highwood122
Established Member
you would be better off forgetting what others have got and concentrate on earning a piece of the pie yourself by what ever means seem the most lucrative
Just to stir the pot, has anyone noticed...
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Its not MMT. Its pure Monetarism.
MV = PQ is the central equation of Monetarism.
https://www.investopedia.com/terms/m/monetaristtheory.asp
Where I & Monetarism part ways is that Monetarism says that :
“Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” Milton Friedman.
And I think that's not strictly accurate.
If we look at MV = PQ we can see that P can vary inversely as Q with MV static.
Which is a fancy way to say you can pay more and get less using the same amount of money.
What happens when petrol goes up? You pay more, get less and that happens irregardless of whether your salary (M) has increased.
When Ibn Bin Saud quadruples the price of oil, you just pay. No ifs, no buts.
The Monetarist argument (which is superficially reasonable) is that if the price of one thing goes up, there is less purchasing power available to purchase other things and their price comes down.
In aggregate, inflation does not change if the price of bananas triples.
Only MORE money could cause inflation to rise because only then would there be more purchasing power to bid up prices.
And that's correct.
But for one teeny weeny problem.
Energy.
Energy does not work like bananas. You can choose not to buy bananas. You can't choose to not buy energy.
So if the price of energy goes up, ALL prices go up, because the price of everything includes an energy component.
And that happens whether everyone in the country gets a 10% pay rise or not.
This is why the BOE increasing the interest rate is pointless fiscal waterboarding.
They're trying to suppress demand to force a fall in the price of goods.
But if the "good" you're trying to suppress the price of is energy then causing the UK to reduce demand doesn't matter a flying ****.
We're like, 1% of the global energy market.
We could halve our energy usage and Big Oil would barely notice.
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Increasing the wages of labour does not require "taking" anything from anyone.
Where do you think people's wages end up? In the profit margins of Tesco, Esso, Ford, Taylor Wimpey, etc, etc.
Their wages are your profit.
As an industrialist, low wages are the road to ruin. You're cutting the throats of your own customers.
Its a prisoners dilemma. You want to pay your workers as little as possible while at the same time, you want every other company to pay their workers as much as possible so that they can afford your products.
How do we cut this knot?
Government.
Government needs to institute a minimum wage people can live on & have discretionary spend left over.
This has long been known. Which is why I stand 100% behind this statement by FDR.
Jacob
What goes around comes around.
Agree 100%. More than, that a universal basic income, whether working or not. Society doesn't need poverty and it would be cheaper to deal with at the root.
RogerS
Established Member
Oh how childish but typical. Carry on wearing those blinkers, mate.
RogerS
Established Member
Don't worry, son. After you have worked out Janet and John Book 1, you might start to understand it. I know it's hard but, please, persevere.
RogerS
Established Member
Jacob's spongers charter. If you follow this line of 'reasoning' then why would anyone go to work ? Just crazy, sunshine.
sploo
Somewhat extinguished member
Because many people would want more than a basic living income, but it would also ensure no one exists below the poverty line.
Now whether the maths actually works out is another matter.
Terry - Somerset
Established Member
The economy is NOT a closed system.
MV = PQ
Money x Number of transactions = Price x Production
The fallacy you re-iterated depends on Q being fixed. Which it clearly is not.
Have you heard of the Witcher Conjecture?
I have not heard of the Witcher conjecture - nor it seems has Google in an economic sense - can you enlighten me.
The proposition that production is not fixed is absolutely correct - in the longer term technological change, education and training has (and probably will) continue.
However the current problem besetting the UK is that productivity is relatively low compared to other developed economies, and growing very slowly (if at all).
Increasing money supply - whether printed by the BoE or by transfer from the mega wealthy - will only increase the volume of goods available if imported. Even wholly automated production requires scarce resources - labour (install, maintain, run machines), energy, packaging, transport etc.
I subscribe to the very simplistic view that national finances are not dissimilar to the personal - albeit with more zeros, different timescales and terminology. Spend more than you earn/produce requires borrowing on which interest is payable and ultimately needs to be repaid.
Do this for too long and (a) the interest rates charged by lenders will increase, (b) lenders become increasingly nervous - credit rating suffers, (c) finally when the house is mortgaged to the hilt, credit cards maxed out etc you go bankrupt.
MV = PQ
Money x Number of transactions = Price x Production
The fallacy you re-iterated depends on Q being fixed. Which it clearly is not.
Have you heard of the Witcher Conjecture?
I have not heard of the Witcher conjecture - nor it seems has Google in an economic sense - can you enlighten me.
The proposition that production is not fixed is absolutely correct - in the longer term technological change, education and training has (and probably will) continue.
However the current problem besetting the UK is that productivity is relatively low compared to other developed economies, and growing very slowly (if at all).
Increasing money supply - whether printed by the BoE or by transfer from the mega wealthy - will only increase the volume of goods available if imported. Even wholly automated production requires scarce resources - labour (install, maintain, run machines), energy, packaging, transport etc.
I subscribe to the very simplistic view that national finances are not dissimilar to the personal - albeit with more zeros, different timescales and terminology. Spend more than you earn/produce requires borrowing on which interest is payable and ultimately needs to be repaid.
Do this for too long and (a) the interest rates charged by lenders will increase, (b) lenders become increasingly nervous - credit rating suffers, (c) finally when the house is mortgaged to the hilt, credit cards maxed out etc you go bankrupt.
No need for personal insults roger, please rein it in.
Besides, other than being critical of others, you've yet to actually propose anything yourself. Or have I missed that ?
Sam Kilby
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I quite like the sound of donut economics myself. Basically suggesting that there is actually no need for “growth” (in a financial sense) and that it doesn’t serve us as humans.
The problem with any of these wealth caps or anything that limits the income of the big companies is that if the financial climate becomes unpleasant to them, they will very quickly choose to not play on it. They are smart and resourceful, and will either find a way to make things abroad and sell them here, keeping their accounting centre away, or if a really unappealing climate they will refuse to trade here. Why would they bother ?
Which of course as a matter of course must lead to job losses, less free spenders etc.
The problem with any of these wealth caps or anything that limits the income of the big companies is that if the financial climate becomes unpleasant to them, they will very quickly choose to not play on it. They are smart and resourceful, and will either find a way to make things abroad and sell them here, keeping their accounting centre away, or if a really unappealing climate they will refuse to trade here. Why would they bother ?
Which of course as a matter of course must lead to job losses, less free spenders etc.
RogerS
Established Member
Group hug ?
sploo
Somewhat extinguished member
Roger, you did fire off three consecutive posts with nothing but jibes directed at Jacob. Didn't really see the need for it. Even if Jacob can be a stuck record at times.Group hug ?
sploo
Somewhat extinguished member
That is ultimately the problem; unless legislation is fair worldwide, the greedy will indeed always be able to send their money somewhere nice and warm (Cayman Islands etc).
The only way around that could maybe be local legislation that makes it mandatory that income from sales in thar jurisdiction must result in payment of appropriate taxes (so the greedy are barred from operating in a country unless they pay their fair share). I've no doubt that would be an absolute nightmare of tax law to produce though.
Jacob
What goes around comes around.
I think it's an imaginary problem.
There are always changes and manoeuvres to meet any economic and fiscal changes, c'est la vie, money and businesses are already shifted abroad but it doesn't suit everybody, least of all those wanting to do businesses in the UK itself and especially those having property here .
I think there is psychology at work here - people are reluctant to accept the need for radical change and react by looking for spurious "rational" reasons for ignoring it.
This is normal and historical - lots of good reasons were proposed for not abolishing slavery for instance.
The word is "reactionary".
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Keith Cocker
Established Member
This sort of comment is what causes interesting threads to be shut down. Not helpful.
Phil Pascoe
Established Member
Yes. You cannot blame large companies for making the most of tax law as it stands, many of the people quick to condemn them do exactly the same with their personal finances.
This of course might have something to do with it - UK tax law is 21,000 pages (over eleven times the length of the entire works of Shakespeare). Hong Kong tax law (deemed to be the world's most efficient) is 276 pages. The more money you have behind you the greater the likelihood of a method of perfectly legal tax avoidance being found.
Surely the real problem lies not with the problem itself nor indeed any of the proposed solutions which different contributors have offered up through this thread.
The real problem is the inability of the people to effect change until some sort of societal fulcrum point is reached.
What is offered to quell our unease is a constrained and manicured choice of 1 or 2 political parties with a smattering of hopeful others offered up not just for ridicule but to catch a few stray thinkers. like an alternating current sine wave this choice floats neatly between two supposedly opposite, yet strangely similar political objectives.
Sadly as I get older I have realised that despite all the encouragement from parents and career advisors along the way, one cannot "make a difference" on one's own.
Difference cannot be achieved without a mass movement of minds and willing. Brexit was rightly or wrongly a case in point, but was quickly stifled by the collective establishment as they panicked like rabbits in the headlights.
My school boy understanding was that the House of Commons was made up of Common people, normal everyday representatives of their respective communities overseen and gently steered by the independent, respected wise and lofty who sat in the house of Lords, a group who had earned respect and nomination by showing their trustworthiness and willing to put the others first.
What we actually have is a house full of multi millionaire career politicians most of whom have not a single sense or understanding of real life. They lie and cheat to further their own personal fortunes, pushing their co conspirators into the 'upper house' to ensure continued access to the trough.
I'm not sure we are pitchfork stage but at some point a mass of minds and willing is in my humble opinion surely needed.
The real problem is the inability of the people to effect change until some sort of societal fulcrum point is reached.
What is offered to quell our unease is a constrained and manicured choice of 1 or 2 political parties with a smattering of hopeful others offered up not just for ridicule but to catch a few stray thinkers. like an alternating current sine wave this choice floats neatly between two supposedly opposite, yet strangely similar political objectives.
Sadly as I get older I have realised that despite all the encouragement from parents and career advisors along the way, one cannot "make a difference" on one's own.
Difference cannot be achieved without a mass movement of minds and willing. Brexit was rightly or wrongly a case in point, but was quickly stifled by the collective establishment as they panicked like rabbits in the headlights.
My school boy understanding was that the House of Commons was made up of Common people, normal everyday representatives of their respective communities overseen and gently steered by the independent, respected wise and lofty who sat in the house of Lords, a group who had earned respect and nomination by showing their trustworthiness and willing to put the others first.
What we actually have is a house full of multi millionaire career politicians most of whom have not a single sense or understanding of real life. They lie and cheat to further their own personal fortunes, pushing their co conspirators into the 'upper house' to ensure continued access to the trough.
I'm not sure we are pitchfork stage but at some point a mass of minds and willing is in my humble opinion surely needed.
sploo
Somewhat extinguished member
If the law had a loophole that allowed you to occasionally steal from children, would you do it? I suspect the answer from most people would be no; because they would consider it to be immoral (per their personal definition of what's acceptable).
Certainly the tax laws are a problem; but they're partly a deliberate problem (the same tax accountants responsible for advising on some of said laws have then touted themselves to organisations to educate them on how to avoid tax). But, I still maintain that it's immoral for a company to make a profit by benefiting from the services provided by the state, then abuse the available tax laws in order to not contribute to the very state that allows them to function.
Jacob
What goes around comes around.
Nobody is blaming anybody for legal tax "avoidance", though there is a huge disputable middle ground.
I doubt many people move to Hong Kong to avail themselves of a simpler tax regime. Or are you thinking of this yourself? If not why not?
What we need is massive change to tax law overall.
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