Economic Survival--Long-Term

When I wrote that China elevated (at various points)

300 Million

500 Million

700 Million

people from poverty to the middle class, I pointed out China created a

Middle Class

Consumer Class

Investor Class

I also pointed out that China created cohesion among the Chinese people.  China created a buy-in.  A vested interest in the success of the Chinese economy.

This brings us to Henry Ford.

Ford doubled his employees' salaries and cut the work week to 40 hours.  He, essentially, created the Middle Class.

Ford workers could now, and subsequently buy

A Ford

A Washing Machine

A Refrigerator (Ice Box)

A Radio & Eventually

A Sears Roebuck House  (Some assembly required.)


By creating a Middle Class, he created a Consumer Class and an Investor Class.  He gave the American worker a vested interest in the success of he American Economy.

Don't get me wrong; the labour movement was ugly, violent, fraught with private armies, sabotage, strikes, lockouts, scabs, strike-breakers, and the like.  Nonetheless, the strong Middle Class meant a Strong Economy.  A strong Economy meant a Strong America.

The Middle Class is the Economy.


Now, The American Widget Company is not going to hire one additional widget maker, until there is an order for one widget more than the company can make when operating a maximum capacity and optimal efficiency.

They also know:

If you grow faster than your market, you tie up capital.
If your market grows faster than you do, you lose market share.  Therefore, company growth is predicated on a rising demand curve.  And when more people buy stuff, they make more widgets, increase their revenue, invest their returns, and also benefit from revenue enhancement.

China: Rising middle class, rising economy.

India:  Rising middle class, rising economy.

Russia: Stagnant middle class, stagnant economy.

America:  Declining middle class, follow the path of the trajectory.

One reason I wrote, 

Tax policy to increase wages $5 an hour. Now! was to show the benefit to increasing wages with a tax policy that incentivises, business increasing wages with serious tax benefits for doing so, and subsequent economic benefits as the programme proceeds. 

If you want to close the gap, you redistribute the money.

Henry Ford did not redistribute the wealth.  He redistributed the money.

Wealth is what you have.

Money is what you make.

If you own a $100 Million Factory, but can't run a business, you make earn $50.000 a year.

If you own a $500 laptop and pay $100 for an internet connexion, (A service, not an asset) might earn $1Million a year.

The first example, you have wealth but little money.

In the second example, you have little wealth but make a lot of money.

If you are responsible, you save half your income, and in 20 years you have $10 Million.

If you spend it on loud noises, bright colours, and shiny things, you end up with nothing.

In the first example, you may end up liquefying assets and come out with, say, $50 Million.  Wealth is what you have. Money is what you make.  If we want to close the gap, we redistribute--Read: Reinvest--the money, create a Solid Middle Class, and let the economy help people create wealth.

Further reading:


Tax Policy to Increase Wages $5 an hour. Now!

If You Really Want to Close the Gap

Powell's Testimony House Financial Services Committee

If you're really interested and energetic & ambitious:

Hillary Redux

Sincerest regards,


Slim.

If you find anything here to be helpful, please don't hesitate to send me a really tricked-out Mac Book and to tuck a few dollars into the envelope along with the thank you car.
Slim.

Robert Asken
Box 33 
Pen Argyl, PA 18072

Copyright © 2019  Robert Asken
All rights reserved.

Where We are Going

What is happening globally with migration on one of the basic laws of physics.


I illustrated this in my ppt presentation 

Solving The Global Crisis




I pointed out that Russia is engaged in Economic Warfare. 

The Visible Hand 


and 

Mr. Putin's ETO 



China knows it will not stay in business very long if it puts its best customers out of business. China will not harm Western markets. 


As India transforms, India will have a more efficient handling of crops. No longer will food rot on the vine or in the field because there are difficulties in bringing the food to market in a timely manner. India will embrace the technology that will be crucial to the future of nations. 


Africa will embrace the models of Industrialised Nations: 
Capital Investment, 
Economic Stimulus, 
Economic Development, & 
Growth. 

Capital Investment + Economic Stimulus = Economic Development + Growth ~ Slim's Paradigm.


Forming an E 20 Group of Nations


Solving the Emerging Economic Crisis



 I have predicted that Plastics will replace wood and steel as a more efficient and cost-effective way of building things. 

Plastics:  



But the largest concern is the control of resources: 

Who controls which resources will be crucial to survival. This is explained in 
  
"Economic Soft-War" 



This is why Globalisation is so important.

Protectionism Isolationism Nationalism
Are the Axis of Evil that impedes or prevents Solving the problems of Famine, Pandemics, and Global Economic Recessions and Depressions & lead to Civil Unrest, Genocide and War.  Support Globalisation.


Thank you for your interest. 

Sincerely, 

Slim.

On LinkedIn 



Slimfairview@yahoo.com

Slimviews@gmail.com 

Bob Asken
Box 33 
Pen Argyl, PA 18072

Copyright (c) 2017  Bob Asken
All Rights Reserved.

 

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

EuroCrats: It is Our Policy to Fail

The handling or mishandling of the debt crisis by the EuroCrats proves one thing. The Process is the Problem.

From the IMF we learn that the set of policy choices that are economically viable and politically feasible is shrinking. That is a bold admission.

Further, the IMF acknowledges the market’s negative response but chooses to stay the course. This is wrong.

Still, the bold admission is a good thing. Oftentimes people don’t take bold action until a crisis is impending. Bureaucrats never do.

Now with Belgium, Italy, and Spain heading toward a crisis, why embrace a proven Policy of Failure? One glaring point: A cash infusion into banks that suffered losses due to the debt crisis will only cause the banks to continue to lose what others infuse.

Meanwhile, there is a call for taxpayers to bolster…..! Any call for taxpayers to bolster anything is a lose—lose situation.

If the plan fails, the crisis deepens.

If the plan succeeds, those who pay for the success of others will harbour a deep resentment. If you don’t believe me: Parliament Hampers Merkel Deal Making.

EuroBanks stand to lose €630 Billion. Banks are starting to not trust each other or lend to each other. That is not a good sign either.

The IMF goes on to say that the Global Credit Crisis moved into the Political Phase. Therein lies the punishment for using political considerations to solve the problem in the first place.



Greece and Europe suffer from problems of Austere Proportions.

As I previously stated, “Analysts conceded a €110 Billion bailout for Greece on the assumption that the Greek economy would grow. Then, they called for sanctions to punish Greece because their assumptions were wrong.”

The austerity measures to be imposed by (upon) Greece include a move to reduce public employment.

“There are no unintended consequences, only unwanted consequences.” –Slim Fairview



Such a move will

Reduce tax revenue.

Strain the social safety net,

Negatively impact the multiplier effect; if there is one.

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



Greece may consider some alternatives

Sell state owned assets [to Greek citizens].

Seek Foreign Investors instead of Foreign Lenders. [Asia. Brazil]

Encourage, promote, and support, entrepreneurship for the Greek people.



The Nanny-State mentality in Europe has less to do with benefits and more to do with business. It is easy for a society to become complacent if the jobs are already there whether provided by Big Government or by Big Business. SMEs provide jobs, growth, economic stimulus, and prosperity. Don’t believe me? The headline in the NY Times reads: India Nurtures Entrepreneurship.

Economic Stimulus by Metaphor

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



Greece can also follow my prescription for the American housing crisis. Only they may wish to expand upon it—tailor it to Greek needs.

Stop Foreclosures

Rewrite Loans at a lower payment rate

Add a balloon payment. [2018, 2019, 2020]



Will all this work?

Did your efforts fail?

The EuroCrats are Intelligent, Educated, and Experienced.

Q: Why the failure?

A: The Process



The meeting of the minds emphasises consensus. The EuroCrats do not need consensus. The EuroCrats need acknowledgement.



“The fact that you cannot predict the future is not a proper rebuff to the one who tells you to get off the tracks a train is coming.” –Slim Fairview



Sincerest regards,

Slim





Copyright © 2011 Slim Fairview

Congress: An Idiocracy, A Theocracy, But not a Democracy

This is Congress.  Faith leads to higher certitude than knowledge. [I had a Jesuit Education.]

This does not mean they are more right.  Only that they are more sure.

This is Congress.

On one side, people believe that if you cut taxes for the rich, the money will trickle down and the economy will trickle up.

Trickle down economics is a myth.

The other side believes that if you raise taxes and spend money, you will stimulate the economy.  You will create jobs.  As one pundit said, “No country ever taxed its way to prosperity.

Now, both sides have experts.  Economists.  Well, back in my youth someone said, “He knows the price of everything but the value of nothing.”  We can move in that direction.  However, can we say, “He knows everything but understands nothing”?  Well, not quite.  It is simply a matter of the interpretation of the truth.

As Jack Nicholson said to Diane Keaton in the movie, Something’s Gotta Give.  “I always told you some version of the truth.”

Thus, it is with Economists.

Here goes.

One Economist works for a company that sells red paint. He says, "If you want to improve your business, paint the walls red."

Another Economist works for a company that sells blue paint. He says, "If you want to improve your business, paint the walls blue."

That much may be obvious. The difficulty arises when they cite the statistics.

The Red Paint Economist says, "Our study shows that red paint motivates employees. They produce more widgets. Your productivity will go up."

The Blue Paint Economist says, "Our study shows that blue paint creates a more serene atmosphere. Your employees will make fewer mistakes and the quality of your widgets will go up."

What each side does not tell you is this:

With red paint, the employees work faster, make more errors, and reduce the quality of the output.

With blue paint, the employees make fewer mistakes and produce higher quality widgets, but make fewer widgets and productivity goes down.

However, they are experts; and we listen to them.

The following aspects of Economics must be taken into consideration.

Economic Stimulus.

Economic Stimulus works.  The issue is where do you stimulate the economy?

Now to explain. For this, we will need to create that all-important metaphor. In addition, I should like to apologise in advance for the one snarky remark I will make about a former President. (One must compare apples to apples.)

For the purposes of this lesson, we will assume that Joy, brown-bags it every day except Friday. On Friday, she takes 10 hard-earned dollars and goes to Whoopi's Sandwich Store for a baloney sandwich.

Now Elisabeth is out of work. However, Jimmy Carter feels her pain. Therefore, he taxes Joy $10 and gives it to Elisabeth so she can buy a baloney sandwich. Joy is not happy. She's being ripped off. Elisabeth is no better off because she still does not have a job. Now, what about Whoopi? She is no better off because she is still selling one baloney sandwich a week.

In response to critics, Jimmy decides to tax Whoopi $10 to train Elisabeth how to make baloney sandwiches. After getting her certificate, she goes to Whoopi's store looking for a job. However, Whoopi tells her, "Sorry, Friday is my last day. Jimmy Carter taxed me out of business."

Now, President Obama comes along and says, "That is not how to do it. I am going to have the SBA lend Elisabeth the money to go into her own business."

Elisabeth opens up a soda store next door to Whoopi's Sandwich Store.

Back to Joy. Aptly named because her tax cut allows her to go back to Whoopi's store and buy a baloney sandwich; and she goes next door to buy a soda.

Elisabeth is happy because she's making money, so she treats herself to a baloney sandwich.

Whoopi is thrilled because she doubled her sales volume and revenue. In fact, she is doing so well; she hires Sherri to help make sandwiches. (Whoopi trains Sherri, as it should be in business.)

Sherri is happy because she has a job, and, please forgive my little joke, her compensation package includes a free lunch. However, no beverage. Therefore, Sherri goes next door to Elisabeth's soda store to buy a soda. Well, with all this soda being sold, Elisabeth hires Barbara to work in her soda store. Now Barbara is thrilled because she has a job.

Back to the Oval Office:

The President's Economic Advisor comes in.

"You wanted to see me, Sir?"

"Yes, I have some money for you. It is part of Sherri and Barbara's benefits payments. They are out of work. I want you to send the money to Sherry and Barbara."

However, the advisor says to the President, "But Mr. President, Sherri and Barbara don't need that money anymore. They have jobs."

"That's great," the President says. "The government is saving money."

The advisor continues. "It's better than that. Since they are working, they are paying income taxes. So, I have some money to give to you from Sherri and Barbara."

"Wow", the President says. "I save money because Sherri and Barbara are working, and I bring in money because they are paying taxes. This stimulus package is great."

This is how economic stimulus works. It takes a little time, but this is how the economic stimulus works.

Government Borrowing

Wolf Blitzer wants to buy a new suit.  This, he figures, will attract more viewers [customers].  He borrows the money from John King—a CNN colleague.

Mr. Blitzer’s ratings [revenue] go up.  He repays Mr. King.

Mr. King, seeing Mr. Blitzer’s success, uses the profits from his lending venture to buy a new suit.  His ratings [customers] go up.

Upstairs, Mr. Turner is looking over the balance sheets.  He sees this uptick in [revenue].  He asks his accountant what happened.  His accountant tells him.  Mr. Turner gets an idea.  He issues a memo to his on air people.

CNN will make low interest loans to those who want to go out and buy a new outfit to wear on the air.

Ratings go up.  Revenue goes up.  Mr. Turner issues another memo.

Up until now, in the cafeteria, employees could buy a meal [breakfast, lunch, or dinner] for $10.  Due to the increased revenue, we are going to charge you [tax you] only $5.

As a result, the employees have more money to spend.  John King buys a new tie.  Gloria Borger buys a new scarf.  Candy Crowley buys a necklace.  Don Lemon buys a new shirt.

This upgrade in the “metaphorical image” generates more viewers [customers].  Revenues go up.  Salaries are increased.  All is well in CNNtopia.

However, what if all were not so enlightened.

What if Wolf Blitzer had borrowed the money from Bret Baier?

Well, Mr. Blitzer would still have a new suit.  However, the profits would have gone to Mr. Baier who would have used his profits to buy a new suit.  Mr. King, not having the profits from his loan to Mr. Blitzer, would have had to go to Shepard Smith for a loan to buy his new suit.

Now, Bret Baier and Shepard Smith could use their profits to invest in a business partnership to lend money to fellow Fox News Anchors.  They would have a spiffed up image and more viewers [customers] generating more revenue.

Back to CNN.

With Mr. Blitzer and Mr. King having to pay interest on the loans to people at Fox, they have to cut back on expenditures.  Now, instead of buying lunch or dinner in the cafeteria, they brown-bag it.  Revenues in the cafeteria fall.  CNN issues a memo.  Due to lost revenues, the cafeteria will have to raise prices [taxes] on lunches and dinners.  This affects the other employees.  No shirts, no scarves, no ties, no necklaces, declining image, lost customers, decreased revenues—CNNistant.

What is the crucial difference between CNNtopia and CNNistan?  That is the difference between solving the US economic crisis and not solving the US economic crisis.

The Multiplier Effect

Next, we have the Multiplier Effect.  While trickle down economics is a myth, the multiplier effect can be seen as counting the dollars in our economy.  This is an illustration.

This does not lend itself to a blog posting.  Thus, a brief PowerPoint presentation is available.  Real Brief.  Look and click to the next of several slides.

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

I will not use the word dishonest.  Our Congressional Leaders truly believe what they are saying.  Then, when the mounting debt is still there in the morning, they say, “I thought so.”

Regards,

Slim

PS.  I am no Paul Harvey; however, I will entertain job offers as a paid blogger or commentator.

slimfairview@yahoo.com

Regards,

Slim

Copyright © 2011 Slim Fairview