How to have a balanced economy

֎ AXIOS distributed a concise and clear statement about why world population rates are dropping. It is a quality statement about a topic that doesn’t get much news coverage but can be a significant interpretation of social response to unsympathetic governments. It is typical that economic health is measured by GDP, inflation, and stock markets but the Axios article suggests that it is the condition of the population that determines the efficiency of a given economic philosophy. Some excerpts:

Why world population is slowing – Population growth is continuing to slow in the U.S. and China . . . Why it matters: Population growth spurs economic growth because it can increase innovation, workers and goods produced and consumed . . . What’s happening: U.S. immigration, life expectancy and fertility are all trending down.

We focus way too much on percent growth like quarterly GDP. We should think about what people want. What level of immigration people want. What age would people like to die.

Americans still want multiple children, but they’re worried about child care costs, their own student debt and a pause in their careers . . .

China has relaxed restrictions on the number of children families can now have. But the new policy seeks more to bolster the workforce than to promote population: The Chinese Communist Party is also raising the country’s retirement age, curtailing a key source of child care . . .

The bottom line: If countries want population growth to pick up, leaders must first fix underlying causes of the slowdown, including cost of child care and fear of immigration.

֎ From his lofty spot in the esoteric atmosphere, Guru suggests that the problems confronting nations in the 21st century will not subside until it is understood that political theories work best only in tailored economic situations. Guru said:

COMMUNISM works best in primitive conditions where authority is based on contributing to the wellbeing of other citizens and the economy is sustained solely by local labor and predictability. If one watches any of the homesteading shows on television they are watching classic communist behavior. Dictatorships that call themselves communist nations are misleading. Even the term ‘nation’ is stretching the concept. The reader may remember the commune movement in the US during the 60’s and 70’s but it failed because the surrounding economy was too sophisticated.

CAPITALISM works best when authority is based on assuring the freedom of all citizens to compete for available resources – but this works well only in economic conditions where there are plenty of resources to go around. The US was created at a time when an entire continent of unused resources was available and the expansion of worldwide economic resources was exploding as new places were discovered around the world. Capitalism was the perfect economy to scarf up resources at a geometric rate making the US the richest nation in the world. Alas, these resources have been depleted; in the 21st century there no longer are enough resources to go around for everyone. The population is too large to have everyone freely compete for resources.

SOCIALISM works best when authority assures equality among the citizens and the economy is stable and predictable. The Native Americans sustained a socialist economy for thousands of years because the resources, especially on the plains and seacoasts, were stable and predictable – until the capitalist authority killed all the buffalo, beavers, doves and destroyed important estuaries.

AUTHORITARIANISM works best when authority enforces social order in an economy that is inadequate or out of balance with the existing authoritative role. Once authoritarianism is in place it is difficult to remove; authoritarianism has no scruples other than power – just like Lord Acton said in 1887.

There are many other variations on the four basic economic philosophies. Corporatism is a style of capitalism; plutocracy is a form of capitalism; militarism is a variation of authoritarianism; Sheikdoms, China’s communist party and monarchies all are variations of authoritarianism. Tribalism, populism, classism, insurrection and other social movements can become significant and derail unbalanced economies – often allowing authoritarianism to emerge.

To use an allegory, consider the tight wire walker. The walker is authority, the wire is population and the long balance pole is economy. If the wire and the pole aren’t in sync, the situation becomes unstable.

Ancient Mariner

Another Road Metaphor

The authoritarian revolt of the belligerent right still deserves our attention and requires some serious effort to contain the movement. Whether the electorate understands that movement’s threat to the constitutional government known as the United States of America will be shown in the results of the 2022 election. Aggressive authoritarian behavior is a failed consequence of many different economic and cultural changes.

While we keep one eye on the fires started in the last century we must keep the other eye on the road to the future. Another form of authoritarianism is corporatism. If we don’t manage the road properly, the division between the few wealthy and the many poor will become wider and more adverse, perhaps even superseding the role of government – which many claim is already happening. Many of the business regulations and institutions that were created in the last century are virtually irrelevant in this new world of computers and instant communication. The entire perspective about antitrust must be reconstructed. Further, one nation can no longer control an international corporation. It will require a new set of international laws.

Riding the road into the future already is heavy laden with issues. One issue that should be left on the curb is racism. Many millennials and most Zs don’t have this issue. Older folk should just be done with racism and move on – there’s not enough energy for all the issues let alone worrying about skin color.

This is made more complex by domestic police departments which have been trained in abusive racism for generations. Decommissioning a militarized police force will be difficult. It must be done or a significant portion of our society will be stunted as we ride the road into the future.

Just as old or older than everything else is the concept of taxation. Mariner’s old saw about the plains indians whose hunters shared their hunting success with the tribe doesn’t exist in American capitalism. As a consequence the billionaires who hunt money sit on untold trillions of dollars that, from a societal point of view, simply gather dust. Taxation – especially in times when labor jobs are disappearing – should redistribute a significant amount of the hoarded wealth to help pave the road into the future.

So, let’s hop on our hover boards and get moving down the road. Uncross your eyes; it was a bad metaphor.

Ancient Mariner

Everything is the same but different.

Last Friday on an early, Way To Early, news show there was a piece about how manufacturers were resizing products to compensate for rising production costs rather than raising prices and lose customers. It has a term: ‘shrink-flation’. Demonstrated were toilet paper, potato chips and ice cream, which had fewer sheets, less weight and smaller capacity respectively. Shoppers have been taught to read labels for health reasons; now they must school themselves on size by learning how many grams in a quart or a pound and beware of count in artificial sugar packets; the price doesn’t change.

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Turning to a more sociological vein, everyone agrees the United States is having an identity crisis. It is difficult to know how to handle the situation. For the common citizen, it seems only to be a mish-mash of conflict and pointing fingers. The citizen truly is in the depths of the trenches and even trenches within trenches. How does a citizen gain perspective so that reasonable evaluation can be made?

Learn some facts. Mariner knows this is a tall order for the electorate but if a rational path to recovery is to be available, one must check history for similar situations. Sorry, electorate.

In place of buying textbooks, use Wikipedia to collect information – and make a donation while you’re at it. Search for information on the cause of the French Revolution, the Magna Carta, the Luddite rebellion and the rise of Nazi government (including persecution of Jews) in Germany. Clues for why there were national identity issues may involve financial security of the masses, oppression, racism, power wars and concentration of wealth.

For starters find something in these events comparable to wage freezes for forty years; find something that represents too much cash for the well-to-do; find something that erased major chunks of job availability; find something where power blocks competed too much for the good of the nation. Once historical information has been gained, how were these issues resolved?

Vote accordingly.

Ancient Mariner

From around the World

During the pandemic citizens became accustomed to ‘free shipping’ from online and storefront retailers. Amazon, for example, touted free shipping in two days. Behind the scenes, however, Amazon had forced sellers to absorb the cost of shipping into their consumer price. This has led to antitrust investigations of Amazon Prime. In short, pervasive free shipping soon may come to an end.

It will be difficult for all three sides of this market — the customers, the drivers and the sellers themselves — to get what they want.

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China has eased birth limits to cope with aging population. Couples in China can now have three children, instead of being limited to two, after the ruling Communist Party eased birth limits Monday. It turns out China, like Japan, the United States and most wealthy and industrialized nations, has an aging population that is increasing while younger citizens are a smaller percentage of the population. The economics are familiar to the US – retired old people cost the economy a lot of money but don’t generate GDP; on the other hand as economies begin to grow in this new era, there aren’t enough workers to do the work. State media reports that leaders also agreed China needs to raise its retirement age to keep more people in the workforce.

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A report by Greenpeace Africa and the Netherlands-based organization Changing Markets urges governments to phase out processing of fish which is fit for human consumption but being used for fishmeal and oil. It says the fish extracted by industrial vessels off West Africa are processed and exported, mainly to Europe and Asia, as feed for fish farms, pet food or use in cosmetics.

The report said the industry is devastating coastal communities and undermining food security in Mauritania, Senegal, the Gambia, Mali and Burkina Faso.

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The Philippines has filed two more diplomatic protests after maritime authorities spotted a total of 165 Chinese vessels within Manila’s exclusive economic zone. The South China Sea is a troubling situation for all the countries adjacent to it. Other nations include Vietnam, Taiwan, Malaysia and Brunei. Taiwan, of course, has a tight relationship with the United States which may lead to a military war between China and the US, and perhaps enjoin other Pacific allies like Japan, Australia and South Korea. China has made it clear they want Taiwan back.

As troublesome as these news items are, it is a bit of relief not to discuss American issues for a change.

Ancient Mariner

As Time Passes

Here is something interesting that reinforces the impact of inflation since 1950: in 1950, using Penn State prices, one year of college tuition, fees, board and books cost $1,365. In 2021, one year of college tuition, fees, board and books costs $39,084. The college industry has  increased inflation by 54 percent or in terms of the Consumer Price Index (CPI) today it takes $1,660 to buy what $150.00 bought in 1950.

This is nice to know information but with little insight until it is compared to wages. The average annual rate of inflation since the 1970s is 3.3 percent; for wages it is -5.1 percent. In street terms, a dollar in wages in 1978 is worth only 68¢ today. Perhaps this may be the reason there is insurrection across the land.

Waxing philosophically, it is technology that changes the behavior of economics – from the first axe with a handle, to spears, to wind, to steam, to internal combustion to artificial intelligence – financial opportunity shifts dramatically giving those with resources a chance to restructure assets while those without resources suddenly are without stability or even individual purpose.

At this moment we are in a time of rapid social and economic change. Worse, our society is managed by governments functioning as they did in 1978.

Ancient Mariner

 

 

Ten Commandments for our times

  1. Don’t sell your house until you have closed on the next one. The housing shortage increases day by day across the entire country. The price of housing increases daily as well. One might think it is a good time to sell their home at a good price but buying the next house may cost twice as much – if you can find one.
  2. Keep your job if you have one. If you suspect you may be let go for whatever reason, look for that next job NOW. The employment market is in shambles; it may be best to take a job in another profession that has training, certification, and in a stable industry.
  3. Pay off debt as rapidly as possible even if it cuts into your standard of living. Anything associated with money is facing a large windstorm of change. Having a debt-free income whether it is cash, percentage or bitcoin, it is best to be financially stable – the windstorm will toss everyone around.
  4. Do not arbitrarily renovate your home or property. Raw materials like lumber, siding, pipe and electric materials are up an average of 25 percent; lumber is climbing without hesitation and now costs 80 percent more than it did one year ago. Much of this is due to a sudden jump in housing starts – or price gouging by lumber companies and mills.
  5. Stay in college. This can be difficult amid the cost and fractured studies offered. Even if one must drop down to a smaller college or part time for any reason that is better than dropping out. The job market that is emerging under artificial intelligence will cut more than half the employment market for labor and white collar jobs.
  6. Form babysitting clubs. Because of looming inflation, in those families where both must work, both will have no choice but to find child care. Don’t wait for Biden’s social services programs; they won’t happen until McConnell retires. Back in the day when mariner had wee children, mariner’s wife connected with nine other women who had small children. It was a useful consortium socially and functionally.
  7. Strengthen social circle. In volatile social times like today, where every aspect of life carries a threat, it is important to be able to relate to a group of readily accessible friends in the neighborhood. Humans are natural groupies. Become active in any neighborhood activity from little league baseball to bowling to volunteer work to jigsaw puzzle parties to (in mariner’s day) sock hops.
  8. Have a hobby. It can be anything from counting types of insects to making miniature jewelry to building doghouses. The hobby must be rewarding, provide relief from the daily world and not be a burden on the family – and not cost too much.
  9. Take frequent small excursions. Disney World may not be feasible but driving an hour to a quaint ice cream parlor works just as well. Visit the remaining department stores; this is a disappearing life experience. How many years has it been since that last visit to the national forest? Even taking in a movie may be an increasingly rare experience.
  10. Read. Get away from the television, Siri, video games and other numbing devices. Turn on your own brain. Read a newspaper, comic book, sexy novel or delve into the history of Kyrgyzstan. Reading requires a different part of the brain than the temporal lobe, home of conspiracies and fantasies. Perhaps as a combined effort with #9, visit a library or museum.

Ancient Mariner

The Money Rodeo

Covid, shelter-in, election turmoil, Afghanistan, Brexit, China, impeachments, perhaps these things still are unresolved but at least we’ve had a chance to beat them with sticks and throw stones, pushing them into some kind of partial remission. There is time now to take a quick shower, put on some clean clothes and prepare for the next item in the national job jar: managing money.

News outlets are covering the party debate about Joe Biden’s infrastructure bill; the sport of legislation will be headlines for a while. Slowly emerging into electorate awareness, however, are the issues of government spending, taxes, user fees and inflation. These are the bucking bulls behind the battle over bridges and health care. Some bucking broncos are bank and investment regulations, bitcoin, and climate change just to mention a few money issues. The rodeo clowns still are putting on a show, that is, everything Trump, McConnell, McCarthy and Gaetz but the main events will take over quickly.

The main attraction is inflation. It is devastating to the value of the dollar bill in our wallets. Economists, both political and institutional, see inflation taking off and running because the US government has – or will – dump $6 trillion dollars into the general economy (6 includes Trump’s contribution). An extremely brief description of how inflation works is “If there is so much money around, then you can afford to pay $10 for this hamburger instead of $4.”

The problem is that common citizens don’t receive salary increases commensurate with the rate of inflation. Everything is subject to inflation from toilet paper to homes and automobiles. Mariner experienced the 1970 inflation by having a pleasant salary that over ten years became a meager one that required him to shift careers. During the 70s the Consumer Price Index (how much things cost) went from 37.8 to 76.7, cutting in half what that dollar in the wallet could buy.

The second attraction is taxes and fees. These actions slow the possibility of inflation to a degree. Biden has said no one with an income below $400 thousand will receive a tax increase; he intends for the wealthy to pay for infrastructure and health services instead of spending government debt money. It can’t be denied that very wealthy citizens are sitting on a pile of money that isn’t doing anything for the economy but republicans don’t want to raise taxes at all. Instead, they prefer that government spending be offset by user fees (an attempt to hide the fact that ‘fees’ actually are taxes applied to specific purchases like gasoline, tolls and utility services) – meaning that the general population foots the bill.

The next two issues of extreme financial importance are regulations to restrict banks to what banks are for and to push them back from ventures into Amazon-like partnerships and credit card manipulations; the other issue is automation of finances generally, that is, replacing the dollar in your wallet with the state of an electron in a computer somewhere.

Finally, climate change will impact everything – everything! Whole industries may disappear as well as whole cities. Climate change is like a very, very, very slow hurricane. There is no doubt all the other money issues will be affected.

Put your chaps and spurs on – the legislators will need guidance.

Ancient Mariner

Liz

A member of the Cheney line (Dick Cheney, a Vice President under George W. Bush who actually was the shadow President in authority), Liz Cheney has the same strict conservatism as her heritage. She is a staunch, very conservative Republican. As we have seen, she is a determined representative of her views. But she has the one characteristic most desired in her industry: honest allegiance to her electorate. She is a clear example of the moral accountability necessary to make a two-party political system work. Given that all elected officials had scruples, the work of legislation would be a careful balance of what is best for the state of the Union.

Liz Cheney’s credentials as a representative of her electorate are sound, coming from one of the most conservative states in the Nation. Mariner clearly is sympathetic to her plight. She is fighting a broken Republican Party whose economic premise has collapsed and has yielded in spineless obedience to a destructive leader because he promises that they will keep their jobs even without due consideration of their electorate.

Whatever her aspirations (shrewdly she has positioned herself to be a player in 2024), in the current era Liz is confronted by a ‘party first, country second’ behavior that started with Joseph McCarthy in 1951, was reinforced by Nixon and intensified by Newt Gingrich in 2012. The ‘party first’ style of legislation has affected both parties to a point of MISrepresentation of the electorate.

In a complete vacuum lacking economic and electorate values, for President the Republican Party elected a showman to sell snake oil. God bless the electorate, they bought it. Until the 2022 election passes, all the inadequate Congressional representatives will be loyal puppies to Donald. Donald may even adversely affect that election. If mariner could replace any of them with Liz, it would be an improvement.

Ancient Mariner

 

The Way Out

Every so many generations a tumultuous time arises. Everyday life is less pleasant, less secure and society is destructive to many social norms. We live in a time like that today. Life is not fun and for too many, not even possible. There were similar times in the past – the 1960s when racism erupted, the Democratic Party was in conflict, national leaders and college students were assassinated. The 1930s suffered unbelievable economic tragedy that affected everyone; the turn of the century suffered riots and prejudice as suffrage and labor rights disrupted daily life. The greatest example of disruption included a deadly civil war that occurred in the 1860s. Further back in US history is the shame of genocide against the Native American.

The telltale signs are present today. Way too frequently innocent people suffer death by gunfire. Riots and protests are daily events. Government at the same time is imperialist and authoritative and otherwise dismissive to the need of its citizenry; justice is served by the flow of cash and favoritism.

Each tumultuous time posed a threat to the high minded principles of a democratic republic based on equality, personal freedom and the right to happiness.

It is time to reintroduce humanism as the rule of society. How the nation emerged from those tumultuous times was not by the wisdom of a great orator or a magic pill that settled society. Emergence occurred because there was just enough faith, just enough opportunity, just enough public intelligence that individual citizens took command of daily life; humanism became the influential judgment.

Humanism is the belief that a human is the most important form of existence on this planet. Humanism implies equality for each human for no other reason than that person is a human. Humanism as a philosophy promotes unity and promoting the rights of humanness. Humanism induces oneness instead of identity politics and populism.

Humanism is not competitive between humans. It is allegiance to the principle that every human has inalienable rights. If a human is disadvantaged, that is not acceptable – after all, they’re a human. Many historic sources allude to the fact that humans are made in the image of God; where is someone willing to take on God?

There is a common phrase that can be used as a first response to general wellbeing. It is required to be the first emotional reaction to any and every human despite political or class differences. It is “I have your back if you need me.” Live by that statement with conviction and a surprising phenomenon will occur: the tumultuous time fades away.

Ancient Mariner

Ready for something new for a change?

Ready for something new for a change?

Slowly crawling out of the darkness of shelter-in, we emerge to find a reformed world – a place of bizarre and unfamiliar phenomena. A new religion infests United States culture, something called Trumpism, an unsettling group similar to voodoo with conspiracies and denial of reality on a par with flat-earthers; people working from home in such numbers that large office buildings sit empty; the lingering death walk of Reaganism that brings Congress to a standstill; driverless 80-feet-long trucks on the highway; a grave, intensified class war pitting unbelievably rich against unbelievingly poor; collapsing colleges and universities with failed purpose, value and broken financing; empty shopping malls; veiled threats about rising oceans and storms; a flooded south, a burned west, a cold north and citizen migrations forcing changes in congressional representation; a weakening Europe, a rising China and still as it was before shelter-in, a pernicious Russia and a Middle East ravaged and ravaged again by imperialism, collapsed economy and extreme inter-religious/political confrontation.

It does seem similar to Charlton Heston seeing a sunken Statue of Liberty in ‘Planet of the Apes’, doesn’t it?

The pandemic can be blamed for concentrating a great amount of change into one single year. Working from home normally would have phased in over several years as new processes were tested, job descriptions changed and resettling home life with new work-at-home opportunities.

Donald Trump can be blamed for the Congressional crisis. Ordinarily, a change in the philosophy of government takes a decade or so but Donald crashed the primaries so badly that elected officials fear for their careers to the point of abandoning rational legislative work. Joining Donald in his abuses of due process are the victims of 40 years of Reagan economics – a working class distrustful of the US government for ignoring their plight. Throw in energized populist groups using gender rights, race and police brutality.

Reader, take a moment to catch your breath. With some luck, the nation may enter a period of boom economy if the infrastructure bill stays together and passes. The electorate needs to patch wounds, regroup its national identity and concentrate on getting an international momentum up to speed.

Oh, about something new, the wealthy nations of the world are preparing to switch to bitcoin accounts for government operations. Think about paying your taxes in bitcoin. The US calls theirs ‘GOVCOINS’.

Ancient Mariner