Posts Noted 30 March 2011

Blog posts noted on 30 March 2011

• Mark Thoma reposts an interesting graph from Greg Mankiw: A Striking Scatterplot at Striking Scatterplot: Unemployment and Investment.

As we move into an economy dominated by Department I, this correlation will continue to strengthen. The countervailing trend of a decrease in importance of Department II means that corporate profit rates must continue to decrease.

• Yves Smith publishes Zeitgeist Watch: Art Critic Questions Winner Take All Society. His comment is:

The fact that a member of a world that has always depended on discretionary spending by the well heeled is raising questions like this is striking. Is this a sign that those at the top have become so isolated and increasingly irresponsible that even support personnel are wondering about the true costs of their allegiance? One of the fundamental assumptions of the new world order is that everyone has a price. Yet social animals of all sorts have developed what looks like a sense of fairness and reciprocity in their dealings, and will incur personal costs to punish cheaters. The wealthy may err in assuming loyalty can be bought.

• Paul Krugman notes in Road to Appomattox Blogging that:

It was, in a very real sense, the victory of modern America — of a democratic nation, in manners as well as politics — over an aristocratic ideal.

And the way modern America won was characteristic. Southerners were better warriors — man for man, they almost always outperformed Union armies, although the gap narrowed over time. But the North excelled at the arts of peace — that is, in industry and ability to get things done. The North couldn’t stop Bedford Forrest from raiding supply lines; but it could repair track incredibly fast. And it was that Northern superiority in logistics, in production, that eventually proved decisive.