Monday, September 20, 2010

How to be an Ass without really trying

I rarely agree with this stuff, and not much has changed. The basic Issue devolves into We Should have Spotted This much Earlier!! The first element which must be understood consists of the fact that such overabundance of data flow continually churns, real factors of definition cannot be found prior to the economic event. Every new progression must be analyzed for its effect on subsequent events prior to those economic events–a sheer impossibility. The Second impossibility establishes no specific set of circumstances will ever be agreed as fundamental for economic Recovery or Failure (Boom or Bust). The Third stands as Speculation that economic forces suffer from Stress throughout the system, and forestalling the function of Stress in certain areas will only transfer that Stress elsewhere. I like to think of operation in the economy as Expansion and Consolidation. This makes it easy to understand that economic forces can only withstand a limited Period of Openness or Expansion, before the totally natural urge to take Profits comes to the fore. No one has studied the economic data, but there is remarkable similarity to new economic leadership attempting to secure their financial position.

I would not lay claim to Paul Krugman being Right or Wrong! I will point in an entirely different direction on the issue. There is a nescient economic element which is never preached to the affluent. This states that when the Poor have greater Income, they Spend more, and the overall wealth of the Affluent increases from the added Profitability. What impedes the knowledge transferring to the Affluent comes from two things: one is a delay of about 28 months from the period of added Income for the Poor, and the rise in Profitability for the Rich; the Second being current Management practice which freezes the Affluent from this added Profit by refusal to disperse such Profits from Stock ownership. The Affluent would do infinitely better in chastising Corporate Management from withholding such Profits, than in getting the Poor and Middle Incomes to pay more in Taxes; a situation which actually reduces the magnitude of their own Income.

I should be in the book-writing mode, and develop a Volume on Why Taxation can be the best stimulus under some circumstances. It could be written, but I am too old and lazy for such endeavor. The reality is that Taxation can establish or crack any order of Comfort quite easily, and what no economy can withstand is any significant segment standing Pat on their current revenue streams: they must either be striving to improve their revenue stream, or acceptant of declining revenue stream. Any other position is inconsistent with economic growth or advancement. Government Taxation and Welfare programs are the best method to destabilize peoples’ acceptance of current revenue streams. This disintegration of revenue stream plans leads to capitulation or enhanced effort to regain the revenue streams. Government needs to utilize this Discomfort through Tax measures and Welfare programs, if it finally expects to possess an economic policy which is effective. lgl

No comments: