Sunday, September 30, 2012

How Europe will get out of the austerity crisis

This current austerity crisis in Europe is hurting their economy. When I look at their economies, since austerity began in 2009, unemployment has risen across the European Union, decreasing consumer spending, hurting the economy and all businesses big and small. (Source: Public Data) I am going to say what I think will drive Europe out of this crisis and back towards investment and prosperity. In the meantime decreasing debts, which I see as a minor issue at most. The debt of these countries was blown out of proportion by economic neoconservatives like Merkel, News Corportation, and Sarkozy, among others.

  1. Germany will vote in a left-wing government next year in September 2013 which will change the course of history. Merkel's push for divestment has hurt the economy of Europe and she will not be ranked highly in the future. Peter Steinbruck will be the next Chancellor of Germany. Most of the CDU's wins were by small margins: http:/s/ so seeing a big flip with Merkel's misleadership over the past two years is possible. This will end a lot of pressure on Spain, Portugal, Italy, and Greece.
  2. Europeans will vote for a liberal government in European Parliament in 2014 following their dissatisfaction with austerity and losing their jobs which will move the EPP (right-wing) to a minority and S&D (left-wing) to become the largest party in Parliament.
  3. The European Parliament will propose an amendment to their constitution which will do the following to resolve the apparent issues of the European Union:
    1. Banking regulations and insurance will be union-wide to avoid future bank runs from nations like Greece. (Source: Planet Money from NPR)
    2. The regulations on debt will remain, but they will be required to cut social services last and raise taxes first. Looking at America's history this is clearly the most economical viable way. The fastest growing economies in American history were during the 1950s when our highest tax rate was above 70% and the 1990s when Clinton and Congress ran a balanced budget and taxes were higher than they are now on the rich.
    3. There will be an investigation into bribery in the government participating most in this fiasco (Germany, Spain, Italy, Greece) which will come out with a lot of evidence to prosecute big companies, banks, and important politicians. Elections will happen across Europe. People will vote in better governments. Companies will be liable for bribery across the European Union.
    4. The ability to form small businesses will be easier in the nations in Europe where it is lowest (which funny enough are Greece and Spain which will stimulate their economies. After decreasing barriers of entry in Belarus, their rank went from 98 in 2009 to 7 in 2010 and their GDP growth rate from 0.2% in 2009 to 7.6% in 2010. This is a crucial part of having a competitive economy. There is a clear correlation between the two. This will also help the distribution of wealth become more equitable, which will allow more people to enter into the middle class in Europe which will drive consumer spending higher and make a stronger economy. But it has to start with people having the ability to create their own businesses and make enough money to be comfortable. I just started a small Private Investigating Agency, so I am a small business owner, and like millions of other people I know exactly the level of benefits this brings to individuals, and to the economies that are driven by trade.
  4. The EU will still exist, corruption will be less, and their economy will recover. With less bribery through enforcement of already existing laws, their copyright laws (which are the worst in the world) will liberalize, their banking regulations will strengthen the economy to prevent the outflow of cash that came from Greece to Germany and France, and it will happen in the next five years.

Saturday, September 29, 2012

The Innocence of Muslims and murder

There is a lot of talk about blocking the inflammatory innocence of Muslims in response to the assassination of the American ambassador in response to that short video. That is the wrong approach. If we block all videos that incite violence, what is there to stop us in blocking hate speech, and who defines hate speech? Hate speech is hard to define and has many different levels. What one person finds offensive to their religion another person may agree with and use for educational purposes (creationists vs scientists). If we block anything that might offend anyone we will be left with a very small Internet. We will give power to the radicals that if they want something to be blocked all they have to do is try to kill the American ambassador in there country and be clear on what they are protesting. That is not an option. We would literally be giving the keys to the Internet to al Qaeda. A better option is to incarcerate the murderers with life in prison without parole (killing members of a group that uses car bombs in response to murder doesn't make sense) which isolates their members from society and forces them to live their lives out slowly contemplating their heinous crimes. Maybe they'll start to read the whole Quran not just their selective misguided selections. That is my opinion. I support free speech, a major difference between democracy and tyranny. There is a very slippery slope between the two.

Sunday, September 16, 2012

A Tale of Two Companies

One day, there was a company that decided to run a strictly Keynesian approach to its business model. The Keynesian company was founded and ran a business model which took the money that it invested and saved it for future investment, payed their employees good wages, and kept their net revenue for future investment. Over ten to twenty years the company had reasonable prices, a good product, well paid employees that worked hard and several locations and the owners were very comfortable. They were known for the best service, best products, and good prices. During times when their revenue decreased, this company had cash saved to protect their existence and continue their employees wages and needed no assistance.

At another time, another company decided to run a strictly laissez-faire approach to its business. This company took a gigantic loan in the beginning to start a large company, paid its employees as little as possible and worked them as much as possible in a 40 hour work week. When they had positive net revenue, they cut their prices for as long as possible and had very little cash to sit back on. What cash was saved up was immediately given to the owners and the company ran by a shoestring. During the recession, they found that the demand for their product decreased, so they closed stores and fired employees (being their largest expenditure). The net loss in revenue from those locations was greater than the costs to hire employees but only in the long term. So, they closed more stores, and eventually were a tenth the size and were able to maintain their large salaries and have low prices. After the doldrums were over, they were a tenth the size they once were, by firing their employees and closing storefronts. They were not known for their products anymore because they had been surpassed.

I do want my government's finances to be run like a business, that is why I hate austerity and support Keynesian policies.

Obama 2012.