What people really hate about "unelected bureaucrats" is they turn into unaccountable tyrants before we find ourselves helpless and unfree. Thank goodness the Trump administration is on the case, putting those bureaucrats in their place. thetrek.co/a-german-thr... ht @benroyce.bsky.social

(if it's not entirely clear, my "thank goodness" is ironic, this is an example of how the Trump administration empowers little tyrants, as long as they share the administration's malignities.)

I think we might just get caught up in definitional differences. To me, whomever bears the financial risk of an enterprise capitalizes it. No financial system is necessary. 1/

So, if I devote many hours and my own resources to putting together a business, I'm financing it, even if no "financial transfers" are involved. The resources, including my labor, had alternate uses that could have converted to money. 2/

I've forgone that money, and if the business fails to work out, it's a loss. In that sense, I bear financial risk, even if no formal finance was brought to bear. 3/

Someone always bears such a risk, whether it is an elaborate skein of players as modern financial systems enable, or just a solo entrepreneur. In that sense, financial risk-bearing is a necessary factor of production. 4/

To me it is what "financial capital " means. No money or banks or anything else are necessary to bring it into existence. Just the fact that all economic production entails risk, and some party must bear that risk, must therefore "capitalize" the production. /fin

another way of saying that maybe it's good deficit countries become poorer in order to overcome the imbalance. but that's not necessary. 1/

i agree the imbalance is a problem, but with intelligent use of financial tools, it could be brought down gradually so domestic replacements have time to ramp up. cold turkey is stupid, politically, developmentally, in every respect. /fin

i don't think they do have structural employment issues. it's country by country, obviously, but for Germany the constraints have been deficient domestic demand and the supply shock with respect to Russian energy. 1/

never forget that the Nordics consistently have higher labor-force participation rates than in work-or-die America. /fin

persistent surplus countries just have to write a check to their own people, then deal with higher accounting deficits or tax the rich. any inflation is limited because, well, excess supply. persistent deficit countries have to build industries they've forgotten or never known how to run. 1/

obviously this is oversimplified, because the goods and services previously exported by surplus countries won't precisely match the goods and services domestic publics will want to buy. directed subsidies can help ameliorate this. 2/

further, surplus countries that produce high-value goods tend to have metacapacity — they know how to build competitive industries. deficit countries less so. 3/

you'd much rather be a surplus country than a deficit country in a time of growing trade barriers. the main benefit to deficit countries is they can learn to become more like surplus countries. /fin

leaving tomorrow…

( chris is already there. seems to be doing well. wanna come? )

transferring debt instruments doesn’t necessarily add an asset, but it is often done in exchange for an asset. in my decomposition, US transfers debt instrument in exchange for, say, Yuan. then spends Yuan for goods. net effect: transfer of debt instrument for goods.

(i’m not sure i get your decomposition? what is the net effect we are decomposing?)