July 27, 2011
Legislation of a debt ceiling does not absolve the US from its obligations.
UPDATE: The 14th Amendment of the Constitution clearly states that Congress must not default on its obligations.
While the USA frantically tried to save the world with a nuclear arsenal they could never use and military overspending on wars that did no good, we see the East’s rise to financial domination by engaging huge numbers of lowly paid workers to export in a way that nobody was able to compete with. If you want something manufactured, get it done in China has been the wisdom of the past 60 years. Market forces!
The agenda of the lever pullers seems to be to froce the USA to default and evade repayment. By making it effectively illegal for the USA to meet its obligations, the USA will have to default. The net effect of the USA not borrowing any more is being described in philosophic terms – what would the result be?
I think the answer to that not yet knowable. But certainly creditor nations will invest elsewhere and perhaps it will be the final straw that breaks US economic hegemony. Time for a new deal?
If Obama was to be effective, he needed the Democratic support in his first two years. Sad that they fiddled while the midterm elections were lost. Back to American isolations, anyone?
July 25, 2011
The Republican “end game” would be everything owned by big corporations not necessarily aligned with nations as entities but freely enriching shareholders from anywhere avoiding tax as their earnings are processed where there are no taxes.
If these mega corporations are able to employ everyone for a pittance then we are buying into a return to slavery.
Is this essentially the same model that makes China appear successful? Enslavement of the majority for the benefit of the few. The problem with the Republican End Game is the loss of what America is – the most rewarding economy for invention. As these corporations become less answerable to Government, they become more able to break the covenant of fairness. The Murdoch empire is a case in point. A corporation which supported a culture of law breaking that believed it could do this with impunity, which it did for twenty years before a single case sharpened public revulsion with the practice. That is what democracy does, it pitches the majority against the business interest and belief of an individual who learns that the end justifies the means time and again.
Democracy allows for peaceful revolution. An absence of democratic principles as in the case of Libya demands more severe responses. The essential problem here is a duality where both sides are destructive to each other. A unified system that causes progress according to long term principles appears have delivered stable growth in China for the last 3 decades by enforcing cheap exports to the world while the West has been experimenting with Freedman’s economics, gambling as though it were an addict. When cronyism and corruption abide, and capital exists only for its own maintenance, there are economic distortions that will result in disasters.
The West can rescue itself by very progressive and specific Government spending on the correct programmes. Education for all, being the most important. Obama decided to invest in rescuing mortgages and jobs but with poor returns. The Republicans want to reduce taxes and spending and leave America a first world city state in a third world country.
See also: Huffington Post
July 7, 2011
Communism is dead! Capitalism is killing itself, rapidly. We need a better system: maybe Competalism*?
The Agora of the Competalists is documented from 250BC:
The Competialists were freedmen and slaves of Italian descent who took their name from the annual Roman festival of the Lares Compitales, the gods of the crossroads. The agora that bears their name was built in the 2nd century BC, and the offertory box decorated with snakes dates to c. 150 BC. The Stoa of Philip was dedicated to Apollo by Philip V of Macedon c. 210 BC.
Citation/References: Bruneau, P. and Ducat, J. Guide de Delos (Paris: Ecole Francais d’Athenes, 1965).
- The Competalist believes that all economic actions benefit by competing with others, without the destruction of ideas but the fostering of ideas in discussion and examinations of truth or utility.
- It is true that competence is derived from training and education. When two similar forces compete, there is clearly going to be a winner and a loser – the loser being the one that wins less or does not survive the battle of wits.
- Competition is the crossroads of success and competence building.
- A failure of competence is not a sign of weakness, indeed the preservation of truth does not imply that other less successful truths may have value in a complex world or at a future date. It means that another force, has been able to adapt to the present circumstances and those that trained them in this competence should now be able to train the loser.
- Weakness is giving up, not contributing, doing less to survive than is done for you. Those who made this their practise shall be considered to be criminal or negligent or both. They shall bear greater pressure on taxation.
- The state is the collective might of captial. Those with more must invest it to make those in whom they rely upon for competence more able to pay their own way.
- Slavery is a crime.
July 5, 2011
Greece and Portugal can sell their gold reserves, the price is very high and that fuels speculation. By putting their gold onto the market gradually, they can keep up with loan repayments. Government spending is necessary during a recession or businesses could change their behaviour. Like paying taxes. Like buying gold reserves and opening offices in countries like Greece.
The rise of the global corporate has enabled cross border legal theft of taxes from the economies of many countries. Is this a pressure from the one-world-government Bilderberg conference confirming years of conjecture by “conspiracy theorists”? Or is the intent to create corporations that exist outside the rule of law? What will stop them becoming feral when even under the auspices of the US government, we had rife corporate misdealings such as Enron and MCI who falsified accounting information to keep share prices suspended higher than they should have been, attracting investment they basically ended up wasting. Or Lehman Brothers who made very irrational decisions with bound to fail one day securitization deals. Corporate theft by Bernie Maddoff happening right under the collective noses of law enforcement, the Inland Revenue Service, the banks and Wall Street.
What if a multi trillion global corporation falls into the hands of corruption? How will that damage every nation states’ progress and growth? Or is that already happening – for example who is motivated to write thousands of computer viruses? Corporate criminals would have the skills. The Mafia probably do not. The West (and Google) point fingers at the Chinese Government. Corporations are more likely to gain from harming their competitors. Is there a war between China and the West? Not really, no. No evidence of that, but are there corporations who have proven they are not to be trusted? Lots.
So instead of regulating the high flyers to merely protect the public from expedential uninsurable risk they pose, why not regulate corporations at the international level to make them more responsible to trade balances and the well being of all?
Why not give the very largest corporations humanitarian projects and social responsibility?
America can get out of debt tomorrow. How? By selling its corporations.
July 3, 2011
While the rich executives of bailed out banks get enormously richer they are laying off staff the bank can not afford to keep. The award of ridiculously huge bonuses is justified by a government scared that these talented market manipulators will go and work overseas. The lack of any real wage growth for the broad middle class is a festering sore on the economic fortunes of the world. If the only customers that can afford your product are 0.5% of the economy then you had better be selling a very high priced item. This creates a scarcity of reasonably priced items when there are increasing numbers of middle class debtors who both owe and now own the banks.
It is a stupid economy. It is not improving the lives of the many, it is rewarding greed and extraordinary indulgence by those who believe they deserve wealth because of manipulations of the market and capital. The result of this free market economy is massive capital flows, debt leveraged and re-leveraged into Government securities and the economic imbalances inflicted upon the East by the West is being replayed back. This is the action of a highly organised Politburo that has longevity of planning over the power of a Western democracy that changes direction and elects officials without sufficient economic acumen to understand the long term risks of excessive debt to one’s very currency, fully expecting that an assumed survival of the fittest aspect of nature will win against careful management for economic survival and economic growth on a scale that is bound to eclipse the West sometime sooner than the West thought possible.
Economics is not a science of certainties. It is the art of fluid dynamics in maybe eight dimensions with all sorts of constraints and purposeful transfers of capital liquidity. It is no longer practical to lug pounds of gold across hallways as there is more money than there is security. If a massive default were to occur, with America owing the rest of the world trillions, world trade could cease up for many countries reliant upon American trade as a major market. The international depression that would follow would mean China could never be repaid. So what would that mean, exactly?
It would mean the wholesale takeover of American assets by people who do not live in America, exploiting Americans who are hungry for jobs. When the public sector is reduced to a slither of its former self in the UK, we could be similarly vulnerable, which is why the conservatives decided they would deconstruct government spending in a hurry, so that what assets the British had left, business and property wise, would remain in British hands.
But instead of that result we see a fear that bankers will go to richer pastures and huge bonuses going to many investment capitalists (including those who caused the vacuum that keeps current capital in a collapsed state). Why does someone need to be paid tens of millions of pounds?
Is it because the Government believes that investment capitalists will naturally more likely invest this capital into British companies than the middle classes would with all that Government spending supporting future generations and universal health.
Economic growth follows if you make children into employable well educated adults. A system that does not ensure mobility is less likely to allow for any real growth. Increasing the presence of excessive capital into property or shares creates a bubble that may attract foreign exchange but real value is transferred by people making things work.
Government Spending is the buffer that allows growth after a recession because all the supportive structures have not been neglected. The next generation is prepared to take the reigns.
March 8, 2009
The fundamental of the economy of any country is that it’s people are doing something productive, and for that they can eke out a living, whether it be a basic or a more expensive variety – the function they are being rewarded for is difference, change, something as a result of their actions.
July 9, 2008
and how to avoid it
Is the world falling into some kind of recession? That is when growth starts to subside and things economically suck, but if one understands it right, then what it is seen as is the loss of confidence based on property ownership – a line of credit was generally loosened up for billions of home owners, a culture of being able to borrow against one’s mortgage increased leveraging and the profits were handsome so the banks continued to go further.
The tragedies that underlie sub-prime + the oil hunger – a direct consequence of the Iraq war + lack of real progress with the nuclear question = potential for another Depression. It is not just that bills will not get paid, it is that assets will lose their value, nobody will buy things and prices will start to fall. If that fall accelerates – the potential for severe economic storms becomes more likely.
The authority carried by Security Council decree against a country, especially one of its nuclear capable members, may help guide us from disaster. The only thing that makes “nuclear weapons” necessary is other nuclear weapons. What real point is there in having nuclear weapons? To conquer any chance of threat in case of unpredictable behaviour. After all humans have their finger on the button. The USSR had Breshnev. America has Bush. Both caused recession.
Both also fought with Afghanistan. Not that fighting Afghanistan has been the problem for America – but because they did not provide their full ferocity to win the war in Afghanistan with commitment, they still are at war with malign forces.
Sorry, Osama bin Laden, it is hard to admire a person who promotes the death of innocents. It was not bin Laden that alerted the world to George Bush’s America. Osama bin Laden is not doing the work of God. It is not definite that he is not working for his homeland.
Neither is the US military incursion into Iraq, although by doing that and by not wiping out the Taleban, and at the same time efforts to quell appear to be fanning the flames of nuclear trouble with Iran, well – one can only imagine the end game.
The Office of President is not being attacked by Congress because it is “at war”. That is all keeping Bush and Cheney in office till February 2009.
To bring charges against Bush or Cheney would require that they depart office or end the state of war, and a pardon from their successor, whomever wins is all it takes to bury this sad chapter.
But the extraction of trillions of dollars from the US economy by chiefly OPEC countries, well. How many trillions has Saudi directly cost the US?
I think that the high oil prices are a direct result of the US uncovering its own lack of ruthlessness in war allowing a relatively degraded enemy to survive. Now the Arab nations smell nuclear technology within reach, and the confidence they now have in bargaining power seems the new reality.
Is the international recession in fact a deliberate plot to vacuum wealth out of US hands and into the hands of Arabia? The underlying economic war is far more serious because of sub-prime and the loss of confidence and money from a system growing on increasingly thin vapour.
A belief that the source of economic difficulties are “asset related” but providing free housing to the poor has been found to be an unsustainable activity of the US Government – is another way to put it.
It appears to be the problem, but it is the oil shock that will change economies the world over. Unless Bush can win his wars real soon now, and instantly restore confidence in the unassailability of the USA, the rest of the world will not start trembling has they now have been given the lever it needs to even the economic stakes.
Perhaps the only way to stop the spread of the Taleban cult or the Al Qaeda insanity is for taxes to increase for the wealthy, the US to pay its debts and stop living so ridiculously beyond its means.
November 8, 2007
Instant public perception reveals the turkey – but sometimes not before thousands have thrown millions at it. Too much property investment capital inevitably results in sales that get reversed. Too many mortgagee sales depresses prices. Declining prices could become deflation. That would cause massive problems.What flooding the market with low value dollars has done is cheapen the US economy. Hence the foolhardy effort to get everyone on the mortgage train we now insidiously refer to as sub-Prime. No-one is talking about how many citizens are losing their homes in the USA as a result of Bush indifference to the needs of real people. It has provided the grass roots market players with a sense of uselessness – or irrelevance. What we hear about is how investors are losing their punts in these non-productive organs of real estate wheel greasing. How many cents in the dollar they can expect. It is a damning and sad story but not half as hard as the young couple expecting who suddenly lose their house and entire life structure. Not to mention to effect on the overall health of the USA economy. How are they going to make productive lives for themselves now? Some one please tell me how this is a good result of the Bush tax massacre? Go on – go to the Discussion site and lecture me on the merits of running huge deficits to fight a war that has little economic benefit but heavy costs. Where is the beef?
August 4, 2007
Economic sustainability does not require endless growth of humanity. Should we continue to accept that greed as prime motivator of capitalistic instincts is actually “civilising”?
Locking up the rich and famous into gated virtual worlds makes a lot of sense. If they can not win the hearts and minds of the unrewarded/uncivilised – then the wealthy can at least hide from them.
The reason housing estates became ghettos is the lack of any economic rationale to improve them. The 21st century mega tower must be self contained as that provides an internal economy. Add solar panels and we are seeing a model of energy sustainability.
Upward expansion is also limited but the ability to control environmental impact with an economic impetus to maintain it makes a whole lot of sense. A housing estate that could maintain its own medical facility, other common facilities, common security and agreed rules is a small village.
If we stop growing, towering communities becomes a logical way to withdraw our footprint on nature.
August 3, 2007Al Gore may be right that ultimately it is up to every individual to believe that change is possible, in order that politically we choose leaders who advance progress in priority to growth. On the 07/07/2007 we all swung away from unrestrained capitalism as the only panacea necessary to allow us to thrive in harmony most successfully. It is really only the political consideration that matters, for, ultimately we may care how many plastic bags make poisonous pits out of landfills but that does not stop the factory down the road from making the local river murky and lifeless. It has only been political change that has allowed us to control our impact upon the environment. And for America this provides an alternative impetus for progress. What is progress? It is invention, finding a better way to do it. And these days cleaner and environmentally friendly is going to become something as important and enforceable as any other law. US Industry is growing at 1% per annum. It is already a substantial contributor to global warming because it requires so much energy. If we draw the energy from burning coal, as seems “politically realistic” it will be with advantages in air filtration and clean burning technologies that do not emit excessive CO2 or other gases that poison the environment. Understanding the problem is hard enough for the scientific community so one can not expect political change unless the addiction to growth is not curbed. Political change needs to encompass stronger motivations for choosing to advance the case for free power generation using large batteries of wind farms. Taking the energy from the air seems logical as a counter measure to climate change. Scientific analysis of this effect may well prove important if the religion of growth is continued. Our climate is like the Earth’s circulatory system. We got to learn to stop screwing with it to get our energy. Free passive energy can obtained with solar cells. If every rooftop in America was covered with power generating solar cells, power would be free. If the environmental cost was assessed and taxed to every business in the world, we could make progress to ensure our safety. It is political for the same reason that it would be very hard to stop someone competing in a race, for example, after they had prepared for it. You would have to have a very good reason. The most convincing commercial argument to prevent climate change is that there is rather a lot of money to be made.