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The Forum > Article Comments > Group stink > Comments

Group stink : Comments

By Vern Gowdie, published 26/8/2019

Central bankers are more Peter Pan than Patton. They never want to grow up and leave school.

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I'm sorry but this economic essay if that is what it is, gets a big F for fail. It's so easy to blame the banks for the state of our economy when so much of what's wrong has its cause in greed is good individualism and the exploitation of others!

Take energy a just one example providing you understand that every western-style economy rests solely on just two pillars, energy and capital!

Energy has been allowed to become way too expensive and acts as a huge tax increase in the economy. Never ever assisted by mindless privatisation to suit an idiotic ideological imperative.

And we have tried to offset this problem with manipulation of capital. Interest rate reductions quantitative easing and the creation from thin air if derivatives, short selling, cryptocurrency, Insuring your insurance policy again and again and onselling the inherently worthless paper alongside other similar Ponsi schemes!

One cannot grow the economy with unrepayable debt. If you and I just borrowed ten times or more than the total capital value of your assets, your parents and against the kid's education trust account etc-etc. We'd be pronounced bankrupt six times over!

As a formula for running any economy, rather reminiscent of what one would expect if the inmates were running the asylum. In fact, some would argue, they'd do a better job?

Conversely, this is what I would do if given my druthers. TBC
Alan B.
Posted by Alan B., Monday, 26 August 2019 10:34:36 AM
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"Group think is the embodiment of insanity."

Sure is; and it's rife in Australia.
Posted by ttbn, Monday, 26 August 2019 10:39:17 AM
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If we were honest and genuinely wanted to stimulate a tanking debt ravaged economy?

We'd start with the simplicity of attacking and removing poverty in all its forms and guises, as a war on unmeet need and want.

And not with charity or handouts but with extremely inviting work/investment/partnership, opportunities created as government-funded and facilitated, co-ops/cooperative enterprise.

Not all Government debt is bad debt! Just that created to fund recurrent expenditure! And like pouring money down a great big black hole!

Co-ops were the only private enterprise, free-market business model that mostly survived the Great Depression, largely intact! And because they have no peer when it comes to efficiency and productivity! And because every employee is also a shareholder, who wants the enterprise to succeed.

They have no history of growing too big to fail or internal undetected profit harming corruption etc-etc. I mean there are a thousand eyes literally. And as they say, a thousand eyes cannot help but see and via blatant self-interest, expose any and all corrupt practice and eliminate bottlenecks and the drones.

Also maximise wages and conditions without any union involvement, given the employees are also their own, self-interest, union! Key to this is affordable, reliable, dispatchable energy. Most of which could be owned and operated by several dozen, competing for your dollar, co-ops. And as small modular, mass-produced MSR thorium, power generators. An absolute essential is affordable reliable cost-effective, on-demand, potable water! And available forever, as deionisation dialysis desalination!

The rest is as limitless as our best ideas, born in our better people, which currently, is arguably our two most successful exports, save the returns that they could earn for us, are exported with them along with the economic advantages that could've been ours!

We have a unique opportunity here to quite massively boost our economy and our self-sufficient independence. As opposed to just handing over our heritage to triaxia!
Alan B.
Posted by Alan B., Monday, 26 August 2019 11:12:10 AM
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Vern has correctly identified that there is a groupthink problem, but has got its implications completely the wrong way round. Lowering interest rates ,when the economy is weak, indeed shouldn't be a difficult decision, but it would be a difficult decision for someone like Vern who advocates the opposite. Their groupthink has the central bankers sharing his unnecessarily hawkish bias, but unlike him they have a duty to try to keep the economy growing. Therefore they make the difficult decision that would be an easy decision for someone less biased.

If he were a little more conducive to logical thought, he might instead understand that productivity is worthwhile whether or not it's the result of capital deepening. And that using recessions to clear out the dead wood is overkill, needlessly damaging healthy trees.
Posted by Aidan, Monday, 26 August 2019 3:31:19 PM
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"Something along the lines of doing the same thing over and over again and expecting a different outcome."
Actually in economics it is the case of "Same problems, different solution".

Unfortunately in the case of the Australian dairy industry most of the dairy coops have failed, mainly because they engaged in a race to the bottom with other coops, aided by the supermarkets. They ignored the adage "United we stand, divided we fall".

We can't keep kicking the endless growth can down the road forever.
https://psmag.com/magazine/fallacy-of-endless-growth

Read it and weep.

David
Posted by VK3AUU, Monday, 26 August 2019 3:53:19 PM
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The central tenet of capitalism is healthy competition. Allowed well-managed co-ops to survive two world wars and a depression.

Destroyed by introduced and enforced, dog eat dog competition (greed is good individualism) where the biggest hungriest gradually took over from the rest, some of who were dumb enough to sell their interest to foreign market competition, then cried a river when that plan went pear-shaped!

Co-ops only prospered when they completely embraced cooperative capitalism/mutual benefit outcomes. Co-ops almost alone all but compel the usual economic flow on factors to flow on inside the local community, the state and the nation making every one dollar do the economic work of seven!

Our economy does it in reverse/shares most of the economic flow-on factors with foreigners and our foreign competition.

If we wanted to build a robust manufacturing-based economy that could lock horns with economic giants like China, then we have no other choice than embrace cooperative capitalism, automation and direct, sell from factory to consumer, assisted by the world's cheapest energy and endless reliable water.

Few if any manufactured products do not have a water component. Finally, there is the cost of transport which must be made to rely almost exclusively on electrified rapid rail and fast turnaround, roll on roll off, submersible ferries.

The world's largest subs are around the size of WW11 aircraft carriers and the latest nuclear-powered version can I'm informed do better than fifty knots. Moreover would be less vulnerable to terrorists in small boats I also see a place for electric planes on short-haul ocean crossings.

And as such put them out of the reach of lightly armed terrorists in cars, trucks and small boats.

The best ones will come with two or more counter revolving props And recharge to 80% within an hour.

As other writers have indicated, doing what you've always done while expecting different outcomes is by definition, madness writ large!

And we just go on and on trotting out the same self-harming "solutions" almost daily, in business, as usual, protect your conies and personal benefactor, madness!
Alan B.
Posted by Alan B., Monday, 26 August 2019 5:10:50 PM
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