Friday, December 26, 2014

Free Markets, Unions, Government Pensions, & Globalization‏

"When you're hungry, you don't care about the facts"

     Before the "American Dream" was a slogan and Keynesian Economics was implemented there was the "Birth Lottery" and your everyday living conditions.  Nothing more was promised to you except that you toiled for everything that you gained.  Military societies such as the ones led by Napoleon, Hannibal, the Ottomans, and Genghis Khan enabled upward mobility for people through military service.  "Mercantilism" enabled upward social mobility to occur through the Investments you made for the Ruler.  Women, especially beautiful women
, moved up (as did their familiesthrough marriages with those in higher social positions .  For most men, upward mobility only occurred through military prowess and through the investments they made for the ruler.  Otherwise, men were trapped by the family they were born to and the land they lived on. This lasted up until the Industrial Revolution (which finally culminated in World War 1).
     During World War I, Communism was brought to the forefront of the human psyche and human civilization as the Bolsheviks overthrew the Tsarist Regime and took over Russia creating the first Communist government the world had ever known.  Communism in Russia led to Collectivization campaigns, World War 2, and the Cold War.  For many in society today, it is believed that Capitalism and the Free Markets won out over Communism.  Alas, the reverse is true.  "Communism won the propaganda battle".  In fact, in the 20th and 21st century, countries only decided on how far Communism was going to grow in their countries.  Items such as: Union power, Social safety netting, Central/Government planning, and the institutionalization of the health care system with access for everyone came into being.  Communism and it's weaker version of itself "Social Democracy" won.  Along with "Bankism" and "Corporatism", "Communism" and "Social Democracy" won out and the "Free Market" was buried after World War 1.  

     In actuality, the world has never had a "Free Market" economy or even an actual "Progressive tax system".  In an absolute "Free market" system, Monopoly companies, Big Corporations, and Companies filled with Cronyism or Nepotism have all to lose and very little to gain from the "Free Market". This is because Small business owners and Entrepreneurs would slowly eat away at their profits therefore weakening their influence, their reach, and the size of their Companies. This would therefore limit the investments that shareholder would have in those companies and erode the expansion power of those companies reversing the influence of the state that occurred through the "Mercantilist era".  More so, the often touted rhetoric used in Social Democracies of the "Progressive Tax System" being "free and "fair for all" is nothing more than government propaganda and government rhetoric.  Especially since the "Progressive Tax system" when properly applied would also tax Monopoly companies, Big Corporations, and Companies filled with Cronyism or Nepotism instead of giving them tax cuts to stay in business as Governments have been willing to do over the years.  The "Progressive Tax System" in existence now drains earnings from higher income earners such as Small Business owners, Entrepreneurs, and the Middle Class and puts them on the hook for everything while giving the rich, the elite, and the poor a "free ride".

     Information about the economic, social, and political climate the masses are familiar with is because of Social Indoctrination and the Propaganda Machine.  The myths, the stories, the legends, the names, etc are all known to the masses because of Social Indoctrination and the Propaganda Machine.  Truth is lost once the Propaganda machine starts engineering a particular mindset and particular viewpoint.  However, with the use of Social Indoctrination and the Propaganda Machine facts are tailored a particular way to fit a particular agenda.  For the Keynesian System and the "American Dream" to take hold on the minds of the masses, many things had to happen first.  
(a) You need to push people to maximize production in order for Capitalism to work
(b) You need to give people an incentive to work therefore creating Union dues, Union benefits, and Universal health care in order for people to want to invest in a particular career
(c) You need to create a tax system in order to create Universal Health Care, Pensions, Jobs for government workers, and also jobs in the public sector for workers.  
(d) You needed to create a safety net (welfare and social programs) so money from taxes can be distributed for people to live and in order for Consumerism to work.

However, the fallacy of the system occurs when you realize:
(a) If you d
on't push people to work for the Capitalistic system entrenched in place, then they themselves would work in order to eat, in order to have a house over their head, and in order to provide for their families.  Therefore, only the businesses that need to survive will survive.  People would not prop up businesses that served no purpose in society and no utilitarian use in society.  The Capitalistic system that we all know today would be revealed as unnatural from the start.

(b) & (c) No union dues, no union benefits, no government pensions, and no universal healthcare would result in people saving their salary and using their money more wisely in the present rather than depending on governments to store their money for them.  More so, less government programs and less government workers means less taxes for ordinary citizens.  People would therefore work in other sectors if the public service sector was gone.
(d) if you didn't give people welfare to live on, people would do what it took to survive and therefore they would work in the "Black Market",or would start their own business, or they would work for any hours and any wages offered instead of not working and depending on the Welfare System.  Many people have used the Welfare System since it's inception as a crutch instead of having to work. 
     Economic environment not the political and social environment a Government creates through policies and regulation(s) will dictate people's choices and people's actions.  If people choose not to work, their religious institute, or their friend and family (social network) better provide for them. Otherwise, the individual has no other choice than to work.  Social Democracies and Communism has made many people lazy, complacent, and entitled -expecting a high paying job and a high positioned job to be there for them when they want it.  By letting the "Free Market" take hold of society, the "Free Market" will be the best judge of the nature's law of survival.  With the "Free Market" in place, more people will be forced to participate in the community and less sicknesses will be in existence because people are trying to live within their means as opposed to living in the "rat race" they live in presently and live over their means.  People will also live less dependently on an institute in order to procure their only means of survival.
     Presently, National Governments are on hook for Banks lending people money. However in the "Consumption era" (Consumer era) everyone borrowed from Banks -Governments, Individuals, and Small business owners. All parties wanted a chance to make quick profits.  In a "Free Market", only those that borrowed should be on the hook for the money lost, not the entire population of Taxpayers.  Citizens who wanted to believe in the "American Dream" and choose to believe in the "American Dream" are all complicit in the De-Regulation of Banks.  Now that they lost money, they are agitated because they feel lied to and feel like they are the victim.  However, they all believed in the "Dream" and were complicit in the risk.  Only because the risks did not pay off, it has made them angry.  Even when National Governments deregulated banks, it was the individual's choice to borrow responsibly.  However, everyone borrowed from banks when they were giving low interest rates.  Everyone took the risk of trying to make money from the money they borrowed from banks hoping that the "good times would continue to roll on".  However, over time a "price ceiling" was reached and no one wanted to buy items over a particular margin.  That led to weakening banks and bank collapses because individuals still had to pay back the bank after they had spent the bank's money.  Governments however should not have bailed out banks.  It was the banks choice to lend money and it was up to the borrower on how he used that money.  Though the money did stimulate the economy, propping it up after the 1990's and therefore through the rapid advancement of a Globalized economy, it created bubbles everywhere.  It was the banks choice to lend money and up to the borrower on how he used that money.  The borrower could have used it on Investment properties and Investment businesses instead of Lifestyle choices (ex: cars, girls, and booze) and High risk stocks and therefore not lost it all.  Banks lost a lot of money this way (though it led to the boom in the "Consumption era"). and led to weak banks and massive bubbles existing everywhere in society.

     In fact, since Globalization has spread in the 1990s, after the Cold War ended, China has been the "Workshop of the World". Why would they be needed once the "Consumer Age" ends?  Hence they too are also dependent on the system that the West has created and because of that they have been expanding into Africa since the 2001 in order to create less dependence on the Western system.  As much as mainstream society likes to argue that, "China is taking over the world", it was not seen as a challenger to Keynesian economics or the Western world until they started to expand into places the West had yet to exploit and develop.  Throughout history, many nations are dependent on other stronger nations to stay strong economically.  Plantation economies ended when Cities exploded all over the world.  Consumerism and the "Consumption era" was directly tied in with Globalization.  If there was no Consumerism there would be no need for sweatshops since sweatshops started after Consumerism and are the consequence and by-product of Consumerism.

     This brings us to our next point, the "PetroDollar".  The "Petrodollar" came into effect in the 1970's.  Beforehand, gold traded for Oil and the U.S.A. was on the "Gold Standard".  After the OPEC crisis during the 1970's, the U.S.A. went on a Fiat Currency and China and U.S.A. became trade partners allowing for China to become the "Workshop of the World".  In the past, from 1918 until 1945, Britain and France were the "Global Policeman" and U.S.A. was the main lender.  Starting from the 2000s, U.S.A. is a "Global Policeman" and the IMF and China are the main lenders.  However, the Fiat Currency did not prevent the Oil prices from dropping in 2008 and did not prevent the Global Recession from occurring. The "good for customer" argument used during the 2008 low oil prices revealed that low oil prices were not good enough to save a faltering national economy.  The present "Oil War" in 2014 between OPEC, Russian Oil, and the N.American Shale Sector and N. American Oil Sands is having a disastrous effect on economies globally with many nations contracting at a rapid pace.  Though "Quantitative Easing" (printing money) will be implemented yet again by the Fed, Japan, China, and the E.U. (all taking turns to prop up and stabilize the Keynesian economic system that we have been familiar with since World War 2) it will also allow money to flow into the stock markets so that companies can "buy back" their products and hide their losses keeping "dumb money" in the stock market.  However, it will not be enough to offset the job losses and the contracting job market holding the illusion together.  The printing of money that allows for the stock markets to be propped up will devalue those particular currencies until no one buys or uses those currencies and then those countries will also have to buy another currency in order to trade and use.  This is when the Keynesian system falls apart in front of everyone.  Like a boxer with weak knees teetering from a body shot, the Keynesian economy has been teetering and swaying for decades.  After the economic collapse and restructuring of society, there will be no more "Gas wars".  "Gas wars" started during the Industrial era and speeded up due to the mass manufacturing of automobiles in the 1900's will no longer be a part of future societies.  After the economic collapse and restructuring of society, the control of gas will move to the command of Central governments.

     Another problem of the Keynesian Economic model is that it has been hiding the weakness of unions.  In fact, unions don't allow for massive hirings or new technology to be introduced which in turn leads to slow "bleed outs" causing burn outs of most workers involved in the union and inside the institute.  For example, if the auto Sector pays $35+ an hour and you have 1,000 workers in a company, then that is $3,500 just in pay alone for the workers.  For an 8hr day, the company pays $20,000 towards workers.  For a 16hr workday, (or 2 work shifts), that's $40,000 paid out to workers.  For a company that is opened 24 hours a day that is $60,000 just on "man hours" alone.  With this union model in place, company will lose money over time due to not being competitive enough.  "Recalls" (due to government regulations) and "Slow Downs" (due to contracting and weak economies) kill off the businesses.  This is why auto companies got rid of unionized workers and closed down their factories and moved them when Globalization started.  It is no coincidence that a cheaper workforce meant cheaper cars and that meant more people bought cars when Globalization started in the 1990's. If you are a auto sector worker that did not finish High School but you make more than a Government worker or someone who has finished his post secondary education -your society is not held together by logic because then what is the incentive to get a higher education? or want to develop skills usable in society?  Your society therefore stagnates in many ways. 

      After Globalization started in the 1990's and the massive job losses of the Manufacturing sector (especially the Auto Sector), post secondary education and post secondary institutes were then propagated in order to "move society forward".  How can the wage a worker makes for an hour be more than the product?  How can the worker's wage not affect the product being overpriced in order to make up the pay for the wage of the workers? This is why $15 for a worker working in McDonald's or Tim Horton's has no logic. If a combo costs $8, and a worker costs $15 an hour, then you would have to sell two combos in order to make more than you would pay the worker.  Furthermore, even at minimum staff which consists of 4 workers, the company would have to sell at least 8 combos in order to cover the worker's salary.  This is not to mention that the company still has to pay for the products they purchased, monthly rent needed to stay open, electric and gas bills used to operate, etc.  How then can a company compete if you were to unionize a workforce and pay them an exorbitant amount.  

Trickle Down Effects on customers if $15 dollar wage hikes were implemented:
Just so people can understand this logically, McDonald's lost 30% of their profits in 2014 by Q3 (this was factored in with regular prices -not the addition of $15 wage hikes that is being asked by workers presently that would increase food menus as shown above).  What would McDonald's incentive be to give a wage increase of $15 dollars to their workers when they have already sustained losses while paying minimum wage? Instead of having to close shops, due to losing profits, McDonald's will instead bring in automation and eliminate workers (which will save them a lot of money).  This means that McDonald's will suffer a one-time loss of profits when switching over from automation instead of using people.  The wage demands of $15 have now cost you a job and the trickle down effect could be devastating because if you have no job -you might not be able to pay for very much else.  People should think before they rally behind a cause because it sounds good to the ears.  People are presently too concerned about the profits that Corporations make when in fact it was never anyone's business other than investors.

      For government pensions to be profitable and worth the amount they were when they were first implemented, Governments had to play it in the stock markets and invest it in companies (ex: Teacher's Pension Plan and ownership of MLSE).  Otherwise, the government loses money because of rising costs of living and the rising costs of inflation, diverting money for the preservation of the Public Services, and Unforeseen Accidents in a region or country (ex: train crash, environmental lawsuits, war, natural disasters, pandemic, etc.)  Then the government has no cash for pensioners but is still required to pay the pension.  This is why pensions were a waste of money from the start and would only serve the benefit of the first few retired generations not the ones afterwards.  People should have been saving for themselves not relying on Government pensions for their old Age retirement.  

     Another problem, that seeped away at Government revenue, particular pensions, was the need of a labor force and an underclass of workers in order to expand and be a showcase for the rest of the world thus cementing the title of "First World" or "Developing World" and avoiding the title of "Third World".  From the 1990's onwards, Governments implemented programs to bring in a massive wave of immigrants introducing programs which were heavily funded but also led to massive expenditures in order to maintain the expected services. In a "Free Market" it is the people that decide if they want "Multiculturalism" or "Assimilation".  It is the people that decide if they want "Segregation", a "Law of Accommodation", or "Full Equality for all".  In reaction to "Laws of the Land" and the "Free Market", it is up to the  immigrants and foreigners to decide if they want to live their or invest there.  Let people decide where they want to travel, where they want to live, and where they want to work.  The spread of Liberalism and the growth of Government has created more dependence on Government and less dependence on Community and Family. 

     Governments don't cover risks for Citizens, they only cover risks for Banks & Multinational and Transnational Corporations therefore there is no need for big Governments to exist in order for Communities and Individuals to survive.  Governments can afford to shrink for the betterment of the people.  Bigger government means more taxes for the citizen.  Immigrants should never be able to demand or transform the culture they live in to suit their needs and wishes  If you invite immigrants and you don't select which ones get in -political ideas get filtered into the country transforming that country forever.  Immigrants who believe that their cultural identity is intermixed with political ideologies therefore pass it onto their children who cement it into the country of residence as they grow older and grow into society.  Examples would be Polish, Italian, and Ukrainian immigrants wanting and expecting Union supremacy to exist during the Cold War and afterwards or Muslims wanting Sharia Law to exist in order to accommodate for their belief system and values.  Once these ideologies and beliefs are implemented however, the climate of a country changes making it very difficult to reverse.  Let the Church, Mosque, Gurdwara, or Temple provide food and shelter and jobs for its believers.  More charity from them and less from Government enables the "Free Market" to exist.  If the religious institute can not even provide food, shelter, jobs, or a social network, then the religious institute serves no practical purpose and is therefore detached from their original conception which was to provide for their adherents.
     There is no such thing as "Free".  No "free press", No "freedom of speech". Anything you hear being promoted by politicians and the government as being "FREE" is not "Free".  It is censored, funded, managed, and regulated.  Mainstream society hears "FREE" before knowing anything about it or how it came to be and automatically wants to have it. The mainstream society hears "Free" and believes "this time" it's too good to be passed up and that there is no strings attached.  History has proved that nothing is free. Just let the "Free Markets" actually work the way they are intended to.  Letting the "Free Market" work the way it is intended to will lead to less government regulations and less corporate patent laws.  "Free" should be altered to say "managed", or "contained", or "planned", or "regulated" -not "free" (ex: "Managed" press, "Contained" Speech).  "Free Markets" ensure that "Bail Ins" and "Bail Outs" do no occur.  It's not a "Free Market" if "Tokenism" and "Affirmative Action" exists in a society.  Rulers don't want anything to be free but will promote "Free" in order to guide, manipulate, con, and control the masses (ex: free speech).  There is no profit or control when things are free, hence it will not be free.  "If it's too big to fail" then there's not enough "Free Markets" involved.  "If it's too big to fail" then there means that there is not enough competition.  "If a bank, or Corporation, or union has become so big and powerful it can hold the entire country hostage, that alone is reason to break it up" and allow the "Free Markets" to operate. "Too big to jail" and "Too big to fail" means "business as usual" for those in power.  

     The only way to avoid this stranglehold which has taken effect since the Industrial Revolution is through the use of the "Free Market".  Through the use of "Commision based salaries" and the use of "Salaries with Incentives" the "Free Market" operates the way it is intended to operate and has operated for time immemorial with the "Barter System" since it makes people work hard at what they are good at.  It gives individuals and staff members (belonging to a business) a target and goal to reach for -with an incentive to attain it.  Union salaries often lead to "dead end jobs" and "glass ceilings" with no upward mobility but an increase of pay based on seniority not skill or hard work.  Even if a "glass ceiling" is hit (and all things do hit a glass ceiling eventually) people with incentive based contracts and commission based contracts will work harder to keep their job and keep their position.  People with Incentive based contracts and Commision based contracts can't stay still because it's bad for everyone not just for themselves.  With a union in place, one individual can drag the whole team down and based on his position -a costly severance pay must be allocated to him which further weakens the company.  However, with a "Free Market" and Commission based contract or Incentive based contract, it means once you become toxic or unproductive and people are carrying your weight -you are dead weight and therefore will be terminated.  Just like in the realm of sports, you are as good as your last shift and you have to keep proving your worth to stay on.  If you are a productive individual, you will be able to accumulate enough money to use when you are let go or want out.

     Since 2008, we are in the "Era of investing in Distressed Debt".  In this reality, most investors go about their job trying to identify winners but more often than not, investing is about avoiding losers.  Choosing winners is a lot harder due to the unpredictability of stocks. Whether you're buying property, or starting a business, or investing -you are borrowing from the Bank or a Lender which means that you are gambling on your present and your future.  You are taking a risk that you are accountable for and will be on the hook for. Nobody else! And this is because nobody else asked you to take that risk.  Bank Investors, Small Business Owners, and Corporation (as well as Government members and Unions members should be on the hook for "Bail Ins", "Bail-Outs", and "Too Big to Fail").  Not everyone who did not come near the Bank that overlent and therefore over extended itself.

     Presently we are experiencing "Price Wars" enacted by Corporations in order to pump out cheap goods and avoid overstock of products.  Oversupply is an effective strategy for Corporations to use as an instrument to make profits, however, when there is no demand, Corporations are in the red and layoffs occur.  Due to the fact that Governments sacrificed their future in order to better the past, Millennials will be one of the few retrograde generations in history.  Previous generations starting from the 1950's could tell themselves that, "it's going to get better from here" (and once we retire, we will be looked after because of our hard work).  Millennials however know that, "it's only going to get worse from here" (and even retirement is an uncertainty).  From the end of the Cold War to 2008, National Governments sacrificed their future generations for the present generation and enacted social programs to make life comfortable for retirees.  That though has led us to this phase now.  The next phase is nothing more than Austerity Measures implemented which leads to Privatization consisting of "Sell Offs" of the Public Service Sector and Natural Resources, Tax Cuts for Corporations in order for them to invest and create jobs (therefore allowing money to stimulate in a stagnant economy), and Free Trade Deals between Nations (which again allows for jobs and money to be moved around in order to stimulate the stagnant economy).

Changing Titles but similar roles in society:
(a) Indentured Labour, Migrant Worker, Sharecropper, Debtor Prisoner, Serfs -selling of labour to pay off debt or meet a certain quota
(b) Forced Labour, Slaves -no choice as to how long you would work because ownership of your body belonged to someone else
(c) Overseer, Manager, Supervisor -ensuring that the owner's product is taken care of and managed
     No matter the historical decade, Coaches, Managers, Supervisors, Bosses, Funders, Investors, Staff, and Team Mates -will always ask you to give more, never less.  Always more.  They will push every inch of energy and sweat out of you.

Unintended Consequences:
"Unintended Consequences" happens all the time, every time an action and choice takes place.  What you see or envision when you start something might be different than the actual end outcome.

- A protest movement in 1 country could be peaceful but in another part of the country or world, the same protest movement can become violent.  Once a protest movement starts, you can never know if a protest movement will spread and the impact it will have once it spreads.  That is the unintended consequence of protest movements.

- After the 1970s, the First World and the Developing World tried to limit the amount of children they gave birth to.  Meanwhile, the poor all over the world and Muslims all over the world were still having plenty of children that they could not pay for and therefore that caused them to be dependent on the State.  Overpopulation also leads to massive emigration flooding into the First World and the Developing World, leading to richer countries slowly evaporating the wealth stored in that country through the use of Social Programs and having it used on new immigrants who have never paid into it but are using it to stay alive.  Aid also has an unintended consequence.

- Unions Leaders will not tell their Union Members the truth about the precariousness of their job(s) until the very end, doing everything they can to say that, "Unions will save their jobs" and "Without the unions there is no other alternative".  In fact, this foot dragging by Union Leaders and Unions will cause a burnout of the workers because it just allows for a slow "bleedout" until the unavoidable happens and everyone is out of a job, the factories are closed, and everything is restructured.  Union Leaders will sacrifice the lower paid union members and the youth of the unions for the senior members of the Union and Union Leaders.  Not everything is "equal and fair" as Union Leaders will argue when trying to keep union membership up in order to collect union dues.  There is also a hierarchy in Unions.  Know what you are fighting for before you fight for it!

"When you have no real power, all you can do is delay"

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