Smart Links 09 August 2011

Articles on the incompatibility of social justice and capitalism, reacting to the downgrade, David Rosenberg answers his critics, watch the President pivot to jobs, Kenneth Rogoff on the bullets yet to be fired like 6% inflation, and travel notes - sleepless in Seattle.

This is how conservatives look at the breakdown in the developed countries; it is well written and well argued, although for someone writing a book that stresses the importance of the ‘invisible hand of social justice’ to long-term economic viability it presents an importance challenge. Thanks to David of London.

Telegraph – If We Are To Survive the Looming Catastrophe, We Need to Face the Truth
The idea that a capitalist economy can support a socialist welfare state is collapsing before our eyes.

In case you haven’t heard.

Pdf below -- TD Economics -- Financial Reaction to US Credit Downgrade

David Rosenberg consistent in this warnings about the fragility of the economic recovery in the US comments on the market’s swift confirmation of his thesis. Thanks to David of Victoria.

Pdf below -- Breakfast with Dave 08 August 2011

We have long argued that the Obama Adminstration’s single biggest threat to a second chance is the structural weakness in the job market. Time to pivot.

New Yorker – How Bad Is It?
After the prime-time drama of showdowns on Capitol Hill, agita in the West Wing, and a doomsday deadline averted comes the local news, wherein bad things happen to real people.

Time to get serious: debt write-downs, 6% inflation, and structural reforms. (ed’s note: are bonds next?)

Financial Times – The Bullets Yet to Fired to Stop the Crisis
Four years into the financial crisis, it is becoming increasingly clear that the biggest deficit is not in credit, but credibility.

Travel notes: Sleepless in Seattle

Smooth and uneventful hop over to Seattle yesterday to get ready ready for our 32 hour airport to airport journey to Johannesburg.

We got the $99 Coast Gateway Hotel special on the recommendation of a friend because of the promixity to the airport.

Bad move.

We ended up walking four minutes further away to the Double Tree (a Hilton property) for dinner and would definitely stay there next time.

We found our room facing the highway -- noisy -- was filled with light all night because every neon sign in Seattle was beaming through the thin curtain that guarded our window.

Energy can't be possibly priced right in America.

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TD Economics -- Financial Reaction to US Credit Downgrade.pdf473 KB
Breakfast with Dave 08 August 2011.pdf674.5 KB
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Twin Virtues: Inequality of Outcomes & Equality of Opportunity©

Twin Virtues

Ultimately, the most successful societies find the balance between the twin virtues of inequality of outcomes and equality of opportunity.

The new politics must marry the twin virtues of unequal outcomes and equality of opportunity.

When too few get too much everybody loses.

Feminism is about women living their lives on their own terms, marshalling the resources of the society to make that possible, and men embracing this as vital to a successful society and their own liberation.

Can it be that striving for equality of opportunity however imperfect the process not only benefits the individual but also creates benefits for the society that are unintended but wonderful?

Economics must be a 'moral enterprise' as much as politics claims to be. Economic outcomes need to be framed in terms of right and wrong not just efficiency if only because these often align in surprising ways that are good for society and the economy.

My vision of Canada is that any Canadian child from a family of limited circumstance can expect to have a chance at lifetime of unlimited opportunities.

Free trade is a wonderful thing. Time and time again economists have proven that free trade creates enormous wealth for each country 'on the whole'. Historians have shown that free trade is usually associated with rising political, social and cultural liberty. The perennial problem is that free trade always creates tremendous disruption for thousands even millions of individuals often concentrated in one geography, and where the state is idle, not investing in best in class instruments of social justice, free trade can be a permanent ticket out of the middle class, down, not up.

Tax policy should be founded on the principle of generating steady tax revenues sufficient to maximise environmentally sustainable economic growth in order to fund fair government.

Public policy should be designed to decrease inequality before the law and increase equality of opportunity.

Capitalism is not the problem; the problem is what we do with capitalism.

Content is always more difficult to argue than conspiracy.

Let the state regulate and the market operate (most things).

Welfare strategies are best designed as a hand up, not as a hand out.

Political debate should not be fact free fighting.

Explanation lasts longer than eloquence.

Always favour empowerment over dependency.

The most enduring public figures are embraced for the causes they fought for and not the concept of themselves they hoped others would remember them by.

Find your voice and don't be the echo of somebody else.

It is possible to operate on two different levels: the practical, cautious and conservative; and the realm of ideas, open, free, and radical.