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sábado, 7 de enero de 2012

About the article: “The economic myths that no longer serve in 2012”

About the article: “The economic myths that no longer serve in 2012”

Enlightening article that ground pulling typical comments from talk shows and newspappers. With certain exceptions we take as valid. We will use their headings to get our own conclusions. Thank you, Pere.
<<The Economic myths that no longer serve in 2012.>> By Pere Rusiñol 07/01/2012

<<1 The stock market rise is always good for economy.>>
False: The stock market inflates and deflates at the rithm of speculative bubbles do: subprime speculation bubble splode in 2008, and began gold and food bubbles to take his place. Before this other bubbles burst like ".Com" in 2000, oil in 70s, etc ... Exploit these and many others will grow. It's a question of time. Is the system.
To raise the stock market is bad, to exist the stock market is illogical.

<<2 If dismissal becomes cheaper, companies will contrac workers>>
False: companies contract workers when are competitive. To become cheaper or not the dismissal itself will not create jobs. In few words, a company to be competitive must have cheap salaries, cheap raw materials, cheap transportation and expensive sales.
Both, raw material and final product, suffer the sieve of the transaction in a tax heaven, which increases their acquisition, pure speculation. To compete with other countries, currently producing competitively,  are required investment in technology for decades, as germany did, or use slave labor like china, brazil or mexico.

<<3 Govermente spending cuts calm markets>>
False: markets, companies and banks, buy and sell, and their forecasts are based on buying and selling expectatives. If spain can’t buy because money not flows companies will not invest. If spain can not sell because their products are expensive companies will not invest.
Goverment spending cuts, as the name suggests, cuts the flow of money. But instead of doing a cost-benefit study of institutions and services for a surgical cut goverments prefers hack and slash tecnics. This is due to the power exercised by those persons interested in such speculation. White glove criminals.

<<4 For a country, nothing is worse than default>>
False: worse than default for countries has been adopted the euro. Despite of the many benefits of the currency has had a problem of begginer: european countries have lost their monetary sovereignty. Sorry, germany exercise the monetarian sovereignty over europe. Without the devaluation of the currency (the cases of Argentina and Iceland or spain in 90s), that allows a hand down the price of their salaries and their products, there is only a way to recover from crisis: govern  adjustment, spending cuts and cropping.

<<5 It is impossible that the euro has reversed.>>
False: If the governments of spain and italy would fell in default as ireland, greece or portugal almost did, the situation would be untenable. Current policies do involve cuts state bankruptcy by year's end. No government in the euro countries wish the rupture, but don’t do nothing special to evoid it. The coin exchange process would be long and laborious, perhaps more than the crisis itself, but there are the plans.

<<6 Inequality propels economic.>>
True: more specifically, the capitalist economy. To say this is to confirm the direct relationship: the more unequal better economical beneficts. More poor people more richest? This paradox is a reality: the chinese slave laborers, thai or mexican maquilas drive the global economy.

<<7 Taxes can not raise to the rich>>
Right: Almost all the really rich live (are addressed) in tax havens. Increasing the tax burden change of address.

<<8 Gurus always right.>>
False: Only Goldman & Sanchs ones.

<<9 The guilty always pays>>
Pardon? In spain there are 8000 municipalities in bankruptcy (there are about 8000 municipalities), fifty saving banks in red numbers (there is about fifty saving banks), all banks supperted with resue plans, 3banks underwent intervented directly by govermentt. More than 1000 EREs (companies with dismissing plans) in 2007, as many in 2008 ... 5 million unemployed and no one in jail becouse of this situation.

<<10 The future of pensions is private>>
True: And more than true. In spain every companie pay a rate of salarie directly to the public service (seguridad social), working as a resistance box. Govern spend actually this many in others affairs as pay exterior debts. When this money finish coupled with the fact of financial markets pressures in the medium to long term, there will be a imposition of U.S. private pension system. Must be remembered that pension plans and insurances arethe main source of financial capital to investment along the planet. England argues that the money from these funds can not be used for risky investments, and tried to create a law to prevent it with no results.

<<11 If banks are helped credit will flow again>>
False: In order to restore the credit flows between banks should be undertake two conditions:
1 - That banks dispose of their toxic assets, unpaid mortgages, mutual funds- risk ... and not reinvested in them again (to recovered the deposit).
2 – To leave speculative intentions (to recover the trust).
Imposible at all.

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