Smart Links 18 December 2012

Commentary on more of the same in the bond market, PIMCO’s el-Erian on investing in 2013, our economic challenges are structural not demand, people the Japanese printing presses, America’s in a recession right now, Obama’s victory, and the Tories would win even with NDP-Liberal alliance.

If we could only know when it blows up.

Telegraph -- Central banks risk bond market crash in turning monetary dial to 11
In This is Spinal Tap, the spoof documentary about a heavy metal rock band, there is a Marshall amplifier with a volume control which goes all the way up to 11.

Japan’s great inflation experiment is about to begin.

Telegraph -- Japan's Shinzo Abe prepares to print money for the whole world
Japan’s incoming leader Shinzo Abe has vowed to ram through full-blown reflation policies to pull his country out of slump and drive down the yen, warning Japan's central bank not to defy the will of the people.

Central Banks are ‘all in’.

CNBC -- El-Erian: My Investing Advice for New Year
“Everybody is long the same trade …”

Jeffrey Sachs on the need to invest in education and infrastructure.

Financial Times -- Today’s challenges go beyond Keynes
For more than 30 years, from the mid-1970s to 2008, Keynesian demand management was in intellectual eclipse.

Listen to the brave.

Business Cycle -- The Tell-Tale Chart
Following our September 2011 recession call, we clarified its likely timing in December 2011. Based on the historical lead times of ECRI’s leading indexes, we concluded that, if it didn’t start in the first quarter of 2012, it was very likely to begin by mid-year.

Maybe the great conservative wave has crested. We won’t know until 2016.

New York Review of Books -- How, and What, Obama Won
Clamorous and overpowering, campaign images are vivid as dreams and vanish as quickly.

The math still doesn’t add up (according to this poll anyway).

Huffington Post -- NDP-Liberal Alliance Might Still Lose To Tories, Poll Suggests
A new poll shows the Conservatives remain in the lead in national voting intentions and hints that co-operation between the Liberals and the NDP might not be able to change that.

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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.