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Wealth & Economics > What to do?

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message 1: by Nik (last edited Jan 27, 2019 08:04AM) (new)

Nik Krasno | 15783 comments Discussing here for a few months different issues that are seemingly flawed in our systems and seeing that many agree on their existence, the natural question that comes to mind 'how, if at all, they are to be addressed'?

One attitude can be - well, that's the way it is and there is nothing we can do about it. We should concentrate on our own personal battles for money and glory and leave grand theoretical issues to lazy bums who have time to waste on them.. -:) Legit, but too passive for my personal liking..

The other side of the scale would be - hey revolution! -:) There are only hundreds of those versus millions of ours. Let's dismantle the flawed system that we have and build something new and shiny. The problem with this course is that radicals prompting for violent resolution of any injustice seem incapable to build anything fair and just afterwards. Evidenced by the history. And besides, we don't have anything with a proven record that is better than the existing system. So, I don't think that any drastic approach is a good and viable solution.

So what then?
Well, the current system is supposedly giving the majority the possibility to enforce its agenda. Can we use more actively the means given to us by the system? I think - yes. We can strive and advocate for more instances of direct democracy. We can try to hold accountable (politically) our representatives when they neglect their promises. These are trivial and obvious things. Anything else?
Yes. Shaming, for example. Customer boycott, things like that. They seem to work. I know some of Russian/Ukrainian oligarchs are denied entry to the US and some other countries. This stigma often bars them from doing business with international business community. Is it effective? To a degree - yes.
Similarly, if certain businessmen would become unhandshakeable because of their ethics, they might think twice whether to employ them. After all, many of them are very particular about creation of a positive public image.
I know instances when public outrage prevented write-off of a substantial debt to one of the tycoons. In the wake of public antagonism the bank decided to back away from the pardon and not to risk losing indefinite number of clients and endanger its reputation.
It's hard to see through clever disguises and manipulations sometimes, but where it's possible the negative public opinion, spread like fire on social networks, is a powerful tool, which no one neglects these days and which can effectively counterbalance lobbying influence of the big biz. Awareness is a big step forward I think, because public attention that's something one avoids when doing shady deals.
Most businesses can't weather out a customers' boycott, meaning that flawed practices can be punishable.
Yeah, the above are not too sexy and immediate, but something to bear in mind and maybe a little better than simply putting up with what is considered deficient.
What's your attitude?


Tara Woods Turner | 2063 comments I think if we treated the wrongs of others as if they were our own that would be a good start. Honestly I also think it's how amd what we teach our children that really sticks.


message 3: by Ian (new)

Ian Miller | 11532 comments My answer is, well, write books, dealing with the problems I see coming. As an example, you may recall the Dallas shooter was neutralised with a robot-controlled bomb. The book I am writing now, called 'Bot Wars, has the theme of what happens when these sort of machines are hijacked, and how difficult they are then to deal with if you haven't prepared. You may not think this is a pressing problem, and perhaps it is not now, but my view is that now is the time to make sure these sort of disasters can't happen in the future.

In principle, people might read these books and avoid the problems. In practice, the number reading them won't make much difference.


message 4: by Nik (new)

Nik Krasno | 15783 comments Ian wrote: "My answer is, well, write books, dealing with the problems I see coming.
In practice, the number reading them won't make much difference..."


Yep, that's certainly an inspiration, but as you mention, the realistically- expected impact wouldn't be grandiose


message 5: by Tim (last edited Jul 29, 2016 02:58AM) (new)

Tim Rees | 732 comments If there's a revolution, Nik, I'm in. Let's bring down this system of money. We need to native American philosophy and Maasai people who live in communities where there is no ownership, their culture works because they share with everything, including other life forms...

There is a video going around Facebook that I found very interesting. It explains simply how the whole system is actually broke and will collapse... again... Greece owe 8 billion lent to them by other European countries, Italy owe something like 6 trillion and Spain 3 trillion... etc... They can't pay it back, so the countries (Germany, France and the UK) who lent them the money have to borrow from countries like the USA and China to survive. The USA's economy is wholly owned by China and China are never going to be paid back because the countries who owe them can't pay unless they borrow more... and now China is struggling...

So it seems to me it's a deck of cards that's destined to fall... Hungary are the first to ban Rothschild's bank and hopefully others will follow...

Rothschild own every central bank in the world apart from North Korea, Iran, Cuba and now Hungary... The fight back is already on...

Incidentally: in the future could we see a system as outlined in Star Trek by the great Gene Roddenberry where money has no value?


message 6: by Nik (new)

Nik Krasno | 15783 comments Revolutions are problematic, as they are usually led by extreme-oriented individuals apt to use violence. Peaceful laymen won't be game to lead, but they are likely to follow. Notably, many revolutions furthered a noble agenda. But can the same people that win sometimes a bloody battle build a just society? I doubt it. The history proved otherwise. French revolution was followed by the reign of terror, where many died, incl revolution's leaders and eventually brought to usurpation of power by Napoleon.
Russian revolution - what can be possibly more noble? Workers and peasants snatched the power from money bags and nobility. But then there were decades of terror where dozens of millions died in 'cleansing'. There is a chart somewhere demostrating this, but in a nut shell Stalin executed almost all of his peers, who were originally leading the revolution.
Besides, it seems to me capitalism is somewhat closer to human nature of individualism than a society based on strictly communal values. There are not enough Mercedeces, but there are lots of people wanting to drive them. How do you solve it? If it wasn't money, then the strongest would've driven them. Or making a queue -:) Both values are important, so I'd rather think of improving the current system than replacing it entirely, especially though revolutionary means. I personally think that race for accumulation of wealth is constructive along most of its way, but becomes very destructive at the very top, where it turns into a self-preservation mode.
Removing oppressive regimes though might be a different story, because there you put force against force.
Re debt - yeah, it's a huge problem. But I remember reading that French asked US to change the pieces of paper, where 'dollar' was written to gold, as they were supposed to be backed by gold reserves. And US refused.... There was a shock, for sure, but they found a solution eventually -:)


message 7: by Ian (new)

Ian Miller | 11532 comments I have written a series of futuristic novels in which various types of political/economic systems are tried (and oddly enough, I seem to have overlooked communism) and the common feature is that they all have series defects (to get the plot going) and these are invariably due to some manipulating the system for their own ends off alternatively, the system goes off course trying to defend itself. OK, I needed that for the stories, but I also think it is true.

My personal view is that the ideals of Star Trek mentioned above are to some extent at least consistent with the ideals Lenin had for Communism (Read "The State and Revolution"). What actually happened was that when the revolution got going, not everybody had Lenin's view, so the Communists had to start overcoming opposition and purging, and of course once started, Lenin found it hard to stop. Then he died, and Stalin had no trouble regarding stopping purges - he simply had no interest in stopping them. Stalin had this perverse view, "Better to get 10 innocents than miss one guilty."
Part of the reason I believe debt is such a problem is that governments think debt is great because (a) they can please the population and win elections now, and (b) the economy will keep expanding, so it will be easier to pay it back. The problem comes when the economy ceases to expand but recesses. That was overcome in 2008 by increasing debt, but the problem now is, by making interest rates so low, debt is getting out of hand, AND by and large, the debt is not going into productive or virtuous ends. The next recession will really bite, so what do governments do? Probably cancel debts and let everyone take "hair cuts". So, what happens then? Who lends to governments?


message 8: by Nik (last edited Jul 30, 2016 02:47AM) (new)

Nik Krasno | 15783 comments But wait a sec-:). What about all those credit ratings that are supposed to reflect something about countries creditworthiness?
The US is a triple A, even Spain is somewhere between BBB+ to A. Moody's, Fitch, S&P and others regularly rate sovereign borrowers.
Or does Poor in 'Standard & Poor' stand for something else?


message 9: by Nik (new)

Nik Krasno | 15783 comments Ian wrote: "My personal view is that the ideals of Star Trek mentioned above are to some extent at least consistent with the ideals Lenin had for Communism (Read "The State and Revolution"). What actually happened was that when the revolution got going, not everybody had Lenin's view, so the Communists had to start overcoming opposition and purging, and of course once started, Lenin found it hard to stop. Then he died, and Stalin had no trouble regarding stopping purges - he simply had no interest in stopping them. Stalin had this perverse view, "Better to get 10 innocents than miss one guilty."..."

Communism, that was never actually implemented, but was supposed to evolve from socialism in socialist countries, envisaged total abolition of money.
I'm not sure, how much the purges can be attributed to Lenin, who was wounded shortly after the 1917 revolution, never fully recovered and died in 1924 and had to deal with the WW1 and ensuing Civil war. Don't think he executed any of the colleagues, although he doesn't strike as a tender dude.
But it was in his time, of course, that Dzerzhinsky started to organize - Che Ka (which evolved into KGB eventually) aimed to prevent counter-revolution...
Anyhow, in the history I studied (and it's being revised practically every morning -:)) the repressions are called 'Stalin Repressions'.


message 10: by J.J. (new)

J.J. Mainor | 2281 comments Debt is the reason governments love inflation. They can borrow a sum of money and pay it back when it loses half its value and the government has to print more money. Inflation is a better friend to debt than low/zero interest rates.


message 11: by Ian (new)

Ian Miller | 11532 comments J.J. wrote: "Debt is the reason governments love inflation. They can borrow a sum of money and pay it back when it loses half its value and the government has to print more money. Inflation is a better friend t..."

In my opinion, the hidden problem with very low/zero interest is that too many get into huge debt, and took few are saving and investing, so you end up with the sort of economy where everyone is working for the banks. Now, how do you get out of this mess? If you raised interest rates, the heavily debated simply fall over and there are so many of them there is a good chance of a major recession, but if you don't, the situation just gets worse, and eventually the only way out is to either inflate the currency so the debts go away, or simply enforce major "haircuts".


message 12: by Nik (new)

Nik Krasno | 15783 comments Ian wrote: "J.J. wrote: "In my opinion, the hidden problem with very low/zero interest is that too many get into huge debt, and took few are saving and investing..."

There is a time bomb right there. It's different across the globe, but in some places loans are indexed to inflation and/or central bank's rate. The moment any of these two parameters considerably increase many businesses and households may have a serious problem to keep solvent....


message 13: by Ian (new)

Ian Miller | 11532 comments Yes, Nik, in NZ, and particularly in Auckland, thanks to politicians with investments in property, house prices have got out of hand with the lower interest rates. And a lot of other people have borrowed against their house because the interest rates are low. It could be quite chaotic if interest rates rise, and sooner or later someone has to lend, and why will they?


message 14: by Nik (new)

Nik Krasno | 15783 comments Exactly same here.
And most loans are indexed to inflation or central ban'k rate. Although banks here usually don't approve loans, which monthly return exceeds 1/3 of household's income, I'm pretty sure that a considerable increase in monthly return resulting from increase of central bank's rate, for example, will cause massive default. Scary to imagine the consequences


message 15: by J.J. (new)

J.J. Mainor | 2281 comments Ian wrote: "J.J. wrote: "Debt is the reason governments love inflation. They can borrow a sum of money and pay it back when it loses half its value and the government has to print more money. Inflation is a be..."
Raising rates might be brutal for many, but it could be the only way to slow down the lending and stop the most vulnerable from getting themselves in further trouble. Problem is, the spending drives the economy. Businesses learned long ago they could get people to by more stuff if they extended that credit. Slow the lending, and you slow the economy.


message 16: by Nik (new)

Nik Krasno | 15783 comments J.J. wrote: "Raising rates might be brutal for many, but it could be the only way to slow down the lending and stop the most vulnerable from getting themselves in further trouble..
Slow the lending, and you slow the economy..."


It became a trap both ways. You both want to slow the lending and don't. Every way you go from here, somebody's getting scr.wed..


message 17: by Ian (new)

Ian Miller | 11532 comments I think a good part of the problem comes from politicians. Keynes had this idea that in tough times the governments could create money and thus run serious deficits. The problem came with the second half of the prescription, which was when times got good again, this created money had to be withdrawn and debts paid off, at least to a reasonable level (i.e. debts for consumption had to be paid off - debts for infrastructure were OK because they paid themselves off). The politicians loved the first half, but the second half (damping down the good times) got really unpopular, and of course it was always "good" to get into debt and have good times, and let the successor politicians work out a way of getting out of the mess. The trouble now is, we are in a mess, and I doubt there is any room left to prime another recession.

Maybe that isn't quite right, but it is the basis of a couple of my novels, so I shall stick with it :-)


message 18: by Nik (new)

Nik Krasno | 15783 comments Even on a high political level it often goes like on the every there - assuming that everything's gonna be alright. In line with human nature.
I think there are positions that your modus operandi should be based on the pessimistic assumptions even if they are against the trends.
Currently, when it momentarily looks like the worst is behind, basing on this or that single macroeconomic indicator, the above assumption should still apply. Yeah, it's annoying and unpopular to think this way, but sometimes and for some positions - necessary.


message 19: by Nik (new)

Nik Krasno | 15783 comments Do you know what to do? -:)


message 20: by Ian (new)

Ian Miller | 11532 comments In my case, given where we are now, I doubt we have too many options. Most countries have record low interest rates, which has led to an explosion of personal debt. There are only three ways out - everybody work it off (unlikely to happen because debtors don't cooperate); cancel debt, which hurts lenders; or shake it out, which effectively generates a depression. So no, I don't know, and I hope someone has a magical fourth option. Any suggestions?


message 21: by Scout (new)

Scout (goodreadscomscout) | 6035 comments No suggestions here, as I don't know enough about economics.

Just an interjection about Star Trek, since it was part of the discussion. Fantasy, I know. But the reason that there was no poverty and that money was not a worry was that they had replicators that could provide food and drink -two staples of life, and sources of strife in our world.


message 22: by Nik (new)

Nik Krasno | 15783 comments Ian wrote: "Most countries have record low interest rates, which has led to an explosion of personal debt. ..."

Yes, that's a global problem, however the specifics might be quite different. From what I hear from friends in the States and UK, for example, and I don't know how true it is, but they say, most mortgages (and that's usually the biggest personal debt) have fixed interest, so their return is predictable no matter what happens.
We, for example, have most mortgages with flexible rates, pegged either to central bank's rate or another rate or inflation. It's quite possible that when these parameters start to change, the monthly return 'jumps' significantly and families fold under the burden.....
So whatever situations, based on low rates and low inflation, they indeed contain a great risk factor, once and if the situ starts to change.
And Trump seemed to be determined to put an end to austerity, increase spending and thus re-ignite the biz and inevitably - inflation.. Yellen has already started to raise the rate in the States, something that hadn't happened for how long? Maybe 7-8 years.
Others might follow suit..


message 23: by Ian (new)

Ian Miller | 11532 comments Here in NZ you can get fixed or floating rates, but the fixed ones are usually only for up to three years. If the rates are fixed until repayment, then I guess you are going to be lucky.


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