Dear Friends,
It seems to me, the modern economic paradigm, where we have producer nations and consumer nations, is unsustainable. This system sets up so many pernicious incentives they are almost too many to count. Every nation vies to become a producer nation, by devaluing it’s currency, government justifies raising taxes to “reinvest” in state backed firms like Solyndra, etc… The system as it stands creates situations where young people in one nation cannot get jobs and live from the dole, and in other countries, very old people still have to work, drives consumer nations into ever more unsustainable debt, and puts producer countries in the position of having money owed them, not paid back. A better solution would be total free trade coupled with a global logistics system.
There are several reasons one nation becomes a producer nation and another becomes a consumer nation. If we examine them, we find the producer nations have, in general, lower taxes, lower regulations, a strong work ethic among the people and liberty of the masses. Obviously, China is an example where they have three of the four, (lacking freedom). Germany which had three, (being high taxed), but is rapidly losing freedom of the people as well, and so might be in peril of losing it’s producer status altogether. Singapore is an example of a microscopic speck with one of the most vibrant economies in the world, because they embrace all four, liberty, low taxes, low regulations and have instilled a strong work ethic in their people.
It is clear, if a nation wants to become a consumer nation, all it need do is have high taxes, regulate every activity to a stop, oppress their people and inculcate laziness to the youth as a virtue. You know… like Britain, France, Italy, Greece, and many others do. The elite in the US are intent on taking us down that path as well, with common core the next step in teaching our youth to be angry, revolutionary, unemployable ignoramuses, unable to think, work diligently, write effectively or read with good comprehension. Instead, in twelve years of schooling they learn, how much better transsexualism is than normal human sexuality, why socialism is the better economic system, and that facts are sexist, homophobic, racist and bigoted, because one person’s fact are another person’s oppression.
The leeches that run nations however, are loath to cut taxes since taxes are their subsistence. Cutting regulations is impossible, and why should they, since the elite consider the common run of man to be their inferiors, in education, intellect and wisdom. The problem with active people, is that they are well… active. They are the ones who complain, vote with their minds rather than their hearts, are not easily led astray since they have been trained to be aware by labor, and have the energy to make changes. The definition of a threat to the powerful. So it is much safer to usurp the education system and bend it to create compliant, weak minded, lazy people who will just go along, no matter what absurdity you tell them.
So consumer nations, to get some share of the producer pie, or keep the gravy train rolling, will have to resort to state holding interest rates artificially low, to subsidize consumption, devalue their currency to make their noncompetitive economies more competitive due to the exchange rate, seize ever more private property to fund the party until there is none left, then print so much money the debt just floats away… as does the standard of living. A better way would be to create incentives for all nations to lower taxes, cut regulations, restore the people’s liberty and stop undermining the work ethic of the masses. This could be accomplished by free trade and a global logistics system to move commerce between even remote places to the most urban.
Today, people living in remote places have limited access to the means to ship their goods to other places. Nevertheless, they have much to offer. Someone living on pennies a day in subsaharan Africa, might have the ability to carve beautiful figures, but without access to markets that skill is of no value. Give that man or woman access to the global market, and instead of having to subsist on pennies a day, they could live a middle class life. Which would translate a measure of prosperity to their neighbors as well. Because if someone is making great money carving, why should they mow their own lawn, when they can pay someone a fraction of what they make in that time carving? Nations would all become producing as well as consuming nations. The lot of mankind will have been improved.
Sincerely,
John Pepin
