The biggest myth about current economic problems is that historical precedents have much value for understanding them. The next biggest myth is that the problems primarily have to do with difficulties in the financial system. The other big myth is that they are part of some short tem business cycle. The reality is that the post World War II era is winding down in a period of unprecedented change. Several different threads of that change that are difficult to factor are the primary agents creating global economic problems. Certainly the role of automation in ushering in post industrial society is one big factor. So is the global competition from the arrival of most of the world's population into the industrial age. Another factor is less certain, but perhaps more basic. That is the possibility that endless economic growth is not really a human priority. Japan may be the more realistic model of human behavior that is satisfied with some level of reasonable economic well being....After the goldrush: between the 1970s and now there has been almost no growth in real wages, whilst the growth in returns on capital have been almost exponential. People felt their standard of living was rising because of almost unlimited credit. That credit has gone. This has left industries, both manufacturing and service, that are in effect crack addicts. Nobody will borrow personally again until growth returns.. People need to be paid more. That way they'll spend all that money on the wonderful things the rich get richer by making and doing. Companies can either strip costs until their markets are dead, or invest in their wet skills through higher pay....
Of course we need to fix the causes of this crisis, but that is going to do bugger all in the short-medium term to fix symptoms. "The attempt to solve a crisis caused by credit with even more credit has, predictably enough, proved a failure. It has been a bit like the motorist desperately pumping air into a tyre with a slow puncture: it works for a while, but eventually the tyre goes flat again."
Nonsense. A fallacy in place of a reasoned argument. 'Debt caused the problem so debt can't solve it' is based on the fallacy that all debt is equally bad. The problem is not the amount of debt but who holds it - governments with their own currencies paying record low levels of interest vs private individuals and businesses who are depressing the economy by all de-leveraging at once. The former is absolutely sustainable at much higher levels than at present - and the use of this debt to produce stimulus the only obvious way out of this crisis that doesn't take years and condemn millions to the scrapheap. (Of course, if you're unlucky enough to be under the Euro, you are doubly screwed: not only is this path not an option - as the ECB won't back your debt sufficiently to make it sustainable - you can't even devalue.)
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CE SPUNE JIGODIA CARE A PUS EVCONOMIA PE BUTUCI : Guvernatorul Băncii Naţionale a României (BNR), Mugur Isărescu, a atras atenţia, luni, că tensiunile politice din prezent dăunează puternic percepţiei externe a ţării noastre, iar politicienii care nu pot să dezvolte dialogul ar trebui să plece acasă şi să nu scoată populaţia din casă.
Domnia sa a declarat: "Folosesc cuvintele unui foarte bun prieten al României, personalitate în lumea finanţelor, care mi-a spus chiar aşa: «Măi, voi chiar nu aveţi ce să faceţi?» Aşa judecă lumea, şi nu trebuie uitat că lumea aceasta este formată din pieţe de unde România ia sume importante ca să-şi finanţeze deficitul bugetar şi ca să meargă mai departe pentru a plăti salarii, pensii. Deci, aici nu e vorba de o joacă a BNR şi de o interferenţă. Aici este vorba de a transmite semnale foarte clare că această ţară trebuie să meargă înainte, instituţiile trebuie să-şi facă datoria. Fiecare trebuie să-şi facă datoria, iar în materie de finanţe... CE SECATURA !!!
16.19 monti warned of break up unless cost of borrowing is reduced. How about reducing borrowing? Probably too simplistic, I know, but I cannot spend money I don't have. Blaming Europe removes the responsibility from the individual countries, so it makes sense to give that responsibility back to each state. Then without the burden of a superstate to support, maybe finances can get back into proportion.
All these billions of euros shuffling about would be surreal if it were not for the hardship brought down on millions of people.
Ben Bernanke, the chairman of the Federal Reserve, has said that official economic data may mask the "struggle" that many Americans face."
Similarly for the UK and elsewhere?
The realisation of Orwell's "Ministry of Truth"?
And, what other aspects of 1984 are also happening now...... or shortly?
Is it time for a rethink on the dubious advantages of free-market capitalism, that euphemism used by the Us and UK governments for the reality, ie. "corporate capitalism", which has brought the western developed countries to their knees?
In a special report on state capitalism last January, the Economist admitted that “the era of free-market triumphalism has come to a juddering halt.” Liberal capitalism in Britain and the United States isn’t just convulsed with internal crises caused by unregulated financiers. It now faced “a potent alternative”: state capitalism, which has on its side one of the world’s biggest economies — China — and some of its most powerful companies — Russia’s Gazprom OAO, China Mobile, DP World, and Emirates Airline. “Across much of the developing world,” Bloomberg Businessweek recently reported, “state capitalism — in which the state either owns companies or plays a major role in supporting or directing them — is replacing the free market.” From 2004 through 2009, the article points out, “120 state-owned companies made their debut on the Forbes list of the world’s largest corporations, while 250 private companies fell off it.”Shouldn't we now be following what the vastly more successful, developing, countries are doing?
Then there would be no more need for the US and UK to massage the figures, in a vain, and widely disbelieved, attempt to maintain economic confidence?
Different days, different conditions, different problems. mainly resulting from WW2 and the over-riding need for national policies and direction in aid of the wartime and post-wartime economies.
We now have corporatism, which has proved itself a vehicle for picking the pockets of the less-well off to line those of the wealthy, including top managers. It has created private monopolies and oligopolies. It has also been the main driver of our current economic problems and the disaster that will surely follow.
Please read about Japan's state involvement, plus those of the developing economies.
There is a pressing need for changed thinking.
I hope that the Greeks will never repay a penny, in or out of the eurozone, so that's where Europe went very wrong-they presumed that keeping them in the euro with two consecutive bailouts will enable Greece to start paying off their debbts.
Only they never intended to so-their political agenda from the start was to promise Europe anything Europe wanted to hear and that they will pay their debts -but that was a lie to get the 300 billion in bailouts.
Only just Europe realised that it had been used and abused.......and will not see a single penny back from Greece.
The Greeks are laughing all the way to the bank to cash in that famous German checks.
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