All Hail the US Buck

From time to time in these endeavors, I've weighed in on the question of the USofA foreign trade deficit. From the quant point of view, narrowly, the question boils down to: is having US dollars floating out on the planet a good thing (that can only happen if the US runs a deficit), and if so, is there a limit to how much is too much of a good thing?

My argument has steadfastly been that from the beginning, Bretton-Woods, when the buck became, nearly, de jure New Gold to now, when it has become de facto New Gold with the repudiation of the Bretton-Woods agreements; the USofA must run a trade deficit with RoW if global growth is to be sustained. If we don't, then global deflation and depression result. But, but, but... The lunatic rightwing goldbugs bleat that the global economy should be run only on specie anyway, so reverting to the 19th century model is a good thing. It was just the sporadic gold supply that caused deflation and depression over that century. Even the substitution of silver was opposed by the goldbugs.

But, of course, they neglect to mention that 19th century America, and everywhere pretty much, was a miserable mess of deflation, depression, and privation for all but the era's 1%. Mark Twain wrote "The Gilded Age" for a reason. And praise wasn't it. And for perspective, its publication date, 1873, was nearer the beginning of the period rather than the end. In other words, Twain was as much seer as chronicler.

A bit of innterTubes searching, whilst waiting for one of my few Redneck Pleasures to begin (Daytona), I came across this recent article. Another bandwagon, another rider.

In the foreign exchange market, the dollar rules. More than 85% of forex trading involves the U.S. dollar. Furthermore, 39% of the world's debt is issued in dollars. As a result, foreign banks require a lot of dollars to conduct business. For example, during the 2008 financial crisis, non-U.S. banks had $27 trillion in international liabilities denominated in foreign currencies.

Of that, $18 trillion was in dollars. That's why the U.S. Federal Reserve boosted its dollar swap line -- to keep the world's banks from running out of dollars. (Source: "Is the Role of the Dollar Changing?" The Federal Reserve Bank of New York, January 2010.)
[check the original for the links]

Concern that China and Russia don't want to be tied to the US Buck:

Prior to the crisis, in March 2009, China and Russia suggested the world adopt a single global currency. The goal would be to create a reserve currency "that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies." In other words, China is concerned the trillions it holds in dollars will be worth less if dollar inflation sets in.

That, of course misses the point. Bannon, Trump, the Chinese, and the Russians all assume that one can create a global (not under the control of a country) fiat currency which grows in total nominal value to just match global economic expansion (avoids both ruinous inflation and deflation), is not tied to physical specie which is limited to what might be dug out of the ground at any given time (of course, since it's fiat), and will nevertheless benefit them preferentially as opposed to their economic/political enemies. A multi-nationalist might suggest the UN, of course. Not going to happen.

Without a US foreign trade deficit, global trade collapses. That's the basis of American Exceptionalism in today's world.
.

Jump on My Bandwagon

Finally, someone has joined my epithet bandwagon. It's Linda Stasi of the New York Daily News, which is a left-leaning tabloid. Perhaps the only one on the planet.

How in hell do the American people think this is OK? It's never OK to bar the press in a society that guarantees freedom of the press. Who is Donald Trump? Kim Jong Un with a combover?

The drum major marches on.

You're Fired!

Demented Ronnie earned his cred with the rich lunatics by firing the PATCO workers. Well, Kim Jong-Don has his shot at immortality. He's been at swords' points with "the intelligence community" at least since the first reports of Russian interference. "I don't really think [Russia] is, but who knows? I don't know either. [The intelligence community] don't know and I don't know." Of course, they know. And I'd bet a buck they've got him talking to some Russians. He's behaving like a perp who knows the jig's up. Real soon now.

So, what's the over/under on Kim Jong-Don firing the working analysts, the ones his new appointees want to corral? A month? Two? Nixon tried to get the CIA to spike the FBI's investigation. Why not go all Ronnie? Such a move could be made to fit Bannon's "deconstruction of the administrative state". 'They won't listen to the American people, so I fired them'. Of course, Kim Jong-Don asserts that whatever he does is for the American people, who, based on what he says, are the uneducated, unskilled, hidebound white folk who just want their niggers back.

Blood Money

OK, so here's the deal: the drug industry (legal ones, that is) is near the top of the list of noxious parasites on the economy. In recent days, one member of that clan, Gilead, has been getting static from the investor class about its less than stellar financial performance. Gilead is a major player in HIV. It was also the lead participant in HepC; the source of the ~$84,000 "cure", several of them.

That marketing started a few years ago, but revenue has waned some in the last year or two. So the idle money rich are getting irritated. If you watch the TeeVee shows suited to the baby boomers, then you've been Gatling Gunned by the ads showing older, white, middle class boomers who, they are told, are at imminent risk!!!! Go get tested, you damn fools!!!! Oh, and then come get our drug (no, Gilead doesn't name itself, of course).

Baloney.

The Red Cross blood banks test for known transmissible diseases, including HepC since ~1992. Here's what they say:

The Red Cross regards blood test results as private and confidential information. The Red Cross may contact you by letter or call to arrange a counseling appointment, but the Red Cross does not disclose information regarding positive blood test results to anyone but the donor, except as required by law. The Red Cross maintains a confidential list of people who may be at risk for spreading transfusion-transmitted diseases. When required by law, we report donor information, including test results, to health departments, military medical commands, and regulatory agencies. Donation information may also be used confidentially for medical studies.

So, in the end, if you've not shot up with someone else's dirty works and have been a blood donor or been in hospital for some operation since 1992, then you've been told. If not, DONATE A PINT OF BLOOD!!! You'll be doing a Good Deed, and find out if you're HepC positive. All for free.

Rednecks and Robots

Kim Jong-Don got elected because enough of the uneducated and unskilled who used to have high wage jobs in high value industries voted against their own self interest. Some of that wage escalating leverage was driven by oligopoly (autos) and some by inherent demand (energy). The Great Recession put an end to much of that. Kim Jong-Don promised such folk that, by making 'America Great Again', he'd get them their high wage, low skill jobs back. Now. That's just a really, really Big Lie and always has been. The former Rust Belt of the blue collar middle class was built on market control by industry, and countervailing power of industrial unions. Industry sucked monopoly rents from consumers, and unions sucked some of the vigorish from industry for workers. Redistribution by any other name, thy result is sweet.

Reagan set out to fully destroy the blue collar middle class, aided in large part by those very folks. Stupid is as stupid does. And the lunatic Right has only gotten more bold since. So, now we have a billionaire and his billlionaire buddies claiming to be the champions of the lost blue collar middle class, working hard every day to restore them to wealth and happiness. Sure they will.

The Left, and some of the Right, cling to the farm-to-factory history of job destruction/creation from the early 20th century as the panacea. No problem; we've been through this before and it turned out all right, and so again. That's some powerful intoxicant.

Well, today's reporting will be declared fake news by Kim Jong-Don and his mouthpieces. Texas, land of the free, and home of the robot. The stupid who voted for him may well continue to believe that their ship has come in, captained by Kim Jong-Don. But the captains of industry tell a different story. And they're not blaming Mexico, China, or Obama. Imagine such honesty!! As stated before in these endeavors, the early 20th century migration was possible just because the skill/brains needed for the created jobs was no worse, even lower, than those destroyed. And the volume of jobs created was commensurate with those destroyed. Successful employment migrations only work simply if labor is homogeneous or, less simply, if labor can be re-trained at a cost sufficiently smaller than the net income increase over the person's remaining worklife to make it worth the effort. For those who lost out on their high wage, low skill jobs over the last decade or so, the only realistic options:
1 - let 'em starve; they wouldn't keep up their skills so it's their ownself's fault
2 - welfare; they were blue collar middle class, so they deserve to be blue collar middle class forever

Some might posit re-training, but as stated in earlier missives, we really don't need more 55 year old London Whales from 50 year old coal miners. Now, do we?

First, the basic issue:

Oil and gas workers have traditionally had some of the highest-paying blue-collar jobs -- just the type that President Trump has vowed to preserve and bring back. But the West Texas oil fields, where activity is gearing back up as prices rebound, illustrate how difficult it will be to meet that goal.

Then, the slap upside the head:

"People have left the industry, and they are not coming back," said Michael Dynan, vice president for portfolio and strategic development at Schramm, a Pennsylvania manufacturer of drilling rigs. "If it's a repetitive task, it can be automated, and I don't need someone to do that. I can get a computer to do that."

And that's exactly what's been going on. Yes, new jobs are happening in the oil patches. No, these jobs are a fraction of the number lost, and demand skills that the oil rig roughneck hasn't a chance of owning.

Recall what's been pointed out more than once here in the past; labor is a variable cost, so it is easily (in Red states, anyway) expanded and contracted as production waxes and wanes. Automation, capitalized production generally, transforms each replaced worker into fixed cost capital. No matter the level of production, those robots and machines have to be amortized. The nut gets bigger. So:

S.O.C. Industries, a small local pump truck operator and chemical services provider, is forced to invest $100,000 a year to keep up with the computer programs and monitoring equipment its clients request. The added expenses are one reason the company has let go 15 of the 60 field workers employed three years ago. Another is that well operators that once hired five or six people on a drill site to mix chemicals and drilling fluids as well as clean up spills are now hiring only three as mechanization has sliced their drilling time in half.

More fixed capital expense of production. The only way the arithmetic works, of course, is for production demand to at least continue at the level when the switch from rednecks to robots happened. Any falloff in demand means Chapter 7. Arithmetic is a bitch.

Our Comic Book President

It's said that Kim Jong-Don doesn't want to read, i.e. text, the documents he gets. He likes pictures and maps. Sorta the "Classics Illustrated" approach. Just only pictures.

Well, here's a picture that explains why the right wing, trickle down, approach to macro-economic policy just never does anything more than making the rich yet richer.

(By Waliapreeti (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons)

You don't need to be a mathlete to see that the marginal propensity to consume decreases with income. IOW, if you're already rich, giving you more moolah means you'll just sit on it and not increase aggregate demand in the macro-economy. That asymptote problem, yet again. Most likely, as your rich cabal does, you'll just chase Treasuries. The result of that will reduce yet more the received interest rate. And, of course, you and the rest of the cabal will demand that the damn gummint raise the rate on Treasuries to something you can live on, say, 10%. The problem, of course, is that even if Treasury did sell instruments at a nominal rate of 10% (they can do that now if the wanted to, by the way), rather than at auction, the secondary market would immediately drive down the rate to meet the demand reflected by The Giant Pool of Money, which grows ever larger. So, we'd get a transparent re-distribution of moolah from taxpayers to fat cats. Fat cats would rather their transgression be less obvious.

May be we can rename Kim Jong-Don yet again, to Robin Hoodlum? Take from the poor and give to the rich!

Thought For The Day - 17 February 2017

Reporting today that Kim Jong-Don intends to remove 11.5 million illegals. Whether anyone knows that the total of illegals is that number, or even one near it is an open question. But here's the thing. For each illegal one could reasonably expect that s/he has some number of kids/spouse tagging along. The kids, if born here, are citizens. Well, until Kim Jong-Don can get the 14th amendment of Constitution repealed.

What might be a side-effect of such a mass expulsion? How about the plunging share price of WalMart? The loss of, say, 40 million poor people will certainly put a crimp in their revenue and profit. Ya think they might just bitch to the little whiney bitch? They'd better get at it. The nasty arithmetic just won't go away.

Babbling Brooks

For some years, David Brooks has self-identified as the coherent conservative, as opposed to the lunatic fringe. Since the ascendancy of Kim Jong-Don, he's become a tad more adamant in that regard. It, therefore, should come as no surprise that his column today carries on in such a manner.

What is refreshing is that he's offering up wisdom that sounds rather like he's been pinching ideas from Your Humble Servant of late. He he. While he doesn't reach the level that I do: Kim Jong-Don's point is to destroy governance, so the conclusion espoused by many, that he's flailing and incompetent is just plain wrong. By the bye: yes, I'm referring to the newly added subhead seen in some versions of these endeavors; I regret the bold font, but that's not me, but the platform's decision. If I ever find a way to get normal display, I will. On to Mr. Brooks.

I still have trouble seeing how the Trump administration survives a full term. Judging by his Thursday press conference, President Trump's mental state is like a train that long ago left freewheeling and iconoclastic, has raced through indulgent, chaotic and unnerving, and is now careening past unhinged, unmoored and unglued.

So, is he crazy? Yes and no. Yes, he's clearly demented, but by his own hand. I'm among those who assert that 99.44% of neurotics are so just because they choose to be, it comforts them. Organic mental health issues, such as schizophrenia, are another issue. So no, Kim Jong-Don's problems, as viewed from the outside, are his assets, so far as he is concerned. The bully in the bully pulpit, so to speak.

Which brings us to the other major point of Kim Jong-Don, which I've expressed more than once in the past (and offer up a self-quote from elsewhere), but bears repeating, since Mr. Brooks gets near it:

Puzder, as well as DeVos and Carson and ..., is that governance is to be destroyed. after all, anarchy favors the rich. and the rich is Kim Jong-Don's only priority. the uneducated and unskilled who voted [for] him were hoodwinked by their own racism. if they were the only ones to be punished.

Mr. Brooks says this

Bannon has a coherent worldview, which is a huge advantage when all is chaos. It's interesting how many of Bannon's rivals have woken up with knives in their backs. Michael Flynn is gone. Reince Priebus has been unmanned by a thousand White House leaks. Rex Tillerson had the potential to be an effective secretary of state, but Bannon neutered him last week by denying him the ability to even select his own deputy.

Yet another self-quote, from an unrelated posting (not mine, that is):

what was that movie (mostly true, I hear) about that mad English king? a recent one, not 14th century or whatever. the moderate Republicans (are there really any left?) don't matter. the lunatic fringe controls the party in Congress and they only care that The Donald won't veto their gifts to the rich, punish the poor, legislation.

Mr. Brooks, today:

Everything about Trump that appalls 65 percent of America strengthens him with the other 35 percent, and he can ride that group for a while. Even after these horrible four weeks, Republicans on Capitol Hill are not close to abandoning their man.

So, a useful Fool. Both to Putin and the lunatic Right.

Obambi or Godzilla?

The shit storm battering Mar-a-Lago approaches Cat 5, and one must wonder: why now? Why did Obama hold back? He's already on record that he held back the petty stuff in order to avoid the appearance of influencing the election. Why didn't he go for the kill last September? Or another October Surprise? The shit storm isn't intel from yesterday, but from 2015 and 2016. Why?

What we may have is the recognition of strategy versus tactics. If Obama had blown a strong whistle during the election (a tactical move), Hill probably would have won, but the Congress would likely have stayed Right Wing, and so the Supremes. What to do? What to do? And the meme from the Right would have continued for four years: it was all a Liberal plot.

The strategic move, it appears, was to force the Right Wing to implode. Obama knows DC, and in particular the history of Nixon and Iran Contra and such. The rank and file intelligence community is somewhat right of center, but they're not in Putin's pocket; they really are Patriots (I met a few when I was with Jack Anderson for a little while in the 1908s). The WMD fiasco was the fault of the political top of the community, not the professionals. They knew that when Kim Jong-Don accused them during the campaign of having "no idea".

So, now the Republicans have to impeach Kim Jong-Don, at least, may be even Pence, or risk never controlling anything more than the Supremes for decades.

Strategy. Tactic. Perhaps Obama is, ya know, really smart.

Thought For The Day - 14 February 2017

It's deja vu, all over again. A St. Valentine Day's Massacre.

Back in the 1970s, for those old enough to remember (and enough memory cells left to realize those memories!), Nixon was taken down by his own narcissistic need to hear his own voice for the rest of his life. Let's go to the audio tape!

This time, Kim Jong-Don is being taken down by the very spy agencies he so disparaged while he ran for president. They have all of his, and his minions, skullduggery on tape. These endeavors predicted that his bravado would be his undoing. And so it has come to pass.

QED

Sauce For The Gander

From the news

"If foreign services are paying attention, and I am sure that they are, they are paying attention to all of the individuals who potentially have access, all the types of devices that are there and they are going to think about how they can exploit that in the future," Cordero said.

That, of course, is the analysis of Kim Jong-Don's North Korean discussion with Abe at Mar-a-Lago, in full view of the other $200,000 (yes, he doubled it in January; I wonder why?) joining cost (plus the $14,000/annum dues) fat cats.

So, not only did Kim Jong-Don's goose-steppers use a non-government email server, he's now discussing national security concerns in public?

Lock him up!
Lock him up!
Lock him up!
Lock him up!
Lock him up!
Lock him up!
Lock him up!
Lock him up!
Lock him up!
Lock him up!
Lock him up!

He can have a cell next to Flynn.

There. I feel so much better.

Diogenes Succeeds

J'Accuse. A guy who's actually run a business has the gonads to tell the truth.

On Monday, Carl Bass, the CEO of $18 billion Autodesk, gave an interview with Pando's Sarah Lacy where he described President Donald Trump as "acting somewhere between a dictator and a small business owner."

Some of us, not nearly so famous, figured that out a while ago. I'd add "whiny brat", but that's just my elite prejudice.

"We are talking about a guy who likes belittling people. He really is a bully. Look, everyone I talk to, the tech guys, who went to that first meeting, well, you saw what they looked like. They didn't want to be there," Bass told Lacy.

And there you have it.

Some Things Are Public Goods

Adam Feuerstein has a plaintive missive today, bemoaning the decline in profits from hepatitis/C drugs. Gilead has ceased being a cash printing machine, since the hep/C drugs do, close enough, "cure" the disease.

I never bought the notion that there was some huge pool of hep/C out in the population, despite (or, perhaps, because of?) Gilead's TeeVee ad onslaught aimed at Baby Boomers. While the virus can hang around asymptomatically for a time, the fact is only IV drug users have been getting infected since 1992 when a test began in blood banks. The notion that middle class oldsters, innocently infected from an old transfusion, are still walking time bombs for the disease is ludicrous. Not to mention that generic drugs have been treating the disease for decades, with nearly the same level of efficacy, just not as comfortably. Why, one might ask, should the non-IV population pay $84,000 per infection for Medicaid drug shooters to feel better? And the drug isn't a vaccine only a cure for the instant infection, so re-infection in the prescribing population is highly likely.

Feuerstein goes on to compare the life-long use of HIV drugs to manage the disease as better.

Right. He is clearly unaware that he's made an iron-clad case for healthcare as public good. Just as Lahren complained that coal miners deserve sinecure, it appears that drug companies do, too. Where's Ayn Rand when you need her?

This Is Your Brain on Drugs

A previous missive bemoaned the death of the financial quant, which doesn't exactly break my heart. But we now have reporting that Kim Jong-Don has set out to kill off the bio-stat (or pharma quant). This is far more serious. If only because it's an assault on science. Clinical trials are important science, not FDA obstruction. But the Randians only see the real world through her kaleidescope glasses. David Frum, no bleeding heart lefty, said it all (on one of those left wing MSNBC interview shows), this will be the most corrupt administration in history.

Pay attention to the money. That is the story of the next four years. Organized self-dealing, self-enrichment of the Trump administration.

If there were any doubt that Kim Jong-Don and his cabal of Randians needed medical attention, read up this bit of legislation. Snake oil for all.

The bill includes a safe harbor provision which would prevent FDA from considering adverse events tied to administration of unapproved drugs to terminally ill patients under compassionate use. The bill would prohibit the federal government from using data or experiences from compassionate use "to delay or otherwise adversely impact review or approval" of a drug or device.

For those who don't follow the process by which medicines come to you, the major impact of this insanity would be to make controlled trials virtually impossible. There would be no incentive for critically ill patients to seek out clinical trials, and without controlled trials, no one would ever know whether DrugX actually works. And, of course, such snake oil would be nicely highly priced, since drug companies could make any claims they want. The other shoe: once enacted, these same clowns will write legislation compelling Medicare/Medicaid to pay for such drugs. Win/win for charlatans.

Here's the other really notable quote

A 2016 study commissioned by BIO found that from 2006-2015, an average of 63% of Phase I trials were completed successfully, while only 10% of drugs that entered Phase I were eventually approved.

Why all this is important? There are three primary phases of trial (some post-approval testing is called Phase IV). Phase I merely tests on, generally, a handful of individuals, whether the compound is deadly. Eventually, the compound goes through a (or two or three) large population, controlled Phase III trial, which provides sufficient data to demonstrate that it really has no nasty side effects and that, "It works, by Jove, it works!!!" So, of course, an inert compound will pass Phase I; be claimed to be a miracle cure for some nasty sort of cancer, say; be sold for a king's ransom; never undergo further efficacy trials; and rake in millions or billions of dollars to charlatans. Stupid people put Kim Jong-Don on his throne.

We Don't Need No Education

Now that we have Mrs. Scamway running the Department of Education, what can we expect? Simple; for those states with lunatic right governments those kids will learn that the earth is 6,000 years old, humans frolicked with dinosaurs, and that all of science is merely "theoretical". The smart states will not go down that rat hole, and the inequality of the uneducated, unskilled angry white men will be passed on to their spawn. The coastal cities will thrive. The Empty Red States will continue to degrade. The Blue States will continue to subsidize their congenital stupidity.

Have a nice day.

Thought for The Day - 2 February 2017

The most, and I mean most, existential threat to Kim Jong-Don and his fellow travellers in the GOP is votes from those not in clan. How best to assure permanent control, a la Putin, without getting caught? To date they've used redistricting and penalized polling places to good advantage. But those efforts can be overcome. How about the simple expedient of requiring an e-mail address in order to register? The old and/or poor are less likely to have such, and then the gerrymandering and polling place gigs don't matter anymore. "That's some catch, that Catch-22."

I Still Hate Neil Irwin, part the Sixth

He's done it again, slurped my mission, but other reporting during the week reflecting the asymptote of progress means he'll be lastly discussed in this missive.

Here and elsewhere I've argued that the future of mobile compute devices is squarely (huh?) on the levelling arc of the asymptote since power available to such devices is limited to what can be packed into a battery of such devices' form factor. The Note 7 is merely the latest example of the results of trying to fool Mother Nature. Well, Nova this week reported on the "Search for the Super Battery", narrated by the NYT's David Pogue. It tickled my ovaries to see one of the battery scientists play with a lego-ish version of the periodic table to demonstrate that lithium is as far as we go. Until someone invents a better atom, of course. Kim Jong-Don's unleashing of innovation by giving away the rest of our GDP to billionaires will certainly accomplish that, of course. One point I had long forgotten, but is vital to understanding the issue was the segment on lithium-as-metal battery and lithium-as-ion battery. The first attempts were the former, but way too dangerous. The latter have become the method for exploiting lithium, but provide about half the energy density of metal based batteries. And can be a tad dangerous, as well. There was some discussion of efforts to find a way to use lithium-as-metal in a safer way, but nothing imminent. In any case, power available to mobile compute devices doesn't jump by anything like an order of magnitude. That pesky asymptote.

Friday morning, Adam Feuerstein linked this essay on possible reduction of FDA's efficacy responsibility with quotes such as

What makes drug development long and expensive is the need to prove, beyond statistical doubt, that your damn drug works. That's not on the FDA -- that's on the underlying biology of the diseases we're trying to crack.
-- Michael Gilman

and

Anyone can come up with safe snake oil, but, if that becomes our regulatory standard, that's what we're going to get. Will it create a vibrant industry? No, it will obliterate it.
-- Bernard Munos

Again, that pesky asymptote of progress: it's the real world science/engineering that determines whether a new widget really is better, not financial engineering. It was this latter that has driven our economy's worse collapses. Kim Jong-Don is determined to make that happen all over again. And with drugs, we get the added benefit of super expensive snake oil. I guess we're not in Kansas any more.

Speaking of the Devil, Maher's show Friday night, without any acknowledgement in Real Time, offered up another asymptotic moment. For those who don't do Maher, the main body of an episode is Maher sparring with three guests. Most often, it seems to me, is two sorta liberal and one token from the lunatic right. Friday was, sorta kinda, the other way round. In particular was Tomi Lahren, whom I'd never heard of until then. But, then, she was titled as a "TheBlaze" talking head, so that's no surprise. Off and on, the discussion dealt with "regulation" during which Lahren repeatedly demanded that coal miners were being abandoned due to regulatory burden. In other words coal miners, unlike say auto workers facing mass unemployment during the auto "bailout", deserved life-long sinecure. Which is not to say that traditional underground coal mining is an easy life. But it does seem that a goodly percent of the 77,000 in PA, MI, and WI voted for Kim Jong-Don on the assurance that they'd get their jobs back. Right now. But that pesky asymptote, again. First, electric power plants have been converting to gas as fast as they can, just because it's cleaner and cheaper. One might argue that this conversion effort is "burdensome" EPA regulation, but said regulation is just implementing statute. Without such conversions, the USofA must inevitably have cities as toxic as China's today or London in the early 1950s. Take your pick. And, second, coal mining in the East has turned to hill topping, which dis-employs underground miners entirely.

In Kentucky, for example, the number of workers has declined over 60% from 1979 to 2006 (from 47,190 to 17,959 workers). The industry overall lost approximately 10,000 jobs from 1990 to 1997, as MTR and other more mechanized underground mining methods became more widely used. The coal industry asserts that surface mining techniques, such as mountaintop removal, are safer for miners than sending miners underground.

In other words, coal miners have been replaced by machines and methods long before EPA began to clean the air. And, of course, the House added more profit (unpaid negative externalities) to coal companies emboldened by Kim Jong-Don.

Clean coal?

So, after this leisurely stroll down the Yellow Brick Road, we get to Irwin's latest, which discusses whether US labor is finding life better or worse. It's his usual decent essay, but he elides the two most important points.

First, employment dislocation remains analyzed in the century old context of farm-to-factory, and Irwin doesn't get beyond that. Farm-to-factory worked, in the sense of "new jobs replace old jobs", just because farm work was at least as skilled as factory work and abundant, so the segue was easy. The only real difficult part was getting from shit kicker states to urban ones. That context is simply duplicitous these days. Lahren, see above, argues for coal miner sinecure (but Northern auto workers get shafted) just because there's really no other choice. A 50 year old ex-coal miner isn't going to be retrained to be a 55 year old financial analyst; not that we need any more folks skilled at deceptive finance, of course. Having a GED, or less, is one impediment. The other, of course, is that education is the main part of what used to be called "human capital" and as with any capital expenditure, the cost/benefit decision rests on the pay back period. So, coal miners are either treated as specially deserving of sinecure, as opposed to Northern unionized factory workers, or they're not. Fair is fair. Well, it's supposed to be. Income redistribution is the only efficient path.

"When firms invest in technical change that disrupts employment structures," Mr. Johnson said, "their decisions focus solely on private profit and neglect the costly side effects that society must bear. When one small firm adopts a new technology displacing workers, this may not be a societal crisis. When many firms do this at the same time, the changes in the nature of production and employment across the nation become a profound social problem."

Second, neither Irwin nor his interviews admit to the asymptote problem. But they do, implicitly.

[The Economic Innovation Group] cite federal data showing that in 1977, more than 16 percent of firms in the United States were less than a year old, a figure that had fallen to half that by 2014. New businesses have similarly done less to power new jobs than they once did, while the biggest, oldest firms account for a rising share of economic activity. Market concentration increased for two-thirds of industries between 1997 and 2012, the report found. That coincided with a steady rise in corporate profits as a share of gross domestic product, and in a decline in the share going to workers' wages.

I guess that lunatic right meme, "small business drives the country", is just more bullshit. Why am I not surprised?

That nasty asymptote, yet again. New business depends on true innovation, and Gordon's book, if you read carefully, demonstrates that the driving force is that asymptote.

Finally, I'll admit that the notion of the asymptote is old hat among quants. So far as I know, the term is my invention, but the quant has been around for centuries. It's called the Gompertz curve.

The Prodigal Son

Well, it seemed time to post a "lost orphan son", i.e. side-by-side photos of Kim Jong-Don and Kim Jong-Un. A slam dunk for me. So, Goog brought up its usual photo array. Damn. I really can't top this one from Esquire:

Like a Tonne of Bricks

For some time now, these missives have questioned, nay derided, the enthusiasm for the likes Amazon and the simple arithmetic of transferring a widget from them to you. The company seldom makes any money, and today's report bears that out again. In pre-market trading the share is down a tad over $35.

In one of the many pundits' musings is this:

"In today's world of e-commerce, two-day free shipping is table stakes," said Marc Lore, Wal-Mart's e-commerce head. "It no longer makes sense to charge for it."

Wal-Mart has gotten into the Sears Catalog business, too. Not to mention chewy.com, repeating the folly of pets.com back during the DotBomb. What was it that Santayana said? All of them are attempting to falsify that which cannot be done: it costs an order of magnitude more to ship by the each by air than by the tonne by rail. (Actually, as of 2014 far more than that.) And, as the 1% will continue to suck up income under Kim Jong-Don from the rest, the addressable market of the lazy and decadent, who care not for efficiency, will shrink. Woe betide them all.