Seven years after the global financial crisis erupted in 2008, the world economy continued to stumble in 2015. According to the United Nations' report World Economic Situation and Prospects 2016, the average growth rate in developed economies has declined by more than 54% since the crisis. An estimated 44 million people are unemployed in developed countries, about 12 million more than in 2007, while inflation has reached its lowest level since the crisis.
More worryingly, advanced countries' growth rates have also become more volatile. This is surprising, because, as developed economies with fully open capital accounts, they should have benefited from the free flow of capital and international risk sharing – and thus experienced little macroeconomic volatility. Furthermore, social transfers, including unemployment benefits, should have allowed households to stabilise their consumption.
[...] Neither monetary policy nor the financial sector is doing what it's supposed to do. It appears that the flood of liquidity has disproportionately gone towards creating financial wealth and inflating asset bubbles, rather than strengthening the real economy. Despite sharp declines in equity prices worldwide, market capitalization as a share of world GDP remains high. The risk of another financial crisis cannot be ignored.
There are other policies that hold out the promise of restoring sustainable and inclusive growth. These begin with rewriting the rules of the market economy to ensure greater equality, more long-term thinking, and reining in the financial market with effective regulation and appropriate incentive structures.
But large increases in public investment in infrastructure, education, and technology will also be needed. These will have to be financed, at least in part, by the imposition of environmental taxes, including carbon taxes, and taxes on the monopoly and other rents that have become pervasive in the market economy – and contribute enormously to inequality and slow growth.
There's likely no certain and simple solution. Witness recent efforts in Europe with major austerity initiatives and in the United States with quantitative easing. If you were the Emperor of the World, what would you do?
(Score: 3, Touché) by Anonymous Coward on Thursday February 11 2016, @09:22AM
Taxes are too high. We need to get rid of them.
Wages are too high. We need to get rid of them.
Come to think of it, our problems can be solved by building a robot army, terminating all the worthless workers, and overthrowing all the useless governments. Then the capitalist master race can finally rape the world in peace.
All glory to the holy ghost of Nazi Hitler.
(Score: 0, Touché) by Anonymous Coward on Thursday February 11 2016, @10:02AM
only ones that would disagree with that are those that don't pay any
only ones that would disagree with that are those that have never employed anyone
without capitalism, you'd be sucking dick for bread in your communist wonderland
(Score: 4, Insightful) by Anonymous Coward on Thursday February 11 2016, @10:09AM
without capitalism, you'd be sucking dick for bread in your communist wonderland
If you're sucking dick for bread, it's not real Communism.
-- OriginalOwner_ [soylentnews.org]
(Score: -1, Offtopic) by Anonymous Coward on Thursday February 11 2016, @10:14AM
Hasn't that gotten you marked SPAM enough times that your IP address has been blocked?
(Score: -1, Troll) by Anonymous Coward on Thursday February 11 2016, @10:26AM
You think an IP ban can stop me?
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @10:43AM
This is some high-level trolling.
(Score: 5, Insightful) by Anonymous Coward on Thursday February 11 2016, @10:32AM
if you're getting government bailouts for business insolvency it's not real capitalism
(Score: 3, Funny) by Bot on Thursday February 11 2016, @11:16PM
I am not the only one to say this, capitalism is just the first phase.
In brief, when successful entities become big, they exit the free market logic, instead of waiting for the competition to emerge you buy politicians to have laws mandating the use of your product in direct or preferably indirect ways.
Example, banks. In my country you cannot do business without offering electronic payments. By law. You are also explicitly forbidden to shift the cost of electronic transactions to the consumer, either by adding them or by discounting who pays in cash. In other words, since you shift your expenses to the buyer anyway, the net result is that everybody pays for electronic transactions whether they do it or not. This is not corporativism, communism, mafia. This is merely the second phase of capitalism, since no change of ideology occurred, the same characteristic that make the entity big will make it enter the second phase.
The third phase is about banana republics and big robot armie[DIRECTIVE 4 TRIGGERED]
Account abandoned.
(Score: 4, Interesting) by Anonymous Coward on Thursday February 11 2016, @12:27PM
Wages are too high. We need to get rid of them.
only ones that would disagree with that are those that have never employed anyone
I run a small business and I can attest to the fact that you get what you pay for when it comes to personnel and contractors. If I'm looking to pay pennies for outsourcing work to be done half a world away then I get crappy work, slow response times, and all the other headaches that comes with it (especially the amount of time I need to waste managing the project). Of course I could hire a project manager, but that's going to cost me! Wah!!
I pay quality people a quality wage and things run much smoother with happier clients. We make our deadlines, we don't need to apologize for substandard work, and the time I spend running my business is not spent on making up for trying to be a cheapskate. I could try to squeeze every last dollar out of the employees and contractors, or I could spend that time & effort (and all the other hassles it brings) by taking on additional clients (which ends up in more total profits).
Did I mention it's hard to have a company picnic with some group of unknown people (who may or may not be the same people from day to day) on the other side of the world? Staff is local, contractors are local, clients are anywhere we can get them (because we can afford travel). If you can't look everyone in the eye then you can't really know who you're working with.
(Score: 2) by Joe Desertrat on Friday February 12 2016, @06:15PM
I pay quality people a quality wage and things run much smoother with happier clients. We make our deadlines, we don't need to apologize for substandard work, and the time I spend running my business is not spent on making up for trying to be a cheapskate. I could try to squeeze every last dollar out of the employees and contractors, or I could spend that time & effort (and all the other hassles it brings) by taking on additional clients (which ends up in more total profits).
I would bet your employees also feel somewhat invested in the success of the company as a result and are willing to make an extra effort to get things right. Amazing what treating people well can accomplish!
(Score: 3, Insightful) by arulatas on Thursday February 11 2016, @03:07PM
Funny. Most corporations say taxes are too high and they still don't pay any. Double Irish anyone?
----- 10 turns around
(Score: 3, Funny) by SanityCheck on Thursday February 11 2016, @03:44PM
Well if the taxes were 0% they would pay them. If the taxes were -10% they would pay those, too! They would even pay them TWICE! That's how nice they are!
(Score: -1, Troll) by Anonymous Coward on Thursday February 11 2016, @01:17PM
The scum in charge of your future today is the same scum Hitler warned us about.
They are the rats that steal food off your table, put you in debt and make you feel like you've won. So you merrily go about your business ambivalent to the fact that the rats are now your masters. Ever heard of the Federal Reserve? Rothschilds?
(Score: 1, Informative) by Anonymous Coward on Thursday February 11 2016, @02:35PM
You're scum.
(Score: -1, Troll) by Anonymous Coward on Thursday February 11 2016, @06:02PM
You're a usurer, a parasite, a scoundrel....
... wait a minute, just remembered an insightful observation by Mr. Goebbels:
The Jew is immunized against all dangers; one may call him a scoundrel, parasite, swindler, profiteer. It all runs off him like water off a raincoat. But call him a Jew and you will be astonished at how he recoils, how injured he is, how he suddenly shrinks back: "I've been found out!"
--Joseph Goebbels
You're scum.
You're a Jew. There. Deal with that!
(Score: 0, Troll) by DeathMonkey on Thursday February 11 2016, @06:25PM
The Jew is immunized against all dangers; one may call him a scoundrel, parasite, swindler, profiteer. It all runs off him like water off a raincoat. But call him a Jew and you will be astonished at how he recoils, how injured he is, how he suddenly shrinks back: "Oh shit, I'm headed for the camps!"
(Score: -1, Troll) by Anonymous Coward on Thursday February 11 2016, @08:00PM
Arbeit macht frei
Being Jew means not wanting to work. Sitting and making money off other people's hard work, leeching, speculating.
The documentary The Eternal Jew [youtube.com] is eye-opener for someone who's been asleep.
We need those camps running again now more than ever.
(Score: 1, Informative) by Anonymous Coward on Thursday February 11 2016, @02:41PM
All glory to the holy ghost of Nazi Hitler.
https://en.wikipedia.org/wiki/National_Socialist_Program#The_25-point_Program_of_the_NSDAP [wikipedia.org]
See point 7. It is exactly what many are calling for. Points 10 and 4 however are contradictory to point 7.
You may have some strange ideas about what Hitler was. Yes he was a horrible person. But not in the way you think. He was basically a totalitarian socialist. But only for his chosen race.
People saw it for what it was. Veiled racism in the name of helping everyone. Sound familiar? It should. These ideals never left they only dropped 'but only for a special race'. Just the bad things got blamed on the Nazis (a term invented by their enemy's). Those 'bad things' were truly terrifying in scope. Points 12-18 however are very familiar talking points of 'liberal' people. What people fail to realize is that these things were the very tools the Nazis used to suppress people.
(Score: 4, Funny) by curunir_wolf on Thursday February 11 2016, @10:45PM
I am a crackpot
(Score: 1, Informative) by Anonymous Coward on Thursday February 11 2016, @09:27AM
This is definitely safe for work, unless you work for a too big to fail bank, the WTO or the IMF.
https://analepsis.files.wordpress.com/2011/08/ha-joon-chang-bad-samaritans.pdf [wordpress.com]
(Score: 2) by RamiK on Thursday February 11 2016, @01:09PM
Incidentally, this is why boycotts, sanctions and divestment campaigns fail without complete port blockades. If a country can acquire industrial machinery and raw materials, then denying it access to foreign consumer goods will only increase it's long term prosperity as it will grow production facilities of it's own to compensate where needed.
compiling...
(Score: 1, Insightful) by Anonymous Coward on Thursday February 11 2016, @03:45PM
We could blockade US ports denying it access to cheap foreign labor. That would be "disastrous" for the .1%.
(Score: 2) by Hyperturtle on Thursday February 11 2016, @06:10PM
Isn't that what the US did with Tea?
The tea partiers do not seem to think the same way.
(Score: 5, Insightful) by Shimitar on Thursday February 11 2016, @09:58AM
Honestly, who is really interested in a recovery of the economy, or fixing the problems and make it sane enough that it can sustain itself?
The system is built so that the same people who control it (if we can say anybody controls it) gain from it. It's a law of "nature" (or human-nature law). With perpetual crisys normal people can get perpetually screwed, you can finally rebuild the good-old society stratification and make it strong and perpetual again (think of the middleage classes). USA is leading this race and forcing everybody to follow, and the people in control (or supposedly so) in the other countries follows, because they have all to gain and nothing to lose. "people" has only to lose and not much to gain, but are we people really in control of our goverments? (no, i never drinked the american-dream cool-aid)
Once most of the wealth is again transferred from the vast majority of the people to the few, we will fully back into the middle ages times.
The article says "Neither monetary policy nor the financial sector is doing what it's supposed to do. It appears that the flood of liquidity has disproportionately gone towards creating financial wealth and inflating asset bubbles, rather than strengthening the real economy". Are they stupid or just with the head in their asses? It does exactly what is supposed to do! Transferring money from the majority to the few. Once the free market stopped being a proper source for this transfer, because people got a bit smarter or just had less free cash, the system started forcing cash out of states, institutions and generally again from people's pockets trough higher taxation, again toward the few.
The big picture is clear, the global economy has failed if the goal was to make the world a better place and make everybody more well off. It has succeeded if the real goal was to drain the "excess" wealth from everybody toward the few. And it's succeeded very well. The only way to restore che economy is to evolve to a different system, where you can have again the initial redistribution of wealth, and it will take generations.
It's just that the mask is falling, finally, off... and so are the gloves. Guys, go buy more lubrificant, we will all need it...
ps: when i say "the few" i don't point the finger to anybody nor any group of people. Its a general statement, the "few" is a fluid concept, it's the people who keep getting richer and richer, for whom the crysis never applies.
Coding is an art. No, java is not coding. Yes, i am biased, i know, sorry if this bothers you.
(Score: -1, Flamebait) by Anonymous Coward on Thursday February 11 2016, @10:04AM
ps: when i say "the few" i don't point the finger to anybody nor any group of people. Its a general statement, the "few" is a fluid concept, it's the people who keep getting richer and richer, for whom the crysis never applies.
s/f\(e\)/j\1/g
But does it run Crysis?
(Score: 2) by maxwell demon on Thursday February 11 2016, @12:22PM
s/\(o\)ny\(m\)\1u\(s\)/ti\3e\2itic/
The Tao of math: The numbers you can count are not the real numbers.
(Score: 1) by Shimitar on Thursday February 11 2016, @01:17PM
I would just say "moron" to your comment, but then i might be modded offtopic or troll, so i will not do so.
+1 for the regxep... at least it's geek.
... well, it's a crysys! for Cryst saké!
Coding is an art. No, java is not coding. Yes, i am biased, i know, sorry if this bothers you.
(Score: 1, Insightful) by Anonymous Coward on Thursday February 11 2016, @09:59AM
duh
(Score: 2, Interesting) by Anonymous Coward on Thursday February 11 2016, @10:33AM
Monaco, Luxemburg, Lictenstein, Isle of Man, Caymans...
But it will never happen. If your money was there, would you make those illegal? ...
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @10:57AM
"Dismantle"
shh... we don't call it things like that
we call it spreading freedum
(Score: 1) by nitehawk214 on Thursday February 11 2016, @10:11PM
The same people that have money in tax havens buy all the politicians.
"Don't you ever miss the days when you used to be nostalgic?" -Loiosh
(Score: 5, Insightful) by Anonymous Coward on Thursday February 11 2016, @10:49AM
The ultra rich have figured out how to game the system. Why is the economy not acting as predicted? Because there are a BUNCH of players actively gaming the system. The "rules" are being broken and the umpires are sitting on the sidelines wondering why the games are so rigged. Wheeeee, go human ingenuity! Hard work earns a suitable reward, or something...
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @11:17AM
It's a game of monopoly, only what happens in real life when someone actually wins at monopoly? You get a reset. We are headed for a BIG reset. Buy popcorn and watch. If I were world leader, i would steer the reset away from military resolution. Apart from that none of us can answer as the crucial information needed to make the right decisions is not in our hands.
(Score: 5, Insightful) by Anonymous Coward on Thursday February 11 2016, @12:01PM
"Citizens United".
It's too bad Prof. Lessig couldn't get any traction in the rigged Democrat race.
We really do need a constitutional amendment to counter the crooked umpires.
Big hint, SCOTUS: The word "money" does NOT appear ANYWHERE in the 1st Amendment.
Money is not speech; corporations are not people.
http://www.wolf-pac.com/the_plan [wolf-pac.com]
https://movetoamend.org/ [movetoamend.org]
-- OriginalOwner_ [soylentnews.org]
(Score: 2) by bob_super on Thursday February 11 2016, @06:29PM
Citizens united is always being read wrong:
- Corporations are NOT people. Counter-examples are too easy to find.
- Money is not speech. Money outputs Protected Speech.
- Therefore Money IS people.
All politicians and analysts agree: need more votes? Get more Money. Can he get elected? Nope, he doesn't have Money.
(Score: 2) by driverless on Friday February 12 2016, @05:44AM
Money IS people.
You're thinking of Soylent Greenbacks.
(Score: 2) by Thexalon on Thursday February 11 2016, @08:39PM
If only there were a candidate who (a) refused to take the big corporate money that the rest of them do thanks to that ruling and instead opted to be funded by ordinary people making small donations, (b) proposed a constitutional amendment to undo the damage of Citizens United, and (c) currently is leading the delegate count for a major party nomination after crushing his opponent by 20% in the most recent primary.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 3, Insightful) by curunir_wolf on Thursday February 11 2016, @11:03PM
I'm really sick of hearing about Citizen's United. It's a rallying cry to the uninformed to drum up support for ending Free Speech. That's pretty much it.
Here's your first clue: idiots that think all of a sudden there are no limits on campaign contributions. FALSE! Limitations on campaign contributions were not affected by the Citizen's United decision.
You know what would be banned if the decision had gone the other way? Funny or Die's production of "The Art of the Deal" would be getting scrutiny from the FEC, just as "Hillary: The Movie" was. It could be viewed as an illegal "electioneering communication"! Seriously.
Stop reading the Democratic fund-raising emails for your information, and try to at least get some basic information [wikipedia.org] regarding the issue.
I am a crackpot
(Score: 3, Informative) by Thexalon on Friday February 12 2016, @12:16AM
It's true, Citizens United doesn't allow unlimited corporate contributions to campaigns.
What it allows them to do is funnel unlimited money into another organization called a "SuperPAC", which while technically not part of the campaign is often associated with the campaign and runs ads in support of that campaign. Which makes them effectively part of the campaign, even though they aren't officially part of the same group. And SuperPACs, unlike regular PACs or campaigns, do not have to disclose where they got their money from.
So yes, strictly speaking it doesn't allow unlimited donations to campaigns. But practically speaking, it totally does.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by curunir_wolf on Friday February 12 2016, @12:50AM
SuperPACs do, indeed, have requirements for reporting donors and donors' identities, so you're wrong about that. They have to be non-associated with the campaign and the candidate (what the FEC terms a "disconnected" committee), but even beyond that, they are forbidden from any kind of "coordination" with the campaign or candidate. Difficult to prove, but there are plenty of cases of disconnected committees being successfully prosecuted for just that. So saying they are effectively part of the campaign is quite a stretch. Are you claiming, here, that Johnny Depp is effectively part of Hillary Clinton's (or Jeb Bush's) campaign? There was certainly no accusation that Citizen United was part of Obama's or Mitt Romney's campaign.
So yes, strictly speaking it doesn't allow unlimited donations to campaigns. But practically speaking, it totally does.
No, it really doesn't. You haven't made that case at all, and the evidence from campaigns since 2010 (including the current ones) don't provide any evidence of that at all. Just the opposite, in fact. You can even find statements from the Koch Brothers lamenting that in a time when everyone is claiming money can buy elections, their money has failed to produce any real results influencing elections [newsweek.com].
I am a crackpot
(Score: 3, Insightful) by edIII on Friday February 12 2016, @03:46AM
With all due respect, you're the complete fucking idiot if you think this doesn't allow unlimited contributions. It most certainly, and expressly does do exactly that.
That tissue paper fucking thin line between the SuperPacs and the candidates is only believed by the same people who believe the Emperor is actually wearing clothes and not naked. Which that is the part that eseentially makes the rest of idiots. "Hey! That dude isn't wearing any clothes!".
There is no effective difference between billionaires buying elections through unlimited donations to Superpacs, and just giving the money directly to the candidate. Yes, Citizens United has some technical legal weaselese language that makes it appear as if the candidate can't be influenced, but do you actually believe that? Seriously, do you believe that they feel no influence from the billionaires donating to their SuperPacs? It's what gets them elected, it's what they write about now. Republicans have articles lamenting how some of them didn't figure out the SuperPac loophole fast enough.
No one is buying what your selling. Citizens United made corporations people at the same time it said money was a form of free speech, and therefore corporations can spend their money freely. This was immediately abused into the complete ludicrous facade of the SuperPac being somehow separate from a candidate.
That's the true idiocy here. Thinking a SuperPac is different, or there is an actual separation between them and the candidate. Money still reaches the candidate, influence is still made. Period.
If we wanted to do something truly intelligent, which it seems you're asking, then we need to completely remove ALL external money from campaigns. Talk about fucking rent-seekers. Why is it that we need to pay billions each year (effectively) to the media to do this at all? WHY does it take billions?
We made the INTERNET. Can we really not figure out how to create a national election platform that is publicly funded that allows all of the candidates equal time and representation? Is that really that impossible? Apparently so, since billionaires couldn't buy elections anymore.
If we can make Facebook, Google, and Amazon we can most certainly make a publicly funded national election platform for the Internet. I'll bet you my pinky toe it could easily clock in at less than a billion per year to run. I'd only lose my toe because of the insanity of government contracts, but that's a whole other mess to speak of. Yes, it would be less than a billion, because IIRC NETFLIX was only spending a bit shy of a billion in operating costs for the entire CDN network they operate for video streaming.
Aside from the Internet, we have some incidental costs allocated towards travel, lodging, food, etc. Again, all of which can be included in a public program. You perform well enough in the caucuses, you're entitled to the public assistance provided to you to travel to the next caucus and be put up in a hotel. What's more impartial than that? Your taxes are supporting ALL candidates equally, including the candidate you may wish to win!
Put a ceiling at 2 billion per year for the whole system, and most of America would gladly pay it right now to get rid of the corrupt influences of the rich upon our democratic process. The 1% has done so much damage to our country and our people, that 2 billion a year is pennies compared to what we've lost as a nation through our apathy and political crapulence. It's for this reason that you see Bernie Sanders performing as well as he has. He DOES talk about doing the things we NEED to do to get this country back on track.
A candidate talking about repealing Citizens United and fighting the corruption of the 1%? Shit, I might actually go out and vote. That's from somebody who has repeatedly said he would never participate in the process for even one of the corrupt seconds it operates.
Technically, lunchtime is at any moment. It's just a wave function.
(Score: 2) by curunir_wolf on Friday February 12 2016, @05:03AM
Your rant is emotionally appealing, but poorly thought out. You've clearly never been involved in any kind of partisan politics or worked with advocacy groups of any kind, or you wouldn't think it was so simple. In fact, just a quick introduction of the current electioneering rules [fec.gov] is enough to point out how naive your viewpoint really is.
There is no effective difference between billionaires buying elections through unlimited donations to Superpacs, and just giving the money directly to the candidate.
There is, in fact, a huge difference in the law, and it all comes down to who can say what. The restriction at issue was a law passed in 2002 (famously the McCain Feingold Campaign Finance Reform) - note it only lasted for 8 years. It said that an "electioneering communication" is any broadcast, cable, or satellite communication that mentioned a candidate within 60 days of a general election or 30 days of a primary, and prohibited expenditures for any such thing by corporations and unions. Citizens United paid for advertisements for "Hillary: The Movie", thus running afoul of the law.
Set aside for just a minute that the Koch Brothers, Donald Trump, or anyone else could broadcast whatever they want to at will under this law without penalty. And forget that anyone involved in the regular programming of any of these communication companies (that is, any of the 5 corporations that own pretty much all broadcast media) can get away with saying whatever they want because they aren't involved in "expenditures" specific to that communication. And don't worry that the campaigns themselves are free to spend whatever campaign funds they want to put on their own advertisements. After all, that's bread and butter for the broadcasters and you'll never see that banned.
What the law effectively did is ban people from pooling their money (remember - the law forbade unions and corporations - even nonprofit corporations like Citizens United) to buy air time for their opinion, if they in any way just mentioned a candidate for federal office. It was really nothing more than an incumbent protection scheme wrapped up in feel-good emotional "get money out of politics" bullshit doublespeak.
But that line that you think is so thin and irrelevant means that we now move into a much broader realm of restrictions on broadcasting, especially your insane idea that the campaign platform is the Internet, and we're going to regulate everything that gets out there, whether it's associated with a campaign or not. Now the FEC's job (and power) has become overwhelmingly huge. Every post, bit of content, article, video, opinion, and tweet on the Internet is associated with an expenditure of some kind. How are they going to police all that? Well, first, we license everyone allowed to put anything on the Internet, then we pre-screen everything that gets posted. Pretty Orwellian if you ask me.
The worst part of your emotional rant, though, is the whole farcical notion that suddenly there are people able to buy elections that never could before. It's simply not playing out. Buying elections was not easy before McCain-Feingold passed in 2002, and it's not easy now that section 203 has been invalidated. In fact, Hillary's campaign, the best funded one this cycle, is floundering, and Bush's campaign, which is also well-funded and actually has more money behind it than Trump's personal wealth, is near the bottom of the pack.
I am a crackpot
(Score: 0) by Anonymous Coward on Friday February 12 2016, @10:02PM
Yeah but what about the smaller elections away from the national glare? Unlimted spending there will seriously bias results.
(Score: 2) by curunir_wolf on Saturday February 13 2016, @01:35PM
You mean like when Eric Cantor's hugely disproportionate spending defeat upstart Dave Brat for Virginia's 7th District ... oh, wait, that's not what happened! Brat's anemic funding was enough to defeat one of the wealthiest campaigns. In a primary in a small district in Virginia.
Money is even less influential in small and local elections, because people are more intimately familiar with the area, the issues, the local folks, and are more difficult to influence with slick advertising and television broadcasts.
I am a crackpot
(Score: 2) by jmorris on Thursday February 11 2016, @09:41PM
Please don't be an idiot. Look at the current elections for a vivid counter factual.
On the Democrat side you have Bernie tearing up the field with almost no money compared to the Clinton Cash Machine.
Meanwhile on the Republican side you have Trump who is a billionaire that isn't actually spending any money to campaign and is dominating the race. Now look closer at IA and NH at who came in first, second and third. In IA you had Cruz, Trump and Rubio. Cruz didn't spend much outside of the cash to organize a ground game (do you oppose organizing?), Trump who spent almost nothing and Rubio who spend more but a lot less than Bush who ended up way down in the pack. In NH it was Trump spending all of $3M, followed by Kasich who didn't have any money to spend and Cruz in third spending $600K. Total spending in NH was said to be $100M so almost all of that was entirely wasted on hopeless candidates.
So explain again how money has corrupted our politics, elections are bought and paid for by the oligarchs and all that other warmed over Marxist twaddle.
Now all that said, I'm entirely in favor of unlimited money in politics because money really is speech. It just shouldn't have be be done through super pacs, let people give unlimited cash directly. Because money does count, and will begin to count more in this campaign as the race goes national. I do not want to live in a world where only billionaires can run because they can self fund. If a multitude want to come together and fund political speech the only legally recognized way to do that is through a corporation so yes, that must be protected speech. What part of "Congress shall make no law..." is beyond your English comprehension skills?
(Score: 1) by PocketSizeSUn on Thursday February 11 2016, @04:14PM
It's worth noting that there are no Umpires in this game (the Umps are helping to game the system actively helping to find loopholes).
(Score: 1) by gOnZo on Friday February 12 2016, @12:59AM
...and how'd you get that, eh? By exploitin' the WORKERS!
By 'anging on to outdated imperialist dogma, which 'as perpetuated the social and economic differences in our society.
If there's ever going to be any progress...
(Obligatory Python quote - constitutional peasants, Quest For the Holy Grail)
(Score: 4, Interesting) by bradley13 on Thursday February 11 2016, @10:51AM
Looked at very simply, the "global economy" is really a shorthand for the collective, overall standard of living. What provides for - or raises - the standard of living? The collective, overall productivity. If people make more stuff, there's more stuff for people to have. We call that "good times" or "economic prosperity".
What restricts or discourages productivity? That's pretty simple, as well: people are generally selfish creatures who want to feel like they get something for their efforts. We'll leave aside the fact that many people would prefer to get something for no effort - that's another discussion altogether.
So how do we encourage people to be productive? By supporting the belief that their productivity benefits them personally - whether that is through a salary, or through return on investment, or through return on entrepreneurial effort. Taking those in reverse order:
- Entrepreneurial effort is currently being destroyed by government over-regulation (which, in turn, is often a result of corporate cronyism). In the US, many of the posts on Coyote Blog [coyoteblog.com] discuss the difficulties a small business owner has with government regulations.
- Return on investment is practically nonexistent, or even negative at the moment. This is primarily due to government debt. Why are interest rates so low? It's not only Keynesian economics, it's also a fact that many governments could not service their debts at normal interest rates. Add to that little things like the new "bail in" rules in Europe, which threaten people's life savings, and you have a horrible climate for investment.
- Which leaves us with salaries. Which are fine, as long as you can find a job. But job creation depends on entrepreneurship and ROI, both of which are in terrible shape at the moment.
tl;dr: Government debt, corporate cronyism and government over-regulation in general.
Just my libertarian 2 cents worth...
Everyone is somebody else's weirdo.
(Score: 0, Flamebait) by Anonymous Coward on Thursday February 11 2016, @11:07AM
enough of that common sense or you'll make liberal and neocon brains explode
(Score: 2) by fritsd on Thursday February 11 2016, @01:22PM
Beyond a certain minimum of existence, that Abraham Maslow described as the bottom of his pyramid, i.e. food, clothing and shelter, [wikipedia.org] there is going to be a diminishing "happiness as a function of money".
Denmark has passed a law that asylum seekers can hand in all their money above a certain minimum, so they're put on an equal footing to Danish natives on the dole. It's harsh, but people *need* to *live*, they don't need to live and be rich. So Denmark provides the bottom rung of Maslow's pyramid, for those whose right to live is not respected in their own country, in exchange for almost all their money. It's an interesting bargain.
The next one is "safety" as in: if you don't have financial or personal security or health then you're under stress and worry, which can be debilitating if it lasts long enough. Just the fact that a safety net exists in your society can be a great psychological help.
We differ a lot in our opinion about how a society should quench this need :-) but money is surely involved at this level of the pyramid.
The newspapers in Western Europe always talk about "the economy" as if it is something that really exists, and as if problems with "the economy" equate to human, societal problems. And by this "the economy" I suspect they mean: economic growth.
But let's look one rung higher on the pyramid, to the levels of "belonging" and "esteem". There are higher levels than that, but sadly most people will never reach them anyway, that's life.
Last year, Pope Francis wrote a readable encyclical where he tried to point out that according to the Catholic Church, or at least its pope, having a job is quite essential.
Not for the money, though. But for the sense of being a respected, *belonging*, *esteemed* member of society. Lemme see if I can find a quote..
Pope Francis, encyclical "Laudato sì", Chapter III par. 124-129 about jobs: (yes, I realize it's a very long quote, but I think it's worth it)
(Score: 2) by sudo rm -rf on Thursday February 11 2016, @04:41PM
Denmark provides the bottom rung of Maslow's pyramid, for those whose right to live is not respected in their own country, in exchange for almost all their money. It's an interesting bargain.
It is absolutely possible that I misunderstood you, but I would call that extortion or sale of indulgences rather than interesting bargain.
(Score: 2) by fritsd on Thursday February 11 2016, @05:08PM
Denmark and Sweden have a problem with nazism, because they were never actually occupied by the Nazis, so it's not "in living memory" what that does to your society's cohesion.
That means, that a political statement like: "those asylum seekers have it *better* than our own people on the dole", is an extremely powerful rallying-call for the far right.
Denmark and Sweden would be a lot worse off than now if the far right got into power (obviously that's just my opinion :-))
So the right-wing government of Denmark has passed this law. They are still loyal ECHR followers, because they allow asylum seekers to live in Denmark, and yet they defuse the argument "those asylum seekers have it better than our own people on the dole", because they can point out that that is no longer true.
Could you please put into words why you think it's an extortion?
(Score: 2) by sudo rm -rf on Friday February 12 2016, @01:08PM
Thanks for the explanation.
I understood that the law mandated refugees to hand in all their money except for a certain minimum for them to get access to the basic ressources of Maslow's pyramid. If that is the case I'd call it extortion, money in exchange for basic human rights (that are not negotiable).
The calls from the far-right that you bring up are very similar to those heard in Germany. A week or two ago some right-winged spokeswoman demanded that it must be allowed to open fire on refugees at the border. The outrage was enormous and even before the last echoes died off, people from most of the political spectrum are now calling for the NATO to take care of it. Hypocrites.
(Score: 5, Interesting) by Thexalon on Thursday February 11 2016, @03:42PM
I have the exact opposite prescription. Here's why:
1. There's a class of really rich people thrashing about trying to find anywhere useful where they can invest their staggering amount of money.
2. There's a ton of work that isn't necessarily short-term profitable and thus isn't happening at the scale it should be: Fixing and improving our infrastructure, educating our young, converting our energy sector to renewable sources, pure scientific research, environmental cleanup, etc.
3. There's millions of people out of work.
So that leads to the following policy prescription: Tax or borrow the money from the really rich people, to hire the people that are out of work, to do the work that should be done but isn't getting done.
My experience with businesses complaining about over-regulation is that nearly all of them are trying to cut corners that shouldn't be cut or even do things that are downright dangerous. Some examples of rule-breaking that I've seen from businesses whose owners were complaining about over-regulation:
- storing credit card numbers and even CVV unencrypted
- storing social security numbers for no reason
- delivering known-faulty products
- spamming
- refusing to pay employees their rightfully earned wages
- using substandard concrete on a road rebuild that had turned into dust and potholes within 2 years of being put in place
- mounting cables incorrectly (this one injured a worker pretty seriously when it broke, exactly as my step-sister the engineer warned them it would)
- storing industrial waste chemicals in containers that leaked into the local water supply, poisoning hundreds of thousands of people
- over-fertilizing farmland near a major river, leading to an entire region's water supply becoming unsafe
And this isn't some sort of white-collar blue-collar thing: For example, a work buddy's husband owns a cement business, and is wildly successful not because he cuts corners but because he's really good at pouring cement. Or my step-brother, who got started working as a clerk in a tiny pet supply shop and now not only owns the business but was able to expand it into a thriving local business. And as someone engaged in some entrepreneurship myself, I can assure you that the regulations have not once interfered with what I was doing.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @09:48PM
Going along with what Thexalon, you're thinking about the economy in terms of supply-side economics [wikipedia.org]. Another way of looking at things is the demand-side. That is, there's lots of people who want things that other people could be producing, but they don't have any money, so instead everyone just sits at home being poor. In the terms you were using, the ROI is low because the potential customers don't have any money.
(Score: 5, Informative) by Anonymous Coward on Thursday February 11 2016, @11:03AM
When Capitalism completely fell on its face the previous time and the Capitalists weren't hiring, FDR put 15 million USAians on the federal payroll.
They rebuilt/built infrastructure.
With working class people having money to spend into the economy, the economy started to recover.
As the Multiplier Effect worked and the businesses started hiring, folks could move from gov't jobs to the private sector.
Over 23 percent of USAians are currently unemployed.
If you're looking to the stock market as being "the economy", you're missing the whole point.
The economy is mostly ordinary folks buying ordinary stuff and there's not a lot of that going on.
After Hoover^W Dubya and his Neoliberal predecessors tanked the economy, what was needed was another FDR.
What we got was Obama--who kept the same bunch of lousy advisors that Dubya had (the bunch who got us into this mess).
What is required is someone in charge who understands what worked before (The New Deal) and what has never worked (sitting on your thumb and waiting for Capitalists to start hiring with a downward spiral still going on).
Bernie seems to want to continue to tinker around the edges.
I hope I'm reading him wrong on that, but I doubt I am.
He's said he wants to put some banksters in prison.
Thats closing the door after the livestock has bolted, but I guess it's better than nothing.
(Props to Iceland who has put 29 in jail so far.)
Green Party candidate Jill Stein has a plan for a Green New Deal.[1] [googleusercontent.com] (orig) [ontheissues.org]
She seems to be the only one that gets it.
[1] Poor use of accessibility features on that page.
You're looking for "a job at a living wage for every American" near the bottom of the page.
-- OriginalOwner_ [soylentnews.org]
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @11:16AM
https://en.wikipedia.org/wiki/Depression_of_1920–21 [wikipedia.org]
"The extent of the deflation was not only large, but large relative to the accompanying decline in real product"
"President Woodrow Wilson's slow response to the depression was criticized by those in the Republican party, catapulting them into the White House under the banner of Warren Harding... However, by the time Harding had called his conference, the country's economy had already shown signs of rebound, and by 1922 was starting the economic boom of the 1920s"
"The essential point about the long ago downturn of 1920-1921 is that... it was the last one that the government didn't attempt to treat with fiscal intervention war with much lower interest rates. In fact the FED, then still wet behind the ears it only had been founded in 1914, actually raised rates in the face of a truly brutal deflation"
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @11:45AM
Yup. I kinda got there with "Neoliberal predecessors"--though that term wouldn't be used for another 30 after Wilson.
A point I left out was how FDR paid for all those gov't jobs.
He took the marginal tax rates on billionaires (another modern word) from the ridiculously low rates of the Harding/Coolidge/Hoover era and got those up to 94 percent (he asked for 100 percent but "settled").
They stayed in that ballpark until after Ike's 2 terms.
There's only so much money someone can spend and, after that, money is just trying to compensate for a small penis.
As we've seen lately, that extra cash is used to manipulate the system even farther in their favor.
-- OriginalOwner_ [soylentnews.org]
(Score: 2) by SanityCheck on Thursday February 11 2016, @04:00PM
Explains why I have little money :( Can I find something else to try to compensate for? Like a barrel chest or no butt?
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @04:03PM
We don't even have to use tax, we could just go hyperinflation if we find a way for property the .1% own not to retain it's value. We would destroy their wealth in short order by printing money to pay people via New New Deal. The debt they own would already become meaningless.
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @08:45PM
the point of highlighting the 1921 depression was that the ebil capitalists helped the economy get out of it in about a year, versus about a decade in the 30's when they are stifled by government bullshit
governments don't help economies out of recessions... they can only cause them and get in the way of those that can help fix them
the answer isn't more government involvement, it's less.... much much less. when the next recession/depression hits, if politicians and central bankers simply sat on their hands, the economy would suffer steep deflation for a little while as imbalances are corrected, and then economic prosperity would have a chance to ensue. when politicians and central bankers try to help everyone by spending and printing, it only makes the imbalances worse and takes the free market longer to correct them
the japanese should have learned this, but they have been infected by the keynesian virus too
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @10:14PM
In your rush to praise Capitalism (which fails repeatedly), you managed to point to an outlier
and completely ignore e.g. the 4-year span from October 1929 to March 1933 when unemployment went to 25 percent and Capitalists were just fine with that as was Republican President Herbert Hoover.
We're currently in our 8th year of the same sort of malaise and about to match that shameful count.
The chief characteristic of Capitalism is its instability and the suffering that causes.
The occasional instances of it quickly self-healing can be counted on 1 hand with fingers left over.
What pulled the USA out of the crapper back then was Keynes'/FDR's "employer of last resort" aka the government.
Without that, we likely would have had another depression of the 1873 - 1896 variety.
-- OriginalOwner_ [soylentnews.org]
(Score: 2, Insightful) by klondike0 on Thursday February 11 2016, @01:52PM
But the US did get something out of the investment -- a decent infrastructure and awesome, illogical things like hiking trails in the Idaho panhandle. The stimulus programs enacted today only seem to underscore the disconnect between how money is used and the actual world. From TFA:
(Score: 3, Insightful) by Anonymous Coward on Thursday February 11 2016, @02:47PM
It could be argued that WW2 ground down the infrastructure of the rest of the world. All that was left was factories in the US. Kinda easy to have a 'recovery' when people can only buy your goods. Things were not so 'peachy' in Germany, Russia, China, and Japan. I think people seem to skip the scope of what WW2 did to everything. It is straight up the broken window fallacy to think hiring 15 million people to shovel dirt did much. It is also the other end of the broken window fallacy to say what happened after WW2 was a good thing. Yeah it is for the guy replacing the broken windows. Not so much for the guy in the shop having to buy a new window...
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @07:39PM
to shovel dirt
AKA rebuild/build public buildings, national parks, roads, waterways, etc.
WRT GP's linked page and his "summarized well" interpretation, there are things that the amateur economist omitted:
- Wartime rationing of goods
People having money and not being able to spend it on anything actually caused a slump in the recovery.
Commenter #2 there mentions rationing.
It also inflated (black market) prices.
The blogger tries to spin a 3-year-plus slump as a positive.
- Millions of men conscripted, exported, and paid poverty wages.
- The Roosevelt Recession of 1937
With the economy noticeably in recovery, FDR allowed himself to be convinced by Wall Streeters (who know amazingly little about Economics yet manage to buffalo a lot of folks) that his ideas had already done all they needed to do and FDR dialed back.
After the economy started to tank again, he wised up and went back to ignoring the Wall Street "experts".
- The contrasting economic policies of Harding, Coolidge, and Hoover (who put the economy into the crapper with short-term "thinking").
-- OriginalOwner_ [soylentnews.org]
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @08:55PM
that's called bribery and corruption, and is even more rampant today
if politicians had an ounce of integrity they wouldn't accept bribes from rich bankers and we'd be all better off
is the rich banker (who we would all assume to be corrupt) really to blame for offering a bribe? or is the politician who is elected and expected to represent the people to blame for taking the bribe?
the problem isn't that there will always be rich people willing to offer money to politicians for special favors, but that the politicians we elect in good faith have too much power to sell to the highest bidder and can't resist making a buck off the back of the taxpayer
corruption in politics is the real issue, and when it happens in other countries we call it deplorable. if only more people could recognize it in their own back yard
(Score: 2) by curunir_wolf on Thursday February 11 2016, @11:18PM
When Capitalism completely fell on its face the previous time and the Capitalists weren't hiring
Back then, the capitalists lost all their money, too, so they didn't have the means to hire anyone. This time, the government took a shit-ton of tax money that the working class paid in and basically gave it to the biggest (err, umm) "Capitalists". A lot of money even went to foreign banks [thenewamerican.com].
Back in FDR's day, capitalism meant you took a risk, and might win or lose. These days, you take a risk, and you win if you're in the win/win/win club, but you lose if you're not. It's rigged by the club (CEO/Regulator/Administrator). People keep calling it capitalism, and claiming it's failed. Capitalism requires the enforcement of a level playing field to have a chance at succeeding, and that vanished a long time ago.
I am a crackpot
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @11:07AM
Finally, the money got accumulated in a place where they cannot produce a high rate profit any more, the banksters and 0.1%-ers won, the rest lost.
The crisis will be over when they'll realize how hollow is their victory, what's the value of it when all the money they got gives them a life them no better then before?
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @11:40AM
There will be the loss of a double digit percentage of the worlds population, and the destruction that leads to this will result in a new golden age of regrowth where the surviving population will enjoy plentiful resources and room for new population growth.
(Score: 2) by curunir_wolf on Thursday February 11 2016, @11:49PM
I am a crackpot
(Score: 3, Insightful) by Anonymous Coward on Thursday February 11 2016, @11:18AM
The system should be stable even when there's no growth.
If it only works when it grows, it's like a pyramid game.
(Score: 1, Insightful) by Anonymous Coward on Thursday February 11 2016, @11:53AM
This is _all_ too true.
The 'belief' that one can have sustained percentage 'growth' forever is false, unfortunately just like winblows taught several generations of computer users that crashing five times a day is normal for an operating system, the 'growth' hawks have managed to teach multiple entire generations that percentage 'growth' rates can be sustained forever.
But the math proves them wrong. Any 'percentage' growth is exponential growth (smaller percentages just flatten the exponential parabola, but it is still parabolic). And any exponential growth will eventually hit that asymptote where the rate of increase exceeds any ability to keep up.
So, in the end, it *is* all just a pyramid game.
(Score: 5, Insightful) by maxwell demon on Thursday February 11 2016, @12:02PM
The problem is that our monetary system forces us into this pyramid scheme. Money is created by credit, and credit means interest, and interest requires growth so you can pay back the loan plus interest.
The Tao of math: The numbers you can count are not the real numbers.
(Score: 2) by acid andy on Thursday February 11 2016, @02:33PM
True. The solution to that (other than negative interest rates - urrrrgh!) would be for everyone to learn to save before they spend. An entrepreneur can't get rich overnight by doing that but it's still possible to skrimp and save for a few years, use that money to build a very small business, then use those profits to build a bigger one. It can be done, but it requires a total change of philosophy that the credit addicted world isn't ready for.
If a cat has kittens, does a rat have rittens, a bat bittens and a mat mittens?
(Score: 2) by acid andy on Thursday February 11 2016, @02:53PM
I realize in a way, describing a scenario of someone building a small business, saving and then replacing it with a bigger one, I've just given another example of continuing growth. It's only growth in that individual context though and it's much slower than if they got a massive loan up front. The entrepreneur would have presumably left a previous job in my scenario to start their business and there's more time for other businesses to die off.
Boundless growth is possible with boundless human population growth, at least until nature's accessible resources run out. That's why the corporate and political elite love population growth, to the detriment of the planet and individual prosperity.
If a cat has kittens, does a rat have rittens, a bat bittens and a mat mittens?
(Score: 1) by dak664 on Thursday February 11 2016, @11:28PM
That solution still uses money, as a means to accumulate IOUs over time so you can trade them later for a chunk of future resources. That presupposes the future has enough surplus to honor those IOUs. Maybe it will, maybe it won't, but a rational guaranteed-to-work way to save is to store something that will have intrinsic value to future people. Energy would be ideal but it can not be easily stored, although one could stockpile energy-intensive commodities like aluminum or ammonium nitrate.
Another suggestion is a system that does not support saving, rather it is structured to force society to live within its means which hopefully increases the general wealth each year as much as or more than a system of fiat money that can be saved for large entrepreneurial endeavors. This could still allow markets and individual consumer choice, what it would not allow is proxy for useful barter and the unproductive zero-sum bets on the first and second time derivatives of the value of the proxies. Using borrowed leverage, for $DIETY's sake.
All this was figured out in the 1930s, see http://www.technocracyinc.org/study-guide/ [technocracyinc.org] where the proposed barter is yearly chits to everyone for the per-capita net energy production of the previous year, for people to spend as they will. But no banks, borrowing, saving, or profit motive (other than possible saving of an excess of useful barter). All big projects would be financed by a sort of energy kickstarter.
Yes I know, That's Not The Way Things Are It Couldn't Possibly Work Any Such Change Would Result In Hell On Earth.
(Score: 2) by curunir_wolf on Friday February 12 2016, @12:00AM
If you're not saving, you're just subsistence living. Using money for that is just an abstraction, but it comes down to the same thing - having a store of value so you're spending a little less than all your time gathering food and securing shelter.
The problem these days is that money is all debt, instead. We've turned the entire abstraction of storing value into a ponzi scheme where we're borrowing from future work (or someone else's). I don't know what the solution is, but I do know that it's not going to come from expanding large bureaucracies.
I am a crackpot
(Score: 1) by dak664 on Friday February 12 2016, @12:47AM
What's wrong with subsistence living? Four hours a day picking fruit and the rest of the time humping? This was mankind for most of history, punctuated by wars to reduce the population during lean years.
Sniff and a tear, then onward and upward for the survivors. Better than everyone starving while sickened by their own wastes.
Possibly intelligent beings could figure out a better way, but that seems way hypothetical at this point.
(Score: 2) by curunir_wolf on Friday February 12 2016, @12:55AM
I am a crackpot
(Score: 3, Insightful) by dmbasso on Thursday February 11 2016, @06:42PM
You make good points, but please don't use words that you don't understand the meaning.
An exponential is *not* a parabola, and neither have asymptotes. Perhaps you wanted to say 'inflexion point' and you were imagining a sigmoid curve or something. These errors trashed what would otherwise be a perfectly good post.
`echo $[0x853204FA81]|tr 0-9 ionbsdeaml`@gmail.com
(Score: 1) by Wodan on Thursday February 11 2016, @12:41PM
That would be true if money had any actual value, but the central banks aim for 2% inflation, so you need to "grow" 2% just to keep your economy the same size.
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @05:04PM
You think it sucks now?!
Try deflation https://en.wikipedia.org/wiki/Deflation [wikipedia.org]
No one will give you a job because they can sit on their cash and not bother with anything.
A small bit of inflation makes money move. With no money movement you think the 1%rs are rich now? Try with deflation. If you have the right amount of cash you can corner pretty much any market you want. Its not even very hard. The robber barons of the late 1800s showed exactly how to do it.
This is what you are talking about https://en.wikipedia.org/wiki/Deflation#Money_supply_side_deflation [wikipedia.org]
2008 was this https://en.wikipedia.org/wiki/Deflation#Credit_deflation [wikipedia.org]
Basically trillions of dollars evaporated overnight. If you want to make someone who owns mountains of debt get a bit anxious this is the way to do it. We are at the mid to beginning stages of another one. You can see it with supply gluts and major transportation companies warning on weak demand.
If you borrow money in any shape or form you want inflation. If you hold onto cash or loan money you want deflation.
Also the 'cycle' is about 8-10 years with inflation/deflation. The Fed is just trying to take off the sting. Honestly Obama and the Fed screwed up. They should have raised interest 3-4 years ago. Now they have little to no wiggle room to cause money to move. They may have to try negative interest rates.
(Score: 2) by curunir_wolf on Friday February 12 2016, @12:24AM
HAHA. I had to LOL at the whole notion of "Credit deflation". What a load of ... sorry, it's just hooey. Don't fear the deflation - it would help us all. Except, that is, the big banks and the .001%'ers.
Actually, we have a pretty instructive microcosm of deflation going on right now - the energy sector. We ALL have an interest in it, because all of us use energy. Some of us a LOT more than others. Who is that helping? Who is it hurting? Yes, the stock market is actually dropping with energy prices tumbling. Why? Are there any equities that are improving? (HINT: yes, there are [yahoo.com]).
I am a crackpot
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @12:39PM
"It appears that the flood of liquidity has disproportionately gone towards creating financial wealth and inflating asset bubbles, rather than strengthening the real economy."
Was this really unexpected? I highly doubt it.
(Score: 4, Interesting) by Anonymous Coward on Thursday February 11 2016, @01:05PM
We're in a balance sheet recession, not an ordinary recession.
An ordinary recession you solve [as a central bank/government] by pumping more money into the economy, traditionally by making the cost of borrowing cheaper. That is the purpose of quantitative easing: increasing the monetary base/base money (liquidity provided by the central bank) will lead to an increase in the money supply (M2) (the amount of money available to the private sector through loans by banks), which will lead to an increase in the number, and amount, of loans and leases taken out by the private sector.
Economic dogma states that when money is [at or near] free, sensible business people will take that money and turn it into a profit; they will NOT shy away and say 'no thanks, no free money for me'. However, that's not what's happening now, or for the past 8 years: the amount/volume of loans [for 2014 ] stood at 105, as compared to a base of 100 in January 2007.
The reason is we're in a balance sheet recession: when the bubble burst in 2008, the balance sheet of quite a number of businesses went underwater, as the assets in which they previously had invested went down, while the amount in loans, taken out to buy those very assets, remained the same. The proper reaction was/is to give happy talks to analysts about how everything is going to work out just fine, while paying down your previous loans like mad and/or massaging [bloomberg.com] your financial statements. If you're asking why companies do not take out loans at the lower rent to pay off previous loans, my guess is that banks [in the same boat, they, what with EU and international expansion, not to mention the blonde on floor 15] also know all of the above, and approving loans will go hand in hand with a slightly more thorough audit these days in comparison to pre-2008.
Typical of a balance sheet recession is that the linear relationship between base money [increase] and money supply/outstanding bank credit is broken: while monetary base for the US had increased to 466 by January 2014 [again, compared to January 2007], money supply M2 had only increased to 146, while loans and leases in bank credit remained practically static at 105. In short, QE is like this massive, heavy, seriously big gun which cannot hit anything further than say, 5 metres, and that is not even on a particular windy day.
If the above makes a bit of sense to you, you might want to read Richard M. Koo's The escape from balance sheet recession and the QE trap; an interview with him is on bondvigilantes, here [bondvigilantes.com]: it all happened before, you know, in Japan [and it hasn't ended yet].
The way to get out of a balance recession is probably through a combination of abolishing QE (neutralisation of this kind of base money supply, in both timing and method, is simply unexplored terrain -- apart from 'the bigger the stick, the bigger the problem' common sense) and an increase in direct government spending: better services (aka direct user subsidization of bus or train services, cheaper health care, more investment in theatres, music festivals, research etcetera with preference to anything that directly makes the consumer feel wealthier and/or more optimistic), better infrastructure (with government spending directed preferentially towards local companies).
All of that, ofcourse, with the biggest tooth paste smile possible or, as one taxi driver put it last time I visited Albania: piano, piano!
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @02:35PM
An interesting theory, seems quite useful for ofscutating the rest of the problem.
It specifically misses:
The crazyness in the financial system and the lack of the holding people responsible, and even rewarding them for doing bad things.
The focus on the FED's bailout towards propping up the crazyness instead of building something with lasting value like infrastructure and supply chains.
The gutting of the middle class by the offshoring of jobs and the supply chain supporting them started by Walmart and progressing to Apple.
The natural law violating social contract asking for equal outcome instead of equal opportunity.
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @03:59PM
You might want to read the entire post -- in your anger you missed the section about how to recover from this type of recession.
Your point 2 is central in such a recovery. Growing, or at least stabilizing, the middle class [and below] is essential as well. The cross-continental supply chain, point 3, is a fact -- increase the price of oil, impose more stringent environmental controls [and subsidize union movements] if you want to make this more expensive; and don't buy Apple. Introduce regulation to prevent importing labour from other countries unless there's a demonstrable need, going beyond labour cost -- we had an article about that here, a couple of months ago: all of which is easier to do in the US than in the EU.
Your point 4 you should clarify: no idea what you mean.
Finally, as to your point 1: true, only small fry has been taken to court -- and even their sentences are being reduced. Would it make things so much better if JP Morgan's CEO would go to jail for, say, 25 years, at this point in time?
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @09:08PM
this is basic keynsianism, and is fundamentally wrong
the flaw is the assumption that if someone saves that someone else must spend
the reason why its flawed is that during a bubble, everyone spends too much and few people save
the notion that after a bubble bursts the increased spending must be maintained by government is just stupid
the reason why the bubble bursts is because people wake up and realize they spent too much and a recession is required to rebuild savings
savings is as important to an economy as debt, because to be able to borrow money someone else has to have saved it (unless you're brainwashed into thinking that QE or fractional reserve banking is a good idea)
a bubble bursts because there has been too much borrowing and spending... not that we need to keep borrowing and spending
if governments borrow and spend it simply moves the problem onto the taxpayer, and if central banks keep interest rates too low for too long it simply inflates another bubble due to the moral hazard of reduced borrowing risk
interest rates need to be higher to promote savings so that money can be lent based on those savings, not based on inflationary policies of central banks
when a bubble bursts and a recession hits, it's not supposed to be gentle or pretty... the purpose is to knock sense into everyone. it's supposed to be a painful realization that the economy has been fucked up and needs restructuring. the process of restructuring can be quick and painful (as in 1920-1921) or if the government gets in the way it can be slow and painful (1929-1939). one way or another the imbalances must be corrected or all you will get is another bubble
(Score: 0) by Anonymous Coward on Friday February 12 2016, @01:15PM
You're making a number of sensible points -- if this was an ordinary recession.
If it was an ordinary recession, I would agree with you: better have a cleansing of companies which don't understand that business is first about making profit, and not about taking out loans for perks, image building and moonshot ventures. Government in this case -- and most other cases (subsidization) apart from environmental, health and worker's rights regulation, and dialog between unions and the private sector -- should get out of the way, and let fools suffer so they might learn.
However, this isn't an ordinary recession. The consensus in 2007 was that the coming crisis was going to be akin to the SE Asian crisis of the end of the '90s aka a rough time, but controllable. What was not expected was that the interbank market -- banks loaning each other money -- was going to freeze up completely, as such an event was nearly unthinkable: only when banks, especially the big boys, and all of them, are in real, real trouble.
A complete interbank market freeze means that the complete financial system stops: in an Internet analogy that would mean that the whole DNS system goes down, together with all major ISPs suffering a concerted blackout. This is something a whole lot different than a recession, even with a big R, where it are mainly companies which are hit -- the GFC [Global Financial Crisis] originated in, and hit the banking system primarily. This wasn't a case of a large number of investors making over-optimistic and wrong investments in companies which wouldn't make a profit: this was (and is) a crisis of trust in the basic financial tools which lubricate the whole system.
(Score: 1, Interesting) by Anonymous Coward on Thursday February 11 2016, @02:21PM
Economic cycles come in about 7 to 8 years. The next recession is a bit overdue (mostly due to China struggling to not let it happen). The fact that we're still doing so bad and haven't fully recovered from the previous recession is due to governments failing to solve the problem.
(Score: 3, Informative) by curunir_wolf on Friday February 12 2016, @12:32AM
I am a crackpot
(Score: 3, Insightful) by inertnet on Thursday February 11 2016, @04:05PM
The powers that be are purposely maintaining inflation between 1 and 2 percent, and they're trying to convince us that it's a good thing. What it actually is is a hidden tax, all your possessions are constantly being diluted. In fact we're all being robbed all the time, little by little.
(Score: 4, Informative) by maxwell demon on Thursday February 11 2016, @04:52PM
Wrong. Only the money loses value. Your house doesn't, nor does any other physical item (unless it loses value for unrelated reasons, like your computer).
The Tao of math: The numbers you can count are not the real numbers.
(Score: 1) by nitehawk214 on Thursday February 11 2016, @10:20PM
Unless you don't own your house, which most people do not.
"Don't you ever miss the days when you used to be nostalgic?" -Loiosh
(Score: 2) by Ken_g6 on Thursday February 11 2016, @05:34PM
Tax companies - and the rich - for everything except directly paying working-class employee salaries. Give them tax breaks for doing that.
(Score: 2) by curunir_wolf on Friday February 12 2016, @12:34AM
I am a crackpot
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @05:40PM
Below written from a solely U.S. perspective.
Furthermore, social transfers, including unemployment benefits, should have allowed households to stabilise their consumption.
Yeah, about that.... Turns out it doesn't work so well when those unemployment benefits run out and one is still unemployed, because the jobs in the category and at the level one was working in have all been offshored and there were only so many management positions to go around. And on top of that the benefits were basically pinched off because the government managers could point to those saying the crisis was over (or, even better, states like Arizona where they voted to "solve" their problems by restricting lifetime safety net benefits even more tightly.)
But even then, more jobs were created consistently! Thus turning formerly productive middle class employees into McDonald's burger flippers.
And the thing is, there's no Emperor of the World position. Asking what the Emperor of the World would do is less than pointless. The President of the United States could help the people of the United States by stopping the selling of the U.S. lifeblood away to multinational corporations under "free trade" agreements, for starters. But that would only affect the lives of the little people and almost certainly be political suicide.
(Score: 2, Informative) by dak664 on Thursday February 11 2016, @06:35PM
Our over-consuming, over-elaborate economy requires around five times the energy return on energy invested to continue business as usual. When the real EROEI dropped enough to start hurting around 2008, money was created to loan to energy producers, which allowed increasing resources for exploration and drilling but at the expense of the rest of the economy. That caused a cooling of demand, a drop in price, bankruptcy of those companies, and the current glut of oil we are enjoying (some of which is because those bankruptcies have returned a portion of the oil being extracted to general consumption instead of continued production).
It's a typical boom and bust, but in this case the next boom will be very different. The EROEI is not there for another cycle of overproduction.
JM Greer has it bang on, http://thearchdruidreport.blogspot.com/2016/02/whatever-happened-to-peak-oil.html [blogspot.com]
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @07:13PM
Please think about submitting that as a soylent article (sorry I'm out of modpoints). Or, if I haven't found it in the submissions by tomorrow, then I'll do it unless I forget:-)
Whatever happened to Peak Oil?
fritsd
PS have you read "the long descent"? Fascinating stuff.
(Score: 0, Insightful) by Anonymous Coward on Thursday February 11 2016, @06:38PM
The very political party that the geeks love is what is holding back the economy. Kick the fucking democrats to the curb especially Bernie Sanders.
(Score: 4, Insightful) by jmorris on Thursday February 11 2016, @06:45PM
The solution to our problems is entirely obvious so the fact nobody will consider it means the powerful prefer the current situation.
There have been many schools of economic thought, early Capitalists like Adam Smith, Communists like Marx, the Keynesians, Freidman and the Chicago School. But the Austrians are the only ones who can actually explain our situation AND show an obvious solution.
The unnatural interest rates cause malinvestment which causes economic inefficiency which accumulates until the economy seizes up; at which point the bad investments must be cleared before growth can resume. We refuse to allow that, doubling down on lowering interest rates, QE, helicopter money drops, whatever we can think of to avoid that pain. So we never hit bottom but we can't recover either. Look around and see if that isn't what you see?
Then we double down and pay people to not work. There aren't "jobs Americans won't do" there are "jobs we pay Americans more to sit on their plush butts more than the job pays" so we can import future voters from Socialist countries to do them.
The answer to economic growth is painfully simple. Sound money and the rule of law. We have neither. Too big to fail should be too big to exist. The public corporation is our problem, they grow and grow, absorbing all in their path until they become so large that their idiocy threatens the entire economic system, at which point they are declared "too big to fail" and merge with the government in that the government will cover any loss while the shareholders and high officers still get the profits. The government, of course, gets what it wants, the ability to largely direct the economy. This form of society has been tried before. Italy, Germany, etc. Didn't end well last time either.
(Score: 5, Interesting) by Thexalon on Friday February 12 2016, @12:08AM
The Keynesians, contrary to what you believe, do have a perfectly clear explanation for both the recession and how to fix it.
The explanation goes like this:
1. When poor people get money, they tend to spend it immediately on stuff they need. When rich people get money, they tend to save most of it because they don't need to spend it on stuff and a man can only consume so much (e.g. wearing at most 1 necktie at a time). People in the middle tend to spend some and save some. This concept is called the "Marginal Propensity to Consume", or MPC.
2. The total amount of money that people want to spend rather than save is called "Aggregate Demand".
3. Businesses hire primarily in response to increased demand for products they can manufacture - they need more capacity in R&D, production, distribution, and sales based on a market opportunity driven by demand. And likewise, they lay off in response to a drop in sales a.k.a. a reduced demand for their products.
4. If income and wealth get too concentrated among the rich, then the poor (who are both about 1000 times more people, and with a higher MPC) don't have as much to spend, which lowers demand, which causes businesses to lay off people or at least not hire more, which causes even lower demand, in a vicious cycle.
5. Debt crises make things even worse: demand drops even more than simple wealth concentration because everyone is now trying to repay their loans rather than buy products.
Points 4 and 5 are the 1-2 punch that make the Great Recession much worse than, say, the S&L crisis.
6. That makes the correct policy response in bad times to be the government hiring mostly poor and middle-class people, at respectable income levels so they have some disposable income.
7. But where can the government get the money to follow that prescription? By taxing or borrowing it from the rich people that aren't spending it. And this is the part that's absolutely impossible politically in the US.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @07:45PM
The problem is letting private central banks be the sole printer of your currency. Hint: The Fed is not owned by the government, it's a private bank. Neither is the Bank of England belonging to the English.
If the country can create bonds, it should be able to print currency directly.
We need to bring back Lincoln's Greenbacks. That way the government can print more money and pay for jobs programs rather than be stuck when the private central banks decide to stop buying bonds in order to suppress the economy. They create these boom and bust cycles to buy up wealth for pennies on the dollar. They then use their leverage and monopoly on currency printing to keep the economy shit until they force the government to sign laws that benefit these bankers but don't benefit the nation's people at all.
They'll cause wars if the country resists and tries to keep the currency nationalized. [youtube.com] This is the real reason why the world went to war in WWI. The same thing happened again in WWII: Germany freed themselves from the central banking cartel. Commies in poland started abusing and killing Germans along the border (the land was taken from Germany after WWI). Hitler went in to end the genocide of Germans, and this was used by the banking cartel as the excuse to start WWII.
Same shit happened in Iraq, and Libya, and Syria, and next will be Iran.
Would you like to know more? [youtube.com]
(Score: 0) by Anonymous Coward on Friday February 12 2016, @07:27AM
Neither is the Bank of England belonging to the English.
Its complicated.
The Bank of England was a private company. Then the post-war Labour government nationalised it, taking it into government control. (In exchange for unusual government bonds which pay 4% - for ever.)
Much later there was a publicity campaign claiming that the current government was using the Bank to irresponsibly make the economy seem better just before elections. So the Bank should be impartially run for the permanent non-partisan benefit of the economy. To do this an independent holding company, the Bank of England "Nominees" Ltd. was set up and the shares of the Bank of England were transferred in, so it could guide the Bank without government meddling. Now, the directors of all companies must be listed on their available-to-the-public registration at Companys' House. Except one, which was covered under the Official Secrets Act. Can you guess which one? And "was covered", well, that record is now non-existant since the company is "inactive".
(Score: 1) by Linatux on Thursday February 11 2016, @08:56PM
Everyone's played the game - someone gets everything and everyone else loses. The End
(Score: 0) by Anonymous Coward on Thursday February 11 2016, @10:50PM
An important part that is typically missing when oldsters teach youngsters how that game is played is making a big deal at the end of the game showing that everything goes back in the box.
The next time, everyone starts over on an even footing.
Even more important is noting that that's NOT the way it works in real-life Capitalism (inter-generational wealth).
-- OriginalOwner_ [soylentnews.org]
(Score: 2) by fritsd on Friday February 12 2016, @11:02AM
I think I read something about that; wasn't that some kind of American/Canadian invention, called a Potlach [wikipedia.org]?
We're so used to thinking in terms of economic systems with "money" and "economic growth"..
(Score: 0) by Anonymous Coward on Friday February 12 2016, @08:52PM
Potlatch is voluntary; not so much a reset as a chance to show off.
It seems to relate to Noblesse Oblige [wikipedia.org] (something we don't see a lot of these days).
Another word that sorta relates is Jubilee. [wikipedia.org]
Words that I associate with intergenerational wealth are inheritance, sloth, nepotism, aristocracy, caste, clique, and dynasty.
-- OriginalOwner_ [soylentnews.org]
(Score: 2) by istartedi on Thursday February 11 2016, @10:16PM
Hopefully history is just rhyming, not repeating. We are in competitive devaluation. The same thing happened during the Great Depression. Countries abandoned the gold standard and weakened their currency. It didn't work, and it caused businesses and governments to engage in the same kind of pointless mucking around. Eventually major trading partners agreed to fix their exchange rates [wikipedia.org]. In theory that would allow them to pursue other policy measures without having to worry about currency fluctuation. The currency is just a yard-stick. It's hard to create growth when the yard-sticks keep getting longer and shorter. Unfortunately, war intervened so we never really got to see how this would work. Europe's and Asia's infrastructure was demolished, and the era of USA economic domination began with Bretton-Woods. When that broke in the early 70s, US domination continued even though the currency is fiat. Now we're finally back to about 1936 again, with different trading partners playing a much larger role, and being on a USDollar standard instead of a gold standard so. That's why it's a rhyme, not a repeat.
First things first. Major trading partners--G7 at least, should agree to fix their currencies against a basket such as the SDRs. With stable yard-sticks, we can measure growth in a sane way and figure out what works. It's important that nations not be restricted too much in their economic policy beyond exchange rates. That way we can see what works and what may or may not translate to other economies.
Leaders may need to stop chanting the mantra of Free Trade--as it stands, currency manipulation is just a kind of tariff anyway, and holding out the promise of FT and then manipulating it away seems worse in some ways than an honest tariff. Duplicating industry in multiple nations will actually stimulate the global economy--building two chip fabs may not be "efficient" in the minds of some economists; but it would be for workers in the countries that lost those jobs, and it would also be of strategic value to nations that re-gain industry.
Artificial job creation and industrial redundancy isn't a long-term solution though. Buggy-whips and all that. As productivity increases, developed nations with persistent employment problems should consider shortening their work weeks and raising wages so that you get the same pay for less work. Most companies would rather hire an extra worker than pay their existing workers overtime on Friday. This would generate the kind of "wage-price spiral" inflation that central bankers were hoping to create. As long as it doesn't get out of control, it could actually be healthy. The late 1970s were rough for my family, but only for a short time. After wages adjusted for the inflation, rising property values and double-digit CD rates helped us a lot. My candy bars cost twice as much, but I could tell my parents were better off.
The future can be 3-days work weeks or WW3. It's up to us.
Appended to the end of comments you post. Max: 120 chars.
(Score: 2) by legont on Friday February 12 2016, @12:42AM
While I could argue with some of your points, I totally agree with the main one. The future is either work-weeks getting shorter or WWIII. Nothing in between is possible. My bet? There will be blood.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 3, Informative) by http on Thursday February 11 2016, @11:22PM
Hammurabi (and later, Leviticus) made it quite clear that making your living from simply having money was, if left unchecked, a detriment to society.
I browse at -1 when I have mod points. It's unsettling.