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It's a brilliant thing.

The depression was caused by fiscal measures. Money is a symptom, it's not the disease.

If surplus rents from privileged property rights are captured for the common wealth by taxes then there won't be asset bubbles will there?

The cause of retail and asset price inflation is by definition and accounting identity rent-seeking - ie the demand for profit/rent in excess of cost.

Retail price inflation is everywhere and always a fiscal phenomenon: asset-price inflation is everywhere and always a monetary phenomenon. Of course, when consumables become assets - as now - we get problems.

This deficit-based banking system is fucked: permanently and irretrievably, and the reason is the systemic imbalance in purchasing power and ownership of productive assets, particularly land.

Only fiscal measures will do, and they will not happen within our perverted 'representative democracy'.

Banks are evolving rapidly into a role as service providers for the simple reason that such risk service provision is capital lite.

By outsourcing market risk, but not credit risk, they facilitated the existing bubbles in equity, commodity and energy markets. When these collapse, we'll see a move to the next adjacent possible.

As regards the fiscal measures necessary to resolve debt and to transition to a low carbon economy, the  Public sector power-seekers (as opposed to private sector rent-seekers) in charge of government-as-intermediary have not only seen the steering wheel come off in their hands: they are handing it to the equally powerless front seat passenger.

This book on the End of the Market makes an interesting case that we have seen the end of 'market clearing', but in my view we have seen only the end of a market architectural paradigm.

I think we saw in late 2008 the end of the intermediated market, and that we will see an evolution via a dis-intermediated 'Energy Economy' market possibly one day to a Gift Economy/Economy of Abundance.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sat Dec 22nd, 2012 at 06:16:24 AM EST
[ Parent ]
The depression was caused by fiscal measures.

...

Only fiscal measures will do ....

So, how is it a good thing that the fiscal authorities have had the wheel come off in their hands?

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sat Dec 22nd, 2012 at 06:50:52 AM EST
[ Parent ]
They've left a massive vacuum for 'reality-based' policies to fill, bottom up.

That is precisely what I've been busy working on doing, by prototyping, along with a network of individuals who are joining in.

eg this project has been 18 months's work so far, but has just reached the End of the Beginning.

I wrote the constitution; co-founded the Trust; brought in the Prince's Charities; and wrote the outline Business Plan.

In a networked 21st century political economy, the parties will not create the policies: the policies will create the parties, or rather, the social movements.

The institutions of the future will not be organisations but will rather be consensual agreements for self organisation to a common purpose:

I'm working on two such movements with global application:

(a) NewClear - aimed at financial resilience, and which is a participative, decentralised financial network (and updates previous work); and

(b) Natural Grid - aimed at resource resilience, and which will be a participative, least energy cost (as opposed to least dollar cost), resource network.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sat Dec 22nd, 2012 at 08:11:51 AM EST
[ Parent ]
The cause of retail and asset price inflation is by definition and accounting identity rent-seeking - ie the demand for profit/rent in excess of cost.

An estimate that sticks in my mind is that 30% of the price of everything today in the USA is due to rent paid to the financial sector. This is probably larger than the effective government tax rate from all levels of government combined, and, in its effects, it is additive. So people, other than those on the receiving end of this flow, have to make do with the 40% of their income remaining to them. The synergy in this case is that the government serves as both tax collector and as the enforcer of the arrangements that enable the financial sector to continue charging such exorbitant rent.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Dec 22nd, 2012 at 01:02:25 PM EST
[ Parent ]
And the result is lowering the available money for consumer discretionary spending further empowering - em-moneying? - the FIRE sector with respect to the Real Economy.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Sat Dec 22nd, 2012 at 01:11:45 PM EST
[ Parent ]
The name of the game is differential accumulation. As wealth becomes more and more concentrated not only will the economy further be strangled, but I can even imagine a scenario where, with so much of the asset base in the hands of the few, it becomes favorable to their interests to destroy the monetary system so as to facilitate even further looting. It will never be necessary to do so, but it might become desirable to some. It would recapitulate the Morgan Bank's actions in the 1870s in withdrawing gold from circulation after they had gotten the US back on the gold standard. That greatly facilitated their wealth consolidation by enabling them to foreclose on so many to whom they had made loans, capturing not only much of the money loaned but also the asset which secured the loan and most of the increased value the borrowers had added to the enterprises.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Dec 22nd, 2012 at 03:28:19 PM EST
[ Parent ]

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