Good News in July 1-15, 1999
[Commentary] ©1998,1999 Phil Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080
7/15/99 One UPsizing -
7/14 Merger talks end, Bloomberg via NYT, C3.
The world's top security and fire systems maker, Tyco International Ltd., ended talks to buy Williams PLC after they could not agree on terms. It was the second time in less that a year that Tyco and Williams, the biggest maker of fire extinguishers, ended talks. The earlier talks ended in November....
[Is Tyco gonna get the message this time? Quit merging and MANAGE for a change!]
[Another hopefully mortal blow against 'free' trade.]
7/13 US, Canada get go-ahead to hit EU with tariffs - WTO ruling affects $124m in imports in beef dispute, by Naomi Koppel, Bos Globe, F7.
GENEVA - The United States and Canada were given the go-ahead by independent arbitrators yesterday to impose 100% penalty tariffs on $124 million of imports from the European Union in their dispute over hormone-treated beef.... The scale of the decision...is an indication of the serious damage the European beef ban has inflicted on US exporters and the opportunities it has denied European consumers," said US trade Ambassador Rita Hayes....
[We have an unusual angle on all this. We think the idea of hormone-treated food is insane. We love the EU for blocking it. We hope this bankrupts the idiots in this country who are zooming into this uncharted territory. They are complete fools in the sense of "fools rush in where angels fear to tread." We hope more Americans smarten up and stop consuming this god-knows-how doctored garbage. And the worst are the dairymen who for years pushed how natural their milk was and now are screwing around feeding weird stuff to their cows. Long live Garelick Farms in the Boston area and other dairies that are blocking this development.
[We're sorry that some EU exporters are suffering for the EU's wise decision on this, but they don't want to get dependent on markets as stupid and manipulable for short-term gains as ours anyway. And by the way, we're ashamed that little puppydog Canada in on this with dumb big brother US.
[And of course, the really good news is that this whole development aims a well-deserved axe into the roots of the free-trade fatuosity. How supporters of private property can seriously propose what amounts to the abolition of private property on the nation-to-nation level (except to expand their short-term looting field) is beyond us. Private property is nature's way of sticking people, not only with the benefits, but with the costs of their decisions. Let's limit the risks of weird long-term problems from hormone-treated foods to one big chunk of the world's population - stupid us. We're already arguably the most violent nation on the planet next to the morons in Jugoslavia. We've got school killings, drive-by shootings, and mass murders reported every week and next year we'll top Russia for the world's biggest prison population. Who's to say there's no connection between this "F in Comportment" and the crap we shove down our craws?]
7/11 A Khrushchev is pledging new allegiance, by Francis Clines, NYT, front page.
PROVIDENCE - Four decades after his father Nikita S. Khrushchev...vowed from the Kremlin, "We will bury you," Sergei N. Khrushchev awaits American citizenship.... "This is a great country and it's an honor to live here," the 64-year-old son of the late Soviet Premier declared this week.... Now a scholar of the cold war whose lectures at Brown University here are driven by eyewitness memories, [Sergei] had been a rocket and computer scientist in his father's heyday and a firm believer in Communism....
Nikita...had barnstormed America with his son at his side at the height of the cold war 40 years ago. "An impression...more friendly than expected. You smile more than others."...
[Welcome, new citizen Sergei Khrushchev! - after so many years of fear.... Here's hoping you're not joining our "club" just in time for its decline.]
7/10 Controversial Internet fee is killed, NYT, C1 pointer to article on C2 by Jeri Clausing.
The Dept. of Commerce has asked the Internet's new governing body to eliminate a controversial $1 fee on Internet address registrations, to open its board meetings to the public, and to draft clear restrictions on the boundaries of its authority.
[Sounds like a plan - at last.]
7/10 The shape of abortion to come, NYT, frontpage pointer to article in tomorrow's NY Times Magazine by Margaret Talbot.
The French pill RU-486 is finally coming to America. It may leave the abortion war without a battleground.
[Here's hopin'! Personally we've had enough of people yelling and screaming about certain intimate details of other people's lives that, either way, have enormous consequences and costs for the people directly involved, but not for most of those doing most of the yelling and screaming. The Magazine itself has an interesting article quote on the contents page (4) - ]
"It's what I think of as the King of Denmark model....
[When the Nazis started persecuting the Jews in Denmark and made them wear a little yellow star so they could tell who to hassle, the Danish King wore one too, and then so did virtually all his subjects, thus essentially stymying the holocaust in Denmark.]
"...If everyone...put on a yellow star, how do you know who the Jews are? If all kinds of practitioners...are doing abortions, how do [anti-abortion terrorists] single out...targets?"
[Too bad they didn't try this model in Jugoslavia every time ethnic cleansing was mentioned.]
[At last, they got them (or did they, and how long will reform - if any - last, especially if Glass-Steagall gets repealed?)]
7/09 N.A.S.D. fines Prudential $20 million - Another sanction for a decade of abuses in insurance sales, by Joseph Treaster, NYT, C2.
7/08 Clinton restricts imports of Brazilian steel and Australian lamb, by David Sanger, NYT, C1.
...in response to complaints from unions and farmers that their livelihoods were threatened by a surge of under-priced imports.
[Pick one: free trade or a viable economy - they're mutually exclusive.]
Mr. Clinton...justified each of the moves as examples of how his Administration is enforcing [anti-]dumping laws... but abroad [his] decisions are viewed...as more evidence that the United States, while talking up the merits of free trade [as in "it's OK for us to dump on you"] is increasingly closing its borders to imports [as in "it's not OK for you to dump on us"].
[In our naive youth, we used to be impressed with the GATT propaganda about free trade, but it's sort of like socialism - it requires that everyone be an angel. And that everyone have a fairly stable [and high] currency as opposed to, say, a collapsed currency and economy which kinda makes you desperate, you know, and in a good position to export your way back to terra firma, if any. In short, free trade is just another dumb simplistic idea, but one that CEOs have swallowed - because some of them want to expand their looting field and pile up more unspendable billions than Bill Gates.]
Trying to determine what products are being 'dumped' at unfairly low prices. [blowout headline]
[This can easily get too complicated to implement. Let's just look back at how our forefathers did it. Alexaner Hamilton "recommended an indirect tax by imposing duties on imported merchandise...so that our own workpeople might be able to compete with the low wages paid in Europe, and with the acquired skill of centuries." (Patton's Political Parties of the United States, 1902, p. 27.) But today, an overriding factor is wildly fluctuating currency exchange rates, as lethal IMF megaloans plus Wall Street's quicksilver capital trash one currency after another in a kind of domino effect far more destructive than anything the Commies ever did. So tariffs today should start with simply neutralizing currency exchange swings.]
7/08 Toyota is seeking to stop use of seniority to set pay, by Stephanie Strom, NYT, C3.
...negotiating with its union to eliminate seniority as a major factor in determining the salaries of white-collar workers.... If...successful, it may influence pay practices...across Japan....
[The idea behind seniority is that 'practice makes perfect' dba 'more productive'. So basically all you have to do to become more productive is get older on the job. It doesn't account for creativity, a more unpredictable variable that can allow a rank newcomer to waltz in, see the obvious, and suggest a killer efficiency. But then, creativity varies directly with job security so it's now in long-term decline anyway, everywhere in the world. What's the incentive for "suggesting your way out of your own job"? That's one big reason that timesizing companies like Lincoln Electric and Nucor cut hours instead of jobs - they want the innovation that job-secure employees pump into the suggestion box.
[Seniority also doesn't account for the productivity killing boredom factor. But what to replace it with? Neither creativity nor job interest are particularly easy to measure. We predict that in the longer term, seniority will be replaced by... versatility.]
7/7/1999 German unemployment, AP via NYT, C4 (NE).
...dropped slightly again in June, mostly because of seasonal factors, as the sluggish economy continued to crimp job creation.... The unadjusted jobless rate for June was 10.1%, or 3.9 million unemployed, compared with 10.2% in May and 10.5% in June 1998....
[The Germans still don't get the power and centrality of timesizing, nor the fact that you don't just sit and wait for job creation - you incentivize job sharing via some such approach as timesizing. But meanwhile, everyone has health insurance, long-term unemployment benefits and - 6 week vacations?! Their 'hell' is better than our 'heaven.']
7/06 Stocks a puzzle for Greenspan - 'Asset inflation' looms, but few remedies available, by Kimberly Blanton, Bos Globe, E1.
[Ah, a headline that almost pops the big question in "few remedies available." We would say "NO remedies available - but timesizing."]
Alan Greenspan...may be losing his cool. The chairman of the Federal Reserve Board has expressed...a growing frustration with a stock market that just won't quit. His fear, Fed watchers say, is that stock prices have becomes so high that this "asset inflation" - an increase in the value of individuals' portfolios, including stocks, mutual funds, and homes - may pose a bigger threat to the economy than old-fashioned price inflation, which has not reared its head.
[Very good, Allan. At last you've realized that your lever (interest rate manipulation) is not attached to anything at all in the deep structure of the economy. We still get inflation, but it's in the financial markets - because so few people in our economy are getting so much money that they literally have nowhere else to put it. Give another billion to Bill Gates and he barely has time to yawn and yell to an aide, "Throw it into a mutual fund and don't bother me!"]
If stocks fall, ...
[Any time you paint yourself into a corner and one of two outcomes just simply absolutely MUSTN'T happen - you've likely been working a Ponzi scheme that actually has to crash eventually, and the sooner the smaller.]
If stocks fall, consumers would feel poorer and would stop spending, causing the economy to slow dramatically. In the worst case, the stock market is increasingly looking to some economists like a bubble that could pop, wreaking havoc on the financial system and the economy. "Greenspan's nervous about it," said Karl Case, professor of economics at Wellesley College, but he "doesn't know what to do about it."...
[Aha, this really pops the big question (as distinct from the big bubble) but it's somebody talking for Greenspan, not Greenspan himself.]
"Leaving aside the notion of some sort of crash...[the Fed's] interest in the stock market is mostly indirect," said Benjamin Friedman [of Harvard economics]. That may be true, but Greenspan's remarks about the stock market have appeared with increased frequency and intensity.
[Which should lead people to conclude that they better not "leave aside the notion of some sort of crash." In fact, if Greenspan had any sense, he'd resign now on the crest - like Rubin just did (and Coolidge in 1928) - and retain his glow in the history books.]
The Fed chairman first broached the problems the stock market poses for FOMC members [Federal Open Market Committee that sets interest rates] in December 1996. He grabbed headlines by using the term "irrational exuberance" to describe the market. The Dow at that time was around 6500.
This year, he has become preoccupied with stocks in his testimony. In January, speaking to the House Ways and Means Committee, he said gains earned in the stock market have created a "wealth effect."... The Fed estimated that the stock market contributed...1 percentage point to the growth in the GDP over the last three years....
[Which should also give Greenspan a shiver of doubt about the adequacy of the GDP as a measure of our real economic well-being, instead of, say, an unemployment rate that counted welfare, disability, homelessness, prisons, and maybe people forced into self-employment or part-time.... or even Herman Daly's complicated Index of Sustainable Economic Welfare.]
In a June 17 speech before the Joint Economic Committee of Congress, Greenspan said stocks have reached "unsustainable levels."
[That's good, Alan. At least you won't get caught like Irving Fischer in September, 1929 talking about a "permanently high plateau"! And it's so nice to hear concepts like "sustainability" on your lips, even if you haven't a clue how to achieve them.]
Despite this concern, Fed members are not inclined to do anything about bloated asset prices, Greenspan said....
[Well what CAN they do?! Twiddling interest rates a tad up or down doesn't start the colossal reinvestment in our own consumer base that we need to solidify the bubble. Only the breath-taking task of shortening our workweek and rationing down worker over-accessibility to the job market can do that in peacetime. And then you need a new way to control wage-push "inflation" or rather, the shift from asset inflation to closing the income gap. A way such as designing the cap on the workweek as a gearshift threshold rather than as a stifling STOP WORK HERE EVERYONE. You simply design incentives for people to either stop work there or switch from work absorption to job creation if for any reason they actually like their job apart from the money. This tends to balance, for the first time since World War II, the quantitative incentive with qualitative incentive throughout the economy; in other words, inflationary incentive with deflationary incentive, the only two real, economy-relevant types of incentive there are. It's all in our manual describing the Timesizing upgrade to our current rather primitive version of fixed-workweek economics.]
...adding that "monetary policy is best primarily focused on stability of" prices.
[Yeah sure, Alan, but the Fed's mandate was two-fold, not just one-fold, and the other "fold" was unemployment, not just inflation. You seem to have completely forgotten that, as well as the fact that anything over 2% unemployment was regarded as alarming during World War II, the last time we had anything like a real balance between labor and employment, job seekers and job openings - in the context of pervasive on-the-job training. Now we only have lazy and spoiled CEOs claiming shortage of qualified candidates with no thought of offering training and really just to get more visas to import cheap labor from abroad. As Michael Dertouzos implies in the article below, the poor don't get trained by magic, they need help. And as long as there's a huge global (including USA) technology-fired labor surplus, regardless of any degree of skills shortage (surplus-caused, think about it), employers will have zero incentive to roll up their sleeves as they last did during WW2 and train, train, train (instead of just collecting their precious cost-cut savings and piling them into the financial markets).]
[Greenspan] concluded by virtually admitting the Fed is helpless to do much about the stock frenzy: "It is useful to preempt forces of imbalance before they threaten economic stability," the chairman said. "But this may not always be possible - the future at times can be too opaque to penetrate."
[Alan, baby, you don't have to penetrate the future. You just have to penetrate the past, instead of accepting uncritically the snowjob the New Deal did on the American and world public. Then you can examine the largely overlooked changes that happened in the area of worktime in the period 1914-1941. Look at Juliet Schor, Ben Hunnicutt, Roediger and Foner. And don't try to tell us that worktime is was ever a constant before 1941 or that it's unimportant or in the least impacted by the critics of that strained strawman, the Lump of Labor Fallacy. We have a huge blindspot right smack in the middle of standard economics and that blindspot is the total neglect of worktime. The only people who study it are the historical economists and for that reason alone, they will be regarded in the future as having won the battle between the historical and theoretical economists that started with Cunningham and Marshall in the 1890s.]
...David Jones of Aubrey Lanston & Co...said he believes that Greenspan "is more worried than anything else about the wealth effect of a runaway stock market.... The Fed could lose control."
[The Fed never did have control of the economic deep structure. Interest rate fiddling is totally superficial and merely adjusts a totally out-of-place variable in the economic surface structure - fear. Fear of job loss, any kind of fear, has no place anywhere in a well-designed economy, surface or deep, as Deming implies in his well-worn mandate, "Banish fear from the workplace."]
One reason is that asset-price inflation is relatively uncharted territory for traditional economists - including economists at the Fed.
[No kidding! They're so busy cheerleading for the status quo that they never penetrate beyond the surface structure to study areas in their own neo-classical heritage like, the marginal utility of wealth, dba "the more concentration, the less circulation." They pull 6-digit salaries and they're lazy, unimaginative, prematurely quantifying, self-justifying SOBs. "Oh Jerusalem, Jerusalem, how often...."]
[MIT guru (Director of the Lab for Computer Science) admits computers could widen gap between rich and poor.]
7/06 A pragmatist on what computers can do, by Claudia Dreifus, NYT, D3.
[Whatever word Claudia is groping for, it's not "pragmatist." Maybe it's "prophet."]
Dr. Michael L. Dertouzos...who in the 1970s foresaw the spread of computers, now says they [will] widen the gap between rich and poor. [Photo caption]
[Well, you didn't have to be a prophet or "foresee" the spread of computers at that time - they were already spreading in the 1970s. We foresaw the spread of computers in the 1950s. By the 1970s, little companies like PDPS of Charlestown just east of the Somerville line (Publication Design Production Services) already had onscreen editing. It was expensive, but by the late 70s you could get automatic typing systems for less than $2000 - we got a used TyData with a cassette-tape-driven IBM Selectric. Then after a brief flirtation with an Apple 2E system with a screen and components all over the place, we got into an Osborne, the first bundled system, in late 81 or early 82. We never bought anything until it came down under $2000.
[But at least Michael is one computer guy who knows how to enjoy himself (he's pictured on his "boat" - make that yacht - in Boston Harbor) and who admits they will widen the gap between rich and poor. Why do we replace Claudia's "would" with "will"? Because that's what he says in his original quote - ]
"...I've concluded that the information revolution, if left to its own devices, will mean that the rich are going to buy more computers, be more productive and become richer, and the poor will not be able to do that and will stand still."
[There isn't a single "would" in there. And he goes on to issue a warning, which makes him worthy of the name "prophet" - ]
"History teaches us that whenever the gap between rich and poor increases, we have all kinds of troubles."
[Now we believe that, but we'd really like to see somebody write a book on it and come up with the case studies, one after another, in all their variety and without a whole lot of rhetoric. And no, Karl Marx will not cut it because he has too much anger and rhetoric. We just want the facts, ma'am. This guy Michael also had the chutzpa to stand up to Bill Gates and his fatuous idea that capitalism is or will soon be "frictionless" - ]
"...[Bill] thinks consumers and suppliers are going to meet on this gigantic football field called the Internet and they are going to do deals together without an intermediary...a seductive idea. In my opinion, it is right for about 15% of the marketplace. But wrong for 85%. It will [only] happen on standard products and products that do not involve trust questions - relatively small products."
"Bill sees this expanding world of networking as an opportunity for poor people to sell their wares, get educated, participate in the world marketplace and pull themselves up from poverty. I see the exact same thing with a time scale of 15 years - and only if we help."
[Michael bases his 15 year estimate on a study of the Nepalese, who he says they have no skills to sell - we would add, "to us" - bearing in mind the anecdote about the Central American Indian who went to Mexico City and saw nothing but sterile buildings while a Mexico City resident visited the wilds of Central America and saw nothing but jungle. Both saw nothing of value on the home turf of the other. Michael is like the dude from Mexico City. But OK, here's something pragmatic in this interview - Michael admits computers aren't a panacea, aren't that for us in the US, and wants to start small in other countries like Israel. When Netanyahu wanted the money to computer-connect all toddlers in Israel (God, what a nightmare), Michael asked him why, Net-a-Yahoo answered "Isn't it obvious?" and Michael answered - ]
"...We in America have all the computers in the universe and we still rank 18th in math and physics worldwide \so\ let's experiment, let's connect a few thousand kids, let's not deploy this for tens of millions because the jury is still out."
[Plus here's a rather nice touch - ]
Q. If you had the power to redesign the curriculum of an engineering school, how would you change it?
A. I would make it a lot more sensitive to the whole human being.
[He seems to focus on the computer's invasion of privacy but perhaps he has a nagging feeling that things aren't getting as good as fast and for as many people as they should be in view of our vaunted rate of technological progress. Technology gets better and better and most people's lives stay the same or get worse, as the rich get richer and the poor poorer. The concentration of wealth intensifies and the circulation of wealth stagnates, and those with the money don't have the anywhere near the time it would take to spend even the half of it, and those with the time don't have the money. Our technology of sharing lags far far behind our computer technology.
[Well, in the immortal words of Crocodile Dundee, "No worries!" because somebody has come up with a design solution to this gap - us (it's nasty work but somebody had to do it) and we call the first installment Timesizing. Our book Timesizing, Not Downsizing is the first volume in the MOT = the Millennium Orienteering Trilogy. We see the complications of modern life as primarily obstacles to seeing the obvious, and we're asplashin' down our "BGO's" (blinding glimpses of the obvious) to cheer up you folks who sense, rightly, that the relentless happytalk about the economy is papering over a big hollow bubble.]
7/04 One New York Times page, TWO worktime articles! -
[Silver lining in dark cloud of weakening US marriage - ]
7/04 U.S. marriage is weakening, study reports, AP via NYT, 12 (NE).
Marriage has weakened as an institution in the United States, with fewer people getting married than at any time in the nation's history, according to a new study...by the National Marriage Project at Rutgers University [called] "The State of Our Unions: The Social Health of Marriage in America"...made public on Thursday..\.. The study...reviewed statistics on marriage and divorce fro the last four decades to find out how many people were getting married and at what ages, and how many of those marriages lasted. It also based some conclusions on interviews..\..
...The national marriage rate has dropped 43% over the last four decades to its lowest point ever.... The number of marriages per 1,000 women aged 15 and older dropped to 49.7 in 1996, compared with 87.5 in 1960..\.. Moreover, fewer people report being "very happy" in their marriages.... Researchers attributed the declining trend to more couples choosing alternatives, including living together outside of marriage or putting off the vows until later in life....
[So what's the silver lining? Marriage was always an extremely big pressure to reproduce, and we are heading for a world populaton of 7 billion. All global ecosystems are coming under stress from our numbers. The biosphere does not need more people, it needs less. We need to shift from quantity to quality. And this declining marriage trend is part of the very natural and necessary shift of our basic social unit from the reproductive pair to the productive person, from the procreative couple to the creative individual. We are slowly becoming "as the angels of God in heaven" who "neither marry, nor are given in marriage" (Matt. 22:30). So don't worry about it. It's all part of the dawning age of ecology, which is gradually taking over as the fount and source of all morality (because of its emphasis on whole-systems balance both here and now and throughout geological timespans), and directly or indirectly, always has been - we just hadn't enough knowledge to realize it.]
7/03 Phillips adopts new shareholder rights plan, Reuters via NY Times, B3 (NE).
The Phillips Petroleum Co., which broke off an $8 billion refining and marketing deal with the Ultramar Diamond Shamrock Corp. earlier this year, said yesterday that its board had adopted a shareholder rights plan...not adopted in response to any specific takeover threat but to the general takeover environment. The company said the new plan is similar to the current plan, which was adopted in 1989 \but\ will expire on July 31....
[There's one company with something in its head besides quantitative bigger-Bigger-BIGGER, and we suspect it may have something to do with quality.]
[Two standard economists sound the alarm on the Time business section frontpage, get slammed as fear-mongers, yet manage to pop the big question, "What if interest rate cuts aren't enough to maintain spending?" - ]
7/02 Reviving the economics of fear - In bad times, consumers might simply refuse to spend, by Louis Uchitelle, NY Times, C1.
[Boy, we are still missing the point here, the point being, even if the people who have the money agree to spend as much as they can each and every day, by the time we get into the downward spiral of depression, spending power is so concentrated among so few people that they CAN'T possibly spend enough to reverse the spiral!]
Paul Krugman, the MIT economist...has concluded that Japan has fallen into a liquidity trap and that America could too [photo caption - such a trap occurs when] the demand for goods and services consistently falls short of a nation's capacity to produce them despite short-term interest rates as low as zero..\..
Robert J. Gordon, a Northwestern University economist, has expanded the discussion of recalcitrant consumers in the latest edition of his textbook [photo caption]....
[Instead of blaming "quirky" or paranoid consumers, maybe these paragons of the present imperfect paradigm should be looking into one of their own under-researched doctrines, that of the "marginal utility of wealth," dba "the more concentration, the less circulation." And then when they get around to asking, "How did it get so concentrated?" we point out - how long can you use waves of work-saving technology to downsize instead of timesize without inducing a collapse of spending and markets?
[The article pops the really interesting question in the pickup headlines on p. 3 - ]
Economists revive a spending theory - What happens if interest rate cuts are not enough?
[And the connection=equation the Greenspan-Rubin's DO NOT GET is the fact that wages = spendings for ordinary people, while investment returns ¬= spendings for big investor/speculators. This is the much-ignored "marginal utility of wealth" = the people with money don't have the time to spend it, and the people with time don't have the money = the more concentration, the less circulation = Keynes' "liquidity trap". Greenspan even occasionally bemoans the widening income gap, but apparently NEVER perceives that it can never be reversed without wage raises for the majority of ordinary people. Wage raises for top executives and investor-speculators is part of the problem (they widen the income gap), not part of the solution.
[And yet, as the Frontline special on The Crash points out, Greenspan and Ruben and their insulated, game-playing clique rescued the big investor/speculators in the late 80s with taxpayer credit (= ultimately money) when they rescued the Savings&Loans (citing the Chrysler bailout, supposedly "successful" but - it's Daimler now), they rescued the big investor/speculators with our money but not our consent in the Mexico peso crisis, they rescued the big investor-speculators in the Thai baht crisis, they refused to rescue them in the dominoed Russian ruble crisis (but the favored had already got out), they rescued them again in the dominoed Brazilian réal crisis, and they rescued them again in the huge ±dominoed hedgefund crisis (LTCM).
[Ya know, we used to hit the Communists for the domino-theory, meaning the Commies would take over one nation after another in Southeast Asia and "enslave" them (or at least ruin them for capitalism). Now WE "capitalists" have actually DONE the thing we so feared from the Communists! We have, by a financial domino effect, RUINED Thailand, Indonesia, Japan, South Korea, the Phillippines, Brazil, who's next? for capitalism because our top investor-speculators have zoomed in, looted these nations of their faith in their currency (by selling short their currencies), concentrated astronomical wealth in our own few hands, zoomed out, and forced ordinary American taxpayer/consumers to resuce the saddest of our victims - except the Russians, of course. Them we talktalktalk about how we HAVE to rescue because of their nuclear stockpile, while just not doing it. Result? The Russians are getting pissed. They are rushing into Kosovo first. They flew their planes very close to NATO air space. They keep their old space station Mir going on and on and on, and try for dramatic (but dangerous) docking experiments. They are saying, "You betrayed us. Why do you expect us to keep cooperating with you? You bailed out everybody else. Why aren't you bailing us out?" Do we have a death wish or something? These big boys aren't looking to be stopped - by catastrophe, and if they look long and hard enough, they're going to get it. As Frontline points out, they get it because they induce it. Their short positions on currencies eventually get so large that the currency can't help but crash.
[But we digress. Back to the question. What do we do after we "cut to zero" (interest rates)? Rate cuts are a superficial solution anyway and we'd like to see rates pegged just to stop them from distracting everyone on and on and on. Let's squeeze all the solution we can out of the superficial interest rate approach, chock'em and chuck'em, ie: MOVE ON. To what? To plugging the really big leak in the our and the global economy. What's the really big leak? The fact that 1% of the population can concentrate 99% of the wealth, and get investment-production totally out of whack with earning-spending - due to "ye more concentration, ye less circulation." We need limits. We need to cap one person's potential wealth. We can't go on with this fool's fantasy of infinite wealth because that much concentration destroys the basic nature and value of wealth in currency ("runningness", French "courir") and circulation. But we can't just walk in and take money away from people, because it's not yet obvious enough what we're giving them in return. However, if we walk in and take work away from people, it is obvious that we're giving them leisure in return - free time, family time, rest, R&R. Conclusion: it's easier to balance work than wealth, time than money.
[So. "What happens if interest rate cuts are not enough?" We CUT THE WORKWEEK, and SPREAD the work (and the earnings and spending and markets and production and solid, no-bubble investment). And we can even do this in a way that accommodates workoholics by saying, You can work all you want, as long as you change gears at a certain point and start giving back, by reinvesting in job creation, instead of continuing indefinitely to be a locus of work concentration. In short, you gotta work overtime for love, or not at all. Love, not money. Deflationary, not inflationary. Thus our whole inflation control effort shifts from negative (fear-based) to positive. You never want to stop the little toymakers who "never worked a day in their lives" because they LOVE it. They'd work for nothing. We're not asking them to do that, that's slavery, but we are asking them to stop working for freely spendable compensation at a certain point every week, and shift to earmarked compensation. Compensation earmarked for reinvestment in training and hiring. And actually spent and reinvested in such ASAP. This can be achieved by a variety of methods. We suggest first a corporate overtime tax with an exemption for training and hiring, and then an individual workohol tax with an exemption for reinvestment (especially in training and hiring). We call it Timesizing.]