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View Diary: Krugman Spins It A Bit In: “The Stimulus Tragedy” (134 comments)

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  •  I agree with everything you write here wizard. (2+ / 0-)
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    The Wizard, RiveroftheWest

    And, would add that in additional to the problems you described if our economy was a closed system, it is not in a way that make extreme concentration of wealth even more damaging to our economy.

    Because the hyper wealthy are investing substantial fractions of their wealth in both hard assets and financial assets overseas.

    So, new factories built in China, and other SouthEast Asian countries are soaking up substantial amounts of wealth
    that might have been invested in the U.S.

    And, also notice the transfer of our latest manufacturing technology and support infrastructure overseas.

    How sad.

    Are you an economist, mathematician, or engineer, Wizard? I couldn't help but notice your correct use of the term "nasty positive feedback loop," while many mistakenly believe those are the "good ones," instead of those produce exponential growth, or decline via reinforcing feedback. Positive refers to the sign of the transfer function from the old days of control theory mathematics.  

    The means is the ends in the process of becoming. - Mahatma Gandhi

    by HoundDog on Fri Feb 21, 2014 at 12:04:13 PM PST

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    •  Engineer (3+ / 0-)
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      RiveroftheWest, HoundDog, jadt65

      I'm an MIT grad. Although I didn't major in economics I took lots of courses including having Samuelson as a lecturer. My interest has always been driven by the obvious observation that Economics, especially Macro Economics, is poorly understood. I'm not surprised that we have run into a brick wall, this is typical of a non-linear feedback system which has discreet states. We go along and everything seems fine, but we are moving into a state in which we can't get out without a major change to the inputs or the internal functions or the internal state.

      My being critical of Krugman and Stiglitz has nothing to do with my respect for them,which is immense,  this is typical MIT culture.

      I also question GDP as a measure of economic health, as does Stiglitz. I believe that our economy is seriously sick and needs some major changes. Unfortunately we also have vested interests that are perfectly happy with the status-quot as they are filthy rich with big-time political power. So we will have to wait, but we should be forming some ideas for a twenty first century economy. We seem to have a perfect storm brewing, U.S. economy flat-lining, the rise of developing nations, especially China, and the Global Climate Crisis.

      •  Fascinating. I have become one of your followers. (2+ / 0-)
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        jadt65, RiveroftheWest

        Our research at the time was to represent the actual stock and flows, (integration and derivatives) of an economic system and a realistic portrayal of economic decision-making based on non-linear feedback systems which we represented with difference equation, and then simulated the solutions using applied numerical methods and Runge-Kutta 2 and 4 methods to simulate the solution to what was about a 1,000 th order non-linear differential equation.

        We were trying to generate macro-economic behavior, from micro-economic representations of the decision-making processes of major sectors of the economy.  

        However, our director was such an iconoclast by nature, and much more of an engineer, rather than an academic economist, he managed to alienate nearly all the scholarly professional "real" economists. So most of our professors, and graduate students ended up going into corporate strategy or other fields.

        I miss those days a great deal.  What an electric thrill that campus was. Thanks for commenting.

        This was never accepted by mainstream economists but it was a wonderfully educational experience for me.

        The means is the ends in the process of becoming. - Mahatma Gandhi

        by HoundDog on Fri Feb 21, 2014 at 05:11:28 PM PST

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