Smoking Hot Political Junkies has the post Black Votes Matter – and South Carolina, You Just Got Played by Hillary Clinton by Kimberley Irvin.

As a Black female, I just can’t wrap my head around it. Why in the hell would ANYONE, especially a person of color, waste their vote on another Clinton?

One factor in the SC blowout that I had not fully understood is something that Clinton said in the debate. She chastised Bernie Sanders for disagreeing with President Obama. For many white voters, it was a “so, big deal” issue. She wasn’t aiming that remark at white voters. She was aiming that remark at black voters. Despite everything, President Obama is still extremely well regarded in the black community for the symbolism he represents, not necessarily for anything he has achieved.

Either because of Clinton’s remark, or the fact that Sanders has disagreed with Obama on wars, failure to prosecute Wall Street crooks, trade policy, and deportation of immigrants, I think that there are many black people who just aren’t going to listen to Bernie Sanders no matter what he says and no matter how much their material interests are in sync with his platform.

Naked Capitalism has the article James Galbraith Describes Major Forecast Failure in Model Used by Romers to Attack Friedman on Sanders Plan.

So why do the Romers say so confidently that Friedman is off base? They are using a different model. And as Galbraith explains long-form, it’s one with a pretty crappy track record in post-crisis America. And Galbraith gives an important warning:

In the real world, forecasts are a very weak guide to policy; when attempting to make major changes the right strategy is to proceed and to take up the challenge of obstacles or changing circumstances as they arise. That is, after all, what Roosevelt did in the New Deal and what Lyndon Johnson did in the 1960s. Neither one could have proceeded if today’s economists had been around at that time.

This is a shocking description of the failures of the ecnomists in the Obama administration who are now throwing stones at Bernie Sanders.

One of the things about Obama that I voted for was the belief that he was a practical guy who would follow Roosevelt’s technique “proceed and to take up the challenge of obstacles or changing circumstances as they arise”

I knew that Obama had failed to meet my expectations in this regard, but until I read this article, I never realized the depths of that failure.

I think I have a special appreciation for the mathematics underpinning the wisdom of constantly checking your results, and adjusting to deviations from expectations.

My explanation below is even more abstract than the James Galbraith explanation of the problems of economic forecasting. I really don’t expect anybody to undersyand what comes below except for people who have also been in my trade of simulation of the behavior of integrated circuits.

When I first got into the business in 1969, there were severe limits on the performance of circuit simulation programs. If you tried to make too large jumps in time in your simulation, the results could predict wild oscillations in the circuits where none existed.

This was due to a method called explicit integration. In that method, you would take a few historical points in time of your simulation, and use it to predict behavior at the next point in time. You never checked to see if that prediction was continuing to satisfy the equations governing the system as a whole. To prevent the problem of oscillation, you were forced to limit yourself to time steps not larger than those limited by the smallest time constants anywhere in your circuit. This limitation would keep the errors to a reasonable level, but it really slowed down the simulator by orders of magnitude. The reason why people stuck to explicit integration was that solving the circuit equations to check for errors was an extremely compute intensive process.

In the early 1970s, The University of California at Berkeley, and others introduced ways to use implicit integration instead of explicit integration. The reason why they could use implicit integration was they had found a technique for rapidly solving the system circuit equations to see if the error was within bounds. Those rapid solving techniques are called sparse matrix techniques. With sparse matrix and implicit integration, you used the predictions from previous time points, but then you checked how accurately those predictions satisfied the equations for the circuit at the time you were trying to estimate. If the predictions were too far off, you would adjust then until they the result was acceptable. If you couldn’t find acceptable results at the new predicted time, you would try a smaller time step into the future at an earlier predicted time. This method allowed you to take much larger time steps than explicit integration allowed while not introducing wild oscillations into the results. The new method was also more suitable for simulating highly non-linear circuits like those found in computers.

In effect, you only had to worry about small time constants in parts of the circuit that were actually changing significantly. Small time constants in parts of the circuits that weren’t very active would not cause your solution to go wild.

I liken this behavior to the Roosevelt economic plan. Forecast something, do something according to your forecast, measure what happened as a result, and adjust if you see deviations from plan.

It’s not rocket science, but it is science and math. I only wish I could explain this to the lay public who are not engineers and mathematicians. Well, at least I can take comfort that I laid it all out there, even if very few will get it.

The Morning Ticker has the story What the heck are gravitational waves? Here’s the beautiful explanation [VIDEO].

The discovery of gravitational waves has been perhaps the biggest moment in science since the discovery of the Higgs boson — but what exactly are they and what makes them so important? A physicist was on the Late Show with Stephen Colbert to break it down for everyone in America.

Here is the featured video Gravitational Waves Hit The Late Show.

I always love the analogy of the bowling ball on the trampoline and the representation of gravity bending space in the three dimensional plot superimposed on images of planets. It is such a simple concept to grasp, and the plots and explanations make you think you have learned something. Then I say to myself, a three dimensional plot has three axes. In the ones being shown, the horizontal axes represent two of the three space dimensions, and the third axis is what?

When we are talking space/time, it has four dimensions of its own. If you could conceive of a five dimensional plot, what is the 5th dimension? I did look this up on Google once and came up with some understanding of these questions, but now I have forgotten what I learned.

If you would prefer, just walk away thinking those plots have taught you something about general relativity, and be satisfied. You can nod your head knowingly whenever you see such a presentation in the future.

Naked Capitalism has the very interesting article Introducing Kuznets Waves: How Income Inequality Waxes and Wanes Over the Very Long Run.

The pro-inequality trends will be very hard to overturn during the next generation, but eventually they may be – through a combination of political change, pro-unskilled labour technological innovations (which will become more profitable as skilled labour’s price increases), dissipation of rents acquired during the current bout of technological efflorescence, and possibly greater attempts to equalise ownership of assets (through forms of ‘people’s capitalism’ and workers’ shareholding).

Now, these are of course the benign factors that, I think, will ultimately set inequality in rich countries on its downward path. But history teaches us too that there are malign factors, notably wars, in turn caused by domestic maldistribution of income and power of the elites (as was the case in the World War I), that can also do the job of income levelling. But they do it at the cost of millions of human lives. One can hope that we have learned something from history and would avoid this destructive path to equality in poverty and death.

The author starkly sets out what I have been thinking are the two options. I’d much rather we promote the benign forces than the malign ones. The wealthy are probably thinking about the same possibilities, but are hoping they can ignore the benign ones because the malign ones probably won’t happen in their lifetimes. As always, the rich don’t realize there is no place for them to hide if the malign options happen.

ars technica has the article Nissan’s connected car app offline after shocking vulnerability revealed.

When a Leaf owner connects to their car via a smartphone, the only information that Nissan’s APIs use to target the car is its VIN—the requests are all anonymous. Those are the findings of Troy Hunt and Scott Helme, who published their findings on Wednesday. Thursday, Nissan took the service offline.

As a retired software engineer with 40 years experience, and now as a blogger, I know that the art of providing computer security is more complicated than what I can manage, so I depend on experts in the field of computer security to do the work for me. I wish that more large companies had software engineers working for them that had an inkling of how unqualified they are to design security into the systems they deploy. They need to seek out the experts in the field to advise them on security matters.

Such amateur behavior on the part of these software designers gives professional software engineers a bad name. More importantly, this amateur behavior erodes confidence in computer systems of the consumer public. Amateurish behavior of software engineers almost sank President Obama’s health care initiative.

I have not supported the idea that engineers working for a large corporation should all have professional engineer credentials to ply their trade, but these sorts of incidents leave me wondering. I guess I can have these thoughts now that I am safely retired and won’t have to get professional engineer accreditation.

New Economic Perspectives has the post The Danger Of Low Oil Prices For The Global Economy.

For lack of something better to quote, here is one excerpt.

My view is that crude oil is in a long downslide, in the short-term giving way to natural gas, and in the longer-run giving way to wind and solar and batteries and stuff like that. Alternative energy is coming on much faster than expected. And also most people think that alternative energy requires subsidies. No it doesn’t. It doesn’t. It is now cheaper.

Alternative energy didm’t need subsidies at $100/barrel oil. I wonder if that is still true at $30/barrel oil.

In the past, the sharp drop in oil prices help cut off the shift to alternative energy. The shift may now be too far along for falling oil prices to have the same effect it used to have.

For those of us with some investments in oil and related industries, there is some very valuable information in this article. I am just having a hard time figuring out what and where that value is.

The Real News Network has posted the documentary Lost in Las Vegas from Paul Jay.

On the day of the Nevada primaries, a special presentation of the feature length documentary by Paul Jay reveals Las Vegas as a model of neoliberalism, a tale of the shape of things to come. It’s all told through the eyes of a Canadian Blues Brothers act deciding whether they want to move their families to Vegas. It’s two performers portraying two actors playing two fictitious characters in a town where everything is a replica of something else.

There is a life lesson for two people, Kieron Lafferty and Wayne Catania, in the Canadian Blues Brothers act that finds themselves trapped in a corporate entertainment world. The lesson that they miss by a hair starts in a conversation at 1 hour 26 minutes into the documentary. Wayne Catania, the John Belushi of the act, delivers the punchline about 45 seconds later.

That’s how you get control. Be able to go without. I think that’s it, is to be able to say no. I’m going to put my daughter above the money, and if I have to say no, and walk away and change my life style so it’s like you know “No, you can’t have those shoes. They’re a little too expensive, we’re going to go with with this pair.”, then that’s the way it’ll be.

The point Wayne miss is that you have to have the conversation with the members of your family about doing with less way before you change your lifestyle to make less money. You have to cut back, and live beneath your means. The money you save, you use to build that nest-egg that gives you the freedom to say no, walk away, and not even disrupt your lifestyle very much. Not doing that is what makes you a wage slave, a slave to your wages. Investing your money so that you become an owner, not just a worker is the only way to get free.

As I remember it, the concept is embodied in the title of the book, Get Rich Slowly: Building Your Financial Future Through Common Sense.

The solution for individuals is laid out in the book The Two-Income Trap: Why Middle-Class Parents Are Going Broke by Elizabeth Warren (yes, that Elizabeth Warren) and Amelia Warren Tyagi.

Naked Capitalism has this fabulous article Did Money Evolve? You Might (Not) Be Surprised. If Ron or Rand Paul would read this and understand it, it would blow their minds. Now that is something I would pay “money” to see.

This conflation of “money” with currency-like financial securities reveals a basic misunderstanding of money that pervades the economics profession. That misunderstanding is based on a fairly tale.

In the golden days of yore, it is told, all exchange was barter. Think: Adam Smith’s imagined bucolic butcher and baker village. This worked fine, except that your milk wasn’t necessarily ready and to hand when my corn came ripe. And moving all those physical commodities around was arduous. This inserted large quantities of sand and mud into the gears and wheels of trade.

But then some innovator came up with a great invention — physical currency! Coins. “Money.” This invention launched humanity forward into its manifest destiny of friction-free exchange and the glories of market capitalism.

Except, that’s not how it happened. No known economy was ever based on barter. And coins were a very late arrival.

Later on in the article, the author posits this definition.

At this point you’re probably drumming your fingers impatiently: “So give: what is money?” Here, a bloodless and technical term-of-art definition:

The value of assets, as designated in a unit of account.

Ironically, one thing that even this article misses is the slipperyness of the concept of “value”. Some times the unit of account is given its “value” by the assets it will buy. In times of inflation and deflation, the “value” of the unit of account changes drastically. So it is rather circular to say that the value of assets is designated by the unit of account whose value is designated by the amount of assets it represents. In truth, there is no such think as a constant that represents value.

Naked Capitalism has posted the article The ECB’s Original Sin and Franco Modigliani’s Long View.

However, unemployment is not a potent instrument to control inflation when there is plenty of slack, while it has a considerable impact on social welfare.

Note the emphasis above that I have added. Too often people seem to think that a prescription to cure a particular ailment should be used to cure every ailment. Decent economists always tell you the specific circumstances that call for a specific remedy.

Even for me, some of the terminology of the article was a bit confusing. The section below explains how central banks could stimulate investment when the only power they seem to have is to control monetary policy. Monetary policy is weak to completely ineffective in stimulating investment when there is plenty of slack in the economy.

As the manifesto itself recognised, the proposed reinterpretation of the ECB role would meet with serious objections. One was that central banks are unable to stimulate investment.
.
.
.
The ECB has proven unable to raise inflation through its QE programme. Higher price dynamics cannot be achieved if the monetary stimulus fails to reach the real economy. When the latter is in deep recession or deflation, and fiscal space is limited, only monetary finance can be effective as it allows newly created money to be transformed into additional (public or private sector) spending without raising public debt. One way to apply money finance at the whole EZ level would be through an initiative whereby the European Investment Bank would issue bonds to finance a large investment plan for the area, and the ECB would purchase the EIB bonds with newly created money. Through such initiative, money finance would pursue the inflation target by stimulating demand and reducing unemployment. The new investment financed would strengthen the output potential of the Eurozone.

When people wonder why their is no private investment in more production capacity, I like to frame it as “What part of no freakin’ customers do you not understand?”