Wednesday, March 3, 2010

Job Creation and Organizational Complexity

Trillion dollar bailouts caused by an economy overleveraged by trillions of dollars has made job creation so salient the master-mind Ivy Leaguers who engineered the Great Recession now have to consider how to reinvent a recovery.

Engineering huge profits and a record consolidation of wealth despite declining demand is a monumental feat of Nobel-Prize proportion. The great mind that devises the scheme for creating jobs without actually creating jobs is due to win the prize for the most complex practical modeling ever conceived. It will make Tyco Brahe's retrograde motion look like basic math.

Quantitative masterminding is what gets us into these messes. It will not get us out, but will add more complexity which, the truth be told, is the master plan.

How it is that a massive, quantum bailout did not result in an improving economy, but an economy projected to get worse, is mired in a complexity we are not allowed to credibly talk about except in the most technically indirect ways. We can talk about point-scoring or any number of other abstruse quanta until we are drawn into a hypnotic, soporific stupor, prepared to accept unemployment and recession as a positive economic force, building an immunity, a tolerance, to what ails us, making us stronger; but not this time.

Depsite "dark markets," the effects are bright as day and have solicited the undivided attention of the masses perfectly capable of knowing when they are being needlessly distracted and bamboozled with questionable quanta of empirical, objective value.

Unemployment consolidates the capital gained into wealth, or private property that does not have the status of capital till it is used to expand the economy and create jobs.

As long as jobs are not created the capital can continue being converted and consolidated into wealth (private property). Property of the jobless, including savings, is converted into capital to be reinvested (redistributed, recycled) without a redistributon of an original accumulation of wealth and value that is inflated. That inflated value is used for the distribution necessary to create jobs that pays the inflated value and, if not more important, the rising tax burden. The remaining value is safely conserved, undistributed wealth (and power to command and control the macro trend).

The value lost through unemployment is gained in the form of capital and converted into private property. Part of that converted value, imbedded in all manner of cryptically descriptive, quantitative analyses, is consolidated into permanent property. It becomes accumulated wealth that can be reconverted into the power to accumulate more wealth. It is a cyclical algorythm, a recurrent process that, over time, is cumulatively steeped in quantitative, and organizational, complexity. It masks the simplicity of the cause-effect relationship between the value created and to whom the value accumulates.

The trick is to not have to liquidate wealth and, therefore, risk it in the form of capital to effect economic growth that creates jobs. The goal is to keep capital consolidated in the form of permanent wealth that cannot be risked, or lost in a free marketplace.

The best way to eliminate alpha risk is to eliminate the free market and create (organize) a barrier that only allows access to capital (the value that creates jobs) on favorable terms that keeps the wealth consolidated. An organized complexity results that minimizes if not eliminates the risk to
accumulated wealth and power.

Without the complexity, the value of unemployment gains retributive value. There is, however, a point of diminishing returns in which the cumulative mass, the quanta, is so overaccumulated that the value must be retributed.

Accumulated retributive value has a gamma risk that cannot be avoided. The risk will not reduce, but increase with added orders of complexity. The value must be redeemed in order to conserve the means of distributive power and, more important, the moral legitimacy--the ethical distribution--of productive value. That ethical value is not only a moral sentiment, but also represents a practical, distributive value, a realpolitique, that ensures public health, safety, and welfare.

It becomes readily apparent that unemployment produces useable value. If that value is not used for productive purpose (the demand--the distribution--that fuels economic growth), despite whatever cryptic quanta may be attached (like a value point score on each dollar cut from the marginal tax rate or cut from the budget returning more than a dollar in revenue, for example, that is both absurdly too good to be true and always suffers an unobjective verification), the probability that more accumulated value can be lost than won becomes equally apparent. The trend will be reversed to conserve the power to retribute the value and control the ontological risk.

A "jobless recovery becomes a more secular "jobs recovery" when a loss to accumulated value gains a probable gamma-risk. The accumulation phase will stop and reverse to hedge the risk.

The useable value unemployment produces can take many transitional forms. Hiding in the labyrinth of a technically structured complexity, the cost and benefit is carefully dissembled to demonstrate the distributive outcome as a net benefit to the unemployed, literally banking on the ignorance of the masses.

While mainstream economists refer to unemployment as the tendency to hord employment in hard economic times (never mind, of course, that it causes hard times if that value is not invested in employment but horded in dark markets accumulating inflated value with a huge systemic risk), the unemployed see the value being horded to make someone else rich at their expense. It is not seen as a means of enhancing their value in the future, as the mainstream analytic suggests, but to diminish it in order to elevate someone else.

Rather than a Jeffersonian self-determination, the actual scenario of unemployment perfectly fits the Hamiltonian model of distributive justice: ensuring the welfare of the rich in priority ensures the general welfare.

So, as the budget deficit grows ever larger to finance the value lost to the elite in priority without the unemployed starving in the streets as beneficiaries, the employed must shoulder the tax burden of that benefit. It is argued to be a systemic ontology. It is a requirement since taxing the rich removes the capital from the marketplace necessary to create the jobs that must be sacrificed to create the jobs that must be sacrificed. It means they will also lose their jobs if they do not pay the tax burden because the model in operation requires jobs be horded to produce investment value--capital.

The employed, then, by dictate of the elitist model in operaton must pay a greater share of taxes proportionate to income than the upper income class in order to keep their jobs and not suffer being demoted to a lower class status--being on welfare.

Jobs are not created to relieve unemployment but to take on the increasing pressure for a progressive tax burden. It must be prevented at all cost to conserve the means of accumulating value, wealth, and power. It is worth the distribution (the capital) necessary to relieve the pressure because it will avoid empirically testing the regressive tax-burden hypothesis which is that it ensures economic growth. That expansion will occur to perpetuate the problem (the boom-bust cycle) with the illusion of empirically confirming the regressive-burden hypothesis by not having tested the probable cure.

There will be clever attempts at simplicity, like the "job sharing" scheme. Despite its apparent simplicity it is confounding because it is a symptomatic treatment, and when used instead of a cure, the disease and the diagnoses become evermore complex and a matter of opinion.

Let's say, for example, you have a chronic headache. "Two aspirin...call me in the morning." The remedy cycles over and over again. It keeps the patient coming back but there is a point of inflexion where the patient realizes the remedy just recycles the problem. The doctor's credibility is diminished and must come up with a better remedy or, at least a different one (and most certainly not a cure) to keep the patient coming back.

The doctor is likely to come up with a remedy with a longer cycle, but the headache comes back with less resistance to the pain. It is necessary to inflate the dosage. The inflation becomes cost prohibitive and so the remedy recycles to "take two and call me in the morning."

Without introducing a cure, the remedy must be innovated. Instead of a red pill, a blue pill. Instead of the blue pill, the red pill. These shorter termed sub-cycles can be varied enough to prevent introduction of a cure till the next generation of patients ready to begin a new macro cycle with all the values conserved.

Increasing pressure for a more progressive tax code rather than tax and budget cuts will strongly indicate the distribution required for significant job creation and a quick recovery.

The cure for that chronic headache: "progressively" apply tax pressure to the accumulus monetus locus (where the value is accumulated).

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