Two Pictures Show an Important Difference Between China and America...

Two Pictures Show an Important Difference Between China and America
Fabius Maximus Feb 3, 2011 7:21PM Summary: Americans tend to see the mote in China’s eye but not the beam in ours. We project our dark traits onto China, no matter how absurd. Today we see two pictures that provide a rebuttal to one common myth about China and America.

The French Marshall Louis Lyautey (1854-1934) told his gardner to plant a row of trees on his estate. “My Lord, they will take a century to reach full growth” said his groundskeeper. “Then we start plant them today” replied Lyautey.

The news media and its pet pedants tell us much about China. Such as tales about China’s rampant malinvestment, unlike America — where home of entrepreneurs, where free markets rule. Google shows 37 thousand hits to the words Chinese and malinvestment. While there is probably much malinvestment in China, America has a far more serious malinvestment problem.
That’s important because over time even small differences in relative performance can produce large differences in national power.

Malinvestment in China
A new train station in Wuhan (Central China), completed December 2009 (source: Financial Times). One of the thousands of new ports, stations, and airports being built or expanded. Two generations from now these will be considered far-sighted acts of genius, building infrastructure before its needed — contributing to its current growth, built cheaply while China is poor.

Malinvestment in the USA
Meanwhile the US has 18.8 million vacant homes (18.6% 14.6% of total units), up from 13.6 million (11.7%) a decade ago (Census data). The office vacancy rate is 17.7% (per Grubb & Ellis).

But that’s a small aspect of the problem. Our critical public infrastructure is decaying (for details see “The 2009 Report Card for American Infrastructure” of the the American Society of Civil Engineers (ASCE). And our private sector engines of innovation have atrophied. Overall levels of investment are low. The great private sector R&D centers have died, such as Bell Labs and the Palo Alto Research Center.

So where is America investing? Much of our research is done by the government. NIH, NSF, DOE, and DARPA. And what are we building to compare with China’s state of the art transportation and communication systems?

An interior view of one of the many new buildings, each roughly the size of the Pentagon, going up to house expansion of America’s intelligence agencies (official picture). Several house only computers, built near power plants because of their fantastic electricity usage. This is the new HQ of the National Geospatial-Intelligence Agency, costing $1.8 billion. It will be the third largest building in Washington. An interesting contrast with the cuts in capex of America’s already decrepit public infrastructure.

Update: another example of “excess” investment in China — “China is planning to create the world’s biggest mega city by merging nine cities to create a metropolis twice the size of Wales with a population of 42 million.“

Almost a trillion dollars per year, America’s blood, our surplus economic product generated from one hundred million families — goes into our military and intelligence services. We spend more than the rest of the world combined, ten-fold times every possible combination of enemies. This money could rebuild our infrastructure, be invested in education and research to build a powerful America for the 21st century. Instead it gets consumed without thought or plan. Spilled carelessly.

Defense analyst Chuck Spinner describes our past and present (until we go broke) in “The Domestic Roots of Perpetual War” in Challenge: The Magazine of Economic Affairs, January/February 2011.

Posts about China LINK...

1.Power shifts from West to East: the end of the post-WWII regime in the news, 20 December 2007
2.China becomes a super-power (geopolitical analysis need not be war-mongering), 9 July 2008
3.Words to fear in the 21st century: Lǎo hǔ, lǎo hǔ, Lǎo hǔ, 14 July 2008
4.A different perspective on the US and China, seen by an American living in Russia, 23 March 2009
5.China – the mysterious other pole of the world economy, 22 July 2009
6.Another big step for China on its road to becoming a great power, 27 July 2009
7.Will China collapse?, 5 August 2009
8.A revolution is not a dinner party. Thoughts about the future of China, 19 August 2009
9.Update about China: a new center of the world, 13 December 2009
10.Fertilizer overuse destroying Chinese soil, 18 February 2010
11.Rare earths – a hidden but strategic battleground between the US and China, 5 May 2010
12.Today’s example of the inscrutable mystery of China’s economic statistics, 13 May 2010
13.How China builds its commercial empire, 12 July 2010
14.The West has power, but often little self-insight, 19 September 2010
15.A look at the future (it’s already here, but it’s not in the USA), 29 September 2010
16.Why China will again rise to the top, and their most important advantage over America, 11 November 2010

The Waves of 2011...

The Waves of 2011
by John Browne

One of the founding myths of the modern global financial system was that governments, especially of the developed democracies, could borrow endlessly without consequence. But, with sovereign debt crises erupting across the globe, it appears the umbrella of perceived safety has gotten smaller, exposing some benighted countries, like Greece and Ireland, to severely rough weather.

As a key condition for financial rescues of these ailing sovereigns, the International Monetary Fund (IMF) and the European Central Bank (ECB) both demanded severe cuts in government spending. Faced with a bondholder revolt that sent yields upward, both acquiesced and have embarked on austerity campaigns to repair their financial positions.

The big question is: has the umbrella stopped shrinking, or will other countries soon face similar decisions?

For now, major governments such as the United States and European Union have been able to continue to borrow and spend licentiously to fend off the threat of deflation and keep their economies stimulated (the U.S. is by far the greater offender). But three surprising and powerful changes threaten the viability of a long-promised "exit strategy."

First, international investors are beginning to become net sellers of sovereign debt. Even the mighty United States is finding that, despite the Fed's rounds of massive quantitative easing, in which the Fed has bought outright hundreds of billions of dollars of U.S. Treasuries, yields are still rising. In other words, the private and foreign selling pressure is stronger than the Fed's buying pressure.

Second, the credit agencies, stung by their failure to warn investors about the banking crisis, are now emboldened enough to threaten the triple-A ratings of member states within the EU, and even of the United States itself--now the largest debtor in the world. Although it remains to be seen how great an impact the rating agencies will have on the debt markets, the fact that such moves are being contemplated at least drives the debate in an unprecedented direction.

Third, there is considerable and growing political pressure on governments to cut spending. There is a growing awareness among Western voters that government largesse can't be maintained forever, and that it will likely cost the next generation if not the present. Many pet spending programs, including defense, healthcare, welfare and even public pensions, are getting ready for haircuts - if not scalpings. Massive government spending cuts, possibly accompanied by tax increases, will be sure to take a huge bite out of near-term GDP growth, and will perhaps put the world back into the second act of a recession. This will lead us to the next great crossroads in the global financial crisis. Put simply, will the governments of Europe and America allow a natural contraction?

If the central banks of the EU and the U.S. choose to unleash even more massive reflationary programs, then a period of crippling inflation could be the outcome. This will form the basis of monetary chaos and prolonged economic stagnation, the most damaging of all economic conditions. In these circumstances, the prices of needed raw materials and commodities, including precious metals and energy, would explode in dollar terms.

Meanwhile, Chinese inflation is beginning to drive the international agenda. In order to keep a lid on this growing problem, China will soon have no choice but to revalue its currency, the yuan, higher. This will curb inflation and make most commodities cheaper in domestic terms. It will also satisfy the increasingly angry political calls of other nations for China to revalue.

A yuan revaluation requires a devaluation of other key currencies, most dramatically the U.S. dollar, but also the pound sterling and euro. This will raise prices for food, energy, and other necessities even in the absence of action by our central banks. Such an outcome will place further economic pressures on the developed West.

In conclusion, 2011 likely will open with a deepening recession, increasing austerity, and falling asset prices. If this is met by a new round of inflation creation and yuan revaluation, then investors should weigh whether to redeploy assets in anticipation of potential rising commodity prices. I expect these developments not to happen gradually, but to come in great waves. Smart investors will tie their fate to an investment vessel with a solid hull, because in these seas, even a hint of rot could tear a ship asunder.

John Browne is an investment advisor, financial commentator and a former member of Britain’s Parliament who served on the Treasury Select Committee and as a close associate of then-Prime Minister Margaret Thatcher.


--------------------------------------------------------------------------------

Renaissance of the Gold Standard?

by Martin Hutchinson... LINK...

Global opposition to Fed Chairman Ben Bernanke's policy, World Bank President Robert Zoellick's "trial balloon" and statements by some of the new Republican Congressional caucus have caused a modest revival in consideration of the Gold Standard. In my view, the chances of its revival by official means in the next 10 years remain infinitesimal, but there is an increasing probability of private sector activity in that direction. Not only politically, the bombed-out Gold Standard stock may have reached bottom and be beginning a modest revival.

The Gold Standard did not disappear because it caused the Great Depression (it had only modest fingerprints on that disaster) nor because Maynard Keynes called gold a "barbarous relic." In reality, its demise had a much simpler cause: the rising rate of global population growth, which caused it to become damagingly deflationary.

The gold supply is limited. At the end of 2009, the total of all the gold ever mined was about 165,000 tons, worth $7 trillion at today's prices. Most of that total is still in existence, gold being essentially indestructible. However, new mine production in 2008 and 2009—both years enjoying near-record gold prices—was only around 2,500 tons, according to the World Gold Council. Thus even at the peak of the market, gold production is only 1.5% of existing supply. This hard limit on the world's gold supply exerts a considerable monetary effect on a Gold Standard world, limiting its money supply. Without an increase in monetary velocity, the world's gold supply can accommodate global growth of only about 1.5% per annum while maintaining prices constant. If global GDP growth is higher than that, the Gold Standard will be deflationary—prices will decline. If global growth is less than 1.5% per annum, prices may increase somewhat.

During the 18th century, for example, global population rose by 0.4% per annum, from 640 million in 1700 to 980 million in 1800, according to United Nations estimates. Accordingly, if world gold supplies had increased by 1.5% per annum during that century and monetary velocity had remained constant, a global Gold Standard would have accommodated about 1.1% per annum per capita economic growth. In practice global growth during that century averaged 0.56% per annum or 0.15% per capita, so gold supplies were ample to support it, even if mining was less active and successful than in some other periods. Indeed, in actuality the century saw mild inflation in Gold Standard countries.

During the 19th century, global economic growth accelerated, to 1.85% per annum, being 1.34% growth per capita (the result of the Industrial Revolution) and 0.51% per annum population growth. Thus the gold supply became much tighter, particularly towards the end of the century as economic and population growth accelerated. There was a shortage of specie and deflation during the "Hungry Forties" before the Californian gold discoveries of 1849 and another more prolonged period of deflation in 1873-96, before the discovery of new gold deposits in South Africa and the Yukon. During those years, the gold supply was increasing at a rate below its long-term average of 1%-1.5%, so global growth above that level caused the money supply to decline in terms of Gross World Product, and deflation to occur. By the early 1890s, there were multiple calls to abandon the Gold Standard, with proposals for bimetallism and William Jennings Bryan's "Cross of Gold" presidential campaign of 1896.

In practice, mild deflation is not a major economic problem, contrary to Ben Bernanke's theories. With an interest rate close to zero, even prolonged deflation of up to about 1% annually can be tolerated, as real interest rates remain containable. The 1880s, however, showed this to be close to the maximum tolerable level—U.S. prices declined by 22% from 1880 to 1896, an annual 1.5% deflation, and the strains showed.

In 1900-25, with world population growth of about 0.8% per annum, economic growth averaged 2.6% per annum, in spite of the depredations of World War I. Not surprisingly, the Gold Standard came under huge strain. Thus the failure of the 1925-31 British return to the Gold Standard was probably inevitable; by that time, global population and economic growth had reached a level at which the Gold Standard's deflationary effect had become intolerable.

For the quarter-century 1925-50, Keynes was right; with global population growth above 1%, even World War II could not hold economic growth below 2.7%. For the next 20 years, the heyday of the Bretton Woods Agreement monetary system, the equation was even worse. Population growth averaged 1.9%, while economic growth, recovering after World War II, averaged a startling 5.6% annually, with per capita economic growth of 3.7% annually. Even if the Bretton Woods system had been designed as a true Gold Standard, with private gold holding and trading permitted, it would never have stood a chance. In practice, since politically motivated governments controlled the Bretton Woods system, the breakdown came in the form of an explosion in the gold price rather than a tight deflation squeeze.

The good news for gold bugs is that the rate of global population increase peaked in 1963 and has now declined to about 1.1% annually. Judging by 1900-25's experience, that is still too high for a Gold Standard to be comfortable. However, the rate of population increase is continuing to decline; on current UN projections, it will by 2045 have fallen below 0.5% annually. At that level, as the 19th century showed, a Gold Standard is perfectly feasible and not excessively deflationary. Hence the young of today can perhaps hope to lead the world back to a Gold Standard in their later years.

The Gold Standard, however, remains anathema to the political class. This not surprising; as the U.S. is currently showing with its repeated bouts of quantitative easing, the seigniorage of money creation is highly profitable to governments strapped for cash owing to unaffordable social welfare programs. Even by 2045, absent a major economic crisis, it is unlikely that elite political opinion will have moved sufficiently to make Gold Standard re-introduction at an official level anything but a long and bitter struggle.

One advantage of commodity-based money over fiat currency, however, is that it does not require official sanction to come into existence. Whereas paper money requires a central bank and a national credit rating behind it to attain credibility (and even with this sometimes fails to do so, as in Zimbabwe, Weimar Germany or Latin America for much of the 20th century), gold-based money can come into existence through private activity.

There is some evidence that this is happening. Austria's Raiffesen Zentralbank now offers its clients gold-based accounts, and other banks are likely to follow. The SWIFT international payments system now allows payment in gold, an essential element in a currency's infrastructure in today's markets. Governments worldwide are competing to depreciate their currencies (or, like the hapless EU, watching their currencies come under fire as the weaker members of their union get into difficulties). At some point, a major exporter with a good competitive position—if you asked me to guess, from China or Germany—could start invoicing its customers in gold.

When that happens, a very important barrier will have been crossed. Once gold-denominated trade paper comes into existence, it will form the nucleus of a short-term money market, in the same way as the eurodollar market for assets and liabilities outside the United States arose in Europe after 1957 or so. Within a few years, gold bonds will be issued—once a company has gold-denominated receivables, it will have a natural hedge for such financing, which will remain cheap in interest terms even after conventional currency interest rates rise. It has happened before, in the formation of the eurodollar and eurobond markets in 1957-65. This time, once gold invoicing happens, the gold money and bond markets are likely to spring up quite quickly.

Banks, even outside Austria and Switzerland, will quickly get up the curve of offering gold-denominated accounts once their corporate customers demand them. They will find that a substantial demand exists at the retail level also. Here, modern technology will be very helpful. An ordinary citizen will be able to use a gold-denominated account for day-to-day transactions by means of a debit card, without the need to carry round expensive sovereigns or double eagles. A payment of $9.50 for a sandwich will be satisfied by the debit card, which will pay dollars (say) to the sandwich bar while debiting the account about 0.007 ounces of gold, using that day's gold price.

The card holder will pay perhaps 1% extra for everything, to cover the cost of the gold/dollar exchange transactions; but on the other hand, since his cash holdings are in gold, he will very likely gain much more than that percentage in dollar terms each month. His wealth will be expressed as so many ounces of gold (or kilos, if he is European), but he will never need to hold physical gold at all—or any other currency, though probably he will get a few dollars from the bank's cash machine each month for expenditures for which his debit card is not accepted.

In this way, both corporate and individual users will be able to move their transactions and holdings to gold, with the banks adapting to meet their needs. The banks will remain regulated by national authorities, and will have to manage their gold assets, liabilities and capital in such a way as to avoid breaching the authorities' leverage ratios, based on the gold price at the end of each reporting period.

If the world's monetary authorities come to their senses quickly enough, adopting Volckerite/Bundesbank monetary policies to restore confidence in their currencies, this private Gold Standard will remain a minor addition to the global financial landscape, perhaps dying away after a few years. If the authorities attempt to suppress the market, it will move underground or offshore, like the eurobond market in its early years—and their suppression attempts will in most countries be rebuked by an angry electorate. If they continue with sloppy monetary policies, then since the gold price will continue rising against all other currencies, gold will come to be seen as the most reliable available store of value and a perfectly acceptable unit of account.

At that point, the private gold standard could come to replace national currencies for most transactions. Governments will attempt to enforce usage of their currencies for tax payments, etc., but they will find themselves at a considerable disadvantage through doing so. They will also lose the vast majority of the seigniorage profit they have enjoyed since paper currencies became universal after World War II. Needless to say, this will cause a financial crisis, and a loss of confidence in the governments' own bonds. Their only remedy at that stage will be to move to gold themselves, cementing the dominance of a global monetary system entirely outside the control of governments and monetary authorities.

Central banks will find themselves unable to meddle with the new monetary system, since they do not control it—only the residual paper currencies will be subject to central bank monetary policy. A true Gold Standard on the basis of free banking will have been created more or less by accident. Banks will find that Basel III leverage requirements are much too generous in a Gold Standard system, so will have to deleverage themselves or face a liquidity crisis and apply for a bailout. Doubtless governments forced to bail out banks would insist that they reorient their business towards the shrinking economic area in which paper money is used—in which case such banks would quickly find themselves irrelevant to the new economic order. Their competitors, seeing the disastrous business- and bonus-destroying results of bailouts, would deleverage to a safe level.

For the world's governments, this would be a disaster. For everyone else, it would be a huge liberation. That is reason enough to encourage the beginnings of the private sector Gold Standard development now, rather than waiting until 2045 in the hope that governments will then establish an official Gold Standard.

As for deflation, don't worry too much about it. The day-to-day debit card-based Gold Standard will initially use very little metallic gold, so will not be particularly deflationary. The money supply will be established by trial and error, as banks that over-leverage and keep inadequate gold reserves discover the perils of fiat money banking without fiat money. In equilibrium, the money supply will be constrained by the physical gold supply, but by that time, we may be approaching 2045.

What Can Be Done...

By Paul Davidson:

After the shellacking the Democrats and Obama took in this November election, it is clear that the old time religion of classical economics will be coming back into fashion. The result is likely to be further economic disaster.

I am not surprised by the failure of the Obama Administration to win over the American people to a progressive economic program. On pages 13 to 18 of my book THE KEYNES SOLUTION: THE PATH TO GLOBAL ECONOMIC PROSPERITY – ( written in January 2009) -- I compared what I expected of Obama vis-à-vis what Roosevelt did in the first few years of his administration.

I cited a letter written by Keynes and published in December 1933 in the New York Times where Keynes warned the president that there were two goals -- Recovery and overdue social Reforms. But Keynes warned if one goes for the social reforms before full economic recovery (full employment) was achieved, then any reforms "will upset the confidence of business... And it will confuse thought ". Instead Keynes recommended just concentrate on recovery. Once the president succeeds at achieving that goal, then reforms will come much more easily!

I suggested that if Obama followed the “jump start” advice of his economic advisors for a small “stimulus” program just to get the private economy turned around , then the nation would not get the full recovery we needed and all reform as well as full recovery will be jeopardized.
Given the politics of austerity, we face maybe a decade of economic disaster. Progressive heterodox economists must get out in front with a Keynes-style of economic thinking – for Keynes’s analytical framework is the only complete available one that is not just a variant of classical theory. Keynes theory of liquidity can deal with full employment recovery, international trade imbalances, policies to prevent inflation and deflation, and an understanding of the role of financial markets in a money using entrepreneurial economy. – what Soros calls a reflexivity economy.

It is necessary to immediately put forth a consistent plan for not only the domestic economy but also for the international payments system to end the huge trade imbalances that have occurred --Mr. Geithner's call for devaluing the dollar relative to the Chinese yuan will not do it.
Nor will relying on some Old or New Keynesian variants of classical economics such as Stiglitz's assymetric information or some other MIT or Harvard New Keynesianism --since all these models assume that the economic system is a classical system except for some ad hoc restraint on the flexiblity of prices or constraint on obtaining complete information about a future predetermined by today's market fundamental. In the long run all these mainstream "Keynesian" models will provide a full employment solution when fixities are removed and full information preceived. It is only these ad hoc constraints that prevent short run optimal results -- theerfore the implication of these mainstream models is get government out of the way and the market, in the long run, will prove to be optimal!

My book THE KEYNES SOLUTION provides a complete alternative program to the various classical models that is going to dominate Washington in the next few years – as Obama tries to compromise with the conservatives such as Paul Ryan and Tea Party people like Rand Paul.

The American people are being interpreted as saying no more deficits—but what they really want back is prosperity and jobs for all who are willing to work. And if we can show them why these goals require governemnt deficits to get to prosperity , they will accept that. We have to get into the public forum the kind of progressive program that is in the Roosevelt tradition and currently can be an economic foundation to provide a good economic future for years to come.

Until we can provide a single consistent program for economic prosperity, all the other goals of progressive thinkers will remain in the dustbin!! The conservatives and their classical theory will dominate, even though they are wrong – because, as they say in politics, “You can not beat Somebody with Nobody”.

The only body of economic thinking available to take on, and beat, classical thinking, is Keynes’s original analytical foundation – and not the Keynesianism of Samuelson, or the New Keynesianism of Stiglitz and other MIT and Harvard graduates.

And remember that the original Keynes analysis implied a nonergodic stochastic process (Keynes called “uncertainty”) is fully compatible with the reflexivity analysis put forth by George Soros. It is when people fear uncertainty that they demand liquidity rather than goods and services. And given all the cash bankers and businesses are sitting on, can anyone doubt the problem is one of too much uncertainty and private demands for liquidity -with the resulting lack of aggregate demand for goods and services?

Paul

Paul Davidson
Editor, Journal of Post Keynesian Economics
author: THE KEYNES SOLUTION: THE PATH TO GLOBAL ECONOMIC PROSPERITY
Bernard Schwartz Center for Economic Policy Analysis
21 Stratford Drive E. Unit D
Boynton Beach, Florida 33436
phone and fax number: (561)369-1951
email: pdavidson@utk.edu
http://econ.bus.utk.edu/davidson.html
Manuscripts for Journal of Post Keynesian Economics can be submitted electronically
to pdavidson@mesharpe.com

The Tri-Polar Intelligence of Pure Thought…

"Wisdom is an ocean of visions, poured into a dewdrop, of a single ultimate vision...."

Ever look deep into the pure mind__I mean really deep, to where you can answer the questions about how thought thinks about pure thought…? Follow me to a zone you may never have been before__it won’t hurt, but it may surprise. Most think they know their own minds quite well, but do they really?__I think you’ll see for yourself, there’s much more to pure thought than you’ve so far realized…

Simply take the word intelligence, and ask yourself, ‘What is the intelligence of intelligence…?’ This is that ancient question Socrates first posed millennia ago, with a bit of a twist, as he asked, ‘What is the wisdom of wisdom?’ and ‘What is the science of science?’__but, these same thought-word relations lead us to the same destination. It’s also been asked by others as, ‘What’s the cognition of the cognition?’ and ‘What’s the concept of the concept?’ and ‘What’s the context of the context?’ and you could also ask; ‘What’s the feeling of the feeling…?’ These questions may seem strange to you at first, but when it’s explained__you’ll easily see the importance of such deep investigations of the mind’s purest deep states of thinking. Most likely, you all do think like this now__it’s just you’ve never given it the detail of contemplation to realize it…

Think about it__when one asks themselves’ any one of these single entity questions, one’s thoughts are centered strictly on the thought of thinking about thought itself. This is the mode of modal thought, modal logic, modal intelligence or modal wisdom, per se__and no different than thinking about the moods of the mind’s thinking about pure thinking… It’s really the easiest idea in the world to accomplish, it’s just most never think about the mood of their being, upon how such controls their thoughts and actions__but, the realization can be the most profound change in a person’s contemplations about themselves, the world and their actions toward self, others and the world…

If one starts out thinking in the mood of self-referential thinking, or experiential intelligence__one’s mood or modal thought is more childhood-soul to super-consciousness feelings' based__a most personal thought stance… If one starts out thinking in the mood of non-self-referential thinking, or operational intelligence of others’ and the world’s ideas__one’s mood or modal thought is more of the intellect to the entire systems’ architectures of all the world’s many systems__a most non-personal stance, yet closely related to the over-soul of global sight… There’s still one more mood or modal thought to contemplate__and that’s one’s modal actionable intelligence, or one’s will to act upon one’s experiential wisdom state, in an attempt to move pieces of such wisdom to one’s operational knowledge state__as it’s really how we all do achieve our best moments in life, that truly satisfy us… For when we accomplish, through our self-knowing actionable intelligence of personal will, to discover totally new ideas and links from our experiential intelligence, to our operational knowledge and action states of mind__we feel we can really set the world afire…

So, next time you’re thinking about thinking about something__first check the mood of the state of mind, you are truly thinking from__and I promise you, that by knowing the mood of your thinking state, is by far the most important progress one can ever accomplish in the evolution of the mind states advancement… It will also give you the chance to really coordinate any presentation state you may choose, from your most personal feelings, thoughts and actions, to the most complex of intellectual contemplations and actions. Along the way of thinking about thinking, you may realize how much the world has lost this art of pure contemplative thought__and how much we all really need to re-instate it__to communicate effectively__as it relaxes the mind more than anything else, to know one has the ability to choose the mood of the conversations and actions one is involved in__purely at the will of knowing one can…

All it requires is to state to another the mode of the thought talked about, whether experiential intelligence, operational intelligence or actionable intelligence__This can also be phrased as experiential wisdom, operational knowledge and knowing intelligent actions__and just simply notify another of the mood change… Many do this without knowing they do it, but to be able to do it knowingly is of great comfort to one’s being, and self-satisfaction…

Therefore; ‘Wisdom is the actionable intelligence capacity, to knowingly move percepts and concepts of experiential wisdom, into the greater world of operational knowledge__to help improve the function and form of our world at large…’

Btw, when anyone actually does see wisdom, even small pieces of it, it’s the most humbling experience in the world, as it’s so huge compared to any one of us__it’s truly overwhelming…

Paul Davidson Joined the Advisory Board of the Institute for New Economic Thinking...

New York, NY, August 24, 2010 – The Institute for New Economic Thinking (INET) has appointed Paul Davidson, Editor of the Journal of Post Keynesian Economics and Holly Chair of Excellence Professor Emeritus, University of Tennessee, to its advisory board. Paul Davidson, is the 31st distinguished individual to join INET’s Advisory Board, including five Nobel Prize winners.

Professor Paul Davidson is currently a Senior Fellow at the Schwartz Center for Economic Policy Analysis, The New School. He has taught at number of prestigious institutions including: University of Pennsylvania, Rutgers University, and Bristol University (UK). Davidson served as the Assistant Director of the Economic Division of the Continental Oil Company and has testified before 20 congressional committees over the years on various economic questions. He has authored co-authored or edited 22 books, including: The Keynes Solution: The Path to Global Economic Prosperity, Economics For A Civilized Society (co-author), Financial Markets, Money and the Real World, and Post Keynesian /macroeconomic Theory: A Foundation For Successful Economic Policies For the Twenty-first Century.

“I share the Institute’s commitment to education, open dialogue, and the support of the next generation in effecting change,” commented Paul Davidson. “I am dedicated to advancing the Institute’s vital initiatives and honored to join its distinguished Advisory Board.”

“As a distinguished educator and champion of Keynesian Economics, Paul Davidson is a invaluable addition to the INET community that held its inaugural conference at King’s College, University Cambridge, where Keynes himself debated economic theory and instigated reform,” commented Dr. Robert Johnson, Executive Director of INET. “His presence and counsel will undoubtedly have an important impact on the Institute and its work.”

About the Institute for New Economic Thinking:
Launched in October 2009 with a $50 million pledge from George Soros, the Institute for New Economic Thinking promotes changes in economic theory and practice through conferences, grants and education initiatives. The Institute embraces the professional responsibility to think beyond the inadequate methods and models of the world’s financial infrastructures and will support the creation of new paradigms in the understanding of economic processes. For more information please visit http://www.ineteconomics.org/
----# # #--------------------------------------------------------------------------
Paul Davidson
Editor, Journal of Post Keynesian Economics
author: THE KEYNES SOLUTION: THE PATH TO GLOBAL ECONOMIC PROSPERITY
Bernard Schwartz Center for Economic Policy Analysis
66 Country Club Drive
Monroe Township, New Jersey 08831
email: pdavidson@utk.edu
Paul Davidson

The Triadic Analytic Esthetic Geometry of Our Universal Emotions of Genericity's Simplicity__Dimensionality and Proportionality__From the Gentile, to

(Someone elsewhere on the web mentioned this post, so I'm re-posting...)

"The world is divided into men who have wit and no religion and men who have religion and no wit. " Avicenna
"As to the mental essence, we find it in infants devoid of every mental form." Avicenna
"At night I would return home, set out a lamp before me, and devote myself to reading and writing. Whenever sleep overcame me or I became conscious of weakening, I would turn aside to drink a cup of wine, so that my strength would return to me. Then I would return to reading. And whenever sleep seized me I would see those very problems in my dream; and many questions became clear to me in my sleep. I continued in this until all of the sciences were deeply rooted within me and I understood them as is humanly possible. Everything which I knew at the time is just as I know it now; I have not added anything to it to this day. Thus I mastered the logical, natural, and mathematical sciences, and I had now reached the science." Avicenna
"The knowledge of anything, since all things have causes, is not acquired or complete unless it is known by its causes." Avicenna

The Triadic Analytic Esthetic Geometry of Our Universal Emotions of Genericity's Simplicity__Dimensionality and Proportionality__From the Gentile, to the Projective, to the Factual...

Avicenna made it part way there... Kant made it a bit further... Peirce made it the furthest... We must finish the journey of the triadic whole__subjective/objective/ajective, or the, monojective/bijective/trijective minds' final journey...

Emotions, our most important essence, are much simpler than most have thought them to be__iff looked at, thoroughly, from and with the esthetic, analytic-synthetic a priori__The true triadic self...

Emotions are the primary source of all the energies of our complete mind’s functioning, whether our animal fight or flight instincts, our most aesthetic emotions of compassion and empathy, or our higher emotional foundations under our intellectual and logical states of mind. We’re talking about our primary energy states in all these categories of choices of personalities, attitudes or medium to higher states of mind potentialities. Many have stated for centuries that this metaphysical state of primary energies could not be analyzed__But I see this, so far non-conceptual state of mind, as being analyzable iff we simply see its primary brain state function, before we apply content to it, as being fully possible of analyzability.

When the primary brain state is looked at, which would be our perceptions’ essence agents’ tools, whether passion, pain, reason, compassion, empathy, love, judgment or whatever other state may be involved, at the time of our action’s choices__is subject to nothing more than the use of the powers of this very primary energy. And when we are talking about any human energy source, we are simply talking about its capacity for good or bad, happiness or sadness, helping or hurting, loving or hating, on and on, yet it has and implies parameters of these mentioned choices and actions__which would be the proportionalities of energies applied to the many different situations we encounter. Just as a simple example; We may use our gentlest of emotional states of love toward another, with the least proportion of energy applied to the person our love is projected toward, even though this may take a tremendous amount of energy to control our will’s involuntary action, at the time__while at other times this state of low intensity energy may be a naturally flowing symmetry, often granted by what's outside our personal control of energy flows__The purely natural metaphysical flows. It’s still understandable as a low proportionality of energy applied.

On the other hand, we may want to excite another couple to a certain action for the day’s activities, and we’d apply a large proportion of energy, with our personality and attitude, to entice that particular couple to be enthused to bid our wishes, as we may have planned a very exciting outing, for everyone to enjoy, as I’ve often done, when bored of the atmosphere of the local area I may have been in. All I’m showing is the simple proportional emotional energy use we may have all applied at differing times in our lives. This would mean our basic epistemic agents of perception, as I see all essence agents, as being housed in perception, are actually acting through a geometric process of distributing energy to our willed actions proportionately differing at differing times and circumstances. Of course, this is just a simple explanation, but many are un-aware of the basic mechanics of pure emotional energy, and I think it’s very important to see all the varied dimensions of actions the emotional mind is actually capable of.

When one realizes it's simple energy choices, of actions’ choices, to control our emotions, we need never be trapped in our boredoms, excess desires or greed, because the free-knowledge-choices of actions is much more fun, than all the fulfillments of possessions could ever accomplish. A pure freedom of our mind’s actions’ choices, knowingly, is the most fulfilling of the spirit's possibilities__and is available to anyone who is shown this simple path__”Put the body in action/motion and the mind will follow.” It is no more complex than this simple statement. There’s no amount of possessions or money in the world, that can surpass the mind’s knowledge of its own freedom’s possibilities of free-will actions’ Possibilia. I’ve seen so many relationships go sour for the simple reason of not realizing the power of empowering the body’s actions, to have the minds follow, it's almost uncountable__and for no other reason than not knowing__The body controls the mind’s states of happiness__Do something__Anything__You’ll like it...

I’ve only offered a simple mind map of happiness’s possible actions, but imo, this is the fundamental state of The Triadic Analytic Esthetic Geometry of Our Universal Emotions of Genericity's Simplicity__Dimensionality and Proportionality__From the Gentile, to the Projective, to the Factual...

Making Dollars and Sense of the U.S Government Debt...

Paul Davidson

Abstract: This paper explains why, given Keynes’s General Theory, worries over the size of the government’s national debt per se is foolish. It is more important to educate politicians and the public that government fiscal policy should be designed to make sure that aggregate market demand will produce sufficient profits so that entrepreneurs will hire all domestic workers willing and able to work. Empirical evidence is provided to demonstrate the correctness of this concept of fiscal policy of the balancing wheel for full employment effective demand. Key words: deficits, national debt.

No economic topic encourages more political demagoguery than the
“unsustainable” national deficits that face the Obama administration as
it tries to extricate the economy from this Great Recession that began
in 2007. Even President Obama has appointed a commission to develop
a plan to assure a reduction in future deficits by lowering government
expenditures or raising taxes.

A sage once said, “Those who cannot remember the past are condemned
to repeat its errors.” So let us review the past history of the national debt
to make sure we avoid its errors and repeat its successes.

Is the national debt too large? In 1790, the newly founded U.S. government
assumed the debts that had been incurred during the Revolutionary
War. Thus, from the very beginning, the U.S. national debt was
approximately $75 million. In 1835, President Jackson reduced the debt
to close to a zero balance. By 1837, however, the economy went into a
steep recession that lasted approximately six years and the national debt
increased dramatically. Since then, the U.S. government has always had
a significant outstanding debt.

During World War I, the national debt increased substantially from approximately
$6 billion in 1916 to over $27 billion in 1919. The prosperous
decade of the “roaring twenties” saw a decline in the national debt
as tax receipts exceeded government spending. By 1929, the total debt
had been reduced to $16.9 billion. This 1920s experience indicates that
when the private sector is spending sufficiently to buy all the products
that industry can produce in a fully employed economy, then there is no
need for the government to deficit spend merely to maintain a prosperous
economy. The 1920s prosperity, however, was partly the result of
significant bubbles in the stock market and in real estate. (Shades of the
dot.com bubble of the 1990s and the housing bubble of early 2000s.)
In 1929, private spending suddenly slowed causing a devastating drop
in business profits. Unemployment rose rapidly as the United States
entered the Great Depression. Tax revenues fell from $4 billion in 1930
to less than $2 billion in 1932. When Roosevelt took office in 1933, the
national debt was almost $20 billion; a sum equal to 20 percent of the
U.S. gross domestic product (GDP).

During its first term, the Roosevelt administration ran large annual
deficits between 2 and 5 percent of GDP. By 1936, the national debt had
increased to $33.7 billion or approximately 40 percent of GDP. Many
“experts” of that era said disaster awaited the nation if the government
continued to deficit spend and thereby burden future generations with this
huge debt. Accordingly, as a part of his reelection campaign, Roosevelt’s
fiscal year 1937 budget submitted to Congress in 1936 cut government
spending dramatically. As a result, in 1937, the economy fell into a steep
recession. Tax revenues declined and the national debt increased to $37
billion. The government resumed significant deficit spending in 1938
and the economy quickly recovered. By 1940, the economy had grown
substantially while the national debt rose to $43 billion.

When the United States entered the war in 1941, the fear of deficits and
the size of the national debt were forgotten. The important thing was to
defeat the enemy. In the war years from 1941 to 1945, the GDP doubled
while the national debt increased by more than 500 percent as Roosevelt
financed much of the war expenditures by government borrowing. By the
end of the war in 1945, the national debt had increased to $258 billion
and was equal to approximately 120 percent of GDP.

Rather than bankrupting the nation, this large growth in the national
debt promoted a prosperous economy. By 1946, the average American
household was living much better economically than in the prewar
days. Moreover, the children of that Depression–World War II generation
were not burdened by having to pay off what then was considered
a huge national debt. Instead, for the next quarter century, the economy
continued on a path of unprecedented economic growth and prosperity
with the Eisenhower administration launching the biggest public works
project—the interstate highway system—and the Kennedy–Johnson
administration spending large sums on sending a man to the moon and
the escalating Vietnam War. At the same time, the inequality in the distribution
of income was significantly narrowed. It was the golden age
of economic development for the United States as the rich grew richer
while the poor gained even more in a rapidly rising level of income that
created a large American middle class.

As a child of the Depression and a young teenager during the World
War II, I have never felt burdened by the huge government deficits that
accrued due to government spending during the Great Depression and
the war that followed. The legacy that the Great Generation who were
adults during the depression and the war left to their children was an
economy of abundance and prosperity. I inherited an economy that made
finding a good job easy for me and all of my cohorts and provided excellent
opportunities to improve our living standards. If this is burdening
children and grandchildren, I hope the current generation can create such
a “burden” for their progeny.

The moral of this history of the national debt and the economy during
the Great Depression and World War II is that we have nothing to fear
about running big government deficits when, during a recession with
significant unemployment, the federal government is the only spender
that can take the responsibility to sufficiently increase the market demand
for the products of our industries and thereby maintain a profitable entrepreneurial
system. For government to spend less in the hopes of keeping
down the size of the national debt will cause market demand to remain
slack, thereby impoverishing both our business firms and our workers.

The idea that capitalism works best when spenders cause healthy growth
in market demands and thereby generate profits and jobs for the community
was the basic message of Keynes theory.

This was clearly demonstrated when government spending increased
during the years 1933–36 and 1938–45. When Roosevelt cut spending
in 1937, the sharp recession showed that at that stage of recovery, no
other spenders were willing or able to take over from government the
role of generator of market demand and profits for American businesses.

Had Roosevelt, in 1938, continued on the path of keeping government
spending in check in order not to increase the total national debt, the
result would have been to propagate the poorly performing economy
of 1937. When the war broke out and no further thought was given to
the size of the national debt, government spending quickly pushed the
economy to a profitable full employment status. Keynes’s ideas that the
role of government fiscal policy was to make sure that the total demand
for goods and services provided profit opportunities to encourage business
firms to hire all workers who wanted a job was validated by this
historical record.

Business firms will hire more workers only when they expect the market
demand for their products is increasing. Today, who are these buyers who
will be willing to buy significantly more products from factories located
in the United States in order to end this Great Recession? Clearly households
suffering from high unemployment, decreasing market values for
their homes, large credit card debt, and shrinking pension funds are not
likely to rush to buy significant more goods and services. Entrepreneurs
with existing excess facilities and facing declining or at most not rapidly
rising market demands are unlikely to invest significantly in new plant and
equipment. Moreover, foreigners such as China with its large savings of
U.S. dollar earnings appears unlikely to spend more dollars to buy more
U.S.‑produced goods. With falling property and sales tax revenues, local
and state governments such as California are cutting spending on public
services and reducing purchases from domestically located firms. Only
the Federal government can afford to buy significant additional products
to stimulate market demand for American products.

Just as we expect the Federal government to spend whatever is necessary
to protect us from foreign enemies during a war, we should also
expect the government to spend whatever is necessary to protect us
from the economic terrorism of a great recession. The public must be
educated to understand that a civilized society is one that assures both
domestic workers and enterprises prosper and that the intelligent use of
government fiscal policy can assure that total market demand is always
sufficient to generate domestic profits large enough to create a fully
employed economy.

Some argue that tax revenues must finance all government spending
so that the federal budget is always balanced without deficits, or at least
annual deficits do not increase the debt-to-GDP ratio. As history shows,
however, even during World War II when America was attacked by foreign
nations (remember Pearl Harbor?) the U.S. government did not finance
the entire defense of this nation by raising taxes. Instead, during the war
years, deficits expanded dramatically while no one worried (correctly)
about burdening future generations with debt.

If wars are not sufficient (or necessary) reasons to raise taxes or cut
government spending sufficiently to balance the budget while protecting
the nation, then why should defending the nation against serious economic
threats require a balanced budget or a lower deficit? Our politicians and
the public must be educated to understand that when total demand for
domestically produced goods is low so that recession and depression
threaten, then government must deficit spend as much as necessary to
encourage domestic entrepreneurs to hire all American workers who
are willing and able to work. If, on the other hand, market demand for
domestically produced goods and services exceed America’s full employment
productive capacity, then government must increase taxes and
reduce spending in order to reduce aggregate demand to a level that can
be met by a fully employed labor force.

When the public and politicians recognize that a primary function of
government fiscal policy is to act as a balancing wheel for aggregate
demand to be sufficient to encourage America’s entrepreneurs to create
jobs for all our workers, we will have developed the political will to
develop a perpetual prosperous American civilized society.
At that point of time, our next task will be to develop an international
financial and payments system that will provide for global full employment
and prosperity.

State-owned enterprises in China: How big are they...?

by Gao Xu...

In China's industrial sector, the shrinking share of state-owned enterprises (SOEs) is evident. This is due in part to the stronger growth of non-government-owned enterprises.

When communicating with my friends outside China, their misconception of Chinese State-Owned Enterprises (SOE) always surprises me. It seems that although Chinese SOEs play a major role in the Chinese economy, they continue to remain mysterious to most outsiders. For some people – even some long-time observers of China – Chinese SOEs are best described as dying dinosaurs that continuously absorb resources from the economy but produce little economic value. However, this impression is far from the case in nowadays.

That’s why I feel obliged to write something about the reality of this myth. In this blog post and the following ones, I’ll try to profile Chinese SOEs with data mainly from industrial sector, addressing questions regarding their size, profitability, leverage, and so on, hopefully presenting a clear picture to readers.

Today, I will tackle the question of how big are Chinese SOEs. This question can be rephrased in two different ways. First, how big are Chinese SOEs as a whole in the Chinese economy? Second, how big are individual SOEs compared with non-SOEs? Starting with the former question:

What is the share of SOEs as a whole in the Chinese economy? It depends on the criteria one chooses. This share is really negligible in terms of the enterprise number, but quite substantial in terms of assets.

The Second National Economic Census conducted in 2008 reveals that of all the 208 trillion RMB total assets of the secondary and tertiary sectors (industrial and service sectors), 63 trillion – or 30 percent of total – was held by SOEs. (SOEs here correspond to state sole funded corporations and enterprises with the state as the biggest share holder.) Meanwhile, in terms of enterprise number, there were 154,000 SOEs at the end of 2008, only accounting for 3.1 percent of the total enterprise number. Hence, the big picture is clear: SOEs control a substantial part of total enterprise assets in China despite the fact that their total number is marginal. As a corollary of this observation it follows that the average size of SOEs is much bigger than that of non-SOEs. This is indeed the case. In terms of average assets, SOEs are equal to 13.4 times of non-SOEs.



To analyze the developments, we now turn to the industrial enterprise survey dataset. As the National Economic Census is conducted once in 5 years, it is hard to study the dynamics with only the census data. Fortunately, there is another dataset that continuously dates back to 1999 readily available to us – the industrial enterprise survey data. This dataset is constructed and released by China’s National Statistical Bureau, covering all SOEs and other enterprises with annual sales larger than 5 million RMB in the industrial sectors. (Note: under the current foreign exchange rate, US$1 equals 6.8 RMB.) As non-state-owned small industrial firms (annual sales smaller than 5 million RMB) are excluded from the survey, this is a biased sample. However, enterprises covered by the survey in total account for almost 90 percent of total industrial value-added, suggesting this dataset is good enough to give a big picture of the overall developments.

The industrial survey data corroborates the Economic Census. In Figure 1, the dark blue line shows the share of SOEs number in total surveyed industrial enterprises, juxtaposed with the asset share shown by light blue line. At the end of 2008, SOEs only accounted for 4.8 percent of total enterprise numbers but controlled 43.8 percent of total assets owned by surveyed firms. Again, the data suggests that the average size of SOEs was much bigger than that of non-SOEs (15.5 times to be specific).

The shrinking share of SOEs in the industrial sector is evident in figure 1. This is on one hand due to the stronger growth of non-SOEs, and on the other hand, with less quantitative significance, reflects the fact that more non-SOEs that used to be excluded from the survey have crossed the 5 million RMB sales threshold and thereby entered into the sample. Once one takes into account the fact that the sample covers 90 percent of the industrial sector, or 39 percent of the national economy, the diminishing SOE share in the sample clearly points to a bigger role played by the non-SOEs in the Chinese economy.



It is worthwhile to note that the decline in the share of SOEs is much bigger than that in the share of SOE assets. Since 1999, the share of SOEs has declined from 37 percent to less than 5 percent in terms of numbers, and from 68 percent to 44 percent in terms of assets. This is to a large extent a result of the SOE reform – specifically the “grasping the big, letting go of the small” strategy – carried out in the past decade. Since the reform started in late 1990s, most small SOEs have been privatized or filed bankruptcy to lessen the burden of the government, while larger ones have been subsidized (directly or implicitly) and/or merged to hopefully create stronger firms controlling the commanding high of the national economy. This reform strategy is a big success in terms of creating large SOEs. As what is shown in figure 2 by the dark blue line, the average asset size of industrial SOEs increased from 134 million RMB in 1999 to 923 million in 2008, expanding by 589 percent in 9 years. Meanwhile, the average assets of non-SOEs only moderately increased from 36 million to 60 million, up by a dwarfed 67 percent.

With all these evidences in hand, we can now answer the question raised before: How big are Chinese SOEs? Even though their share in the economy continued to decline in the past decade, SOEs still make up a substantial part of the national economy – roughly controlling 30 percent of the total secondary and tertiary assets, or over 50 percent of total industrial assets. The average size of SOEs is much bigger than their non-SOE peers, with average assets of the former equaling over 13 times of the latter.

Now we know that Chinese SOEs have a relatively bigger average asset size, while they continue to account for a substantial part of the national economy. Naturally, one would ask what performances of these big SOEs are. This will be the topic of my next blog post – Chinese SOEs: how profitable are they?

Explanation of The Triadic Shadow Logic, Used In The Graphic…

What I mean by 'fully considered limits', is to collect all the systems' data, and personal data, in the entire world, at a generally applicable enough logical level for mathematical soundness, not perfection, but at the fair enough probability level of general accuracy beyond doubt__then process the numbers representing this data into real 'Universal Knowledge' of our world, to chart a proper future course__toward our best ideals and orders of liberty for all...

Such data if collected, which has not been yet, can be computer processed into a sound 'Universal Knowledge' of human actions, even projected by sound modeling, out into the future, of course with less accuracy, the further projected into the future, and that's why I'd always suggested 'Sliding Time-Scaled Laws', that are dynamic and capable of changing as new numbers are crunched. Of course some would be repelled by math guiding their futures, but 'Mathematical Futures' are better than 'War Futures'__which we all know we are going to get, if we keep pursuing the non-past and non-future-knowledge route...

These solutions are possible with computers, responsibility and effort...

Here's the military model of processing such massive informations: The same can be used for peaceful purposes...



Explanation of The Triadic Shadow Logic, Used In Above Graphic…

Here’s a recent survey of my deepest thoughts about creative hypothesis logic, known as ‘Abduction’:

Most accept psychology as a valid study of humanity's conditions__I do not. To me psychology is a regress of scientific philosophical logic's long march to find the full scientific truth, of itself and the scientific psychology of the feelings. The trouble all through-out almost all the psychological literature is the simple word uses of; may, suppose, maybe, if and not iff, probably and not probability, possibly and not possibility, non-necessity and not necessity, etc., which forms most of psychology's and sociology's main linguistic texts__and involves far too much conjecture and hear-say. This is far too loose a language for any science to exist in, therefore, even though I also entertain this area of speech, when it's not too blatantly negative against science__I only accept a logic that does not accept psychology proper into its realm__except to talk about the science of psychology, as per my attempts to use Esthetics__The sceince of motives, aims and goals__long established since the Greeks. The reason everything may seem so confusing at times, is the fact, I often am more or less crossing my own borders of linguistic and system uses, to even begin to talk to those who are, imo, far too psychological__which causes problems because I'm always trying to bring those conversations, in the science threads or ideas, back to science's accepted logical norms. That's the war you may sometimes see... Until I can build better bridges between what I knowingly reject, and what I knowingly accept__psychology vs. logic__I am bound to be trapped in the in-betweens of bad communications at times, and there's nothing I can do about that, except self-evolve the bridges__Nature's got control of that__They don't fully exist yet__referred to as the Einstein-Gap, or the J. Herbrand-Gap__The very wise mathematician Gode'l followed__but he died mountain climbing, a year or so before Godel published his famous papers, mainly from Herbrand's papers and letters to Gode'l. Here was one of the real true geniuses of history, hardly anyone even knows existed...

As to my own ideas, just this morning I awoke to the deep pre-suppositional reasoning we all use, knowingly or unknowingly. It's the realization of how 'inductive logic' actually functions, deep in all our pre-thinking processes, we may or may not be fully aware of. That's why I've nick-named it 'Shadow Logic', which is really the triadic logic process C.S. Peirce tried to awake the world to, over 100 years ago. He named it 'Abduction’(published earlier at my thread, with the military uses shown by graph above), and the most famous living philosopher, mathematician, logician__a lifelong scholar of Peirce__J. Hintikka(professor at Boston U., from Finland)__stated; "The greatest goal the modern world has to achieve, is to fully understand abduction." This is the 'shadow logic' I speak of. Put simply__'Abductions are modal inductions, creating deductions, for models, hypotheses, and facts'. In a common language, this would be; 'The thinking taking place in the very backgrounds of all our brains(shadow logic_semi-conscious and non-conscious states, i.e., barely visible if we fully reflect) is a basic triadic+ thought process, of all the infinite constant inflow of information, from all external and internal memory, sensory, imagination, intuition and feelings sources, that is naturally being processed by the triadic modal processes of possibility, probability and necessity__from this infinite creative source, into its finite deductions, we all use in fully-conscious thoughts, ideas, aims and actions, to work up all our models of reality, hypotheses about reality, and all our final beliefs into facts, as knowledge and or even creative wisdom, which is the state of necessity, we all seek__knowingly or unknowingly...

Finally in summing this short piece__Imo, this is the difference between psychologists, sociologists and I, myself… They use a psychology and sociology I reject as far too inaccurate, and I use a logic I'm further trying to define, so it can do the science of both psychology and logic. That's a battleground, even within me__one which must be played out for discovery purposes__the public be damned, at times... Though, I am being able to see between the two opposed schools of thought better__they still are governed by opposite mental state laws, just as Freud, Jung and Husserl long ago stated__as did Peirce__One being too subjective to the other's objectivity of subjectivity...

This may not be too informative, but it's too new to me to be any better__yet...