Re: [SLUG-POL] Facist economic model, wealth v. income, Jackson v. Bank all over again, China -- WAS: one-sided political figure jabs?

From: Paul M Foster (paulf@quillandmouse.com)
Date: Fri Sep 10 2004 - 18:46:15 EDT


On Thu, Sep 09, 2004 at 10:36:42PM -0400, John Pedersen wrote:

> Paul M Foster wrote:
> >On Wed, Sep 08, 2004 at 09:43:09PM -0400, John Pedersen wrote:
> >
> >
> >>Paul M Foster wrote:
> >>
> >>>On Tue, Sep 07, 2004 at 05:37:18PM -0400, Bryan J. Smith wrote:
> >>>
> >>><snip>
> >>>
> >>>>>Bankers and corporate elites get richer, everybody else loses.
> >>>>
> >>>>Agreed. The monopoly the Federal Reserve has had on the amount of cash
> >>>>in this country is at the heart.
> >>>
> >>>
> >>>I'll disagree here. The key to any economy is productivity. The Fed can
> >>>act as a brake or a stimulus, but producitivity is what drives any
> >>>economy. The problem in this society is that too much of the wealth
> >>>vests in the hands of too few _who produce too little_.
> >>
> >>I sort of agree with you, but don't be too quick to dismiss the
> >>effects of monetary policy set by the Fed. The Fed has lots of ways
> >>of creating money, and does so in astronomical amounts. Why do you
> >>think you can buy a house full of furniture with no interest and no
> >>payments for a year. Keep on shopping! That's the only thing that is
> >>keeping the economy going, so that "pundits" can claim the economy is
> >>doing well. (Apparently the definition of "economy" == number of
> >>people shopping)
> >>
> >
> >
> >I don't disagree that monetary policy can affect the economy. But it's
> >productivity that's the key. And people shopping is a byproduct of a
> >productive economy.
>
> Be careful with that word productivity. If productivity means output
> (measured in dollars) per manhour of labor, then consider:
>
> a) I have a factory with 100 workers that makes widgets; they start as
> castings, they machine them, they assemble, they test and they ship
> them out the door, to the tune of $10,000,000 per year. (or pick your
> own number)
>
> Now we improve things:
>
> b) Get the castings, already machined, and assembled, from China.
> Very low cost. Do some testing and packaging in USA. Get rid of 90
> people, because 10 people can handle it. Now 10 people ship
> $10,000,000 per year.
>
> Gee, by the definition of "output/manhour", we improved productivity
> by a huge wallop. Ain't that great?!
>
> My point of my oversimplified example is that the liars who need to
> keep blowing air into the stock market furnace can and do play with
> "productivity" figures and keep the bullshit flowing. Like a juggler
> with ten balls in the air, if they lose control of just one, the whole
> thing is likely to fall apart.
>
> Personally, I prefer to look at PRODUCTION, in absolute numbers,
> instead of productivity.
>

I'm not talking about scam accounting here. I mean real productivity. If
the company in question turns out more widgets (whatever way they do
it), it means more productivity/production for that company. As for
those laid off, it is assumed that at some point those people will go
get jobs and produce something as well.

The point is not how we tweak examples to show one thing or another. The
point is that if you want to have a profound lasting effect on an
economy, your most workable direction is to increase productivity in the
aggregate.

>
> >The cornerstone of economies is the creation of
> >saleable items and the exchange of those items for something else
> >considered valuable (in our case, money). Buying and selling are simply
> >the opposite sides of the same coin. More of both means a healthy
> >economy.
>
> Tom, Dick and Harry. Tom has a printing press and prints pictures of
> presidents on green paper. He supplies them (lends them) at virtually
> no interest to Dick, who buys TVs, VCRs, DVDs, etc, from China. Dick
> sells these to Harry, who buys one of everything as soon as it comes
> in the store! Harry has no job, by the way, because he used to work
> in a factory that closed. But that's ok--he can keep buying from Dick
> because he refinanced his house, and besides, Dick often has specials
> where he offers no payments for one year. So Harry has a 50 inch LCD
> tv, and a Mac dual G5 computer, two new cars in the garage, and pretty
> much every toy and gizmo that comes onto the market.
>
> By your definition, with all this buy and selling, the above is a
> vibrant, healthy economy.
>

Well, if you think you can run a whole economy on examples like that, go
ahead. I contend that it can't be done sustainably. Also note that I
mentioned earlier: producing nothing while increasing "wealth" isn't
productivity. It's a drag on an economy.

Paul



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