Outrage of Nobel Proportions

If you can believe the Bloomberg Headline

Taxing the Rich to Fund Welfare 

Is the Nobel Winner’s Growth Mantra

You will be enraged by the paradigm of keeping poor people shackled to poverty by keeping poor people shackled to poverty programmes as a pathway to closing the gap.

And I haven't any Nobel Aspirations.  My outrage is a moral one, not a personal one.

And I don't know which is more repugnant.

The economic legerdemain or the linguistic legerdemain.

As the article reads I must focus on two points

1.  Giving tax cuts to the rich to create jobs is a fantasy because the rich have massive funds available and they will only invest the money to make more money.

2.  I never said anything about giving tax cuts to the rich to create jobs.

Years ago I emphasised this.

"Mr. Widget will not hire one additional widget maker until he has an order for one widget more than he can produce when operating at maximum capacity and optimal efficiency."

The Quotations of Slim Fairview © 2019

One of the few things Robert Reich ever said on the topic of economics that I believe makes any sense:

If you want to close the gap, you give tax cuts to the people who spend money.

This was adequately demonstrated by Henry Ford who doubled his employee's wages from $2.50 a day to $5.00 

a day.  And cut the work week to 40 hours.

In so doing, Henry Ford made it possible for his employees:

To buy a Ford

To buy a washing machine

To buy an ice box

To buy a radio

To buy a Sears Roebuck house. Some assembly required.

He, in effect, launched the middle class.

Needless to say, the African American community was left out.  Racism, segregation, and discrimination were operating in full vigor.  And still are.

Robert Reich is also the fellow who extolled the virtues of the 93% tax rate.  He told of how well the country was doing. Peace, employment, factories humming away....

What Reich did not say about the 93% tax rate is another example of economic smoke and mirrors.

When the tax rate was 93%

A Black man earned half of a White man's wage.

Women were kept barefoot and pregnant.

Mexicans and Filipinos were picking lettuce and grape for pennies a day.

There was no EPA and those factories were polluting the environment.

We were rebuilding Europe after WWII.

The 93% tax rate is a celebration of 

Racism

Sexism

Xenophobia

Pollution

Imperialism

Throughout the Obama administration, we heard about creative, innovative, high-tech entrepreneurs.

Richard Nixon had a plan for promoting entrepreneurship within the African American community.  Congress would not fund it.

Not too long ago, a Black civil rights leader said, "When White people die, they leave their homes to their children. This keeps the wealth in the family."

So, too, "When White people retire, they leave their businesses to their children. This keeps the wealth in the family."

A solution to closing the wealth gap is to close the income gap. Help the disenfranchised start their own businesses. Make profits. Grow their businesses, Buy their own homes, and, ultimately, keep the wealth in the family.

You can't leave Public Housing to your children.

Let's now focus on Slim's Paradigm:

Capital Investment + Economic Stimulus =

Economic Development + Growth

When people who spend money buy things

People who make things must make more things.

To make more things, they must hire more people.

They make more money.

At this juncture they can afford to pay hire wages. That or end up subject to competition, regulation, institutional investors dumping their stocks.

This is the paradigm established by Henry Ford.

When China elevated 700 million people from poverty to the middle class, China 

Created a consumer class.

Created an investor class.

Gave the Chinese people a buy-in.  A vested interest in the success of the Chinese Economy.

The alternative would be for big business to continue as it has with stagnant wages and ultimately triggering a backlash. Routinely at the polls. 

However, before you worry, there is little evidence that Congress ever raised taxes on the rich. Or that they will.

The ruling party notwithstanding.  

Conventional Wisdom: The Democrats don't want to tax the rich. They just want to blame it on the Republicans.

~ Slim Fairview

Well, how do we move from here?

If you want to close the gap you redistribute the money.

Henry Ford did not redistribute his wealth.  He redistributed the money.

Wealth is what you have.

Money is what you make.

One idea, which needs some economic modelling, runs like this.

A corporation gives its employees an immediate $5. an hour raise.  In exchange, the corporation takes a $10. write-down for labor costs.

The benefit to this is the multiplier effect.  

The multiplier effect is NOT trickle down economics.

In the illustration on PowerPoint on SlideShare, I created such an illustration.  Caveat: This has nothing to do with an $800. coat.  The $800. coat represents all the small purchases of the middle class, the working class, the working poor, in a one month period to coincide with that $5. an hour raise. 

(40 hours a week x $5. an hour = $200. x 4 weeks = $800.)

The Multiplier Effect -- Illustrated

There are several other articles on the matter.

If you really want to close the Gap

Powell's Testimony to the House Financial Services

Tax Policy to Increase Wages $5. an Hour. Now!

Africa: 100 years after Versailles

African Economic Union

Sincerest regards,

Slim

If you find anything here to be helpful, please don't hesitate to send me a really tricked out Mac Laptop and, in lieu of a Nobel Prize, tuck a few dollars as a gift into the envelope along with the thank you note.  Slim

Bob Asken 

Box 33 

Pen Argyl, PA 18072

Copyright © 2019 Robert Asken

All rights reserved.

Knowledge V. Understanding

What is knowledge without understanding?  It is like having the pieces to the puzzle in the box.  You can rattle the box and make a lot of noise, but to no avail.

It is only when you fit the pieces of the puzzle together do you see the complete picture and understand.

This takes time.  And this takes patience.

About 50 years ago, my Dad told me a fable.  I have yet to locate the source.  I believe it originated in Turkey because it contains wisdom and a rope woven from sand.

For want of a title I call it

The Business of Wisdom in Global Affairs.


How do you solve problems?



You Can't Fool the Lion

Let's say you tell everyone you're a lion tamer.

Everyone believes you.  They have no reason to doubt you.

Anyone with questions about lion taming comes to you.  You answer their questions with confidence and authority.

Then, one day, a lion walks into the room.

Everyone panics.

They run to you to save them.

And you panic.

Why?

Because you can't fool the lion.


Other insights:

The Bug and the Bird

Five Apples

Mr. When's Chicken

How Mr. Yakamoto Saved Face


Regards,

Slim.

Bob Asken
Box 33
Pen Argyl, PA 18072

Copyright  ©  2019  Robert Asken
All rights reserved.

Powell Testimony House Financial Services

Wow!  What a day.

Powell did a good job of answering questions, unlike those who do a lot of talking to run down the clock.

Okay, The Phillips Curve doesn't mean what it did 50 years ago.  Back then, however, labor had more clout.

The one thing Robert Reich said that was halfway sensible was "If you want to stimulate the economy, give tax cuts to people who spend money."

That causes a problem with revenue.

The next solution is the old canard, the 93% tax rate that Reich propounded.  However, as his article extolled the virtues with full employment, factories humming, and everybody was happy, he omitted that when the tax rate was 93%

A Black man earned half of a White man's wage.

Women were kept "barefoot and pregnant."

Mexicans & Filipinos picked lettuce & grapes for pennies a day.

There was no EPA

We were rebuilding Europe after WWII.

This is a celebration of Racism, Sexism, Xenophobia, Pollution, and Imperialism.

Need I tell you where those revenues were spent? 

Now, this is no longer the age of JFK.  And I will address the remarks by President Kennedy to the New York Economics Club.

"In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now."

Again, this is not 1962.

However, as the Republicans and the Democrats have opposite views on solving economic problems, I am compelled to say that "because this is Congress, it is not ironic that they are both wrong."

You can neither cut your way nor tax your way to prosperity.

Slim's Paradigm.

Capital Investment + Economic Stimulus = 
Economic Development + Growth.

Merkelism and the Economic Crisis of Europe proves spending cuts don't work.

President Kennedy, quoting Nikita Khrushchev on Russia surpassing the US in production proves that tax hikes don't work.

President Obama touted 
Creative, Innovative, High-Tech Entrepreneurs.

Entrepreneurship means capital investment and Economic Stimulus. Two factors absent among the poor.

I wrote the article

Tax Policy to Increase Wages $5 an Hour. Now!

To demonstrate how the important factor is to put money into the hands of people who work for a living.  However, this burdens business as the tax write-down does not prove to be a sufficient incentive.

The American Widget Company will not hire one single additional widget maker, until it has an order for one widget more that it can produce when operating at maximum capacity and optimal efficiency.

The explanation on how to make it work

The Multiplier Effect (Don't dare call it trickle down economics)

Increased government revenues (properly) are all included in the article.

There are three ways for the Government to raise revenue.

1.  Increase taxes
2.  Increase the number of tax payers
3.  Increase the wages of the tax payers.

Number three is best.

An illustration of The Multiplier Effect

There are other factors to consider that were raised at the hearing.

Michigan.

I think of Detroit and Battle Creek.

If Americans choose to buy foreign cars and stop eating cereal, Michigan is in trouble.  This is something the Fed cannot fix.

If Americans choose to move to the coast for the surf and the sand, and leave Iowa, this is something the Fed cannot fix.  Other efforts are necessary.

Closing the Gap


Remember, "Grow the Pie" is only a slogan. And a bad one.

If Archie Bunkers gets a promotion and a raise to a management job, he gets a bigger paycheck.  A bigger piece of the pie.  But he must take his suit to George Jefferson's Dry Cleaners.  George Jefferson also gets a paycheck.  However, he also makes a profit.  Why? Because he owns a piece of the bakery that bakes the pies.  Entrepreneur.  And he creates jobs.


Warmest regards,

Slim.

If you find anything here to be helpful, please don't hesitate to send me a really tricked out Mac Book and to tuck a few dollars into the envelope along with the thank you note. Slim.

Bob Asken
Box 33
Pen Argyl, PA 18072

Copyright  ©  2019  Robert Asken
All rights reserved.

If You Really Want to Close the Gap...

If you want to close the gap, you redistribute the money.

When Henry Ford doubled the wages of his workers, he did not redistribute his wealth. He redistributed the money.

"Wealth is what you have. Money is what you make."
Slim Fairview

What Henry Ford did was to launch the creation of the Middle Class.


What Really Created the Gap?

Some of the contributing factors to the wealth gap have taken place over the course of decades.

1.  Planned Obsolescence:  Forcing consumers to buy shoddy products to replace the shoddy products they bought the first time.

2.  Sending Jobs Overseas: Any one, two, or ten companies can outsource to cut costs to increase the bottom line.  However, as a national policy, this is bad.

No matter how much you cut costs, you won't sell a lot of Oldsmobiles in a country where people make $5, a day.

Witness Japan:  Japan sent jobs overseas.  The Japanese auto companies built Japanese cars in America.  They labeled the cars "Made in America". They sold Japanese cars to American consumers. (To American auto workers.)  The Japanese paid American workers American wages and still made a profit.  Those profits went to Japan.

"Those who forget history are doomed to repeat it."
Santayana.

"Those who remember history are able to repeat it."
Slim  Fairview.

The Japanese did what Henry Ford did.  Made it possible for American workers to afford to buy Japanese cars.

China also created a consumer class.  
China created an investor class.
China gave 800 million Chinese people a vested interest in the success of the Chinese economy.

3.  NAFTA :
NAFTA was bad for the Economy.
NAFTA cost American jobs.
NAFTA was a disaster.
Nancy Pelosi on 
Reliable Sources on 
CNN before the election.

4.  Conspicuous Consumption and the vulgar displays of wealth as consumers celebrated the lifestyles of the rich and famous.  (And embraces a television show by the name, Lifestyles of the Rich and Famous.)


SOLUTIONS:

Tax cuts for the rich to enable them to invest money doesn't work.  It can't work.

The American Widget Co. will not hire one additional Widget Maker until it has an order for one widget more than it can produce when operating at maximum capacity and optimal efficiency.

"If you grow faster than your market, you tie up capital. If your market grows faster than you do, you lose market share."
The Quotations of Slim Fairview (c).

Tax benefits to companies for increasing wages will do more to close the gap by increasing wages and benefiting the economy. Through increased economic activity business will recoup the outlay.  But there is a twist that will make this work.  That is why I wrote

Tax Policy to Increase Wages $5 an hour. Now!


Invest in people starting their own businesses because small businesses (SMEs) create jobs.

A worker makes a paycheck.
A worker with a raise makes a bigger paycheck.
The owner of a business makes a paycheck and a profit.

Profits grow the business.
The business hires more people.
and so on.

The Multiplier Effect

And this only scratches the surface.  The reality of the economic benefits will illuminate the rest.

Ascribed Value 

Limiting Demand

Another Hidden Inflation



Regards,

Slim


If you find anything here to be helpful, please don't hesitate to send me a really tricked-out Mac Book and to tuck a few dollars into the envelope along with the thank you note.
Slim.

Bob Asken
Box 33
Pen Argyl, PA 18072



Copyright  © 2019
Robert Asken
All rights reserved.

Africa 100 Years After Versailles

One hundred years ago, World Leaders made mistakes at The Conference in Versailles. One hundred years later, Africans are paying the price in blood.  And mistakes are still being made.

Case in Point: 

On Thursday 27 June 2019 the G 20 is meeting in Japan.  Have they invited the leaders of Emerging Nations?  Have they invited the E 20?


Too many people blame the Treaty of Versailles for WW II.
I was among them.  However, thanks to a presentation on the Versailles Conference by France24.com we are reminded that the Stock Market Crash of 1929 and the Great Depression are really responsible for the rise of National Socialism and the outbreak of WW II.  And, as always in tough economic times, the first response is scapegoating.  And I say that for a reason.

At the outbreak of WW II, Germany went through Belgium to get to France.  Today, Merkel is going through Belgium to get to France.  The Prize?  The Control of the European Parliament.

This is the reason I raised the alarm.  To raise awareness.

I've written on previous occasion  "Africa can do business with Europe, but only with great caution.  Include an escape clause.  Why?  Because you don't want Africa feeding Germany. That and that the economic decline under Merkelism triggered scapegoating.  Who were the scapegoats?  The Africans.

Thursday 2 May 2013, I wrote the following in my article Merkel's Big Lies?

Big Lie # 6:  Incite Then Blame the People

Big Lie Number 5 creates large numbers of unemployed enduring increasingly harsh conditions.  The people have no jobs, no money, no food.  They take to the streets to protest.  The protests lead to unrest.  The protests must be quelled by Government use of force: The Police.  The use of force leads to riots.  The riots must be quelled by Troops.

Big Lie # 7.  Blame Other People

The rise of the poor and hungry leads to the rise of the opposition--The Extreme Right.  The Right cannot blame their fellow countrymen, so they blame immigrants and begin fomenting xenophobia. This creates more hostilities, more police, more riots, more troops.

We are witnessing that today, six years after I wrote the article. 

If you remember some of the demands presented at Versailles, you will remember that Ho Chi Minh wanted France out of Vietnam.  That did not happen. Not for many decades.

France and others wanted reparations from Germany.  And the African people wanted to be able to govern their own countries.

Independence:

Mauritania:   28 November 1960

Angola:         11 November 1975

Nigeria:          1 October     1960

Talk about it?  Neville Chamberlain agreed to talk about it.  With predictable results.

Cohesion  

When I wrote about China recently, there was an omission.  And a misstatement. 

David Malpass, head of The World Bank, reported that China elevated 850 Million people from poverty.  Hence, in addition to creating a consumer class and an investor class and giving the Chinese people a vested interest in China's Economic Success, there was another benefit.

What if China had elevated only 150 Million people from poverty?  The result?  700 Million people would resent the success of the 150 Million.

The same situation occurred in the United States.  The economic boom created by Henry Form when he doubled his workers wages and created a middle class, was denied to African Americans and Latinos. Almost 100 years later the effects of racism, discrimination, segregation, and exclusion from the economic boom has devastated their communities.

Richard Nixon attempted to trigger African American entrepreneurship with a programme for Minority Economic Development, but Congress refused to fund it.  And there was no private sector equity.

Soon, the G 20 will meet again.  And again, there will be no 

E 20 inclusion,  However, technology makes it possible for Africans and others in Emerging Economies, to bypass the politics and do business directly with Private Equity.

Personal Initiative

Individual Effort

Self-Determination.

Time Magazine  1 July 2019  had an article by Angelina Jolie. This is crucial reading.  You will see how the focus on humanitarian aid negates capital investment opportunities for people in emerging nations.  This is analogous to how the US Government has kept African Americans shackled to poverty by keeping African Americans shackled to poverty programmes for as long as I've been watching. And that has been 60 years.  But it's been going on for longer than that.

The same economic crisis (and not the Treaty of Versailles) led to World War II, 40 million refugees, and ushered in the occupation of Eastern Europe.

Now, the economic crisis creating refugees and migrants is leading the scapegoating, violence, and political and social turmoil.

This is the opportunity for Emerging Nations for form Economic Unions and a Union of Economic Unions.

Emerging Nation Economic Unions 

Forming an E 20 Group of Nations

Solving the Emerging Economic Crisis

Sincerest regards,

Slim.

Copyright ©  2019  Robert Asken

All rights reserved.

Using Our Strategy Against US

To understand China, we must look back over the learning of almost 60 years.  

This is where it comes from:

When I was barely old enough to see over the kitchen counter, my mother and I were having a discussion.  While I can't recall the discussion, I do recall this: 

"Robert, stop using my words against me."  [It's a gift.]

No more than a scant few years later, my Dad was chiding me for some minor infraction.  I offered my defense.  The conversation went like this:




To understand China, we must look back over the learning of almost 60 years.  

This is where it comes from:

When I was barely old enough to see over the kitchen counter, my mother and I were having a discussion.  While I can't recall the discussion, I do recall this: 

"Robert, stop using my words against me."  [It's a gift.]


No more than a scant few years later, my Dad was chiding me for some minor infraction.  I offered my defense.  The conversation went like this:

"Robert, do you know what you are?"

"No."

"Did you ever hear the expression, A Philadelphia Lawyer?"

"No."

"Well, that's what you are. You're a Philadelphia Lawyer."  
[I was so proud.]


This brings us to China:

It is not unpatriotic to say, 

"China will succeed because China will do as we did, not as we say."  ~ Slim Fairview.

The Quotations of Slim Fairview. Copyright © 2019.


Then and Now.

Then
**********************
Santayana said, 
"Those who forget history are doomed to repeat it."

Slim said, 
"Those who never learned history are doomed--Period!

Now
**********************
Santayana said,
"Those who forget history are doomed to repeat it."

Slim says,
"Those who remember history are able to repeat it.

**********************

China saw:  The Transcontinental Railroad
China said,  Belt and Road

China saw:  Manifest Destiny
China said,  South China Sea

China saw:  The Hoover Dam
China said,  Three Gorges Dam Project

China saw:  The Monroe Doctrine
China said,  TPP


"If you want to know where China is going, look at where America has been."  Slim Fairview
The Quotations of Slim Fairview Copyright © 2019.


Years before I heard the Chinese saying, 

"Face is more important than life."

My Mother taught me,  "Always give someone an out."

My Dad taught me, "No one agrees with someone else's opinion. Only his own opinion expressed by somebody else."


My Mom had a saying:  "I say yeah, but....."

Since then I've heard experts say that the Chinese are too polite to say no.  They simply smile and nod and when the deal does not go through, we don't know why.

They smile and nod, but....

I've already written  "The Media Doesn't Understand China"  

We see things through Western Eyes.

Here are some examples of how the Chinese see things.

The Chinese say,

"In the West, when you want privacy, you go into a locked room.  In China, when we want privacy, we go into an open field."

"A white horse is not a horse."

"Never underestimate the power of a symbolic gesture."

(Slim says, "Never forget, the power of a symbolic gesture resides with the person making the gesture." Slim Fairview.
The Quotations of Slim Fairview. Copyright © 2019.

Confucius said, "Life is simple. We make it hard."
Slim says, "Management is simple. We make it hard."

China is using our own strategy against us.

Henry Ford doubled his employees salaries from $2.50 a day to $5.00 a day.  He made it possible for his workers to buy Fords.  And after they bought a Ford, they could buy a washing machine, an ice-box, a radio, or save up for one of those Sears Roebuck houses. 


"The Middle Class took off 100 Years Ago--
Thanks to Henry Ford?" 
27 January 2014  NPR  All Things Considered.


When China elevated 500 Million people from Poverty to the Middle Class, China:

Created a consumer class
Created an investor class.
Gave the Chinese people a vested interest in the success of China's economy.

Today, in the US, we outsource to cut costs.

In plain English, you aren't going to sell a lot of Oldsmobiles in a country where people make $5.00 a day.

By outsourcing, we've destroyed 
The Consumer Class
The Investor Class
&
The Working Class is now the notoriously underpaid 
"Service Sector Class"

One reason we have less and less manufacturing, is because those working in the manufacturing industry can no longer afford to buy what they make so we make what they can afford to buy overseas.

Tax Policy to Increase Wages $5.00 an Hour. Now!


And there are more economic travails approaching.

Soon the G 20 will meet.  But that meeting is analogous to putting tires only on the front wheels of your car. Yes, they will drag your car down the road.  But your car will more faster and more efficiently if you have tires on all four wheels.  What does that mean?  You must invite the E 20 to the meeting.

Forming an E 20 Group of Nations

Solving the Emerging Nation Economic Crisis

The Future of the G 20 in Good Times & Bad

And for those looking to do business globally

Global Management: A shift in the paradigm of corporate America

Best of luck.

Sincerest regards,

Slim.

If you find anything here to be helpful, please don't hesitate to send me a really tricked out Mac Book and to tuck a few dollars into the envelope along with the thank you note.
Slim.

Bob Asken
Box 33
Pen Argyl, PA 18072

Copyright © 2019.  Robert Asken
All rights reserved.