Consider the situation. With consumers broke, a spiraling deflation has taken hold. What is worse, deflation is a positive feedback effect, meaning that it feeds on itself - deflation begets more deflation. As prices decline, corporations go out of business, unemployment goes up, and people have less money to spend, feeding the endless loop. As life becomes offers more choices, people desire these choices, and this in turn creates jobs. Think about the number of jobs that an iPod alone creates around the world. Why then, don't we pretend to want things, even stupid things, and simply take a portion out of every check and spend it to create jobs? In addition, we should spend in accord with our wealth making power. So Bill Gates should spend more than me. Why does the demand have to be honest? In other words, does the demand need to know it is on an errand of mercy? It is well known that most wealthy people are very good at saving and investing, but most of them are misers. Then, is not the middle class the real driver of jobs in the world?
Either, we evolve to want nothing and we all share, or we must spend with a conscience not to acquire anything, but to help provide jobs. There is no middle ground. The whole thing seems so artificial to me. So, as long as someone is working, our spending isn't welfare, even though we may not want what is created. So, as long as our choice is left free, it is not welfare. I guess one is sustainable and the other way is not.
It's those phuckers in Africa, they're not doing their part. If they would stop fighting over food and buy some ipods, this depression would be over in no time. Instead of sending food to Zimbawae, the relief agencies should send shipments of ipods.
The working have to spend more in this case. That is why corporations should give a raise to their employees during hardships. It even makes sense, they are working them harder and getting more productivity out of the same worker. It is then the workers "duty" to spend more to create new jobs. This eventually feeds on itself. It is a form of welfare, but you know what, I am beginning to believe the whole thing is smoke and mirrors anyway.
Consider today. The futures markets are open, but the stock markets aren't. So nobody knows what the fuck anything is really worth. If everybody lazing around today dove in and traded, we could rustle up some wealth out of thin air! Couple of hundred of us sell a contract each, woo ha!
Yes, the corporations should bankrupt themselves. It's sort of like destroying the village in order to save it. So what if the workers will be out of job shortly after they get their raises and the company goes tits up.
But, wealth is created out of thin air? What is a pound of gold worth today? A can of tuna? What is a pound of gold worth in a nuclear holocaust? A can of tuna?
Corporations have more cash on hand then they ever have in a long time, perhaps in history. They have several choices, not all of them mutually exclusive. Here are some obvious choices: a) Raise dividend b) Buy company c) Give raises It is probably arguable that one of those choices is more likely to create jobs then the other. For example, most people simply reinvest dividends. Buying a company probably loses net jobs. Only a raise may be spent.
All good points. I am a gold bug, so I admire the late Roy Jastram's "The Golden Constant", showing what a loaf of bread has cost in gold over the centuries. But let's get more basic. You brought up disaster. Fundmental need: pussy. Fundamental unit of luxury trade in a disaster: a Hershey bar. THAT's economics! And thin air? The ultimate thin air creation is one contract of a stock index future. Poof! I'm short. You're long. I didn't have it to sell. You don't really want to own it. Poof! Back to thin air again s if neither ever existed.