tag:blogger.com,1999:blog-8764541874043694159.post9151249227293101900..comments2024-03-29T10:48:38.142+00:00Comments on Coppola Comment: When the Nile floods failFrances Coppolahttp://www.blogger.com/profile/09399390283774592713noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-8764541874043694159.post-89137254782764004562015-03-03T06:43:23.725+00:002015-03-03T06:43:23.725+00:00Global climate change is unambiguously worse than ...Global climate change is unambiguously worse than World War I and the Depression of the 1930s, and we've fallen right into it. :-P<br /><br />I'm not sure what that means, but ow.Nathanaelnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-18887689834376277522014-11-07T01:52:54.285+00:002014-11-07T01:52:54.285+00:00As a housing planner in the U.S., working on the f...As a housing planner in the U.S., working on the fringe of the Washington, D.C. MSA 1973 - 1990, after which Front Royal, Virginia - Warren County, became part of the MSA - 60 miles from D.C. The increases in housing cost far exceeded the increase in wage and salary income. Though Northern Virginia had the highest median household income - the house was six times that. If in a locality, the median income will not enable purchase of the median priced home, wages are too low or housing costs are too high. Even today, people who qualify to buy because they can make the payment, will never pay off the mortgage. The goal is to own the ranch, not keep betting on it by taking out equity. The cash out scenario was always to move to a lower housing cost region, like the Shenandoah Valley, where with the sales proceeds one could buy what they want, put money in the bank, and live off the pension or investments. That gentrifies the receiving exurban area, making local housing unaffordable for those making the local wage. Easy credit flamed up the prices - my appraiser friend quit the business because they didn't want appraisals. Easy credit leads to bad decisions. <br /><br />Still too much unpayable private debt. There are very few income generating assets to pay interest and principle on this debt. The vacation or fancy car may have made people feel more productive, but they didn't result in a raise - actual income to pay off the debt. The private debt problem was/remains widespread. <br /> <br />For the sad, but true story, check this from C-Span's BookTV - "Richard Vague talked about his book, The Next Economic Disaster: Why It’s Coming and How to Avoid It, in which he argues that the threat to our economic stability comes from privately held debt, which stood at over $11 trillion. He said that many of the big economic downturns in the U.S. and around the world could be traced to privately held debt and questioned whether the economy was on the verge of another downturn. Mr. Vague spoke at New America New York City. August 27, 2014. <br /> <br />http://www.c-span.org/video/?321267-1/book-discussion-next-economic-disaster<br /><br />Read David Graber's "Debt: The first 5,000 Years" to understand the predatory uses of debt. Economist Michael Hudson is one of the few who knew what was going on. Steve Keen is now working to improve models to provide for the Minsky Moment as a option.<br /><br />With the global weather monitoring we have today, floods and droughts are not mysterious at all. If the outcomes in the world are different than the model can predict - bury the model. Don't get new priests, get better science - including sociological, psychological, anthropological and spiritual. Thou shalt not steal is a very simple law. That lawyers can write contracts that we sign that say the contractor can steal from us, though it would take six lawyers to find it, is not a problem of theory, but morality. Lying as a legitimate business method should not be tolerated, but it is. And then things fall apart. Tom Christoffelhttps://www.blogger.com/profile/09565106373282503275noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-68184784260628011272014-11-06T19:29:26.151+00:002014-11-06T19:29:26.151+00:00Mario Draghi shares Blanchard's faith in ........Mario Draghi shares Blanchard's faith in .....politics. He always stated that the ECB can help only to some extent.Persilhttps://www.blogger.com/profile/04772263204290091653noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-77348663072899089482014-10-25T13:49:48.210+01:002014-10-25T13:49:48.210+01:00Thanks Steve! Thanks Steve! Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-13110584334795101862014-10-25T03:26:03.989+01:002014-10-25T03:26:03.989+01:00Frances ...
This is hands down one of the best ar...Frances ...<br /><br />This is hands down one of the best articles you have written to date, if I wasn't already a fan I would become one overnight. <br /><br />Indeed we are all servants to higher masters, that we have duties as well as rewards. We are stewards of this world, it does not belong to us but to all the generations to come. We need better models but we also need the sense of responsibility that goes with them. Our models can at best be guides, it is our actions that matter; in place of greed there must be generosity, along with the taking must be giving. steve from virginiahttp://www.economic-undertow.comnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-51896603964509265922014-10-08T17:00:19.006+01:002014-10-08T17:00:19.006+01:00I think the Fukushima disaster was man made - the ...I think the Fukushima disaster was man made - the power station structure stood up OK but the backup generators for cooling were inundated - not built to same standards. I suspect cost-cutting and poor regulation and politics. Bad tsunamis happen there about once in 500 years and the 50 year lifecycle of a nuke is long enough to make trouble fairly likely and nuke trouble is big trouble. Re the Egyptian flood failure, a poor farmer does not need much and can survive anywhere, but a priest and shopkeeper class is a more delicate thing, who died out first I wonder.<br /><br />I don't mind taking my chances with a volcano, they are a sort of agricultural free ride. Everyone wants a free ride and a house (used to) represent a financial free ride. But whereas volcanoes are random and not choosy the housing market seems rigged and a plaything of the politician's feel-good factor and the mortgage seller's greed with those on the margins getting hurt most.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-3878177243392089902014-10-08T14:01:20.928+01:002014-10-08T14:01:20.928+01:00I think the distinction between "man-made&quo...I think the distinction between "man-made" and "natural" disaster is not so clear-cut. I might agree with you that the GFC was entirely man-made: but was Fukushima a man-made disaster or a natural one? Is the failure of the Nile floods really a disaster - or was the real problem man-made, namely an entire economy built on the assumption that the floods would never fail?<br /><br />Re your point about defending against every risk, yes I agree that over-caution is as dysfunctional as recklessness. I'm planning a follow-up post to this one on why people choose to live near volcanoes. The risk of occasionally being wiped out is worth taking because of the fertility that volcanic activity generates. And there is usually heroic denial of the risks, too - collective amnesia, belief that it won't happen in our own lifetime or that of our children, belief that we will get away in time if it does happen, underestimating the economic effects. I think our attitude to volcanoes is quite a good indicator of our attitude to other risky but rewarding activities. Housing bubbles, for example: I remember the late-1980s housing bubble - I think we all knew it would blow, but we thought we could benefit before it blew and get out without too much damage when it did. Volcano thinking, see?Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-53094345351800439542014-10-08T08:57:43.512+01:002014-10-08T08:57:43.512+01:00Two things here. The US housing crisis seems a to...Two things here. The US housing crisis seems a totally man-made problem. The banks failed in their role as 'risk transformers' low risk/small returns v higher risk/bigger returns. They were not regulated properly, probably due to the punch-bowl effect. We know people will cheat and lie and twist the truth, that is what the press and regulation is supposed to be for (both ways).<br /><br />Re exogenous effects, we cannot do much about giga volcanoes or asteroids - except muddle through afterwards - if there is an afterwards. But slower developing things like climate change or increased flooding we could at least hold off the effects for a few 100s of years but such costs money and is bothersome and so some means of denial or inaction is developed. As for Ebola etc, the wheels fall off most problems before they develop as 'experts' aver - unless they don't. If we defended against every risk we would all be living on bread and water.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-23770752530634149262014-10-08T00:03:27.088+01:002014-10-08T00:03:27.088+01:00Interesting post.
So basically we should be looki...Interesting post.<br /><br />So basically we should be looking at things that 'could' happen, but if you say they might, everyone looks at you like you've got 2 heads? I'm trying to imagine such things that could totally derail the world, economically and socially. How about a slip into a mini Ice age, as in Thames frozen over etc? It has obviously happened before, within recorded history, so it could happen again. But we are so in thrall to the whole 'the world is going to fry and its all man's fault' global warming schtick, that to suggest such a thing is akin to saying the earth is flat. But such an event would completely decimate the world's population due to famine, and the inevitable wars over food supplies etc. It would be a New Dark Age.<br /><br />Then there's the obvious ones, like an asteroid impact, and the mega volcano eruptions, such as Yellowstone. And mutated viruses as mentioned above. Another possible one is mass rejection of fiat currencies. - what if everyone just suddenly decided that they wouldn't accept bits of paper as money any more? Thats happened before too, and in an age of instant communication such a mass mood change could go global very quickly.Jimnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-18401192185501666312014-10-07T14:23:07.183+01:002014-10-07T14:23:07.183+01:00Nice piece, Frances. Thank you. 'We need to le...Nice piece, Frances. Thank you. 'We need to learn from the past, but look to the future' - would add only that we need to know what kind of future we want - how best to satisfy the universal basic human material needs of food, clothing, shelter; our emotional needs; and 'political' delivery systems. <br />Meg Howarthnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-17547742301363492462014-10-07T13:48:01.719+01:002014-10-07T13:48:01.719+01:00Indeed, I said in the post that the GFC was hardly...Indeed, I said in the post that the GFC was hardly on the same scale as the Old Kingdom collapse. And I agree with you about the risk from Ebola - in the post, a global pandemic was one of my candidates for the next crisis.Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-82567722597375757602014-10-07T13:44:41.636+01:002014-10-07T13:44:41.636+01:00if you're looking for an equivalent massive ex...if you're looking for an equivalent massive exogenous shock, Frances, the GFC is hardly it...but we could be in for one just as bad if Ebola spins out of control and cuts down a significant percentage of the population...rjshttps://www.blogger.com/profile/15681812432224138582noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-11528397013178668162014-10-07T10:27:10.994+01:002014-10-07T10:27:10.994+01:00I'm afraid you've missed the point. You do...I'm afraid you've missed the point. You do not know the size of the hole you are falling into. It may be small, or it may be very large. The 2008 crisis was unambiguously worse than the inflation of the 1970s, unambiguously less bad than World War 1, and we don't yet know how it compares to the Depression of the 1930s (we aren't through it yet and the Eurozone's hole looks set to be a lot bigger than the 1930s). That's what I mean by non-linear. Just because we haven't fallen into any really big holes recently doesn't mean we won't do so in the future. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-85361436507743498482014-10-07T09:35:57.797+01:002014-10-07T09:35:57.797+01:00On the whole your paragraph about stumbling is a p...On the whole your paragraph about stumbling is a pretty hopeful one; the Great Depression was absolutely unambiguously less bad than World War One, and the inflation in the seventies was absolutely unambiguously less bad than the Great Depression. Falling into small holes while working around the big ones isn't that bad a problem to have.Tom Womackhttps://www.blogger.com/profile/16704310173473318448noreply@blogger.com