hikes to have a net deflationary effect over the cycle. Most of the literature on interest rate policy refers to "shocks", as in the effect of a change in policy rates on inflation or deflation.  I am aware of very little research into the effects of the rate level itself, on inflation or deflation.  On this question I am not even clear, whether mainstream economists believe an stable elevated rate is inflationary or deflationary. To believe a stable elevated rate is deflationary, appears to contradict the fisher equation.  As for the fisher equation, I believe that it has the flaw, that your measure of inflation is flexible(although not arbitrary), so it becomes impossible to distinguish in the general case

Econ101: Supply and Demand Econ101 presents a set of foundational notions about prices and markets, namely the supply and demand framework, which makes a lot of assumptions, some of them hard to justify. This leads to an intellectually fragile specialized analytical framework that does not allow for general or abstract thinking.  While it is useful to think about pricing and bidding processes in the context of opposing interests of buyers and sellers, supply and demand should be considered an emergent phenomenon, and not a foundational one.  Supply and demand emerges after property, markets, government, and infrastructure are established. The conditions leading to smooth and opposing price curves are complex, and supply and demand does not equip one to think very basically about how these opposing price curves emerge. Meanwhile, in a typical second year computer science course, a comparable topic on resource management is covered, and that is the limiting resource costs of algorithms. 

MMT is Narrow in Scope I've been discussing on twitter of late, how I would like to move past the "MMT" label, in discussing economics.  The problem is not that MMT is wrong or flawed, but that it is only concerned with a specific set of issues related to public finance.  Furthermore, it relies on a somewhat simplified "money story", which I believe is useful for understanding how money works, but which is ill suited as a more general framework to understand political relations and economic development. The problem with the MMT money story, is that it starts with taxes, and not the issue of "what is property?".  I think this issue of what is property is more important politically and socially, but talking about money in terms of taxes is the quickest way to get an idea of what money is, and what function it serves.  So it is not that I find the MMT money story flawed, on the contrary, only that it is limited by its focus on money.  If your goal is expl

A quick thought experiment Imagine the worst investor/capitalist  you can think of.  This person will fall for any scam or ruse, unless there is an even worse one just around the corner.  Any money he has is an open invitation to a conman or grifter.  Perhaps he has a rich uncle, perhaps he just got lucky gambling.  Either way, things do not look good for this person. Much better than trying to invest his money, this person would be better off just holding on to it. But over the long run, such a person will not stay in "the game".  They will end up like any other tom or harry, working for a wage, or collecting some benefit. If that is one end of the spectrum, then what does the other end look like? And what is in the middle? Somewhere in the middle between the worst investor and the most fortunate, you have someone who is miserable but competent. They can just barely hack it and stay in the game.  For these people one misstep could send them in a spiral that they never recove

Much of employment is merely laundering your time and free energy into a work history... so that you can find more amenable employment. There are more different jobs than ever before The nature of employment and work has changed, and this is one reason why humans have to shuttle themselves incessantly across our cities and communities.  Specialization is definitely a boon, but we live in a world, where not only individuals specialize, but communities as well.   The needs of humans are relatively simple, and have been unchanged over thousands of years: food, shelter, warmth, and some kind of work or effort to be involved it.  Without something engaging to do, our abilities atrophy, both mental and physical.  This is perhaps one of the most important aspects of work and having a job, for your own personal development.  We could all take online courses and go to the gym every day, but making your labor a part of human development saves times and helps you focus. A job is never going to be