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The Financial System is Destroying the World Economy

Discussions about the economic and financial ramifications of PEAK OIL

Re: The Financial System is Destroying the World Economy

Unread postby Newfie » Sat 28 Dec 2019, 11:46:03

It’s pretty scary to think people like that are actual professional economist.

I honestly think it’s better to think of them as “high priests of growth”.
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Re: The Financial System is Destroying the World Economy

Unread postby evilgenius » Sat 28 Dec 2019, 12:22:23

Where does money come from, but the faith of the people? Money is only worth what people believe it is. And the authority of the government is a good place to look for a place to collect our understandings.

That being said, my main beef with Modern Money Theory is how those behind it can so easily discount the worth, or effectiveness, of fractional reserve banking - and its ability to adjust the money supply according to the people's needs. It's a magic bullet, compared to top down ordering or five year plans, when it comes to regulating what resources are available for investment as the people need them. Things like universal basic income are not nearly as responsive, though a better answer to starvation, if it should come to that.

I think pitting classes of ownership, to compete over policy input around which the executives of a corporation manage, would get us much further than handing out money over time. To start with, a class could be set up which derives its sole income from the same pool of money, stocks included, which the executives have available to them. The resulting relationship, that class voting for how much return would go to the executives versus how much they would take home, would, I think, tend toward the middle rather than a radical company selling or labor force destroying edge. It would be more dynamic, spending a lot more time exploring a range than fixed around a price point. It would mean that returning value to shareholders would receive challenges to its meaning.
Last edited by evilgenius on Sat 28 Dec 2019, 14:21:24, edited 3 times in total.
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Re: The Financial System is Destroying the World Economy

Unread postby Newfie » Sat 28 Dec 2019, 12:36:56

Evil,

I’m more radical. I liken our vision of the economy to a perpetual motion machine. Nice idea except it defies the basic laws of physics. You can Tim is something up to cool food, for a while but eventually it must stop.

Same thing for a “perpetual growth” economy. It will stop. Best to plan for the slow down. Folks that deny the inevitability of the slow down are not connected to reality.
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Re: The Financial System is Destroying the World Economy

Unread postby asg70 » Sat 28 Dec 2019, 21:27:44

Since people discount the future, even if they know the process is unsustainable they will profit from it while they can and pass the buck to the next generation. So the only question that counts is how much longer the system can go on. Very few people will make sacrifices in the now to better future generations.

BOLD PREDICTIONS
-Billions are on the verge of starvation as the lockdown continues. (yoshua, 5/20/20)

HALL OF SHAME:
-Short welched on a bet and should be shunned.
-Frequent-flyers should not cry crocodile-tears over climate-change.
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Re: The Financial System is Destroying the World Economy

Unread postby Newfie » Sun 29 Dec 2019, 07:36:51

^1+
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Re: The Financial System is Destroying the World Economy

Unread postby Outcast_Searcher » Tue 31 Dec 2019, 14:25:05

Newfie wrote:Evil,

I’m more radical. I liken our vision of the economy to a perpetual motion machine. Nice idea except it defies the basic laws of physics. You can Tim is something up to cool food, for a while but eventually it must stop.

Same thing for a “perpetual growth” economy. It will stop. Best to plan for the slow down. Folks that deny the inevitability of the slow down are not connected to reality.

Among serious economists, there is no denying that things slow down as economies mature. Just look at 30 year growth forecasts (from serious economic analysis) of China or India, for example.

It's just that natural slow down isn't in-our-face doomageddon, which so many of the ill informed wish so strongly for.

Given planetary constraints, things overall had BETTER slow down before too long, or nature will do it for us, and it won't be pretty.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: The Financial System is Destroying the World Economy

Unread postby Outcast_Searcher » Tue 31 Dec 2019, 14:28:13

asg70 wrote:Since people discount the future, even if they know the process is unsustainable they will profit from it while they can and pass the buck to the next generation. So the only question that counts is how much longer the system can go on. Very few people will make sacrifices in the now to better future generations.

Yup. For an indirect proof, as I'm fond of mentioning, you can't get a HUGE proportion of people to even wisely prepare for their OWN future (re saving, consumption restraint, etc), much less future generations.

The problem is so bad that in the first world, a mandatory "social retirement program" is universal. Even in the "wild west" US.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: The Financial System is Destroying the World Economy

Unread postby Newfie » Tue 31 Dec 2019, 15:07:40

I’ve just read Khanamans Thinking:Fast and Slow. He goes into this in much detail. For all that he wins a Nobel in economics you would think his ideas would be more widely accepted.
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Re: The Financial System is Destroying the World Economy

Unread postby jedrider » Thu 16 Jan 2020, 12:37:11

Yes, this is what the financialization of the world economy means:

Why Manhattan's Skyscrapers Are Empty
https://www.theatlantic.com/ideas/archive/2020/01/american-housing-has-gone-insane/605005/
In Manhattan, the homeless shelters are full, and the luxury skyscrapers are vacant.
Such is the tale of two cities within America’s largest metro. Even as 80,000 people sleep in New York City’s shelters or on its streets, Manhattan residents have watched skinny condominium skyscrapers rise across the island. These colossal stalagmites initially transformed not only the city’s skyline but also the real-estate market for new homes. From 2011 to 2019, the average price of a newly listed condo in New York soared from $1.15 million to $3.77 million.
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Re: The Financial System is Destroying the World Economy

Unread postby EnergyUnlimited » Fri 17 Jan 2020, 13:23:40

Outcast_Searcher wrote:
asg70 wrote:Since people discount the future, even if they know the process is unsustainable they will profit from it while they can and pass the buck to the next generation. So the only question that counts is how much longer the system can go on. Very few people will make sacrifices in the now to better future generations.

Yup. For an indirect proof, as I'm fond of mentioning, you can't get a HUGE proportion of people to even wisely prepare for their OWN future (re saving, consumption restraint, etc), much less future generations.

The problem is so bad that in the first world, a mandatory "social retirement program" is universal. Even in the "wild west" US.

Why not to make such people a first wave of customers of dieoff?
Any protected degeneration will only breed more degeneration.
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Re: The Financial System is Destroying the World Economy

Unread postby Outcast_Searcher » Sat 18 Jan 2020, 17:28:06

EnergyUnlimited wrote:
Outcast_Searcher wrote:
asg70 wrote:Since people discount the future, even if they know the process is unsustainable they will profit from it while they can and pass the buck to the next generation. So the only question that counts is how much longer the system can go on. Very few people will make sacrifices in the now to better future generations.

Yup. For an indirect proof, as I'm fond of mentioning, you can't get a HUGE proportion of people to even wisely prepare for their OWN future (re saving, consumption restraint, etc), much less future generations.

The problem is so bad that in the first world, a mandatory "social retirement program" is universal. Even in the "wild west" US.

Why not to make such people a first wave of customers of dieoff?
Any protected degeneration will only breed more degeneration.

What? You're mirroring my issue with welfare for any but the severely crippled. The liberals (especially the far left) will be after you in force, since in their opinion, the universe MUST be fair, as that's their belief system. (And I know, they didn't bother to define fair. Who has the time to get a real education when there's so many courses in things like "women's studies" for easy A's if you mimic the teacher?)

Our current system re protecting "those who claim they need the most protection, whether legit or not" IS the means to our overall demise.

The "irony" slot in every dictionary is hysterically laughing at us, about now. :idea:
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: The Financial System is Destroying the World Economy

Unread postby Newfie » Mon 20 Jan 2020, 09:06:58

Interesting piece in this topic.


LONDON (Reuters) - A majority of people around the world believe capitalism in its current form is doing more harm than good, a survey found ahead of this week’s Davos meeting of business and political leaders.


https://www.reuters.com/article/us-davo ... SKBN1ZJ0CW
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Re: The Financial System is Destroying the World Economy

Unread postby evilgenius » Mon 20 Jan 2020, 20:06:09

EnergyUnlimited wrote:
Outcast_Searcher wrote:
asg70 wrote:Since people discount the future, even if they know the process is unsustainable they will profit from it while they can and pass the buck to the next generation. So the only question that counts is how much longer the system can go on. Very few people will make sacrifices in the now to better future generations.

Yup. For an indirect proof, as I'm fond of mentioning, you can't get a HUGE proportion of people to even wisely prepare for their OWN future (re saving, consumption restraint, etc), much less future generations.

The problem is so bad that in the first world, a mandatory "social retirement program" is universal. Even in the "wild west" US.

Why not to make such people a first wave of customers of dieoff?
Any protected degeneration will only breed more degeneration.

And who defines 'degeneration?' Is it down to whether a thing makes a profit? Is this going to go the way of corporations, which can splinter themselves into distinct inner divisions. Then they reward those that are revenue generating. Those that aren't slowly suffer. You know, like the accounting department. It becomes a sort of self-fulfilling prophecy, that accounting isn't important. You can say the same thing about the value of art in society, for instance. But it also fosters a sort of paralysis, when a respect for importance becomes a fetish for the nostalgic. I think we, collectively, have a hard time seeing how hard these sorts of decisions really are. It's worse because sometimes these kinds of decisions effect whole generations, or sets of them.
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Re: The Financial System is Destroying the World Economy

Unread postby Newfie » Mon 20 Jan 2020, 21:48:37

My understanding is this, ask what someone from 10,000 BC would do. We have not evolved much from then, we are still working largely within that rule set.
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Re: The Financial System is Destroying the World Economy

Unread postby evilgenius » Sat 25 Jan 2020, 10:23:12

The thing is, any person with an idea can try it as a business - if they can get funding. With more money available in the money supply for investment, many will. It's a short step from there to asking people you hire to do the impossible, if your model isn't going to work. But there are models that work, but don't work well enough for those who do the work to get anything out of them other than their pay.

It has become possible to go into business and pass the costs traditionally accompanied by that along to independent contractors. This produces a cost of doing business which those operating otherwise have a hard time competing against. There isn't any loyalty, except to perform for the next pay packet. Some general contractors will attempt to ensnare their subs in legal and economic situations which commit them beyond the next packet. It's a pseudo loyalty that is almost entirely self-deprecating. Many businesses which operate this way are privately held.

To be truly egregious it takes being publicly held. It's the same principle, only instead of battling less to go around there is a deliberate redistribution that accomplishes the same thing. That's when the excess which may have been available to reward those involved in the scheme, through economies of scale and division of labor, goes to the owners, and management. Under the guise of transferring value to shareholders, management has come out on top while workers haven't.

That's just capitalism, and how it works, until everybody is doing it. Then, tremendous income inequality develops. It gets worse over many decades of the practice. Things like cheapest price become more important to marketing efforts than they once did. Wages don't rise when economists thought they would. Fewer people have careers. Instead they change jobs more often. Most people don't save. They are too busy borrowing.

Oddly, if they made more money they might be able to pay off their debt. If they paid off their debt, the money supply might shrink. If it shrank, there might be less money for those who speculate upon business models. The lack of push for higher incomes allows the imbalance, in that odd way. Yet, it's not certain that people wouldn't still borrow, up to whatever the new sane limits under a higher wage scheme.
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Re: The Financial System is Destroying the World Economy

Unread postby rockdoc123 » Sat 25 Jan 2020, 12:55:34

To be truly egregious it takes being publicly held. It's the same principle, only instead of battling less to go around there is a deliberate redistribution that accomplishes the same thing. That's when the excess which may have been available to reward those involved in the scheme, through economies of scale and division of labor, goes to the owners, and management. Under the guise of transferring value to shareholders, management has come out on top while workers haven't.


Please give an example as this is pretty absurd to my mind. There are basically two kinds of public companies, those which are focussed on share growth and those that are focussed on dividend growth. In the latter category (think XOM) the shareholder reward is pretty simple...it is a contract you enter into when you buy the shares. You receive X% yield and your compensation or share of the success is based on how many shares you hold. In the former case success in a strong market would be measured ultimately by share price growth. If you own more shares you get a greater share of the success in either company construct.

Company owners cannot somehow filter off profits and put them in their pockets. There are so many checks and balances in the system that sort of thing is immediately apparent in the annual independent audit and would result in the SEC (or other securities exchange regulator) issuing sanctions and the Board of Directors firing the individuals responsible. As to paying themselves salaries, annually all public companies issue statements about compensation and how that was arrived at. Almost all public companies now have governance in place that has a compensation committee that outlines a number of measures against which performance of the corporation is tracked (cashflow, operations completion, share price, safety etc). Those measures are compared against companies of similar size and the compensation is then justified. Even someone who is a founder in a small public company cannot filter money off into their own accounts. That person may have a seat on the Board but the other seats are generally independent so the ability to do something criminal is pretty much precluded. Ultimately all of these owners, executives, etc report to the Board who in turn report to the shareholders. The shareholders annually vote to approve the appointment of Directors and it is in that fashion that they have significant control.

Suggesting all public companies are run by owners and executive who are able to somehow feather their own nests at the expense of shareholders is nothing more than a socialist rant that has little basis in fact. Whining about how much executive are compensated is a discussion that can't happen without looking at the actual measurements by which they are compensated. I suggest you avail yourself of the documents filed by these public companies each year to the SEC, TSX etc.
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Re: The Financial System is Destroying the World Economy

Unread postby evilgenius » Sun 26 Jan 2020, 12:36:42

rockdoc123 wrote:
To be truly egregious it takes being publicly held. It's the same principle, only instead of battling less to go around there is a deliberate redistribution that accomplishes the same thing. That's when the excess which may have been available to reward those involved in the scheme, through economies of scale and division of labor, goes to the owners, and management. Under the guise of transferring value to shareholders, management has come out on top while workers haven't.


Please give an example as this is pretty absurd to my mind. There are basically two kinds of public companies, those which are focussed on share growth and those that are focussed on dividend growth. In the latter category (think XOM) the shareholder reward is pretty simple...it is a contract you enter into when you buy the shares. You receive X% yield and your compensation or share of the success is based on how many shares you hold. In the former case success in a strong market would be measured ultimately by share price growth. If you own more shares you get a greater share of the success in either company construct.

Company owners cannot somehow filter off profits and put them in their pockets. There are so many checks and balances in the system that sort of thing is immediately apparent in the annual independent audit and would result in the SEC (or other securities exchange regulator) issuing sanctions and the Board of Directors firing the individuals responsible. As to paying themselves salaries, annually all public companies issue statements about compensation and how that was arrived at. Almost all public companies now have governance in place that has a compensation committee that outlines a number of measures against which performance of the corporation is tracked (cashflow, operations completion, share price, safety etc). Those measures are compared against companies of similar size and the compensation is then justified. Even someone who is a founder in a small public company cannot filter money off into their own accounts. That person may have a seat on the Board but the other seats are generally independent so the ability to do something criminal is pretty much precluded. Ultimately all of these owners, executives, etc report to the Board who in turn report to the shareholders. The shareholders annually vote to approve the appointment of Directors and it is in that fashion that they have significant control.

Suggesting all public companies are run by owners and executive who are able to somehow feather their own nests at the expense of shareholders is nothing more than a socialist rant that has little basis in fact. Whining about how much executive are compensated is a discussion that can't happen without looking at the actual measurements by which they are compensated. I suggest you avail yourself of the documents filed by these public companies each year to the SEC, TSX etc.

How about Boeing? That CEO just got canned, after the fact. You wanted an example. That's just a very public one. Since the 737 Max crisis hit the company, I've seen several employees interviewed who tried to tell somebody about something wrong with the plane. These are employees who bought into the company's story. They felt like they owned the problem, only to find out that the criteria by which things like executive compensation are determined don't include things like that.

Or, again, I recently read a story about how a major car company in the US had allowed SUV's to roll off of the assembly line with too many defects. I can't remember which one, or I would say their name. They were warned as well. But it was deemed cheaper to shove the numbers out, and fix the issue later. Well, so many months of round the clock overtime later, and the budget gets totally blown.

These examples are nothing, compared to all of those companies which rely upon things in society to keep their underpaid employees working for them. Yes, things which they, or those like minded to them, have lobbied for over the decades. The sort of things exemplified in single issue politics.

The way you approached this topic, and how I have responded to it, reminds me of that Rodney Dangerfield movie Back to School, when Dangerfield's character tells the professor about all of the mob kick backs that have to be considered when actually doing business.

https://www.youtube.com/watch?v=uSLscJ2cY04

But I like this clip better.

https://www.youtube.com/watch?v=k9DO26O6dIg
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Re: The Financial System is Destroying the World Economy

Unread postby rockdoc123 » Sun 26 Jan 2020, 17:22:31

How about Boeing? That CEO just got canned, after the fact. You wanted an example. That's just a very public one. Since the 737 Max crisis hit the company, I've seen several employees interviewed who tried to tell somebody about something wrong with the plane.


Suffering some cognitive dissonance are we? You were complaining that the owners of corporations were taking money and enriching themselves at the expense of workers. Did the CEO of Boeing get enriched? No, in fact, he lost his job because the Board got fed up with the lack of delivery on promises to fix the issues. Did employees lose money? No. They were paid precisely what their employment contracts entailed. Issues happen in manufacturing and what happened with Boeing is exactly how it should be handled. Try to figure out the problem as soon as possible and fix it. If the guy you put in charge isn’t up to the task put someone else in there. Honestly, you approach this as if it is some kind of conspiracy happening.

Or, again, I recently read a story about how a major car company in the US had allowed SUV's to roll off of the assembly line with too many defects.


Again nothing to do with what you were claiming. How did this benefit the owners or management? In fact if the Board of that company were to find this out (and I think it is BS as you can't hide that sort of thing...ie. recalls) they would have had heads roll. That is the way it works.

These examples are nothing, compared to all of those companies which rely upon things in society to keep their underpaid employees working for them. Yes, things which they, or those like minded to them, have lobbied for over the decades. The sort of things exemplified in single issue politics.


Perhaps you should try English? What "things in society".....what "like minded" individuals lobbied for what? And wtf does single issue politics have to do with corporations and they way they are run?
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Re: The Financial System is Destroying the World Economy

Unread postby Outcast_Searcher » Sun 26 Jan 2020, 17:52:01

evilgenius wrote:[
How about Boeing? That CEO just got canned, after the fact. You wanted an example. That's just a very public one. Since the 737 Max crisis hit the company, I've seen several employees interviewed who tried to tell somebody about something wrong with the plane.

...

Or, again, I recently read a story about how a major car company in the US had allowed SUV's to roll off of the assembly line with too many defects. I can't remember which one, or I would say their name. They were warned as well.

Jesus Christ. Have you EVER WORKED for a large company?

Do you imagine that in large companies, everyone agrees with every decision? Or that every decision management makes is AT ALL competent?

Trust me, after working for IBM for 26+ years (which used to be a very highly regarded company in the 50's - 70's), I saw MASSIVE disagreements over MANY MANY things with virtually EVERY significant product -- which went on for days, months, and years.

There were a lot of competent technicians who wanted to see their product succeed, but management didn't have a clue, or was more interested in due dates, or wanted to be promoted, or whatever.

...

If you want to live somewhere that such things aren't the norm, try planet Vulcan, because you're not likely to find it ANYWHERE in a large company (which Boeing is, of course) on planet earth.

Very SIMPLE things like how to budget, how to invest, how to treat the work force, what the rules should be, much less EVERY significant aspect of a major project are all blatantly obvious examples of this, again, on planet earth.

(I suspect the same is true for 99%+ of small companies, but unlike large corporations with public records, there's less data to tell.)
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: The Financial System is Destroying the World Economy

Unread postby Newfie » Mon 27 Jan 2020, 19:07:50

In my experience small companies MAY not be as bad, but frequently are. The larger the company the harder to have a work force that is better than average.
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