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Economics, Growth and Finite Resources (Read 165867 times)

ksjs

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#25 Re: Economics, Growth and Finite Resources
December 14, 2011, 11:35:59 am
Greece and Italy have a serious current problem funding persistent publi-sector deficits. People are reluctant to lend to those countries because they don't think they'll get their money back. What's your proposed solution?
My solution would be to have never got there in the first place, to not spend where you can't pay it back. I have no detailed knowledge of Italy's economy but I imagine that the whole culture of 'growth' and unfettered and speculative capitalism contributed.

As for a way forward now, let them default. Have a big correction / wake-up call and then live within your means. Build on solid foundations not some borrowed tomorrow. Italy is particularly hard to have sympathy for: the whole thing seems corrupt to the core and Berlusconi is almost as pathetic and laughable as Bush.

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#26 Re: Economics, Growth and Finite Resources
December 14, 2011, 11:40:07 am
Yes, by the way, I am excited by some of the developments I have seen in power generation and energy storage. There are some exciting things which are yet to be published (some already in peer review). As I said before, our own humble efforts have resulted in systems that use 50% less absorbed power compared to the existing technology and we are sure we can do better!
It would land me in some serious Khaki if I detailed specific things here.

I'm waiting to see this "knowledge transferred" (bit of a bullshit bingo term IMO, people have been applying the results of research for years, e.g. Stephenson's Rocket, commercialisation is perhaps more appropriate, although some may see that as "dirty" as it implies connotations of consumerism)

Artificial leaf that could be more efficient than the real thing

(A more technical description from the PNAS)

Ooo ooo oo! I want one!

I have to agree on the terminology, I'm always giving Ian shite about his job title. What they do is go out and speak to academics/businesses/developers and then go and find others to introduce them to... It works.
Commercialism is correct, although perhaps we should point out; commercial means part of an economy, not wasteful or pointless.
"The Economy" can be what ever we make it.
I hope, I'm fairly sure; we will adapt and our economy will change. GDP will continue to grow, the measure may evolve to suit this change. Wealth is a fungible thing, once it was cows, then it was gold, now it's bits and bites. The one thing it is not is absolute.

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#27 Re: Economics, Growth and Finite Resources
December 14, 2011, 12:37:20 pm
However countries that go down this route will still need their new technocratic austerity-orientated leaders to ensure they can fund themselves. There's no magic solution.
No, but that's what people want (a magic solution). The apparently dull, unglamorous and long-term business of doing and making stuff that works within budgetary constraints may however be the only option.

I think it would have been better and had had more chance of creating some kind of legacy if the change had come from within rather than being force-fed to the Italians and Greeks. I don't think they take kindly to being told what to do. But maybe medicine never tastes good so perhaps the imposed leaders and measures will be accepted?

Bonjoy

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#28 Re: Economics, Growth and Finite Resources
December 15, 2011, 08:49:22 am
As a matter of interest where do other folks get their news/info on this kind of stuff? I follow www.energybulletin.net for articles on resource/energy/climate change/alt economics; www.zerohedge.com for views/ (generally right leaning)articles from folk inside the financial world; www.counterpunch.org for political (left leaning) articles; and the usual sort of sources for MSM take on the news (BBC, FT, Guardian).

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#29 Economics, Growth and Finite Resources
December 15, 2011, 09:58:50 am
I'm finding UKB to be a surprisingly useful and educational forum!
It has the advantage of involving people from a broad spectrum of backgrounds.
Like Toby, I get to meet some (supposedly) influential people, through work.
For those who don't know, I work in the Super/Mega yacht industry. I usually meet them in a non-professional, leisure setting. I don't believe in conspiracy theories either (it would be the proverbial "herding of cats", for one thing). I think I wrote somewhere else on the forum, in more stringent terms; they are grossly ordinary. Very few standout as something special. Those that do are often the least assuming (Mark Watson, of Munich Rey, is one of those).
I'm a living embodiment of the financial crisis (in 2008 I was the MD of a shipyard building yachts over 500GT, that turned a profit of 18M USD that year, now I'm almost broke, on income support (until I start work in the new year); go figure).
And yet, I feel optimistic about the future...

Bonjoy

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#30 Re: Economics, Growth and Finite Resources
December 15, 2011, 10:22:32 am
I am also lucky to meet occasionally with people in positions of power ... politicians, central bankers, chief executives, heads of private equity firms, etc. The most recent interesting one was Peter Thiel who founded Paypal and was the founder investor in Facebook. One by-product of that is that I am very unsympathetic to the sort of conspiracy theories of the world that are common on the internet and even visible in this thread. There isn't some sinister ruling class, only motivated to suppress the poor in perpetuity ... these sorts of people are just like everyone else: varying motivations, varying abilities.

News like this - http://www.guardian.co.uk/business/2011/dec/14/executive-pay-increase-america-ceos  would suggest a good proportion are self serving wankers.
I don’t believe that the current financial mess is a result of orchestrated actions by malevolent powers either, more the aggregate consequence of lots of individuals/groups exploiting dysfunctional financial regulation (mostly via legal means), on a background of stalling world growth caused in large part by resource limitations. The whole ‘too big to fail’ thing is a disaster waiting to happen, it has unbalanced the sytem and created another deadly bubble, what is capitalism if bad investments aren’t allowed to go the way nature intended? It’s a cliché but risks have been socialised to the vast benefit of those in a position to cut and run.

I have occasionally read the Economist and will make an effort to do so more often. I’m always keen to read as widely as possible to avoid confirmation bias.

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#31 Re: Economics, Growth and Finite Resources
December 15, 2011, 10:59:37 am
I don't think anyone is trying to suggest the ruling class are deliberately trying to "keep the poor poor", but they're sure as hell trying to keep themselves as rich as possible and to hell with the consequences.

P.S. working in the superyacht industry must be an interesting one. Some of them are absolutely stunning works of design, function and form. They do; however, perfectly embody unnecessary greed, consumerism and excess.

I'm always intrigued by the luxury goods industries to find out if the "trickle down theory" actually happens?

Rich person buys boat, boat company makes money.

Boat company pays wages to staff (high/low??) and probably creams a fair profit too.

Subcontractors pay staff, and probably also creams a fair profit.

Much of this profit probably goes back to shareholders, or owners pockets.

I'm keen to know, as a percentage, how much actually makes it from the Russian Oligarch to the GRP fabricator, engine fitter and all the other folks who work hard building these things? (And therefore, how much just gets recycled around the luxury end of the market?)



Maybe I'm just having a bitter day since I found out yesterday that my department has been canned and I need to find a new job (fortunately there are options inside the company). It's a shitter, as we were hoping to build new, clean renewable energy generation but our parent company got cold feet because the banking system and sovereign debt is so fucked in Europe that the investment was too risky.

Apologies if the lights go out in 2014...
« Last Edit: December 15, 2011, 11:12:49 am by Fultonius »

Stu Littlefair

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#32 Re: Economics, Growth and Finite Resources
December 15, 2011, 12:49:25 pm
Late to this fascinating thread, but in the nick of time to edit Toby's pedantic edit.

"states that some CEOs have had large pay increases which may not be deserved"

May? May?

http://online.wsj.com/public/resources/documents/CEOperformance122509.pdf  <- This.

fried

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#33 Re: Economics, Growth and Finite Resources
December 15, 2011, 12:49:48 pm
This is getting dangerously close to the kind of political bashing that stops me reading 'other' forums.

Try and keep it clean.

Bonjoy

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#34 Re: Economics, Growth and Finite Resources
December 15, 2011, 01:10:52 pm
I am also lucky to meet occasionally with people in positions of power ... politicians, central bankers, chief executives, heads of private equity firms, etc. The most recent interesting one was Peter Thiel who founded Paypal and was the founder investor in Facebook. One by-product of that is that I am very unsympathetic to the sort of conspiracy theories of the world that are common on the internet and even visible in this thread. There isn't some sinister ruling class, only motivated to suppress the poor in perpetuity ... these sorts of people are just like everyone else: varying motivations, varying abilities.

News like this - http://www.guardian.co.uk/business/2011/dec/14/executive-pay-increase-america-ceos  would suggest a good proportion are self serving wankers states that some CEOs have had large pay increases which may not be deserved. I don’t believe that the current financial mess is a result of orchestrated actions by malevolent powers either, more the aggregate consequence of lots of individuals/groups exploiting dysfunctional financial regulation (mostly via legal means), on a background of stalling surprisingly-stable world growth not yet effected caused in large part by resource limitations. The whole ‘too big to fail’ thing is a disaster waiting to happen, it has unbalanced the system and may have created another deadly bubble, what is capitalism if bad investments aren’t allowed to go the way nature intended? It’s a cliché but risks have been socialised to the vast benefit of those some people in a position to cut and run.
... would be my pedantic edit there. Packing for the weekend - otherwise I'd comment in more detail.
Giving yourself a huge underserved payrise while those in your charge are losing jobs and have frozen or shrinking wages is the behaviour of a self serving wanker and I'm happy to stand by my original wording. Excuse the sarcasm, but stand back and look at the trees, there's some wood in there.

You don't think the more than tripling of crude oil prices in the last decade and its knock on cost to agriculture/industry has had anything whatsoever to do with today's woes?

Growth is only superficially 'surprisingly stable' because of the afformentioned 'too big to fail' game and the subsequent huge injections of QE. Stable or otherwise growth in most OECD countries it is not fast enough to service the debts.

If the current euro debt situation and all the hugely leveraged off balance sheet liablities in the shadow financial economy don't represent a (deadly to world stability) bubble I don't know what does.

« Last Edit: December 15, 2011, 02:41:05 pm by Bonjoy »

Stu Littlefair

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#35 Re: Economics, Growth and Finite Resources
December 15, 2011, 01:12:17 pm
"Try and keep it clean. "

Will do.

I'd be interested in what people think about the wisdom or otherwise of devaluing your way out of debt problems. Toby above seems to say it's wise that the ECB has rules which prevent this happening, but I've got to admit it's an area of economics I struggle to understand.

So devaluing makes people poorer, but so would paying off the debt. If you rule out growth as a solution*, then isn't it better to print money to pay your debts, then default?

*the reason I say this is that I don't see how most eurozone countries can possibly grow much in the next decade. With interest rates nearly zero, the private sector is paying off debt rather than investing. And competitiveness is appalling in these countries, since their currency is held artificially high by Germany's strong export economy...

Bonjoy

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#36 Re: Economics, Growth and Finite Resources
December 15, 2011, 01:21:25 pm
I found this quite an interesting read on that subject - http://www.shadowstats.com/article/hyperinflation-special-report-2011 .

Bonjoy

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#37 Re: Economics, Growth and Finite Resources
December 15, 2011, 01:23:59 pm
Sorry Fried I don’t know what you’re objecting to in this thread thus far. Seems pretty ‘clean’ to me.

fried

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#38 Re: Economics, Growth and Finite Resources
December 15, 2011, 02:03:19 pm
I just thought Thisiger was getting a bit heavy-handed in this (non) reply to your post.

I enjoy reading the political stuff on here, but don't want it to become entrenched opinions and preaching to the not likely to be converted. It not the opinions, it's how they're presented that counts.

Apologies if I mis-read anything.

Ding ding

Round 2 :popcorn:


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#39 Re: Economics, Growth and Finite Resources
December 16, 2011, 12:15:06 am
http://www.theoildrum.com/ Energy stuff
http://earlywarn.blogspot.com/ Stuart Staniford is one of the best commenters on global risks about IMO
http://theautomaticearth.blogspot.com/ Financial doom. Illargi and Stoneleigh called the credit crunch early and have been shouting about the sovereign debt issue for a few years now
As Toby says, the FT is good on this stuff. The economist is ok too.
And despite not sharing his conclusions, I'd also second his point about the west's problems not necessarily being global problems. Do have concerns re the impact longer term on the export economies of the east.
I don't meet anyone powerful, but trade short term electricity and gas futures for a living. Most of the folk I work with don't have a clue. I despair of them sometimes.

Bonjoy

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#40 Re: Economics, Growth and Finite Resources
December 16, 2011, 10:34:37 am
    Tom Murphy’s Do The Maths articles are great for a none political look at the maths and science behind various potential solutions to the energy problem. Always an entertaining read. . .
Quote
    When we imagine a smorgasbord of options in front of us, we think we’ll never go hungry. But when the plate arrives and it’s a raisin here, a crumb of bread there, and a speck of cheese there, the variety alone is no longer a source of satisfaction.. . .it is as unlikely that a hundred 1% solutions will satisfy us as it is that we could strap enough gerbils together to make a serviceable pony.     

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#41 Re: Economics, Growth and Finite Resources
December 20, 2011, 10:34:00 am
Quote from: thesiger
I am curious, why?

Not wanting to put words into fried's mouth, but perhaps the corrections were being almost as pedantic as I can be.

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#42 Economics, Growth and Finite Resources
December 20, 2011, 10:37:09 am
I just thought Thesiger was getting a bit heavy-handed in this (non) reply to your post.
I am curious, why?

Please also note my opening remarks on this thread.

Careful Toby...

Capitalism is an easy target and easily misunderstood. There are some who, not to put too finer point on it; kick the arse out of the system. These high profile Monkeys, belie that fact that most of the people who benefit from the system, do so in a much more modest way...
A glib or hurried response can seem, if not arrogant, then uncaring.
I didn't read your response in that manner, I can see how it could be read that way.

Any defence of the system, needs to acknowledge the current failings of said system; which are legion.

Crap! That sounds sooo preachy!

Sorry.

I hope you get my point....

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#43 Re: Economics, Growth and Finite Resources
December 20, 2011, 10:49:29 am
Quote
I'm finding UKB to be a surprisingly useful and educational forum!
It has the advantage of involving people from a broad spectrum of backgrounds.

I agree, your contributions are valued Toby. Always useful to keep the spectrum as broad as possible. Researching these things on the internet presents a mass of information where its all too easy to just reinforce your own hunches.

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#44 Re: Economics, Growth and Finite Resources
December 20, 2011, 12:19:03 pm
it would be a helpful change if the public learnt more about risk also, and realised that it is implicit everywhere, even in the underlying mechanism of ordinary bank accounts.

 :agree: any links on how it relates to 'ordinary bank accounts' please?


A more general blog on risk is Understanding Uncertainty by David Speigelhalter (with some guest posts).

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#45 Economics, Growth and Finite Resources
December 20, 2011, 12:25:33 pm
On the subject of disparity...

I try to think of it like this:

Generally, I think someone who spends X^n on a flash sports car, is a moron.
When my family car at a fraction of the cost, does the same job.
As long as I can service my personal needs, the moron can do as he pleases; up to the point where he impacts on my needs.

Then, I try to remember; there are plenty who would view my spending of X hundred pounds on a mat/Anazais, as equally pointless...

Clearly, a simplified version of what passes through my mind but, the essence.

"Trickle down" clearly does happen, or no one would have a job or eat...

I said it before, elsewhere on the forum; when the rich buy luxury goods, they pay a premium and thousands benefit down the chain. The goods retain some value, the worlds economy grows by that value.

We would be in trouble if the rich stopped spending money (corporation or individual).
That seems unlikely...

Is it fair?

No.

But ask yourself, what do I really need/want?

Do I really care that some woman has paid a six or seven figure sum for a lump of Carbon (aka Diamond) on a metal chain (aka Gold). Because the critical point is, she has spent the money! Almost certainly, vastly more than it cost to produce and that will be spread out to thousands.
Incidentally, the bulk of the Diamond mining industry, is dedicated to industrial application; not gem stone production. That is almost a by-product.

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#46 Economics, Growth and Finite Resources
December 20, 2011, 12:35:08 pm
Unfortunately small teams of people can make very large profits for their employers in finance - it's the nature of the business. Those profits can and will be used to reinforce bank capital to improve bank solvency, which is in everyone's interests. So it is rational for the people generating those profits to get a reasonable cut, especially if they could easily walk off to do the same thing somewhere else.

The counter-argument to this being that those small teams may be taking too much risk in generating those profits. But that's a very complex discussion. I am in favour of initiatives like the Volcker rule to ban deposit-taking banks from highly-speculative trading, but it would be a helpful change if the public learnt more about risk also, and realised that it is implicit everywhere, even in the underlying mechanism of ordinary bank accounts.

It would also help if the commodities in question were more strictly attached to tangible assets...

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#47 Re: Economics, Growth and Finite Resources
December 20, 2011, 12:44:22 pm
...but it would be a helpful change if the public learnt more about risk also, and realised that it is implicit everywhere, even in the underlying mechanism of ordinary bank accounts.
What would be even better is if the people taking the risks understood them! Or could it be that they did/do but given that there is so much to be made and the cobsequences of risk going bad mostly fall on other people's heads...

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#48 Re: Economics, Growth and Finite Resources
December 20, 2011, 12:50:25 pm
We would be in trouble if the rich stopped spending money (corporation or individual).
That seems unlikely...
Part of the problem is that the rich DON'T spend that much, other than buying assets (hence creating asset bubbles). You give a million pounds to a millionaire, he'll most likely put it in some sort of account or buy some sort of financial product. Give that million to a thousand people living hand to mouth and they will spend it all. The multiplier effect is much greater in the latter case.

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#49 Re: Economics, Growth and Finite Resources
December 20, 2011, 12:59:26 pm

What would be even better is if the people taking the risks understood them! Or could it be that they did/do but given that there is so much to be made and the cobsequences of risk going bad mostly fall on other people's heads...

I saw you sneaking another bird reference in there.

 

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