Corporatism Discussion
- Thread starter Cannuck
- Start date
What truly unbelieveable? That the government should maintain some control over stimulus spending?
Recessions are often followed by inflation. That being the case, while we may want to put more money into the economy now, we'd want to do so in such a way as to ensure that we can rake it back in when inflation kicks in so as to control inflation. To just give money to GM may help to create jobs now, but it does nothing by way of allowing the government to pull that money back out of the economy easily when inflation hits.
By putting more money into the economy through debt reduction or purchasing stocks, we still manage to put money into the economy but in such a way as to be able to take that money back out of the economy later. At a later date, when inflation hits, government could reduce spending if possible and, if that's not possible, it also has the option of borrowing money and not spend it, essentially just taking back the same debt it would have gotten rid of in the recession. Or if it has stocks, then it can sell the stocks to take that money back out of the economy. But if we just give the money to GM (yes, I know, it also took part ownership, but it wasn't a good deal on our side), then how do we take that money back out of the economy when the inflation hits later?
Alright Machjo - I'll give it a whirl and offer my thoughts. I'm using this post to start.
RE: Bank rate set at 0%
Your assumption isn't really correct here. Even if there were restrictions in who was able to access the cheap loans, the notion that lower costs may in fact compel more folks to purchase items that they may not have considered otherwise. Think about how many people were seduced into buying over-priced real estate based on the opportunity for cheap mortgages? The same goes for other capital goods like cars, furniture, electronics etc.
Those lower perceived costs will not force the cost of the goods down, rather, it may act to increase demand and potentially raise the prices - it is a response by gvt to stimulate the economy and generally that goes hand in hand with higher costs (inflation). Although we've addressed the defalation issue you identified - the genie is out of the bottle and the inflationary trend is promoted again.
Again - look to the experience that Japan had or even the USA when their treasury under Greenspan lowered rates to 0.5% - the results are not positive. (... and in the event that his name elicits a response that he was under the Bush admin, please spare me the political partisanship - Greenspan is respected by the finance sector throughout the world)
RE: Printing more money
I see your logic but the system is not that responsive or 'controllable'. Further, a nation's valuation of their money is, in part, based on the perception by other nations. In reality, nations control their money supply through buying and selling their currency on the international markets. When the dollar is too low, the feds will buy-up dollars on the open market and thus restrict the outstanding amounts in hopes that the (more) limited supply will increase demand and therefore the price. The opposite holds true for those times when the value of the currency is considered too high.
In terms of just printing more money, here's the example: Between WWI and WWII, the Germans had to pay reparations for their WWI antics. As the country was devastated by the war and their economy had yet to be rebuilt, one of teh strategies they attempted was to simply print more money and fire it into the system. The response was that no one wanted German currency. The result was that the local population (at its height) needed (literally) pillow-cases of money just to buy groceries.
RE: Bank rate set at 0%
Your assumption isn't really correct here. Even if there were restrictions in who was able to access the cheap loans, the notion that lower costs may in fact compel more folks to purchase items that they may not have considered otherwise. Think about how many people were seduced into buying over-priced real estate based on the opportunity for cheap mortgages? The same goes for other capital goods like cars, furniture, electronics etc.
Those lower perceived costs will not force the cost of the goods down, rather, it may act to increase demand and potentially raise the prices - it is a response by gvt to stimulate the economy and generally that goes hand in hand with higher costs (inflation). Although we've addressed the defalation issue you identified - the genie is out of the bottle and the inflationary trend is promoted again.
Again - look to the experience that Japan had or even the USA when their treasury under Greenspan lowered rates to 0.5% - the results are not positive. (... and in the event that his name elicits a response that he was under the Bush admin, please spare me the political partisanship - Greenspan is respected by the finance sector throughout the world)
RE: Printing more money
I see your logic but the system is not that responsive or 'controllable'. Further, a nation's valuation of their money is, in part, based on the perception by other nations. In reality, nations control their money supply through buying and selling their currency on the international markets. When the dollar is too low, the feds will buy-up dollars on the open market and thus restrict the outstanding amounts in hopes that the (more) limited supply will increase demand and therefore the price. The opposite holds true for those times when the value of the currency is considered too high.
In terms of just printing more money, here's the example: Between WWI and WWII, the Germans had to pay reparations for their WWI antics. As the country was devastated by the war and their economy had yet to be rebuilt, one of teh strategies they attempted was to simply print more money and fire it into the system. The response was that no one wanted German currency. The result was that the local population (at its height) needed (literally) pillow-cases of money just to buy groceries.
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Give everyone $1000 to save, invest, buy new trousers or blow on crack and magic beans. It would do far more for the economy than giving dead stagnant industries money to buy new trousers, blow on crack or buy magic beans.
Yeah! Those bastards in big companies will just use the money to keep the doors of the business open and provide employees with a number of pay-cheques that are worth thousands over the course of a single month.
Why not invest in companies that aren't stagnant & dead-end?
How many people have been let go from medium and small companies in comparison to those let go from huge outfits like GM? How many people were empIoyed in smaller companies in comparison to huge companies? Yet who gets bailouts?
I think economic North America suffers from something that individual North Americans suffer from; the childish & erroneous consideration that bigger is always better.
How many people have been let go from medium and small companies in comparison to those let go from huge outfits like GM? How many people were empIoyed in smaller companies in comparison to huge companies? Yet who gets bailouts?
I think economic North America suffers from something that individual North Americans suffer from; the childish & erroneous consideration that bigger is always better.
Agreed. I'd just add though that instead of giving them the money or giving them loans they might not be able to pay back, why not buy up shares instead. It still puts money into the econmy, increases the market value of the shares, and ensures that the government can get that money back by selling the shares when the time comes. And of couse the government should buy shares based on their likelyhood of rising in value in future, as long as they're ethical businesses so no tobacco, casinos, porn mags, etc.
Paying off national debt?
USA tax dodgers have $ 12 trillion in overseas shelters. All we need do is to re-claim the money and that will end our Republican created deficit. If the far right doesn't like it, it's too damn bad.
USA tax dodgers have $ 12 trillion in overseas shelters. All we need do is to re-claim the money and that will end our Republican created deficit. If the far right doesn't like it, it's too damn bad.
Why not just confiscate all of the assets of all democrats and their supporters.. Seel the items and pay off the debt?
Sound alright gopher?
Sound alright gopher?
The answer is pretty clear Anna - start yourself a manufacturing concern and build gas/oil free transportation.
It just that easy.
Republicans claim to be good, moral Christians. According to their Bible, they are supposed to gladly give away their money to the poor.
Don't you want to see them go to Heaven?
Good Christians also work to help the democrats 'see the light'... What better way than to assist them in giving their money away. Besides, it's for the good of society gopher - you liberals get-off on that right?
I'd be doing you a huge favor... So, lets get down to business: Send me all of your financial info along with a power of attorney (deed to the house and other assets as well please) and I'll get to work on doing some liberal good!
I'd be doing you a huge favor... So, lets get down to business: Send me all of your financial info along with a power of attorney (deed to the house and other assets as well please) and I'll get to work on doing some liberal good!
Your reaction to gopher's statement leads me to think you have squirreled way a tidy sum in offshore banks.
But to be fair, the assets of rich Dems and Repubs should be treated equally: Seize them all!
People are doing just that. There have been people doing that for quite a few years. Bicycles can be completely petroleum free. Electrically driven autos can be, also. There are even some people converting existing styles to electric drive. I'd like to turn my Dakota into all electric drive and we've already started using synthetic lubes in our vehicles.
Anyway, back to corporatism; I think global corporations tends to move their operations around according to its own needs rather than those of people. And locally, they tend to pressure gov'ts into acting for them rather than the good of the people. Thusly, they are antisocial entities.