The
global economy Or American Economy has suffered immense damage due to the
pandemic covid 19. Before covid 19 global economy still suffered with pandemic
economic policies. The global economy or American Economy cannot recover with
the existing baggage of economic thoughts and prescriptions in the possession
of economists including Nobel Laureates.
The Economics talked
about by Economists, Policy Makers, and Politicians is anything but economics.
What is talked about as economics is collecting taxes, increasing government
borrowings, fiscal stimulus, and saving adventurous banks. But this talk is
anything but economics as it is simply reallocation of monetary resources.
Economists with influence give scant regard to the power of consumer and the
truth that value is subjective. Austrian economists give importance to consumer
or the individual and recognise value as subjective. But Austrian economists
are condemned. So, the Economists in favour with Governments with their
influence, policies, and prescriptions ruin the economy.
Just as men or
women are born and they die so too businesses are born and they die. Businesses
die when consumers don't want their product or service. If businesses can't be
saved how can you save jobs? Jobs are incidental to any business and are not an
end in themselves (Sadly economists don't recognise this fundamental truth and
talk of employment, or full employment as an end in themselves). Capitalism is
closest to human nature. Genuine capitalism where businesses can be started and
closed without any restrictions is the need of the hour. Instead, what we see
is saving of adventurous banks and financial institutions by the governments in
the name of capitalism. Economists and the Governments fail to see that money
is a means to an end and not an end in itself. Money is a medium of exchange
for real business and not for derivatives and speculation.
Since America is
taken as a role model for capitalism, it can be used as an example to
illustrate the sorry state of Americans today.
Fractional Reserve
Banking which enables creation of money out of nothing and increases money
supply with no relevance to the real economy gives easy money to Goldman Sachs,
Citi Bank and their likes to indulge in mindless speculation and ruin the
economy as it happened in 2008. When a Goldman Sachs, Citi Bank and their likes
are saved with Government money it increases the money supply only( Economists
including Nobel Laureates don't recognise the harm of fractional reserve
banking and creation of money out of nothing).
The vice like grip
of investment bankers and stock market on business enterprises in USA
have made management focus on profits than the local economy. Add to this
influence of Trade Unions, American businesses have merged, outsourced their
production and destroyed American jobs. This action in the American
economy has inadvertently delivered economic power and dollars to China which
wags its tail now.
Post Covid 19
economic policies in the USA should have no Goldman Sachs and its likes. Banks
should be full reserve banking. No derivatives. No options. No financial
engineering that an ordinary American can't understand. No investment of
pension funds in speculative stock market but in government securities only.
All products consumed by Americans should be produced or assembled in USA.
Economists and Policy Makers should know that income disparity has increased
because manufacturing intensity has decreased.
There are only two
genuine comparative advantage for any country. One raw material and two Nature
(waterfalls, rivers etc.). Period.
America was used as
example to illustrate the point. What is applicable to USA is applicable to
every other country.
Source Actionable Ideas focuses exclusively on sustainable actionable ideas to make capitalism work to create job opportunities for people.The Goal:Make people find jobs in every country.
Thursday, May 28, 2020
American Economy or Global Economy And Covid Pandemic
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