Productivity and Objective Reality

According to right-wing conservatives, the stagflationary trend we have now can be attributed to low productivity. The reason value is consolidated in the top one-percent of income class is because the tax rate is too progressive. If the tax rate is more regressive, they say, capital will distribute and GDP will rise because the rent will be lower.

Regressive taxation models an elitist philosophy of the risk assessment: the more money you have the less the risk. The working model essentially works like this: When facebook's IPO, for example, is suddenly not such a good buy afterall, people that have the most money are alerted before the market opens and everybody else discovers objective reality (the price) after the detriment (the risk) has been applied (converted into a cash reward). The risk distributes by classification to conserve the distribution of the reward at the expense of everybody else, just like a more regressive tax code will do.

According to Romney and Ryan, the poor are too rich and the rich are too poor (up is down and down is up, just like in the stock market), and they plan to fix that with a more regressive tax burden, adding to the supply of capital for economic growth and debt reduction.

Essentially, for the rich, the rent is much lower with a more regressive tax burden, but it raises the rent for 99 percent of consumers who are then less able to demand the supply. (Remember that the capacity to demand in the marketplace raises the rent. A high degree of income distribution not only demands supply and productivity but productive propriety. See articles on proprietary risk on this website.) The accumulation of supply is then used as evidence that capitalism adds supply, which is a fraud (an impropriety).

(Facebook's IPO was diluted with additional shares after a lot of hype that gave the appearance of strong demand. When the demand wasn't there to support the price, essentially because the money to demand it is too consolidated, confidence was lost, but the value accumulated was not, just like what happens in the real economy. It is a confidence game...you know, what criminals do to rook people out of their money.)

In the real economy, supply is added only to suggest strong demand (capitalism doesn't really want strong demand because it demands propriety). The suggested demand supports the price against real, declining demand (the Enron effect just like in speculative markets), allowing a rising supply to be sold at high-demand prices, which is supposed to be unnatural (i.e., improper).

(We see here how economics technically functions with natural philosophy. Many of our most notable founders, and Adam Smith, for example, based their philosophy on what they observed in nature. Some of our founders were members of secret societies because they were empiricists, persecuted for questioning the absolute truth of caesaropapal power and Aristotelian logic.

The more empirical ethic of our founders is in opposition to the Aristotelian logic that Ayn Rand, for example, favors as being more representative of our founding philosophy. Romney and Ryan favor Rand's political-economic philosophy because using empirical analyses readily reveals the Romney-Ryan plan to be complete garbage! It is a philosophy of risk that belongs on the trash heap of disconfirmed hypotheses.

Continuing to use a plan that always fails to work as expected is highly improper--i.e., completely unnatural and inherently unstable. It is a product of ignorance that Mason's, for example, consider to be the ultimate evil--what a free market will not tolerate by confirmation if the market is not allowed to verifiably consolidate and result in the instability we have now.

When the marketplace becomes so consolidated that firms are too big to fail, and the Ivy-League solution is to ignore the "too big" dimension and allow for failure because it efficiently manages the marketplace by ensuring the crisis to be avoided, a reasonable person can only question the empirical value of the technical objective.

Obviously, the risk needs to be de-consolidated, not more consolidated, if safety and soundness is the real objective. If we want to allow for failure, obviously it is impractical to allow firms to be "too big" to fail.

If low inflation and high employment is the empirical measure of success, what we are doing now is a dismal failure. The Ivy-League alternative, the Romney-Ryan plan, will extend and reinforce technical failure clearly indicated with empirical measures.

When supply increases, the oversupply can be geometrically confirmed with the relative price. Price naturally falls, or disinflates, to confirm, or indicate, the oversupply, and if it doesn't, something is wrong and will be verified with, for example, a deflationary crisis that will surely result in a declining rate of profit if not supported with debt or some other form of redistribution.

Inflation, understand, is not the result of too much money chasing too few goods, but overconsolidation of the capital--too much money bidding up oversupply against declining consumption due to unemployment, or overproduction.)

An accumulating supply and high prices suggest high productivity, but the objective reality is that supply is being added because income is too consolidated to demand it. When income becomes highly consolidated, prices are pulled up to where the demand is, not pushed up with income distributed to a more productive workforce that, with rising unemployment, is less likely to buy at any price.

Value surplussed and consolidated does not substitute for the reduced distribution of demand (income). (Remember that the crisis proportion is not the surplussing of value but its consolidation. When it becomes too big to fail, the capital becomes irrationally short term and self-retributive.) Instead, the surplus value (the capital) is used to push up prices in speculative markets. Profit margins are not the product of consumer demand, but speculative demand, which adds to declining consumer demand and accumulates risk into a systemic, crisis (gamma-risk) dimension (the opportunity for private equity firms to capitalize on the detriment, which is attributed to cyclical, market forces).

An accumulation of risk occurs with speculative demand. Supply accumulates with slowing consumer demand against rising prices to create a volatile, beta-risk environment.

In the beta-risk dimension, the risk is arbitraged (swapped for cash value in highly exclusive, "dark" markets) with complex risk-timing-and-transfer devices (derivatives) like credit-default swaps. This is where the risk is transferred for its classified consumption and transforms into political, gamma risk.

The risk goes gamma (and becomes highly unstable) because consumers do not directly participate to determine the outcome, like in a free market, despite being told that their fate is the result of self-determination. Instead their fate is swapped for cash value (net worth is cashed out in the form of private equity that Romney so admires as the American dream come true) as the credit consumed to self-determine (to make demands in the marketplace) is forced into default.

Since the accumulated capital is not used to reduce unemployment, but pushes prices up against an accumulating supply (which accumulates risk-value in the form of debt), the result is overproduction. The slow economy (and the debt that accumulates to demand the supply at high prices--the risk to be reduced and the value, or detriment, thus produced to be consumed) is then blamed on low productivity.

Attributing overproduction to low productivity is not objective reality, however, which misprices the risk (essentially because it is supposed to be in reduction, not accumulation), and because the risk is managed with economy-of-scale efficiency (making markets) as per efficient-markets theory, the error of fundamental attribution accumulates into a politically unstable (too-big-to-fail) gamma-risk proportion that is evermore likely to fail.

Low productivity (unemployment) is the effect, not the cause of overproduction, just like high debt (demanding supply) does not cause low GDP, low GDP (no income to demand the accumulating supply) causes high debt.

Temporal fallacies are integral to the fraud that perpetrates through efficient-markets theory, having a risk-timing-and-transfer effect that operates with error of fundamental attribution. If there is only the appearance of a free market, then the differential between the fraud and objective reality can be structured to time and transfer risk with a calculated complexity that suggests free-market mechanics.

Complex, arcane interaction of monetary-fiscal policy and corporate practices are represented as a free market efficiently managed to maximize pursuit of the the American dream. It makes it look like fate is a function of probability, and thus inculpable, when it really isn't.

When buyers and sellers meet, trying to overprice their interest to the detriment of the other party, the vice of self-interest is transformed into the Pareto-optimal virtue of risk-value legitimately determined with free and open interaction. If by chance, for example, labor cannot sell its supply at any price due to a macro-risk proportion, the detriment, and the benefit derived, is a function of probable risk. Timing is the determinant, and if you consume the detriment, well, that's just life. In other words, the distributive value is ontological and non-retributive.

It is no coincidence, however, that millions of Americans lost half their net worth, and lost their jobs only to be rehired at half the price in a so-called recovery, in pursuit of the American dream. The value lost became private equity poised to buy distressed assets (to capitalize on, or benefit from, the detriment). These assets are timed to transfer risk-value and transform the value (the stuff of the American dream) into the capacity to command the marketplace with efficiency, and we see the effect of this consolidated power (the power to determine our selves like the king, which is the aristocratic, Hamiltonian, Romney-Ryan version of the American dream) in every aspect of economic life.

If market participants are trying to measure the value of facebook's IPO, for example, retail investors have to consider the source of the risk, and transposing cause with effect is a fatal error. The technicals fail when high concentrations of consolidated capital can "make the market" on command, which is a fundamental error of attribution.

Markets are not supposed to produce profits on command with a post-hoc legitimacy, but attributed to consumers who make the market productive, ad-hoc, on demand. The marketplace is supposed to be self-determined by consumers, not pre-determined by producers who then argue the value produced is demanded, or determined, by consumers when the price to be paid, or the value rented back, post hoc, to consume the product is in the form of accumulated debt.

If the relationship between production and consumption is disintegrated by consolidation of the capital, the marketplace can be, and is, rationalized, post hoc, to meet supply with demand and bring buyers and sellers together with what is claimed to be the integrity of a legitimately determined price. Reintegration is then the opportunity to derive value referred to as "making the market more efficient" with, supposedly, ad-hoc self-determination.

After the fact has been accomplished, with the distribution having been, presumably, self-determined, a battery of babbling barristers are retained to confabulate a post-hoc legitimacy of the risk. With all manner of mindless chatter (like a mocking bird that instinctively rattles off a continuous repertoire of songs that mocks objective reality), the value derived from the detriment gains an integral attribution, post hoc, by arguing the shared benefit of maintaining coherent rules that govern the possession of private property as a public good, without which the liberty to legally and properly dispossess it will surely perish.

Market makers make it look like cause is effect to make trade-based value transfers (a technique criminals use to launder illicit funds) look legitimately earned. With technical manipulation of market mechanics that investors use to predict the value of the risk, market makers can make it appear that something has value when it doesn't and vice-a-versa.

Transposing cause and effect misprices the risk and the difference is the vig that insiders use to manipulate the technical indicators with both massive volume and high frequency trading. Keep in mind, as well, that making markets is explicitly legal. It is encouraged by Dodd-Frank to provide maximum liquidity for financial markets.

It is absolutely essential to understand that positive law (supposedly derived from natural law that postulates markets--based on objective, empirical observation--naturally consolidate to reduce risk) is applied to maximize financing for the accumulation of the risk to be avoided. Dodd-Fank explicitly supports (by objective) the big, consolidated, accumulated proportion that determines the direction of the risk and positions most Americans (the American dream) for its adverse possession whether you are an investor or not.

Pricing the recent facebook IPO, for example, supposedly derives from the technicals--natural laws like supply-demand. The IPO was rigged so that an oversupply of shares were sold at a premium price with retail investors, due to a technical failure, complaining that they were left in the dark. Then, in the light of day, the value of the IPO quickly lost 12% of its value the next open.

The 12% is not "lost," it is, technically, retributive value that a free-market ensures is equitably shared in priority, not in posteriori where the equity is distributed by administrative authority. The business model (efficient management of markets, or efficient-markets theory) fits the deliberate intent to sell high supply at low supply prices on command, which is a fraud, and fraud is a crime.

Market prices are legitimately determined on demand, not command. If command is the determinant, and a free market is said to determine the distribution of risk-value, a fraud has been knowingly and willingly perpetrated, which is a crime. Prosecution will not occur, however, because perpetration of this fraud (creating facebook and having big-daddy-war-bucks overprice it with consolidated wealth and power) is the American dream (the objective that defines what reality is).

Implicit to efficient-markets theory is that the objective of the managers aligns with the vast majority of Americans. In the case of the facebook IPO, what was good for Morgan Stanley and all the insiders (who are about one percent) is the self-interest of everybody else. This "objective reality" supposedly exists in both the political and economic dimensions because it represents the popular vote, and in both, it is up to elite authority to determine what that is and best represent self-interest, with efficiency, in the marketplace. According to right-wing reactionaries, for example, class warfare is a false construction of reality--there is no value to be retributed because our self-interest is aligned (fully assumed) in the marketplace, and Mark Zuckerberg proves that "everybody has a fair shot."

When Romney claims his private equity experience qualifies him to be president, he is implicitly saying that the objective (the incentive to act in self-interest) is properly aligned with the general welfare, just like the interests of private equity managers are aligned with its shareholders.

In reality, then, cutting debt by reducing spending and broadening the tax base (austerity) keeps the American dream alive, which makes us more productive. The creators of facebook, however, keep in mind, relied on debt to create the product and the wealth being consumed. It was not the product of austerity--it was not the product of depriving, but providing facile resources for creative innovation incubated in a higher education environment.

Reducing debt with a more regressive tax code will not add GDP. It will not increase productivity as Romney and Ryan say it will. Instead, it will increase the demand for debt (the risk supposedly being avoided). It will raise the rent and push the stagflationary trend into deflation, which for the vast majority of Americans destroys the dream by objective (by default) to create value for property owners--shareholders like Mitt Romney in the form of private equity.

(Plutocrats learned not to make the mistake the king made. Allowing your subjects to own property so that they will be more productive renders the power of self-determination. The objective of productive value becomes more readily retributive, like in a free market.

In order to maintain power it is necessary to efficiently manage markets and organize the inherent political risk to validate the need for elite authority to command the risk. This organized tautology has the pretense of a risk ontology, appearing to have the value of empirical confirmation derived from natural law, but it is a fraud perpetrated by transforming the value into positive law.

When the liquidity of the vast majority of Americans is trapped into detriment, the law is very positive about the disposition of the negative value. Debt--the liquidity required to own property, or the rent to be paid--is naturally transformed into its adverse repossession, confirming the value of its natural possessor.)

While stagflation is always a long way from full employment at competitive prices (disinflation), it is always just a stone's throw away from the opportunity to consolidate even more wealth and power (the fully assumed risk of loss) by default (deflation).

(Remember, nature--objective reality, the fully assumed risk of loss--does not care if we are too ignorant or arrogant to recognize and correct for fundamental attribution error, and if we persist in error, allowing it to accumulate, the error will, inevitably, unavoidably, correct with a catastrophic proportion of accumulated risk referred to as "the gamma risk." Yes, we are self-determined, and allowing risk to objectively accumulate into self-retributive value is just crazy!

Constructing predictive models without including the retributive value can result in, for example, a sudden, $2 billion loss at a major bank. Being too-big-to-fail, remember, means that the business model, with the missing value, creates the opportunity to consolidate wealth--the income--needed to demand the supply. So, you see, the value is not "lost." It is never lost. The risk is always conserved by nature in one form or another, and nature does not care if big, self-satisfied capitalists are too arrogant to admit that they cannot command nature by making demands in the marketplace. They are mere mortals like everybody else, and when demands are made, they know very well, in a free market, they can be rejected--that is, they can be disciplined to accept the demands of others to make a profit, which is exactly "the risk" capitalists want to avoid.

Consolidating risk to control it on command is what business economists refer to as efficient-markets theory. It is a business model for reducing the risk by creating "synergies." The model, however, does not reduce risk, it transfers it...it transforms it into detriment for its classified consumption, forming the basis for class warfare to retribute, or reintegrate, the "lost" value.

Risk avoidance is falsely referred to as reduction by creating synergies, which is nothing but horizontal and vertical integration to network the externalities. Supposedly, the synergies make us more productive by, primarily, dis-integrating labor and productivity, which means, objectively, there is not enough value distributed to consume the value produced; and when supply accumulates along with unemployment, labor is falsely accused of being unproductive.

The contradiction technically indicates a disintegration of value that capitalism does not want to admit because the solution is obviously to reintegrate the value--or deconsolidate the risk. This means the rulers are subordinated to the ruled in the marketplace on demand, which according to business economists, without creating synergies, is the model of inefficiency.)

It is important to understand that business economists deliberately attribute value derived (the marginal profit) to integral value. Objectively, however, the value is derived from dis-integral value. As long as the working model of productive efficiency operates with this objective failure, cyclical crises (overproduction) will always present as objective reality. Problems like inflation and/or unemployment never resolve but are continuously transformed (recycled) into what only appears to be our natural condition by default.

Treating value that is derived as being integral is a technique for legitimizing the application of the risk. Saying, for example, that the Fed is keeping interest rates artificially low is to attribute our problems to action that derives from application of the risk.

Interest rates are low because unemployment is too high. There is a deliberate, technical failure that occurs that does not identify value integral to productivity. Instead, it is identified as value derived so that productivity does not depend on the value imparted to labor (remembering that plutocrats learned not to make the same mistake the king made--instead of allowing the risk to go plural, the risk is allowed to go gamma, which demands command authority).

Value to be consumed does not derive from capital, it derives from labor. Policies and programs, like the Romney-Ryan plan, that reverse this fundamental attribution results in technical failure. Raising interest rates against rising unemployment, for example, is sure to result in a depression and a declining rate of profit.

It's hard to make a profit when the objective is to accumulate all the value (the labor) needed to demand it in reality.

Unemployment (hording labor value) accumulates capital--the savings (the austerity) needed to keep interest rates low like they are. Productivity is not the missing value. The value missing is the employment needed to demand productivity.