Mark Zuckerberg of Facebook has his social graph.  Ben Bernanke has his printing press.  What can the combination of the two achieve?  An easing of the Great Recession, perhaps.  Facebook is a platform where people reveal their social connections.  It is possible to track how news stories or opinions traverse social circles by following the connections of the social graph of Facebook.  Mark says social graph, but I say network.  At a basic level the economy is a network of transactions.  A purchase by one consumer involves a series of transactions among a diverse group of actors.  Think of all the people involved in your purchase of a Starbucks latte from the barrista to the farmer, the contractor who built the store to the manufacturer of that fancy automatic espresso machine, to the bank which authorized your debit card transaction.  This complex network is resilient to a myriad of disruptions.  However, a great many, well timed group of disruptions can wreck havoc.  Such a group of disruptions are responsible for our current economic malaise.

This view of the economy as a network is not uncommon, but perhaps Chairman Bernanke should leverage it to ease the credit crunch.   [Read more →]

You have heard it before, probably during the late 90’s from an open source proponent or a Netscape executive, Microsoft is on the way out.  Microsoft will loom large in the market for PC’s indefinitely, but growth in the PC market is shrinking.  A graph of PC sales over the last twenty three years illustrates this.  We have not reached the peak in terms of the number of PC’s sold, but a scan of the growth rates indicates a decline.  The mix of PC products consumed is also experiencing a significant shift towards smaller, cheaper machines.  This shift in the types of products sold, which is caused by shifts in consumer tastes, combined with smaller growth rates will ultimately lead to a significant reduction in Microsoft’s dominance.

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Janet Daley recently wrote an article in the UK Telegraph that presented her opinion on President Obama and Prime Minister Brown’s view that within the current economic crises lies an opportunity.  The article appears here.  My take on Janet’s argument is basically this: Minister Brown (the Al Gore of British politics, minus the US Supreme Court and elections) and President Obama are using the current economic malaise to institute a leftish power grab, which is fool hearted and is not addressing the crises at hand.

She claims that the economic crisis was enabled, “as much by the Left-liberal determination to spread prosperity through easy credit to the poor, as by the greed of bankers.”  This is an entirely political claim that speaks to no more than the margins of the origins. [Read more →]