That was my original take on things too. Though he has recently started getting into bed with some of the establishment types so he may end up being just be a wolf in sheeps clothing.
I was refering to post #74 when I said my points still stand. And they prove velocity of money is a bigger issue than productivity. Actually, I find it amazing how you can be convinced that it's all a matter of productivity when millions don't even have the opportunity to produce by getting a job, ending up on food stamps and / or with student loan debt.
Now I see...you only care about decreasing taxes. That's why you dislike Sanders and say Ted Cruz would be better for the Economy. Your only issue is taxes. Not the wars, not Wall Street, but the only thing that still attempts for some opportunities' equality (which is nonetheless a far cry to what Europe has).
How do you increase velocity of money then? And I'll just remind you again before you attempt to describe how you would increase the velocity of money: Increasing our rate of spending does not improve our economic condition. All it means is that we are spending more and once we run out of money we have to borrow more to continue increasing our rate of spending. We are not adding value but destroying it. Productivity = the capacity for a company to produce more/higher quality products at a cheaper rate, thereby reducing the cost of the production of goods driving prices down resulting in cheaper products for consumers which in turn is one factor in raising desire and creating greater demand for labour. The only way a company or entrepreneur can increase productivity is by investing in capital goods, because it is these capital goods that enhance the value of labour - increasing taxes and government spending does not enhance a company's capacity to invest in capital goods because it draws money away from that investment, Bernie Sanders wants to increase taxes and the footprint of the government therefore he is not the best candidate for improving the economy. FFS get it through your thick socialist head.
We've just come home from spending 4 hours at work. It was a busy day, if you don't already know it was a national holiday - ANZAC Day, a day in honour of our fallen soldiers. Our turnover today was probably at capacity (based upon $$$ earned/hour), the main constraint being the size of our kitchen and the number of staff we can therefore employ. We could possibly employ more staff, but it would probably be inefficient to do so because we don't have the room nor the equipment to make the most efficient use of the extra labour - therefore it would end up reducing our profits and efficiency ie we'd be less productive. Furthermore, given the physical and technical constraints upon our equipment, I'm glad it wasn't a normal 8 - 10 hour day because it would just wear us out. That being said, we do have a number of days during the year when that does happen eg Boxing Day, Australia day, Good Friday etc etc we look forward to those few times in the year, but they come at a physical and emotional cost, in the end they are worth it, but not sustainable on a continuous basis within our current business model. The only way we can see to increasing our turnover is by investing in capital goods and expanding ie renovating our kitchen by gutting it and possibly making it bigger and by buying more equipment giving us the capacity to employ more people so that we can increase our productivity, which will increase our turnover and also the duration of time in which we can trade (limited staff and equipment means limited opportunity to trade). But, opportunity cost aside from loss of trade whilst renovating, we don't have enough capital reserves to do so, we also don't own the building so we don't want to. One solution to work around this could be to borrow more money which is what the Fed and our Reserve Bank want us to do by lowering interest rates to buy more equipment or even purchase the building - but we are averse to entering into further debt because our confidence in the economy and employment opportunities for potential customers is low. So, whilst easy money may be available for us to borrow, and that we acknowledge that only productivity gains will increase our earning capacity and our ability to employ more people and become wealthier, we are reluctant because we fear that more government intervention is not the solution. And those business operators who don't operate from an Austrian framework are just as fearful, but for other reasons. Edit to add: ^ this phransisku is real world economics. Central planning can't solve these problems and nor should they. This has nothing to do with equality, this is what most business operators contend with. Your link in your OP is pointless, inconsistent with the reality of how most businesses function, is a blatant promotion of the status quo and destructive.
Woolworths pretend managers work 60hrs week for $50 to $60k pa, day after day including Sundays ...There is always someone else doing it tough too brother. Well the good old days where were the hard times were had. Try peeling and chipping a bag of spuds by hand. Regards Errol 43
I will first address your 2nd sentence. I largely agree with it. Velocity of money, by itself, is not the major propelling factor to increasing wealth. Adding value is much more effective to that matter. I must however admit that velocity of money can in fact increase wealth. When a no-legs-man has a lot of shoes and a no-teeth-man has a lot of bread, they actually can increase wealth just by exchanging their goods (and yet no value was added to them). Similarly, a greater velocity of money can make people to get faster the things they want / need, and thus increase wealth. Nevertheless, adding value is a "healthier" way to create wealth, I acknowledge that. And when american companies go adding value to China, they're not doing it in the USA, hence the USA isn't as wealthy as it could be. When Wall Street chooses to gamble on the derivatives market instead of loaning to small and innovative businesses, value is not being created. When almost 60% of the tax payer's money is spent on war rather than in building much needed infrastructure, the USA is losing wealth, no question. But the issue here is that you're assuming the only problem of the USA Economy is wealth creation. It's not. USA does not lack wealth. Actually, it is the wealthier country on Earth. They lack good redistribution of money. That's why the rich are getting richer, the poor are getting poorer and the middle class is shrinking. As a result, the Economy suffers. Because of productivity? No. Because companies can't sell, as simple as that. Now addressing your question: by strengthening the middle class and small businesses. By stopping with the crazy policies followed so far that only favor the rich and the big corporations. It's so simple. Oh, I see. So you think unemployment is exclusively due to a lack of competitiveness from american companies?
Trade adds value. Your no-legs man values the bread that the no-teeth man possesses more so than his shoes, so he trades and vice-versa. The amount that they agree on sets the price benchmark for shoes and bread, if in the future both can produce more shoes and bread at a cheaper rate then they are currently able to, then the cost benefit will result in them having more goods to trade once their own needs are met which they can then use to trade for other goods which in turn increases their wealth and satisfies their need for consumer goods. None of this has anything to do with increasing the velocity of money ie the number of times a set amount of money passes from one hand to another does not increase wealth. Oops, back to socialism again? I've already addressed that myth here: http://forums.silverstackers.com/message-908892.html#p908892 I'm giving up on trying to explain to you that productivity is the key. :/ And like I've already posted, both you and Bernie say the right things, but both you and Bernie have the wrong solutions.
If people have money but they do not consume, businesses won't sell goods and services. If businesses don't sell, they have to reduce costs, for example in personnel, by laying off workers. If people do not earn a salary, they have less money to spend. Conversely, if people consume, businesses sell more. If they sell more, they need to produce more. And, believe me, they can do it. Their level of operational efficiency, low or high, won't stop them. If companies produce more, eventually they'll need to expand and hire more workers, either from unemployed people (they begin to earn a salary) or from other companies (they will demand a bigger salary). Either way, people will earn more and have more to spend. In the end, people get more stuff and businesses make more money. What has increased here, operational efficiency or velocity of money? And yet wealth has increased. The analogy I was trying to make before is that, like the no-legs man values more the bread that isn't in his possession, companies value more the money that consumers have. Consumers only have money to trade for the stuff they need. They can't do anything useful with the money itself (same thing for the no-legs man and his shoes). Redistribution of money exists in every system, even in Capitalism. When companies sell and people buy, money is being redistributed. You're obsessed with Socialism (which by the way exists in every developed country). Your closed mind prevents you from seeing reality, and once again I tell you, it makes you to assume the only problem of the USA Economy is wealth creation. It's not. USA does not lack wealth. Actually, it is the wealthier country on Earth. It is wealthier than 15 years ago, although the vast majority of people are worse off (in a recession, like Edelman told). How do you explain that, if not by talking about to where the wealth has been going to? If the USA was stagnated in wealth (same productivity, same velocity of money) but redistribution had remained the same as 15 years ago, I bet people wouldn't be complaining. It's good if we are ever increasing in wealth, technology, knowledge, etc. But it's not the end of the world if we aren't. We just proceed with our lives as before. However, if people have a shrinking purchasing power and are worse off than 15 years ago, oh you can bet they will complain. And if they see that still the country as a whole became wealthier, oh they will be more than angry. Today, redistribution is the major issue, not wealth creation. If you can't see it, you don't live in this world. No, you haven't. You simply dodged the issue. And I've already told you that here: http://forums.silverstackers.com/message-909165.html#p909165 As for the other quotes, well, if you give up you give up. Can't do anything about it. I just hope someday you will open your mind and see reality as it is.
All I'll say is if we don't continue to expand and improve the efficient use of our resources then we will see a decline in our living standards as we will use up all of our resources. Productivity improvements are the continued search to utilise current resources more efficiently in order for us to invest our wealth and savings in producing goods/providing services that meet higher order needs. We can only create demand for money (the velocity of money) by increasing the demand for goods and increasing the demand for goods can only happen when productivity increases and innovation occurs. Sanders' policies do not improve productivity and nor do they encourage innovation - because he wants to increase taxes and redistribute wealth!!!! Both of these policies harm investment and capital expenditure and will continue to drive jobs overseas. You remind me of the antagonists in "Atlas Shrugged". You'd do well writing government policies such as the "Anti-Dog-Eat-Dog Rule", and "The Equalization of Opportunity Bill" and in the process while you and your central planning mates all prosper, the rest of the population would starve to death. Welcome to Phransisku's Portugal, the North Korea of Europe! http://www.bloomberg.com/news/artic...d-supply-imperiled-by-water-shortages-un-says
I'll say it again - True equality does not mean "equal amounts of property" (or other outcome-based measures). Hence, your rant about the children of people who earned wealth being given expensive gifts is unhelpful. The parents earned their money and they have the natural right to peacefully distribute it as they see fit. You are saying that they should not have this right (ie they cannot give it to their son to buy a new Lamborghini, or whatever). Hence, to prevent such a horrendous "unjust" outcome you are proposing to take the money away from the wealthy parents who rightfully earned it for the purpose of giving it to someone who you believe is "more worthy" of the money. This can only be achieved by: (a) a culture where the parents voluntarily do not give their own children "excessive" amounts of money, or (b) using force or the threat of force against the parents and taking it (generally via the tax office backed by the guns of the state). So "Yes" - Classical Liberalism does hold Equality as a central tenet. And "No", you are not a Classical Liberal. And further, "No" you do not believe that people have the natural right of self-ownership and are free to pursue their peaceful projects and live their lives as they see fit (as evidenced by your rant against children of wealthy parents).
