Wall Street Gambling, Price Manipulation, etc

trouble with GDP is how is it calculated...
Each time the US has a bad hurricane your GDP will go up when you spend to fix it when actually thats a net loss to an economy
declare war GDP goes up when the bills come in
Each time they print cash your GDP will go up
each time you print cash stock market goes up
now with record debt, unemplyment and homeless where's the link to prosperity
I hear bankers got their bonuses

 

Michael's right, of course. Even .00001% per annum growth is unsustainable in the loooong run. Many think there are already too many people on the earth. I don't remember the exact numbers, but it would require something like 2-1/2 earth's worth of resources for everyone currently on the planet to live like we do in the US. Drill, Baby, drill!

 

Its scandalous that people are taught Growth, instead of sustainability and quality of life.

The last 100 years of capitalism and "growth" has been the most destructive period in human history.

Perhaps Growth and Greed are simply basic human needs.

 

It seems to me that "growth and greed" are basic to life in general. Remove the predator population and the rabbit and deer population explode. Allow fertilizers to run off the land and you get algae blooms and dead zones.

Humans have a unique advantage among life forms of being able to anticipate the future. However, large groups of people tend to behave much more primitively than individuals. (e.g. global warming) Not very encouraging.

 

I'll try to keep this short. My back round, professionally, was in Economics, I earned a Bachelor of Science degree in the field back in 1978. That doesn't make me an expert. Briefly we have......

1. The Krugmans of the world - believing in stimulus.
2. The Stockmans of the world - believing in "fee markets". Less or little government intervention.

These are the two camps and each have extremely loyal members.

Although Economics is considered a science it's actually more of an art. Economists build mathematical models, use a lot of calculus that most people don't understand. Economics is influenced greatly by psychology and sociology, peoples behavior, which makes the mathematics complex and often (some say usually) unreliable. How do we boil human behavior down to a mathematical construct?

If we built boats (engineering) like we run economies we'd have a lot of drowned people.

What scares people is uncertainty. Uncertainty is always with us but in terms of Economics it is really very visible in today's world. It's "the emperor has no clothes" thing. Folks who are paying attention realize that there are 2 philosophical camps and no one knows who is right or weather either camp is right. Is there another solution? Is there a solution at all?

As to the recent debate on growth. Michael, I'd say this:

If you take a stock of raw materials and build a boat you create something from your labor. Thought and physical effort go into the work and if done well you have a wonderful creation. This is growth. Creating products and improving our world (think medical treatments for example) improve life in theory for everyone.

If, after the boat is built, 100 people were involved but only 1 or 2 people profit from it's creation, we have a problem. What about the rest of the workers? This is where the problems lie in my view. Since wealth is concentrated amongst very few, "growth" must be unsustainably high by definition. If most of the legitimate gains (and perhaps even more) go to those at the top, we have to find a way to give something to the rest of the workers. We've achieved that so called growth through an explosion of debt. We've let the masses (weather individuals, businesses or governments) borrow enough to survive so that the wealthy at the top of the income/asset pyramid can continue to accumulate a disproportionate amount of the worlds GDP.

How do we lessen wealth disparity? I have no idea. Sooner or later though, somethings got to give because Michael is right when he says that this system we have in the West is unsustainable.

MIA

Pretty slick weaving boat building into the discussion don't you think?

 

Troy doesn't go quite far enough.

The worlds economic output has been growing since the first man walk the earth.
Calling it unsustainable is a discussion of limits on our growth as a species- there isn't some dark villain of greed or capitalism creating the growth. It is a reflection of a increasing modernization of our way of life across all regions and the populations they contain.

Man the tool user will in time have a fairly universal approach to the challenges of meeting shelter and food production communication and transportation. The economic activity to create this technology will continue be reflected in growth of our economies.
As our populations stabilize will will enter and new era.
What will growth mean then?- I imagine it will reflect how changes in our technologies are built and adapted. Though the production will be distributed across a static number of users.

Edit- To keep this on topic:

Anyone notice that gold has just passed another "buying point"?

 

That all sounds dreamy to me. Faith based.

Please cite a past example of sustained growth...Romans, Egyptians , Mayans...

In a short one hundred years, growth based capitalism has emptied the sea, poisoned the water, changed the climate, depleted resources..

In one hundred years of modern capitalism the Chesapeake has been transformed from a fertile estuary into an open cesspool of coffee colored water.

The Mississippi, Lake Eire, Farmland, the water supply................................

Describe to me The USA in 500 years with 2 percent GDP growth along with a 2 percent loss in natural resources each year

Free market Capitalism will fail to increase the vitality of the human race just as it has failed to take care of the environment.

 

My. You're quite the pessimist, aren't you? Of course we're all doomed in the long run; we're all fated to die. So is our species, and so is the world. But there's no need to throw up our hands in despair at our eventual fate....

Yes, the Chesapeake looks pretty bad compared to what it used to be. But it isn't nearly as bad as you claim it is, and it's been getting better the last few years, not worse -- just like the air in Los Angeles has improved dramatically in the last thirty years, even with the huge increase in people and cars.

Do you know what the Thames looked like in the 1800's? I'll give you a hint: look up The Great Stink of 1858. Then take a look at the Thames now....

Obviously all growth is finite in the absolute sense, if that's the way you're defining 'unsustainable.' We can't keep infinitely reproducing; we can't make infinite gains in productivity; we can't dispose of an infinite amount of garbage.

But have a little faith in humanity, will you? We aren't even close to hitting the absolute limits on what we can accomplish.... there's still a lot of room to make the world a lot better place for people all over the world.

Out of curiosity, why are you so tightly focused on the US? Aren't there plenty of problems and examples you could have cited right there in Europe, to make your points?

 

Because you re American.

I could describe the depletion of the Mediterranean Bluefin tuna or groundwater supplies, but it would make little sense to you.

Additionally America is the cheerleader for Unbridled Free Market capitalism. The Word socialism is frowned upon in America and often blurred with communism and evil empires

Efficient socialism , were community resources are managed for the good of the community, not for growth, is the only long term solution.

 

you can have growth without population growth its called productivity but thats way harder than just open the gates and let the migrants in which actually lowers productivity but helps the GDP figure
Guys at the top of the pyramid get richer and the rest get futher away from him but feel good as there is now a layer below them

 

So what's the answer? Is there an answer?

If you haven't seen David Stockman and Peter Orszag in this entertaining debate you might like to spend an hour or so.

http://www.reuters.com/video/2013/0...-royale?videoId=241963787&videoChannel=117851

MIA

 

Dreamy?
Faith based?

Have you been paying attention to how often we are doubling our population?

Where do you think those folk are living?
How much of the production involved in increasing the housing base is assigned to our growing GDP globally?
This is our current reality as as our population continue to climb.

 

Sure , I can see the population increase. Plenty of Hungry folks and they are not living well. Simply review the Arab Spring and its connection to food prices.
Then I scratch my head and wonder why agricultural land and precious groundwater would be used to grow fuel for cars.

I can also scratch my head and wonder why an economic system based on winner takes all, a system that concentrates wealth in the top one percent , is allowed to operate and be considered...THE BEST.

Obliviously unsustainable

 

I think you're stereotyping, over-generalizing, and bashing an America that isn't nearly as solidly one-minded and short-sighted as you like to paint us.

Why do you think the depletion of Mediterranean Bluefish tuna or groundwater supplies wouldn't make sense to me? Do you really believe that unlike you, as an American I'm so insular and ill-informed I can't understand problems outside my own country? Pardon my jaundiced viewpoint, but that sounds like typical (and unfounded) European intellectual arrogance to me...

Some Americans are cheerleaders for unbridled Free Market Capitalism. Generally, the cheerleaders are a relatively small group of people who are best positioned to take advantage of it in the short run.

Some Americans frown on socialism, and conflate it with communism and evil empires. They're part of a very noisy minority, who are egged on by rabble-rousers like Rush Limbaugh and some of the more ignorant (or cynical) members of Congress. But you'll notice that in spite of all their shrieking about Obama being a socialist, he was reelected anyway.

Many of us understand quite well that our government and economy are already a blend of socialism, capitalism, libertarianism, paternalism and a few other -isms, and that finding the best balance among all those -isms is a never-ending, always-changing task. In fact, many of us actually realize that it isn't a task best left in the hands of ideologues and demagogues....

Although I believe that socialism works well for some purposes and has its proper place in our system, I have to smile a little at the term 'efficient socialism.' Socialism, like democracy, is rarely described as efficient.... 'messy' is a word that comes more readily to mind.

 

The EU is trashed as well due to the socialist wave that rode over Europe post WWII and 'we are rich' ( well the US gave them lots of cash) so we all retire at 50 as we will have growth forever..oops forget to save up for a rainy day, ok we follow the US we just print money...oops asset bubble, crash oops value and pension swiped out...oops...

At least the Germans do what they are told and that is work work work and there's no raise for a few years so they are looking the best in Europe but in the long run ( now and the next 20 years)cant compete due to half of the current tax take being used to pay unfunded pension liabilities.
Post WWII EU governments didnt have that anchor around their necks, They do now.
So China and Japan own the US and Germany are heading towards owning the EU, trouble is none of them want that asset/liability or whatever they view them as
Saying that China is unwinding their position in the US