this global economy problem

[Dubai Blue]

Wages haven't dropped

erm...mine have, plenty of us who still have jobs and are living under the threat of redundancy have had to take a wage cut

interests rates have plummeted so

now what income I have from my savings to supplement my wages is non existant

;-)

Unfortunately the people who've spent their lives saving are now being punished by those dickheads who earn 10k a year and wanted a 50 inch flatscreen tv.

 

[Ronnie the Rep]

I realise I'm a money simpleton..so bare with me BUT

If every country in the world is feeling the pinch, every economy is bolloxed, every country is heading down the swanny. WHY cant every country just agree to rip up all debts, get rid of all present monetary devices, burn all current money, print new money, set up a new system, and start again. A little like pressing reset on the games machine. Surely the problem the world is facing isn't due to owing money, its due to money not moving about. just start again...OK if a few banks lose out...who cares!!!!!!

The reason money isn't moving about is precisely because of people owing, and not being able to pay off, debts. Aswell as general economies (particularly the USA's economy - seeing how the crisis began there) being unsustainable 70-80% service based economies.

A new monetary policy is needed, banking system etc. Personally I think money needs to be made sound again by some kind of backing - gold, silver etc - to ensure the integrity of the currency and to keep government spending in check. A new decentralized banking system, whereby interest rates are set by the market and not some central "authority" , the Federal Reserve in the USA's case,

Basically we have to do the opposite of what we have been doing for the past couple of decades. Shrink government, and its burden on society, size/spending/power. Restore soundness to currency. Cut taxes massively. Let the market work and allow poorly run businesses to go bankrupt which then allows the more honest and/or competent people to take over. Allow recessions to play out (the reason why this one is so bad is because the US kept re-inflating bubbles, like the .com one etc), cut barriers to competition (ie. regulations) and generally cut back on central economic planning. The Western economies need to rebalance and start manufacturing products to sell. To do this people need to save.

I'd disagree with you that all the worlds economies are bolloxed. Most are, but some, like the Asian economies, have stronger foundations and are much more capable of working their way out of the crisis because they have a manufacturing base. Of course, if they continue the policies of creating "Zombie" banks and businesses then they will be as fucked as we will be. If we all keep rewarding bad business practices by printing up bail outs then there is a much worse crisis heading our way in the next decade.

And writing off debts will not go down well with those who are owed the green ;)

you sound like a Tory ;-)

 

[bluespana]

I realise I'm a money simpleton..so bare with me BUT

If every country in the world is feeling the pinch, every economy is bolloxed, every country is heading down the swanny. WHY cant every country just agree to rip up all debts, get rid of all present monetary devices, burn all current money, print new money, set up a new system, and start again. A little like pressing reset on the games machine. Surely the problem the world is facing isn't due to owing money, its due to money not moving about. just start again...OK if a few banks lose out...who cares!!!!!!

The reason money isn't moving about is precisely because of people owing, and not being able to pay off, debts. Aswell as general economies (particularly the USA's economy - seeing how the crisis began there) being unsustainable 70-80% service based economies.

A new monetary policy is needed, banking system etc. Personally I think money needs to be made sound again by some kind of backing - gold, silver etc - to ensure the integrity of the currency and to keep government spending in check. A new decentralized banking system, whereby interest rates are set by the market and not some central "authority" , the Federal Reserve in the USA's case,

Basically we have to do the opposite of what we have been doing for the past couple of decades. Shrink government, and its burden on society, size/spending/power. Restore soundness to currency. Cut taxes massively. Let the market work and allow poorly run businesses to go bankrupt which then allows the more honest and/or competent people to take over. Allow recessions to play out (the reason why this one is so bad is because the US kept re-inflating bubbles, like the .com one etc), cut barriers to competition (ie. regulations) and generally cut back on central economic planning. The Western economies need to rebalance and start manufacturing products to sell. To do this people need to save.

I'd disagree with you that all the worlds economies are bolloxed. Most are, but some, like the Asian economies, have stronger foundations and are much more capable of working their way out of the crisis because they have a manufacturing base. Of course, if they continue the policies of creating "Zombie" banks and businesses then they will be as fucked as we will be. If we all keep rewarding bad business practices by printing up bail outs then there is a much worse crisis heading our way in the next decade.

And writing off debts will not go down well with those who are owed the green ;)

I'm not sure how you work a lot of that out.

The 'smaller government, less taxes, less regulation, 'let the market work' statement just seem to be the knee jerk reaction of any monetary policy/right wing man to everything.

Just as a lot of left wing/socialist people will automatically claim that the answer to everything is centralisation, nationalisation and state interference.

Anyway, the facts remain that this economic crisis was caused exactly by a severe lack of regulation and governement involvement in the city and financial markets. It's a bit rich to then try to pin the blame for it on too much government involvement.

As for getting out of the mess. Well, cutting taxes won't do much. Cutting interest rates, part of the same fiscal theory, has and will do nothing because of the pcyhological issues mentioned above. Cutting governement spending and involvement would have already seen the crisis be beyond recovery, as the banks would have gone to the wall, and you'll do well to find any serious economist who can see any other options for getting out of this than huge levels of government spending to boost the economy, create jobs, safeguard others and hope that in a few years it can return to normal levels.

I might be missing something, and I'm prepared to accept that I could be, but the above just sounds a bit like the cliched 'everything is the governement's fault - they want to take my taxes' point of view and seems to fly in the face of all the facts that have got us in this situation in the first place.

Don't tke that as me advocating nationalisation of everything, I'm not, but it's a funny time to be bleating about too much government interference, regulation and spending.

You might not have noticed, but even without your views being implemented, there are dozens of 'bad businesses' going to the wall every day, meaning that the market is currently doing a more than adequate job of 'freeing up space' as you put it. It hardly needs the implementation of John Redwood on speed policies to ensure that only the strong survive.

THese "serious economists" are the same people who saw no crisis coming over the horizon. The same people who saw monetary policy as "spactacular" and the same people, who once the recession was here, said it'd be "very mild". The same people who see nothing wrong with a 70-80% based service economy. The same people who think the dollar is infallible. Trust them at your own peril.
Cutting taxes (and Gov. spending) is the way to get out of a recession. It is the true market, not some artificial government creation. You think a few people in Washington or London know how to best run an economy? I don't, and neither does history. To get out of a recession and actually be on firm ground after it is over you want the people to spend. If you had more money in your pocket, you'd spend it alot better than Brown or Obama could. Without Government printing up money, prices in the market will stay lower for longer and it wouldn't take too long to see this crisis through. It'd be tough for a while, but we've gotta man up and take it. It's the consequence of living above our means, on cheap unsustainable credit, not saving and spending all our money on things that cannot make a return. Too many McDonald's and not enough Production. The current economy is completely out of whack and unsustainable, anyone who wants to prop it up is just either going to prolong the pain or merely put it off and in the meantime have it bubble up into something much worse. Government caused this, make no mistake, by propping up former bubbles and encouraging bad business practices. Regulation merely acts as a barrier to competition. THe amount of red tape a small business has to jump through to even get set up is crazy and only helps to maintain the status quo, thus why corporations continue to lobby for regulations.

It's fine if you disagree, but I would advise you to look at putting some of your money into commodities(gold is going to rocket) and maybe agriculture. You could make a nice bit of money if you even invested in McDonalds (aslong as you get out quite quickly) since more people are going to be going to McDonalds than nice restaurants for a while.

I agree with JMA. What economic news have you been reading? Deregulation et al has caused this. Bush and his business cronies ignored sound economic advice (Paul Kruger, of the NY Times and Nobel prize winner this year, for one) and tried to cut taxes to keep their pockets lined. Lending practices were absurd and they hoodwinked people into debt. We are barely staying in recession and are now possibly heading for the 'New' Great Depression. And how did we get out of that exactly? By spending on public works and controlling the numskulls that sold us down the river before. This Madoff clown is the poster boy for regulation. Where have you been?

 

[remoh]

Well, to me it all started with Thatcher, Reagan and Kinnock.

They started the deregulation and 'greed is good' culture which eventually led us to where we are. (I include Kinnock because he changed economic horses and allowed it all by his political failure)

This system of ours can only thrive when we consumers spend more than we can earn, so the crunch always has to come sooner or later.

Giving private enterprise and market forces free reign just now would be like cutting off a leg to cure an ingrowing toenail! It's not possible to get out of a mess by leaving it to the same people who got us into it, with their short-sighted and greedy priorities.

 

[ElanJo]

you sound like a Tory ;-)

Lol, I'm far from being a Tory :P

The reason money isn't moving about is precisely because of people owing, and not being able to pay off, debts. Aswell as general economies (particularly the USA's economy - seeing how the crisis began there) being unsustainable 70-80% service based economies.

A new monetary policy is needed, banking system etc. Personally I think money needs to be made sound again by some kind of backing - gold, silver etc - to ensure the integrity of the currency and to keep government spending in check. A new decentralized banking system, whereby interest rates are set by the market and not some central "authority" , the Federal Reserve in the USA's case,

Basically we have to do the opposite of what we have been doing for the past couple of decades. Shrink government, and its burden on society, size/spending/power. Restore soundness to currency. Cut taxes massively. Let the market work and allow poorly run businesses to go bankrupt which then allows the more honest and/or competent people to take over. Allow recessions to play out (the reason why this one is so bad is because the US kept re-inflating bubbles, like the .com one etc), cut barriers to competition (ie. regulations) and generally cut back on central economic planning. The Western economies need to rebalance and start manufacturing products to sell. To do this people need to save.

I'd disagree with you that all the worlds economies are bolloxed. Most are, but some, like the Asian economies, have stronger foundations and are much more capable of working their way out of the crisis because they have a manufacturing base. Of course, if they continue the policies of creating "Zombie" banks and businesses then they will be as fucked as we will be. If we all keep rewarding bad business practices by printing up bail outs then there is a much worse crisis heading our way in the next decade.

And writing off debts will not go down well with those who are owed the green ;)

I'm not sure how you work a lot of that out.

The 'smaller government, less taxes, less regulation, 'let the market work' statement just seem to be the knee jerk reaction of any monetary policy/right wing man to everything.

Just as a lot of left wing/socialist people will automatically claim that the answer to everything is centralisation, nationalisation and state interference.

Anyway, the facts remain that this economic crisis was caused exactly by a severe lack of regulation and governement involvement in the city and financial markets. It's a bit rich to then try to pin the blame for it on too much government involvement.

As for getting out of the mess. Well, cutting taxes won't do much. Cutting interest rates, part of the same fiscal theory, has and will do nothing because of the pcyhological issues mentioned above. Cutting governement spending and involvement would have already seen the crisis be beyond recovery, as the banks would have gone to the wall, and you'll do well to find any serious economist who can see any other options for getting out of this than huge levels of government spending to boost the economy, create jobs, safeguard others and hope that in a few years it can return to normal levels.

I might be missing something, and I'm prepared to accept that I could be, but the above just sounds a bit like the cliched 'everything is the governement's fault - they want to take my taxes' point of view and seems to fly in the face of all the facts that have got us in this situation in the first place.

Don't tke that as me advocating nationalisation of everything, I'm not, but it's a funny time to be bleating about too much government interference, regulation and spending.

You might not have noticed, but even without your views being implemented, there are dozens of 'bad businesses' going to the wall every day, meaning that the market is currently doing a more than adequate job of 'freeing up space' as you put it. It hardly needs the implementation of John Redwood on speed policies to ensure that only the strong survive.

THese "serious economists" are the same people who saw no crisis coming over the horizon. The same people who saw monetary policy as "spactacular" and the same people, who once the recession was here, said it'd be "very mild". The same people who see nothing wrong with a 70-80% based service economy. The same people who think the dollar is infallible. Trust them at your own peril.
Cutting taxes (and Gov. spending) is the way to get out of a recession. It is the true market, not some artificial government creation. You think a few people in Washington or London know how to best run an economy? I don't, and neither does history. To get out of a recession and actually be on firm ground after it is over you want the people to spend. If you had more money in your pocket, you'd spend it alot better than Brown or Obama could. Without Government printing up money, prices in the market will stay lower for longer and it wouldn't take too long to see this crisis through. It'd be tough for a while, but we've gotta man up and take it. It's the consequence of living above our means, on cheap unsustainable credit, not saving and spending all our money on things that cannot make a return. Too many McDonald's and not enough Production. The current economy is completely out of whack and unsustainable, anyone who wants to prop it up is just either going to prolong the pain or merely put it off and in the meantime have it bubble up into something much worse. Government caused this, make no mistake, by propping up former bubbles and encouraging bad business practices. Regulation merely acts as a barrier to competition. THe amount of red tape a small business has to jump through to even get set up is crazy and only helps to maintain the status quo, thus why corporations continue to lobby for regulations.

It's fine if you disagree, but I would advise you to look at putting some of your money into commodities(gold is going to rocket) and maybe agriculture. You could make a nice bit of money if you even invested in McDonalds (aslong as you get out quite quickly) since more people are going to be going to McDonalds than nice restaurants for a while.

I agree with JMA. What economic news have you been reading? Deregulation et al has caused this. Bush and his business cronies ignored sound economic advice (Paul Kruger, of the NY Times and Nobel prize winner this year, for one) and tried to cut taxes to keep their pockets lined. Lending practices were absurd and they hoodwinked people into debt. We are barely staying in recession and are now possibly heading for the 'New' Great Depression. And how did we get out of that exactly? By spending on public works and controlling the numskulls that sold us down the river before. This Madoff clown is the poster boy for regulation. Where have you been?

Madoff isn't an example you want to bring up if you believe in regulation. He passed numerous inspections by the FCC, way back into the Clinton era. If you want so much regulation as to catch every single Ponzi scheme and bad business practice you will see even more oligopolies and monopolies in the economy, and, therefore, even more control over government by "special interests". Regulation may be well intentioned, but it is short sighted, having far more negative impacts than catching the odd fraudster.
And if you are so against Ponzi schemes, maybe you should look at the biggest of them all, the Government. Social securities are Ponzi schemes. However, alot of people have this blind faith, this religious like tendency, to believe Government, which is just a bunch of people and in most cases arrogant buffoons, can break the laws of economics. All they have is a printing press, and the more they print the more everyone will suffer. They have been putting off mild recessions, with this Keynesian BS ideology, and to keep their seats of power (on the back of economic ignorance in voters), and in doing so have created the current global mess. What is hard to understand here??
It boils down to whether you want to localise problems or collectivise them. Do you want everyone to suffer or just those that made bad decisions? Keep in mind tho, that there is no perfect system. Magic isn't real.

As for the Great Depression. Hoover and Roosevelt created the great depression. I suggest you reread your history.

PS. I read varying economic views. I lean more towards the Austrian school rather than Keynesian thinking, and with good reason.

PPS. and you mean Krugman, right? Would help your argument if you knew what his name was ;)

 

[1.618034]

Zeigeist: Addendum

http://video.google.com/videoplay?docid=7065205277695921912

Long winded at 2hrs+ but the first 30 mins explains the "money creation" that has got us to where we are now...

A mind-numbing paradox indeed...



"It is no measure of health to be well adjusted to a profoundly sick society"

 

[ElanJo]

Zeigeist: Addendum

http://video.google.com/videoplay?docid=7065205277695921912

Long winded at 2hrs+ but the first 30 mins explains the "money creation" that has got us to where we are now...

A mind-numbing paradox indeed...



"It is no measure of health to be well adjusted to a profoundly sick society"

Zeitgeist does a decent job on Monetary policy and Monetary foreign affairs, but, imo, goes off on one with the Venus Project, and previously, 9/11.

 

[DirtyEddie]

Unfortunately the people who've spent their lives saving are now being punished by those dickheads who earn 10k a year and wanted a 50 inch flatscreen tv.

that attitude annoys me quite a lot. heaping blame on the working poor as if its their fault (i would say ours but im unemployed now) this is a society built in the interests of capital so a select few can continue to grow their wealth at the expense of others. you hear talking heads on the tv saying 'oh, too many poor people taking out too many loans' well fuck them. the people who control capital implemented these policies and now you want to blame some poor sod because they want to get some pleasure out of life and shock horror maybe buy a big tv. seems the poor have let down the wealthy yet again.

more regulation less regulation who thinks it really matters? regulation wont do anything. there arent enough regulators to police the financial institutions and there never will be because there is a total lack of political will to enforce the rules. you might see a few embarassed bankers getting a telling off in front of a select committee, but thats not going to change anything. you might see one or two scapegoats targeted for public relations purposes but its going to be business as usual because this is how our society is supposed to work

 

[jay66uk]

Some people saw it coming.

And things are going to get much worse before they get better. The housing market hasn't bombed yet as much as it will simply because of the unavailability of mortgages. When the drop finally happens people will feel much worse off and the psychological impact on spending will be even worse.

The trouble is there is no solution. Allowing banks to break the "old-fashioned, overly cautious, restrictive" liquidity ratio-based lending restrictions has created a black hole that may never be filled.

We're doomed! Doomed, I tell ye. Doomed!

 

[bluespana]

Madoff isn't an example you want to bring up if you believe in regulation. He passed numerous inspections by the FCC, way back into the Clinton era.

FCC? Federal Communications Commission? or the SEC? Securites and Exchange Commision? It might help your argument if you knew their name.

Deregulation in the SEC allowed Madoff to prosper, along with that market force, blatant profiteering. Think Rogue Trader.

Under Bush:
Ms. Thomsen of the S.E.C. said resources for the agency had not kept pace with the growth in the securities industry and said the agency simply did not have the resources to fully investigate every tip.

As for the Great Depression. Hoover and Roosevelt created the great depression. I suggest you reread your history.

I would laugh it weren't so depressing. Luckily for you, it was refuted just other day after this 'idiotic' Republican said the same.

From the Ohio Times:
Hoover's renominating speech at the 1932 Republican convention used the word 'depression' 10 times. So, it seems beyond idiotic for anyone to claim the country's great economic disaster of the 20th Century was rooted in the New Deal policies of Franklin Delano Roosevelt, the Democratic president who was elected to succeed Hoover. Of course, we know that there are people who are beyond idiotic, including U.S. Rep. Steve Austria, R-07. (Austrian School?)

Hoover -- who was blamed for allowing the country's economic emergency to worsen between 1929 and 1932 -- was under no illusions about the existence of a depression during his single term in the White House. Hoover told the Republican convention that had gathered in Chicago: "The last three years have been a time of unparalled economic calamity. They have been years of greater suffering and hardship than any which have come to the American people since the aftermath of the Civil War. . . Thus beginning 18 months ago, the worldwide storm grew rapidly to hurricane force and the greatest economic emergency in all the history of the world. Unexpected, unforeseen, violent shocks with every month brought new dangers and new emergencies to our country. Fear and apprehension gripped the heart of our people in every village and city."


When will we see your contrition, Elanjo?

Rep. Austria gets right with history: FDR didn't start Depression
Wednesday, February 11, 2009 - 3:24 AM
By Darrel Rowland, THE COLUMBUS DISPATCH

Freshman U.S. Rep. Steve Austria conceded yesterday that President Franklin D. Roosevelt did not cause the Great Depression.

In a one-page e-mail, the Beavercreek Republican wrote: "I did not mean to imply in any way that President Roosevelt was responsible for putting us into the Depression, but rather was trying to make the point that Roosevelt's attempt to use significant spending to get us out of the Depression did not have the desired effect. Roosevelt did not put us into the Depression, but rather his policies could not pull the nation out of the recession."

I would suggest you use google. It is your friend.

For the record, I lean to no school of economics.