Hi,
Firstly, i am a capitalist. I believe many of the world problems are caused from departing from capitalism (central banks pumping up asset prices with no real earnings/innovations/wage growth to back it up as one example). But also i do agree there are serious issues effecting a lot of people.
Inequality is growing and although a big part of me thinks "thats life, there are winners and losers", civil and then political unrest is no good for anybody and when the poor start to revolt it never ever ends in a pretty way. The disillusioned need help quickly or we could see more and more protest votes until we end up with something very ugly.. communism or communism-lite i.e huge taxes on people making money, big taxes on your possessions, huge taxes on inheritance, huge taxes on investment incomes.. basically a larger and larger state dominating what we can and cant do taking money from us in the process until we are forced to become more equal. Im genuinely worried where this could end.
But back to the issue, i dont buy the whining "oh theres rich people and im not rich, boo!" they will always be around. But when people are working full time and still have crap lives something is very wrong.
But what options are there?
1/ Bring asset prices down through rate increases/step back from monetary stimulus to level the playing field and allow first time buyers to get some property and calm unrest. This is risky, a lot of people have been forced into property and leveraged assets to squeeze any sort of return. A downturn in this market and could lead to another crisis as people quickly go into negative equity and non performing loans crash the system again.
2/ We do a tax slash and hope growth accelerates and "trickle down" works. America and possibly UK stands a decent chance of getting away with this but a lot of Europe is left leaning, you try this and it doesnt work and will be a strong left wing response that will take decades to recover from.
3/ Do a "New Deal" type stimulus plan where the government borrows to build a ton of infrastructure that probably isnt that efficient but gets people into a job and the government becomes the employer/wage grower of last resort. ISSUE, with what money? If borrowing endless amounts to just give people feel good jobs worked we would all be driving around on perfect roads and have 5 kids per class in schools and private hospitals for all. But this doesnt work, money has to be repaid back and employing road builders on $50 an hour to make unemployed people feel better will cripple governments ability to service debt.
If we are going to have a future of free market capitalism where the american dream still is something a person can achieve/aspire to, capitalism needs to prove it can fix this situation.
Anyone got any positive scenarios to combat my pretty negative outlook?
Firstly, i am a capitalist. I believe many of the world problems are caused from departing from capitalism (central banks pumping up asset prices with no real earnings/innovations/wage growth to back it up as one example). But also i do agree there are serious issues effecting a lot of people.
Inequality is growing and although a big part of me thinks "thats life, there are winners and losers", civil and then political unrest is no good for anybody and when the poor start to revolt it never ever ends in a pretty way. The disillusioned need help quickly or we could see more and more protest votes until we end up with something very ugly.. communism or communism-lite i.e huge taxes on people making money, big taxes on your possessions, huge taxes on inheritance, huge taxes on investment incomes.. basically a larger and larger state dominating what we can and cant do taking money from us in the process until we are forced to become more equal. Im genuinely worried where this could end.
But back to the issue, i dont buy the whining "oh theres rich people and im not rich, boo!" they will always be around. But when people are working full time and still have crap lives something is very wrong.
But what options are there?
1/ Bring asset prices down through rate increases/step back from monetary stimulus to level the playing field and allow first time buyers to get some property and calm unrest. This is risky, a lot of people have been forced into property and leveraged assets to squeeze any sort of return. A downturn in this market and could lead to another crisis as people quickly go into negative equity and non performing loans crash the system again.
2/ We do a tax slash and hope growth accelerates and "trickle down" works. America and possibly UK stands a decent chance of getting away with this but a lot of Europe is left leaning, you try this and it doesnt work and will be a strong left wing response that will take decades to recover from.
3/ Do a "New Deal" type stimulus plan where the government borrows to build a ton of infrastructure that probably isnt that efficient but gets people into a job and the government becomes the employer/wage grower of last resort. ISSUE, with what money? If borrowing endless amounts to just give people feel good jobs worked we would all be driving around on perfect roads and have 5 kids per class in schools and private hospitals for all. But this doesnt work, money has to be repaid back and employing road builders on $50 an hour to make unemployed people feel better will cripple governments ability to service debt.
If we are going to have a future of free market capitalism where the american dream still is something a person can achieve/aspire to, capitalism needs to prove it can fix this situation.
Anyone got any positive scenarios to combat my pretty negative outlook?
