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Building an Open Future
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Economic Depression 2009?Views: 603
Feb 18, 2009 1:12 pmEconomic Depression 2009?#

John Stephen Veitch
http://www.openfuture.co.nz/depression/depression.html

Here is a small part:

"Depression 2009
It's now very clear that we are in a depression. This is the worst recession since the 1930's. Economist know well how governments responded in the 1930's and that policy response was wrong. Around the world governments are trying to re-inflate the economy by pumping money into the system. So far with very little success.

Jared Diamond has written a book called "Collapse: How Societies Choose to Fail or to Succeed". The key point Diamond makes is that time after time societies collapsed from a period of high success. Moreover, they commit suicide by group choice rather than being adaptable in order to survive. Each society has it's cultural rules, and insists on being "true to our own vision", even if it means death. Human societies adopt cultural beliefs, strategies and rituals that become "the reason for our existance". My allegiance to "(Put what you like in here. - 'God' might do.)" is more important than my life. Many human groups have decided that Cultural survival is more important than physical survival.

James K. Gailbraith in his classic book "The Great Crash of 1929" writes that "the bad distribution of income" where the top 5% of the population got 33% of all the income was at the top of a list of causes of the depression. In the last 30 years we've recreated that situation.

Economist Nouriel Roubini was one of the few economists with a high profile who correctly predicted the present depression. Roubini recommends that the government of the USA should nationalize all those US Banks that have balance sheets weakened by toxic assets. The directors and managers of those banks should be dismissed, and a form of bankruptcy should be pursued, which protects jobs and depositors funds. The bad debt should be isolated and the bank recapitalized. Over time the banks should be sold back into private hands. The problem with this idea is that in the USA, the concept of nationalization of the banks is unlikely to get political support. If this proves to be the obstacle I anticipate, it will be impossible to give the banks a clean bill of health and to restore confidence in the system. That will cause the depression to last much longer than it otherwise might.

GDP is not a satisfactory way to measure the progress of a society. An increase in economic activity does not spread to lift all boats."

(To print from the original use the printable pages.)

John Stephen Veitch
Open Future Limited - http://www.openfuture.biz/
Innovation Network - http://veech-network.ryze.com/
Building an Open Future - http://openfuture-network.ryze.com/

Private Reply to John Stephen Veitch

Feb 26, 2009 8:33 amre: Economic Depression 2009?#

John Stephen Veitch
This is from the Open Future Blog.

"20 years ago I was very impressed by the concept of tapping an unlimited resource as we became a knowledge society. The human brain was a mine that would produce unlimited richness, we were told. I believed that message. But I misunderstood it. I was thinking in terms of money and the things money can buy. I was thinking about physical assets.

The human brain is a source of unlimited richness, but it's a richness of ideas, of imagination, and there are limits to our ability to make any of that available as a real object.

When I try to find the cause of the 2009 Depression, I list as the first cause the unsuccessful attempt to get rich by deregulation and by excessive focus on financial transactions. The main result was concentrate "wealth" more and more, while 90% of the population quietly got poorer and poorer. The expectation of "high returns" led people to over-promise and to take exceptional risks in order to make the promise seem to be achievable. Many people became involved in magical thinking, believing that by belief and willpower, any chosen objective was achievable. Those same people are now saying, "there is no depression". When too much money is in too few hands, there is not enough spending power in the economy to keep it running. Pouring in more money into the market doesn't work, because very quickly it accumulates again in those same few pockets.

The 2009 Depression is being driven by two or three other forces besides an unequal distribution of wealth. One of those is an over built housing sector that now can't be paid for. There is the problem of over dependence on oil as a transport fuel, and the exponential growth of that demand if Brazil, China and India were to experience economic development using the American model of "development". Economic development for really large populations based on petrol powered cars, isn't possible. Added to that, there is the very serious background problem of global warming. People are not stupid, they do understand that the climate is changing, and that we MUST, change the way we live in two ways. First we have to reduce the amount of greenhouse gasses we ourselves produce. Secondly, since climate change damage affecting the next 50 years has already been done, we have to live with the changes that brings.

I'm picking that the 2009 Depression will continue for at least 10 years. It will take two years to fix the financial problems. Banks will be nationalized, but the most important thing will be a International Financial Agreement, coming out of the G20 Summit meetings and the UNited Nations. World finance can't be under the control of any one nation, as it has been for the last 70 years.

It will take at least five years for the problem of excess demand for oil to decline in importance. And at least 10 years before we can be sure that progress on global warming is really being made. Then perhaps people will be able to imagine a better future or their children and grandchildren. That will give them a reason for living and a propper purpose in investing."

John Stephen Veitch
Open Future Limited - http://www.openfuture.biz/
Innovation Network - http://veech-network.ryze.com/
Building an Open Future - http://openfuture-network.ryze.com/

Private Reply to John Stephen Veitch

Mar 13, 2009 3:44 amre: re: Economic Depression 2009?#

William J
Hi John,

What people should be planning now is survival, food storage, and growing their own food. With all the food scares and food imported from China that is tainted. It should send out loud alarm signels to everyone that this is a crises that all people should be aware of.

Life as we know it is about the change drasticly. Some think the worse is over while other say this is just the beginning of rough times. Through it all we must remain focused for better resolve..

William

Private Reply to William J

Mar 13, 2009 10:00 amre: re: re: Economic Depression 2009?#

John Stephen Veitch
Hello William

Thanks for your input. I agree, you might be surprised how much I agree.

Two recent articles.
What we must personally do now:
http://www.openfuture.co.nz/depression/personalorg.html

How we might better organise our communities:
http://www.openfuture.co.nz/depression/communityorg.html

(Note that these pages all have printable versions.)

Many years ago I have a business failure that occurred despite all the planning and hard work I put in. Facing the facts was hard. It was then I came across this great quote fro Waldo Salt, an American film-maker. "To search for the truth you must first have lost it!"
http://www.openfuture.co.nz/truth.html

I think Lamar Morgan is now on that search.
I think in the next two years most of America will be engaged in that search. From that work a road to recovery will be found. The Open Future web site has quite a lot to say about where I think the answers lie.

John Stephen Veitch
Open Future Limited - http://www.openfuture.biz/
Innovation Network - http://veech-network.ryze.com/
Building an Open Future - http://openfuture-network.ryze.com/

Private Reply to John Stephen Veitch

Mar 13, 2009 10:37 pmre: re: re: re: Economic Depression 2009?#

Lamar Morgan 954-603-7901

John,

Did I read in a prior post that you believe the United Nations will help solve America's financial situation? If so, you cannot be serious. If there ever was a classic example of dysfunctionality, it has got to be the United Nations.

Innovation is what drives an economy - not big government programs. Innovation comes from private enterprise. It's a grass-roots approach. Grass grows from the ground up - not from the sky down to the ground.

I believe people around the world have figured that out. Saddly, few of those folks live in my part of the world. That is why they have an "entitlement" mindset rather than a "sense of responsibility" mindset.

The entitlement mindset says it is the government's responsibility to provide for your needs. Well, that has been tried and it does not work. Remember Russia under Communism? The nation collapsed economically. Why? Because no government can successfully manage the needs of a population. Why do you suppose China does most of its retail business with the USA? It could not keep its economic system afloat without the help of the USA. Yes, China thinks in terms of communism for its own people. But, it thinks in terms of capitalism when it deals with the USA. Make no mistake, a FREE marketplace is a necessity for survival on this planet.

So, what works? People learning to lead responsible lives on their own. That is what works. More capitalism and more private enterprise innovation is what is needed to restore any economy. That is why I am all for New Zealand stepping up to the plate and helping California to solve its $42 billion budget deficit. You obviously, cannot do all we need. But, make no mistake, every little bit helps.

Lamar Morgan
CDMM - Synergistic Business Marketing
707-709-8605
Attract more customers!

Private Reply to Lamar Morgan 954-603-7901

Mar 14, 2009 2:03 pmre: re: re: re: re: Economic Depression 2009?#

John Stephen Veitch
Hello Lamar

I really do find your posts confusing. You keep mixing up some really good ideas that I agree with, with philosophical, political and religious values that I believe distract us from understanding what we really need to do.

For instance the United Nations.
We have really serious International issues to solve that can NEVER be solved at a national level of debate. I have said that there is no choice but the MAKE a form of World Government that works. I'm very serious about that.

I agree entirely that the UN is a joke, compared with what we need to do. Nation states the USA in particular has made a point of making SURE that the UN is weak and ineffective and incapable of strong action that the USA might disapprove of.

You don't need to tell me that innovation drives an economy. I've run an innovation network on Ryze for 5 years. Innovation comes from the most unlikely places, not only from the ground up, but especially from the outside to the inside. The most common innovations are small and incremental and are continuously evolving. Disruptive innovations always happen in places where they are not supposed to happen, they are unplanned and most often misunderstood, both by the innovator and by the first users.

The next paragraph is all mixed up. In my view both capitalist and communists want to control the market. In fact the prime intention in making a business grow is to be the market leader (= controller). Free markets only exist in the warped minds of economists. The entitlement mindset also exists everywhere it can get established. People like to feel that they are entitled to ........ ( an easy ride, a free lunch if you like.)

I'm surprised Lamar to see you claim to support capitalism and free markets and then immediately look to the world for "support" for the USA or for California.

The USA has been and still is the worlds largest nation economy, and California is the eighth largest economy in the world if it's treated as a nation state. So crying poor is a nonsense.

You do in fact have the answer.
"So, what works? People learning to lead responsible lives on their own."

So in the Depression of 2009 we should do that. I think I do have some answers and previously I've posted links to them.

John Stephen Veitch
Open Future Limited - http://www.openfuture.biz/
Innovation Network - http://veech-network.ryze.com/
Building an Open Future - http://openfuture-network.ryze.com/

Private Reply to John Stephen Veitch

Mar 15, 2009 4:39 amre: re: re: re: re: re: Economic Depression 2009?#

Lamar Morgan 954-603-7901

John,

This may shock you, but I think we both think alike for the most part and are in agreement. While you may not subscribe to a Biblical world view as I do, I do believe you hold fast to a "responsible" as opposed to an "entitlement" worldview.

Now, with regard to capitalism and free markets, that is simply how a successful economic system works. Russia went bankrupt because the Communistic economic system could not sustain itself. You simply cannot predict in advance how much in the way of goods and services will be needed by a population. A government, for example, cannot predict in advance how many potatoes a population will need to eat. Russia actually tried to do that - not just with potatoes, but with almost everything. What happened? The economy collapsed on itself. But, you know what? Although Russia had the wrong economic model, they did not cheat. They simply learned the hard way that the design was faulty.

The USA, on the other hand, had some cheaters who exploited an economic model that did work and made it unworkable. Right now, it does not look like anyone is going to jail. Amazingly, the lives of future generations are being mortgaged so that some of the folks who helped cause the mortgage crisis can stay in business.

According to my records, California is the fifth largest economy in the world. I understand Gov. Schwarzenegger has requested a bailout from the federal government. With a $42 billion deficit, California will likely be living on credit for the balance of my lifetime.

When I say we need help from foreign governments, I am not referring to the governments themselves. I am not requesting "bailout money" from New Zealand. I am thinking about private enterprise relationships - partnerships involving innovation that provides goods and services that solve problems. I am seeking to foster win/win relationships between innovative folks the world over. And yes, I believe that will do a lot more to help solve California's financial problems than bailout money...which will likely have to be paid back with considerable interest.

Lamar Morgan
CDMM - Synergistic Business Marketing
707-709-8605
Attract more customers!

Private Reply to Lamar Morgan 954-603-7901

Mar 18, 2009 4:11 amre: re: re: re: re: re: re: Economic Depression 2009?#

John Stephen Veitch
Hello Lamar

You wrote:
"With regard to capitalism and free markets, that is simply how a successful economic system works. Russia went bankrupt because the Communistic economic system could not sustain itself. You simply cannot predict in advance how much in the way of goods and services will be needed by a population."

I did study the Soviet and the Chinese economic models many years ago. I agree with what you said about how it's impossible for the central planners to predict what's likely to be needed. But it's also impossible to do that in a free market economy too. After 30 years, and especially now, it's so much easier for me to see that BOTH systems are deeply flawed.

For instance I've been laughing for about 5 years over the great hallabsloo on Ryze, because Kofi Annan was supposed to be directly involved in a Food for Oil scandal at the United Nations. Millions of dollars were supposed to be involved, and the controversy went on for months. Why? Because it suited the USA to cripple the United Nations, and make it completely ineffective. Eventually there were some irregularities found involving Annan's son, to the extent of $600,000 I believe.

In contrast the USA in Iraq has been involved in scams and rip-offs involving millions of real dollars that are for the most part not even investigated. Much of this is directly related to the Republican Party decision to give contracts to friends of the party on a cost plus basis. In at least one case I know about on a "no competition" basis.

One of the big jokes in International Economics was the Soviet incentive system. For instance on the railway bonuses were paid for the tonnage that passed down the line. Annual traffic data showed that the scheme was massively successful. Yet Russian businesses could never find rolling stock on which to transport their goods. Complaints were widespread. In fact much of the rolling stock was filled with rocks that were shipped across the Soviet Union and back repeatedly. It was a great way to increase the tonnage.

So in Iraq under cost plus contracts I heard reports of trucks that are never unloaded, simply driven across Iraq and back to clock up the cost, which is then billed at 100% mark-up. And the stories about the building paid for and never started, and the meals never delivered and the training that was done by people who were never employed, and the financial auditing that was done by two men with no accounting skills and no staff.

This is not a few bad apples, Lamar, it's a whole rotten system. The mortgage crisis proves it. For Fannie Mae and Freddie Mac to be so deeply underwater, thousands of real estate agents, valuers, lawyers, accountants, bankers, buyers and sellers all had to WANT these fraudulent transactions to be made. Every one of them is crooked, but they all claim to be innocent. If you choose not to see, it's amazing how blind you can become.

So the "free market" system has failed very badly.
The "centralised market" system has failed very badly.

So now it's time to discover the "truth" if we have the courage. Which brings me back tho this central message.
http://www.openfuture.co.nz/truth.html

So for Americans, I think there is going to be a lot of discovery about "missing truth" in the next few years.
It applies to "free markets", and to "democracy" and to "American exceptionalism" and "racism" and "the success formula" and much else about American life. The Depression will be a great bullshit detector.

John Stephen Veitch
Open Future Limited - http://www.openfuture.biz/
Innovation Network - http://veech-network.ryze.com/
Building an Open Future - http://openfuture-network.ryze.com/

Private Reply to John Stephen Veitch

Mar 21, 2009 11:22 pmre: re: re: re: re: re: re: re: Economic Depression 2009?#

Lamar Morgan 954-603-7901

John,

If what you are telling me is true - and not just your opinion or speculation - I am angry at the Republican Party (as I am a registered Republican) and my own government. No one who is decent endorses corruption. Even casinos here in California have material advising caution when gaming (gambling).

I worked for Bear Stearns myself for nearly 16 years. Most of that time I was pricing mortgage-backed securities for institutional clients. Do you think I thought Freddie Mac and Fannie Mae were providing me with fraudulent information? Of course not. But, at some point both organizations were passing along inaccurate information. And, certain people high up knew it was inaccurate and did not care. And, now the entire nation is suffering.

It's not that the free market system does not work. It's the free market system that has enabled the United States the lead the world the way it has with innovative ideas. It's the politics that attaches itself to the process that is the problem.

Can we separate politics from the free market system? I believe we can. There certainly is a lot of talk about separating church and state, why not politics from free markets?

Lamar Morgan
CDMM - Synergistic Business Marketing
707-709-8605
Attract more customers!

Private Reply to Lamar Morgan 954-603-7901

Mar 24, 2009 4:48 amre: re: re: re: re: re: re: re: re: Economic Depression 2009?#

John Stephen Veitch
Hello Lamar

I think you've come to a good place in your thinking. A crossroad. I hope you have already read the story about Waldo Salt, that led him to write in his journal: "To search for truth you must first have lost it."

The real point is that when we "know" we can't be advised, told or taught anything different because the status if "I know" precludes learning or even understanding any contrary information that is being presented.

Only when the seed of doubt exists are you capable of re-examining anything you might "know".

Lloyd Geering says that the essential root of faith is that because you are uncertain, that there is a seed of doubt, faith is a necessary part of Christian belief.

Geering's complaint against New Life religious groups is that they try to abolish doubt. According to Geering; "Your doubt is the growing edge of your faith."

I was very easy to educate as a young man. I believed what I was told by my teachers and parents and I wasn't rebellious as a teenager, as many of my mates were. But in my early 30's I began to realise that lots of the stuff I'd been fed and so willingly accepted was clearly wrong.

That realisation had professional, political and religious roots. I can't be sure where it started. I do know that I felt a strong need to document what I was learning, to observe and record what was going on around me. I was 34 when I started to write my journal.

For many years all the stuff I was collecting didn't make any sense, it was just a collection of miscellaneous "stuff" that interested me at the time. It's only after 20 or more years that I can see a process of searching going on. Slowly developing a new point of view that was mine, and not the one that my parents gave me. It's taken a long time to become comfortable with my new position on lots of different issues. It surprises me sometimes, but I learning to trust my instincts on new issues more and more.

I'm interested in this paragraph:
"I worked for Bear Stearns myself for nearly 16 years. ... Do you think I thought Freddie Mac and Fannie Mae were providing me with fraudulent information? Of course not. But, at some point both organizations were passing along inaccurate information. And, certain people high up knew it was inaccurate and did not care."

I think even then the guys at the top didn't know. You were in the best position to know. Valuers, real estate agents, lawyers, banks all had staff who KNEW that values were being falsified, or that client qualifications for loans were being massaged so that loans would be approved. The trouble is that when something becomes "normal practise" it become impossible to "see it".


John Stephen Veitch
Open Future Limited - http://www.openfuture.biz/
Innovation Network - http://veech-network.ryze.com/
Building an Open Future - http://openfuture-network.ryze.com/

Private Reply to John Stephen Veitch

Mar 25, 2009 10:38 pmre: re: re: re: re: re: re: re: re: re: Economic Depression 2009?#

John Stephen Veitch
This from Brasscheck TV - The text below goes too far, but it does seem that Eliot Spitzer was removed because he was an embarrassment. You have to decide if the willingness to speak out or the sexual activities caused that embarrassment.

http://www.brasschecktv.com/page/291.html

"Mortaging America's future for a quick buck
This video was originally posted in March of 2008

It's one of the most amazing displays of journalistic incompetence and malpractice in recent memory.

The US news media failed to draw the obvious connection between the bizarre federal law enforcement investigation and leak campaign about the private life of New York Governor Spitzer and Spitzer's all out attack on the Bush administration for its collusion with predatory lenders.

While the international credit system grinds to a halt because of a superabundance of bad mortgage loans made in the US, the news media failed to cover the details of Spitzer's public charges against the White House.

Yet when salacious details were leaked about alleged details of Spitzer's private life, they took that information and made it the front page news for days.

To the 9/11 fiasco, the Iraq War, the travesty of the federal response to Hurricane Katrina, and the shredding of the US Constitution, we can now add a deliberate and reckless undermining of the credit and banking system of the US to the list of Bush administration "accomplishments."

No external enemy, or group of external enemies, could have done as much harm to the nation as this group has in less than eight years."

John Stephen Veitch
Open Future Limited - http://www.openfuture.biz/
Innovation Network - http://veech-network.ryze.com/
Building an Open Future - http://openfuture-network.ryze.com/

Private Reply to John Stephen Veitch

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