Anodyne
Friday, March 28, 2008
 
Everyone wants to dispute economics with me today.

Dru writes,

"American recession (debatable) does not translate to Canadian recession.

Have a look at these indicators:

http://www.economist.com/markets/indicators/displaystory.cfm?story_id=10926201

5.8% unemployment as of March 27/08.

Historically, that's ridiculously low for Canada.

In many previous recessions (even 97-98) people would have killed to have it this good."

This illustrates the danger of using a single variable as a determinant of economic health.

For a contrary point of view, check the following sources:

US Household Debt Service Ratio (DSR) -- at its highest point ever

Equity Loans as Next Round of Credit Crisis -- note the graphs and accompanying multimedia. When the value of one's property falls, perhaps dramatically, in the short-term, and a lender either calls the loan or asks for additional equity as a security, how will those payments be made? On a 19% credit card? For how long? Or perhaps in conjuction with reduced consumer spending? If funds previously directed to consumer purchases are redirected to debt service, what effect will this have on an economy fuelled by selling goods and services?

Also, your insistance that the US and Canadian economies aren't joined at the hip is pretty tenuous. When US new home orders slow down, which major North American country's lumber producers experience a dramatic downturn in sales? (Check Norbord Inc.'s last few quarterly reports for an excellent illustration of this process at work). When US consumers quit buying new cars, which province's auto plants lay off workers? And when broke US residents quit visiting their "super, natural" northern friend, whose hospitality industries, recreation industries, and retailers feel the pinch?
 

JWV has some questions:

"Chris,

'For example, suppose that the closed economy’s marginal propensity to consume (MPC) is .85; that is, for every dollar that a household in the economy earns, it spends $.85 and saves $.15. The multiplier is then given by the formula 1/ (1-.85), or 6.666. In this economy, $5 billion of government spending would generate $33.3 billion of aggregate demand.'

I'm meeting with my friend who is a physics Ph.D at Harvard/M.IT. this weekend and I hope he can explain this to me. If it checks out you should be nominated as Satan. If it doesn't then at least nominated for a Nebula award or some shit. When you refund money back to people who are in debt you only put them in more debt because things cost more, and money is worth less, no?

There is no marginal propensity to consume when one has all of their desires, plump on Applebees etc.

The philosopher Samuel Weber notes how DeTocqueville saw the American illusion of economical growth and legal stasis correlating in life and the relation to death. I suppose Maurice Blanchot sees his way to the same score (arch post-modernist that he is, I know). That puzzling slogan above the Belkin satellite gallery will make more sense when it peeks over the water line at high tide.

Or, quoting from 'Can You Get to That' off Funkadelic's 'Maggot Brain':

When you base your life on credit
And your loving days are done
All the cheques
you signed with love and kisses
Later come back signed 'insufficient funds'

Y'all get to that.

Sašo thinks the economy is going to tank and he's interviewed on Wall Street. It's politics that makes me agree with him, and the fact that he can do the maths that I never could. So, what am I saying? I dunno. My birthday is the 25th of June, traditionally held as the birthday of the antichrist.

All my friends are Satanists (You should read 'Satan loves Me' by Robert Irwin...)

As for artists preferring a review or online attention: THE REVIEW!"

In order:

1. It's a macroeconomics model for a first-year course, not reality. You teach students physics by dropping weights with springs attached to them and watching balls roll down slopes, not by beginning with quantum mechanics, and you teach students basic economics by starting with closed economies and adding complications later. You don't need a physics Ph.D from Harvard/M.I.T. to solve the equations or grasp the concepts; my C+ in Algebra 11 is doing just fine.

2. You can simulate a population up to its neck in debt by changing the marginal propensity to consume; it's not a fixed value. Say the population spends .01 of every extra dollar and saves .99 because it's flat broke and wants to pay off its 19% Mastercard (In this model, paying down debt is exactly the same as saving, because the money spent paying off debt is not available for new consumption). So the MPC is (1/1 - .99) or 1.01, and $5 billion in government spending will generate $5.05 billion of aggregate demand and essentially be useless.

3. "When you refund money back to people who are in debt you only put them in more debt because things cost more, and money is worth less, no?" You're confusing short-run and medium- to long-term outcomes. In the short run, a monetary injection in a closed economy or an open economy with a fixed exchange rate will increase aggregate demand, even if it's only by a miniscule amount, as in #2, above. Keynes proved this in 1936, and no contemporary economist I know of, right or left wing, doubts it. In the medium to long run, a loose monetary policy will increase wages and prices and lower the exchange rate in an open economy with a flexible exchange rate. That's why a loose monetary policy is a terrible idea in the real world, except as a short-term stimulus to jump-start an economy out of recession.

4. North America isn't going to have a recession; we're in one, and it's going to be bad. If you want a culprit, you could look to a capitalist culture that treats its citizens like children and encourages consumption as the solution to every psychic wound. Caramel sundaes with sprinkles for everyone!

5. I'd go with the review, too. Comments are nice, but one always hopes for understanding.

Thursday, March 27, 2008
 
More from a new fave:

Time For Change, Cat Rackham!
 
SCORE!

Acquired just now, after 15+ years of looking: J. Wall, Landscape Manual, UBC Fine Arts Gallery, 1969-70

And a second copy of Portfolio of Piles, if anyone's interested in purchasing a seminal work of Canadian photoconceptual art.
 
Recent reading: Stephan Pascher, "Phantom Limb: Michael Asher's Sculpture Project," Afterall 17 (Spring 2008).
 

8pm-11pm: building a small-scale relational database to inventory the store's used mass-market paperbacks. (Not quite from scratch; I had the help of Geoff Coffey and Susan Prosser's handy book, above, and Filemaker Inc.'s intuitive and surprisingly easy-to-use software). I just spent the last hour and a half loading up data and trying to crash the server. But it just ticks along like a Toyota Prius. So, never again will we pay cash for that 22nd copy of Stephen Coonts' Liars And Thieves or any book by Amanda Cross. Never again will a stack of Dan Brown's Digital Fortress topple from on high, nailing me right in the forehead. And never again will I buy Amanda Quick pocket books in the States, under the mistaken assumption that all the last ones sold.

Off home on the night bus with the year's first installment of Annual Report Season (Bank of Montreal) and Adorno's Aesthetic Theory. An odd and often frustrating life, but I wouldn't trade it.
Wednesday, March 26, 2008
 

Turns out Flickr has its uses after all.
 
Dru responds to this morning's post:

"If there's no market for your creative work the only reason to make it is for deeply subjective personal reasons.

Contrariwise: Monetary reward may not be forthcoming but you may receive respect and adulation even without being paid. Many people might find these things more satisfying than a small or moderate sum of money.

Case study:

A) Artist X takes a picture and posts it to Flickr. 127 people comment on his picture and 3,469 people add it as a favorite. His picture makes #2 on the Flickr explore page for the day.

B) Artist X has a gallery show at ABC Gallery, which includes the picture mentioned above. A couple dozen people show up. No one buys anything, but Critic Y writes a nice 600 word review for the Georgia Straight and Critic Z writes a deeply insightful 2,000 word review for Canadian Art, linking Artist X to a tradition stretching from Titian and Raphael through Duchamp, Foucault and Houllebecq to Regine Debatty.

Which of these two events is likely to provide more satisfaction to Artist X, and why?"

In event A, Artist X's picture is at best a distraction or a novelty. Someone else will be #2 on the Flickr explore page tomorrow, and the day after that, and on into infinity. Who'll remember, even a week from now, that Artist X's picture exists? At best, a very small group of the 3,469 people who "added it as a favorite." I'm Facebook "friends" with lots of people I haven't seen or interacted with in years. I think the same metaphor applies to Flickr favoriting. This is Warhol's promise of fifteen minutes of fame sped up to warp speed, and it favors works "of the moment" over everything else. It also isolates pictures as pure visuality, without consideration of the larger social, historical and philosophical contexts they're a part of.

Anyone can make one good photograph, but it's a lot harder to keep making them, and to have your work evolve in spontaneous, unpredictable, and aesthetically significant ways. When Critic Z describes Artist X as part of a lineage -- a retroactively constituted one, inconceivable before Artist X and his work -- he or she is not just evaluating the Flickr favorite in isolation, but Artist X's whole involvement with the world. Critic Z's thinking should count for a lot more than Flickr comment #97's "Dude! Sweet shot!"
 
Score!

22.09.94 UBC MFA Graduation Exhibition, inc. Jeff Wall, "On Learning and Judgement." The critical bibliography is coming along nicely. So, if anyone has a copy of Landscape Manual or Faking Death looking for a good home. . . .

BC Almanac(H) C-B, National Film Board of Canada, 1970. Inc. Dikeakos' Instant Photo Information, plus Kiyooka, Morris, N.E. Thing Co. & etc.
 
Spime

Pro: Giant simulated self-replicating bacteria wandering 'round Second Life

Con: arrogantly asserted by Wikipedia's content cops to be theoretical Bruce Sterling pie-in-the-sky, and, as such, not deserving of an encyclopedia page.

Judge for yourself.

"You first encounter the Spime while searching on a Web site, as a virtual image. The image is likely a glamorous publicity photo, but it is also deep-linked to the genuine, three-dimensional computer-designed engineering specifications of the object -- engineering tolerances, material specifications and so forth.

Until you express your desire for this object, it does not exist. You buy a spime with a credit card, which is to say you legally guarantee that you want it. It therefore comes to be. Your account information is embedded in that transaction. The object is automatically integrated into your spime management inventory system. After the purchase, manufacture, and delivery of your spime, a link in established through customer relations management software, involving you in the future development of this object. This link, at a minimum, includes the full list of spime ingredients (basically, the object's material and energy flows), its unique ID code, its history of ownership, geographical tracking hardware and software to establish its position in space and time, various handy recipes for post-purchase customization, a public site for interaction and live views of the production change, and bluebook value. The spime is able to update itself in your database, and to inform you of required service calls, with appropriate links to service centers.

At the end of its lifespan, the spime is deactivated, removed from your presence by specialists, entirely disassembled, and folded back into the manufacturing stream. The data it generated remains available for historical analysis by a wide variety of interested parties."
 
Dru, in town all too briefly yesterday afternoon, asks me to imagine a world where content is free. What would it look like? Dru's answer: pluralistic, more performative, definitely outsider-artish. If there's no market for your creative work the only reason to make it is for deeply subjective personal reasons. I'd hope that the result wouldn't look like deviantART or Flickr or the Saatchi "people's" website, but the evidence to date doesn't support much optimism. Gorilla paintings, clown paintings and bondage photographs ad infinitum! Every town in North America has some chucklehead "rebelling" against art school by churning out huge acrylic-on-canvas portraits of mandrills clutching guns or electric guitars. I like monkeys too, but reflexively inversive aesthetics just seems blinkered from the get-go. "Don't become the thing you hated," says Mr. Bejar. Nor its shadow. There's a tradeoff between creative autonomy and a paycheque that isn't going away. Anyone who's ever written for a major newspaper or magazine dreads the call from the autistic fact-checker who can't parse even moderately complex sentences and wants all the polysyllables and jargon converted not to Hemingwayesque or Orwellian "just plain prose," but to Canwest Global 'graphs and snappy leads. Text should go down easy: a neck massage; a cool refreshing draught. Thinking feels too much like work; it makes the customer less happy. I quit writing art journalism on a regular basis after being assigned a seven-artist group show and a 400-word word count. Fifty-seven words per artist, forty to forty five if you subtract the participants' names and the works' titles. My friend Naeara used to write press releases twice as long. The editor, who will remain nameless here, found my incredulity bizarre. If you don't want to do the job-- Thanks anyway! A hundred or hundred and twenty-five dollar cheque isn't worth the lasting contempt of one's "peer group," their lingering suspicion that drugs or psychosis fuelled your text's creation. And it's not like a periodical's "targeted demographic" can't find you elsewhere. Google has erased the wall between writers and and audiences, a wall previously punctuated by periodicals' doors and windows. My former editor seemed to think that producing art criticism online was the equivalent of writing a manuscript by hand with a quill pen, walking down to Spanish Banks, and casting the ink-and-paper product into the waves sans bottle. To which I can only oppose my own experience and my stats counter. Lots of people found Exponential Future without any trouble, and the photographs too. So: optimism after all.
Tuesday, March 25, 2008
 

Score!

Free Media Bulletin No.1, 1969, eds. Duane Lunden, Jeff Wall, Ian Wallace

A Portfolio of Piles, N.E. Thing Co., 1968
Monday, March 24, 2008
 

I was a -- eh, heh, heh, heh -- dandy
Sunday, March 23, 2008
 

 

The Hid, Here
by Margaret Avison

Big birds fly past the window
trailing strings or vines
out in the big blue.

Big trees become designs
of delicate floral tracery
in golden green.

The Milky Way
end over end like a football
lobs, towards that still
unreachable elsewhere
that is hid within bud and nest-stuff and bright air
where the big birds flew
past the now waiting window.

 

Q: Consider the following statement. "Fiscal policy is a very precise tool for controlling aggregate demand. If the government wants to increase aggregate demand by $5 billion, all it has to do is carry out exactly $5 billion worth of government spending." Is this statement true or false? Explain. In your answer, consider both a closed economy and an open economy. Also, consider the difference between fixed and floating exchange rates in the open economy.

CJB: Fiscal policy is, at best, an imprecise tool for controlling aggregate demand. The statement implies a 1-to-1 correlation between a dollar’s worth of government spending and a corresponding increase in aggregate demand. But a dollar of government spending could generate more or less than a dollar’s increase in aggregate demand. It could also fail to have any effect on aggregate demand whatsoever. Government spending’s ultimate affect on aggregate demand depends on the interaction of several key variables: whether an economy is open or closed; and whether that economy’s exchange rate is fixed or flexible.

In a closed economy, a $5 billion increase in government spending will initially increase aggregate demand by $5 billion. The multiplier effect – the additional shifts in demand that occur when expansionary fiscal policy increases income and consumer spending – will then generate an additional shift in aggregate demand. For example, suppose that the closed economy’s marginal propensity to consume (MPC) is .85; that is, for every dollar that a household in the economy earns, it spends $.85 and saves $.15. The multiplier is then given by the formula 1/ (1-.85), or 6.666. In this economy, $5 billion of government spending would generate $33.3 billion of aggregate demand. However, the increase in income would also raise the demand for money in the economy, as households seeking to consume additional goods and services would choose to hold more of their wealth in liquid form. Because the supply of money in the economy is fixed, interest rates would increase to bring the demand for money and the supply of money back into equilibrium. The increase in interest rates would create a corresponding drop in the demand for investment goods. In other words, the increase in government spending would crowd out investment, which would cause the aggregate demand curve to drop back from the $33.3 billion of “additional” aggregate demand. In a closed economy with a high MPC, $5 billion of spending would probably generate more than a $5 billion increase in aggregate demand; the increase in demand would outweigh the crowding-out effect. But in a closed economy with a low MPC, it is equally likely that the crowding-out effect would outweigh the multiplier effect and shift aggregate demand by less than $5 billion.

A similar situation would prevail in an open economy with a flexible exchange rate, with a few additional wrinkles. First, given perfect capital mobility, and ignoring tax and default risk, the open economy’s initial interest rate before the $5 billion of additional government spending would equal the world interest rate, R(w). As before, the rise in household income created by the multiplier effect and the corresponding increased demand for liquid wealth would cause the interest rate to rise until the local interest rate, R(loc), > R(w). The interest rate increase would have two effects. First, as before, it would crowd out investment spending and decrease aggregate demand. The higher local interest rate would also generate additional foreign demand for local assets. This demand would generate additional demand for dollars in the foreign currency exchange market, which would cause the dollar to appreciate and net exports to decrease. The fall in net exports would generate a reduction in consumer spending, a corresponding reduction in money demand, and a reduction in interest rates until R(loc) once again = R(w). Consequently, the government spending increase would have no lasting impact on aggregate demand.

A slightly different situation would prevail in an open economy with a fixed exchange rate. As in an open economy with a flexible exchange rate, $5 billion of government spending would increase aggregate demand, increase demand for liquid wealth, and raise interest rates until R(loc) > R(w). As before, a local interest rate above R(w) would generate additional world demand for local assets, and the dollar would appreciate. To prevent the value of the dollar from floating, the government would increase the supply of dollars available by purchasing foreign currency in exchange for dollars, which would cause the interest rate to fall until R(loc) once again = R(w). The non-appreciation of the dollar would prevent net exports from decreasing as they would in an open economy with a floating exchange rate. The money supply increase, coupled with the $5 billion spending increase, would shift the aggregate demand curve even further than it would in a closed economy, and generate a substantial increase in demand for goods and services.
 


But now the day has come

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