Placebo Goods (There is nothing but profit in the basket)

Okay this is an exceptional thirty-four page download to read and review regarding export and derivatively global business strategy. Thanks to r/economics for this nugget of intellectual activity.

I found myself oscillating between ‘yep’ and ‘uggh’ trying to determine my ethical integrity when it comes to trade and trade law. Outcome: I’m not cut-throat from behind.

The article certainly paints a bleak picture for American greed based Capitalism cannibalizing itself thanks to being outwitted by the global community.

However should the consumer financially survive – a more pure, not quite laissez faire, Capitalism can thrive and reintroduce consumers to actual goods and choice rather than what, after reading this, I would effectively call placebo goods.

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Real Economic Growth Analyzed

Excellent read from Yale economist and Federal Reserve Bank of Minneapolis consultant Timothy Kehoe. He expresses that economic growth is driven by productivity growth as opposed to prevailing view of capital accumulation as driver.

This is shown with his use, as the beginning stage and presented in excerpt below, of the Malthusian Trap. Fascinating to me and fundamentally important is how this can be applied to global economic growth beyond his analysis.

From 1999 to 2013 (set in 2013 dollars) the World GDP – per capita (PPP) rose from $6800 to $13,100.

How do we move forward with this information?

  1. wait and see: continued development and economic growth
  2. search for post Kehoe analysis: next level (Kehoe 4?) and new cycle of leader-style
  3. present consideration: spread of investment into a global economy

The median annual household income worldwide is $9,733, and the median per-capita household income is $2,920″ by Glenn Phelps and Steve Crabtree via Gallup.

Article excerpt:

Stages of economic growth

We classify the countries in our sample into four stages of economic growth. (For details on country data and classification, see the appendix.)

0. Malthusian trap
1. Taking off into growth
2. Catching up to the economic leader
3. Joining the economic leader

The Stages of Economic Growth Revisited, Part 1

by Timothy J. Kehoe

The Stages of Economic Growth Revisited, Part 2

The U.S. Debt, unlike the South – it will rise again

[Note on Image: picture the reverse as well but combined – fiscal cliff?]

A view forward to 2020 there will be an increase in entitlement spending as noted in the article per one of the President’s within the Federal Reserve district banks. With Baby Boomers moving to peak in claiming Social Security and Medicare benefits coupled with rising interest rates, my previous prediction of a rough year approximately 2019 doesn’t seem so radical.

IMO 2019/2020 also aligns with a roughly typical 10-year cycle of consumer tentativeness, increased investing, and then fear brought about by roughly steady years of growth (albeit this time slow, low, and difficult to accept as rebounded). I like to think of this as a revolving Jungian Cycle limited to Summer and Autumn.

I know there is plenty of debate on these issues but the economy has recovered to the point we’ve increased interest rates and with the entitlement wall approaching fast, beware the scare.

Affordable Care is a beast and not quite perfect but in this humble opinion it is the one thing going to keep the Baby Boomers from a scary end and I for one am willing to swallow the dark, expensive pill as a Millennial, will you Gen X?

The U.S. Debt: Why It Will Continue To Rise

by Forbes Contributor Mike Patton

slower gdp growth IS NOT A BAD THING

An excellent view on why GDP growth is not a good measure for economic health likely cannot be better worded than is in an article by the Harvard Business School: “Other activities included in GDP, such as health care costs, do not reflect the fact that spending more on health care is, in John Caddell’s opinion, “in general not good for the country.”

spending more on health care is in general not good for the country

More to my person opinion, measuring GDP growth as a measure of the economy disappoints me because this suggests to me that we are in a consumerist economy.  I have no issue with people desiring whatever goods are desired however attributing these to the health of the economy appears problematic; not all goods are necessary for life and including the unnecessary should not indicate a general higher national economic well-being.
Authors from Boston University provided The Pardee Papers, specifically issue number four from 2009, as an early look into the need to change how we measure GDP. From the abstract: “We critique the inappropriate use of Gross Domestic Product (GDP) as a measure of national well-being, something for which it was never designed.” The authors help readers to understand that measuring GDP as a measure of well-being is problematic by offering the analogy of a building using electricity and that the more electricity used does not necessarily indicate higher quality of life. I find this to be a weak analogy – however it does begin the process of recognizing certain things – as suggested before higher health care spending does not imply higher quality of life. Link to PDF follows.
One alternative measure is examined by Senior Fellow at New America: Georgia Levenson Keohane in an article posted by Time in which a Social Progress Index measures the extent to which countries provide for the social and environmental needs of their citizens. The SPI was developed by the Social Progress Imperative and is based on the writings of Amartya Sen, Douglass North, and Joseph Stiglitz. From this list I’ve read three of Amartya Sen’s books and have concern about inflationary aspects of his lending practices if applied globally, however I take no issue with his belief in assisting the extremely impoverished. It appears the SPI has been in use since the beta version launched in 2013.
Several other alternative measures are reintroduced in a January 2016 article by CBSnews which provides a re-listing and link to a 2008 article from The New York Times.

 

Poverty

Poverty is a deficiency.

I have been asked to define poverty as I am of the belief that we need to reduce world poverty. Poverty is challenging to define with any specificity due to perspective being key to ‘AN’ understanding for a definition and so aside from the $1.90 per day border to extreme poverty we read about now, I will try a more generalized idea before pursuing a more specific definition. Poverty is a deficiency.

poverty is a deprivation of time…a lack of autonomy

Poverty sits on the one side of equality. Wealth is an excess on the other side of equality. I believe that the action behind this idea is time. I believe that poverty is a deprivation of time that some would call a freedom but I would like to describe it as autonomy. To me poverty is then defined as a lack of autonomy.

a minimum standard of living should be recognized and realized as we globally approach equality

Within this scope I believe a more specific definition can be explored reaching closer to the idea that a minimum standard of living should be recognized and realized as we globally approach equality.

culture defies the ability to create equality in nearly every aspect

The major challenge in doing so is recognizing that culture defies the ability to create equality in nearly every aspect. In fact, culture almost assuredly requires any creation of equality to be that of cultural autonomy and in this sense, there remains poverty within each culture. I refuse to suggest that there are correct cultures and incorrect cultures but I do suggest that within each culture there is an equality that can be reached and within this scope we can establish minimum standards of living by culture. I recognize that there are groups and international organizations working toward these ends so I’m simply seeking to explore how we can move more quickly in the direction of global equality and a severe reduction in poverty. To me this begins with education and education in cultural diversity. The more anyone can understand a culture, the easier it is to understand how to work within the culture to attain equality. I believe this is challenging to conceptualize as I do not wish to bring a change to a culture that isn’t the culture’s own, but with each person added to a group of philosophers or thinkers, the greater the chances of discovering or recognizing opportunities for growth, development, and change. This is why to begin, a great test would be to recognize equality at home and abroad; certainly there is no shortage of poverty within the United States which needs to be reconciled (and we should continue to work on this) but perhaps there are other cultures in other parts of the world that have greater inequality than here.

how dare we not help when there is greater need elsewhere…how dare we help elsewhere when there is still need at home

There are always two sides; on the one side, how dare we not help when there is greater need elsewhere. On the other side, how dare we help elsewhere when there is still need at home. I believe this is in large part why as part of international organizations we have a strong obligation to participate and at the national level we need to recognize our neighbors and communities and try to work at the municipal levels as well as the state levels to accomplish a strong reduction of poverty as defined most simply and generally as insufficient autonomy. I will continue with the specifics of autonomy in a following piece.

Medicine, Economics and the Future

Source: Medicine, Economics and the Future

Concise look at the future of U.S. Health Care Industry

Ecologically Sustainable Growth

The Commonwealth Scientific and Industrial Research Organisation (CSIRO) released findings from two-year project: the Australian National Outlook report. The report “integrated a model of the economy with no less than eight models of different aspects of the global and domestic natural environment in which the economy exists,” as reported by in his article Economic growth doesn’t need to cost the world. The article covers findings on the 18 scenarios with variables, that include global population and economic development in Australia, and impact on ecological concerns, such as greenhouse gas emissions and water stress.

Continue reading Ecologically Sustainable Growth

Economics Analysis and Manufacturing

Economic Analysis may be using outdated information with regard to conditions over time. Authors point to manufacturing as a share of GDP and U.S. Energy Production suggesting perhaps 1980 and 1998 may be better start years for analysis on current years with regard to trends over time.

Economic Growth and Planetary Boundaries

Analysis of the nine boundaries critical to human existence and how macroeconomics recognition is integral. Author discusses ‘ruthless’ growth, ‘futureless’ growth, and transition steps pre-2050.

Time to Stop Worshipping Economic Growth

by Brent Blackwelder PhD and President Emeritus of Friends of the Earth U.S.

The International Monetary Fund and ‘Trickle-Down Economics’

This article has a snapshot of the rates at which the economy grows and shrinks depending on how earnings are distributed.

The ‘trickle down theory’ is dead wrong

by Alanna Petroff

Senior Business reporter: CNN’s London bureau