regionswork
Forum Replies Created
-
Posts
-
Interesting that curtain banks exist at all. Nothing similar comes up in the States. https://www.communityenergy.org.nz/curtain-banks/
In the U.S. there are bureaucratic migets in the NRA that keep the people’s government from doing sane things. The UK lacks the lobbying structure of the U.S., which meant the people had a greater degree of freedom in their mental environment.
The overhead costs have gotten too high. No longer does the communication function of government add to economic base with infrastructure and services that are a foundation for communities and families. Instead its a burden due to the corruption of the peoples intention for their government. Everything will shrink to fit actual resources. Fighting and war only add to the burden of the future where there will be less. The Emporers have no policies – those woven by tailors are all semantic and obscuring numbers. As explained here, very few know.
Mussolini said people were at their best when: “War alone brings up to their highest tension all human energies and imposes the stamp of nobility upon the peoples who have the courage to make it”. The first neocon? Terrorism is crime, political or otherwise. With the end of the Cold War, American citizens, particularly boomers and their parents were taken off the Cold War fear of nuclear attack which began post WW-II. The end of history was a threat to the military-industrial-congessional-financial complex gravy train, so new enemies were required to keep us at our best. The war on terror, like that on drugs and poverty keeps us on edge and needing to be alert and armed. In the Wild West, you checked your guns at the door. Now, always be ready to hit the deck, shelter in place. In a world becoming short on resources, cooperation is effective for perpetuation of communities, but conflict makes some individuals rich. A moral rather than an economic problem.
In the U.S. , the disconnect between the provision of the government services which are the platform for having an economy in a long-term stable city/county/state/nation, including infrastructure building and the perpetual maintenance/improvement of these high value/high cost assets, AND the tax and fee revenue to cover these organizational and built-environment costs by the “No new taxes” mindset has led to more and more debt as the solution. The stimulus effect of debt money is long gone and now it is an ever growing burden and oppression. Still, we must invest in war – the greatest waste of resources, that which destroys what has taken centuries to build – look at Allepo. With easy credit everyone’s wishes can be met in the short-term. The short-term is long gone. I learned public budgeting and management in 1973. Jimmy Carter used it in Georgia. Real cost calculations conflict with optimism, so put it on the credit card. At some point our fragile economies will drink to fit their uninflated reality. TAE has been teaching this from the start. Unlearning the cover stories is not easy, given the mental environments we coexist within.
Love Steve Keen. Failure of intelligence among humans and in academic disciplines is, we see, quite common.
Dear Raul – Your collection of bad economic news is part of my daily news diet. I’ve done such news aggregation for regional cooperation since 2003 and know how much work it is to find, read and decide what should be included. That you’ve been doing this in pain due to severe muscle pain is troubling. Having had long term chronic pain for many years, like others offering advise here, we do in fact feel your pain. My problem was a pelvic tilt, one leg shorter than the other more than normal, a lifting injury at age 17. Some resolution with chiropractic finger pressure acupuncture at age 50, but it took deep muscle massage at age 58 to correct the muscle distortion caused by living with an injury over 40 years. I did two or three sessions a week for nearly a year, with regular massages after that. Though I’d had massages here and there, it took continuous treatment to get the muscles right – then the regular hiking I did was more effective in maintaining moderate strength – never have been an athlete.
So there’s a way to correct muscle, but that doesn’t mean you need to carry all the problems of the world. An unburdening of that is what I recommend. I carried that too, but not as much as I see you doing. The teaching of Greater Community Spirituality that I follow says we are here to work and to do so need to find our meaning, purpose and direction so that we may contribute to the world. The many challenges of the world we can’t solve, but working with others, we can contribute. It is beyond chop wood, carry water, in that this is a complex world in which we live. Power and domination are the objective of many, so communities have to work together to create environments of responsible freedom where human creativity can continue its evolution of organization and technology in a very competitive and challenging universe. The lack of wisdom and knowledge in our societies is reflected in the stories you give us daily.
Those that can respond are responding and hopefully ideas will come as we retrofit forward, correcting the errors of the past and making a new, more humane way for a worldwide age of human unity and cooperation. Peace Dynamic. Tom
Thanks? I come here for a daily dose of bad news. Problems now are the children of poor decisions in the past. At 70, I’m living in the world only a little bit of my own creation. Post WW-II, I wonder why the US didn’t promote democracy, at some expense to the colonial powers as an alternative to Communism? Maybe it was our own racism, the colonial social engineering that invented whiteness. Consult Gerald Horne for some understanding here. King of the hill is a game for snow piles on the playground. Power and domination may be the great game, but my prayer is that earth’s nations become a greater community of communities. Think local planet, act regionally. I will continue my daily reading of TAE, as it is a cataloging of the necessity for human unity and cooperation. Bests.
It seems to me that the purpose of any enterprise is the production of value. In a tribal community that was survival – perpetuation of the tribe. Life is an unfunded mandate. Babies show up; something must be done to take care of them, as well as those already here.
When there are relations with others that can’t be balanced internally with debits and credits, then some form of money is required. From David Graeber’s account in “Debt: The first 5,000 years”, money appeared when there were armies of conquest. My simple summary, credit is for friends, money is for strangers.
When money is part of the game, it can be debt based from banks, or sovereign money issued by states, along with private credit. In the case of money/debt – it seems there must be some correlation with the value of what the enterprise has created, say the sum value the franchise of a city, state, nation has created over time, using also the wise investments of ancestors – noting that the Mediterranean and European nations still use Roman infrastructure and the rights-of-way secured long ago.
These are high maintenance, as is anything of high value. Dumb gold requires lots of maintenance. The ability of credit/debt to bring forward consumption is not a new thought, but certainly not used in any meaningful way a a brake on over-consumption. The mental environment of the “wealth effect”, trading today’s high against a deniable future low, is behavioral economics at its worst.
When I first began reading TAE – perhaps about 2008 when my search for understanding began, you pointed out that the debts exceeded the existing assets. At age 62, that was a difficult to grasp truth, though I came to understand it quickly through the housing market. As a planner, I’d seen housing pass from affordability of 2.5 times income to “whatever payment can be financed” some time in the 1990’s. Incomes did not keep up with housing prices. People drove to cheaper markets; thus the long – insane U.S. commutes. Close in jurisdictions were taking on debt to meet the service requirements of new schools, libraries, parks, fire and rescue services for new housing. The jobs for the new residents [the needed population growth] were in another taxing jurisdiction – which needed the employment based taxes for its own provision of services.
Refinancing is not repayment, the renewal as well of credit worthiness, but that has been the game. That can kicked down the road is now a dumpster. This is something the modern world seems incapable of seeing. I’ve read that the grads with $100,000 in debt see that as their value. When faced with the reality of repayment they may change their minds, but how will they come to understand how the easy credit environment inflated values and created a trap?
TAE, Michael Hudson, Steve Keen, Max Keiser – the realists – thank you.
Having been a regional planning executive, I wrote a piece for the World Future Society in 1986 about the need for cooperation at the regional level for local and state governments. There would be “deficit-sharing” rather than revenue-sharing.
A fix was put in; perhaps it was the plunge protection team after the 1987 crash. Republicans and Democrats agreed it seems, to borrow for each of their own priorities and therby avoid tax increases or reduction of services. I recall the notion that, relative to the national debt, we just owed it tou ourselves – it didn’t matter how big it was.
The advent of personal/e.g. cheap computing did give a business boost and keeping the southern border open brought in competitive labor, followed by the flood of workers due to the collapse of the Soviet Union. Boosts in value creation by the entrepreneurial organizations, governmental and non-governmental occurred, but grossly inflated by dot.com market valuations and more credit – optimized optimism plus fraud. Max explained that part. More faking than making, and an increased acceptance of risk without understanding the down side. Three ship syndication – that’s all Shylock needed. Restraint, prudence, true conservatism, all diminished by MBA spreadsheets, perfectly hedged.
What kind of Kondratiev waves are in store? Great waves caused by sinkholes?
Theft is a moral problem, legal or not. So, I signed a contract that allows you to steal from me when necessary, and neither I nor my team of lawyers caught it. Fine. Economic formulas can not solve a moral problem. They even deny that markets can be manipulated for an extended period of time. So the challenge is really one of spirituality. Graeber says thoughout history, religious authorities were on the side of the poor – opposing usury as it was used to control people. The business world has gotten past that with the debt industry. Extending credit [trust that they can repay] to people who statistically won’t, creates higher rates of loss that are then used to justify higher legal rates of interest. So – as you say – credit is maxed out for people on the street.
TAE – you’ve done a great job – but where is the audience? The pews are nearly empty; buttons in the collection plate. Too many temples of money-changers.
Facebook Post to my page: Cooperation Industry Earth –
“This status report from The Automatic Earth’s Raúl Ilargi Meijer.
If you’ve not spent some time trying to understand the nature of debt based money and banking, this will be somewhat confusing. Much truth is present, but study is required. Reading: “Debt: The first 5,000 years” by David Graeber is a good start – but it is a long read. Easy credit leads to bad decisions. Payoff of debt can be delayed by refinancing, and the related fees make a good income stream for the banking industry, but without repayment of debt there is no renewal of credit worthiness. Debts mount up to the point that they can not be paid. “Forgive us our debts as we forgive our debtors” in the Lord’s Prayer was probably about real debt and not sin. Predatory debt has been in human civilization that long and it has been the true religious authorities that had to fight usury, the rich controlling the poor through debt. Very often, they did not want the debt repaid – so the terms were intended to get a family’s land and/or daughters. The Egyptians were more fair because they knew without the farmers, in the event of war, they’d have no army. Easy credit – unpayable debt”.
Did the Chinese play us – use their 5,000 year history to get the gold and infrastructure for another 1000 years? Are they getting even for the Opium Wars and related colonization? We are only going to survive and advance as the Greater Community of Humanity. War – stealing the fire from others – just doesn’t lead to net benefit. Until that primitive notion is dispelled, we will manage to hobble our evolution and diminish the life supporting capacity of the planet. Other intelligent races may be watching, wondering – how to get control of this real estate. President Reagan warned of this. True or not, it is a perspective that is needed.
Velocity is the term under discussion, but I’m not sure it captures individual or household economics, which are of course, different. In my work as a regional planner for 35 years, I used economic analysis as one tool in the development of recommended policies and programs for
People for whom money “burns a hole in their pocket”, like my son, would be the velocity folks, gunning the throttle until the tank is empty. My daughter, on the other hand, would save – be more tempered in her use. That isn’t necessarily a brake. If it went into a bank, when banks actually needed deposits, it would be available for others that wanted to rent it. Credit is treated as money – and it used to be that, when its source was the savings of others.
When credit extension creates money – the item value may be overstated (list price) and the interest adds to the profit. So a dollar down gets you a new car or whatever. Cash price that day might be $500, but with credit it might be $600 or more. Worth it in many circumstances, providing you have the income to pay off the principle and interest. The old rule of 78s gave the pre-payment penalty – extension of credit has costs. Vendor financing – GM, Sears, GE made finance the profit center.
All this was useful when people managed their debt – and had savings. No over extension in terms of ability to repay. In home buying, the house was not an investment, but where you lived. If paid off by retirement, then only taxes and maintenance had to be covered. Most U.S. housing stock since the 1950’s was built for single family ownership, not rental. S-F housing is high maintenance – yardwork required; not the best style for people who move. Renters, being deemed not as good as homeowners, in some cases you couldn’t be on the planning commission or on a jury if you were not a property owner, that housing stock was unwanted. The high unefficiency of the American housing stock is one reason it is so expensive. Banks wanted zoning since the 1930’s to protect housing value so longer term loans could be made. The separation of uses to enable this created the unwalkable distances of the now entirely automobile dependent society.
Somewhere in the 1980’s – 90’s, the economy shifted on debt from repay to re-fi(nance). The debt creating and recycling economy came into being. Costs rose faster than wages, so the difference was made up with credit. The more debt you had, the more you could get. As the finance fees, more than interest, was the income source, the more the better as far as the financial folks were concerned. Failure of individuals and households to be able to repay was fodder to raise interest rates beyond usury standards. That the vendors were being fraudulent in extending credit and should have had higher standards, well that wasn’t even a thought for those whose PRODUCT IS DEBT. (Apologies for shouting).
So, I believe it is one of the basic thoughts of Nicole and The Automatic Earth that there is more debt, more claim on assets, than there are assets in the physical world. The living assets, debt slaves yet unaware of their condtion, will produce for quite a long time. The balance sheet method of accounting, rather than cash, can easily be balanced by the insertion of an asset valuation equal to or larger than the debt.
Treading water is the velocity? Economies will shrink to the sustainable.
The financial situation of the 1980’s led me to make a case for regional cooperation in a World Future Society paper. Credit magic somehow changed the dynamics, but in doing so – we are worse off in an existential sense. A new message from God would be useful, at least in providing direction. Here’s the paper REGIONAL COUNCILS: Today’s Governmental Tool for the 21st Century (1986)
Political scientists, geographers, historians, scientists, pundits – like to redraw political boundaries based on some superb logic. The boundaries we have are hard won and are the basis for identity in this world. Not everyone agrees, but that doesn’t change much. Civil war is not pretty. Political boundaries are the basis of identity. You wear your nation, state, or local government hat. In each case adults have a direct vote, pay taxes and get services. There are both economies and dis-economies of scale for governments. They persist based on the cumulative infrastructure of the societies and the civil obedience of the community. That creates stability and security. Global capitalism has messed with that. The economists have been blind to the impact of credit and debt in the private sector, for corporations and individuals. In this environment, the people struggle to maintain a vision of the future and perpetuate their families and values. Community motive, that greater force which has enabled human survival and growth of civilization, will overcome the recent infatuation with the lesser profit motive, something that can only exist within community.
David Graeber’s “Debt: The First 5,000 Years” is a big book, a long slog, but worth the effort of reading.
Historically, debtors have been protected and that is the religious history Ashvin relates.
In The Lord’s Prayer, “forgive us our debts, as we forgive our debtors” was therefore, probably actually about debt, not sin. Family debts were paid with human bodies, sons and daughters enslaved
Following is an excerpt from the introduction from the Kindle edition.
“… How many times have we been told that the advent of virtual money, the dematerialization of cash into plastic and dollars into blips of electronic information, has brought us to an unprecedented new financial world? The assumption that we were in such uncharted territory, of course, was one of the things that made it so easy for the likes of Goldman Sachs and AIG to convince people that no one could possibly understand their dazzling new financial instruments. The moment one casts matters on a broad historical scale, though, the first thing one learns is that there’s nothing new about virtual money. Actually, this was the original form of money. Credit system, tabs, even expense accounts, all existed long before cash. These things are as old as civilization itself. True, we also find that history tends to move back and forth between periods dominated by bullion—where it’s assumed that gold and silver are money—and periods where money is assumed to be an abstraction, a virtual unit of account. But historically, credit money comes first, and what we are witnessing today is a return of assumptions that would have been considered obvious common sense in, say, the Middle Ages—or even ancient Mesopotamia.
“… in the past, ages of virtual credit money almost invariably involve the creation of institutions designed to prevent everything going haywire—to stop the lenders from teaming up with bureaucrats and politicians to squeeze everybody dry, as they seem to be doing now. They are accompanied by the creation of institutions designed to protect debtors. The new age of credit money we are in seems to have started precisely backwards. It began with the creation of global institutions like IMF designed to protect not debtors, but creditors. At the same time, on the kind of historical scale we’re talking about here, a decade or two is nothing. We have very little idea what to expect.
“This book is a history of debt, then, but it also uses that history as a way to ask fundamental questions about what human beings and human society are or could be like—what we actually do owe each other, what it even means to ask that question. As a result, the book begins by attempting to puncture a series of myths—not only the Myth of Barter, which is taken up in the chapter, but also rival myths about primordial debts to the gods, or to the state—that in one way or another form the basis of our common-sense assumptions about the nature of economy and society. In that common-sense view, the State and the Market tower above all else as diametrically opposed principles. Historical reality reveals, however, that they were born together and have always been intertwined. The one thing that all these misconceptions have in common, we will find, is that they tend to reduce all human relations to exchange, as if our ties to society, even to the cosmos itself, can be imagined in the same terms as a business deal. This leads to another question: If not exchange, then what? … drawing on … anthropology to describe a view of the moral basis of economic life; then return to the question of the origins of money to demonstrate how the very principle of exchange emerged largely as an effect of violence—that the real origins of money are to be found in crime and recompense, war and slavery, honor, debt, and redemption. … actual history of the last five thousand years of debt and credit, with its great alternations between ages of virtual and physical money. Many of the discoveries here are profoundly unexpected: … ” Kindle Locations 390-417
In: “We find ourselves in a world of receding horizons,” the notion of “receding horizons” seemed an interesting metaphor and wondered how to visualize it?
A search led to: “Model Predictive Control, or MPC, is an advanced method of process control that has been in use in the process industries such as chemical plants and oil refineries since the 1980s. … The prediction horizon keeps being shifted forward and for this reason MPC is also called receding horizon control. Although this approach is not optimal, in practice it has given very good results. …”
https://en.wikipedia.org/wiki/Receding_horizon_control
So, in the oil industry, it is not simply a metaphor.
Growth and change for the individual and community have a cumulative and maturing nature. Broccoli at age 12 may be a different experience that at 24. “Seek ye first the Kingdom of God” will take on different qualities throughout life, as does “To be, or not to be.”
I prefer that our modern world not collapse, but there doesn’t seem to be a glide path for “Voluntary Simplicity.”
That recent economic growth was credit/debt driven, rather that the virtuous outcome of “The Ultimate Resouce,” is a reality difficult to understand.
In many respects we are past limits, but have not recognized this. Solutions are in the past – things we should have done, or not done.
These problems don’t respond to intellectual arguments, because each is underpinned by beliefs.
An objective, off world view might help us appreciate the qualities of this world’s environment and the deterioration of those qualities from quantification, economics and financialization.
Intellect could take such a Spiritual perspective. It has been done in the past. It could be done today. The future could be real instead of a dream of technological singularity, when current technology is making us weaker, unhealthy and susceptible to disease.
