Op-Ed Columnist - No, It’s Not About Race - NYTimes.com

Op-Ed Columnist - No, It’s Not About Race - NYTimes.com: "For example, for generations schoolchildren studied the long debate between Hamiltonians and Jeffersonians. Hamiltonians stood for urbanism, industrialism and federal power. Jeffersonians were suspicious of urban elites and financial concentration and believed in small-town virtues and limited government. Jefferson advocated “a wise and frugal government” that will keep people from hurting each other, but will otherwise leave them free and “shall not take from the mouth of labor the bread it has earned.”"

This Hamiltonian Vs. Jeffersonians divide which has recently been stated as Blue Vs. Red states is a very rational behavior even though it does not seem so a priori and can be explained via population density and the holistic theorem: The more concentrated a population, the more it makes sense for it to seek government intermediation. The more people there are, the more government intervention makes sense, on a linear cost bringing in quadratic benefits basis.

FT.com / Comment / Opinion - Economists clash on shifting sands

FT.com / Comment / Opinion - Economists clash on shifting sands
The neo-classical vs. neo-liberal debate as being framed here between Ferguson and Krugman has always struck by the fact that none of these positions provides clear analytic means for deciding when to decide where government (or central counterparty) action is judicious and when it is not.

While Krugman might be right at this moment, blind acceptance of his prescriptions may lead to trouble at other times.

It it is why I see my piece on the holistic theorem, despite its analytic relative simplicity as crucial in understanding how to decide among these two camps in practical situations such as the present issue of whether or not to adopt centralized clearing of derivatives.

SEE: http://knol.google.com/k/phil-kongtcheu/the-holistic-theorem/24v2kgtuvzk2v/16