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Re: How long have you been running the PP?

Posted: Fri Apr 15, 2011 8:39 am
by Lone Wolf
Pkg Man wrote: One aspect of economic development that I think has not received much attention from economists is the degree of social cohesion in a society.  Years ago I read a great book by Francis Fukuyama called Trust.  To put it in overly-simplistic terms, it is much easier to enter into contracts in a society where a person can have a certain degree of trust in the people he is dealing with.
MediumTex wrote: I think this is an area in which the U.S. has great economic advantages.  Regardless of what anyone says about corruption or crooked politics at the macro level, it's very uncommon to fear being short-changed in routine commercial transactions, feel that you need to bribe a police officer to stay out of trouble, feel that you won't get paid after doing work, etc. (there are exceptions, but I am just talking about typical expectations).
...
Creating this sense of shared values is harder to do than it looks, but when a community or society does reach a critical mass of shared values, it is a powerful boost to economic transactions (among other things).  When people are talking about the U.S. being in bad shape, as PkgMan notes, they rarely focus on this huge structural advantage that our economy has.
I very much agree with you both.  This is one of those very important intangibles that I have never quite been able to pin down.  How does it emerge?  Why does it fail to emerge in so many societies?  In short, I don't yet understand how you "bottle that magic".

Does anyone have any ideas on this?

Re: How long have you been running the PP?

Posted: Fri Apr 15, 2011 8:55 am
by MediumTex
Lone Wolf wrote: I very much agree with you both.  This is one of those very important intangibles that I have never quite been able to pin down.  How does it emerge?  Why does it fail to emerge in so many societies?  In short, I don't yet understand how you "bottle that magic".

Does anyone have any ideas on this?
The thing that is so impressive about what the U.S. has achieved in this area is that it exists in a multi-cultural society.  Japan also has a very strong social cohesion factor, but that is less surprising in a homogeneous society with a strong tradition of intrasociety trust.

As far as how these values get a foothold, I think it's a slow process and requires a sense among the people that the game isn't rigged against them.

Re: How long have you been running the PP?

Posted: Fri Apr 15, 2011 9:47 am
by HB Reader
I very much agree that trust confers more economic advantages than most people realize.

Although we are quick to express our frustrations with our legal and political processes, few Americans seem to appreciate (probably because they've never known it any other way) the rule of law here and how free our society is from the petty corruption that is endemic in much of the world.

I say this from the perspective of someone who spent several years in Latin America growing up and spent 24 years working in Washington with a fair amount of exposure to foreign businessmen and government officials.

   

Re: How long have you been running the PP?

Posted: Fri Apr 15, 2011 12:47 pm
by TBV
From a social science standpoint, economic interdependence, exposure to integrative mass media, upward social mobility, shared universal norms, the existence of intermediary social institutions (between citizens and the state) and the absence of multiple reinforcing social cleavages go a long way toward building trust.  The opposite is a system reliant on face-to-face communication, enforced loyalty toward primordial groups, fragmented markets hindered by geographic isolation, etc.

Social trust is present in all societies, but the intensity and scope vary widely. Insular groups often exhibit high levels of trust intramurally, but not toward outsiders.  The major benefits come when trust is extended to an ever-widening circle.  Working in the opposite direction is the need to feel special and supported.  At the DMV or the Post Office, everyone is treated the same, but that's not very emotionally satisfying.  Having an "uncle in the business", a "back door", or an acquaintance who treats you better than the norm is far more satisfying. But that is contrary to universal norms of equal treatment.  I think the truth is we would not like a society very much that was purely one way or the other.

Re: How long have you been running the PP?

Posted: Fri Apr 15, 2011 6:04 pm
by Tortoise
MediumTex wrote: The thing that is so impressive about what the U.S. has achieved in this area is that it exists in a multi-cultural society.  Japan also has a very strong social cohesion factor, but that is less surprising in a homogeneous society with a strong tradition of intrasociety trust.
In the case of the U.S., the intrasociety trust in spite of the nation being multicultural is probably a combination of (1) the immense unifying power of the historically radical idea of individual liberty, and (2) the fact that the U.S. was able to form itself with a relatively clean slate--no historical baggage of tribal/ethnic conflicts over the territory going back hundreds or even thousands of years.

Re: How long have you been running the PP?

Posted: Fri Apr 15, 2011 6:56 pm
by TBV
Tortoise wrote:
MediumTex wrote: The thing that is so impressive about what the U.S. has achieved in this area is that it exists in a multi-cultural society.  Japan also has a very strong social cohesion factor, but that is less surprising in a homogeneous society with a strong tradition of intrasociety trust.
In the case of the U.S., the intrasociety trust in spite of the nation being multicultural is probably a combination of (1) the immense unifying power of the historically radical idea of individual liberty, and (2) the fact that the U.S. was able to form itself with a relatively clean slate--no historical baggage of tribal/ethnic conflicts over the territory going back hundreds or even thousands of years.
Geography and the Constitution had a lot to do with it.  Vast expanses allowed discontented citizens to vote with their feet in search of communities that better suited them.  Once arrived, they had few advantages over anyone else, making cooperation a viable strategy for success.  As for the lack of tribal/ethnic conflicts, I'm not so sure.  Religious differences were very pronounced in 18th and 19th century America. Rhode Island, Utah, and Maryland (for example) owed their existence to a desire to be free of the established religions of other colonies/states. And let's not forget the Indian wars, slavery and the Civil War.  In a sense, the constrained federal government that the Constitution gave us grew out of a distrust which states had toward one another, fear that the more powerful ones would expand the reach of their religion, or wealth, or slaves beyond their  home borders.  Perhaps by making it so difficult to achieve pre-eminence, the Constitution helped reduce tensions that would have otherwise made trust very difficult.

Re: How long have you been running the PP?

Posted: Sat Apr 16, 2011 7:27 pm
by cabronjames
9 months, started in July 2010.

Perhaps I ended up starting at a "lucky time", altho I did not try to time the start.  When i decided on the Perm Portfolio-type asset allocation, I "just did it".

Re: How long have you been running the PP?

Posted: Sat Apr 16, 2011 7:53 pm
by MediumTex
cabronjames wrote: 9 months, started in July 2010.

Perhaps I ended up starting at a "lucky time", altho I did not try to time the start.  When i decided on the Perm Portfolio-type asset allocation, I "just did it".
cabronjames,

How did you learn of this site?

I assume you learned of it after you started your PP, or else you would have joined us sooner.

Re: How long have you been running the PP?

Posted: Sat Apr 16, 2011 10:33 pm
by Pkg Man
Pkg Man wrote:
MediumTex wrote: What made things better under Reagan was primarily driven by demographics.

When a demographic bulge of that size enters its peak earning years in a stable economy, things are normally going to look very rosy.

The dawning of the technology revolution and the capacity of the U.S. economy to take on enormous amounts of debt also helped (though the ability to take on debt is itself a product of favorable demographics).

George W. Bush tried to do what Reagan did, but failed to realize that the Reagan playbook appplied to an unfavorable demographic situation is a recipe for disaster.

Normally, the demographic profile, degree of political stability and natural resource availability will tell you all you need to know about the state of an economy.  Interestingly (and I am interested in PkgMan's thoughts on this matter), these three metrics are frequently not given that much attention by economists.
...
The other obvious things that matter are political institutions, or stability as MT says.  Included in this is how friendly or unfriendly the government is to business.  I'm not talking about being in the pocket of big business, but rather not interfering excessively in the ability to create and run a business.  If you look at a scatter chart of the number of days it takes to start a business on one axis, and GDP per capital on the other axis, there is a clear relationship.   
...
As a follow-up, I read an interesting article on bloomberg that touches on the topic I brought up http://www.bloomberg.com/news/2011-04-1 ... laces.html.  Below I've posted a portion of the article concerning the difference between the two states in how long it takes to start business and the level of government regulation in how they are run:

Puzder, whose Carpinteria, California-based CKE Restaurants Inc. is the parent of the Carl’s Jr. and Hardee’s fast-food chains, said in a telephone interview that he will tell legislators that Texas is quicker to permit new business and has fewer employment restrictions than California.

Puzder, 60, said he can get a new restaurant approved in six weeks in Texas, compared with up to two years in his home state. Employee scheduling is restricted by California laws that prevent managers from spending more than half their time on non- managerial tasks, he said.


So you don't have to look beyond our borders to see examples of this in action.  Regulations, even well-intentioned ones, often have perverse effects.

Re: How long have you been running the PP?

Posted: Sun Apr 17, 2011 11:29 am
by cabronjames
MediumTex wrote: cabronjames,

How did you learn of this site?
iirc, there was a link to crawlingroad.com from the mymoneyblog.com personal finance blog, that I read occasionally
MediumTex wrote: I assume you learned of it after you started your PP, or else you would have joined us sooner
I had read crawlingroad blog before Jul 2010 when implementing a PP asset allocation.  I don't recall when I started reading this forum, however I was initially "read-only" on the forum a while, before I ever posted.

Thx again to this forum's OGs, including craigr, MT, clive, etc, for your insightful commentary here.

Re: How long have you been running the PP?

Posted: Sat Jan 04, 2020 11:51 am
by vnatale
Lone Wolf wrote:
Tue Apr 12, 2011 5:08 pm


Like I said, no politician is perfect but I'd take Reagan in a heartbeat over the current possibilities.  With the potential for the US to have to choose between Donald Trump and Barack Obama, it is an easy choice.  :)

I had to check to see if this had been subsequently edited but it WAS written in April 2011!

What prompted Lone Wolf to name Donald Trump way back then??!!

Vinny

Re: How long have you been running the PP?

Posted: Sat Jan 04, 2020 2:30 pm
by dualstow
vnatale wrote:
Sat Jan 04, 2020 11:51 am
Lone Wolf wrote:
Tue Apr 12, 2011 5:08 pm


Like I said, no politician is perfect but I'd take Reagan in a heartbeat over the current possibilities.  With the potential for the US to have to choose between Donald Trump and Barack Obama, it is an easy choice.  :)

I had to check to see if this had been subsequently edited but it WAS written in April 2011!

What prompted Lone Wolf to name Donald Trump way back then??!!

Vinny
Because Trump was already taking potshots at Obama as one of the most famous so-called Birthers.
On top of that, he was often asked if he would run.