Economics and Productivity by James Jaeger
IDEAS v. LAWS: Good Ideas and Bad IdeasAn idea is always more powerful than a law.
In fact, a "good" idea is the most powerful "thing" there is because it requires little or no force (laws) to execute it. A "bad" idea, takes force (laws) or politics to even persist. Two examples are the "Law of Supply and Demand" and the Legal Tender Laws.
The legal tender laws, because they are based on a bad idea, must force people to adopt them hence a currency. If the currency was sound and backed by some commodity that governments could not manipulate, it would not need to forced into acceptance by legal tender laws. The currency would be a good idea not requiring force.
The "Law" of Supply and Demand is not really a "law" but only an observation and since it is a bad idea, it must be given the status of a law to be given any credence at all.
Economic books define it to the effect: When there is a surplus of a goods in the marketplace, prices will be driven down by the existing demand until it is no longer viable for producers to continue supplying those goods under their current costs of production.
Conversely, when there is a scarcity of goods in the market, people will pay more for goods, if they are in demand. Others seeing the profit being made by such suppliers enter the market to sell such good also. Eventually more and more of the goods are produced and the situation enters the state of equilibrium described. The above observation is so reliable, economists have labeled it a "law."
But here's where the law is perverted:
It seems we live in a civilization that simply wants to produce less and charge more. This is even viewed as being "cool" or a good businessman: seeking to attenuate the supply of products on the grounds that one can earn more money by artificially forcing the demand for their products up and then charging more money per unit to make up the difference of less per-unit sales.
Too many businessmen, being greedy to a greater or lesser extent (and justifying such greed by saying or thinking they are "only looking out for their families"), pervert the "Law of Supply and Demand" in this manner to their benefit - but the disservice of others.
Look at it. In a Universe of virtually infinite mass and infinite energy, where the Sun burns 4 million tons of hydrogen each second, where there is infinite "supply" - certain members of Mankind accept that they should limit productivity on Earth so they can "supply" less of this infinite mass-energy but charge higher prices.
This is the lazy way out - to produce less and charge more.
Isn't this evidence that too many people don't enjoy their jobs?
Under this attenuated-supply perversion, we all loose, even the rich few that can afford the excessive prices (even though they are "justified" because they are supposed to be "higher quality").
Henry Ford
Fortunately, a few entrepreneurs like Henry Ford have used the inverse of the Law of Supply and Demand to benefit others on large scales.
Henry Ford's investors and stockholders, just doing their normal animal-thing, wanted him to manufacture fewer cars at higher prices. Ford's dream was to manufacture more cars at lower prices, so every one, not just the rich, would be able to afford one.
By going against the sick law of supply and demand, i.e., increasing the supply so that he would increase the demand, Ford build one of the greatest companies in history, and to this day, it is possibly America's finest automobile manufacturer.
Rather than being a "businessman" overly concerned with the bottom line, Ford was equally concerned with the quality and the quantity of his product.
The fact that he invented assembly line manufacturing, proves that there is always a way to increase quantity and quality at the same time.
In the end, Ford made more money for his company and provided a greater benefit to his fellow man. It would be nice if there were more Henry Ford's around - and there are - yet to be discovered.
This is the same principle Bill Gates has used to build the Microsoft Corporation, now the largest software development company on Earth in just over a decade or two. He made MSDOS cheap and effective and got everyone using it.
Hence, by bucking the "Law of Supply and Demand this way, one will:
1. Ultimately sell more units in the long run because the units are more affordable to a wider base of people.
2. Generate greater corporate cash flow from a more loyal customer base.
3. Become more efficient and create higher quality because of the sheer volume.
4. Make new discoveries faster for additional products.
Such a company with such a philosophy will invite others to follow suit - and we will all win.
Over Duplication
Factor 4. above: Make new discoveries faster for additional products, needs to happen more because so much energy is wasted over producing repeats of virtually the same product that's a total waste of planetary resources.
We have too much of the same, slightly different stuff on this Planet and not enough of more other stuff that could be exotic.
Why do I need 87 different styles of toast popper when I don't even have 1 personal space ship?
Manufacturers have gone psycho trying to cater to the whims of their customers by over differentiating minutia on their products.
For instance, would you rather buy the black boom box with treble, mid-range and base or the pink boom box with only treble and base but a footage counter.
This over choice syndrome will even be worse with "manufacturing on demand" which is coming around the corner.
Metered-Out Technology
Another problem is the metering of technology. Why do you have so many black boxes all over each one with similar or exact technology in them but all doing only a portion of the job?
For instance, a printer, fax, copier and scanner all use similar or identical technology, but for years manufactures were making you buy four boxes to get the four functionalities. Now thanks to someone at the Okidata Corporation, you can buy all four in the same box for about one half the cost as all four separately.
In the long run, like Henry Ford's cars, more people will buy the combo and, even though it will earn Okidata less per unit, they will make more money. If they are smart they will use a significant part of the cash flow to discover new products, not just to over produce the same product.
What I am saying is, too many manufacturers are creating too many duplicates of their products and not putting in the creative thought it takes to research and develop new products.
Production Stats
Here are some prime production statistics for the Planet Earth that would remedy the problems I have discussed above, provided these stats were all rising:
1. Number of new products discovered.
2. Number of these products on the shelf.
3. Number of People that can afford to purchase these products.
4. Number of products or options consolidated.
5. Percent the price has dropped.
6. Percent the quality has increased.
7. Number of obsolete products consolidated or discontinued.
8. The reciprocal of the cost of energy.
The way out is to increase productivity on a Planet wide scale is to tap into the infinite source of energy being supplied by the Universe (such as the Sun) and cause energy to eventually become as free as air.
This means all energy producers should be given an absolute deadline in which they must amortize the cost of their installations - and thereafter - they must "by law" provide energy at NO cost and operate as a non-profit business - but each energy producer should be given stock in every corporation that uses the energy.
Under an economic scenario like this, you would see a flourishing of productivity on the planet that could be mind-boggling.
Non-Profit Businesses
The following businesses should be conducted as non-profit enterprises:
ENERGY PRODUCTION MEDICINE BANKING LAW RELIGION We have thousands of FOR-profit endeavors on Earth, 5 should be NON.
Coordinated Solutions
Other than the force of entropy, and international bankers fomenting war for profit, the major things that keep the world in turmoil are the following:
o Inexperienced people are constantly being born on the planet.
o People are not trained for what they could be doing in life until the last second if at all.
o Too many people exist for the state of development of the training.
o A gross oversupply of redundant products exists while too many go without any products.
o Products are not viable enough.
o The energy supply of the planet is being wasted.
o The money supply of the planet is being stolen and inflated.
o Populations rove rather than work things out where they are.
o Pleasure, the indicator of survival direction, is suppressed by belief systems that are overcompensating for past abuse by the few.
o New inductees in to the Civilization, (Children) are taught to be goal oriented and dream, yet the work-a-day, "real" world frowns on this if they actually try to practice what was preached.
o People do not know what they want to have, do or be until they have it, are doing it or are it - and then they don't want it.
o Governments keep coming and going every 20 to 400 years, yet war and the above problems continue.
In general, the principals connected with the above phenomenon do not know each other or understand their relationship to the other principals connected with phenomenon in the rest if the list.
A "solution," is a given matrix juxtaposed over a "problem" that resolves the current problem by creating a different problem. There can be an infinite number of solutions to any given problem such as WORLD HUNGER, POSSESSION, KNOWLEDGE, SHELTER REPLICATION, TRANSPORTATION, COMMUNICATION, etc.
Capital Gains TaxDonald Trump and H. Ross Perot made the following statements on CNN around 25 November 1991:
Mr. Trump:
"In 1986 (the government, both parties) destroyed the real estate industry... by passing the dumbest tax law ever thought of by Man. They destroyed the savings and loan and the insurance and banking industry will be next. Insurance companies have most of their assets in real estate. If they don't put incentive back into real estate, you're going to have a catastrophe in this country like you've never seen before.
"They took all the incentives away and destroyed an industry and that is in turn is destroying the country. If they put the incentives back into the real estate industry, you're going to see the economy rebound fast...
"Frankly, tax rates for the wealthy are too low. You used to have a 50-60% tax rate and people would invest to cut their tax - then pay nothing maybe... They destroyed real estate and this is why your unemployment is so high, this is why your manufacturing is so low - REAL ESTATE TRIGGERS EVERYTHING. When you build a house, again (people buy) refrigerators, carpeting, this, this, this - it effects so many different things.
"Change the tax law, put incentive back - (a developer) should be able to syndicate the building - (get) shorter deprecations. They could have taken away the abuse from certain tax shelters and left it the way it was in 1986."
Mr. Perot:
"Do not allow former US government employees to act as lobbyists FOR other countries. This is a major conflict of interest and hurts the US economy."
My thoughts:
If the capital gains tax on real estate were lowered, marginal people would be less reticent about selling their properties. This would free up money to put it to work in purchasing other goods and services.
Give significant capital gains breaks to investors who invest in start-up companies
Give more significant capital gains breaks to investors who invest in research and development of new needed products over research and development on how to build the same product better. We have too many people trying to build a better mouse trap!. Enough already. Where is my personal space ship rather than my 87 perfectly quiet, poppless toast poppers?
Lowering the prime rate and discount rate, while nice - IS NOT THE SOLUTION to all problems. In fact it is the window dressing the Federal Reserve Board keeps constantly changing to take you attention off the fact that they are inflating the money by granting the government credit backed by debt instruments.
Credit card rates - although irritatingly high - are basically not going to deal with any problems.
Eradicate the deficit by making cuts across the board. We are never going to get everyone to agree on who should do with less.
Get that $4.8 trillion federal debt paid down by following the steps outlined in The Creature from Jekyll Island, by G. Edward Griffin.
Get the cure for AIDS no matter what the cost. It has a very demoralizing effect on people and makes them less productive.
Tie government officials' salary, from the president on down, directly to major U.S. statistics. If their statistic goes down, their pay goes down. If the stats go up, their pay goes up.
I do not see anything wrong with paying the President of the United States, for instance, as much money as say the President & CEO of a major entertainment company such as Walt Disney - provided their stats are up.
Political Convergence
We have delegated our right as Human Beings to manage the resources and money supply of the Planet Earth to entities we call governments and banking cartels which are converging to the point of oligopolistic control.
A recession does not go away because the government lowers interest rates or taxes or its debts. Fiscal and monetary policy, like the democrats and the republicans are just window-dressing.
The concept of convergence, which is pivotal in science to the understanding of dynamic systems, has made the democratic and republican parties virtually the same in terms of what they do. This is true of fiscal and monetary policy as well.
The principal of convergence says that any competing systems will eventually have to conform to underlying universal laws or physical constants - hence, such systems will evolve to being almost identical in function while retaining small differences in appearance.
This is why cars all look the same in the 90's - unlike the creative diversity we had in the 60's. They all go through wind tunnel tests and in order to meet the fuel efficiency requirements (law) the aerodynamics of the car (physical law) must fall into a narrow set of parameters ( the convergence).
An other example of this is the fact that almost all species have eyes. With minor differences, they are all sensitive to the visible portion of the spectrum, yet they come in all shapes, sizes and colors. All eyes do the same thing.
All fish have fins. Although they look different, they all have the same function.
The democrats and the republicans both have better ways of "moving the country forward" but nothing changes - the deficit and debt persist, war persists, horseshit persists. That persistence is the convergence.
The only way to change things politically is to change the underlying universal laws or physical constants - hence, such political systems will evolve and things will move forward.
Selling Debt
It is a mistake to allow governments to borrow money. A government should be fully funded by its taxpayers. If the tax payers are not wealthy enough to pay taxes, then it a sign that government, hence the people are not doing their job.
When a government is allow to borrow money there are abuses such as perpetual war, inflated currency, over spending on military, deficit spending, central banks, ridiculous national debts, violation of rights.
This then leads to criminality and eventually revolt which then leads to anarchy and waste.
And it all starts with governments selling debt.
The sale of government debt is terrible for a free enterprise system because the government is then in competition with entrepreneurs for capital.
And this competition is not fair because the private entrepreneur does not have the power of taxation enforced by the police powers nor does the private entrepreneur have the hydrogen bomb. Which is what it ultimately comes down to.
Another reason government should not be allow to borrow money is they are supposed to be Non-profit Organizations.
They have no profit unless it is plunder of other nations, or theft from its citizens, and in today's times, as always, this is not socially acceptable.
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