There are 3 kinds of Lies: Lies and Damned Lies, but then there are Statistics (Mark Twain popularised this saying but see link for attributions)
Not all are bad though and the most salient one to come out lately is the bond yield inversion currently occuring in the US with long duration bonds yielding less than short term ones.
In other words, the markets are expecting the economy to tank in the medium term.
If sustained for any lengthy period of time, this would point toward a recession in the US with a high degree of confidence so watch this space.
It's pretty certain that the whole neo-liberal economic model is faulty and is only sustainable in the short term.
This has increasingly become the view of most leading economists, the World Bank and the IMF.
Unrestrained Capitalism, as in Friedmanesque systems in play since the mid 80's, will have the effect of concentrating wealth at the apex of the capital pyramid (trickle down), so a big thanks to Maggie and Ron!
We fail to learn from our history repeatedly and disregard the lessons our forebears learned the hard way, that Capitalist systems need strong controls to function effectively and prevent this situation occurring.
The systems in place after WWII were based on the theories of Keynes which were designed to give govts prescriptive economic powers in an attempt to avoid the boom and bust cycles that had been the norm previously, particularly at the end of the 20's ie The Great Depression.
Unfortunately, this involved hard work and political menace for incumbent govts so the theories of Milton Friedman, who was head of the US Federal Reserve under Regan, held considerable appeal.
They went like this:
If govt's sold off all the public goods they were responsible for (Electricity supply, Rail, Post, Coms etc), they could not be held accountable for any price hikes as this was the result of mysterious and often spooky "market forces".
Thus, they could relieve themselves of both ownership and workload, not to mention responsibility.
They could then go to the people around election time with promises to make the economy great by giving business tax cuts and handouts in the hope that the electorate would gain employment and a rise in living standards.
What a beauty! Collect tax, sling it about, go to lunch, swig some Grange and enjoy a nice cigar in the courtyard afterwards.
This view was all well and good, and it does work in the short term, but when you stretch this sort of thing out, that capital concentration function built into the system begins to become unsustainable.
All those public companies and privatised services become pressed to show profit growth as consumers have less to spend.
So prices rise and the accountants sharpen their pencils and get to work cutting costs.
The low hanging fruit in this exercise is always the wage bill so the market as a result contracts and profits go down more.
Unfortunately, govt has no levers to pull as they gave them all away, so in reality, the best they can do is fiddle with the cash rate and hope for the best.
Or throw more cash at business and again, hope for the best.
So Capitalism doesn't work, but why not?
After all, didn't Adam Smith lay it all out in eloquently in his "Wealth of Nations"?
Well yes, he did, and it's definitely a much better system than the one Marx has to offer, but there is something adherents fail to take into account.
You see Smith was a moral philosopher, not an economist, and he was a Presbyterian Scot to boot.
Few people who read his "Wealth" tome, ahave ever read his original work.
This was:
The Theory of Moral Sentiments
He opens with these lines in the preface:
" How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.
Of this kind is pity or compassion, the emotion we feel for the misery of others, when we either see it, or are made to conceive it in a very lively manner.
That we often derive sorrow from the sorrows of others, is a matter of fact too obvious to require any instances to prove it; for this sentiment, like all the other original passions of human nature, is by no means confined to the virtuous or the humane, though they perhaps may feel it with the most exquisite sensibility.
The greatest ruffian, the most hardened violator of the laws of society, is not altogether without it".
How do you think this would be received in either the modern board room or the govts cabinet rooms?
But this is the prescription that underwrites his Inquiry into the Nature and Causes of the Wealth of Nations and that's the book that defines our economic system.
So, to conclude, how the hell do we legislate for the above morality in Free Market Capitalism?
Maybe Digi is on the money with a UBI?
Maybe the Nordic countries are on the money by just being ethical?
What we see at the moment is a turning point in modern capitalist economics so sit back, relax and try to enjoy the ride.
Sales will pick up eventually when govt realises it's better to go for trickle up economics as that's what makes markets grow, even if it does involve some hard work to keep it on track.
3BrNBBRz4UYdo+!~~60_7.JPG "chameleon54"){kind=avatar}
