Loading...
Inequality and how it is increasing that affect the unemployment rate

Inequality and how it is increasing that affect the unemployment rate

INEQUALITY
The new hot topic is inequality and how it is increasing. This is a very vague term. We are human beings with substantial differences; we cannot all be Donald Trump, Bill Gates, or Warren Buffet. We are too imperfect to create a utopia or all to have the same standard of living. It is just not possible at this time in human evolution.

There are many reasons why inequality exists in the economy. Before I give my specific list, I will review the general macroeconomic reasons. One, we are NOT created equal! We have many different talents, abilities, and appearances along with unique emotional and physical make-ups. Second, the institution of capitalism—competitive markets by their very nature, naturally flow money to the wealthy. The main reason for this flow is that it is easier to make more money if you already have money. This goes for businesses as well as individuals. This naturally causes a shift towards business consolidation creating monopolies and oligopolies.

For those doubters, I have never seen a statistical, economic study proving otherwise. If you do a little macroeconomic historical reading covering the last 175 years, you can see this yourself. Inequality was proved again by the recent bestsellers by Thomas Picketty, Capitalism in the Twenty-First Century and Inequality by Anthony Atkinson.

The nature of capitalism eventually causes so much consolidation of wealth that the entire economy or country becomes unstable. This instability7 could cause a complete breakdown in society7 because of a lack of basic surv ival goods for the general population. This failure can even result in severe violence and/or revolution. This growing income disparity7 is not only a disaster for the poor, but also a threat to the rich. Poverty breeds broken families, crime and criminal organizations, beggars, prostitution, mass immigration, social protest movements, and failed states. The most recent examples are Egypt and the Arab Spring. These societal upheavals would probably not have occurred so swiftly if they had a reasonable standard of living and opportunities for advancement. You can also see the failures in our own economy in 1907,1929, and 2008.

The following is my list of additional reasons for inequality:

1. Birth – 41% of individuals in the USA remain in the same income level they were born in.
2. Lack of Education
3. Lack of access to capital for investing and savings Lack of luck – This one is more
4-
important than you think
5. Overreliance on debt
6. Lack of adequate wages
7. Employment in the wrong industry or profession
8. Competition against extremely low cost or slave labor
9. Productivity – replaced by machines
10. Caught in the boom/bust economy which hurts the middle and lower income class
11. Lack of competition because of monopolies and oligopolies—less jobs
12. Illegalities and discrimination

Therefore, my definition of equality is: all having an opportunity to advance with adequate health care, education, shelter, and nutrition. The definition also includes the right to live in a sustainable environment with drinkable water and breathable air. There are currently billions of people on this globe that do not meet my definition. This book will illustrate the specific solutions to solve this global inequality both on a private and governmental level. We can create a whole new populace of quality’ customers, clients, consumers, and citizens resulting in a permanent boom and quality of life for all.

Our concern should be how well the populace is living, not how much the top is making. The exception being the extreme consolidation of inherited wealth that is among several thousand families worldwide. This is not about a safety’ net for the unemployed or those who need welfare. This is about providing the basic necessities of life for all! It is not measured by GDP-growth! (See Section V – Statistics) We do not \vant to eliminate competitive markets. Instead, these markets provide for more freedom, diversity of investments, and checks and balances over government. Governments cannot do it all.

We are all in this economy together; what happens to one group economically effects all. We are now in a globalized economy—good, bad, or indifferent. Therefore, our solutions are for the globe at large and each country individually. There are substantial numbers of projects that need to be accomplished to advance humankind, such as space exploration, medical advances, and environmental issues. Reducing the flaws of capitalism will allow us to move forward in solving our problems and enhancing mankind by creating the correct win-win political macroeconomic philosophy.

Money power in politics and we need to stop this for more new job

Money power in politics and we need to stop this for more new job

This book is not about the money power in politics and how it influences governments. The wealthy individuals and businesses involved in politics through lobbying and political donations set and skew the rules to their perceived self-interests. My concern is that their macroeconomic influence is at best misguided but mostly wrong, especially in the long run. This book is about correcting the macroeconomic philosophy of the 1%, so that they will use their influence correctly to create a win-win economy. In our society’, “money talks”, so they are the stewards of protecting our smaller businesses, customers and clients. It is in their best interests!

The extensive power of wealth gained by lobbying, campaign contributions, and jurisdictional girth wall probably not be countered until some form of public financing of elections can be implemented. The “Clean Money” movement has created the appropriate structures for having both transparency of private and public financing of elections.

Have you ever wondered why you continually see changes in democratically elected governments from right to left and from left to right, and then switching back again? You see this on a global scope, not just in the USA. Were those leaders so incompetent that the electorate had to change back and forth? In the UK, they elected a conservative party and then skipped over the liberal party to another liberal party to form a government. In Egypt, they kicked out a right leaning dictator, voted in a left leaning Muslim and were so unhappy with the economy and his governance they forced him out, too. We also see the switches from right to left continually throughout South America. What is going on here?’

The general population always wants to see a thriving economy and a quality standard of living, or at least an improving one with opportunities for advancement. Why are those leaders not delivering? Why can’t they govern?

The reason is, the leaders are not in control of the major influence on the economy regarding the amount of money in circulation or the money supply. Money in circulation is the lifeblood of any economy. If money in circulation is reduced too much and/or overly concentrated in the hands of a few, there will be a recession/depression. A quality economy needs to have money flowing and diversified in many different hands.

Therefore, monetary reform should be on top of the agenda for debate. However, it is not even on the agenda or even discussed in the campaigns. Why isn’t monetary reform the major economic issue? The first reason is the hidden nature of what money is and how it is created. The second reason is the ignorance and failure of our leaders to read and become educated about the origins of money. The third reason is the amount of money the banking sector contributes to campaigns and to lobbying. The fourth reason is the major influence in the macroeconomic academia of neoclassical philosophy.

A majority of economic professor’s formulas and models have money as a minor or neutral factor, but in reality, it is the major factor! The fifth reason is the fear of change, any change, always hinders any debate and implementation. Therefore, any reform proposals have to have a win-win scenario or the powerful banking industry will stop it in its tracks. Most of the current proposals are too far left to get the time of day by the right. We start with this topic in Section I.

I label businessmen—whose mindset is on microeconomics not macroeconomics—as the “business right”. They call themselves fiscal conservatives, which is a micro term not a macro term. The “business right” still evaluates the entire economy the same way they consider an individual business or industry. It is almost the complete opposite. The goal of an individual business or industry is to maximize profits either over the short run or the long run.

Therefore, one of business management’s major objectives is to reduce cost, of which labor is one of them. These managers consider the vast global labor pool as another market or commodity. The labor pool cannot be completely subject to supply and demand, because a quality economy (macroeconomics) needs to have a substantial amount of well-paid customers and clients. An example of this implementation will be explained in Section II with Henry Ford’s pioneer solution.

Capitalism and what we need to do to get a new job

Capitalism and what we need to do to get a new job

Let’s start by describing some benefits of capitalism, because most of this book is about improving it and taking it to the next level—to a Win-Win 21st Century Economy. My definition of capitalism: the first choice for the delivery of goods and services to the people is through a private ownership operation in a competitive marketplace. We need to increase competition to increase quality of goods and services, employment, stimulate innovation, and increase research and development, while reducing regulations and inflation. If business operations cannot be subject to a competitive marketplace, we have to consider other alternatives for delivery. Nonprofits, government owned firms, and substantially increasing regulations, including price controls, could be alternatives to business monopolies.

In the history of humankind, there has never been a period where vast majorities of the people have lived a superior quality of life as in the last 70 years in Europe, the USA, and Japan; we can also see increases in developing nations. The lower middle class has a quality of life that in many ways is better than the elite had 150 years ago. My definition of equality is having adequate healthcare, nutrition, education and shelter, along with the opportunity for advancement.

It is not the standard definition which would describe the gap in income or net worth between the rich and the poor . The current system has delivered basic living benefits and opportunities to advance to many. Now it is time to deliver them to everyone on this globe. This is accomplished by reducing the effects of the four major flaws of capitalism. The U.S. economy was well under way to solving these flaws when we started a reactionary course, in the 1980’s, back to some concept of the “free market place solves all” (libertarian, laissez-faire philosophies).

There is no such thing as a free market place; there is always some undue influence somewhere. The free market ideology assumes human perfection, which by nature cannot exist. All markets are subject to distortions of non-market variables, such as religious practices, local customs, and traditional laws, oligarchic, ethnic, or national factors including government regulations. In practice, every market is planned and organized by some party; this has been so ever since the Neolithic rhythms of agriculture planting and harvesting.

In today’s world, governments design, organize, enforce, and help fund the ever-changing market place! In fact, there can be no fair and competitive marketplace without governments. A marketplace today may be an abstract location like a fleeting digital connection. The marketplace can have deeper processes than a mere exchange of goods and services. Any totally unregulated marketplace will eventually cease to exist, as it becomes a monopoly or at best an oligopoly. Civilization is defined by rules; rules create markets, and governments generate rules. See Robert Reich’s recent book Saving Capitalism, for its discussion on markets and the powers to influence them.

Human imperfections exist in all operations, both government and nongovernment. Since government inefficiencies are exposed by the press, one has to review the errors of the private sector. Professor Ha-Joon Chang’s book, Things They Don’t Tell You About Capitalism, is a must read depicting the many failures in the private sector.

Prepare personal finance before get out of unemployment status

Prepare personal finance before get out of unemployment status

Microeconomics and personal finance will not be discussed here. Microeconomics is the stud}’ of businesses making sales, operations, and profits. This book is about macroeconomics which is the other branch of the economic discipline that studies the overall condition and behavior of a country’s economy. The size of the macroeconomic pie is unlimited.

The age of scarcity is over, because the current capacity and productivity of the private sector can grow and produce all the goods and services that everyone needs as long we use proper resource conservation. We just can’t produce and distribute it properly! The elimination of scarcity is fully proven in Peter Diamadis’s and Steven Kolter’s Abundance.

However, we need to understand the ingredients that allow the pie to exist and how those ingredients make the current conflicts important to the global picture. I will describe the solutions in U.S. terms, but they apply to the global economy.

Let me state this loud and clear: the macroeconomic systems of the world are in need of change! The proper macroeconomic philosophy will free the politicians from fighting about philosophy, and it will allow them to argue and compromise over the specifics of implementation. The debate between the 19* Century Laissez-faire Libertarian economics and the 20 th Century Keynesian Economics has gone on long enough! Both are not complete enough to create a 21st Century Win-Win Economy. I will take the most successful parts from each philosophy and add to them the proper money creation and distribution systems.

The political economic debate that continually splits our country and our leaders is a vicious cycle that can be stopped. Arguments over tax and spend (fiscal policy), and the so-called national debt are not the answer to our economic problems. Fiscal policy was not the cause of the “Great Recession,” “Great Depression,” or any other economic downturn; therefore, it cannot be the solution! What is the solution? I have one.

This book is not an exhaustive description and defense of capitalism. There are plenty of economists who have expounded on this subject. Instead, I will define Capitalism and provide the structures to reduce its major flaws. The solutions will not be about zero or limited government, but the “right” government. One of my goals is to educate our leaders and to empower the government to be a more efficient partner so we can accomplish the necessary programs to insure our future. My answers will be based on imperfect human operations, not on nonexistent human perfections.

This is not a proposal to solve all the problems of mankind, just the economic ones. The book is not a proposal for some creation of Utopia or what I call “La-La Land”. These are solutions that I believe we should and can do now, not in the next century. This book only covers and defends with economic reasoning and history—not on moral, fairness, political, community or social justice. These are valid points, but should not be used until an economic defense is presented.

In my many talks and articles over the decades, I am either labeled a “righty” by the left or a “lefty” bv the right. This means that I probably have it just right. This is why I have two separate titles for my same speech. For the right, it is labeled “Saving Capitalism” and for the left it is called “Progressive Economics”. The solutions that I propose are nonpartisan; they are purely based on economic logic and reasoning. So keep an open mind!

This is a solutions book written for the average citizen, but should be read by academics. In order for the book to be of reasonable length, it is not a typical academic book. It is not written in what I call “Econospeak”. I will try to keep the language easy to understand, and I will also provide a glossary. There will be mainly answers provided, with a limited amount of descriptive history, examples, footnotes, and statistics. I will refer to books and websites for you to read as a way of providing additional evidence, validation, economic reasoning and examples. Unfortunately, we cannot discuss every economic problem in detail; however, a general macroeconomic roadmap for decision making and basic solutions are provided within.

There are six sections in this book; the first four sections are based on the four major flaws of capitalism. I will provide specific solutions to overcome the negative effects of each flaw. The most important of all the flaws is the fallacy that money is scarce, which we will discuss in the first section. In the second section, we will discuss the conflict between microeconomics and macroeconomics, which results in not creating enough customers. In the third section, we will cover insufficient competition.

The fourth section will cover long-range profits versus short-term profits. These four major flaw’s are all interconnected; they are organized in order of importance. The fifth section covers short messages on an array of macroeconomic topics including trade, taxes, environment, healthcare, education, usury, and regulations. In the last section you will find a summary of recommendations that has to be debated and implemented.

In the gradual implementation of these recommendations to reduce the major flaw’s of capitalism, we will create winners in our country and around the globe. There are answers to solve our problems, but we have difficulty implementing them, mainly because we lack the proper macroeconomic philosophy. The following paragraphs are a description of the results of implementing the win-win recommendations.

The populace will have their basic living requirements and education met with reasonable work and opportunities to advance and to grow as individuals. Just think of the morality of it! This will prepare them for the evolutionary “Robotic Age”. With more money and personal time, it will unlock the human potential of a great number of our very talented people to solve our problems. The global stability this brings wall reduce the many conflicts we have around the world.

Large and small businesses will have substantially more sales from the increase in the number of affluent customers, clients, consumers and citizens. Businesses wall have more profits as a result of the lower cost of labor, and a lack of pressure to raise wages. Businesses wall provide more innovation with less regulation. The substantial increase in personal time wall rapidly expand industries such as entertainment, education, travel, sports, charity, arts, and wellness. These industries wall usher in the “Personal Growth Age”.

Commercial banks wall be winners by not having an unsustainable system that periodically collapses or has severe writedowns. They will have substantial profits from their continued banking business as well as the operations of the many new distribution systems of new money. They will have an abundance of deposits as they replace treasuries because these are federally insured deposits. The private investment banks and financial advisors will have more money to manage and the financial service industry will boom.

Our environment will start to improve as the elimination of scarce money is used to convert the source of energy from fossil fuels to alternatives and provide funds for prevention and clean up, especially in our rivers and oceans. Infrastructure repair will accelerate. It will allow the implementation of the five Rs: Reuse, Repair, Renewables, Regeneration and Recycling. Other funds will be used to provide research and development to cure cancer, malaria and other diseases. New exploration will then proceed in our oceans and space.

These solutions are neither socialistic nor utopian. There will always be human disparity’, differences and conflicts. We will still fight over operational decisions but the basic macroeconomic philosophy will be established!