Friday, December 09, 2005

Global imbalances on a snowy day

It's a big snow day here in the Northeast. The kids are home and I'm on duty to make sure nobody kills each other.

But you don't want to know about domestic life at the Glut house. You want to know what's next for the global economy. On that very topic, I am currently digesting a very interesting (and mercifully short!) paper by Ricardo Hausmann and Federico Sturzenegger on the US current account deficit titled "U.S. and global imbalances: Can dark matter prevent a big bang?".

Their argument is especially interesting to me not so much because they poo-poo folks like Brad Setser and Maurice Obstfeld (with whom I largely agree) on global imbalances. I am more interested in their possible contribution to an explanation of how world cities -- London and New York especially, but many others besides -- manage, promote and sustain dramatic and increasingly unequal exchange between themselves and the rest of the world.

So that's what I'm thinking about on this snowy day somewhere in America. If you've read the piece, I'm keen to hear what you think. I'll be pondering it today while I dig out the car and shovel my walk.

83 Comments:

At 3:56 PM, Blogger mai_neh said...

I'm 38 years old. I earn nearly $100,000 per year. Until recently, my balance sheet showed my net worth to be negative. My debts, including student loans and car loan, exceeded my assets. Looking only at my balance sheet, you'd think I was poor, in danger of bankruptcy. Looking only at my income statement, you'd think I was upper-middle class.

As a going concern, I'm worth $100,000 per year. At a 5% interest rate, you'd need $2,000,000 of capital to generate as much income as I do. I submit to you that as long as I'm alive, my body & brain are worth about $2,000,000 ... but no CPA looking at my situation would tell me I'm a millionaire.

If we still tolerated slavery, we'd have a market-based way to measure my "going concern" value, by putting me up for bids on E-Bay ;-) But as a society of "free" people, we forget to value ourselves as capital when we look at our personal balance sheets

 
At 4:01 PM, Blogger frank said...

"In short, the US is a net provider of knowledge, liquidity, and insurance."

I just read the article and this is what I take away as the executive summary: The current system for measuring capital flows makes the US's financial position look worse than it is. I think there has to be at least some truth to this proposition or the dollar would have collapsed already.

The one concrete fact they give is the claim that the US earns a stable net 300bil on its foreign investment, you have argued that this number is dropping fast IIRC, so I'd be interested in a second look at that.

The example they use of Euro disney doesn't really show what they think it does, since not all the transactions go that way: i.e. if a European company sells bonds at 5% in order to build something over here that earns 20% the current accounting system would "understate" the value of the investment in exactly the same way the paper's authors claim US investments are understated.

Of the three factors they claim support the existance of dark matter two; liquidity and insurance are just another way of saying people prefer the dollar because people prefer the dollar.

Knowledge is important, and perhaps so far the US's advantage in knowledge has been stable, but I don't see how that can continue in the face of outsourcing.

 
At 6:41 PM, Anonymous Anonymous said...

Uh, here's the thing 'bout global immmmbalances in a system driven by thuh nexus of uh Federal Reeeeserve liquidity hegemony and uh ohl oleeegompoly and other assorted oleeeegopolies. Them imbalances yer always uh hand wringin' 'bout (and fairly so ah b'lieves), whah them imbalances kin go on purt near as long as the exploited cain't fahnd no ways tuh create themselves ohl bourses to drive the pricin' of ohl off'n the dollar and into some kinda more heterogeeeeneous currency pricin' mecheeenism. that be whah them neeeeocons be spillin' blood over in "the eyeraq"; and that be a quaint ol' way uh reeeeferrin' tuh thuh poor folk ol' aristocratic winnie churchill, bomber harris and that ol'gal (what built the british muuuuuseum in Baghdad, when she warn't uh intriguin' with winnie and bomber) strung tuhgither to try tuh make sure thuh west could control the ohl...at a fair price, don't ya know.

anyhows, ewe can make a fella pay most anythin' if'n ya got somethin' he cain't live without. wah, ah reckon ewe can make him buy an immmmbalance of debt instruuuments issued by the Fedeeeral Reeeeserve if'n you can turn off his ohl, er his grain (that's an oleeeegopoly, too, some even calls that uh cartel, but whah quibble over seeeemantics anyway), er what have ewe. general, its just uh fact uh life, like supply and demand balancin', and the principle of substeeetution and so forth. if'n ah kin starves ewe tuh death, er freeze ya tuh death, wah ewe'll quit uh makin' rational substeeeetution choices about supply alternatives (mostly cuz there ain't none) and ya say, wayel, ah gotta get on board this here immmmbalance soze ah kin eat and hep it get even more immmmbalanced. power tuh thuh imbalanced, so tuh speak. does ya sees mah meanin' here, General?

Ever things completely immmmmbalanced, General. And ah knows sooner er later its all gonna come into some other kinda immmmmbalance. What ah cain't say is: whens the instituuuuutions and the corruptions and the horse garglin' disinformation gonna change to allow that immmmbalance to shift into the next immmmmbalance.

See, General, if'n ewe look back over the history of any good or service, ewe will always find that imbalance is the norm. Now sometimes immmmbalance favors ewe and some times not, but they is always immmmmbalance. And sometimes that good er service gets traded in a market, er uh subsidized market, er uh price controlled market, er its price is set by uh price czar, er some oleeegarchs corner supply with an oleeegopoly and hire some highly educated stooge tuh set price in uh way that maximizes the likely hood that the oleeeegopoly is persists and the oleeeegopolist gits the most he kin. now there's uh curve ya don't read a whole lot about in economics text books...the curve what deeeeelineates just how fer uh highly educated manager will go tuh please his oleeeegarch that put him there and how far that highly educated manager is willing to pervert the system tuh enrich hisssself. probably not many grants fer that kinda research ah reckon, since the oleeeeegarchs be fundin' most of thuh grants. But ah's digresssin' ain't I? And sounds like sour grapes tuh boot, soze ah'll stop and git back tuh muh main thrust.

Sometimes immmmmbalance is AYcute. Some times it are not. But thuh only time imbalance is in balance is durin' thuh time it is on the way tuh thuh next imbalance. do ya catch mah meanin'?

General, what we got here is a failure tuh insteeeetute (both the writ and the not writ ones) tuh avoid AYcute immmmbalances we been seein' fer along time. And mah apologies fer uh kinda rippin' off "Cool Hand Luke" there. See it ain't that we ain't been insteeeetuin' enough, rather its the kinda insteeetuin' we been uh doin' that be producin' alot of this immmmmbalancin'. Ah means what else would a feller expect when the agents of oleeegopolies and liquidity hegemonds (hoooweee that was uh big word) has been uh writin' most of the international finance and trade insteeetutions fer the last quarter of uh century at least (probably since god created human bein's, but ah don't like tuh be uh pessimist). Ah mean the last quarter of uh century of insteeetutin' is like havin' only the owners of the five biggest NFL franchises write all the dang rules of football fer ownin', draftin', and coachin and playin'. Now if we done that, whah we'd have no balance at all in thuh NFL. Capeeeechie? None. Wayel, that's what we got here in world finance and trade insteeetutin' goin' on. Shuuuute, the boys doin' the insteeetutin' is from such narrow backgrounds (and from such few sugar daddies) and is so danged inbred that if'n they could interbreed, wah, ah reckon they'd all give birth tuh mutants ever danged time. ain't no ecological diiiversity among'em. Bilderbuggers some folks calls 'em. Tri-lateralists they gets called too. Shuuuuute, most of 'em's in both clubs. And their epistemic professionals (hoooweee that's another big mouthful), whah, they's largely drinkin' outta thuh same still, too. Mah point here is this: economics ain't rocket science even when they try tuh make it seem like it is. There are a lotta folks around what could think sensible about economics. These oleeeegarchs and their epistemic workers is all the time tryin' tuh say that we needs tuh leave behind sweet, good ol' representative gubmint, cuz the plebes is too dumbed to unnnerstand things. now does that sound like a car sales man sellin' a lemon to uh ordinary Joe er what? Actually, what it really reminds me of is certain old church leaders quite a time back what told their followers,
"we are the only ones who can talk to god. you let us tell you what he says and means." whah, after awhile, them preachers got so carried away with the scam that they started tuh sayin' they actually was god on earth. Reeeeediculous, eh? But how different are it really when that ol'jazz musician and disciple of that frustrated ol' Ayn Rand, uh, Allie Greenspan, speaks uh bunch uh mumbo jumbo nobody unnnerstands. Heck fahr, even the book larned economic players cain't figure out all the soft shoein' he passes off as economic observations. Whah don't ol'Allie just sit in congress and say all his nonsense in Latin, er, Pig Latin, er some other such foreign tongue and ever once in awhile say, "raising rates"? And now the next economic pope, er fed chairman (and ah mean no disrespect to Catholicism, which ah thinks is a fine religion in ever day practice) is going to be Benjie Bernanke. It's silly really, but the folks he works for got control uh the nexus of liquidity hegemony and necessary goods oleeegopolies, soze we gots to pays attention to drivel like its some kinda encyclical from on high, else we might not get to eat tomorrow. Oh well...

Ah'll be still a spell now, General, cuz after all, ah is only a corporal, and that is lowerin' a snake in the grand canyon in this man's economic army. we are an army, ya know, that don't ya, General? The economy done become uh battle field along time ago. All these fellers talks about is economic warfares strateeegies dressed up as egg head economic talk. markets is just little peaceful temporary bivouacs till the next clique with a bigger gun and uh more powerfuller hold on the nexus among liquidity hegemony and necessary goods oleeeegopolies gets tuh feelin' his oats and wants tuh make us bow down to his immmmmbalances. sad, but apparently true under gods heaven. wish it warn't, but seems it is.

Oh, General, what're we gonnna doooooo?

Sincerely,

Corporal Eustice Glutt
(at your service as always)

 
At 7:07 PM, Anonymous knzn said...

Frank, I think you’re a bit too hard on the authors: “The example they use of EuroDisney doesn't really show what they think it does, since not all the transactions go that way” Of course one example doesn’t show anything, but I’m almost certain that a substantial majority of transactions do go that way. (I confess I’m not up to the task of finding data to support this view right now.)

“Of the three factors they claim support the existence of dark matter…” I think you’re missing the point here. If their statistics about net foreign income are correct, then dark matter exists by definition. The question is what the dark matter is. Americans have been earning more on their foreign assets than foreigners do on US assets. The authors suggest some reasons. They may be the wrong reasons, but there must be reasons. Their reasons sound plausible, and I’m inclined to take them as working hypotheses unless someone comes up with a better idea.

“liquidity and insurance are just another way of saying people prefer the dollar because people prefer the dollar” You may be right about liquidity, since there is no particularly good reason to prefer the dollar to other large-economy currencies for transaction purposes. But insurance is a different story. It’s not arbitrary to prefer US debt to that of emerging markets: the US has and long a excellent (though not perfect, in real terms) record of paying its debts, and the emerging markets don’t. Anyhow emerging market debt is only one example. The same argument would apply, for example, to equity positions and FDI. In general, Americans are borrowing and investing in risky assets and being compensated for assuming that risk.

I am frustrated, however, by the authors’ lack of quantitative data about the sources of dark matter. I’m convinced that the 3 sources they identify do exist, but I’m not convinced that those are the only major sources, and I have little idea about their relative importance.

 
At 11:47 PM, Blogger frank said...

knzn- You make some good points. Of the three factors they claim support the existence of dark matter…” I knew I phrased that badly, causes, forms it takes. I'm still not sure how to say it.

On insurance you may be missing the point, if people start preferring the dollar a bit less, the fall in the dollar would end up making it a much more dangerous bet than third world debt. Our financial position is already worse than that of many third world countries which proved to be bad bets. (ie they defaulted)

There is no risk of a default but I am not convinced people are adequately pricing in the likelyhood of devaluation.

 
At 12:27 AM, Anonymous Anonymous said...

Dear Frank,

Of course it makes it all look worsen it is; that's the whole danged idea. If'n ya don't scare folks consistent like, how else er ya gonna get a buncha regular folk to vote like a bunch a scared jack rabbits for the policies of the very coyotes that wants tuh eat'em? Economic numbers and the economic models used tuh interpret'em ain't got no historical record uh bein' unbiased at no time, near as i've found. wah, you take ol' Alfie Marshall, you know, one of the fellers Jack "weez all dead in the end" Keynes uh studied under. Wayel, Alfie was just about as reeeeesponsible as anyone fer a concoctin' up what we call macroeconomics fer most of the last century. Now ol' Alfie, he done had a boss what was mighty interested in managin' uh empire of colonies...that bein' the British Empire over which the sun never set (er to put it another way, on which the darkness never lifted). And do you know what kind of uh economics Alfie done thought up? Wah he thought up uh macroeconomics whar in the firm didn't play no particular role. Ever thin' tuh Alfie was just big huge markets uh fungible things with marginal this and marginal set out at the end of the last fungible unit produced, er consumed, er equileeeebrated, er, well, you knows what ah means. yer an educated fellow. of course you read yer alfie marshall. wayel, ol' alfie is the theorizin' ol sunnuvagun what in no small part created this idiotic dichotomy betwixt and between macro and micro economics. now whah did he do that? he weren't no dummy. he were workin' fer uh boss what didn't want an economic system that facileeeetated uncontrollable firm growth all over the danged world. and his boss sure as heck didn't want uh economics that revealed to the world thuh killin' were bein' made at the nexus of the bank uh england liquidity hegemony and uh hand full uh Limey mercantile firms. what alfie's boss wanted was an economic model that allowed the nexus to remain kind of anonymous like on the one hand whilst accumulatin' the necessary numbers and ratios and graphs tuh let BOE and the mercantile tradin' companies plan how tuh keep everthin' in uh, shall we say, uh equilibrium. whew, equilibrium! you can almost hear them fellas cacklin' over tea when they thought that word up fer maintainin' the status quo. like over a scone, made from grain from central russia er california, sippin' tea from the east india company, and uh havin' digestibles from cocoa from british some where er other, wah them fellers said, "I say, chaps, why don't we ask old Alfred to figure up what it would take to equilibrate things, if we were to work the wankars in India 20 percent harder to increase salt production, have old Ashley raise interest rates a few points to give him his cut for underwriting some more soldiers to put down the inevitable rebellions, and then have a go at crickett. Right?" Ah mean, Frankie, ya know that's how it hadda be. Alfie had tuh come up with a science of economics that answered his bosses questions and rationalized the imposition of his bosses avarice, er, needs. And have you read Alfie's Principles of Economics? That kin get down right luuuugubrious to try to slog through. Ah mean ah didn't even try tuh read "The Pure Theory of Foreign Trade: The Pure Theory of Domestic Values." Ah mean what's pure got tuh do with ANYthin'. It don't sound too scientific. Pure? What be pure related to economics, er business, er liquidity hegemonies, er oleeegopolies, er balancin' trade deficits with opium. Ah know, ah know, ah ought tuh keep an open mind and read it, but, haysoos christo, Frankie, ah gotta clean mah rifle sometime er General Glutt'll have me slit, skinned and stockaded.

All of which is a long way around a thick tree tuh say, wayel, heck fire, no economic numbers is accurate. they all obscure somethin. Its like the news media. When you read yer newspaper, er watch one of the hair god news anchors, even a simpleton knows they ain'ta tellin' but one narrow angle of what someone wants the plebes tuh know. Whah in gawds green earth would ya think any one would put out the whole truth, so help their god. Ain't ya heared that ol' biblical verse: the lord heps them what heps themselves. Lemme tell ya Frankie, these oleeegarchs and their knowledge workers what produce the economic data, they be mighty religious....mighty religious, yessiree.

Best regards,
Corporal Glutt

 
At 1:03 AM, Anonymous dryfly said...

Dark matter, ether, miracles happen... whatever. Any time the empirical can't be explained by the theoretical... call on one of the above.

 
At 1:43 PM, Anonymous knzn said...

frank, I do get the sense that the market is underpricing the risk of devaluation, but that is reflected more in the current value of the dollar than in the interest rate. Much third world debt is already denominated in dollars, so that particular form of insurance sale does not necessarily depend on currency risk. But the whole argument that our financial position is weak depends on using the official statistics (or on the belief that dark matter is unreliable). The paper at least presents an internally consistent argument that would largely justify the strength of the dollar. (Even if one does use the official statistics, I think an analysis of the dollar risk has to take into account how dependent the rest of the world is on US demand perpetuated through a strong dollar: in the case of an incipient huge drop in the dollar, most countries would have an incentive to pursue policies that weaken their currencies.)

 
At 8:42 PM, Anonymous Anonymous said...

knzn,

dollar risk is lower than a tick on a gopher until someone can find a way tuh get there needs met without dollars. if hugo chavez can create a s. amurrrrican common market of folks what don't give a hoot and uh holler about payin' their world bank debts, and got the 4 trillion barrel ohl bourse to price them thar ohl barrels in boleeevars, whah then ewe got yerself real high dollar risk. ain't no more complicated than that. you got iranians with 25 percent uh the world's natural gas and an iranian LNG bourse uh pricin' that LNG in, say, euros, whah then ewe got yerself uh AYcute dollar risk. If'n someone figgers out how tuh crack the grain cartel and start a pricin' john barley corn and winter wheat in say, Yuan, well, ewe got yerself a dollar crisis.

And if'n ewe don't got any of the above, then ewe don't got no real dollar risk er related crisis imho of course.

respectful like,
Corporal Glutt

 
At 5:42 PM, Blogger Epimethee said...

Well, just read it. I can hardly believe these people are serious. It's a long way from unequal exchange of the 70's to dark matter of the 00's ...

aside from that.
Well...
1 they've said. Dark matter has been stable, so it'll remain so.
I wonder how you would coin :
housing prices have been stable, stocks have been rising etc.
How long is 20 years stability ?
Not long.

2
I need time to ponder on their main claims :
1
if I earn more on an asset than you do on yours, then my assets are worth more "in fact". (they should be worth more)

2
If it is so it is for efficiency reason (Know how, liquidity, insurance).
THere's no such thing as extorsion ...


I'll come to you later, my girl friend needs the computer.

 
At 11:24 PM, Anonymous TM said...

To me, dark matter sounds like an aspect of soft power. Whether American soft power continues to exist depends to some extent on whether the rest of the world believes that this country, for all its real and perceived sins, is still a force for good in the world. The last five years have seen heroic effort by our current rulers to prove that it isn't. Not good.

 
At 3:15 AM, Blogger Epimethee said...

So back to the comment section ...
Here are my 2 cents :
The authors say :
1 if US assets abroad pay more, it must be because they SHOULD have a higher price,
2 and this MUST be because USA exports so called "dark matter" made of unreported know how, liquidity and insurance...

So let's make a comparison, imagine that I'm a 19th century cloth making entrepreneur, or because for what we're concerned it is the same thing, that I'm a present US company.

I have a monopoly (or a very strong market position) on my selling market because of brands, superior mobility (accumulated capital, US citizenship ...).

I have two solutions :
1 own 100% of the capital necessary to make stuff, and hire workers. In which case I earn 5% on my stock of capital.
2 Force workers to acquire some tools, tools especially designed to make them dependant from me by the way (Tools that I design for instance, different from my competitors) or else not work for me. They earn 1% on their capital.
Meanwhile, since I've reduced my own K stock necessary for the same business, say by a factor of 2, I earn 10% on this capital and I can start a new clothing-orwhatever business elsewhere.

THis sounds more like what we've seen back in 19th century output system, see Marglin, what do bosses do ? THis sounds more like we're witnessing now.

The basics of economics state : if there is profit then there is unperfect competition.
If there is a differential on capital returns, then it is highly probable that one side is the monopolist exploiter, and the other side is the monopolised exploited.

So let's sum my views :
if the USA have been able to get ever higher returns on their assets, it is because they are relying more and more on a monopoly position. They are taxing the rest of the world (that's what seignorage is) and more and more so and deliver less and less productive services for the very same tax.

Sooner or later, revolt will behead the landlords. Probably sooner than later.
End of story.

You can pick your story :
fairy tale dark mater and USA is a goldilock economy.
Or
Increasing tax burden from the landlords of the earth and mounting pressure to replace this unproductive parasite elite.

(remember, the chinese are working, 60% of the US population technically is not (they sell houses and credit, guard prisons, work in the army or the police), even more so the chinese work for the rest of the world (they export 35% of their GDP), the USA suck up the work of the rest of the world and deliver rights to a future US production that will never rise enough to allow the servicing of the debt).

 
At 3:22 AM, Blogger Epimethee said...

FYI the capital game I've just presented is happening right now at all scales.
Lumber companies fire workers and hire independant workers owning equipment on which they make 0 profit.
Truck companies fire workers and hire independant workers owning their truck on which they make 0 profit.
Big companies fire workers in the USA, sell the equipment and land, and hire independant subcontractors in China which make 0 profit on their capital.
Etc. Etc.

ANd the best of all of course is
during the 25 years, the wages have not kept up with labor productivity WORLDWIDE.
DUring the last five years real wages have fallen in the USA.

However during the last 25 years human capital accumulated has exploded worldwide. More people attended more years of school worldwide, have higher diplomas ...
Those owning the highest diplomas have fared well. However returns on human capital as a whole, have FALLEN : more educated workers as a whole, get a smaller pay (or not rising in comparison).

There you have it again.

In a nutshell, exploitation is higher now than in the end of the 70's. ANybody doubts that ?

 
At 3:51 AM, Blogger dryfly said...

In a nutshell, exploitation is higher now than in the end of the 70's. ANybody doubts that ?

But we have more channels now and bigger screens than in the 70s.

 
At 5:42 AM, Blogger Epimethee said...

Yeah sure.
Brad Setser has written that those very same authors said that developping countries who could borrow only at a high price were suffering from original sin.
Well, I'd like to go on and say that when moses came down from the sinai stating : though shall not make any images.
He was OF COURSE, adressing the future creation of television.

 
At 1:51 AM, Anonymous Anonymous said...

Mah, oh, mah, people talkin' bout Chinese folk workin' and Amurrrican folk not workin' cuz of the kinds uh work they both does. Don't tell that tuh all them low wage Chinese and workin' poh AYmurricans hustlin' they buns off tuh feed they youngin's. It sho do feel like work tuh them, when they lay they heads down on they pillows late at night.

see, work be anythin' one will pay another tuh do. don't matter what it is. if'n someone will pay ewe tuh deep fat fry sheep turds, that's work, whether someone else be buyin' those turds er not. now, fact is, if no one be buyin' them sheep turd frittes, ain't nobody gonna keepa payin' folks tuh deep fat fry'em.

think 'bout ol benjy bernanke fer uh example. He be makin' money and debt up outta nothin' but the insteeeetuted right tuh do so. He don't worry bout gold er silver reeeeserves. He don't worry 'bout current AYccounts defeeeeecits. He don't worry 'bout the decline in the AYmurrican standard of livin'. He don't apparently worry 'bout nothin' but what every other bank ceo worry 'bout....his job and makin' boucoup bucks for his controllin' stock holders. Now, even what Benjy do...even that be work, if'n the Rothschilds, Morgans and Rockefellers what own controllin' interest in the New York branch of the Fedeeeeral Reeesserve (which eeeeffectively controls the whole danged Fedeeeral Reeeeserve system by fine print uh thuh Fed by-laws) retain and pay him accordin' tuh his employment contract with their bank. Now, ah reckon if'n folks around the world, especially the Chinese, deeeecided they didn't want tuh buy and hold no more uh them outta-thin-air notes uh Benjie's (ever kinda bond and t-bill the Fed issues fer the USA tax payer to repay under the reeeputedly never leeeegitamately ratified income tax amendement, plus all them Fedeeeral Reeeserve bank notes that keepa lookin' less and less like dollars), wayel, then ah guess the Rothschilds, Morgans, and Rockefellers might just fire ohl Benjy's keister. But folks do keepa buyin' Benjy's fiat liquidity. So, Benjie get's tuh keep his job and have it count as part uh real work, just like sheep dip fryers, and AYmurrricans hustlin' real estate and credit and such, as counted by eeeconomists. so, tooo conclude, ah don't graaaasp this distinction 'bout work what's work and work what ain't.

 
At 8:10 AM, Blogger Epimethee said...

Well caporal...
Here's some hindsight inspired from Amiral Keynes.
Keynes said, that in times of demand drought, or general glut, it was wise for the government to pay workers to dig holes in the ground and then fill the holes in the grounds.
Giving money to people is very important in times of general glut, even if they do useless work, like digging a hole and then fill it later.
Some people make a job out of giving money to others, for instance civil servants in the keynes example. This is not a productive job. They are boosting demand.
Others for instance, with the same amount of money tell the same workers to build a Dam, a road, or something useful. They turn that money into something productive. That's useful.
Of course giving money to people can be indirectly productive, because it helps others to find purchasers for their production, and so it helps others to be productive. But as you can see this is indirect.


I tend to overstretch things always so that people can grasp them easier, but of course that's over stretching. Most people in all countries do work that has a very high directly productive value.

However, comparisons can be made.
The easiest is to compare the worth for the rest of the World of an american job and the worth of the rest of the world of a chinese job. The standard US job takes care of americans, it's a service job directed to americans, a non tradable, teaching, healing, feeding, police, law.
The standard chinese job makes stuff bought by the rest of the world (in fact the standard chinese job is making food, correctly phrased I should say, more chinese GDP is exported).

Now many american service jobs are really helpful for the american population. Teching caring ... Besides they make that population more productive in other areas.
However some jobs are "useless" and indeed "counter productive". For instance financial jobs and real estate agents are not working to make people more productive, they are working to give them more money, more wealth. BUt it's illusory money, speculation. When a bank helps an enterprise to finance a productive investment, it is doing a productive job. When it helps a consumer to spend more than it earns it is not doing a productive job.
Back to keynes. Lending to people is just like giving subsidies to people it is not a directly productive job. Well more and more US work in such jobs. They make money, they do not produce.

 
At 8:14 AM, Blogger Epimethee said...

In fact lending money is worse than creating than giving subsidies.
When the government creates money out of thin air and gives it to people, it does so at little cost and boosts production indirectly without putting a drag on our future.
When private bankers and agents, create money out of thin air by lending it to people, they do so at a cost (interest rate), turn rich in the process, and boost production only by increasing the drag on the future, until finally under the weight of debt everything collapses.

It's always good to get back to keynes.

 
At 1:18 AM, Anonymous Anonymous said...

Dear Mr. Epimethee,

Ewe sure give me food fer thought. So: ah thunk and ah thunk and ah thunk some more and ya knows what occurred tuh me? It occurred tuh me that mebbe ah don't fully unnerstand everthin' you be sayin'. So: ahm'a gonna ask ewe fer some clareeeefications. Nor arguin', er ulterior moteeeeves. Just question posin' and such soze ah kin either be persuaded by yer points er not.

If ah unnerstands right, yer sayin' some jobs is more productive than others and some jobs ain't productive no how. Wayel, ah agree kinda in theory, even though no one's ever been able tuh come up with a right reliable way of accurately and precisely (them's stayyyytistical terms ah heared once) when quantifyin' productivity. Productivity be one uh them measures that depends real highly on who ever be doin' thuh assumin' and the measurin' and the modellin' of it (note: ya know we live in the danged tyranny of the algorithm don't ya? Good old induction done got reeeeplaced by easier tuh fudge algorithms preeeetendin' tuh be econometric models, but ah digresses). And even then countin' productivity ain't zactly like countin' the number of Fedeeeeeral Reeeeeserve notes ol'Allie er ol'Beny get thuh itch tuh print on any given day. Thems discrete objects what you can pickup and touch and count. Productivity is kinda like countin' how many more things ya done fer yer wife than she done fer ewe and her doin'g the same and ewe both comin' up with differnt answers cause ewe both count the values of the inputs uh work of differnt things differntly. Soze if ya kin follow the way ah've overstretched this clareeeeefication, tuh make sure we 'bout tuh be uh talkin' from the same page, wayel, let me commence tuh askin' questions fer mah educational betterment.

1. If'n a feller loans money tuh a man soze he can have a house where's he can come home and eat and rest up fer the next day's work at producin' somethin' ewe would characterize as productive work, like cobblin' uh shoe, wah, do ewe think that lender man is a doin' productive, er nonproductive work? Ah reckon if'n that hard workin' cobbler didn't have no place to eat and sleep, then in a short time he might jest shoot hisself in the head dead and then he wouldn't make no more shoes. Tuh me, this seems like this lender man is both productive, in that he is valvin' accurately and precisely quantifiable money into a system what needs its valvin', and he is indirectly productive in keepin' that poor cobblin' man from shootin' hisself dead. That seems pretty danged productive to me. What are your take?

2. What if they was a hole digger, what once were called a ditch digger. And what if Lord Jackie Keynes hisself said, "My fellow aristocrats (that's what they used to call themselves before they called themselves Bilderbergers and such), we must pay the ditch digger to dig a ditch to no where in order to stimulate demand in the economy." And 'spose Lord Jackie says this at some real important London salon where Lord "in 1931 ah chose monetary policy that induced global depression" Montagu could hears him. And Lord Montagu has a snoot full'uh bitters and says, "Sure, Jack. Ah'll print up uh bunch uh Pound Sterling notes right now fasterin' you can say the House of Windsor/Hanover is German." And soze the gubmint tells the ditch digger tuh start'a diggin uh entirely useless ditch and payin' him tuh do it. And then what if he goes out and buys hisself a used bicycle. And what if he starts uh deliverin' the Times uh London (an aristocrat's pipe organ if they ever was one) on a paper route and uh makin' money doin' that, too. Now, how do ewe cateeeeegorize that there kind of uh eeevent? Tuh me, it seems like the ditch digger did work, got paid and bought a good (a used bike), jest like ol'Jackie Keynes theorized he would do. But then low and behold, the danged ditch digger bought took this bike and turned it into a danged capital asset in a news paper delivery business. and he started deliverin' mainstream propaganda, a job what needed doin' if'n the society is tuh stay on thuh same page, at least accordin' tuh the AYristocrats. Ah mean he got what you would call uh non productive subsidy fer diggin' the useless ditch, but at the very same time he becum uh capitalist by buyin' uh bike and deliverin' newspapers what is conventionally considered uh infermation industry what has value counted by eeeconomists. Soze heres what ah thinks: ah thinks what ol'Jackie Keynes done called a make work project of diggin' a ditch tuh nowhere's (what you might overstretch tuh calls a non productive job) was really uh zero interest loan and some exercise, at least tuh the ditch digger, and these hepped him start up a capeeeetalist enterprise called a newspaper deeelivery service that had capeeeetal stock of one used Raleigh bike and thuh ditch diggin' got him in good enough physical shape tuh allows him tuh survive the first couple rides whilst his cardiovascular system was uh rampin' up. Do ya follow me? It ain't rightly clear where nonproductive and productive leaves off and commences. They is tangled up with one another. And alot seems mighty dependent on how ya slices the defeeeenitions of all these things. And ah ain't'a dreamin' up this example just to be uh AYnomalous thorn in yer side. Ah mean this example is quaint and set in the increasin'ly fer past, but ah thinks it fairly calls attention to problems of defeeeenition and uh countin' and uh modelling' of productivity in many of the cases of what you was uh overstretchin' tuh make yer points.

3. Ya mentions that some jobs is useless, even counter productive like. Now that one really made me think. Ah mean, ah immediately thought of military weapon makin' as one of them kinda jobs. Ah means jet bomber maker A is listed on the NY stock exchange, er else its owned by Carlyle. And it builds and sells jet bombers hither thither and yon tuh whatever states and mercenary airforces that kin afford it. Then that jet bomber is sent to blow up an opponents tanks, and soldiers, and factories and command and control infrastructure, and utility infrastructure. Its a mighty heap uh destroyin' it does. And all thuh destroyin', wah, it destroys alotta economically productive persons and economically productive private sector assets, and economically productive infrastructure (some private, some public). Now whah am ah jawin' on this? Wayel, this here seems like negative productivity er somethin' in that jet bomber, don't it? And yet that there jet bomber and the companies what makes it is considered a very serious chunk of a nations GDP and those who work in this industry is considered reasonable productive, ain't they? Ain't it odd. Ain't it odd? Ya build somethin' that destroys 50 er 100 times the productivity of itself and it is cault a productive asset built by a productive firm with productive employees. Do ya see what ah'm'a grapplin' with here? And this problem is going to get even stickier as ol Rummie privatizes more and more uh the military, don't ya know. Wah, Blackadder, er, Blackwater is a private army right now. And logistics is significantly took over by the likes of Halleeeeburtin and Kellogg, Brown and Root, er whatever they call them apparent over chargers and underproducers. Ah mean, how does ya talks meanin'fully 'bout military in a productivity vein and ya gots tuh talk 'bout thuh military cuz its one of the hugest chunks of the global economy. Is it productive, er is it non productive. Alot of defense contractin' corporations is workin' hard tuh be more productive soze they can makes more fiat money fer their shareholders don't ya know.

Frankly, havin' laid out some uh these questions soze ah could be educated by ewe, ah'm now uh wonderin' if'n ya kin clarify this. but ah 'spect once ya gets done overstretchin' tuh makes yer points, wah, it'll all come clear as a bell tuh me.

So: overstretch as much as ya thinks necessary cuz one thing is fer sure: ah remains jest a lowly corporal in this man's economic army and ah ain'ta gotta lotta book larnin' beyond a worthess master of science in business. no ah wasn't buckin' fer officer's candidate school er nothin' like that. i just lost mah mind one day and said, 'wayel, if'n ah don't get a masters deeeegree, some other corporal is goin' to bump me off'a some easy detail and into latrine duty. now, of course, ah'm old enough tuh know better'n tuh pay folks tuh complicate thuh truth and then grade me fer simplifyin' it back to'em. but what kin ah say. ah was young once. and warn't we all? :-)

Inquirin'ly yours,
Corporal Eustice Glutt

 
At 3:36 AM, Blogger Epimethee said...

Well, caporal, as you point out, it's difficult to measure productivity. It was difficult when goods were produced (you could count the cars at the end of the factory line, counting the imputs was arder), it is even more difficult with services. For instance hospitals make people live longer, and old people are sicker, so hospitals make people sicker. How productive is that ?

Now as far as I can help :

1 if you invest in a house that provides shelter to yourself or others this is productive investment.
If I loan you money so that you can invest, I help your productive investment. Be it a bicycle or a house.
Now if I loan you money on the virtual value of your house if it were to be sold now on the market, so that you can take vacations, I'm not helping you to make producte investment. However, as said before, some floridian people may be investing into hostels because I loaned you money based on the virtual value of your house.
Of course, then I have no decisive tool to state how productive (in housing services) it is to repaint your house, or install a pool.
I have simply the quasi certainty that many invest in such "improvements" on the face of the improvement in the "virtual" value of their houses, and not for those improvements per se. So if 100 invest in pools thinking their house selling prise will rise 10% and only 5 sell their house, it works. But then comes some trouble, and 50 want to sell their houses and suddenly they discover not many people have sufficient means to pay for pool services, so their investment are worthless.
See what I mean ?

2 No problem at all with that one. This is indirect boosting of productivity. I pay someone to do useless work, he makes intelligent use of its pay. It fits the distinction perfectly.

3 well you might be interested to know that not all countries count weapon production into the GDP, I ve heard on this and need to check sources, but I know there's a lot of debate on this. Debate also on knowing if may be building a weapon is productive, but using it (paying the soldier and its equipment) is not... I'm sorry to be unable to provide any sources.

Aside from the military, I believe sth like 50% of bank clerks and realtors are doing counter productive work right now, and that includes GReenspan in the first place, boosting debt and asset prices when we are way deep in the bubble.




2

 
At 3:36 AM, Blogger Epimethee said...

Well, caporal, as you point out, it's difficult to measure productivity. It was difficult when goods were produced (you could count the cars at the end of the factory line, counting the imputs was arder), it is even more difficult with services. For instance hospitals make people live longer, and old people are sicker, so hospitals make people sicker. How productive is that ?

Now as far as I can help :

1 if you invest in a house that provides shelter to yourself or others this is productive investment.
If I loan you money so that you can invest, I help your productive investment. Be it a bicycle or a house.
Now if I loan you money on the virtual value of your house if it were to be sold now on the market, so that you can take vacations, I'm not helping you to make producte investment. However, as said before, some floridian people may be investing into hostels because I loaned you money based on the virtual value of your house.
Of course, then I have no decisive tool to state how productive (in housing services) it is to repaint your house, or install a pool.
I have simply the quasi certainty that many invest in such "improvements" on the face of the improvement in the "virtual" value of their houses, and not for those improvements per se. So if 100 invest in pools thinking their house selling prise will rise 10% and only 5 sell their house, it works. But then comes some trouble, and 50 want to sell their houses and suddenly they discover not many people have sufficient means to pay for pool services, so their investment are worthless.
See what I mean ?

2 No problem at all with that one. This is indirect boosting of productivity. I pay someone to do useless work, he makes intelligent use of its pay. It fits the distinction perfectly.

3 well you might be interested to know that not all countries count weapon production into the GDP, I ve heard on this and need to check sources, but I know there's a lot of debate on this. Debate also on knowing if may be building a weapon is productive, but using it (paying the soldier and its equipment) is not... I'm sorry to be unable to provide any sources.

Aside from the military, I believe sth like 50% of bank clerks and realtors are doing counter productive work right now, and that includes GReenspan in the first place, boosting debt and asset prices when we are way deep in the bubble.




2

 
At 3:53 AM, Blogger Epimethee said...

oops seems I posted twice.
I found this
http://dieoff.org/page11.htm
not really a respectable source.
It seems that in the past, hungary did not report non productive activities within its GDP.
Wikipedia has a list of debates on GDP
http://en.wikipedia.org/wiki/Gross_domestic_product#Controversies

Finally wikipedia has a debate on productive and unproductive labour
http://en.wikipedia.org/wiki/Productive_and_unproductive_labour

 
At 1:27 PM, Anonymous Anonymous said...

Wayel,

Thankee kindly fer that civilized, digneeefied, and lucid reeeeesponse. Here's where ah thinkin' we be uh not quite on the same page yit.

EWE says if'n ah loans ya money on a kind inflated house valuuuuue and ya takes out some equeeeeety and goes tuh vacation, wayel, then ah'ma doin' counter productive like work.

Wayel, on AYssumption ewe are makin' is that that house is arteeeeeficially inflated some how. now ah says they ain't no such thin' as arteeeeeficial inflation. ah says all prices, no matter when, is uh complex reconciliation of straaaaategic and tacteeeeecal and economical factors that don't got no equeeeeelibrium price point around which they fluctuates...cuz everthin's always changin'. Sees ah see this economic system as eeeeemergent complexity fraught with uncertainty. Don't know if ah's right, but that there complexity theory seems purty close tuh what ah experiences first hand and it seems tuh correlate high with what empirical folk can be uh measurin'. as uh ol'perfessor uh logic might say, it follows therefore that they ain't no long term pattern except what some chaos theoretician might call infinite variation between limits with a few mebbe useful and mebbe useless straaaaange tendencies that's always changin' unexpected like cuz the system itself is uh dynamical, don't ya know. This, ah blieve be why ever body wants uh monopoly, er oligopoly, er as little risk as possible (risk as mah pappy used tuh say is fer suckers) cuz that be thuh best way yit deeeevised tuh manage that eeeemergent complexity and its reeeeelated risks.

so: back tuh yer point that loanin' on inflated inflated prices (er what ah calls prices feasibly reconciled tuh total money supply and all strategic and tactical and economical and legal and other constraints) to a fellow what takes out his eqeeeeety and goes golfin' in hawaii. ah figures if ewe does take out yer eqeeeeety and does goes tuh golf in hawaii, wah yer apt save yer sanity long enough tuh keepa doin' that highly productive work ya likes tuh do, but what gives folks alcoholism, deeeepression, and family violence and such. so if'n ah loans ewe money at a goin' rate, set by benjy cuz that's what the rothschilds, morgans and rockefellers is most apt to keep them the flushest and most influential oligarchs around, wah, then ah figures am'a doin' right productive work, not undiffernt from if ah produced a car what made ya able tuh keepa goin' tuh work. Do ya catch mah meanin' here? Ah mean this productivity thing is just plumb squiggly as a bowl uh mercury.

Ah, agree that some folks is more productive than others; that ain't not my point of divergence here. a person with a big heap of IQ, er emotional intelleeeeegence, wah, they ain't no doubt but what he can figger out and make happen alot more than the village idiot, er someone in between, if'n he's empowered with enough Fedeeeeeral Reeeeeserver notes and don't get thrown in the poor house by laws aimed tuh keep him from doin' business what oleeeegarchs don't want done. mah point is more this: it don't make clear good sense to me that a chinese prison worker making computer parts, er, a 12 year old girl makin' tennis shoes in indonesia, is uh necessarily more productive than the fellow what loans money tuh build that factory and extend a line uh credity to smooth out the rough spots in the cash cycle of that factory. and ah even has trouble thinkin' that them folk in china and indonesia is more productive than a feller what loans money to ewe tuh buy ewe uh new BMW M3 er tuh go golfin at Turnberry. See it gets all blurry in mah mind what's causin' what and accurately and precisely to what quantitative unit of measure er what have ewe.

Now don't take this as provokin' er nothin'. Ah just cain't quite gits mah mind around this here concept of your'n yit. Ah'll work on unnerstandin' your'n if'n you'll work on unnerstandin' my'n. That's square, ain't it? And ah knows ya made more good points worth uh chewin' on, but at this moment, ah done run outta time. The danged general said he was gonna make me do a whole heap uh non linear cipherin', if'n ah don't git tuh work.

Yours very truly,
Corporal Glutt

 
At 2:04 PM, Anonymous Anonymous said...

Provocative little piece with just the right amount of playfulness.
Dark Matter, which they make sure everyone understands is an analogy with Physic's dark matter (and not your laundry's), is their clever invention to allay our fears about the widening deficit.
The fact that GM invests in China while foreigners invest in the US does need some explanation. Why don't foreigners invest in those low wage opportunities? The US 'know how' (really some more dark matter) is cited along with other dubious qualities (liquidity, insurance) to distinguish the American investment from the foreign investment. [It could be that the American investment has the connections to the American consumer (and foreign investment must navigate through this American gate exacting some toll), but I digress.]
In order to get Dark Matter on the map, they make a serious claim about the "unnatural" accounting standards of the BEA and the arbitrary (but consistent[I can get picky, sorta]) rules of accounting. The $30B earnings @ (modest and arbitrary) 5% points to a foreign asset of $600B --no matter what the other books indicate. Dark Matter will be the difference between the official estimate and their's. Such a charming way of introducing their baby as something the BEA created and then abandoned --I like it (and them).
So the Dark Matter is the gap between the BEA's yard stick of FDI and the BHSA (Hausmann Sturzenegger) yard stick, akin to the celsius and fahrenheit temp scales. They calculate this Dark Matter to be $3.1T, and this explains why we have not really been such a nose-bleeding debtor nation over the past couple of decades.
But will the Dark Matter continue to hold us up? It turns out that this depends on the FDI. Yes, their perception that the US 'know how' is still worth the premium. And how different is this analysis from the 'kindness of strangers'? An advance maybe but not much.
Such a good start to end up in the same place with an extra cushion of $3T to account for past performance/confidence. Couching accounting inside economics was a good first stroke, but then I felt the piece melted into a pacification of overblown worries about debt. Someone should pick it up from about page 3 and rewrite it. Could be some dark matter in the house and I don't mean the crawl space.
calmo

 
At 6:43 PM, Anonymous Anonymous said...

Ah, been kinda talkin' round this dark matter and ah AYpologizes. Here's how ah sees dark matter: its illegal drugs, weapons, slavin', prostitutin', money launderin', killin fer hire and off-the-shelf crooked merc stuff and misc. other underworld activites and the financin' and money supply expansion they requires done in uh unsavory kinda JV with de-scrupled folks in the overworld, maybe even some uh the most powerful, thoughs ah don't knows no facts here. Ah's jest uh speculatin'. Ya might be too young tuh remember BCCI--sometimes more AYffectionately known as the bank of connivance, corruption and intel money launderin'. It made purty clear tuh anyone with even a 40 watt light bulb on upstairs that the wages of sin was mighty big...so big they made these huuuge CEO salaries today look like alms fer the poor. As ol'gawd might say: this be all ye know and all ye need tuh know 'bout dark matter in economics. Sayin' the BEA has some skew in its AYccounin' methods on the subject uh dark matter is kinda like sittin next to uh hungry bear and complainin' that a mosquito be right irritatin'. Shuuuuuute, theyze some folks what say the dang dark matter, as i've deeeeefined it here, be biggerin' alot uh thuh light matter. And ah reckon if ya tracked alot uh the fiat money the Plunge Protection Team been uh dumpin, and the trillion er so that the Penteeeeegon just plain mislaid uh couple uh years back, and such, that more'n uh few pennies of it wound up in underworld tuh square things regardin' dark matter imbalances of trade--yep, General, them underworld types they worry about squarin' their accounts just like you worry about the overworld types oughta square theirs. Ah reckon, if they was grants gaaaalore from the Rockeeeeefeller Foundation fer figgerin' such things out (and ah don't blieve they is, that the gross underworld product (yeah ah coined a phrase here and ewe can abbreviate it to GUP if'n ya likes) is purt near just the right size tuh make up the gap we all be uh flappin' our gums about. If'n ahm way off here, do point out thuh error in mah foolish ways.

See, ah could be plum wrong and they ain't no big wages fer sin, but if'n ah is wrong, whah then ere so many super rich folks involved with the likes of the BCCI's uh this man's economic army? And theyze sposed tuh be lots uh BCCIs. Heck, ah 'spect yah could say certainly little tiny states what oughta go nameless outta respect for their AYristocrats, be little more'n BCCIs theirselves.

Whoooweee! General, what're weeee gonnna doooooooo?

Corporal Glutt

 
At 9:43 PM, Anonymous Anonymous said...

But Corporal, the piece gets its bite from the fact that even the Italian Mafia doesn't get this deal. The contrast is between American investment and foreign investment. Have you noticed that American firms are not generally investing in domestic plants? They are generally buying back and developing M&A positions, yes? Foreign investment is aiding these causes (ok mostly by buying tbills rather than competing) rather than waltzing over to China and investing where there are savings, and the world's fastest growing economy. Why?
How is it that American investment in foreign adventures is so much more profitable than foreign investment there?

The underground economy is interesting, dramatic, and exciting but like the public servant, government employee and military economy, not what we want to talk about just now. [But can I corral the Corporal with my new glasses to narrow the range of those panoramic visions? Dream on calmo.]

 
At 11:54 PM, Blogger eightnine2718281828mu5 said...

re the asymmetries between foreign vs domestic investment; domestic investment in foreign assets are directed by actors in a free market, while many foreign investors in the US market are government entities.

The 2 groups may have differing criteria guiding their investment decisions, ie, capital appreciation vs capital preservation.

 
At 12:20 AM, Blogger eightnine2718281828mu5 said...

And, I might add, they're not even strictly limited to those two criteria.

 
At 2:09 AM, Anonymous Anonymous said...

Bsetser and others have documented the withdrawal of foreign central banks from the tbill market over the past few quarters. The idea that the fcb is not profit motivated and therefore prefers the dollar supporting tbill in the interests of their own export-led economies has lost some of its punch. [Ok lots of the punch it had when Japan was intervening in fx for example.]

The foreign private investor is picking up the slack. Roach tells us it is not Middle East money, (but never tires of telling us that this only exacerbates an already imbalanced foreign investment distribution). This does not mean it is small investors looking for security and low risk investments. These are money managers acting on behalf of clients who must be brain dead...
Ok, I do not understand it and think that even the possibility that the Treasury is buying their own bills is less outrageous a thought.
calmo says thanks for your views 'numbers'.

 
At 4:11 AM, Blogger Epimethee said...

Corporal... I'm a poor lonesome french surrounded by english speakers and I must admit I have trouble to grasp your very specific english dialect ...

My point is that markets are indeed good tools to allocate ressources. BUT
1 that's about the only thing they do. For instance markets never produce things, markets can't figure out the future, markets won't bring you love and confidence ... So you need other institutions and tools to bring those things.
2 If excessive importance is given to markets, markets become selfserving, transactors instead of seeking to maximize their utility, start to maximise their wealth, they indulge in speculative purchase and selling.
SPeculation is good when it is a minor part of the market, it smoothes fluctuations, you hinted that. But it's wrong when it becomes a major part of the market.

How do we know when exactly the line is crossed.
No idea. Besides I don't care.
Do we know there's too much power given to markets.
You bet.
Do we know asset prices are inflated.
You bet.

Chaos is the direct product of excessive speculation.

On stupid DM I commented at Brad setser.

 
At 11:30 AM, Blogger eightnine2718281828mu5 said...

anonymous:

just saw the new post on rge re asian liquidity, which supports your commenst.

 
At 12:56 PM, Blogger eightnine2718281828mu5 said...

---
calmo says thanks for your views 'numbers'.
---

Is that directed at me? If so I don't know what numbers you mean.

If it's sarcasm, you'll just have to be disappointed that I wasn't smart enough to be insulted. :-)

 
At 2:05 PM, Anonymous Anonymous said...

My goodness eightnine2718281828mu5, I need all the help I can get after Corporal Eustice's posts. Yes, my new glasses help but they are sort of cumbersome (imagine a converted welder's mask) and I would just like to take a breather now and again. So I thought I could just refer to 'numbers' instead of that cut and paste move. I did not mean to short change you in anyway. 'Nuff punishment.
Maybe I need megavitamins to post here.
an anemic calmo

 
At 2:24 PM, Blogger eightnine2718281828mu5 said...

Thanks for the clarification; btw, I'm a software geek, and the eightnine moniker is a hax0r obfuscation of the name 'anonymous'

eight - a
nine - non
2718281828 - the natural log 'e'
mu5 - mous

 
At 2:25 PM, Blogger eightnine2718281828mu5 said...

And I'm old enough that my eyesight sucks too. :-)

 
At 10:42 PM, Anonymous Anonymous said...

Will you be offended if I use 'mu5'?
Thanks for unravelling your puzzle moniker though, I WAS worried about you.
MU5 is close to MI6 which is British Intelligence, yes? So you must be close to figuring out this 'dark matter', yes?
And private foreign investors seeking the 'best place in the world', pick US tbills (again today another $100B --we need it every month), calmo knows you have this pretty near decoded, yes?

 
At 12:42 PM, Blogger eightnine2718281828mu5 said...

---
Will you be offended if I use 'mu5'?
---

Of course not; it's a free country.

Whoops! Forgot to check the headlines this morning; looks like the Bushists have put that freedom and democracy thing on hold...

 
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