Tuesday, July 31, 2012

Four Million Jobs in Four Weeks--No Joke.



Do you remember the 800 Billion Dollar Stimulus Bill?  I do. And I did some math--well, simple arithmetic actually.  Here is the way to create four million jobs in about four weeks.  This is not a joke:

An $800 Billion dollar stimulus bill, when divided by 5 (years) will work out to $160,000,000,000 a year for 5 years.  My original thought was that the initial legislation would take us to 2013--the year following the election.  Now, I am looking at the issue from a different perspective.

4 million people and $40,000 per year.

People who earn $40,000 a year, spend $40,000 a year.  Now, we can quibble about the taxes: for the purposes of discussion only,  let's say 20%. Do we pay people $40,000 and tax then 20% or pay them $32,000 a year? (Now you know why I don't discuss, debate, or defend my viewpoints.)


4 million people making $40,000 a year will cost about $160,000,000,000.

I suggest this because it is flexible.  You can plan the programme for 2 years, 3 years, 4 years, or you can adjust the number.  More people in the programme for fewer years, for example.

What those people who have been hired by Uncle Sam will do is subject to debate.  Certainly, companies looking for trained employees can train the "new hires" at a very reduced--temporary--wage.  People could go to school; start a blog; do volunteer work; or sit in front of the television set all day watching CNBC thus answering the question, "Who is CNBC's target audience?" One would like to think that professionals in the finance industry are at least watching their money if not ours.


This then leads to the multiplier effect.  This was mentioned--only in passing--by Madame Lagarde in her interview with Maria Bartiromo on CNBC.  The topic was the European Economic Crisis.  This is the crisis that the European Leaders are attempting to solve without any attention to Capital Investment or Economic Development which leads to growth, employment, increased revenue, reduction of Government spending (through the divestiture of State owned assets), and the improvement of the economy.  But don't bother listening to me, everyone always doesn't listen to me.  But I digress.


To play out the math of the multiplier effect serves no useful purpose.  Therefore, I have included a link to an illustration of the multiplier effect--this being more easily understood than an explanation of the multiplier effect.   Keynesian? Perhaps--but only just a bit.


The Multiplier Effect--Illustrated.


http://www.slideshare.net/slimfairview/the-multiplier-effect-4962273


Economic Stimulus--by Metaphor

http://slimviews.blogspot.com/2011/06/economic-stimulus-by-metaphor.html


(Please read them both. It builds character.)

Regards,


Slim


slimfairview@yahoo.com

Copyright (c) 2012 Slim Fairview
All Rights Reserved.


PS.  An attempt was made to post this monograph in the comments of the New York Times online.  (Probably on Dr. Krugman's blog.)  I assume the reason the monograph was not approved for posting was that the relativity to the topic was tenuous. Slim







Tuesday, July 24, 2012

Russia

Let's consider a topic I have not yet written about--Russia.



To understand the misalliance, we must look back over time.

The economic problems in Russia go back to before the Bolsheviks.  One of the reasons for the economic decline is the absence of primogeniture in Czarist Russia.  Feel free to Google the topic.

The second reason is the failure of leadership to understand that while propaganda may fool some foreigners, it won't fool the citizens.  They must live under the conditions as they are, not as they are defined or described.  In short--when everyone owns everything, no one owns anything.  Reported in the news over four decades ago.  Eighty-five percent of the food grown in the Soviet Union is grown on fifteen percent of the land. We are not discussing surficial geology.  We are talking about the 15% of the land allocated to the farmer for his personal use.  This was a problem the Pilgrims confronted in Colonial New England.  They resolved the issue more expediently.  (Change or starve.)

With this much established, a centralised government, provided little or no opportunity for the independence that fosters creativity.  However, there is more.  The lessons of the revolution.  For those who read Danton's Death by Georg B├╝chner: The Lessons of the Revolution: "They are suspect, we are suspect, all are suspect."

However, the Soviet Union is no longer in business.  Today, President Vladimir Putin is moving Russia into a free-market economy, moving Russia into the WTO. These are positive moves.  However, what happened in between?


Russia had a startling success with Sputnik in 1957. However, it was not long before the U.S. put a man into space and a man on the Moon.


Soon after, we saw some rather iconic images.   The Gdansk Shipyard Strike. Then:  Ronald Reagan, a President of Mythic  Proportions single-handedly tearing down the Berlin Wall. The collapse of the Soviet Union. And, most poignantly, the unbridled success of China's economy.  Too, there was the reunification of Germany and the stark contrasts that were revealed. 


The problem President Putin has in his efforts to move the Russian economy forward and upward is this simple--he must contend with the fact that there are still a few members of the Old Soviet Guard who "remember a better time".  


Quite frankly, I believe President Putin will succeed.  Still, globally, there are many old wounds that have not yet healed.  Many slights, embarrassments, "awkward moments" in diplomacy.  The "companionable" silence.  Complicity in excruciatingly polite behaviour. And, there is another factor:


"It is a universal condition: We refuse to accept that all alliances and enmities are transitory." Slim Fairview.  From The Quotations of Slim Fairview.


Regards,


Slim


slimfairview@yahoo.com

Copyright (c) 2012 Slim Fairview
All rights reserved.