"The establishment of perfect justice, of perfect liberty, and of perfect equality, is the very simple secret which most effectually secures the highest degree of prosperity to all ... classes" (Smith. 1776. p.726).
John Verdon Sr. Strategic HR Analyst / Defence Scientist DSMPRA 2-2 Directorate Strategic Military Personnel Research and Analysis Department of National Defence 285 Coventry Road. Ottawa Ontario K1A 0K2 voice: 992-6246 FAX: 995-5785 email: [EMAIL PROTECTED] "Searching for the pattern which connects.... and to know the difference that makes a difference" Sapare Aude Compassion is the natural condition of what one really is. -----Original Message----- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of [EMAIL PROTECTED] Sent: Thursday, 9, October, 2008 21:31 PM To: [email protected] Subject: Futurework Digest, Vol 59, Issue 14 Send Futurework mailing list submissions to [email protected] To subscribe or unsubscribe via the World Wide Web, visit https://lists.uwaterloo.ca/mailman/listinfo/futurework or, via email, send a message with subject or body 'help' to [EMAIL PROTECTED] You can reach the person managing the list at [EMAIL PROTECTED] When replying, please edit your Subject line so it is more specific than "Re: Contents of Futurework digest..." Today's Topics: 1. Re: Are the fundamentals sound? (Harry Pollard) 2. Re: Will Justin Yifu Lin be the person? (pete) ---------------------------------------------------------------------- Message: 1 Date: Thu, 9 Oct 2008 18:17:26 -0700 From: "Harry Pollard" <[EMAIL PROTECTED]> Subject: Re: [Futurework] Are the fundamentals sound? To: "'Ed Weick'" <[EMAIL PROTECTED]>, "'futurework'" <[EMAIL PROTECTED]> Cc: [EMAIL PROTECTED] Message-ID: <[EMAIL PROTECTED]> Content-Type: text/plain; charset="windows-1252" Ed, What has changed since Adam Smith is the introduction of the controlled economy. The US has some 9,000 tariffs and quotas to keep out competition. Does that sound like Adam Smith? Umpteen billions of dollars are given to producers distorting the market. The agricultural subsidies are a disgrace. More billions go to consumers in a variety of ways. We have huge bureaucracies at every level of government, wasting American money with gay abandon. Direct meddling in the economy by inflating the currency and artificially depressing interest rates doesn't exactly sound like Adam Smith. Whereas the evidence is clearly seen that big government action is synonymous with failure. Yet, apparently, you favor big government. Harry ******************************* Harry Pollard Henry George School of Los Angeles Box 655 Tujunga CA 91042 (818) 352-4141 ******************************* From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Ed Weick Sent: Tuesday, October 07, 2008 7:44 AM To: futurework Cc: [EMAIL PROTECTED] Subject: [Futurework] Are the fundamentals sound? How many times have we heard politicians recently tell us that "the fundamentals are sound"? On hearing it, we are supposed to picture expansive landscapes full or wheat, oats or corn, and cows in green pastures that sweep off into the distance. Or we are supposed to picture workers with secure jobs doing their thing on assembly lines, or trucks and trains moving the stuff they produce to distant consumers, or families able to pay their mortgages and happy in their homes. The picture is supposed to be one of productivity and the expansion of material goods, of supply meeting demand and of nobody being left out if he or she wants to participate by putting effort into the economy. After all, it goes back to the 18th Century and Adam Smith, doesn't it? But are those really the fundamentals? In reading the business pages, one has increasingly come across words like credit, leverage and derivatives. One learns that a typical commercial bank lends about $10 to $11 for every $1 of capital on its books, but that investment banks have typically invested $22 for every $1 and even as much as $30 to for every $1. One also learns that the financial markets of today are highly sophisticated, consisting of very bright minds, very powerful information technology and vast amounts of data. In an earlier posting, I suggested that the economic world consists of two parts, a highly supplicated upper world equipped with technology that permits it to do things ordinary mortals would never dream of, and a nether world, consisting of ordinary mortals ? people who either have or want ordinary jobs, urban and farm families who want decent houses and cars, and so forth. It is the latter that politicians and economists have traditionally thought of when they referred to the soundness of the fundamentals. But, judging from what has happened to financial markets recently and the impact this will have on the well-being of the goods and services economy, it may well be that the upper world has become fundamental. If it goes down the tube, everything else seems to follow. The assembly lines begin to shut down, crops are left in the fields, and the cows head for the hills. Don't feel badly, Adam Smith, you may have had it right in your day, but a lot has happened since then. Ed No virus found in this incoming message. Checked by AVG - *http://*www.avg.com Version: 8.0.173 / Virus Database: 270.7.6/1712 - Release Date: 10/7/2008 9:41 AM -------------- next part -------------- An HTML attachment was scrubbed... URL: https://lists.uwaterloo.ca/mailman/private/futurework/attachments/200810 09/e8a25d22/attachment-0001.html ------------------------------ Message: 2 Date: Thu, 9 Oct 2008 18:30:55 -0700 (PDT) From: pete <[EMAIL PROTECTED]> Subject: Re: [Futurework] Will Justin Yifu Lin be the person? To: [EMAIL PROTECTED] Message-ID: <[EMAIL PROTECTED]> Content-Type: TEXT/PLAIN; charset=US-ASCII On Thu, 09 Oct 2008, Keith Hudson <[EMAIL PROTECTED]> wrote: >Pete, > >At 14:26 08/10/2008 -0700, you wrote: > > >On Wed, 08 Oct 2008, Keith Hudson <[EMAIL PROTECTED]> wrote: > > > > >Hi Pete, > > > > > >To answer your question, variable interest rates of a universal > > >currency could occur just as they do now within a national > > >currency. A country with a central bank interest rate of, say, 4% > > >p.a. can also have a spectrum of other interest rates operating > > >within it (even up to 1,000% p.a. -- as is the case of Fidelity > > >small loans in this country at present) according to the > > >credit-worthiness of the borrower and the uses to which the loan is > > >put. > > > > > >Thus a traditional building society in this country requires > > >evidence of a mortgagee's income and the deeds of the house being > > >mortgaged -- the latter not only as collateral but as persuasive > > >evidence of the use to which the loan is being put. At the other > > >extreme, a loan shark (the local representative of a much larger > > >firm such as Fidelity in this country) charging, say, 30-50% > > >interest per week, dealing with a borrower with little or no > > >collateral, constantly updates his much flimsier evidence. He > > >usually lives in the same area as the borrower and visits the > > >borrower every week (usually on payday or, more usually today, > > >benefits day) to collect repayment. > > > > >It's up to the lender to ensure that he has the evidence of > > >credit-worthiness and borrower's intention and has a continuing > > >level of supervision that the loan is being carried out according > > >to stated intention. However, since the rise of securitized > > >mortgages and credit derivatives, contact with the original > > >borrower or lender respectively may be any number of indirect steps > > >away. The collateral follows through legally with the paper > > >documents, but the value of the collateral becomes vaguer each time > > >the paperwork is bought and sold -- rather like the game of Chinese > > >Whispers. > >>What you are describing here is simply the protocols of a single >>universal lending regime. What I am talking about is more lenient >>lending terms for economically depressed areas, which is the opposite >>of the effect which results from the regime you describe here - >>depressed areas are preceived as higher risk, so they face _higher_ >>lending rates than boom regions, under a universal system. What is >>required to prevent enhancing economic hardship for depressed areas is >>a regional overall adjustment to the lending regime: all the >>computations you describe would still hold sway, to allow appropriate >>pro-rating of interest rates based on relative risk, but all this >>would be based on a less onerous base rate, reflecting the depressed >>economic climate of the region. I have never seen this concept applied >>within a single currency. With a separate regional currency, the >>effects on relative value computed by the bean counters manifest as a >>change in the exchange rate of the regional currency, but at least >>within the region its currency (with its own interest rate structure) >>allows a continuation of much more vigourous economic activity than >>would be possible facing the lending regime of a broader currency >>based mainly in more affluent and booming regions. >> >>-Pete > >I appreciate your concern about economically distressed regions and, of >course, the sort of universal currency that I think ought to be (and >will be) brought into existence sooner or later, will do nothing for >these specifically. But, if anybody's, this is a government's job not a >bank's. And even governments can do little when a region loses its >former prosperity. For example, in this country both Tory and Labour >governments have been trying all sorts of ways for the past 50 years to >help northern England but to no avail. There is still a large disparity >in incomes between north and south and, in fact, it has been growing >rather than declining in the last ten years of a Labour government. >Despite much cheaper costs of living, and land and property costs in >the north which ought to help entrepreneurs set up new businesses, the >more talented of the young decide to go down south. > >Keith Yes, all large enough jurisdictions with a single currency and a single lending regime will develop depressed regions, due to both real and perceived disparities. In all these cases, the depressed areas would have, to some degree, a better economic environment if they were buffered by a separate currency, simply as a mechanism for providing a distinct lending environment somewhat insulated from the larger currency. In that sense, being subjected to the broader currency enhances the financial hardship of these depressed regions. Noting how this happens now, within the relatively limited size of country regions currently administered by single currencies, my point is that with a universal currency, the oppression of lending regime logic will result in much greater financial hardship for depressed areas - if a country as a whole is doing fairly poorly in the world market, imagine how badly a depressed area (relatively to the rest of that country) will fare when it must conduct its financing with the lending regime of a universal currency, whose interest rates and risk assessments are based primarily on the performance of the most currently successful regions, which will necessarily represent the bulk of their business. Without the buffering of an independent currency, I contend that such regions will do much worse under a universal currency regime. I cannot see how individual bank franchises can ameliorate such an effect, when such banks will have to fend in the universal currency regime. It may be that some sort of regulatory framework could be brought forward to provide such buffering, but I don't see how it would work, nor do I foresee such a framework being implemented over the objections of the doubtlessly unenthusiastic financial community. -Pete ------------------------------ _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework End of Futurework Digest, Vol 59, Issue 14 ****************************************** _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework
