Tuesday, July 9, 2013

"Too many consumers and not enough producers."



"Too many consumers and not enough producers."

Totally wrong ! we have way more producers than consmuers by a long shot, we have huge excess capacity, all EU car factories (except germany) are running at less than 80 % production and you think we don't have enough producers ?!?!

The USA was used to building 2 million homes a year, now it can't even reacvh a million and so on, the Chinese have huge factiroes, we could produce thousands of times more goods without even increasing the number of workers, or just increasing them by very little.

No way, jose', you have it all wrong and upisde down. We have we too few consumers for what can be produced, hence no jobs, no economy moving and so forth. We need huge amount of increased consumption more than anything else!


"What sort of work will succeeding generations find that allows them to be consumers?"

Simply no work, the idea of full employment in a society is relatively recent, only a few decades, most of the world and people, study anthropology, has lived dirt poor, most people who have ever lived would have been considered "unemployed" for all of their lives by todays' arbitrary standards and so forth.

The chinese have millions of empty homes in skyscrapers, they just keep on building like drones, so where is the "too few producers " ? All companies and factories and home builders would love to make and build like crazy, as they have done in the past but saturating markets in the end. all of the instability of capitalism is due exactly to this, easily saturated markets with goods, homes cars and all kinds of things by too few workers given the huge efficiency and productivity gains a technological economy provides and so forth.

Of course economy is just a cycle of booms and busts and instabilities, economy is not a science, just an arbitrary beahavior set a civilization gives itself, and the economy will always change and surprise you: just when housing goes bust and prices go down, there will be another boom and priceds going up again and so forth.

The stupid moralistic "work makes you richer" no longer operates for the most part, hard work for the most part is senseless and so forth. Of course some will get rich by working hard, but the system has nothing to do with hard work and merit and all to due with politics, power struggles, arbitrary decisions, networks, energy and so forth.

What I find amazing is how much of all the economic rules are truly pure inventions, man made fluke - quirk - totally arbitrary inventions masking themselves as somehow being necessary or a necessity or grounded on some fundament, some objective reasons and so forth.

Economy is a purely cultural affair, a purely tribal affair, the laws with which a tribe engages itself with are 100 % invented, a comic book, a flight of fantasy that somehow becomes encoded as a necessity, as a reference system (along with all law and legal systems, all political systems, all of the "rules of laws" governing how people interact between each other and so forth).

So where is the problem with having millions of "free loaders" who don't want to work, or make believe they work and live anyways ? who cares ? where is it written that humans must engage equality between themselves ? who is the boss and slave ? why are there even bosses and slaves ? (because someone arbitrary decided to force himself to be a boss and slave weaker people ? or a rigged system of relationships make a class of people the bosses and so forth).

We live in an economic system that is totally arbitrary at its heart, totally a random fluke of laws, rules, engagements, behaviors, values and so forth. So we must buy loads of things, new things (a never ending array of new gadgets, complex and time consuming as much as possible, crazy complex smartphones with thousands of new apps as that is what all the chant of "Innovation and Research and Startups" (are these tags even valuable ? who decides what has value and what doesn't ?) are all about and so forth) from loads of peoples or robots or machines building them to justify a mechanism to distribute money to other people and so forth. There is no solution to the economy, the economy is not even a problem, anything goes really, anything can go and will go, anything will happen, the economy can and will evolve in anyways whatsoever according to any crazy rules that become the new rules and behaviors that capture a large enough arbitrary consensus amongst the people in a tribe.

Look at anthropology, how many different tribes lived in history, each with their own rules and laws and engagements according to anything at all, a religion, a god, a book, a master boss, an enlarged family, wars and fights (between each other or against other tribes, or anything in between) all kinds of strange and absurd relationships between all of the elements of a tribe, all of the social structures being totally arbitrary, the infinitely programmable machine, a tribe of people that can be programmed into any set of rules at all (man having many wives, woman having many husbands, incest relationships ok or not, or people killing themselves all together in the name of an imaginary god or rock in the sky and so forth, the examples and possiblities are never ending, study sociology also to see how the social stuctures are all inventions, minds progammed to act and behave in any odd way, just because, for no reason at all).

So the worldwide economy is doing fine, is excellent, it will always be in crisis mode, it thrives on creating problems for itself and imaginary solutions, on instabilities and so forth. Growth will always be too low until the economies start growing too much and then must be "cooled off" and then the interest rates must go up again and the cycles repeat.

And to think that thousands of economy professors actually study this stuff thinking they are studying something that is more worthy than astrology or a comic book...




Kunstler's errors:

1) "Enjoy the flat screen TVs, water-parks, RVs, and Happy Meals while you can. "

This stuff today is a dime a dozen, takes nothing to produce, can be available to 7 billion people worldwide for free, is not available to all only because people want to grab a bigger piece of the pie to have more power upon other people. This stuff is virtually free today (along with houses, cars and all other consumer items) because the Technological Economy has reached a point where it costs very little to produce, with little labor and little energy (which is infinite, like solar) so the old fashion "resource scarcity existence" is no longer operating. Kunslter, get over it, this is the reality.

2) "The dollars that the Fed creates out of nothing are trapped in this fetid backwater of rotting capital, destined to go nowhere — surely not into activity that produces real wealth, or the means to continue being civilized."

The houses and swimming pools and stores, the Real Estate is actually the only Real Wealth a civilization needs: the real wealth has been created by the boatloads, in fact, the real estate bubble came about because too much real wealth was created, too much goods were created, too many homes: homes are real wealth, people really need only a few real things and goods to live well, cars, homes, food etc. The problem is once again that a Technological Economy can produce loads of this stuff very cheaply with very little labor and so forth.

The real problems are all Cultural, Psychological, Political and boil down too: what rules of engagements between people must be used in order to Distribute the Wealth and goods between all people ? How can we distribute a huge amount of goods and real wealth to all in such a way as to keep the economy moving and everyone satisfied ? The problems are all about distribution, not production.

And especially the biggest contradiction of all is that once you build so many homes, you got your job done once and for all, now you don't need to work for years since the job has been done, but economies and societies are based on work in order to distribute money, but the work is no longer needed, the product of the work has been created, now you can simply live without working, but an old fashion, moralistic, 18th century view of the world thinks that the equation "work creates wealth" is still operating when this is no longer operating.

Now the same problem happened in Spain and will happen in China: too much production, too many homes built but no way to distribute them. Now Spain and China are very different culturally from the USA and between themselves but they all have the same common denominator: the ease with which a technological economy makes you build real estate and they all fall in the same trap: they built and build too many homes using them as an imaginary store of value: but that is the mistake: the problems are simply how to distribute the huge amount of free wealth a Technological Economy can generate.

Now Spain has a million empty homes it can't distribute to anyone and China is building millions of homes destined to remain empty for the same reasons (the prices of the homes are too high compared to their going salaries, like a home in China costs 100,000 dollars or rents at 500 dollars a month and the avergae slob makes 300 or 400 dollars a month, go figure).

The problems are all about distribution, how to distribute the wealth to any old slob, since work is no longer necessary to create wealth, real wealth is created very easily, it is all a problem of how to give it out to all without being conditioned by the moralistic, fairy tale, comic book model of "having to work for a living".


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