Home > Uncategorized > Cutting wages — the wrong medicine

Cutting wages — the wrong medicine

from Lars Syll

'Sure, your salaries are low but think of all the apples you're getting.'A couple of years ago yours truly had a discussion with the chairman of the Swedish Royal Academy of Sciences (yes, the one that yearly presents the winners of ‘The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel’). What started the discussion was the allegation that the level of employment in the long run is a result of people’s own rational intertemporal choices and that how much people work basically is a question of incentives.

Somehow the argument sounded familiar.

When being awarded the ‘Nobel prize’ in 2011, Thomas Sargent declared that workers ought to be prepared for having low unemployment compensations in order to get the right incentives to search for jobs. The Swedish right-wing finance minister at the time appreciated Sargent’s statement and declared it to be a “healthy warning” for those who wanted to increase compensation levels.

The view is symptomatic. As in the 1930s, more and more right-wing politicians — and economists — now suggest that lowering wages is the right medicine to strengthen the competitiveness of their faltering economies, get the economy going, increase employment and create growth that will get rid of towering debts and create balance in the state budgets. 

But, intimating that one could solve economic problems by wage cuts and impairing unemployment compensations, in these dire times, should really be taken more as a sign of how low the confidence in our economic system has sunk. Wage cuts and lower unemployment compensation levels do not save neither competitiveness nor jobs.

What is needed more than anything else is stimuli and economic policies that increase effective demand.

On a societal level wage cuts only increase the risk of more people getting unemployed. To think that that one can solve economic crises in this way is a turning back to those faulty economic theories and policies that John Maynard Keynes conclusively showed to be wrong already in the 1930s. It was theories and policies that made millions of people all over the world unemployed.

It’s an atomistic fallacy to think that a policy of general wage cuts would strengthen the economy. On the contrary. The aggregate effects of wage cuts would, as shown by Keynes, be catastrophic . They would start a cumulative spiral of lower prices that would make the real debts of individuals and firms increase since the nominal debts wouldn’t be affected by the general price and wage decrease. In an economy that more and more has come to rest on increased debt and borrowing this would be the entrance-gate to a debt deflation crises with decreasing investments and higher unemployment. In short, it would make depression knock on the door.

The impending danger in today’s economies is that they won’t get consumption and investments going. Confidence and effective demand have to be reestablished. The problem of our economies is not on the supply side. Overwhelming evidence shows that the problem today is on the demand side. Demand is — to put it bluntly — simply not sufficient to keep the wheels of the economies turning. To suggest that the solution is lower wages and unemployment compensations is just to write out a prescription for even worse catastrophes.

  1. lobdillj
    January 9, 2019 at 4:25 pm

    Cutting wages to increase GDP is insane. If GDP is low then sales are low. Sales are low when consumers are not buying. Why are consumers not buying? 1. They don’t have enough money, or 2. the store shelves are empty. Why would store shelves be empty? Because enough goods are not being produced. Solution: Produce more goods (requiring more labor costs). This solves the consumption problem and the supply problem. Q.E.D.

    • EDWARD K ROSS
      January 9, 2019 at 11:53 pm

      To comment on Lars Syll’ 9,2019
      Cutting wages-the wrong medicine

      From my non academic background in the real world of real people I think this blog of Lars Syll’s would really resonate, with real people struggling to survive on reduced hours and pay rates that deprive them of an acceptable standard of living. This perception is reinforced by Richad C Koo’s RWER paper on the stupidity of austerity policies.

      Other examples of how the elite wealthy modern-day pirates rob the disadvantaged are here in Australia the major banks have been exposed in the way they have promoted housing bubbles giving mortgages on houses greater than reasonable market expectations. Then since they have been exposed and the bubble has burst their new conditions for loans have placed them far beyond the means of ordinary working people. For example demanding at least a 20% deposit and heavily devaluating their evaluation of the property downwards.so that in the case of a default they can recover all of their investment. Another problem that contributes to the overall problem is how negative gearing encourages the unscrupulous greedy investor to profit from negative gearing. Which with the competition between the same unscrupulous mongrels contributes to making it almost impossible for a family to purchase I home and avoid excessive rent charges of the speculators’

      My point here is that there are many factors in the economy that benefit the already wealthy elite .while they penalise the already disadvantaged. Therefore in my humble opinion addressing these problems is what could encourage and give confidence the thinking public to speak out and with help of all those academics and other academics interested in reforming economics to restore democracy and egalitarianism in order promote a more equitable society. As I have often written before in my opinion this is where the economic conversation needs to begin, before engaging in questionable theory.Ted
      .

  2. January 9, 2019 at 8:15 pm

    Agreed, and please look at the bubble periods like pre-2007 for answers. I mean not merely as examples to avoid. The economy is booming during bubble periods: Builders build, manufacturers make stuff, consumers consume it, employers employ. Surely there’s something to learn there, at the very least that the supply limit on the modern economy is untested or very high. Now it’s easy to dismiss bubble periods as unustainable or “people were living beyond their means”. That is just another fallacy. Money is not a kind of fuel that you use to run the economy, and a bubble economy isn’t depeleting a kind of resource other than indirectly the environment. So we can throw this facile explanation of bubbles out the window.

    Money is a token that curculates between people. Real value like fishes and chips circulates one way and money circulates the other way. Money is just an algorithm for discovering flows of real value and enabling them. The difference between a bubble and other times is that during a bubble people happily produce and share stuff while not thinking clearly how money is going to come back to them. They produce stuff for promises of money (debt) or hopes of getting money later (investment). Isn’t that just great? Isn’t this dynamic, sharing, productive, altruistic economy what we want, and the selfish economy that only does stuff for profit the problem?

    I’m an amateur. Those of you in academia who have graduate students, please study bubbles and not just as failures. You’ll probably find that bubble economies teach inspiring lessons, while the usual ethos of capiltalism, which refuses to do any activity unless it makes already rich capitalists richer, is the source of most of our problems.

  3. January 10, 2019 at 12:44 am

    We see lower wages lead to less consumption and therefor less stress on Earth.

    The question is not how to increase consumption.

    The real economic riddle is how to rationalize the economy so that quality of life increases as consumption per happy and healthy human declines while Earth heals.

    • January 12, 2019 at 9:22 pm

      Garrett et al – The good & bad qualities of goods, services & consumption determine the impact on our habitat, Earth’s biosphere. As our population grows, production & consumption could grow in direct proportion, without excess harms, if we develop a nontoxic monetary/credit paradigm & a bio-ethical cultural economy that supports a sane civilization sustaining biocentric values. That is the 1 and only Way to achieve our best case QOL. On the practical side, implementation can be as easy as the Swiss & Finnish approach to a decent middle-class mincome for all working citizens. However, the only truly sustainable way to implement a sane phase of civilization is a nontoxic complementary cultural currency/credit system for the transition. Still, the optimal option is a totally nonmonetary community credit system that becomes a debt-free, tax-free global reserve currency for nontoxic cultural interaction & fair exchange (equal value trades). That is what the forthcoming Global Community Development Alliance network of for-profit local/regional & national mutual benefit associations is designed to sponsor & support. FYI: The current concept for transitional (taxable) monetary currency is 3 term-limited denominations of global index e-notes. To level the global playing field, the app will value each unit per the current average of all listed assets & currencies (local, crypto- & national). At term (or whenever) they can be used in exchange with any other currency, etc., and be redeemed by member org.s & individuals for stock, options, debentures & bonds issued by GCDA Group associations. I look forward to your questions, critiques & constructive suggestions.

  4. January 10, 2019 at 1:55 am

    May I suggest a new mathematical formula? Let agree that the Gini co-efficient (despite its multiplicity of usages and interpretations) had something to do with inequality. The Gini expired some time ago out of the bottle. Assuming that the “co” can plausibly stand for a moment for co-operation, and “e” for efficiency, can someone pump some sense of rationality into Economies? All other comments are correct and much appreciated.At the cost of repeating oneself the real issues remain untouched: war, famine, climatic mayhem, destitution, fascism (old and new), and the like…

  5. January 10, 2019 at 12:45 pm

    Hi Lars, I’m a little surprised that you don’t directly mention that cutting wages would reduce aggregate demand in the local economy. This would reduce turnover of local businesses and have a domino effect all along the supply chain. Another result would be less tax revenue for the government. And combined with debt deflation you do mention, a catastrophe would ensue.

    @Garrett Connelly. Although long term I agree that we need to get away from a growth oriented economy, getting there directly from here will be difficult because of the scale of private debt. As Lars points out, shrinking the economy generally leads to debt deflation – it is harder to pay back debts and interest payments soak up more of household income. In the UK for example, unsecured household debt is at an all-time high. Shrinking the economy in the short term would cause a crisis by crashing demand and causing businesses to fail. Large scale defaulting on debts threatens to bring down the banking system.

    Mortgages is another problematic category as house price inflation has outpaced wage inflation by orders of magnitude. Any attempt to shrink the economy leaves the whole middle class in negative equity. This is a long term problem.

    The first step for a positive economic future is to stop mining future income for present spending. It is imperative to shrink (non-mortgage) private indebtedness to close to zero.

  6. January 10, 2019 at 1:50 pm

    “mining future income for present spending” is another fallacy. Debt and credit move claims on things through time, but they don’t move the actual things like resources or goods. Real value is always transacted in the present. Excessive debt may be a serious problem and destroy the economy by a bad distribution or interrupted flow of money. But the idea of “spending our children’s money” is not a thing.

  7. January 10, 2019 at 2:22 pm

    Although Keynes was 100% right in his observation, his “cure” rests on the present being a fait accompli. And thus he’s unable to seek a prevention of both the past’s wrongs that had led to the present and those wrongs of the past repeating themselves in the future. In other words, all he’s doing is mitigating wrongs that presently (i.e. statically) are. A more penetrating insight takes into account that the present is both a resolution of costs, acquired during past production, and an acquisition of costs to be resolved in the future. If because of dropping wages, presently acquired costs due to new production are less than they were previously, they are insufficient to resolve previously incurred costs at present.

    Perhaps at first sight this interpretation doesn’t differ enough from the Keynesian one to supplant it. But it should help to further emphasize a distinction by forgetting the whole process as taking place in terms of an accumulation of depletable material output (positives), and rather as just an acquisition and later resolution of economic debt (negatives). The positive identity of economic output in this alternative view remaining instead submerged within the economy, only to appear as consumable final goods outside the economic production sphere, as being the end result of the entire process. Now from this new inverse perspective, conclusions can become drawn that are unreachable for Keynesians. Keynesian economics doesn’t differentiate from an NC approach for instance, that by earning money and saving a portion of it, the means to liquidate personal debts that were incurred in the past become available. However if disbursed income by employers is held as a to be resolved negative already, and the economy is to continue as a dynamic process without incurring losses (say in terms of employment) along the way, then those on the receiving end of debt liquidation now become obligated to substitute for the foregone direct spending of the saver.

    This puts a whole new dimension on the term “odious” debt, as meaning income to creditors, that becomes permanently withdrawn from direct spending; which brings us full circle to my contention that Keynesian “cures” are no more than band-aid solutions to the structural wrongs of the economy’s institutions. The real solution to cure economic woes is to make creditors aware that their bragging days about exorbitant profits on their balance sheets are over, and institute a non-profit financial sector. Aggregate profits in the financial sector are not self-realizable but occur at incurred losses elsewhere.

    • Craig
      January 10, 2019 at 6:53 pm

      John V,

      Correct. Keynesianism was finance’s post war fall back position to the burgeoning world wide social credit movement before WW II. Are you aware of C. H. Douglas and social credit? In your post above you’ve basically expressed his cost accounting flow of funds analysis.

      Social credit was a superior analysis and theory to Keynesianism and any other theory for that matter since it was proposed almost 100 years ago because it was aware of the focusing tool of double entry bookkeeping and its subset of cost accounting which is probably one of the top 4-5 inventions mankind has ever developed. The problem with social credit was its advocates partially fell back into the fallacies of DSGE, did not fully recognize the power of the point of implementation of one of its two major policies at retail sale and also did not do or comprehend the concept of the new monetary and economic paradigm and hence it remained simply a superior theory….instead of a paradigm change. Again, are you aware of social credit? When I mentioned to Steve Keen, who has basically mathematically re-discovered the insight of social credit with his observation that a dip in the rate of change of credit creation means the economy has entered recession, that Douglas was the first disequilibrium theory he said he would have to investigate Douglas, so even the most insightful current economists are unaware of him and his movement which has been buried rather effectively because it has the potential to philosophically and policy-wise end finance’s monopoly paradigm of Debt Only.

      • January 11, 2019 at 12:23 am

        Craig:

        I believe I told you before, but apparently it didn’t stick, so here goes once more… Douglas was a money crank, who rejected the only valid attribute of money: a unit of account. His cockamamy A+B theorem supposedly “accounts” for a lack of sufficient effective demand existing at all times on the retail level. In a normally developing economy with a rising debt associated with additional real capital formation, the opposite is true, cf. the Prebisch article in the current WEA. As far as I can tell, there are no redeeming values in his “social credit”. Sorry to burst your bubble.

      • Craig
        January 11, 2019 at 3:38 am

        There’s no bubble to burst he wasn’t a money crank. Keynes’ and every other economist’s definition of effective demand is faulty because they believe the quantity theory of money and the velocity of its circulation adds to effective demand….when it doesn’t. The classic illustration of velocity erroneously shows businesses fraudulently treating their business revenue as if it were their individual income….which it is not.

        As for its redeeming values, if there is no scarcity of individual incomes and no systemic austerity….then why are heterodox economists like Steve Keen and Michael Hudson advocating for UBI, QE For The People, and “a modern debt jubilee” in order to exit debt deflation costs in excess to incomes to pay them?

        A very good reason….because Douglas was right.

        Now if we’ll just take the additional and extended policies of Wisdomics-Gracenomics we will be able to complete Keen’s and Hudson’s theories and accomplish the new paradigm in economics and money systems.

        When you hear someone calling someone a “crank” it’s a dead give away that they have only read someone who referred to another as a “crank”, ….but has actually read little or nothing of that person’s actual work. That’s how orthodoxies deflect truth and insure only the regurgitation of orthodoxy.

        Sorry to burst your bubble.

      • January 12, 2019 at 12:24 am

        “[Douglas] wasn’t a money crank…” So says a money crank on steroids, who preaches to regularly inject an additional 50% of “debt-free money” into the economic system in order to “save” it from inherent inflationary tendencies. You’re probably a nice fellow Craig, but you’ve got way below zero credibility on the subject. Want to change that? Provide us with an analysis of how, under your proposal, the value of the economy’s unit of account either is of no valid concern or remains stable. If you can’t, you might as well consider giving it all up. Why continue pissin’ into the wind?

      • Craig
        January 11, 2019 at 11:58 am

        You see Douglas was the first disequilibrium theorist long before Minsky and Keen. He was the first one to recognize that we truly lived in a monetary economy not the obfuscating “veil over barter” that neo-liberalism tried to force everyone to stumble around in the dark with. Douglas was aware of both the statistical datums of cost accounting and the rate of flow deciphering nature of calculus and integrated those studies long before Keen realized the importance of accounting and system dynamics.

        Douglas was aware of the ancient’s use of debt jubilee as a means of ending the de-stabilizing effects of continuous debt build up way before Hudson’s recent book described it, and his universal dividend and compensated retail price policies were continuous if not paradigm changing ways of attempting to deal with it. They were also more direct and effective means of distributing money in an austere economic system than the indirect governmental stimulus of Keynes and the deficit spending advocated by MMT.

        Douglas recognized the significance of the summing, ending, terminal expression and tipping point of retail sale for policy that no economist stuck in abstraction and complexity has yet fully mentally “broken through the sound barrier” on.

        And the “only” thing I’ve done is cognited on and taken these prior insights of Douglas to all of the recent iconoclastic and unconsciously derivative economists, and with my additional adult studies of the scientific method, philosophy, the world’s wisdom traditions and of the signatures of historical paradigm changes themselves….again cognited on the fact that the basic nature of the cosmos and thus the temporal/natural universe that economics is inextricably embedded in is an abundant, dynamic, interactive, integrative flow that reflected the natural philosophical concept of grace and then applied its various relevant aspects to Douglas’ and his decedent’s theories…and so, elevated them to the level of paradigm change. 

        All of the above of course are worthy, erudite and well intentioned scholars. But paradigm changes are the destroyers of prior mindsets and the orthodoxies that have too long grown up around them.

      • January 12, 2019 at 12:27 am

        Douglas’ point of departure was an empirical finding that disbursed income is insufficient to purchase the output produced in the same period; and, without being able to come up with a theoretical explanation, concluded that therefore additional money is required to do so. This is a fallacy in a dynamic economy where directly spent profits (his dividend part of disbursed income) allow for yet another round of market clearing, and so on… (realizing and spending of profit income) over many successive periods until finally petering out to nothing, when the output of the original period under consideration has cleared in total. No additional money is required and anybody holding the view that money is a thing, with inherent empirical power as a circulating/realization tool, is a money crank. A potentially cashless society is ample proof of that. In any case, the percentage of market clearing due to statically hidden repeated profit-income spending is a tiny fraction of a social-credit prescription to rectify a perceived to be impossible market, and therefore highly inflationary. All of this indicates once again that it simply isn’t possible to make sense of a dynamic economy using fundamentally static tools and concepts.

        In light of the above, all the references you come up with in support of both your own and Douglas’ positions are false conjectures. And if not, the cliché of a stopped clock being right twice a day too applies. Sentience is no requirement to be sporadically right.

      • Craig
        January 12, 2019 at 1:55 am

        EVERY bit of economic orthodoxy you just spit out is invalidated by the single economic and monetary insight that retail sale is both the terminal summing and ENDING price point for every consumer item or service….because IT’S WHERE PRODUCTION BECOMES CONSUMPTION, and it’s also by dearth of same the terminal expression point for any and all forms of inflation.

        Hence, (and I have probably posted this here at least a dozen times and apparently your addiction to one or another kind of orthodoxy undoubtedly made you either not read it or not perceive it) …IF YOU ACTUALLY LOOK AT IT you realize that retail sale is the single aggregative/macro-economic and individual/commercial/micro-economic INTEGRATIVE point in the entire otherwise wizbang, Rube Goldberg perpetual motion machine of the economy…and that’s incredibly important to understand because it’s also a fulcrum/pivot/tipping point.

        If you understand basic physics that’s where one can move, change the entire direction of, or in the case of an individually and systemically austere economic system, with enough direct and reciprocal gifting of its primary factor (money) totally invert it’s basic scarcity of total actually free and available to spend individual incomes in ratio to total costs….into an abundance of same…..AND WITHOUT INFLATION because garden variety inflation is only low single digit and hyper-inflations only occur after major wars where a nation’s productive capacity is almost entirely destroyed and they are left with all consuming debts and so the central banking and the political elites decide to leverage up speculators that short the currency and so hyper-inflate.

        A 50% discount/rebate policy at retail sale enables us to inject virtually as much money into the economy as we so choose….with only beneficial empirical monetary and economic effects for the individual, commercial enterprise and the entire system that I have enumerated here a dozen times. Sure, there will be some irrelevant low level inflation by the greedy and anti-social, who despite having received the incredible benefit of almost tripling the available individual income/business revenue for their goods and services by the two primary policies of a universal dividend and the discount/rebate,…but that’s what a few regulations and targeted sin taxation is for.

        Play the 50% discount/rebate policy out on paper with the summing/ending/terminal expression/tipping points in mind until you see its how it changes everything…or just keep on regurgitating old paradigm orthodoxies if you choose….it won’t make a damn bit of difference in the empirical temporal universe results of the new paradigm.

      • January 12, 2019 at 2:10 pm

        I really tried to make sense of what you wrote Craig. But I’m afraid I never read anything as discombobulated in my life. When retailers become confronted with the result of your proposal, they’ll do in unison what comes natural to them. They raise prices, with all taxes passed on to the consumer. You’re dreaming in technicolor if you think they won’t. Good luck in getting the support of like-minded fantasizers about what money as a thing can do. I’ll stick to logic, dynamics, and the real world; with non of it reflecting orthodox thinking.

      • Frank Salter
        January 12, 2019 at 9:33 am

        Craig, January 12, 2019 at 1:55 am, in reply to John Vertegaal, January 12, 2019 at 12:27 am: If I have understood you correctly then the corrections you are proposing will have the effect of making the “disbursed income” match the “output produced in the same period”. I would express it simply as markets need to clear, which they clearly fail to do.

      • Craig
        January 12, 2019 at 6:24 pm

        JV:

        “When retailers become confronted with the result of your proposal, they’ll do in unison what comes natural to them. They raise prices, with all taxes passed on to the consumer. You’re dreaming in technicolor if you think they won’t. Good luck in getting the support of like-minded fantasizers about what money as a thing can do. I’ll stick to logic, dynamics, and the real world; with none of it reflecting orthodox thinking.”

        Uhmm….no they won’t….because one of the rules of being able to participate in the discount/rebate is to not raise their prices for any reason other than an increase in actual costs. And as the combination of a $1000/mo universal dividend and the 50% discount/rebate everyone 18 and older will have $2000/mo. guaranteed purchasing power which means all transfer taxes for welfare, un-employment insurance and social security IMMEDIATELY become redundant and so can be eliminated….it’s therefore going to be very difficult to justify any cost increases by any enterprise. :) And of course if just ONE of your competitors agrees to obey these “onerous” rules and can get the entirety of his full competitive price despite offering the consumer a 50% discount….just how long is a greedy, anti-social unappreciative businessman, who even in the face of the above REALITIES also raises his prices….going to remain in business?????

        The recognition of the paradigm changing power of a 50% discount/rebate at the point of retail sale clarifies the mind of the fog of many old paradigm orthodoxies. It’s the invention of the telescope and the discovery of the ellipse of economic theory.

        Paradigm changes are always simple, but elegant and powerful. Try the above one….you’ll like it. Or, rant on about old paradigm orthodoxies until you can hear the rising volume of laughter from those who ACTUALLY LOOK AT the temporal universe realities created by the above policies. The choice is
        yours.

      • January 13, 2019 at 2:15 pm

        I showed before how a market clears in principle, without additional “money”, so measures (by a deus ex machina) can be taken to assure it coming to pass as a reality. How does “over-“clearing make for a superior analysis? By what analysis did you decide to double the standard socred dividend? Why not triple or quadruple it? In other words, what are your assumptions leading to the logic of your proposal?

      • Craig
        January 12, 2019 at 6:46 pm

        And as for businesses before retail sale raising their prices precipitously, purchasing agents aren’t stupid, if one of their providers raises his prices….they’ll simply buy from someone else. And if such businesses collude to do so that’s “in restraint of trade” number one, and number two a nice little regulation like a 110% tax of the difference between what they earned by the price rise and what they would have garnered by not doing so might keep them in line. Of course their business revenues will probably show decreases from such price rises anyway which ought to be reason enough for them to cease and desist.

        Macro-economists get so involved with their abstractions that they forget basic micro-economic realities which will apply even more sternly than they did before the paradigm change. And if forensic accounting is necessarily the new growth area of the economy in order to keep enterprise honest….so be it!  I’d be happy to sic Bill Black and a million of his minions on dishonest and greedy businesses. It will give him a much bigger and better crusade to right wrongs than advocating MMT which is absolutely correctly pointing at an aspect of the problem, but is not a paradigm changing theory like Wisdomics-Gracenomics.

      • Craig
        January 12, 2019 at 7:30 pm

        By the way, thank you for being such an excellent old paradigm abstractionist and orthodox foil to rebut and re-focus attention onto the present time realities that the new paradigm will create. The old/current paradigm so thoroughly forces economist’s attention inwardly that it’s like a psychotic episode. I think I’ll now refer to all theory within the old/current paradigm as psychotic economics.

      • Frank Salter
        January 13, 2019 at 10:21 am

        I don’t believe in unicorns.

      • Craig
        January 13, 2019 at 7:03 pm

        JV: “I showed before how a market clears in principle, without additional “money”, so measures (by a deus ex machina) can be taken to assure it coming to pass as a reality.”

        That’s just some derivative tweaking of DSGE which of course will be gamed and de-stabilized by the gambling obsessions of private banking and deep pocketed multi-national corporations with global reach who have the power of money creation and profitability to do so.

        “By what analysis did you decide to double the standard socred dividend? Why not triple or quadruple it? In other words, what are your assumptions leading to the logic of your proposal?”

        The logic is the temporal/flowing universe abhors and cannot maintain a static “equilibrium” but it aligns with an abundantly free flowing one. That’s where Douglas and his present advocates tripped up. They didn’t fully recognize the aspects and power of the concept upon which their theory was based.

        The definition of the natural philosophical concept of grace is a dynamic, interactive, integrative and abundant free flowingness which also describes the cosmos and the temporal universe on the planet we live on.

        The human universe is inextricably also an ethical one because if you are conscious and sensitive to pain and fairness…then so is everyone else (except for that small minority who simply choose to deny such status to others). Consciousness of and sensitivity to self and others EXISTS no matter whether you attribute such to god or the cosmos itself.

        So called free markets are a delusive confusing of freedom with what they actually are which is increasingly the absence of ethics also known as chaos which is overseen by our less than ethical and obviously dominant economic and monetary institutions and entities. Hence the answer to that chaos is to take rational, ethical, abundant and benevolent control of markets, the money creating power and the economic process all of which adjectives are aspects of grace.

        The beatific scientific and ethical chains of the natural philosophical concept of grace need to be cognited upon by economists….so that policies that reflect that concept can be implemented and the economy become continuously free flowing etc.

        Finally, the answer to the complete financialization of commodity and stock exchanges Is the re-retailization of them. And you accomplish that by taking benevolent and rational control of the money creating process, strictly regulating speculation and if necessary creating rival/competitive exchanges that have the ethical fortitude to obey actual economic values instead of the greedy, gambling obsession to “make a killing” that such markets are now driven by.

        That’s being both real and ethical….which of course are aspects of grace.

      • January 13, 2019 at 7:34 pm

        You could have saved yourself the trouble of writing this sermon. I don’t think it’s going to convince anyone here. Perhaps you should look for a pulpit somewhere else? Over and out

      • Craig
        January 13, 2019 at 7:50 pm

        Frank, I don’t know if you were referencing me in your unicorn statement. If so, I would only ask: Do you believe in wisdom? And even if you don’t, don’t you think that it is preferable to a counsel of despair?

      • Craig
        January 13, 2019 at 8:32 pm

        John V: Your sermon reference is a false, scientistic conflating of religion with what I’m actually saying. The wisdom/natural philosophy I’m advocating is a lot more in line with cutting edge science than the pre-quantum physics scientistic/quasi-religious orthodoxy you’re dramatizing. Also, am I supposed to say everything in some stoic and completely ineffective way? No, that’s only for the orthodox, SELF assured and static.

      • Craig
        January 13, 2019 at 9:03 pm

        And apparently you and your reality filters missed this:

        The definition of the natural philosophical concept of grace is a dynamic, interactive, integrative and abundant free flowingness which also describes the cosmos and the temporal universe on the planet we live on.

  8. January 12, 2019 at 12:28 pm

    Lars: “When being awarded the ‘Nobel prize’ in 2011, Thomas Sargent declared that workers ought to be prepared for having low unemployment compensations in order to get the right incentives to search for jobs.”

    We Brits have been wondering what sent the Conservative party crazy. Of course, being in thrall to bankers and businessmen they don’t see public service as employment, so one needs to factor in a 60% drop in local government incomes over the subsequent period.

  9. January 12, 2019 at 9:37 pm

    If I remember correctly, back in 2007, Inc. Magazine published an article on the realities with a chart that showed sharp decline in retail sales & real wages preceding severe recessions. I think it may have been the work of Steve Keen (?). Anyway, it was clearly accurate and just as clearly ignored by the faux news media & corrupt politicians & plutonomists ever since. Yet, evidently, the noncorrupt Swiss & Finnish conservatives finally got the message. Now, who among the faux news hucksters, plutonomists & oligarchs of the kleptocracies pay any attention to the hugely successful results of general middle-class mincome & QOL & GDH (general domestic happiness)? Right, 0 (zero), none of them. They clearly fail to care about global QOL, even for the sake of their own spawn. Why? They lack the following: natural morality, ethics, bio-ethics, empathy, compassionate wisdom & sanity (spiritual wellness). Evidently, they think their game & their score is all important. Hence, plutonomics lacks any qualitative ecometrics that can evaluate the psychosocial realities of kleptocracy.

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