Author: Brian

BBC’s Robert Peston: UK’s debt ‘biggest in the world’

The indebtedness of the UK – that’s the sum of household debts, company debts, government debts and bank debts – had risen to 492% of GDP, or almost five times the value of everything we produce in a single year.

…and is still the biggest relative to GDP of any of the big economies.

Japan’s debts were also 492% of GDP. US indebtedness is less, at 282% of GDP.

So what’s going on?

Well partly it’s to do with a phenomenon, that debt has been shuffled from the private sector to the public sector.

When banks stopped lending, and private-sector spending and investing collapsed, governments continued to spend, even though tax revenues were falling. So public-sector borrowing exploded.

To be clear, if governments had not continued to spend, our recession might well have become something much worse, a 1930s-style depression.

But it is fair to say that a consequence of banks, households and businesses trying to repay their debts has been a big increase in government borrowing.

What it means is that we must brace ourselves for many years of relatively low growth, perhaps 1% versus the 3% of the 16 boom years before the crash, because we no longer have the fuel of borrowing more and more every year.

The Divine Right of Capital, by Marjorie Kelly [link to .pdf]

In an era when stock market wealth has seemed to grow on trees—and trillions have vanished as quickly as falling leaves—it’s an apt time to ask ourselves, where does wealth come from?

More precisely, where does the wealth of public corporations come from? Who creates it?

To judge by the current arrangement in corporate America, one might suppose capital creates wealth—which is strange, because a pile of capital sitting there creates nothing.

“I tasted a beer and tried a cigarette once, as a wayward teenager, and never did it again.” —Mitt Romney

Whole sectors of the economy are dying.

Why is this happening?

Christensen retells the story of how Dell progressively lopped off low-value segments of its PC operation to the Taiwan-based firm ASUSTek —the motherboard, the assembly of the computer, the management of the supply chain and finally the design of the computer.

In each case Dell accepted the proposal because in each case its profitability improved: its costs declined and its revenues stayed the same. At the end of the process, however, Dell was little more than a brand, while ASUSTeK can—and does—now offer a cheaper, better computer to Best Buy at lower cost.

…the impact of foreign outsourcing on many other companies, including the steel companies, the automakers, the oil companies, the pharmaceuticals, and now even software development.

…steadily becoming primarily marketing agencies and brands: they are lopping off the expertise that is needed to make anything anymore.

George Monbiot on socialism for the rich:

For corporate welfare queens and their crystal baths, there is no benefit cap.

Limited liability, offshore secrecy regimes and state handouts ensure those at the top bear none of the costs they inflict on us.

…soon it will be impossible to actually arrive anywhere because everywhere will be full of people trying to get somewhere else…

Motor Car Madness,
written & produced in 1970 by Alan Wakeman.

…soon it will be impossible to actually arrive anywhere because everywhere will be full of people trying to get somewhere else…

Nations and their cities around the world suffering the fact that corporations have created damage rather than growth.

“The problem society faces, says Roger Martin, is that the best way to become rich is to trade value, not create value.”

This may seem counterintuitive at first.

After all, analysts have long painted a picture of growing inequality over the past few decades in whichthe top quintile’s share of the national income has risen while the share of the other 80 percent has fallen.

Almost all the gains for the top 20% was for the top 1%.

And half of that is accounted for by a tiny group within the top percent —the top 0.1 percent.

“No society ever thrived because it had a large & growing class of parasites living off those who produce.” -Thomas Sowell

here’s a fine fine fella pointing out something we didn’t know

It should not be forgotten in this debate that the greatest objection to the pipeline seemed to come from Nebraska.

Lest you forget Nebraska is the largest producer of corn ethanol west of the Mississippi River.

It has 34 ethanol plants, converting 769 million bushels of corn a year into 2 billion gallons of ethanol.

How big is Big Ag,
how big is Big Corn?

The equivalent of 130,000 barrels per day of our national oil production of around 900,000 barrels per day.

our headlines are so-o-o poor…

The economy has to grow faster than the population !

e is greater than p

1. most communities will not have enough staff for their economies
2. they’re going into a death spiral

1. attempt to create a future that does not now exist
2. mindlessly crunch numbers that do exist

Nor is the problem the failure to abandon models and move on to new ones when they cannot adequately explain the data.

In my career, the attempt to find models that can explain past data and predict future data with more accuracy has caused Old Keynesian models and New Classical Models to be replaced by Real Business Cycle and New Keynesian models.

And it’s time for that to happen again.

Toward a More Democratic System of Corporate Governance

“It should be unsurprising then that the interests of employees, shareholders, and other stakeholders are, at best, secondary to those of executives.

“As Harvard Law Professor Mark Roe succinctly phrased it, “the US is managerialist, not capitalist.”

“Current governance arrangements have had an enormous impact on the larger economy and on the distributive features of American capitalism.

“Excessive risk-taking, stagnating wages, and the spike in executive compensation can all be linked back to a system of corporate governance that privileges management’s interests at the expense of other actors.”

[It should be unsurprising… hmmm]

How Our Economy Was Overrun by Monsters and What to Do About It

Although, let’s be fair.
Let’s target our criticism.
Some CEO’s revert to an exchange.

our united states of america

Let’s thimnk a wee bit on this.

For Americans, changing the distribution of wealth is such a loaded issue that regardless of how you frame it, they’re opposed.