Economic Tendencies

[caballero]

Hello, I have been attending recently a speech about economic tendencies, from Guillermo Dorronsoro. I have found it very interesting because he presents what he calls economic paradoxes that indicate that a change of economic model is coming.

According to Thomas S. Kuhn, in "The structure of scientific revolutions", we explain a reality by going to a model, a paradigm.

For example: the Earth is at the center of the Universe because we see that everything moves around it, including the Sun. However, they begin to accumulate paradoxes that refute this model, we will have to resort to a new model that manages to explain these paradoxes We go to the heliocentric model, which was banned until 1835. Paradigm changes take time.

Paradoxes:
1) If population and consumption, and research and technologies are growing very strong, why is the global economy stagnating at around 3%?
  - There are 7.4 million people on earth, in this century there will be the maximum number of people, from 2,100 will begin to decrease. The great demographic power is the one that increases its birth rate. The increase in the economy causes a decrease in the birth rate. Consumption will shoot up in India and China between 2020 and 2050.
  - Investing in research is spreading around the world, China will reach the USA in absolute values by 2025. This career implies that science and technology is increasing as never before in the world.
 
2) The curve of the elephant. The left is the poorest, the right is the richest. The poorest are escaping poverty for the most part. The richest are still richer. However, the middle classes of the richest countries, around 70% of the richest, their wealth has stagnated.

3) We will be able to generate bigger and better products at less price. Vatican has divested in Petroleum for sustainability issues. The photovoltaic system will decrease its production cost dramatically. The energy is going to be cheap. However, employment will be increasingly scarce.
  - Low qualification work grow: waiters, etc.
  - High qualification work grow: blockchain, big data, etc
  - Middle qualification work decrease. This is the paradoxe. Here are the middle classes.
 
  The speed of processing in computer systems increases remarkably. We will arrive in this century to the point of singularity: the AI will have reached humans. The jobs that up to now we worked, will be better done by the IA. Will come a part-time job, will have to work on several projects at once. In short employment of worse quality.
 
4) We have achieved a state of wellbeing that has never existed before. However, we realize that this system is unsustainable. At least in Spain, this system is pyramidal. The base is responsible for holding the top. In Spain, around the year 2050, 92.90% of the population will be dependent: under 16 years or over 64. 7% of the population will have to pay the party to the rest, being part of this percentage public administration, whose salary It leaves the rest of the workers. It is not sustainable.


Some indicators of paradigm change:
1) Heterogeneous society. We are living radically different generations as never before in history:
   - Builders
   - Baby boomers
   - X Generation
   - Y Generation or Millenials
   - Z Generation
   - As the change is accelerating, another one will come even more different
   
2) Digital change. Retail is falling brutally in the USA because Amazon's digital sales are rising brutally and small businesses can not compete. Sector by sector, the digital world is going to revolutionize.

3) Collaborative economy.
   - P2P transport
   - On-demand household services
   - Collaborative finance
   - P2P accomodation
   - On demand profesional services

   Less and less people use a taxi, for example, they use Uber, Cabify.
   
   Our economy was individual, including at the business level, owning something. The collaborative economy breaks this scheme. Every time this is being developed more in our days.
   
4) Circular economy.
   I have to worry that everything I do does not generate waste or avoid unnecessary travel to save costs. This is coming because it is a growing social demand and because the economy will start to become scarcer. This can create many opportunities in the middle class sector, for jobs of medium difficulty.
   
5) The investment in science in Spain is not one of the most advanced in Europe, being that Europe is not one of the largest in the world. Our level of competence is born corseted. However, this does not worry anything at the popular level.

6) On-line demand is developing more and more. Even cars, can be parameterized online and arrive in 2 or 3 weeks at home.

7) More and more countries accumulate more debt. If the champions were Europe, USA and Japan, lately India and China have joined the club.


What to do
Machiavelli, in his work "The Prince", chapter 25 (fortune, change) offers some advice in this regard, valid for the current situation:
- Adapt. Fortune, changes, is invincible. You have to understand what's coming and try to prepare for it.
- To resist. The change is hard and, therefore, learn to resist the challenges and know how to get up.
- Change. What needs to be changed, learn to change it and change it quickly, do not wait.
- Audacity We do not have to wrinkle before changes, we must have strength of spirit.


my Conclusions
All this is known at the level of economic professionals and I would say that at street level for anyone who knows how to add two plus two. However, the solution of the politicians is always to increase spending (the public debt) so that the legislature does not appreciate the problem, thereby significantly increasing the problem in the short term.

In Spain, the new government, the result of an agreement of a multitude of political parties, that is, without real support from the electorate, have decided to increase taxes significantly, without a logical reason behind. Simply to please their electorate, pushing forward the necessary reforms and increasing the risk. Yeah, there are many bills to pay.

Said a Dutch politician, Mark Rutte, who had not felt that Europe devote 70% of its budget to agricultural matters. Do we want to continue being agricultural?

[Siekmanski]

Mark Rutte A.K.A Pinocchio :icon13: :icon13:

[caballero]

Well, I don't know who's Mark Rutte, just what he says, it makes sense to me.

[Siekmanski]

The Prime Minister of the Netherlands and the marionette puppet of Shell and Unilever, the Dutch call him Pinocchio because of all his lies.

[jj2007]

That's a lot of anecdotic fog with some arbitrarily picked statistics, but it completely misses the important trends.

[hutch--]

There is something missing in the equation to change the functioning of societies, cleaning out the top end as well as the rest. The French did it by chopping their heads off, Russia had a revolution, Iran got the Ayotollah, Pinochette got the shove and it all shows that radical change has to be done from the top down, not just from the middle down.

Reform based on the interests of an elite class is nothing more than window dressing that ups their profits and screws the rest, yet another version of the rich get richer and the poor get poorer. Now the French may have been more humane than many others but a blunt axe and a lousy axe man would be far more fun or a plank off a very tall building with the poverty stricken pushing the greedy bastards off the end.  :P

[aw27]

We had also our Pinocchio, a socialist con artist that put millions in his pocket and led the country to bankruptcy and Troika intervention. He is still to be judged and, as usual, will never pay for what he did.

[caballero]

Pinocchio and his girlfriend were making a 69 when she shouted to him: "Pinocchio, TELL ME A LIE, TELL ME A LIE"

Sorry, just a joke.

I forgot to include the the problem of sovereign debt, that I include now.

@JJ
I think there's no doubt on the data presented here, even more each one of us already know them. The author tried not to give them any political overtones. For example, I would add as an obvious element of social heterogeneity the fact that Europe has accumulated over the last decades large groups of different ethnicities and religions, which did not exist before, which can cause social tensions. It seems that he did not dare to add this element.

The trend you say he forgot is reflected in the curve of the elephant, already mentioned in the second paradox.


@Hutch
Yes, the data is there and we seem to only think about continuing to get into debt. What does not seem like a good idea, because we will devote a large part of our budget to paying off debt, which makes the richest richer, who are the ones who lend the money. Here, even, the term "right to borrow" or "austericide" has been coined.

Politicians do not seem to be the solution, they look for short-termism and do not look for solutions to improve the solution in the future, because it is unpopular. That is to say, are we, the voters, who are ultimately responsible for the bad practices of our politicians.

@AW
We also have our Pinocchio. When Zapatero came to power, Spain's debt was at 40%, he left it at 70% and Rajoy raised it to 100%.

In the time of Zapatero noone could even mention the word "crisis" (economic). And they invented any linguistic turn to not use it. It was pretty funny. The problem is that if they accepted the existence of the crisis, they would have had to make economic cuts, which is lethal for any left party. Finally, they were obliged, under penalty of dropping Spain, to cut the salaries of officials and retirees. It was lethal for his party, plummeted in the successive elections.

The current ones aim to raise the debt a lot more ... hhmmm, I do not know exactly why.

[hutch--]

There does seem to be wisdom in the idea that you can tell if a politician is lying if their mouth is moving. Ours are a bunch of R_SOULS and from what I hear, so are everyone else's. When you see politician creating policy that damages ordinary people and impoverishes the country you know they are kissing the arse of a global elite and trying to line their own pocket. The pursuit of the global elite is to produce 2 social classes, them and serfdom.

The only real solution is a top down change, asset strip the bastards, find them a job on a chain gang shovelling chyte or scrubbing public toilets with a toothbrush held in their teeth in the coldest places in the world, Patagonia, Alaska, Siberia or northern Canada, we don't want chyte like that in Antarctica.  :P

[nidud]

 

So back to the good old days then when property was the only value and ones settled the owners divides the sheep's into servants, farmers, and soldiers.

At one point the blacksmiths gained some personal freedom and managed to transfer some value into hard metal. As things progressed they needed guards and a large vault to safeguard the precious.

In the beginning this arrangement was mainly used by the oligarchs as a means of trade. When the merchant ships arrived the metal was collected by the blacksmith who verified and issued a certificate for the value. This was then used as means of payment at the associated trading companies.

The blacksmiths got organized and the guild started to issue fixed certificates which in turn was used as payment. As a result only 10% was collected so the guild started selling off the gold. This started a chain reaction where the number of issued certificates increased ten-fold before the scam was revealed.

The problem with this was that everybody benefited from the scam where the whole society ended up getting a ten-fold face-lift. Factories, schools, hospitals, bridges and roads was built and numerous jobs created, all facilitated by a grand theft perpetrated by a pack of scoundrels.

This is how words like economy and the modern way of fractional banking was created. Now money are created from credit so you basically create money by borrowing money: for each Euro you borrow ten freshly minted Euro's are created. If we stop the borrowing the whole thing collapses and we end up back in the good old days again.

[jj2007]

If we stop the borrowing the whole thing collapses and we end up back in the good old days again.

You are embarrassing the friends of Silvio Gesell

[caballero]

Interest on the debt has already cost 250,000 million to Spain since the beginning of the crisis.



They are paid mainly to banks, investment funds (such as Norway, one of the world's leading) and national and international insurers.

The state has had to pay an average of 25,000 million euros a year to pay interest on debt since the beginning of the crisis.

The budget for 2017 allocates 32,006 million to the payment of interest on debt, twice as much as to pay unemployment benefits, when at the beginning of the crisis it was the reverse.

Source:
http://www.elmundo.es/economia/macroeconomia/2017/04/03/58e298ace5fdea390d8b466c.html


Before the crisis and after it, money was borrowed. What is the difference?

[aw27]

The current ones aim to raise the debt a lot more ... hhmmm, I do not know exactly why.

Let me guess.... hmmmm... increase the salaries of public servants! Bingo?
Public servants are those that will vote for them.
 

[mineiro]

I'm here with caballero, AW and Siekmansi.
Sir Hutch, in the past I agree with you about France (Robespierre, Russeau, Montesquieu, ...) but now, ... .They approve pedophilia, I mean, if an 8 year old wants to have sex, it is not considered pedophilia, but if they do not want to, then it is characterized as yes. An 8 years old know about that? To me not. On the social level they are making socialism as we know, nothing new, just a new way of doing nothing new. I cry when I see fetuses being discarded as if they were trash, it seems like I'm alone. This is happening in USA and a lot of Europeans countries, South America too.
Well, I should not mix economy with social; but, I remember a speech about the current economy made by the Dutch banker Ronald Bernard.
The solution is simple; work, study, no one will read books for you, no one will plant for you, no one will strive for you; but everyone will want to have their earnings for something they did not do.

[hutch--]

The issue with children is never a happy one, in OZ we have just had a multi-year long royal commission into the abuse of children over a long period and it is almost exclusively a situation where an adult imposes their desires over a child who had no defence against them. My views on this subject are close to unprintable but the technique used by Daesh (Islamic state) of throwing people off the top of a grain silo comes to mind.

The abortion issue is an ugly trade off between bad and worse. I see it as a tragedy that children are terminated before they are born but the alternative is even worse. For reasons of human biology, young people are full of hormones and are not always wise when it comes to their sex drive so you end up with young girls pregnant and it big trouble in many societies. The body snatchers want to force the girls to have the baby then take it from them to pass the child out for adoption. Then you have that element who see that pregnancy, loss of their child is punishment for getting their pants off.

In so many societies the girl get ostracised by the society after she has had the child taken from her by force while the guy is excused for doing what come naturally. I don't see that a ruined life for a young girl forced into drugs and prostitution is reasonable either. I don't see that a girl having an abortion is a good choice but the alternative in so many instances is worse.

The other factor is who is in control of a young girl's body, when they are very young its the parents if they are around but once the get old enough I am of the view that they are the only ones who should make decisions about their own body.