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| | The Innovation Network Network is not currently active and cannot accept new posts | | US Economy and Stimulus | Views: 1244 | | Mar 01, 2009 7:26 pm | | US Economy and Stimulus | # | 
Ron Sam | | Removed and Reposted
Historically, this shows what has or has not worked in the U.S. in terms of socialism vs. capitalism. Pethokoukis gives his sources at end.
If you make comments contrary or otherwise, could you keep comparisons to the U.S.?
Ron
10 Reasons to Whack Obama's Stimulus Plan
January 27, 2009 02:10 PM ET | James Pethokoukis
Some people are going to oppose President Obama's ginormous stimulus package just because they're on a different political team. But when you look at the economic evidence, it sure seems like an economic recovery package that's heavy on government spending and light on tax cuts is just the opposite of what we should be doing right now. Try this closing argument on for size:
1) A 2005 study by Andrew Mountford and Harald Uhlig "analyzed three types of policy shocks: a deficit-financed spending increase, a balanced budget spending increase (financed with higher taxes) and a deficit-financed tax cut, in which revenues increase but government spending stays unchanged. We found that a deficit-spending shock stimulates the economy for the first 4 quarters but only weakly compared to that for a deficit-financed tax cut." In other words, FDR vs. Clinton vs. Reagan, Reagan wins.
2) Harvard economist Robert Barro looked at the multiplier effect of World War II military spending -- supposedly the Mother of All Stimulus Plans and found that "wartime production siphoned off resources from other economic uses — there was a dampener, rather than a multiplier." Barro prefers eliminating the corporate income tax to massive government spending.
3) Alberto Alesina of Harvard and Luigi Zingales of the University of Chicago want to address the fear and confidence issue by creating "the incentive for people to take more risk and move their savings from government bonds to risky assets. There is no better way to encourage this than a temporary elimination of the capital-gains tax for all the investments begun during 2009 and held for at least two years."
4) An initial CBO analysis found that a mere $26 billion out of $274 billion in infrastructure spending, just 7 percent, would be delivered into the economy by next fall. An update determined that just 64 percent of the stimulus would reach the economy by 2011.
5) University of Chicago economist and Nobel laureate Gary Becker doubts whether all this stimulus spending will do much to lower unemployment: "For one thing, the true value of these government programs may be limited because they will be put together hastily, and are likely to contain a lot of political pork and other inefficiencies. For another thing, with unemployment at 7% to 8% of the labor force, it is impossible to target effective spending programs that primarily utilize unemployed workers, or underemployed capital. Spending on infrastructure, and especially on health, energy, and education, will mainly attract employed persons from other activities to the activities stimulated by the government spending. The net job creation from these and related spending is likely to be rather small. In addition, if the private activities crowded out are more valuable than the activities hastily stimulated by this plan, the value of the increase in employment and GDP could be very small, even negative."
6) Christina Romer, the new head of the Council of Economic Advisers, coauthored a paper in which the following was written about taxes: "Tax increases appear to have a very large, sustained, and highly significant negative impact on output. Since most of our exogenous tax changes are in fact reductions, the more intuitive way to express this result is that tax cuts have very large and persistent positive output effects." And former Bush economic adviser Lawrence Lindsey tack on this addendum: "The macroeconomic benefits of tax cuts can be two to three times larger than common estimates of the benefits related to spending increases. The relative advantage of tax cuts over spending is even clearer when the recession is centered on the household balance sheet."
7) Economists Susan Woodward and Robert Hall find that the multiplier effect from infrastructure spending maybe just 1-for-1, less than that 3-to-1 ratio for tax cuts that Romer found: "We believe that the one-for-one rule derived from wartime increases in military spending would also apply to increases in infrastructure spending in a stimulus package. We should not count on any inducement of higher consumption from the infrastructure stimulus."
8) Economist John Taylor thinks it better to let the Federal Reserve deal with the short-term problems in the economy, while fiscal policy should attend to long-term issues: "In the current context of the U.S. economy, it seems best to let fiscal policy have its main countercyclical impact through the automatic stabilizer ... It seems hard to improve on this performance with a more active discretionary fiscal policy, and an activist discretionary fiscal policy might even make the job of monetary authorities more difficult. It would be appropriate in the present American context, for discretionary fiscal policy to be saved explicitly for longer-term issues, requiring less frequent changes. Examples of such a longer-term focus include fiscal policy proposals to balance the non-Social Security budget over the next ten years, to reduce marginal tax rates for long run economic efficiency, or even to reform the tax system and Social Security."
9) Massive stimulus didn't work in the Great Depression. As this Heritage Foundation study notes: "After the stock market collapse in 1929, the Hoover Administration increased federal spending by 47 percent over the following three years. As a result, federal spending increased from 3.4 percent of GDP in 1930 to 6.9 percent in 1932 and reached 9.8 percent by 1940. That same year-- 10 years into the Great Depression--America's unemployment rate stood at 14.6 percent." Same goes for Japan and its Great Stagnation of the 1990s.
10) Olivier Blanchard, the chief economist of the International Monetary Fund, coauthored a paper which found "that both increases in taxes and increases in government spending have a strong negative effect on private investment spending."
Bottom line: There is another model out there. One that worked in 2003, 1997 and 1981. But will America use it?
Sources:
1) http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2005-039.pdf
2) http://online.wsj.com/article/SB123258618204604599.html
3) http://online.wsj.com/article/SB123249646698200289.html
4) http://cboblog.cbo.gov/
5)http://www.becker-posner-blog.com/archives/2009/01/on_the_obama_st.htm
6)http://www.econ.berkeley.edu/~cromer/RomerDraft307.pdf
7)http://woodwardhall.wordpress.com/2008/12/11/measuring-the-effect-of-infrastructure-spending-on-gdp/
8)http://www.stanford.edu/~johntayl/Papers/Reassessing+Revised.pdf
9) http://www.heritage.org/research/economy/bg2222.cf
10) http://www.mitpressjournals.org/doi/abs/10.1162/003355302320935043?cookieSet=1&journalCode=qjec
11) http://www.weeklystandard.com/Content/Public/Articles/000/000/015/951hvyxc.asp?pg=
comments
http://www.usnews.com/blogs/capital-commerce/2009/1/27/10-reasons-to-nix-the-stimulus-plan/comments/Private Reply to Ron Sam | | Mar 02, 2009 11:51 am | | re: US Economy and Stimulus | # | 
John Stephen Veitch | | Hello Ron
Really this is a very poor quality article. All the 10 points do is repeat the standard mantra that American economists have used since Ronald Reagan was President.
The concluding statement is this.
"Bottom line: There is another model out there. One that worked in 2003, 1997 and 1981. But will America use it?"
Well that's precisely the point, we are having these crises on a regular basis and the same old medicine has got less and less effective to the stage where it's almost totally ineffective.
What's more, for the American economy, while there has been some growth over the last 30 years, it hasn't been healthy growth, and it's been entirely captured by the top 10% of the population.
This is exactly what got me thinking in a new direction. After the boom of the 1960's the 1970's weren't so good, growth was harder to find. Reagan and Thatcher supported by the University of Chicago realizing that the economy was in a mess, proposed the "market" as the solution to almost everything.
Here in NZ, we had the same problems, and I fully supported the reforms proposed. At least it seemed logical at the time. It hasn't worked in NZ, and it didn't work in the USA either. So despite all the high sounding rhetoric of economists they apparently know sweet very little.
I do recommend my 12 short essays.
http://www.openfuture.co.nz/
Since I wrote those there has been one new idea proposed. It's the concept of a "mature economy" which says that once a certain standard of living is reached it becomes very difficult to "grow" the economy, and that we need a different sort of economics, economics that aims to improve the quality of what we've got.
Sadly for you Ron, this theory says that a major objective of "mature economy" economics is redistribution of income. It's unhealthy for the economy to develop a class of rich and powerful people, and it's the responsibility of government to make sure that doesn't happen.
One of the key factors of both 1929 and 2009 is the concentration of the flow of wealth to a few people. I know that the Republican party tells us that these rich people "create jobs". Perhaps we can now see the error here. Spending power in the markets creates jobs. When too few people control too much money that spending power disappears. It's ordinary folk who spend all their money and keep the economy rolling.
None of this begins to look at the FOUR key issues. They are. population, water supply, fuel supply and climate change. The economic and political process has to help us resolve those issues, I've concluded that the PLANET is telling us that a DEPRESSION is essential. We don't just have a financial crisis, it's a crisis partly caused by feedback from nature. In the depression of 2009, from the point of view of the PLANET each of the four problems gets better. Mother nature doesn't care how much you and I suffer, if we abuse the environment consequences will come our way. I think partly, that's what's happening.
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 02, 2009 4:04 pm | | re: re: US Economy and Stimulus | # | 
Thomas Holford | | John Stephen Veitch sayeth:
> . . . the FOUR key issues. They are. population, water supply, fuel supply and climate change. The economic and political process has to help us resolve those issues, I've concluded that the PLANET is telling us that a DEPRESSION is essential. We don't just have a financial crisis, it's a crisis partly caused by feedback from nature. In the depression of 2009, from the point of view of the PLANET each of the four problems gets better. Mother nature doesn't care how much you and I suffer, if we abuse the environment consequences will come our way.
This is a concise statement of the ideology of the "Deep Ecology" movement articulated by Arne Naes, Paul Ehrlich, Al Gore, and others.
It is fundamentally and profoundly nihilist, narcissist, and elitist to the core.
I have set forth critiques of "Deep Ecology" in bits and pieces in various forums, but I think the time has come to to give a good, hearty yank on the loose threads of this pastiche of nihilism and narcissism, undo the seams, and watch the whole shebang fall apart.
I have started organizing my notes, and if you're lucky, you might actually get to see a comprehensive, coherent, devastating, published deconstruction of "Deep Ecology in a few months, or so.
T. Holford
Private Reply to Thomas Holford | | Mar 02, 2009 9:37 pm | | re: re: US Economy and Stimulus | # |
Ron Sam | | Hi John,
re: It's unhealthy for the economy to develop a class of rich and powerful people, and it's the responsibility of government to make sure that doesn't happen.
No, I believe that the voting population and not the government (bureaucrats) make that decision. And by the way Al Gore and Barak Obama are in that 10% wealthy class except Gore was born with money whereas Obama did not have that advantage yet manage to amass millions and gain power as a minority. See any irony in there?
What Thomas mentioned (Deep Ecology) is relevant in that we have Cronyism or the Ole boys club in some of that 10% wealthy class echelon. They want to manipulate environmental rules to capture money from polluters via carbon credits. Some large enterprises will get more than their share of credits simply because they can buy sell swap trade them from others. Can see how this elitism will not work to keep polluter at bay?
I see someone like Warren Buffet with his billions giving most of it away while guys like Al Gore don't come close to any comparison. Why is that? There is wealth distribution already going on with the money from Buffet in the Gates Foundation. Where is the Gore foundation? Do all liberals believe in wealth redistribution? Where Gore put his money is not a foundation to help fund education, health, the poor, etc., no he put his money into the 'New World Order'. That's a group dedicated in destroying Capitalism.
Want another comparison? Warren Buffet is condemning Obama's plans for wealth redistribution by increasing taxes on the people who make more than 250k. I think Newt Gingrich made the comment, '... so let me see if I got this right, Everyone making under 250k will not be paying more taxes, ... unless they use gas or electricity?'
I'd love to see wealth redistribution comparison among the rich liberal and conservatives and see where their money goes to. I have my hunches, but maybe you can prove to me how liberals think in actions of their own.
John, historically socialism never worked and capitalism has done nothing but built up the U.S. I know you hate the mention of the name Reagan but in his presidency, the highest number of jobs were created and the most growth economically was ever generated - period!
There is a documentary that I think everyone should see:
'In the Face of Evil: Reagan’s War in Word and Deed'
Have any of you seen it?
Ron
Private Reply to Ron Sam | | Mar 02, 2009 10:03 pm | | re: re: re: US Economy and Stimulus | # |
John Stephen Veitch | | Thomas
Your attempt to be insulting fails. I said in another thread today that our friends and our enemies have the power to help us see ourselves as we really are.
You described my view as:
"fundamentally and profoundly nihilist, narcissist, and elitist to the core."
I thank you for the word "nihilist" because although it's intended by you as a put-down, (Nihilists were Russian radical reformists in the 19th Century.) I think you are right, my view is nihilistic, in all the best ways. Nihilists understood that there was something fundamentally wrong with their society (Russia under the Czar's) and that they somehow needed to understand the ROOT of the problem to solve it.
As for being a narcissist and an elitist, I don't think so, but that's not for me to judge and frankly I don't care either way.
If you get your criticism of "deep ecology" together Thomas, please start a new thread to discuss it. I don't want you posting destructive and misdirecting comments into these discussions. By all means engage, but your form of contribution so far has been a refusal to engage. To do that you have to take other people's ideas seriously.
I really do recommend that you try to understand what the Rev. Prof. Lloyd Geering is saying about the world. There are threads here and elsewhere about him.
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 03, 2009 1:52 am | | re: US Economy and Stimulus | # | 
James Booth | | .
"There is another model out there."
What is that "other" model ?
Not one of the "10 Reasons" even seems to be aware of the fatal flaw in this "system"
The current "stimulus" is a necessary move, but only a "stop gap"
- only "bridge" to our future.
If we have a future.
Last time I looked, or heard, the focus was still on "getting banks to start loaning again."
Without new loans, there is no "new interest" (profits) forthcoming, to the "system"
A trillion-dollar "stimulus" package generates new interest, which will be "due and payable"
That trillion-dollar "stimulus" also creates *new currency* - more worthless than the "old" currency we had yesterday, or last week, or in January - but *new currency* which is needed nonetheless to pay the *interest* on our OLD debt.
Remember, those "old" appropriations, like the September "bailout" of AIG and its ilk
... or those "older appropriations" like for the so-called "War in Iraq" ?
All of those represent money the United States government was required to "rent" from the Federal Reserve System to generate more "new currency" to pay off the ever-increasing interest on previously rented currency, because the U. S. government does not, as it is supposed to, create its own currency, as authorized (required?) by the Constitution.
So all these "10 reasons" are part of a shell game to help keep the American public ignorant of the truth, which is that no matter how much *wealth* their (code word) DYNAMISM can EVER create, they will never have anything to show for it, because no matter at what level our (worthless) "money" is borrowed, in this debt-based economy, the money to pay the interest on "debt obligations" is NEVER created - only the *principal* amount is created by our signature - which means new money ALWAYS has to be created for there to be any way to pay interest, and if the interest is not paid, (y)our collateral disappears, and even if the interest is paid, sooner or later (y)our collateral disappears anyway, just like (y)our 401Ks, so I do not have to tell you, I hope, that you are existing in a *lose/lose* game that you can never win, do I ?
Yes, there IS "another model out there" and we best be getting it up and running ASAP !
JBPrivate Reply to James Booth | | Mar 03, 2009 1:30 pm | | re: re: US Economy and Stimulus - another model? | # | 
Ken Hilving | | http://www.greenamericatoday.org/about/newsroom/editorials/rethinkingGDP.cfm
Rethinking the GDP
February 26, 2009
When the Commerce Department announced the nation’s Gross Domestic Product (GDP) figures for the fourth quarter of 2008 at the end of January, they revealed a historical context for our economic slide – the 3.8% GDP shrinkage at the end of 2008 is the fastest pace for an economic slowdown in a quarter of a century.
Consumer spending, stated the Commerce Department, has fallen sharply, with big-ticket spending plunging even faster, falling off by 22% for the 2008 fourth quarter.
But what if the GDP – measuring the market value of a country’s economic output – isn’t the best indicator of societal well-being?
“GDP growth is mostly a measure of growth in consumption, which is the driving cause of environmental decline,” writes Positive Futures Network chair David Korten in his new book, Agenda for a New Economy. “Human health and well-being depend on a great many things that do have market value: food, housing, transportation, education, health care, and many other essentials of a healthy life. These, however, are means, not ends, and their real value is a function of how they contribute to improving human and natural health and vitality.”
Because the GDP measures quantity of consumption only, rather than quality of that consumption (and its costs to society or the environment), relying on such a measurement suggests an underlying assumption that material growth and wealth accumulation are the greatest goods. In actuality, the GDP remains largely silent on societal well-being.
For example, the GDP counts economic activity that produces horrific pollution alongside the economic activity required to clean up that pollution – as if there were no difference for society between the two.
As Korten points out, a rising GDP can occur alongside simultaneous social upheaval: “[The GDP] can be rising in the face of disintegrating families and a vanishing middle class, increasing prison populations, rising unemployment, the disruption of community, collapsing environmental systems, the hollowing out of domestic manufacturing capabilities, failing schools, growing trade deficits, and costly but senseless foreign wars.”
Instead of relying on the GDP as our primary economic measurement, Korten recommends adding extra-financial indicators to the GDP, as 150 other countries have already done. The Human Development Index (HDI), conceived by Pakistani economist Mahbub ul Haq, replaces a country’s GDP with a collection of measurements that examine the overall well-being of its people by looking at statistics on health, education, and standard-of-living.
Shifting from the GDP and its emphasis on growth to something like the HDI and its emphasis on environmental and social well-being would require a vast retooling of the role of business—particularly big business—in our society. Instead of focusing solely on growing their bottom lines to the detriment of our collective social and ecological well-being, companies would have to operate in ways that support the life expectancy and life satisfaction of their workers, customers, and communities. They would have to operate in ecologically efficient ways that restore, rather than destroy, the environment.
And for those companies that do harm instead?
Dr. Neva Goodwin, an economist at Tufts University, suggests we revive the practice of revoking their charters. “In the 19th century, it was understood that a corporate charter was given to allow a group of people to do something that was in the interest of society,” says Dr. Goodwin. “Corporate charters were sometimes given for limited periods of time, and if the producer wasn’t living up to their part of the bargain, the charter could be taken away.”
Another solution is to levy severe taxes on corporations that do harm, such as violating environmental rules, while giving tax breaks and incentives to corporations advancing the greater good, and contributing to an increased HDI.
Finally, regulations to reduce corporate influence in politics could help enact laws that push big business further toward ensuring that they operate in the interest of society rather than in the interest of their bottom lines.
The better path for our society is to turn away from of the GDP-focused model of relentless economic growth—which comes at a steep cost to human health and well-being, and to the environment—and toward a renewed emphasis on real wealth.
--Tracy Fernandez Rysavy
Private Reply to Ken Hilving | | Mar 03, 2009 5:32 pm | | re: re: re: US Economy and Stimulus - another model? | # |
Thomas Holford | | Kenneth sayeth:
> The better path for our society is to turn away from of the GDP-focused model of relentless economic growth—which comes at a steep cost to human health and well-being, and to the environment—and toward a renewed emphasis on real wealth.
GDP is an aggregate measure, in a market economy, of the combined decisions of 300 million or so independent economic players in the economy.
HDI is an artificial numerical calculation invented by a social theoretician sitting at a desk in a windowless government office with poor ventilation.
HDI measures the values and perceptions that are in a bureaucrat's head; it does not measure reality.
T. HolfordPrivate Reply to Thomas Holford | | Mar 03, 2009 6:00 pm | | re: re: re: re: US Economy and Stimulus - another model? | # |
Ken Hilving | | So how's that GDP been working out for you? Private Reply to Ken Hilving | | Mar 03, 2009 8:34 pm | | re: re: re: re: re: US Economy and Stimulus - another model? | # |
Thomas Holford | | Kenneth sayeth:
> So how's that GDP been working out for you?
The GDP's been down because the economic activity of 300 million improvement-seeking decision makers has been down.
So, I would have been better off if a bureaucrat imagined a higher number for the imaginary HDI?
Call me a skeptic.
T. HolfordPrivate Reply to Thomas Holford | | Mar 04, 2009 9:17 am | | re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
John Stephen Veitch | | The use of GDP as a measure of national economic health demonstrates the role of economists as handmaidens of the rich, and of governments.
GDP is a measure of CASH and cash-like transactions, bank account movements if you like, adjusted to measure the value added at each stage. GDP is the total value of all the production sold in the community. It includes both "goods" and "bads".
When a government is collecting taxes, that measure is a pretty good first view, of what the future tax take will be. So governments want to keep their revenue up, and so a high and rising GDP is a very nice and easy target.
But as MANY critics have quite rightly said, it's not a valid measure of well-being in an economy. It doesn't measure non-cash changes in value, either positive of negative. So increases in land value "capital gains" are not measured, but not are capital losses. Nor are real losses as mines are depleted, or as forests are cut down or as rivers are diverted away from nature towards "use" in some "productive" enterprise. The unpaid work of women and volunteers is not measured.
We've organized our society to produce "growth" and we've done that so that government can have a bigger tax take, and provide better services in education, health and welfare. (At least in the rest of the world that's what governments do with taxes. In the USA, they seem to spend it on the military and on prisons and on making the political process so expensive that only the most wealthy people can be candidates. )
GDP as a measure of the economic success is a process that will stop. Perhaps quite quickly. We have to move in this direction.
http://www.openfuture.co.nz/depression/steadystateeconomics.html
We don't quite know how to do that yet, but it looks like we're about to learn how to do that trick. When we've succeeded the depression will quietly go away. GDP in the meantime might have fallen a very long way, but that will be irrelevant because we're now organizing to achieve a different purpose.
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 04, 2009 3:58 pm | | re: re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
Thomas Holford | | John sayeth:
> We don't quite know how to do that yet, but it looks like we're about to learn how to do that trick.
Wow! This is a reassuring proposition for restructuring the world's economy and remaking human civilization.
I would agree that you and the rest of the utopianist crowd don't know how to do that and a lot of other things.
Would it be impertinent to suggest that maybe you should try out your ideas on a small laboratory project first -- say, your condominium association -- before trying to impose your new global social order.
T. HolfordPrivate Reply to Thomas Holford | | Mar 04, 2009 8:26 pm | | re: re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
James Booth | | .
Even in a "condominium association" there exists *love*
An old woman says, "What do I have to give?"
She has LOVE and that *love* is needed all around her
... in small ways, and invaluable ways, every minute of every day.
Now, I challenge anyone to show me LOVE as expressed by a dollar amount
- in Gross Domestic Product (GDP) figures anywhere.
How is kindness, and how is *volunteerism* or the like, expressed in GDP ?
What IS included in GDP ?
- what elements of American (code word) *dynamism* are included in GDP ?
As an expression of the "worth" of transactions among the top 20 percent of population who control 84 percent of the nation's "wealth" GDP is enlightening ...
... but what does GDP say about the 16 percent of that nation's "wealth" which is NOT in any way, shape of form, *defined* by any of the remaining 80 percent of population who must, nonetheless, *subsist* on that 16 percent ?
Maybe the "value" of GDP attains most to the *one percent* at the top who "somehow" manage to control - HOARD - more than a third - more than 33 percent - of the nation's resources, monetary and otherwise.
Seems to me silly to argue with John when he says:
"The use of GDP as a measure of national economic health demonstrates the role of
economists as handmaidens of the rich, and of governments."
... but that is just my opinion.
JB
Private Reply to James Booth | | Mar 04, 2009 11:19 pm | | re: re: re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
Thomas Holford | | James sayeth:
> Now, I challenge anyone to show me LOVE as expressed by a dollar amount
> - in Gross Domestic Product (GDP) figures anywhere.
> How is kindness, and how is *volunteerism* or the like, expressed in GDP ?
> What IS included in GDP ?
> - what elements of American (code word) *dynamism* are included in GDP ?
"Love is blind" . . . as well as deaf, dumb, and stupid.
If you're trying to argue that the health and prosperity of a national economy can be measured and managed by guaging the amount of "love" in the economy, I can only conclude that you're not a serious person.
T. Holford
Private Reply to Thomas Holford | | Mar 04, 2009 11:46 pm | | re: re: re: re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
Ken Hilving | | California, whose economic issues kicked off the latest series of posts on the economy, has an interesting dilemma.
Water is in short supply, and a sustained drought has made the situation worse. Agriculture, which has been a major part of California's economy, requires water. So do residents, and a major growth area has been homes. IF each new home required an identifiable supply of water, no new homes would have been built in a decade. But they were, pulling water away from agriculture, and causing friction with neighboring states and Mexico.
Yet while this problem grew, the GDP showed all was well in California.
This should illustrate to any thinking person that the GDP is not a sufficient indicator of the overall society the economy operates within. Relying simply on GDP reminds me of the optimistic parachutist. Despite the failure of his primary and backup chutes, with the ground approaching, his perspective is "So far so good."Private Reply to Ken Hilving | | Mar 05, 2009 12:49 am | | re: re: re: re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
abbeboulah | | Mr. Holford,
If your comment
"If you're trying to argue that the health and prosperity of a national economy can be measured and managed by guaging the amount of "love" in the economy, I can only conclude that you're not a serious person."
is indended to be a comment ot James Booth's post, I can only conclude that you have not read that post and/or not understood it, or that there is something wrong with your concluding ability.
It further strongly suggests, together with previous evidence, that your contribution on this forum is less aimed at exchanging useful information and argument to the issues but predominantly towards insulting people. This might on occasion even be fun, even if it's not the purpose of the forum, but only if accompanied by some seasoning of humor and wit, both of which are sorely lacking from your posts.
If I may presume to speak for at least some others here, who are sincerely trying to find better ways of dealing with the crises that (blind, deaf, dumb, stupid...) obsession with GDP-guided policies have gotten us into: we would be indeed be interested in your promised treatise and would prefer to wait to hear from you until that is done.
===
Meanwhile:
The question of what is included in the GDP -- which, incidentally, once was also conceived by some (bureaucrat?) person behind a desk -- leads to a fruitless enumeration of everything that it tries to capture. It is more enlightening to ask what it does include, that demonstrably does not contribute much to human or societal well-being. One such example is everything that has to do with waste. Every increase in the output of garbage which then leads to more activity of the activities euphemistically entered into the GDP accounting as "waste management", paid for by taxes, is increasing GDP, while a reduction of waste would reduce GDP.
An interesting thought experiment: Imagine an economy consisting of homesteads where everything needed for the survival of its residents is produced by the community living there -- e.g. a family. This may sound "utopian" and therefore "not serious", but I have personally seen remnants of such economies; farmsteads in Austria or in Indonesia, waterfront communities ('stilt' houses in the water) in Malaysia. They were, for example in Singapore, relentlessly opposed by GDP-drunken governments, (Singapore had numerous "fires of convenience" to destroy these communities) because of course nothing produced there ever could be accounted for, -- and taxed -- in the respective country's GDP.
In such communities one could find, if one were so inclined, examples of fine craftsmanship, construction ingenuity, expert gardening and animal husbandry, art -- e.g. in form of the handmade gifts with which the members of the community expressed their love for one another, or in the little baskets of flowers offered every day by the Balinese, to their various gods high and low, or the songs with which such people entertained each other and nourished their spirits. Talking about spirits, this even included the expertise with which e.g Swiss and Austrian mountain folk converted their apples, pears, and various other fruits and herbs to potent and very much inspiring beverages. (They also produced very little if any garbage that couldn't be recycled into fertilizer etc.) Or the little precious monuments they built everywhere in the countryside to honor some deity or saint, atone for some unspecified sin, or to remember some revered member of the community. Just to name some examples, none of which -- NONE -- ever made it into the GDP, simply because they were not part of any market, free or otherwise, from which taxes could be extracted.
I am not saying that we should necessarily revert to such economies. Or that measures such as the GDP are entirely useless. But the argument that exclusive reliance on such measures by policy-making agencies has been responsible for the disappearance of many such elements that were not just life-enhancing and made life more worth living, is one that cannot be countered with condescending remarks such as that GDP 'measures reality'. (One almost feels sorry for people whose reality is measured by GDP.) And it more than justifies efforts to find better measures to guide economic policies. The fervor with which such efforts are opposed (and, in the case of Singapore, led to what by all criteria must be called criminal acts) makes one just a tad suspicious. Private Reply to abbeboulah | | Mar 05, 2009 5:54 am | | re: re: re: re: re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
Thomas Holford | | Kenneth:
> This should illustrate to any thinking person that the GDP is not a sufficient indicator of the overall society the economy operates within. Relying simply on GDP reminds me of the optimistic parachutist. Despite the failure of his primary and backup chutes, with the ground approaching, his perspective is "So far so good."
I don't think that I or anyone else argued that the GDP was an indicator of future policy stupidity.
There's plenty of water that COULD be made available to consumers in California, but it would require (economically justifiable) infrastructure and public works.
The problems of providing water to California are mental and political, i.e., they exist between people's ears. It's not a problem of supply or technology.
T. HolfordPrivate Reply to Thomas Holford | | Mar 05, 2009 6:45 am | | re: re: re: re: re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
Thomas Holford | | Thorbjoern sayeth:
> Mr. Holford,
If your comment
"If you're trying to argue that the health and prosperity of a national economy can be measured and managed by guaging the amount of "love" in the economy, I can only conclude that you're not a serious person."
> is indended to be a comment ot James Booth's post, I can only conclude that you have not read that post and/or not understood it, or that there is something wrong with your concluding ability.
> It further strongly suggests, together with previous evidence, that your contribution on this forum is less aimed at exchanging useful information and argument to the issues but predominantly towards insulting people. This might on occasion even be fun, even if it's not the purpose of the forum, but only if accompanied by some seasoning of humor and wit, both of which are sorely lacking from your posts.
> If I may presume to speak for at least some others here, who are sincerely trying to find better ways of dealing with the crises that (blind, deaf, dumb, stupid...) obsession with GDP-guided policies have gotten us into: we would be indeed be interested in your promised treatise and would prefer to wait to hear from you until that is done.
I'm not a big fan of utopianism.
I am a strong believer in the proposition that "there is nothing new under the sun".
People with far more wisdom than you and I have pored over, dissected, analyzed, and evaluated every imagineable social, economic, political, and tax scheme that the mind of man is capable of dreaming up.
When someone claims to come up with some "new idea" to bring about "change" or more "fairness" or "more love" in society, I am skeptical.
There is a 99.9999 percent chance that society has, at some time, been down that road. We've seen that movie before, and we know how it ends.
In a rational, adult discussion, where people are conscientious about the time they invest in understanding purportedly "innovative" ideas, it is arguably a social benefit to identify tried-before ideas, and explain where experience shows they are inexorably going to lead. It is not necessary for rational adults, to sit through the introduction of all the characters and the exposition of the complete plot line if we know outcome.
Now, if "giving away the ending" offends some people who are convinced that their innovative idea is what the world has been waiting for, maybe their problem is that they chose the wrong audience to receive their innovation.
In California schools that practice "outcome based education", it is expected that every idea will be received with a great big group hug, and everyone's self-esteem will be fluffed up. But in business and professional venues that I have participated in, the expectation is that any idea you choose to contribute should be well thought out, and if it isn't, it's generally more merciful to be told in one sentence that your idea has a conspicuous gap, rather than endure having your limbs pulled off one by one.
T. Holford
Private Reply to Thomas Holford | | Mar 05, 2009 2:23 pm | | re: re: re: re: re: re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
abbeboulah | | I am all for skepticism -- (for example when confronted with a collection of "10 reasons to whack the Stimulus package" that upon scrutiny consists of nothing but the regurgitation of the mantra of deficit-financed tax reduction). But a skeptical attitude in itself is not an argument against any idea or proposal. "Giving away the ending" -- an ending that is arrogantly postulated only on the skeptical attitude, not on any examination or even identification of the 'gap' does not qualify as 'rational, adult discussion'. The only remotely rational aspect of it is that it saves one the work of critical examination of proposals: thinking. Otherwise known as intellectual laziness and clinging to prejudice.
But I am perfectly willing to return to a previous impression that this may indeed be the wrong audience for such discussion. Puzzling though: why on earth would a self-styled 'rational adult' waste his precious time on a forum on innovation, when he already knows the ending of any new idea? Private Reply to abbeboulah | | Mar 09, 2009 6:21 pm | | re: re: re: re: re: re: re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
Thomas Holford | | Thorbjoern sayeth:
> The only remotely rational aspect of it is that it saves one the work of critical examination of proposals: thinking. Otherwise known as intellectual laziness and clinging to prejudice.
Are you REALLY inviting "critical examination" of your "innovative" proposals when your response to criticism is: "you're intellectually lazy and clinging to prejudice"?
Henceforth, in the interest of group harmony, I encourage everyone to find all of your ideas marvelously innovative and magnificent visions of hope and change.
T. HolfordPrivate Reply to Thomas Holford | | Mar 09, 2009 10:29 pm | | re: re: re: re: re: re: re: re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
abbeboulah | | My remark about intellectual laziness was not in response to any criticism of my ideas -- there wasn't any, nor were any of my ideas part of this thread -- but to the acknowledged refusal to engage in discussion or criticism, of any new idea simply because it is new. Labeling this attitude (which I generously accorded a measure of time-and-effort-saving rationality) intellectual laziness and clinging to prejudice: What else would you call it?
Regarding my suggestions (not in this thread, as I said) I have learned my lesson: I don't expect any true criticism (and certainly did not ask for hugs) from people with such an attitude. Should I take another lesson: Any new post by one T. Holford, by the same 'rational' reasoning, should be dismissed as irrelevant and 'nothing new under the sun' because it is new? Private Reply to abbeboulah | | Mar 10, 2009 1:29 am | | re: re: re: US Economy and Stimulus - another model? | # |
John Stephen Veitch | | Gentlemen
The topic is "The US Economy and Stimulus"
The suggestion was that we need "Another model"
That is a topic worthy of serious discussion.
Thomas: If you want to discuss why all innovation except the 0.001% that is genuinely new, leads to a repeat of the same old film we've seen before, start a new thread on that topic.
Thorbjoern: When you get baited by the likes of Thomas the best response is just to ignore it. Not worthy of reply.
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 10, 2009 2:17 am | | re: re: US Economy and Stimulus - another model? | # |
John Stephen Veitch | | Hello Everyone
Back on topic.
Nouriel Roubini in the last few days published a paper under the title "The U.S. Financial System if Effectively Insolvent".
He states clearly why the financial assistance given to the banks isn't effective, and why the only solution is FULL Nationalization.
His reasoning goes like this.
Banks have many assets of doubtful value.
Banks would like to sell those assets but there are no buyers at any sensible price.
Government support is intended to help the Banks realise the value of some of these assets.
Insurance Companies and Superannuation Funds and other investors might be in the market to buy the assets of the banks.
The longer the purchase is delayed the lower the price gets.
There is no incentive to offer a "fair price".
Government support of AIG and Mannie Mae and similar groups is intended to help deals to be done.
Nothing's happening.
Solution: Nationalization - wipe out the old interests in the outcome of the deals. Wipe away the old management.
Government then has TIME to reintroduce those assets to the market, and the option of deciding how to manage them until then.
This offers the financial institutions a chance of a fresh start. And a chance to get the economy moving again.
Writing today Paul Krugman in "Behind the Curve" argues that the "stimulus package" is far too small and cannot be successful in maintaining the number of jobs in the community.
Both these experience economists tell us that the present "stimulus package" won't be successful.
So the question is what about that "other model" hinted at in the title of this thread?
We need to be able to imagine a better future. If we could do that, we'd be able to invest in that, and the economy would recover.
But we can't: some of us can't because we are in debt.
Some of us hold assets that are now of doubtful value.
Some of us have falling or negative incomes.
Some of us are fearful of the future.
Some of us have funds but since CASH is KING, holding off making purchases is our preferred strategy.
Nobody in their right mind wants to invest in the old automobile industry or in coal fired power stations or in steel mills, or in shipbuilding.
Some people dream of a better future, in a few words a "green future", and that requires investment in businesses and community infra-structure that doesn't yet exist. For me, that's the way forward.
When people invest money or time or effort in whatever they choose to do, they do so because they imagine some FUTURE result from that action. The power of the imagination is the way out of this depression.
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 10, 2009 4:00 am | | re: re: re: US Economy and Stimulus - another model? | # | 
Lamar Morgan 954-603-7901 | | John,
While politicians may take the credit for economic stimulus packages, innovative private enterprise is what will take the United States out of its economic mess. Of course, how long that will take is anybody's guess.
Just last Saturday I went to a local workshop, sponsored by the county via a federal grant. The purpose was for the public to help the local county government decide what its priorities should be in preparation for the year 2030. Our population here in rural California is supposedly scheduled to increase substantially by that time. How should the area prepare?
We were all give a stack of cards. Each card stood for an area of concern - such as Public Services, Economic Development, Transportation, Water, Agriculture, etc. I believe we were given a total of 10 cards. We were asked to pick the Top Five and discuss them. When all was said and done at my table of 10, guess what the top concern was? Water. It was pointed out that without water, we are all dead.
What interested me even more than the fact "water" trumped everything else as the chief concern, was the turnout for the workshop itself. This was a city-wide event in Clear Lake, CA. Only 20 people bothered to show up for the workshop. Keep in mind, this is a free workshop so far as the public's participation is concerned. But, a company was given a grant by the federal government to conduct these in cities all over the county. Keep in mind too that these workshops serve a very important purpose - to help design the future for human beings in rural Northern California. But, guess what? The human beings here did not seem to care.
Something's wrong with this picture. I think far too many Californians have an upside-down mindset and lean so far to the left, it is a miracle they can walk upright. Somewhere along the way Californians have exchanged a sense of responsibility for a sense of entitlement. From what I observe, folks in my county only care about themselves - not each other. Therefore, if a lot of small businesses suddenly go out-of-business, that is not a problem...so long as your business is not one of them. And, you know what Zig Ziglar calls that? He calls that "stinkin' thinkin." I think that's the California mindset in two works.
California needs to get rid of its "entitlement" mindset and adopt a mindset of responsibility. Instead of asking for handouts from our own federal government, California should seek a HAND UP from foreign governments. And, do so, not to be manipulative, but in a mutual collaborative effort - one that benefits both parties. If Microsoft and Apple can do it, so too can California and New Zealand (for example).
I am not just talking the talk, folk. I am walking the talk. I am bringing The Foundation Center of San Francisco to my neck of the woods on April 15th to teach the local nonprofit organizations how to write grant letters and prepare budget proposals. And, guess what? Unlike the workshop I attended last Saturday, the public has begun to figure out that this upcoming seminar is actually in THEIR BEST INTEREST. I have more than 50 people already signed up to attend the event. See for yourself. Visit Tools To Move Middletown, CA Forward.
I call this upcoming seminar "Better Together: A Grant-Writing Seminar" for good reason. I really do believe in the "better together" concept. More mutual collaboration, more caring about one another, more innovative ways to GTD (Get Things Done) is what America needs. And, it needs it right away.
Lamar Morgan
CDMM - Synergistic Business Marketing
707-709-8605
Attract more customers! Private Reply to Lamar Morgan 954-603-7901 | | Mar 13, 2009 12:24 am | | re: re: re: re: US Economy and Stimulus - another model? | # |
Ron Sam | | Economist Unhappy
Video report:
http://tinyurl.com/bh2acu
Article:
http://tinyurl.com/dexezn
U.S. President Barack Obama and Treasury Secretary Timothy Geithner received failing grades for their efforts to revive the economy from participants in the latest Wall Street Journal forecasting survey.
The economists' assessment stands in stark contrast with Mr. Obama's popularity with the public, with a recent Wall Street Journal/NBC poll giving him a 60% approval rating. A majority of the 49 economists polled said they were dissatisfied with the administration's economic policies.
On average, they gave the president a grade of 59 out of 100, and although there was a broad range of marks, 42% of respondents rated Mr. Obama below 60. Mr. Geithner received an average grade of 51. Federal Reserve Chairman Ben Bernanke scored better, with an average 71
continued at linkPrivate Reply to Ron Sam | | Mar 13, 2009 9:50 am | | re: re: re: re: re: US Economy and Stimulus - another model? | # |
John Stephen Veitch | | Hello Ron and Lamar
Ron first:
Obama is in a straight-jacket created by the funding process that made his election possible. The Democrats and the Republicans are BOTH funded by the people who were making millions on a swindle.
One of the few economists with any credibility left is Nouriel Roubini and his view is that ALL the public banks, investment banks and insurance companies that need federal help should face bankruptcy: all the shareholders funds should be wiped out together with any commercial bonds, the management should be completely replaced. Rubini says "you must start with a clean slate." But Obama can't do that, because it would destroy the financial base of the Democratic Party. So he's stuck.
Here's my view on the political problem that caused they present crisis and why it can't be solved.
http://www.openfuture.co.nz/depression/powerpolitics.html
Lamar
The people who imagine a doubling of the population in 30 years are almost certainly wrong. Those who are concerned about water are almost certainly right.
I write about water here:
http://www.openfuture.co.nz/depression/economiclimits.html
About the failure of democratic participation here:
http://www.openfuture.co.nz/depression/democracyofideas.html
And about the Need for communities to solve their own problems here:
http://www.openfuture.co.nz/depression/communityorg.html
Yes I have been busy. Over a month's work in that series.
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 14, 2009 4:06 am | | re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
Lamar Morgan 954-603-7901 | | John,
In my previous post I mentioned the 10-card card game that was played. Each card represented an issue - like Water, Transportation, Agriculture, Economic Development, etc. Our job was to pick the top FIVE most important issues and discuss them. WATER was the winner - the number one concern. Why? Because without water, we are all dead. But, in truth, all these issues are connected. How, for example, can you separate WATER from AGRICULTURE?
But, what upset me the most is that only 20 people out of the entire town showed up for the workshop. This was one of five workshops being given to get feedback from the folks whose offsprings will make up that 2030 audience.
Last night I was at a town hall meeting. I pointed out at the town hall meeting the immense importance of the final workshop on this "Lake County 2030: A Blueprint for Our Future" matter. It happens on Saturday. Some folks were upset with me for promoting this workshop. Guess why? The folks conducting the workshop are from outside the county. That means the grant they received received to do good here goes to someone who lives elsewhere. Can you believe this? Folks are actually upset that the grant money went to an outsider. Could this be why you do not find very many folks on Ryze from Middletown or any of the cities which comprise Lake County, CA?
This county actually has as its slogan, "Shop, Stay and Play." While that may sound nice for outsiders to hear, it makes absolutely no sense to shove it down the throats of the folks who already live here - like me. But, that is what the folks have been doing since I moved here in 2001 from Atlanta, GA.
As I have stated before, the entitlement mindset does not work. And, that is one of the reasons I think Lake County, CA needs a 180-degree change-of-mind.
Lamar Morgan
CDMM - Synergistic Business Marketing
707-709-8605
Attract more customers! Private Reply to Lamar Morgan 954-603-7901 | | Mar 17, 2009 9:26 pm | | re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
Ron Sam | | John,
re: Obama is in a straight-jacket ...
No straight jacket on increasing the national debt and making foreign investors feeling critical over the deflation/inflation we will see. Specifically China, Japan and Germany are sending warnings to the US. Yet Obama isn't likely to listen to common sense.
Which economist does Obama follow?
How Frank or Deceptive Should Leaders Be?
Private Reply to Ron Sam | | Mar 18, 2009 12:24 am | | re: re: re: re: re: re: re: US Economy and Stimulus - another model? | # |
John Stephen Veitch | | Ron Sam asks two questions:
"Which economist does Obama follow?"
I'm sure Obama is getting a lot of economic advice, but I can't imagine any economist recommending the policy he is following. Mind you the same can be said for what GW Bush was doing in the previous administration.
In my view Economic madness in the USA began with the Chicago School of supply side economists, it entered politics under Ronald Reagan in the USA, Margaret Thatcher in the UK and Roger Douglas here in NZ.
Once in the political arena certain business groups thought all their Xmas's had come at once. Business support for these market led policies has been massive, and across the world these ideas became popular and shifted world politics towards a pro business focus.
Here in NZ, the change in our voting system allowed us to tame this tiger, beginning about 16 years ago. The USA wasn't so lucky.
In the USA, the Democrats under Clinton, tried to produce economic sense, but at the end of his term Clinton was facing a recession. GW Bush made the recession go away, by deficit spending, by creating an unnecessary war, and by generally living in fairyland. The REPUBLICAN party has completely disgraced themselves in making this depression much worse than it might have been, and by working today to make fixing the problem impossibly difficult.
Both Obama and the Republicans are beholden to the people who funded them. They CANNOT act against the hand that fed them, but to succeeded that's exactly what they MUST do. So Obama is trapped by politics, by the two party system and the massive funding required to get elected in the USA.
I believe despite the pretence to the contrary, that the Republican party is so discredited, they will never be elected in the USA again. And when Obama fails, the Democrats may face the same fate. This has nothing to do with economics, it's all about how do you deal with a nasty unpleasant reality.
And
"How Frank or Deceptive Should Leaders Be?"
I happen to believe in democracy. We've had experience in NZ of leaders being less than frank with us, the public. That's exactly why we changed our voting system. Our experience was that BOTH Labour and National told us one story before the election and did something else afterward. Public anger led to a revolt, voting for MMP which BOTH major parties and the business community vigorously opposed. So briefly, leaders should be frank.
We've seen in NZ that the public will vote for a party promising to RAISE taxes, if they are told why that's necessary. Our experience under MMP, with 8 parties in the house, is that politicians are forced to be much more honest with their approach.
Right now I'm disappointed with the present National Party leadership. They are faced with a situation they didn't cause, and their promises to the electorate cannot be maintained in the present economic climate. They have become very secretive, and gagging orders have been put on many senior civil servants. I think our situation is much worse than the public know and they are trying to paper over the cracks. For me that's disappointing. People are much better able to help themselves if they begin with the best available information.
"China, Japan and Germany are sending warnings to the US" for very obvious reasons. The present economic policy is increasing the amount of debt in order to reduce the pain now. The debt is backed by TWO certainties, one of those is serious increases in taxes on Americans, and the other one is a decrease in the value of the American Dollar. The piper WILL be paid. There is no escape.
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 24, 2009 9:23 pm | | re: re: re: re: re: re: re: re: US Economy and Stimulus - another model? | # | 
Joseph Lynders | | ~~~~~~~-----~~~~~~~~
"How Frank or Deceptive Should Leaders Be?"
That is an interesting question. Everybody seems to have a plan or at least an insight into why nothing did or will work the way they would like it to work, be or become.
I wonder if it would be considered a good IDea if we just tried to do the right thing. I sometimes find myself wondering if anybody has thought of trying to do the right thing.
I would like to here my new president say that we are going to do X,Y and Z because it is the right thing to do.
I expect that if you are going to do the right thing there is little need for deception.
Have a good IDea today,
03/24/09 Joseph F. Lynders FTg/M/TPrivate Reply to Joseph Lynders | | Mar 24, 2009 11:52 pm | | re: re: US Economy and Stimulus - another model? | # |
John Stephen Veitch | | Beautifully simple Joseph.
The problem is that we live inside a real history that is full of good people who don't understand what they are really doing, blundering ahead and compounding previous mistakes.
We all do it. We can't see what we are doing, because we only see with our own eyes; the wider view of our real situation and the actions of others is denied to us. Other people who we might view as critics or even as enemies, often offer us a huge service: to state clearly how we look from the outside. Of course in our "great wisdom" we immediately reject that view, rather than seeing the unwelcome truth that it contains, that would better inform our understanding.
I warn you (and I warn me) that we all do this, and it's only by having a conscious awareness of that fact that you can try to protect yourself from your own tunnel vision. This is absolutely fundamental to all innovation processes too. But I find it better to use political examples, which everyone should be able to understand. (Sadly some people insist on wearing red or blue tinted lenses and render themselves incapable of understanding these examples too.)
Clear example:
USA's policy towards Iraq.
At first the USA tried to be alongside Saddam Hussein and to get favoured access to oil and to support for Israel by being a friend of Iraq.
When it became obvious that Saddam Hussein had his own regional ambitions and wasn't content to do as he was told, the worm turned and the USA, dropped active support.
There was a legitimate border dispute between Iraq and Kuwait, the border had never really been tested. Iraq "tested the border" by drilling for oil in what later became disputed territory, but his wasn't clear at the time. Then the dispute became military. Iraq is accused of invading Iraq and the first Iraq war (GH Bush) was begun.
The end of that war was unsatisfactory from a American point of view. Saddam was still in power and his regional ambitions remained a "problem".
Solution: Use the UN against him, demand that Iraq destroy all it's missile capability, and invoke economic and trade sanctions against Iraq until she complies with UN resolutions. (Oil for food)
That's a brief background as I remember it. There's no need to discuss the detail of that; what happens next is my point.
Inside an information bubble of their own making, US politicians of both sides decided that Saddam was a thoroughly bad guy and that nothing he did would ever be enough to satisfy them. So while Saddam DID dismantle his weapons of mass destruction and even when weapons inspectors verified that; US politicians on both sides of the house agreed not to accept the evidence because it didn't suit their purposes. (Result we are told is that 100,000 Iraqi children died for lack of food and medical treatment, that Madeline Albright thought was perfectly acceptable as the "price" of keeping Saddam under control.)
When GW Bush is elected the willingness to get involved in Iraq increases, and all sorts of "reasons" for taking an aggressive approach were invented by the new administration.
Eventually of course there is a new Iraq war, which three years later was said to be illegal and based on fabricated and false "evidence". (There are many people who in reading this will still not accept that the reasons the USA and the UK gave for initiating the war were fabricated and false.)
Now go back to what I said at the beginning:
"The problem is that we live inside a real history that is full of good people who don't understand what they are really doing, blundering ahead and compounding previous mistakes."
The weapons inspectors in Iraq, were telling the USA and the UK the truth about the decommissioning of the WMD. But it wasn't a message the USA in particular wanted to hear. So faced with the evidence, what was the reaction?
"In our "great wisdom" we immediately reject that view, rather than seeing the unwelcome truth that it contains, that would better inform our understanding.
When you can see how you play mind games to fool yourself, how you manufacture your own blindness, you become more sensitive to information you might otherwise reject.
I don't deny that there is a distinct downside to being open to more information and to listening carefully to contrary viewpoints. It takes a lot of time and it adds sometimes to your own confusion. Listening to all the points of view seriously might make it almost impossible for you to act. I've been there.
I can only suggest that with time that messy confusion passes and you do learn to assimilate and understand a bigger picture, and to make better decisions because of that.
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 5:59 pm | | re: re: re: US Economy and Stimulus - another modtoel? | # |
Joseph Lynders | | ~~~~~~~~~--------~~~~~~~~
I like the IDea of the Clear example.
Clear example:
The common rowboat is designed so that one rower can carry a pretty decent payload in a small stable craft and maximize his/her energy transfer to the water making the boat go.
In maximizing the payload capacity, the stability and the efficiency of the rowboat the ability to see where you are going was sacrificed.
This deficiency can be overcome in rowboating and in many other activities by turning around once in a while to see where you are actually going.
I never really liked row boats.
03/25/09 Joseph F. Lynders FTg/M/TPrivate Reply to Joseph Lynders | | Mar 27, 2009 4:12 pm | | re: re: re: re: US Economy and Stimulus - another modtoel? | # |
Joseph Lynders | | ~~~~~~~~~~-----------~~~~~~~~
Note from book I am re-reading:
"...the complexity of reality demands that we exercise great care in making distinctions without sacrificing reality for clarity."
There is a lot of that going on these days.
Have a good IDea today,
Joseph F. Lynders FTg/M/TPrivate Reply to Joseph Lynders | | Mar 29, 2009 8:55 pm | | re: re: re: re: re: US Economy and Stimulus - TIME-LINE | # |
Ron Sam | |
Here
is Timeline
of Events that shows of who warned of impending meltdown -- This comes
via Canadian TV. Time Warner has pulled a bunch of things off YouTube
in the past few months. Already removed this one in the US.
Watch it if you can before its gone. We have a very lopsided
news media - dishonest in my opinion. (over 3 million views)
http://www.youtube.com/watch?v=cMnSp4qEXNM
This
video shows that George Bush tried to warn Congress in 2002 that this
economic crisis was coming, if something was not done. But
congress refused to listen, along with Barney Franks. The liberal
AMERICAN media did not want this video on You Tube, so they had Time
Warner threaten a law suit (proprietary rights) if it was not taken
off. This link is of the same video but is routed through
Canada.
===================================
re:
the Democrats under Clinton, tried to produce economic sense....
1977,
President Jimmy Carter +
1995, President Bill Clinton
*
"CRA" - Community Reinvestment Act * Origin of the Current "Crisis"
In
1977 President Jimmy Carter signed the Community Redevelopment
Reinvestment Act (or CRA) into law. As a result of “national grassroots
pressure for affordable housing”, it forced banks to underwrite risky
mortgage loans in order to meet the needs of “the entire community.”
In
1995 the Clinton administration strengthened the regulations of the
Community Redevelopment Act. The CRA enabled consumers to secure
mortgages with “no verification of income or assets; little
consideration of the applicant’s ability to make payments; [and] no
down payment.”
The
above is never mention in the news media. Wikipedia has more
on each.
===================================
I
liked this article in my local paper which is mainly a Left-wing
rag. I was surprised to see them print it.
Where is my hope and change?
By
Forrest Mize 03/26/2009
I
am one of the millions who did not buy in to Obamania. Despite the
media relentlessly and unapologetically campaigning for him and against
the GOP, I saw him as too far left, too inexperienced and an altogether
mediocre candidate. He gives a good speech but his résumé is razor-thin
for the top job.
Now,
two months into his presidency, let’s take an honest look at his
accomplishments or lack thereof. I know it is early
in his term but this is the Messiah we are talking about. He
made lots of big promises and the American people expect results. The
honeymoon is over and we can only blame things on Bush for so long.
President
Obama promised complete transparency in government. Presumably, this
meant that we citizens would be informed about the laws he was passing
and that we would have to live under. So among the first bills he signs
into law is a gigantic 1,100-page, $787 billion pork sandwich that was
introduced at midnight the day before the house voted on it.
Nobody has read it because they couldn’t possibly have had the
time. Is this the transparency we were promised or an attempt
to sneak the biggest pork bill in history past congress?
President
Obama says that the “spendulus” package does not have any pork or
earmarks in it. I have seen a summary of the bill, and it is
nothing but pork and earmarks. It looks like a giant lotto payoff to
all the left-wing programs that have been denied federal funds for the
past eight years. There is money for unions, global warming hoax
researchers, arts, abortion clinics, stem cell research, STD research,
green energy (whatever that is), neighborhood stabilization (ACORN) and
Harry Reid’s high-speed train from Los Angeles to Las Vegas.
Some of the infrastructure projects are worthwhile, but most of them
should be funded by the states that own them. There is no reason for
the federal government to borrow these billions that future generations
will have to pay back with interest.
During
the campaign, I remember a promise about how “I will run the most
ethical administration in the history of Washington, D.C.” With that in
mind, how is it possible that four high-level cabinet nominees
(Geithner, Daschle, Solis and Killefer) have been revealed as tax
cheats, and Bill Richardson withdrew his name from nomination as
commerce secretary when it was revealed that he is about to be indicted
for corruption? Another nominee, Judd Gregg, withdrew his name, citing
irreconcilable differences with Obama, meaning he did not want the
White House to “steal” the 2010 census from the Department of Commerce
and use it to redraw voter districts to benefit the DNC. Eric
Holder barely made it through confirmation as AG and has since called
all Americans racists and cowards.
What
about ending the “politics of fear” as we were promised? Remember how
the evil President Bush used fear of terrorists to allow eavesdropping
on phone calls made to al Qaida training camps in Pakistan?
Since assuming the Presidency, Obama has used the words “emergency,”
“catastrophe,” “disaster,” “crisis,” and repeatedly raised the specter
of a second great depression if congress does not approve the
Pelosi/Reid pork stimulus bill. Besides the historical
inaccuracy of comparing today’s economy to the depression, isn’t that
called the politics of fear?
What
happened to the end of partisanship we were promised? Not one house
Republican and only three senate Republicans voted for the pork
sandwich. It is the most partisan congress in history, only the
Democrats have the votes to ram through whatever they want. That
defines partisanship.
A
lot of people think the USA is on a rocket ride to socialism, and I am
one of them. When the government decides to nationalize
banks, airlines, automakers and the health-care industry, does anyone
think they will somehow magically privatize again? Will the government
turn them around, or will it just be more of what useless bureaucracies
have done with welfare, social security, Medicaid, immigration reform,
education, tax reform, FEMA, etc.? More government is not the answer.
Finally,
how about a little more substance and a lot less style? These are
troubled times, and I want my president in the oval office, not posing
for magazine covers, going to cocktail parties, schmoozing with Jay
Leno, and flying Air Force One to town hall meetings as though he is
still on the campaign trail. Please give your poor, overworked
teleprompter a break, too. You are supposed to be the smartest man
alive, so speak from the heart for once. Don’t just give us your
rehashed campaign platitudes. We already know what David Axlerod and
your handlers think. We want to know what you think.
I’m
still waiting for my hope and change, but all I see happening is the
overspending of Franklin D. Roosevelt, the failed social engineering
projects of Lyndon B. Johnson, the empty rhetoric of Jimmy Carter and
the scandals of Bill Clinton.
Forrest
Mize is retired and runs a charter boat business part time in Ventura.
===================================
quote:
The problem with Socialism is that you eventually run out of other
peoples' money."
-- Margaret Thatcher
Private Reply to Ron Sam | | Mar 29, 2009 11:29 pm | | re: re: re: re: re: re: US Economy and Stimulus - TIME-LINE | # |
Joseph Lynders | | ~~~~~-----~~~~~
The most disturbing problem with Socialism is that order can only be maintained through force of arms.
03/29/09 Joseph F. Lynders FTg/M/TPrivate Reply to Joseph Lynders | | Mar 30, 2009 2:30 am | | re: re: re: re: re: re: US Economy and Stimulus - TIME-LINE | # |
John Stephen Veitch | | Once again Ron, this is disappointing.
Don't you understand yet that America is facing a depression that will take 10 years to fix. It's easy to blame the Republican's under GW Bush for "causing it" but that would be unfair.
As the biased information you have provided demonstrates, BOTH Republican's and Democrats over the last 30 or more years have willingly played their role in causing this crisis. So the really productive question for ALL Americans is not which of the two main parties is the devil here, but why is it that they BOTH tried to outdo each other going down the SAME pathway.
(Shades of what got the USA into the illegal and unnecessary war in Iraq here. BOTH parties choosing to believe the lies, and to ignore widely available truth, because it suited their JOINT political agenda. A failure of the political system. )This is the main point of a video I saw for the first time today. (I disagree with much of the content, but the central theme is sound.)
http://www.youtube.com/watch?v=jeYscnFpEyA
So let's try to remember that this is the Innovation Network, and to think about what innovation might be helpful.
I suggest the same old things that innovators always find helpful, so let me list some of those.
1. Your own personal knowledge is the key to success. Document your experience. Keep good notes.
2. The key thing holding you back is almost always something you KNOW is TRUE but ins in fact a falsehood. Your belief in this "truth" stops you from seeing what's plainly in front of you that you don't understand yet.
3. Strive to find what's real. The innovation, it's production, it's marketing and it's performance all have to pass reality tests.
4. Build a support team with diverse experience and ideas.
5. Try to explain what you are doing to strangers. Be willing to incorporate those people in your team if they step forward showing interest.
6. When the project hits a brick wall of some kind, do something else, be busy keep working. Produce something useful. Extend your experience, add to your knowledge, talk to more people. The "failed project" is still looking for a solution, and if you keep yourself involved, one day, "pop" the solution might present itself.
In terms of the topic of this thread, the US Economy and the Stimulus Package, a good deal of what they are doing is just buying time to do items 1 through 5.
Personally I feel sure the present stimulus is necessary but that it won't produce the desired result. So I'm predicting failure: because I don't think from here success is possible. FIRST we have to have failure. FAILURE succeeds like nothing else in making you take off the rose coloured glasses and the blue tinted glasses and to look really hard at what's really happening. The fundamentals of who we are and what we believe are going to be tested.
Go back to 1 to 3 above. Get the fundamentals right. What is this environment teaching me that I couldn't see before?
What does my own personal experience tell me?
Where was my belief system at variance with reality?
What opportunity does this new reality offer me?
How in a practical way can I more that agenda forward today?
So can we please put aside the political games. You don't do yourself any good, and it's not advancing the discussion in any way.
Someone said, "the government can't save us". (I think it was Lamar Morgan.) Which is right, but the government MUST set the climate in which you can work to do a reconstruction. in your life; and across the nation. In this context the bailout, too expensive and ultimately ineffective, is buying YOU time to do what you need to do. Become more PRODUCTIVE, become more effective in changing the real world.
Here's the issue as I see it. (Quoted from earlier in this thread.)
"None of this begins to look at the FOUR key issues. They are. population, water supply, fuel supply and climate change. The economic and political process has to help us resolve those issues, I've concluded that the PLANET is telling us that a DEPRESSION is essential."
What we choose to do has to chip away at those four fundamental issues. Any one of those, out of control brings whatever sort of new economy we build crashing down. So we need to build both political and economic systems that prevent that.
Plenty of room for lots of innovation. But it starts in your head. If all you can imagine is to rebuild the old failed economy and the old failed political system, then you are part of the problem, not part of the solution.
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 31, 2009 11:46 pm | | re: re: re: re: re: re: re: US Economy and Stimulus - TIME-LINE | # |
Ron Sam | | I believe in the US Constitution and expect my US government executive branch to uphold those concepts.
Seems not.
Have you heard the latest? The executive branch wants to take away judicial branch power. We're talking government bailouts vs. bankruptcy law and who has control. In my viewpoint, it's a socialistic move to eliminated 'checks and balances'.
More Hope and Change, then and now.
Lets go back ~45 years.
I strongly recommend every Democrat and Republican watch or listen to:
"A Time for Choosing" October 27,1964
http://www.youtube.com/watch?v=yt1fYSAChxs
MP3 file here:
http://webstorage4.mcpa.virginia.edu/speeches/audio/spe_1964_1027_reagan.mp3
Ronald Reagan was a Democrat but supported Barry Goldwater.
Today (3/26/09) Daniel Hannon gave a terrific speech in tearing up PM Gordon Brown for spending into the future.
Is it a preview for a new socialist USA? What can we learn from this?
http://www.youtube.com/watch?v=94lW6Y4tBXs
Obama's answer is to raise the national debt and to 'provide' and the 'growth' of the nation (many more tax payers) will be used to pay back the immense debt. Problem with that, there will be no incentive for anyone to work hard, build an enterprise and have the nationalist yank it away.
What works?
Capitalism and free enterprise and incentives to bolster that kind of growth.
RonPrivate Reply to Ron Sam | | Apr 01, 2009 4:59 am | | re: re: re: re: re: re: re: re: US Economy and Stimulus - TIME-LINE | # |
John Stephen Veitch | | Hello Ron
Well done, that lifts the quality of the discussion.
Ronald Reagan gives a great speech and except for his strong anti Communist stance, I agree with most of what he says. However what the USA did under his administration was almost exactly the opposite, government got bigger and the deficit grew and grew.
It's funny, but the part of his policy I disagreed with, taking a tough line against the USSR, was from the point of view of an outsider clearly wrong, but it created a tension which was later released to good effect when Ronald Reagan had a change of heart and decided the USA and the USSR could be friends after all. (It had always been the case.)
Thanks for the opportunity to listen to Daniel Hannon, who like Reagan makes valid points, but doesn't necessarily win the argument.
There is OPPORTUNITY in this economic crisis to rebuild the economy in a way the opens the future, but there is also an opportunity to rebuild the old economy which will have the effect of re-creating all the problems that have temporarily disappeared in the depression.
It's important that we do the former and not the latter, because if we don't in a few years we'll revisit the present crisis in an even worse form.
For the last 30 years in the USA and around the world we've had the most free market culture ever. That's especially true in New Zealand. Yet here, it's failed to produce the economic growth we were promised. In the USA it's produced false wealth. Real wages have been declining. Only the top 10% have had any real wealth increase and 50% of that went to the top 1%. So don't tell me that "free markets" alone, are the key to success. That's simply not true.
So we need to be lot more intelligent about what we mean by "markets" and what we mean by "free". We need to be much more aware of political, business and personal options. We need to create a democracy of ideas, rather than a free market of ideologies.
Gordon Brown and Barack Obama are forced in the short term to shore up the existing structure. Otherwise the short term cost in jobs lost would bring almost immediately street riots and civil disobedience. I agree the debt that imposes is undesirable, and I also agree that much of the money will go to the wrong people. I'd say make a choice; Take the risk of paying the wrong people or risk having burning buildings. Today, we have to keep the system standing, make the payments.
Then we need to strongly embark on building a new system. I identified four targets, but there may be more. My targets were:
Water use and distribution
Energy use / Transport
Climate Change
Population
We could usefully add serious investment in the 8 Millennium Goals, the achievement of which would both create jobs and change the future of the world.
Doing these things is essential for the future of the sort of society we aspire to live in. None of us want to see our children and grandchildren living in a world where an acceptable lifestyle is impossible because of resource shortages, climate change and global warfare.
If the free market is allowed to go on it's own merry way, we destroy the climate first, and then we find a solution. (In fact we may have already done that.) And we'll wait until oil is so expensive it's uneconomic to use it, and then we'll look for alternatives. (We've done that too.) And we'll go to war over water and mineral rights, telling ourselves that there is "no alternative", because our "survival" depends on it. But in the end we won't survive anyway, because we will have killed the means of our survival.
Time NOW to be much smarter than that. But to do so YOU, and also ME, have to be willing to put aside our outworn ideologies and understand reality. So tone down the political rhetoric and all the ideological statements about free speech and free markets and personal sovereignty, and individual rights. If it's useful, use it. but if it's stopping us from thinking clearly then it's a barrier to our survival, and we need to put it aside.
For the UK, the financial system is a basket case, but with help from Europe Brown might be able to succeed.
IN the USA Obama has a much worse problem. The Democratic Party (and the Republicans) are deeply committed to the existing structure by strong financial support. Obama is committed to rebuild the old system and to retain the people who run the old system in a way that Brown is not constrained.
With the recent strong words to the Auto Industry, and with a plan to support green energy projects, there are hints that he'd like to move into the new economy I speak about, but I doubt if the "system" will let him.
In the end, it will probably comes down to what happens on the street. If the economic wheels start rolling again before unemployment gets too high and the riots start, executive jobs are safe, the old system is restored, and we go on to fight another day. (But without the fundamental change I believe is needed.)
If that doesn't work, pressure on the street will force more drastic changes forcing the more fundamental change I believe is necessary. There is plenty of room here for the Republican Party to rediscover a new future for themselves, but I suspect they can't, and we've already seen the last of them. There's plenty of room also for the Democrats to self destruct. And there must also be opportunity for new political forces to enter the arena.
As I've said before, EVERYTHING is being revalued, not just the price of your assets, and the value of the US Dollar, but also the value of our own belief systems. Stress testing is the order of the day. Everyone's already lost a great deal. Those who re-evaluate well, who come out the other side of this depression with the right ideas and business models and philosophy for a reorganized "new" economy will do well. Those who find they can't change will engage a lot of work and investment but find only repeated failure, and wonder why.
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 | | Apr 03, 2009 2:22 am | | re: re: re: re: re: re: re: re: re: US Economy and Stimulus - TIME-LINE | # |
Joseph Lynders | | ~~~~~~~~----~~~~~
Change is an interesting word.
Have a good IDea today,
Joseph F. Lynders FTg/M/TPrivate Reply to Joseph Lynders | | Apr 03, 2009 6:43 am | | re: re: re: re: re: re: re: re: re: re: US Economy and Stimulus - TIME-LINE | # |
Ron Sam | |
Makes
me wonder -- How much gold the US Treasury has since we have Fiat
Dollars.
"Is the United States Bankrupt?" (PDF)
There are 77 million baby
boomers now ranging from age 41 to age 59. All are hoping to collect tens of thousands of dollars
in pension and healthcare benefits from the next generation. These claimants aren’t going away.
In three years, the oldest boomers will be
eligible for early Social Security benefits. In six years, the boomer
vanguard will
start collecting Medicare. Our nation has done nothing to prepare for this onslaught of obligation.
Instead, it has continued to focus on a completely meaningless
fiscal metric—“the” federal deficit—censored and studiously ignored long-term fiscal analyses
that are scientifically
coherent, and dramatically expanded the benefit levels being explicitly or
implicitly promised to the baby boomers.
Countries can and do go
bankrupt. The United States, with its $65.9 trillion fiscal gap, seems clearly headed down that
path. The country needs to stop shooting itself in the foot. It needs to
adopt generational
accounting as its standard method of budgeting and fiscal analysis, and it needs to adopt fundamental tax, Social
Security, and healthcare
reforms that will redeem our children’s future.
LONDON -(Dow Jones)-
International Monetary Fund Managing Director Dominique
Strauss-Kahn said Thursday that the Group of 20 nations' decision to
triple the
IMF's resources will more than double the amount of funds available to
low-income countries.
The G20 agreed to
triple the IMF's funds to $750 billion from $250 billion and
provide an additional $250 billion in special drawing rights, or SDRs,
that
members can use to ensure their currency reserves remain liquid and
stable. The
IMF will also more than double the amount of concessional loans
available to
low-income countries to about $6 billion.
"My goal was to double
the resources (for low-income countries) in line with the
expected doubling of general resources. The general resources have more
than
doubled....(So) the low-income resources will more than double."
Strauss-Kahn
said in a briefing after the G20 meeting.
He added that steps
taken by G20 members to combat the global economic downturn
represent "the most coordinated stimulus ever" in history.
It also shows that the
IMF is now a focal point of the G20's ambitions, both in
terms of policy making and monitoring the health of the global economy.
"At each step of what
the G20 is working on, you will find the IMF...The IMF is
now back."
Strauss-Kahn said the
IMF is ready to become a voice that represents low-income
countries, the poorest nations among the world's developing nations.
Out of the $250 billion
in additional SDRs, low-income countries will receive
about $19 billion. The IMF will also commit up to $6 billion to help
subsidize
concessional loans to the poorest countries, Strauss-Kahn said, more
than double
the amount previously available he said. The $6 billion will be drawn
from a
portion of an agreed IMF gold sale that has yet to be completed.
The additional $500
billion in funding will be made available to countries
through new arrangements to borrow, or NAB, a type of credit line
developed by
the U.S. The NAB has so far been partly funded by bilateral agreements
such
Japan's $100 billion contribution and the E.U.'s plan to contribute
$100
billion.
Strauss-Kahn declined
to discuss how much China plans to contribute, but he said
China preferred to contribute by purchasing IMF-issued bonds, a form of
capital
raising that the IMF hasn't yet experimented with but has the right to
do so.
U.K. Prime Minister
Gordon Brown said China will contribute $40 billion to the
IMF but didn't say if Beijing would make the contribution through the
purchase
of IMF bonds or loans.
Separately,
Strauss-Kahn said the ECB's "monetary policy is now correct." He was
responding to a question on whether he was satisfied with the ECB's
decision
earlier Thursday to cut its key interest rate by 25 basis points to
1.25%.
He added that more
could be done, "but I'm not asking for more."
He said he was also
content with the Bank of England's monetary policy.
-By
Alex MacDonald, Dow Jones Newswires
(END)
Dow Jones Newswires
http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=eb40ea5b-b793-4051-ae30-efef40ec198e
========================================================
G20
Supports IMF's Plan to Sell 403 Tons of Gold
Private Reply to Ron Sam | | Apr 03, 2009 1:37 pm | | re: re: re: US Economy and Stimulus | # |
John Stephen Veitch | | Hello Ron
Your comment takes us in two directions nether of them to do with the economic stimulus.
This thread needs to be sorted into it's parts if the debate is to be sensible. By all means feel free to start new threads.
So the treads that you might like to start might be:
Social Welfare and Medicate for the elderly - Are the unfunded liabilities a problem? I've written about that recently here:
http://www.openfuture.co.nz/depression/retirement.html
Is the USA in danger of becoming bankrupt?
What does funding the IMF to help the poorest nations mean?
Can the US$ remain the reserve currency of the world?
Do we need a Global Regulator of financial markets?
There are lots of options.
Regarding this thread:
The decisions of the G20 yesterday were much more united and forward thinking than I expected. That will make it much easier in the 2-3 year term.
Meanwhile in the USA expect house prices to continue to decline for another year yet, if at a slower rate.
Expect unemployment to continue rising for two more years.
Much tougher time are coming. It's not Obama's fault. The G20 has done what it needed to do. But the problems of both households and businesses in the USA and around the world are not going to be solves inside three years. (It took 30 years to get into this bother, we can't expect instant release.)
Here's why. To get the economy running again people need to have HOPE for the future, and a PLAN that they fee SURE will turn investment into profits. They also need a little security behind them, a backstop, a nest egg of some kind they can call on if things get tough.
Most people who had nest eggs have lost them.
Sales are more difficult to get right now.
Every plan has to be evaluated as to the right time for execution. There is a go/nogo decision to make. Right now most people are finding the courage to make "go" decisions is hard to find. Caution is the order of the day.
NOTHING quick and easy will solve that.
New ideas, new innovations, new technology, especially if it helps solve the energy/transport/water supply problems is likely to look more attractive. If we are SURE we can solve those problems, restructure our whole economy in that direction, we will have already created a lot of jobs. Knowing these problems can be fixed and are being addressed will lift confidence. That's the sort of change we need to help the stimulus work.
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 | | Apr 03, 2009 3:38 pm | | re: re: re: re: re: re: re: re: re: re: US Economy and Stimulus - TIME-LINE | # |
Joseph Lynders | | ~~~~~~~~~---~~~
"Change is an interesting word."
Some Change results in nothing positive or negative happening.
Some Change results in mostly positive results.
Some Change results in mostly negative results.
Some Change results in short term positive and long term negative results.
Some Change results in short term negative results and long term positive results.
When we use the word "Change" we should be specific about what results we are looking to acheive both short term and long term.
Maybe we should start looking for a better buzz word than Change.
Have a good IDea today,
04/03/09 Joseph F. Lynders FTg/M/TPrivate Reply to Joseph Lynders | | Apr 07, 2009 3:45 pm | | re: re: re: re: re: re: re: re: re: re: re: US Economy and Stimulus - TIME-LINE | # | 
GARKO FACTOR 917 215 2510 | | get the truth about what is going on politically
http://trueconfessions.info
and
http://theobamawave.comPrivate Reply to GARKO FACTOR 917 215 2510 | | Apr 07, 2009 9:35 pm | | re: re: re: US Economy and Stimulus - Keep to the Topic | # |
John Stephen Veitch | | I've just removed one of the two posts by Garko Factor.
Garko, was this some kind of drive by shooting?
You have not read the thread.
You accused Thomas Holford of promoting four problems that in fact I introduced. Those ideas are certainly open for debate if you choose, but in another thread.
The topic in case you hadn't noticed was the economic stimulus package. BOTH your posts are about something else.
As I said to Ron Sam and others, by all means start new threads if you want to discuss other issues. But PLEASE read the posting rules, this is the innovation network. We are interested in new ideas and the sources of change. To that end identifying the "TRUTH" is very valuable and important.
If "truth" is important to you Garko, get down off your soap-box, stop shouting, and discuss the issue that concerns you. Start your own thread. If it's interesting, it will grow.
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 | | Apr 07, 2009 10:41 pm | | re: re: re: re: US Economy and Stimulus - Keep to the Topic | # |
John Stephen Veitch | | This video message was posted at the Information Clearing House today.
http://informationclearinghouse.info/article22371.htm
It's a message from Argentina.
Argentina was wrecked by military power, by corruption inside Argentina and by the IMF. John Perkins' book about "Economic Hitmen" is important here.
The USA has been able to ignore the signs that brought the economy of Argentina to it's knees three times.
1. The US$ has been the reserve currency of the world. That has allowed the USA to tax other nations by extracting value from their currencies. One estimate was this has earned the USA more than US$ 400 Billion a year, and is the reason why the USA can afford to have military forces spread across the world.
2. The USA effectively controls the World Bank, the World Trade Organization, and the International Monetary Fund.
3. With it's veto the USA can keep the United Nations powerless and ineffective.
So for the last 30+ years the USA has been able to ignore economic reality. The G20 meeting a week ago changed the nature of this debate completely. China gave notice that she would no longer keep the USA afloat by buying treasury bills. Several different forms of "reserve currency" are now sitting in the wings. The Special Drawing Rights, are likely to become the future reserve currency of the world.
See my essay of 8 weeks ago, where I talk about Keynes' idea of the "Bancor". Well, SDR's are Bancor's.
http://www.openfuture.co.nz/depression/worldwide.html
(See the end of the essay.)
So the situation is that the stimulus packages will buy time, but they will fail. The US$ will suffer a severe decline in value. Many of the banks and major businesses the Obama government is trying to rescue will in fact fail, they also NEED to FAIL.
The fall in the value of the US$ will be the beginning of the real recovery, but perhaps after a long delay. At a lower value, it will be possible for US industry to regrow industrial jobs and become a successful exporter again. But you can't get from here to there without paying the piper on the way. Lot's of economic pain ahead.
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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