Family Crest

Family Crest
Motto: I will never forget. [ Source HouseofNames ]

HUMANITY DOOMSDAY CLOCK - Moves forward to 2125 due to election of US President trump.

Estimate of the time that Humanity will go extinct or civilization will collapse. The HUMANITY DOOMSDAY CLOCK moves forward to 2125 due to US President trump's abandonment of climate change goals. Apologies to Bulletin of the Atomic Scientists for using the name.

PLEASE QUOTE, COPY and LINK

While this material is copyrighted, you are hereby granted permission and encouraged to copy and paste any excerpt and/or complete statement from any entry on this blog into any form you choose. In return, please provide explicit credit to this source and a link or URL to the publication. Email links to mckeever.mp@gmail.com

You may also wish to read and quote from these groundbreaking essays on economic topics with the same permission outlined above

The Jobs Theory of Growth [http://www.mkeever.com/apply.html]

Moral Economics [http://www.mkeever.com/moral.html]

Balanced Trade [http://www.mkeever.com/essay.html]

There Are Alternatives to Free Market Capitalism [http://www.mkeever.com/taa.html]

Specific Country Economic Policy Analyses - More Than 50 Countries from Argentina to Yemen [http://www.mkeever.com]




Translate

Monday, June 4, 2018

Too Much Capital

There is a structural problem within most of the industrialized world's economies. It is most pronounced in the United States of America.

It is an imbalance between the amount of capital available and the level of incomes available to consumers.

Simply put, there is too much capital and not enough income.

The evidence is clear: historically low real [inflation adjusted] interest rates and stagnant real consumer incomes.

In practice it means that capital is available for projects that promise low profits. Historically, the expected profit rate has driven capital toward more profitable, hence more efficient, projects.

Thus some investment is driven toward marginal projects - which do not contribute materially to the economy's well being - since they are the projects available.

More damaging is the trend toward monopoly control of markets and supply chains. Monopolies are incentivized to provide fewer products at higher prices than a competitive market would absorb, thus reducing employment and incomes.

Monopolies and oligopolies also attempt to control the regulation environment so that their dominant positions are sustained. One needs only to look closely to the banking and financial services industries to see the pernicious effects of such regulation control.

The problem is hidden today because the numbers are good - low unemployment rates and GDP growth.

But, these numbers are not sustainable unless consumers have the real purchasing power to sustain them. Real growth happens only when consumer demand is strong.



No comments:

Post a Comment