[americandream]

Here's why another generation of derivatives are on the way. Forget all your airy-fairy libertarian notions of small shopkeeper with gun at door freedom. You must consume! Consume I tell you!

http://www.telegraph.co.uk/finance/econ ... hrift.html

[mattduke]

Classic Keynsian fallacy. This from the same guy that advised digging and refilling holes in the ground as "solution" to depression.

http://peakoil.com/economics-finance/ke ... x%20thrift

[americandream]

Raise your hand those amongst us who would willingly sacrifice your way of life to the brute force of pure economy. That noble creature does not exist and it is in the nature of capital to seek the path of least resistance to survival.

I am a marxist but theres no damned way I would willingly succumb to the impoverishment of my affluent capitalist means of livelihood. I'm rational but not a saint. The next generation of derivatives is on the drawing board.

Classic Keynsian fallacy. This from the same guy that advised digging and refilling holes in the ground as "solution" to depression.

http://peakoil.com/economics-finance/ke ... x%20thrift

[efarmer]

The real danger is that the cash strapped consumer, low on funds will have to ditch the television and Internet links completely, and without anyone able to dig into his head and tell him what he needs to buy to be stylish and complete as a human being, he will simply look to his neighbors to see what they are doing, who of course will be looking back at him because they too have lost their link with the consumer programming mavens. This will lock us out of consuming our way out of the results of consumption that we are presently in.

I am afraid they will all just buy more Spam and sacks of potatoes. The cure of course, will be to send in "seed consumers" outfitted by manufacturers, retailers, and advertisers, with fancy clothes, cars, and goodies to start the fermentation of consumer frenzy back up again.

Being a "seed" consumer could be the next big thing...

This will be very fragile, if the rumor that the "seed" consumer is a politician
or a repo man gets going, we are back to square one.

[mattduke]

This cartoon may help AmericanDream. The author is a political prisoner in the US.

http://www.takelifeback.com/hegawid

[Tyler_JC]

Consumption-led growth be damned. Britain is in no position to increase its debt load right now. Sensible public policy would be moderate tax hikes on the rich and spending cuts across the board.

Keynesian economics is based on the idea that the long term doesn't matter because "in the long run we're all dead".

Speaking as someone in his 20s, I'd say the long term matters quite a bit. Extreme leveraging at the government level is just as bad, if not worse, than extreme leveraging at the corporate/individual level. Governments are in for a serious shock once they realize that 1940s debt levels are not going to be followed by 1950s/1960s economic growth levels.

Once the debt payments exceed economic growth over a long period of time, the indebted countries will be caught in a hopeless debt trap. They will never be able to truly pay off these obligations and the only solution will be a devaluation of their currency followed by years of austerity.

[americandream]

All this academic steady state capitalism is fine in the class room but you ask an investor (small or otherwise) to steady state his appetite for increasing annual returns and you wont get work as a professional in the financial services. In fact, you will quickly be consigned to a failed state of employment.

You'ld be surprised at the number of financial professionals who all agree that only compulsion (due to an impending calamity, resource exhaustion or something beyond humankinds control) will impel us to adopt a steady state system. And it wont be a proft driven one. The two do not mix. Try asking a child not to grow. Impossible dreams of those who invariably sit in academic cloisters and have never really confronted business people other than to beg for grants and subsidies.

This cartoon may help AmericanDream. The author is a political prisoner in the US.

http://www.takelifeback.com/hegawid

[americandream]

Thats all well and good but its the private sectors tail thats wagging this government sector dog. The lobbying mechanism is fiendishly fcukked in the western world.

Consumption-led growth be damned. Britain is in no position to increase its debt load right now. Sensible public policy would be moderate tax hikes on the rich and spending cuts across the board. --snip-- Once the debt payments exceed economic growth over a long period of time, the indebted countries will be caught in a hopeless debt trap. They will never be able to truly pay off these obligations and the only solution will be a devaluation of their currency followed by years of austerity.

[nobodypanic]

All this academic steady state capitalism is fine in the class room but you ask an investor (small or otherwise) to steady state his appetite for increasing annual returns and you wont get work as a professional in the financial services. In fact, you will quickly be consigned to a failed state of employment.

You'ld be surprised at the number of financial professionals who all agree that only compulsion (due to an impending calamity, resource exhaustion or something beyond humankinds control) will impel us to adopt a steady state system. And it wont be a proft driven one. The two do not mix. Try asking a child not to grow. Impossible dreams of those who invariably sit in academic cloisters and have never really confronted business people other than to beg for grants and subsidies.

agreed.

even the petty bourgeoisie's first priority is to grow his business, to make more money, to get bigger. the very structure of capitalism makes it necessary that he do so in order to survive and thrive in the institutionalized cut throat competition that takes place w/in the market arena. thus, sans growth, capitalism ceases to be and must instead become something else.

[Tyler_JC]

Oh, I have no doubt that the British government (along with America, Italy, etc, etc) will continue to borrow and spend like there's no tomorrow.

They don't give a damn about the future beyond the next election.

It's the private sector that won't follow their lead because they just won't be able to.

Credit lines have been slashed for the middle class and no amount of government proclamations is going to convince them to spend money they don't have access to.

[americandream]

I advise for a living and I have worked in NZ, Australia, the States, UK and Ireland and it's all the same no matter where you are. In fact the pressure on a finanacial services advisors to push portfolio growth and annual profit enhancing strategies, both income and capital, is hellish. I've seen them all.

You are judged by how happy the clients are and that in turn is judged by how healthy their annual bottom line is. All this waffle I read on here by this institute or that pundit is bullcrap. They're either pushing their own agenda or lining their pockets in the course of selling you said bullcrap. I'ld advise most of the dewey eyed libertarians on here to get themselves a job at one of the larger accounting firms for a year or so...even something menial....to get a flavour for whats really going on. That will soon set your right.

agreed.
even the petty bourgeoisie's first priority is to grow his business, to make more money, to get bigger. the very structure of capitalism makes it necessary that he do so in order to survive and thrive in the institutionalized cut throat competition that takes place w/in the market arena. thus, sans growth, capitalism ceases to be and must instead become something else.

[americandream]

I wouldn't bet on that. I've heard a rumour that the Chinese banks are considering opening credit lines into the West, in effect picking up the slack. Iceland part 2 may well be on the way.

Credit lines have been slashed for the middle class and no amount of government proclamations is going to convince them to spend money they don't have access to.

[TreeFarmer]

Here's why another generation of derivatives are on the way. Forget all your airy-fairy libertarian notions of small shopkeeper with gun at door freedom. You must consume! Consume I tell you! link

Let me see, I'm supposed to get on a treadmill and run faster every day than I did the previous day and somehow I'm going to be better off?

The real bullshit that is not stated is that is how the rich bankers end up with all of the money! So what if your wealth grows SLOWER if you actually end up with some wealth at the end?
TF

[rangerone314]

Ironically USSR never practiced true communism and we in the US do not practice true capitalism.

Read up on ADM price fixing and extrapolate that to many other industries and you will see what we have here is not Adam Smith's "Wealth of Nations" but a wealth-redistribution system from the producers/workers to the people who are gaming the system.

It is funny that rich people and their supporters decry "unfair" taxes when business practices such as price-fixing and outsourcing are far more unfair.

Why rich people rape the middle class and then think they have the right to complain about the quality of sex they get, is beyond me.

[MarkJ]

Many of the things people spend their money on like broadband, notebooks, cell phones, pre-paid minutes, flat panel televisions, BluRay players, gaming systems, digital cameras, video cameras, electronic gadgets, air conditioners, power tools and numerous accessories weren't available, weren't affordable or didn't have acceptable bang-for-the-buck only 10 years ago. As these things scale in performance and affordability, more people are buyers, plus households make multiple purchases and upgrade more frequently.

We're already seeing many low income households with broadband, multiple notebooks, multiple gaming systems, wireless routers, numerous computer/cellular/gaming accessories, multiple cell phones, multiple flat panel televisions, BluRay players, multiple window unit air conditioners etc and we haven't even started the Christmas shopping season. Many of these electronic gadgets are damaged, stolen, fail or become obsolete in a short period of time, so replacement cycles are frequent as well.


Many of the restaurants, hotels, shopping centers, super-stores, convenience stores, car dealers, discount stores, dollar stores, tanning salons, nail salons, fast food joints, movie theaters and other businesses didn't exist 10 years ago, so there are more outlets where people can spend money as well as more online outlets due to the growth of broadband and computers.

The increase in transit units, routes and frequency is also getting more transportation challenged residents to the suburban malls, restaurants, shopping and entertainment where they can spend their money. Some regions have identical convenience stores on opposite sides of the street to handle the increase in traffic.


Stimulus checks, low/zero/negative tax brackets, $X,000 tax refunds, freebies and subsidies like rent, housing, home improvements, food-stamps, HEAP, Emergency HEAP, medicaid, daycare, transportation etc also help stimulate spending since they put money in the pockets of goods/service providers, or they buffer the incomes of people receiving the benefits.

As people trade down in one area, they tend to increase spending in another.

Many people won't see the official growth in spending since the cash economy has grown substantially.

Go Consumers!

[Pretorian]

I am a marxist but theres no damned way I would willingly succumb to the impoverishment of my affluent capitalist means of livelihood. I'm rational but not a saint. The next generation of derivatives is on the drawing board.

yet you want others to eat dirt while digging ditches 12 hours a day. What a hypocrite. Or should I say communist?

[efarmer]

It does seem the credit bubble and "globalization" has / had
a strong current of financial colonialism built in. Foreign people
work hard and we spent their money in return for the promise
that they could continue to work hard and loan us money.

Let's cut to the chase, it does look as if we are going to have
to spend our own money and work hard again, doesn't it?

[Pretorian]

It does seem the credit bubble and "globalization" has / had
a strong current of financial colonialism built in. Foreign people
work hard and we spent their money in return for the promise
that they could continue to work hard and loan us money.

what other options do they have , mind me asking? Stop working and become welfare queens? Set a tent in the woods and live off hunting&gathering?

Let's cut to the chase, it does look as if we are going to have
to spend our own money and work hard again, doesn't it?

yes, but much sooner these foreign people, those who produce useless crap and useful crap will be eating each other for a protein boost.

[aldente]

Hey MarkJ, the spending that you point towards is not voluntary IN MENTAL CONTEXT , it is rather an abstract AND might as well be a "void" place holder, since it does not hold any content IN REGARDS TO::::::::::::