February 17, 2013
Adam Smith wrote the seminal work about capitalism – The Wealth of Nations. Growth was then based on nations competing in the most extreme act of international piracy in history, colonialism.
These days we talk of “bubbles” as though these modern gold rushes were a certain financial rhythm. We developed a science to predict and thus invest as a business. The most successful have been investing madly and hiding it from tax authorities. Capital is continually extracted from the wealth of nations and poured into tax havens in a sort of reverse colonialism – only to find its way back into the economy funding more Government debt via bonds.
The only way that the Government can reduce these debts is to have a money supply from tax revenue exceeding expenditure, or to devalue the currency. Western economies continue to need to spend more than they take. What has happened to the Wealth of Nations?
August 22, 2012
The use of austerity has worn thin at least for the probable longevity of George Osborne. In its current form at least. Infrastructure spending by this two faced Government amount to allowing private roads to be built which is certainly going to provide some relief to chronic unemployment and incrementally it may result in economic improvement. But it is not what they set out to do, which is to build a bigger economy. That, they surmised, would result if we do what we would want a government to do, to protect wealth – to sustain privilege.
Which seems based on the misapprehension that wealth itself is a thing. It is not, really. It is the flowing of money that is the thing. The flow of money between viable entities finding areas of demand and creating supplies to meet them. I am hungry. I go eat a sandwich. And Joe’s is just around the corner. These connected imperatives, these compelling reasons to do things. Art. Achievement. Enterprise. Hobby. Obsession. A society with flows inward to fewer central points creates poverty as well as pockets of wealth. Taking risk on credit creates debt with a chance of wealth. Governments tend to run in debt as a natural state, hoping to improve things sooner.
If the measuring stick of a society is the degree of economic growth it can achieve, it establishes an instant demand for more population to share the load. If we can find an honest way to limit the growth of humanity we can then modulate our economics to fit more comfortably than the monied classes feeling they need to accumulate so much more than anyone else before anyone else gets their filthy mits on it. It is not so much that economies are inflating by increasing the money supply and devalusing currency slowly – it is the only way to evaporate the effect of trillions of dollars locked into tax havens. Unproductive wealth is the economic glutony of the modern world. And it works like cortisol in the body, it adds sink holes to the economy – which means that there is less actual cash in the system.
This is an ever accelerating economic phenomena of allowing tax havens. To attract people with a lot of asset income to reside Governments are obliged to allow tax havens into the economic equation.
The net effect with devaluation is to make the funds that tend to be locked into tax havens more at a risk of devaluation if left in your currency. The problem is that the Governments are compelled to compete for such retinues as those of the religiously rich.
Job creation by government in times of economic emergency yes. This Government’s record at economic improvement? Negative, trending: negative.
June 28, 2012
A generation or two of high unemployment and low wages is considered a price worth paying to bring down the deficit. This makes little sense economically (no jobs means less tax revenue, hence Osborne’s frantic borrowing)
If the Government believes that it is good to take from the majority because they a) either live in low circumstances and thus electorates that will never vote Tory anyway, or, b) they are young and are not enfranchised into the democratic system as they have no independence of mind or body. The “Baby Boomer” generation is defined by indulgence and when this is given to children in the fashion of top education good nutrition and a sense of moral value well and good, but a vast number of children these days get past the age of 25 due to zero economic options.
It is a cynical and unlawful party that recommends scrap heaping a section of its population that may never be able to vote against them. A bullying tactic or just a natural consequence of being a Tory toff who had his bread buttered for him from the start and now can not conceptualise that the economy is like a living animal, when you run it too hungry it gets tired quickly. The methods of the “financial stimulus” that the Brown government did was to buy into RBOS and NatWest – now the most badly managed banks because they outsourced too much responsibility to one failed cog that cost them a week of downtime and millions of customer headaches. And now Barclays has been fleecing interest. After the PPI scandal you would think that the banks would be a little more careful when it came to customer base fairness. A run on a bank is always down to perception. Dishonest bankers must be rooted out and sacked or confidence in the financial system suffers manifold.
This lenience on the wealthy and brutal treatment of the vulnerable while pricing education so that students are forever in debt is a master stroke of enslavement and duress upon an undeserving generation.
The Lib Dem balls up on Proportional Representation was a tragic day for those young disenfranchised voters. All voices should be heard equally or your democracy is unavailable.
Austerity is failing our children as it makes it impossible for them to assert their independence, so they do not define themselves in terms of their roots being well placed. They start life late, feckless and unremarkable. Our instincts shelter our young so they can lord it over their own isolated game console addiction the default pacifier of the teenager. Better than having them run wild in the streets.
Today’s government is a little like a medical team locking themselves in the cafeteria in case they catch something. The evolution of progress is forming an ugly mess of a future. That is what is wrong with this austerity. It is the isolation of social spending as a target for funding wealthy arrogance.
Lift them up for godsakes.
June 24, 2012
Top Tory donor George Robinson was a director of Rushmore, a (failed) tax avoidance scheme that Jimmy Carr was also a listed “Director” of – alongside 500 other disappointed capitalists.
Does this mean that the Tory Party is partly funded by income made via tax avoidance. Does this not mean that the Tory party is funded by people willing to steal from the people? Our Government is dishonest if they do not immediately act to close tax sheltering by the very very rich and if they are to remain honourable they should investigate their donors and if they are making donations of tax avoided monies, then the Conservative party effectively owes tax – and must immediately pay the correct amount of it to HMRC.
Additionally, the Government cost reduction strategy has reduced the HMRC staffing levels to the point where billions of pounds in tax avoidance are unable to be investigated.
Guardian article on Tory donor tax avoidance.
October 11, 2011
So many convoluted answers and the likelihood is that those we elect into power will have none of it.
The real answer is simple enough. The tax payer bailed out the banks, and now there is not enough cash in the system to stimulate demand. When we have demand we buy the stuff that is offered, investments that do not benefit the client as much as the provider because those providers are endlessly trying to dig themselves out of the hole they dug with securitisation assets that require an economy 100 times larger to support. It is not demand that is lacking, it is the ability to demand.
Cameron can achieve his blundering objective, make credit card interest illegal or fix it at 3%. Make all private mortgages fixed at 2% and regulate the hell out of bank ponzi schemes. Get back to a fair economic playground where the citizen is more important than the corporation and the dollar. Get back to a political environment where politicians serve the electorate, not the ruling elites. And do not bail out failing gambling banks. Put the bailout cash in the hands of the citizens to buy what they need and restart the engines. Make business that produce exports our priority. Reduce our reliance on gambling to get by.
We get two things remarkably wrong, both are our own purely human inventions: politics and economics. We just need to wake up one fine day and realise that all our assumptions about both are out of date and work out a way to do things that will work. We have the computers and can do the modelling. We need a financial revolution and to realise that capitalism and socialism, neither one, will solve it.
A comment added to this article:
July 31, 2009
Signs of an economic recovery are starting to appear. After recapitalising the financial system, President Obama kept the US economy liquid. This is may have averted more depressing news but as the bankers start to return funds they were lent by the tax payer the question arises, where to now for the US economy?
February 27, 2009
All this focus on the economy may mean we take our attention off the real issue. All the focus on sectional interests and pressure groups that drive the climate change agenda, instead of actual planning to change things that must change is distracting humanity from its mission, its meaning and its life.
Real progress follows talking about it, only if plans are made real without all the political watering down of meaning that occurs.
February 14, 2009
…it is not so much an economic crisis but a crisis of confidence in the frightening mathematics. Financial instruments and currency are a form of instant contract – they assume faith – but the gambler, the criminal, the banker – they lose the concept of money as value as they are no longer participating in the “being a part of responsible humanity” model.