Wednesday, September 30, 2009

The Story of Stuff

There is a movie that is making headlines on the interwebs on a topic that is becoming more popular. If you haven't seen it yet it's called "The Story of Stuff." Here it is in case you are interested:

In my opinion the author makes a good presentation on a very important topic but the video would be more effective if not politicized and was backed by sources. While although it never references a political ideology specifically the resulting conclusion is capitalism via corporatism is evil and socialism by means of equitable distribution of resources (including labor) is the answer.

I fully agree though that we must develop a sustainable framework but we must do so while limiting infringement on personal liberties. What would such a framework look like? The author suggests community farming, zero waste initiatives, and overall environmentalism and consumer reduction but this neglects a glaring problem, our need for jobs. The real question is what can we do to replace the jobs?  That is where you will find that we already live under a socialized society. You need only look to our monetary system to see it. My question then is "was this planned and if so why does it suck so bad?". My answer I'm willing to bet is through conflict of interests and greed by political leaders and wealthy individuals we got a half baked system that is unsustainable and unchangeable. 

Monday, September 14, 2009

The System

So banks are back to their old ways again but I have to wonder, is this really a surprise to anyone? It always irks me when news report headlines like "results were more or less than analysts expected" or something along the lines about how "results weren't as expected." Why it irks me is I do believe we have a bunch of really intelligent people in charge of things but the media dumbs things down to a few talking points which results in a horde of ill-informed strongly opinionated drones to do the bidding of the leaders they appointed. How backwards is that!

If you'll step back with me and take a view from 30,000 ft you'll see things much different in regards to our current economic mess.  Many easily jump to short term solutions but lets look at our economic system. People often wonder "why are we having a recession?" The talking points (depending on your source) are: greedy bankers, incompetent government forcing bad policies on banks, and greedy individuals buying more than they can afford. All these may be true but is their an underlying system that supports such activities?

I feel there is. Our economic system is designed to be a risk-taking environment that encourages greed. Many cry this is why socialism is necessary but I'll save that for another topic. I want to focus on the US economic system. The US has to keep growing or else it collapses. There can be no stagnation. Since we are a debt economy if we stagnate just for a little, loans start to default. It doesn't matter if the loans will get a return or not in the long run. The point is to get the money circulating again as quickly as possible which is why the FED pump so much money into banks and then expects them to loan it out. The FED criticizes banks for making "bad" loans but in order for the economy to grow, loans have to be made, period. So the FED also criticizes banks for not making loans because the FED gets heat from the politicians because everyone is losing jobs and income. In order to succeed in this system you take "risks" by getting a loan and doing something with it. It doesn't really matter what because if there is enough money in the economy someone is going to buy whatever it is you are selling for whatever price they can afford.

What we are experiencing in our generation is an adjustment in the markets due to the limitations of natural resources. We have an unlimited supply of money and an unlimited supply of labor, and the last ingredient for a market to work is resources which unfortunately we can't artificially create. What has been good for a time has now set us on a course of unsustainable growth. Fiat currency enables rapid growth and corporations provide for a more efficient means of collecting money for wide spread market penetration and possible research and development. All good things but the consequences are amoral entities that damage our environment and treat humans as if they are pieces in a machine. For deeper thoughts: going back to the gold standard and the idea of ending corporations would certainly set us on a sustainable growth path and reduce moral hazard since someone is forced to be held accountable for the actions of a private business. Unfortunately, such a dramatic shift in the economy would wipe out a vast majority of those currently employed resulting ultimately in the collapse of society. There has to be some way to transition from our current system to another slowly or else we will experience an ever greater deterioration of living standards or greater imbalance of living standards (depending on which country you live in).

We need much more thought into our global economic direction to avoid further wars which will ultimately result as resources dwindle or as economic disparity increases and resentment builds. The likely outcome as the world "flattens" is everyone becomes more "equal" unfortunately that means equally poor. You see, everything is tied together in a way. I hope you see it too. I wonder how many of our leaders see it? I have a feeling many do and those that do can (and probably do) exploit it to their benefit while maybe a few are simply pawns used by those who do understand the system. Now, the only real question left is can you change the system without becoming a part of it?