Keynesian economics was an innovation for organizing production so that growth, success in the marketplace, could still be measured by the profit margin in the classical economic sense.
Monetarism allows the measure of legitimate success of the classical model into the neo-classical world of managing cyclical crisis that does not necessarilly produce legitimately pluralistic, free-market results measured by the profit. It allows for maximum profit with minimal growth, and a way to "successfully" manage the instability that causes.
The promise of the new technique for stabilizing the economy was to calibrate the money supply as needed to control inflation with growth, what a free market will achieve on its own if the capital, industry and markets are not allowed to consolidate.
If capital is always available for investment in profitable markets (buying the greed), the economy can grow with adequate supply to control inflation, and that added supply requires full employment, thus, full employment with low inflation. The effect is a declining rate of profits and return on investment that minimizes an accumulation of wealth and an income-class distinction. Aspiring to the "ruling class" requires a return on investment ensuring a free-market economic through the monetary system denies.
Monetarism was invented to largely stabilize the business cycle of a consolidated capital. It was not invented to finance the competition, but to provide liquidity (interbank lending) when the capital becomes so consolidated that it locks up and has nowhere else to go but to be redistributed to the consumer (spreading the wealth around) to reduce the inventory of overproduction. Rather than finance the competition, causing full employment with low inflation, the recovery is monetized (trickled down) through the central bank system and the treasury, allowing the consolidated capital--the problem--to persist.
The process of economic stimulation and stabilization we have now is the "monetizing of the debt" so that it is not quite as obvious that the business cycle operates to consolidate the capital. Consolidation is antithetical to a free-market legitimacy in which power is sufficiently pluralized to be self-correcting and requires little need for government regulatory authority.
Since monetarism is not used to pluralize, but stabilize the marketplace, there is a big demand for government. That demand has evolved in favor of consolidation of the marketplace, so we have The People's tax money being given to a healthy bank (PNC Bank) to buy an unhealthy bank (National City Bank). Public finance, and the power of legitimacy it represents, is used to consolidate, and not just the accumulated capital. The return on the investment comes in the form of the interest paid on the public debt which, you may have noticed, is a perpetual-debt (leveraging) machine that grows infinitely if it is paid with a regressive tax code.
Keynesian monetarism is easily switched to finance a genuine free-market economic system. The way it is being used now to keep the capital, industry and markets consolidated through an unstable business cycle, "the switch" will eventually become the socialist alternative.
Avoiding a global liquidity crisis, and general instability, is entirely possible. It is time for the political will to do it.
Obama/Biden 2008!
Showing posts with label Economic Stabilization Act of 2008. Show all posts
Showing posts with label Economic Stabilization Act of 2008. Show all posts
Saturday, October 25, 2008
Tuesday, October 14, 2008
The Passive Investor
Bush, Paulson and company, and that includes John McCain in that company, say that the government's passive investment in the critically decisive economic sector of finance is not a long term commitment.
The rhetoric is laughable. Validation of a system of finance with a commitment to returning it to its former condition as soon as we are out of the crisis it creates is an absolute farce! Should we laugh or cry with this deliberate ignorance, avoidance, of the empirical method of verifiable hypothesis?
The trickle-down hypothesis and the consolidation of wealth into organized entities too big to fail does not even remotely resemble the free-market capitalism these neo-conservatives say works by, not allowing for it.
One very famous classical economist said that the farcical contradictions of capitalism will indicate change to a socialist legitimacy of government--a switch from state capitalism (not a free market) to state socialism (not a free market). In both cases the critical element of freedom is compromised for the greater good, the General Welfare.
For those that think socialism cannot happen because consolidated capital is too powerful, we see very clearly the strong tendency for consolidated power to switch its legitimacy to maintain a bureaucratic relevance to its clientele in order to survive. This is the bureaucratic model of power combined with the task of administering the political economy (the capital).
Empowering the bureaucracy with the primary task of ensuring a free and unconsolidated marketplace in priority, of keeping the means of power unconsolidated, is an easily testable, verified, hypothesis and a practical alternative to the other two classical alternatives that we erroneously think is the inevitable fate of our freedom.
Considering that details of the buy-in Action Plan do not exclude the possibility of the taxpayer paying the shareholders a dividend by determination of its directors, effectively paying the corporate to receive the bail-out money, and that the decision would not include the government, The People, as passive investor, effectively suggests Hamiltonianism isn't dead yet. If the legitimacy of the socialist solution can be corrupted, this is exactly where it would start, by directive.
The rhetoric is laughable. Validation of a system of finance with a commitment to returning it to its former condition as soon as we are out of the crisis it creates is an absolute farce! Should we laugh or cry with this deliberate ignorance, avoidance, of the empirical method of verifiable hypothesis?
The trickle-down hypothesis and the consolidation of wealth into organized entities too big to fail does not even remotely resemble the free-market capitalism these neo-conservatives say works by, not allowing for it.
One very famous classical economist said that the farcical contradictions of capitalism will indicate change to a socialist legitimacy of government--a switch from state capitalism (not a free market) to state socialism (not a free market). In both cases the critical element of freedom is compromised for the greater good, the General Welfare.
For those that think socialism cannot happen because consolidated capital is too powerful, we see very clearly the strong tendency for consolidated power to switch its legitimacy to maintain a bureaucratic relevance to its clientele in order to survive. This is the bureaucratic model of power combined with the task of administering the political economy (the capital).
Empowering the bureaucracy with the primary task of ensuring a free and unconsolidated marketplace in priority, of keeping the means of power unconsolidated, is an easily testable, verified, hypothesis and a practical alternative to the other two classical alternatives that we erroneously think is the inevitable fate of our freedom.
Considering that details of the buy-in Action Plan do not exclude the possibility of the taxpayer paying the shareholders a dividend by determination of its directors, effectively paying the corporate to receive the bail-out money, and that the decision would not include the government, The People, as passive investor, effectively suggests Hamiltonianism isn't dead yet. If the legitimacy of the socialist solution can be corrupted, this is exactly where it would start, by directive.
Wednesday, October 8, 2008
Obscure Tax Modification
In recent articles I have advocated recapitalization of the financial sector from the bottom up, pluralizing the marketplace to keep everybody honest, accountable, at competitive prices like a free-market economics verifiably does.
The opposite is being done.
Last week, for example, the IRS made a significant change to bank accounting rules that allows a bank that acquires another bank with bad debt to immediately write down the debt and write it off its current tax liability.
A front-loaded tax credit is being used to encourage consolidation of the financial industry to "recapitalize" it. This little-known modification will encourage the problem--consolidation of the capital--by selling it as part of the solution to remove the toxic-debt from the "system."
Not only will it encourage the problem, but it will put the burden, the cost, of the problem on the taxpayer--The People. It fits the Hamiltonian model, the "system," perfectly.
The taxpayer, by definition, will not be the consolidated capital. It is being "credited" for causing the problem. So the benefit trickles up, the cost trickles down, and The People are dependant on a financial system that is increasingly too big to fail, which results in high-risk leveraging that causes the problem.
Just as obscure is a provision in the Stabilization Act that makes any agreements that restrict merger and acquisitions unenforceable, making the probability for consolidation of the financial sector--just the opposite of what we need--all but certain.
Being made to pay the perpetrators of what ails us to peprpetrate some more is completely perverse, and that it is with the force and legitimacy of public authority is an absolute outrage! This is government for plundering The People!
Fixing the problem with more of the problem does not instill confidence!
The opposite is being done.
Last week, for example, the IRS made a significant change to bank accounting rules that allows a bank that acquires another bank with bad debt to immediately write down the debt and write it off its current tax liability.
A front-loaded tax credit is being used to encourage consolidation of the financial industry to "recapitalize" it. This little-known modification will encourage the problem--consolidation of the capital--by selling it as part of the solution to remove the toxic-debt from the "system."
Not only will it encourage the problem, but it will put the burden, the cost, of the problem on the taxpayer--The People. It fits the Hamiltonian model, the "system," perfectly.
The taxpayer, by definition, will not be the consolidated capital. It is being "credited" for causing the problem. So the benefit trickles up, the cost trickles down, and The People are dependant on a financial system that is increasingly too big to fail, which results in high-risk leveraging that causes the problem.
Just as obscure is a provision in the Stabilization Act that makes any agreements that restrict merger and acquisitions unenforceable, making the probability for consolidation of the financial sector--just the opposite of what we need--all but certain.
Being made to pay the perpetrators of what ails us to peprpetrate some more is completely perverse, and that it is with the force and legitimacy of public authority is an absolute outrage! This is government for plundering The People!
Fixing the problem with more of the problem does not instill confidence!
Monday, October 6, 2008
Taking the Loss, Recapitalize the Gain
An Economic Reconstruction Act
Our economy needs reconstruction, not just stabilization.
I am hearing from policymakers that the Stabilization Act is just the first step to economic recovery. This just means that the recovery phase of the cycle is being hastened. The problem will be kept intact to cycle into crisis again, and again. That needs to change.
We can start changing it now. We do not need to wait and systematically forget about the problematic elements of our economy that causes cyclical crisis like, a regressive tax code, budget deficits, and an over-leveraged, over-consolidated capital. Reverse these causal elements of crisis and we will be squarely, surely, on the road to reconstrucitng our economy for reliable stability both now and in the future.
The beneficiaries of the over-leveraged capital need to take the loss directly. The gain needs to be directed into recapitalizing the financial markets fpr a competitive multiplicity that is disinflationary (competitive prices), rather than deflationary (leveraging speculative demand), and keep everybody honest. If you are not up to snuff, if you can't be trusted to do the right thing, YOU WILL FAIL! Success will be by following the dictates of the marketplace (the legitimacy of the collective will), not by dictating the collective will in the marketplace to fulfill the self-interest of a small power elite.
Now is the time to exercise the political will--the Constitutional Right and Duty--for reconstruction of power and political economy.
Our economy needs reconstruction, not just stabilization.
I am hearing from policymakers that the Stabilization Act is just the first step to economic recovery. This just means that the recovery phase of the cycle is being hastened. The problem will be kept intact to cycle into crisis again, and again. That needs to change.
We can start changing it now. We do not need to wait and systematically forget about the problematic elements of our economy that causes cyclical crisis like, a regressive tax code, budget deficits, and an over-leveraged, over-consolidated capital. Reverse these causal elements of crisis and we will be squarely, surely, on the road to reconstrucitng our economy for reliable stability both now and in the future.
The beneficiaries of the over-leveraged capital need to take the loss directly. The gain needs to be directed into recapitalizing the financial markets fpr a competitive multiplicity that is disinflationary (competitive prices), rather than deflationary (leveraging speculative demand), and keep everybody honest. If you are not up to snuff, if you can't be trusted to do the right thing, YOU WILL FAIL! Success will be by following the dictates of the marketplace (the legitimacy of the collective will), not by dictating the collective will in the marketplace to fulfill the self-interest of a small power elite.
Now is the time to exercise the political will--the Constitutional Right and Duty--for reconstruction of power and political economy.
Friday, October 3, 2008
Psychology of Acting to Stabilize the Economy
It is critical to give careful attention to normative rules of rationality and problem solving here.
It is clear to all of us that we face a condition of uncertainty that is being described as a crisis of confidence in the financial, credit market.
Uncertain conditions lead to irrationality of what psychologists call an availability heuristic, or what a person is likely to verifiably and reliably know to be the problem and an appropriate solution.
For the most part, the public generally feels that problems are too complex and largely out of its hands anyway. It is exactly what an elitist form of government and model of power intends to achieve. Do not succumb to this psychological modeling in which an elitist bias is falsely described as the collective will.
When we make inferences from the available evidence, for example, we tend to reason with representative samples, like a stereotype. There is a tendency to mistake the more generally inclusive properties as being more probable than the more specific.
In the case of our economic stability, we generally infer that "We The People" is representative of macro economic decisions made by elits. While elits are included in the concept of The People, their exclusive, specific self-interest is falsely inferred to be the General Welfare because it is the result of a generally inclusive public process.
In the same way, do not judge the veracity of economic analysis in theory or practice by representative sample and similarity. Just because the wealthy argue the general health of the economy is represented by their economic well being, it is not reasonable to infer that policies and programs that promote their specific welfare is the General Welfare. It is a mistake to reason that the more inclusive property is more probable than the more specific: that passing the bailout bill is a more probable positive event because it includes the extension of credit to everyone.
It is unreasonable to infer that the harm to The People will be more inclusive and extensive if the stabilization legislation is not enacted. This is called the anchoring effect. The harm is overstated to determine the level of acceptance by suggestion of an unconfirmed hypothesis based on prior beliefs and experiences (the harm being experiencing now despite belief in the policies promised to be beneficial).
In order to reasonably assess the risk, it is necessary to determine if the expected value of the gamble is equal to the sure thing. We all tend to predictably avoid a dead loss and assess the risk as reasonable by accepting a lesser loss to avoid a sure loss. By being risk averse in a condition of high uncertainty with dire consequences, accepting the stabilization act will avoid the possibility of a sure loss and keep the possibility for a stabilization when the probable values are equal and status quo.
By intuitively miscalculating the probable odds, there is a dread factor aasociated with the unfamiliar. There is a tendency to calculate risk with the most available impression of the odds and the easiest assessment. While we all know that overextending credit leads to bankruptcy, it seems that not bailing out Wall Street will be the more harmful probable event because it would be more catastrophic.
To preserve unity and harmony of the nation toward the conservation of traditional means and ends of the power structure (the elitist model), it is necessary to instill the value of us all being in crisis together, and a process of group thinking. Critics of the stabilization act should be self-censored in the public interest so that a lack of criticism is assumed to be the collective will of a popular consent.
Instilling the sense of the necessity for a group think also minimizes the zero-sum properties of the negotiating process. It is necessary for the outcome of the stabilization act not to appear zero-sum in order for it to have proper legitimacy of public authority, avoiding the appearance of conflict resolution instead of a consent of the governed.
The perceived inequity of the stabilization act resulted in some very loud protest of The People, and there is a significant element of cognitive dissonance built into passage of the bill. Socializing either a benefit or a detriment conflicts with belief in the operation of markets, free or not. A change must be made to accomodate what is believed, or what is to be done.
The change needed here to eliminate the dissonance is to choose freedom.
Let it be a free and unconsolidated marketplace in priority.
Let it be a legitimate collective will of The People appropriately rewarding the righteous and the unrighteous toward a peaceful and prosperous body politic that the dictates of power can only crudely approximate.
Very best wishes.
It is clear to all of us that we face a condition of uncertainty that is being described as a crisis of confidence in the financial, credit market.
Uncertain conditions lead to irrationality of what psychologists call an availability heuristic, or what a person is likely to verifiably and reliably know to be the problem and an appropriate solution.
For the most part, the public generally feels that problems are too complex and largely out of its hands anyway. It is exactly what an elitist form of government and model of power intends to achieve. Do not succumb to this psychological modeling in which an elitist bias is falsely described as the collective will.
When we make inferences from the available evidence, for example, we tend to reason with representative samples, like a stereotype. There is a tendency to mistake the more generally inclusive properties as being more probable than the more specific.
In the case of our economic stability, we generally infer that "We The People" is representative of macro economic decisions made by elits. While elits are included in the concept of The People, their exclusive, specific self-interest is falsely inferred to be the General Welfare because it is the result of a generally inclusive public process.
In the same way, do not judge the veracity of economic analysis in theory or practice by representative sample and similarity. Just because the wealthy argue the general health of the economy is represented by their economic well being, it is not reasonable to infer that policies and programs that promote their specific welfare is the General Welfare. It is a mistake to reason that the more inclusive property is more probable than the more specific: that passing the bailout bill is a more probable positive event because it includes the extension of credit to everyone.
It is unreasonable to infer that the harm to The People will be more inclusive and extensive if the stabilization legislation is not enacted. This is called the anchoring effect. The harm is overstated to determine the level of acceptance by suggestion of an unconfirmed hypothesis based on prior beliefs and experiences (the harm being experiencing now despite belief in the policies promised to be beneficial).
In order to reasonably assess the risk, it is necessary to determine if the expected value of the gamble is equal to the sure thing. We all tend to predictably avoid a dead loss and assess the risk as reasonable by accepting a lesser loss to avoid a sure loss. By being risk averse in a condition of high uncertainty with dire consequences, accepting the stabilization act will avoid the possibility of a sure loss and keep the possibility for a stabilization when the probable values are equal and status quo.
By intuitively miscalculating the probable odds, there is a dread factor aasociated with the unfamiliar. There is a tendency to calculate risk with the most available impression of the odds and the easiest assessment. While we all know that overextending credit leads to bankruptcy, it seems that not bailing out Wall Street will be the more harmful probable event because it would be more catastrophic.
To preserve unity and harmony of the nation toward the conservation of traditional means and ends of the power structure (the elitist model), it is necessary to instill the value of us all being in crisis together, and a process of group thinking. Critics of the stabilization act should be self-censored in the public interest so that a lack of criticism is assumed to be the collective will of a popular consent.
Instilling the sense of the necessity for a group think also minimizes the zero-sum properties of the negotiating process. It is necessary for the outcome of the stabilization act not to appear zero-sum in order for it to have proper legitimacy of public authority, avoiding the appearance of conflict resolution instead of a consent of the governed.
The perceived inequity of the stabilization act resulted in some very loud protest of The People, and there is a significant element of cognitive dissonance built into passage of the bill. Socializing either a benefit or a detriment conflicts with belief in the operation of markets, free or not. A change must be made to accomodate what is believed, or what is to be done.
The change needed here to eliminate the dissonance is to choose freedom.
Let it be a free and unconsolidated marketplace in priority.
Let it be a legitimate collective will of The People appropriately rewarding the righteous and the unrighteous toward a peaceful and prosperous body politic that the dictates of power can only crudely approximate.
Very best wishes.
Thursday, October 2, 2008
The Volume Data
Use of the volume data is what the hedgees, the leverage kings of private equity, don't want you to know because it smacks of rigging the market--of causing market prices rather than predicting them, which would be price manipulation, and that is illegal.
The volume data is a secondary, or lower level, analytical indicator used by hedge fund managers to predict, if not cause, buy and sell points on the trage according to who owns what when.
You know the old Wall Street saying: the market can wait longer than you have money. The hedgee can wait till you have to sell to stop and reverse a trend, lure the investor into chasing the value, indicated by the volume, and then deflate it with a massive money flow that leaves the investor on the negative side of the trend. The result is a consolidation of capital into the accounts of consolidated capital.
Take the Wal-Mart business model, for example. It is predatory based on volume discounting, and even if it means you may have to take a loss, all that matters is that you bankrupt, consolidate, the competition. The result is a gain (a loss) that is sold as "Always the Lowest Proces in Town."
The same model is utilized by the hedgees that manage consolidated capital. They will gain long by making the small investor, like the samll retailer, weather a negative trend that is caused by a high volume inequity on the bid and short selling. The hedgee can afford the loss for the gain of dispossessing the competition and consolidating the capital. This is largely accomplished with volume data indicators and high volume market activity that the small 401k investor is virtually no match for.
The only thing the small investor can do is monitor money flow indicators for buy and sell points so to not always be on the wrong side of the market or spooked into selling at a loss (the consolidated value) typically with volume at a bid that forces at least a 20% decline in value.
Now, understand, this model is applied on the macro-economic scale of business cycle dynamics as well. The current financial crisis, the liquidity crisis, is part and parcel of the hedgees operational model to capitalize on the move from traditional pension funds, and the PFGC is bankrupt, to the 401k and the like.
While there are more sophisticated high-tech means, all the Hedgee has to do to figure the who owns how much of what when is, the hedge fund capital minus the total capital equals the amount to be consolidated, or to shake out.
At the macro-economic level, economic recovery will not be allowed to occur till at least 70% of the unconsolidated capital (savings) is shook out, or repossessed. This is much more sophisticated through an indirect market mechanism, all be it not a free market mechanism, than just raiding your pension fund, and the government's guarantee is bankrupt now anyway. This technique has the elegance of a false collective legitimacy. It only loses its legitimacy when the market participants figure out that it is not a free market when there is an inequitable bid ever present and operational, causing market prices rather than predicting them.
Understand further that the bailout legislation will not reverse the macro trend, it will sustain it to allow for maximum consolidation of the wealth. A recovery will not occur until you are empirically determined to be sufficiently dispossessed,
The legislation is nothing but a Wall Street bail out.
The bail out needs to be a recapitalization in YOUR self-interest.
The volume data is a secondary, or lower level, analytical indicator used by hedge fund managers to predict, if not cause, buy and sell points on the trage according to who owns what when.
You know the old Wall Street saying: the market can wait longer than you have money. The hedgee can wait till you have to sell to stop and reverse a trend, lure the investor into chasing the value, indicated by the volume, and then deflate it with a massive money flow that leaves the investor on the negative side of the trend. The result is a consolidation of capital into the accounts of consolidated capital.
Take the Wal-Mart business model, for example. It is predatory based on volume discounting, and even if it means you may have to take a loss, all that matters is that you bankrupt, consolidate, the competition. The result is a gain (a loss) that is sold as "Always the Lowest Proces in Town."
The same model is utilized by the hedgees that manage consolidated capital. They will gain long by making the small investor, like the samll retailer, weather a negative trend that is caused by a high volume inequity on the bid and short selling. The hedgee can afford the loss for the gain of dispossessing the competition and consolidating the capital. This is largely accomplished with volume data indicators and high volume market activity that the small 401k investor is virtually no match for.
The only thing the small investor can do is monitor money flow indicators for buy and sell points so to not always be on the wrong side of the market or spooked into selling at a loss (the consolidated value) typically with volume at a bid that forces at least a 20% decline in value.
Now, understand, this model is applied on the macro-economic scale of business cycle dynamics as well. The current financial crisis, the liquidity crisis, is part and parcel of the hedgees operational model to capitalize on the move from traditional pension funds, and the PFGC is bankrupt, to the 401k and the like.
While there are more sophisticated high-tech means, all the Hedgee has to do to figure the who owns how much of what when is, the hedge fund capital minus the total capital equals the amount to be consolidated, or to shake out.
At the macro-economic level, economic recovery will not be allowed to occur till at least 70% of the unconsolidated capital (savings) is shook out, or repossessed. This is much more sophisticated through an indirect market mechanism, all be it not a free market mechanism, than just raiding your pension fund, and the government's guarantee is bankrupt now anyway. This technique has the elegance of a false collective legitimacy. It only loses its legitimacy when the market participants figure out that it is not a free market when there is an inequitable bid ever present and operational, causing market prices rather than predicting them.
Understand further that the bailout legislation will not reverse the macro trend, it will sustain it to allow for maximum consolidation of the wealth. A recovery will not occur until you are empirically determined to be sufficiently dispossessed,
The legislation is nothing but a Wall Street bail out.
The bail out needs to be a recapitalization in YOUR self-interest.
Declining Profits
Classical economics describes the current phase of the business cycle as the declining rate of profits in which there was so much investment in supplying a profitable market that the result is overproduction.
The declining rate of profit is a condition of diminishing return in which the capital is so consolidated there is nothing left to feed the profit, which describes the financial crisis we have now.
Neo-classically, the rate of decline is characterized with a de-leveraging of a mature, overconsolidation of industry and markets, and especially with an overaccumulation and surplusing of capital in the financial sector. Hedge funding, or leveraging financials, is so profitable it is the compelling demand of money for profit, and any financial manager that can be considered sophisticated is doing it. The overproduction--the inability to repay the leverge without printing more money (inflation)--is a deleverage phase that is a highly negative effect on the real economy that already suffers a suboptimal investment with the leverage finance.
The deflationary trend, and the declining rate of profit, is magnified. The result is general demand reduction, less available credit needed in a credit economy, unemployment and recession.
The inflationary dimension will be controlled by demand reduction and is classic overproduction that causes crisis like the Great Depression. There is less need now for the Fed to raise rates to deflate the economy (control demand and cause overproduction). The Fed is likely to lower rates to support real estate prices, which accounts for at least 70 percent of the leverage, and the deleverage.
Lowering interest rates along with socializing the worthless assets of leverage finance will resart the leveraging cycle. This will deepen the crisis before regulatory reform and legislative action can occur to control it in lieu of a free market mechanism. The economy will improve, but then get much worse because credit, what the credit economy of a consolidated capital is dependant on, will already be tight and will crowd out growth (real economy supply-side) investment even more. While it will not result in classic depression, it will cause a deep and prolonged recession and tremendous hardship for "classes" that are not the upper class.
Causing and verifying extreme class hierarchy (a crisis of disequilibrium), of course, is what classical and neo-classical economics is designed to do if capital and markets are allowed to consolidate: to create and confirm class distinction with deprivation, or classic overproduction that is now neo-classic deficiency of available credit for real economy growth and the demand (the optimal distribution of income) it produces to drive the world economy.
This macro economic dynamic is essential for the small 401K investor to realize and understand. Ideologically it is not favorable to realize the cycle of deprivation because the legitimacy of the consolidated marketplace is the value of limiting the risk. That limit, however is realized in class distinction that is confirmed in a detrimental deflationary trend and a spreading of risk that is our current legislated, financial bailout on worthless assets now owned, socialized, by The People. It is state capitalism with The People being assigned, leveraged into, all the risk and all the detriment in class distinction (the Hamiltonian model of political economy).
The stabilization act will just make the problem worse for 401k investors because it is not designed to support your financial interest. It is to support the leveraged, neo-classical, financial cycle that looks to consolidate your assets to pay the return on the leverage that is profit without growth--deflation, recession.
The phase of the business cycle we are now in is defined by declining profits which is indicated, confirmed, by the data. It just gets worse going forward, and the stabilization legislation will just provide a brief bounce.
The worsening trend is avoidable, the entire crisis is avoidable, but the market is rigged to make the same mistake, to algorythmically recur the cost and the benefit (an exclusive class benefit), over and over in a cycle.
Quick reversal of the deflationary trend and a real economic stabilization that is not for an exclusive benefit comes in the form of recapitalizing the benefit of leverage finance from the ground up. That will be a benefit for exeryone and will be a confirmation of "we The People" as meaning we are genuinely all in this together rather than a few take the benefit and the majority take the cost in support of class distinction.
If the financial elite are to enjoy the benefit up, they can take the loss down by redistributing the profit to The People that will reward their investment with the profit of economic growth and economic health.
Very best wishes.
The declining rate of profit is a condition of diminishing return in which the capital is so consolidated there is nothing left to feed the profit, which describes the financial crisis we have now.
Neo-classically, the rate of decline is characterized with a de-leveraging of a mature, overconsolidation of industry and markets, and especially with an overaccumulation and surplusing of capital in the financial sector. Hedge funding, or leveraging financials, is so profitable it is the compelling demand of money for profit, and any financial manager that can be considered sophisticated is doing it. The overproduction--the inability to repay the leverge without printing more money (inflation)--is a deleverage phase that is a highly negative effect on the real economy that already suffers a suboptimal investment with the leverage finance.
The deflationary trend, and the declining rate of profit, is magnified. The result is general demand reduction, less available credit needed in a credit economy, unemployment and recession.
The inflationary dimension will be controlled by demand reduction and is classic overproduction that causes crisis like the Great Depression. There is less need now for the Fed to raise rates to deflate the economy (control demand and cause overproduction). The Fed is likely to lower rates to support real estate prices, which accounts for at least 70 percent of the leverage, and the deleverage.
Lowering interest rates along with socializing the worthless assets of leverage finance will resart the leveraging cycle. This will deepen the crisis before regulatory reform and legislative action can occur to control it in lieu of a free market mechanism. The economy will improve, but then get much worse because credit, what the credit economy of a consolidated capital is dependant on, will already be tight and will crowd out growth (real economy supply-side) investment even more. While it will not result in classic depression, it will cause a deep and prolonged recession and tremendous hardship for "classes" that are not the upper class.
Causing and verifying extreme class hierarchy (a crisis of disequilibrium), of course, is what classical and neo-classical economics is designed to do if capital and markets are allowed to consolidate: to create and confirm class distinction with deprivation, or classic overproduction that is now neo-classic deficiency of available credit for real economy growth and the demand (the optimal distribution of income) it produces to drive the world economy.
This macro economic dynamic is essential for the small 401K investor to realize and understand. Ideologically it is not favorable to realize the cycle of deprivation because the legitimacy of the consolidated marketplace is the value of limiting the risk. That limit, however is realized in class distinction that is confirmed in a detrimental deflationary trend and a spreading of risk that is our current legislated, financial bailout on worthless assets now owned, socialized, by The People. It is state capitalism with The People being assigned, leveraged into, all the risk and all the detriment in class distinction (the Hamiltonian model of political economy).
The stabilization act will just make the problem worse for 401k investors because it is not designed to support your financial interest. It is to support the leveraged, neo-classical, financial cycle that looks to consolidate your assets to pay the return on the leverage that is profit without growth--deflation, recession.
The phase of the business cycle we are now in is defined by declining profits which is indicated, confirmed, by the data. It just gets worse going forward, and the stabilization legislation will just provide a brief bounce.
The worsening trend is avoidable, the entire crisis is avoidable, but the market is rigged to make the same mistake, to algorythmically recur the cost and the benefit (an exclusive class benefit), over and over in a cycle.
Quick reversal of the deflationary trend and a real economic stabilization that is not for an exclusive benefit comes in the form of recapitalizing the benefit of leverage finance from the ground up. That will be a benefit for exeryone and will be a confirmation of "we The People" as meaning we are genuinely all in this together rather than a few take the benefit and the majority take the cost in support of class distinction.
If the financial elite are to enjoy the benefit up, they can take the loss down by redistributing the profit to The People that will reward their investment with the profit of economic growth and economic health.
Very best wishes.
Full Faith In Credit
The Economic Stabilizaton Act of 2008
The objective of this monumental legislation in the era of post-Great Depression, neo-classical, economics is to restore confidence in the U.S. financial markets. Some European policy makers are calling for limiting the amount of money any one investor can borrow at one time, which is how hedge funds manipulate market prices by non-market means--by consolidation of the capital and massive money flows. While it will not deconsolidate the capital, it does identify the problem and the obvious solution that will effectively, genuinely, restore our full faith in the credit markets.
Republicans say the assets that The People are going to buy (pay the abusers for) and have resold to them are of an undetermined value because nobody wants to buy them. This assessment is what is wrong with it and why we have Sarbane-Oxley and mark-to-market accounting.
These assets do have value. Assets that can't be sold in the marketplace are called, worthless assets! They are the product of the people and the institutions and processes they employ that the stabilization legislation is going to support and "trickle-down." It is a failed, elitist, model that global markets have no confidence in. So why are we doing it?
The assets that the government is going to buy, or socialize because they have been rendered worthless because their value has been consolidated, will be a good investment with government policies and programs that are antithetical to what caused the distressed value in the marketplace. That would refill The People's raided cookie jar by deconsolidating the capital, taxing the benefit, instead of subsidizing it by not taxing it as McCain and his neo-conservative supporters propose.
The progressive tax revenue will not kill capital finance and free enterprise, but will provide optimal liquidity to cultivate growth, pluralism, a free marketplace that effectively checks the abuses, the perversions, of power with the least operation of government, from the ground up.
You have been told that this current economic crisis was unforeseeable and unforeseen. Absolute nonsense! Pluralists, free-market economists, have been warning and inveighing against the practices that consolidate money and markets from the start. We were dismissed as un-American, social psychotics unworthy of accessing the sentiments of The People.
What did have access has resulted in a lack of confidence in financial markets because it is full of fraud and abuse because the mechanism to check it, a free and unconsolidated marketplace, is not being ensured in priority. The result, consolidation of wealth and power, a model of power that deprives instead of provides, is a probability of 100 percent.
If U.S. taxpayers, and that includes people that consider themselves too good to be taxed like "The People" but will be with a more progressive tax code, want economic stabilization legislation, something that does not need legislating by ensuring a free market economics, and to buy assets rendered worthless by Wall Street to have good value, be sure to legislate for a free and unconsolidated marketplace.
Very best wishes.
The objective of this monumental legislation in the era of post-Great Depression, neo-classical, economics is to restore confidence in the U.S. financial markets. Some European policy makers are calling for limiting the amount of money any one investor can borrow at one time, which is how hedge funds manipulate market prices by non-market means--by consolidation of the capital and massive money flows. While it will not deconsolidate the capital, it does identify the problem and the obvious solution that will effectively, genuinely, restore our full faith in the credit markets.
Republicans say the assets that The People are going to buy (pay the abusers for) and have resold to them are of an undetermined value because nobody wants to buy them. This assessment is what is wrong with it and why we have Sarbane-Oxley and mark-to-market accounting.
These assets do have value. Assets that can't be sold in the marketplace are called, worthless assets! They are the product of the people and the institutions and processes they employ that the stabilization legislation is going to support and "trickle-down." It is a failed, elitist, model that global markets have no confidence in. So why are we doing it?
The assets that the government is going to buy, or socialize because they have been rendered worthless because their value has been consolidated, will be a good investment with government policies and programs that are antithetical to what caused the distressed value in the marketplace. That would refill The People's raided cookie jar by deconsolidating the capital, taxing the benefit, instead of subsidizing it by not taxing it as McCain and his neo-conservative supporters propose.
The progressive tax revenue will not kill capital finance and free enterprise, but will provide optimal liquidity to cultivate growth, pluralism, a free marketplace that effectively checks the abuses, the perversions, of power with the least operation of government, from the ground up.
You have been told that this current economic crisis was unforeseeable and unforeseen. Absolute nonsense! Pluralists, free-market economists, have been warning and inveighing against the practices that consolidate money and markets from the start. We were dismissed as un-American, social psychotics unworthy of accessing the sentiments of The People.
What did have access has resulted in a lack of confidence in financial markets because it is full of fraud and abuse because the mechanism to check it, a free and unconsolidated marketplace, is not being ensured in priority. The result, consolidation of wealth and power, a model of power that deprives instead of provides, is a probability of 100 percent.
If U.S. taxpayers, and that includes people that consider themselves too good to be taxed like "The People" but will be with a more progressive tax code, want economic stabilization legislation, something that does not need legislating by ensuring a free market economics, and to buy assets rendered worthless by Wall Street to have good value, be sure to legislate for a free and unconsolidated marketplace.
Very best wishes.
Subscribe to:
Posts (Atom)