How Globalization affects Countries and Markets

March 28, 2010 353 Comments

Markets, Inflation, Economics

by Joshua Ioji Konov 2016

Marketism i.e. Market Economics

Market,s i.e. individual countries’ economies

Market Development i.e. Economic Growth

The exogenous forces aggregated by the ongoing globalization and rising productivity, well supported by the ongoing technological improvement, the Chinese Industrialization, and the Internet, affect individual markets – developed and developing alike. The shrinking employment needed for manufacturing, farming, and services have brought rising first, inequality; and second, debt – national and individual. The big transnational corporations’ open markets and large pool public capital access by using best technologies and structural organization have expanded in size: in manufacturing, finance, farming, wholesale, high-technologies, or services they (the transnational corporations) have been growing disproportionately to the markets even though on paper they belonged to the US, China, Germany, UK, and a few others, in reality they have their own independent management being able to avoid taxation and control by moving facilities, offices, even headquarters; using the offshore zones, countries like Ireland, Luxembourg, etc for the purpose of not paying taxes. Not the least they also moved production to Mexico, China, Vietnam, etc to reduce cost, access developing markets, position strategically for future gains. For the last 20 years, the rising inequality has been a natural for the markets consequence of the Transnationals shareholding and control; whereas, the booming debt of the tax avoidance while technologies and good organization have reduced employment to a minimum. Globally the lack of adequate jobs have brought misery to the established middle class making it quickly deteriorate adding to the underclass poor, while the poor have gone further into poverty; poor markets could not rely on some industrialization of the past even adopting the requested by the International Finance Institutions, European Union, developed countries. The ruling trickle-down philosophy in the economics of the European Commission pushed on developing markets imposing austerity, high Value Added Tax, reducing labor protection regulation, a penny on the dollar privatization. The 2007-9 Great Recession was causal of these new developments in the US and around the globe: the difference in real estate prices to the inadequate income and business opportunities concentrated immense capital into the very few related sectors of the US economy that burst under their own pressures, spreading out to the rest of the world suffering similar illnesses. What started from the US wasn’t an isolated development but consequential to imbalanced markets equilibriums: a market development must retain balance to avoid violent outbursts.

A Market Development can be relatively fluent if self-adjusting market forces are allowed on a Micro-level while these are supported by artificial market adjustments on a Macro-level. Market Economics projects using Market Tools as parameters on macro-level to either accelerate or slow-down Market Development: action adjusted to Inflation/Deflation on an ‘as it comes; as it goes’ depoliticized approach.

Saving Earth by aggressively reducing pollution is fundamental issue achievable by employing environmentally friendly market tools to alleviating poverty and maintain adequate (full) employment: it is more like the ongoing change from manufacturing to services but by targeted Market Leaps using these environmentally friendly tools. Free micro-level market competition of demand-to-supply balancing which approach has been used on all around macro-level. The General Equilibrium used by Central Banks through Monetary and Fiscal Policies evolve into partitioned market on sectors that on micro-level are let to compete freely whereas on macro-level are directed into in case environmentally friendly technologies, farming, tourism, etc by Stimulus Packages, Social, Educational, Infrastructural, FDI, Fiscal Policies, and etc to boost or slow-down in case of overheating. Actually, the 2007-9 recession has pushed the developed countries’ governments to interfere and intervene in the real economy to save these from total destruction. What was done through Quantitative Easing, Stimulus Packages and by bailing Banks and Corporations has been a bleak copy of a market-related approach product of chaotic actions, in many cases not theorized by economists. What Marketism does is apprehending the newly developed market conditions into a theory to use these forces into productive ways.

The entire system of Marketism is about boosting free entrepreneurship, building equity: infrastructure, education, the overall standard of leaving, full employment while keeping low Inflation/Deflation by using Environmentally Friendly approaches: it is neither based on the Industrialization as Capitalism is, nor budgetary economics as it has been always practiced. Thus the change could be achieved because of the growing powers of exogenous forces of the globalization and rising productivity: never in History, such forces had been available but for the last 20-30 years, and therefore such new approach could had been considered utopian ever before. The individual market sectors of a market: developed or developing alike must be dealt with by the Central Banks on individual bases: let say hypothetically that the Real Estate sector and Construction was overheating whereas the Manufacturing is slowing down; if a Prime Rate is rased such would affect all sectors including Manufacturing, so targeted market tools such as lending on real estate rates, LTV and requirements may be adjusted to slow down speculation in the sector but not affecting straightforward Manufacturing. Such an approach was successfully used by China in post-recession time. The Market Tools if used as Parameters in comparison to Quantum Mechanics are similar as far the Uncertainty Principle applies to both, the complexity does not allow exact ‘weighing’ or ‘measuring’ of at a momentum situation. The simulations of currently used game theories simplify complexity by using limited information. The motion forces in real markets are endogenous and exogenous changing by objective and subjective factors and pressures: the globalized marketplace, emerging technologies, force of nature, wars etc make detailed market evaluation impossible; however, by using probabilities some at the moment picture could be put together that shows by relativity the direction a market or group of markets are following. The inflation/Deflation variances realistically give the momentum of a market direction. Until now Deflation has been considered anti-growth as the falling prices take down business, fiscal reserves, economies – however, Deflation is a self-adjusting tool that in limited variance may be used as a macro-level tool for conversion of some market exaggerations and cutting down dead threes of some overheating sectors. Same comes with a limited Inflation. Currently, economists fight market developments by trusting theories whereas Marketism lets the Micro-level market roars while using Market Tools on Macro-level to prevent excesses. The orthodox economics takes debt as the main tool for measuring an economy direction therefor productivity must be prompted to eventually make economic and officials structures sufficient enough to reduce deficit/debt becoming competitive. Marketism targets environmental protection and employment beyond debt or debt control over an economy. Boosting free entrepreneurial-ship is not by expanding shady business laws, as have been considered up until now, in the opposite, to marginalize market competition inequality between large Transnational Corporations & Investors and Small to Medium Business & Investors by enhancing the rule of law in business. The idea of ‘easy’ business lowers market security thus prompts high lending rates if any lending is available for most Small to Medium Businesses and Investors;. The idea to boost market equity and SME lend-ability ny using environmentally friendly approaches and alleviation of poverty is fundamental for Marketism.

The globalization and rising productivity are the very new Market Agents that allow plenty of flexibility to succeed adequate market development on a global scale, use environmentally friendly technologies, reduce pollution, alleviate pollution, create and manage full employment, minimizes the re-surging radicalization, nationalism, xenophobia, etc

Employment, Capitalism, Environment, and Resources by Joshua Konov

Modern day’s economics encounters conflict between market (market synonyms of economic, economy) growth that could boost employment and the environmental regulations, which are obstacles, adding to high taxation and business regulations such conflict could have a serious weakening effect on businesses’ competitive edge. It is so right because, in current relatively low-security markets founded on cyclical runoffs and high lending rates, particularly to small businesses and investors, the business competitiveness is negatively affected, a step farther, by additionally imposed environmental rules and regulations. In addition to, the environmentally friendly products average high production prices and high technological machinery prices that make such production quite expensive, indeed. Only subsidies and tax initiatives could help sustain market competitiveness, however, these subsidies and tax breaks are watered down into unproductive artificial market interference in an insecure market, which instead of enhancing the market competition are pushing it down making it totally dependent on such tax breaks and subsidies for their existence.

The global business conditions of many countries running a high deficit and accumulating national debt establish highly unlikely conditions to meet the demand for environmentally friendly products and alternative energies anytime soon.

Declining Earth resources prompt energy-related inflation, which aggravate the need to maintain consistent economic/market growth in a runoff to survival for developed and developing markets alike. However, the 2007-09 Recession has been followed by anemic rebound of employment and of personal income, contemporaneously causing a market imbalance of demand-to-supply high national indebtedness. Easing Interest Rates, Quantitative Easing and Stimulus Packages have decelerated the processes of declining economic indicators, but could not boost market activities to the needed fundamental turn around. Outsourcing and moving of industrial production prompt high unemployment and marginal personal income growth. The inadequate consumption resulted from the declining industrial employment has long-lasting negative consequences to the market development. The fundamentals of the trickle-down Capitalism lay on relative high lending rates, shady business that benefits large transnational corporations and investors, however, under the newly developing market conditions of globalization and rising productivity, of the Chinas that make outsourcing and moving industrial production targeting reduction of expenses much easier, the trickle-down approach cannot function appropriately.

In this new global market, small to medium businesses and investors play a progressively higher role to create employment, enhance consumption and business activities overall, the current economics empowers large corporations and investors in conflict with what is necessary for market development. The shady business practice and unfair competition might had performed well in a pro supply economies of the past, but cannot ensure needed market development of the presence, and such inadequacy is particularly transparent when it comes to the issues of environment and diminishing Earth resources, which are counterproductive and cannot keep up market balance, therefore fiscal indebtedness is in progression.

The question remains: if the Earth environment is so much affected by pollution and the Earth resources are so quickly declining to require prompt action?

Even some scientists and politicians object global warming and fight restrictions on pollutions, there should be no question that our environment should be saved to the maximum in the future, and very rarely someone would object it. However, the economics of Capitalism is industrially based: in meaning, industrial production is considered the highest contributor to the GDP of any developed economy, therefore in times of slow growth and factors that regulate industrial production, limit it too, and while the competition is Global, coming from places with wider opened doors and more flexible regulations, the competitiveness and success of any economy is directly affected by any regulations the particularly environmental ones. Hence, if Environmental protection, environmentally friendly production, and alternative energies are to be implemented: it could be done only on an equal base globally, or/and if the system of economics is amended to apprehend these new developments. Any other ways, such cause is “cauza perduta”, and especially in the conditions of slow economic growth.

Subsidies and tax breaks could help environmental protection to a certain point, sure, it could be done only nationally for the most developed economies, but even in there counter market measures of such regulations are politically resisted; these are just very difficult to be implemented when working against the markets.

What kind of economics could adopt Environmental protection, environmentally friendly production, and alternative energies into a productive competition?

The Capitalistic economics takes productivity as the main economic tool for growth, thus anything that prompt it is good and anything that slows it is bad for the economy: social, educational and infrastructural expenses are bad, business laws and regulations are bad too, while deregulated and shady business practices, lower taxes for the rich, no social or medical protection and expenses are good.

Well, are all of these the bad, bad or the good, good? – Yes, these are…, but such a statement reflects the reality of the modern days’ Capitalism of industrial production and trickle down capital.

The world history (recent Greece is a perfect example) shows that governments could not manage markets, being inept and inflexible the governments create redundancies and economic upheaval. Only free entrepreneurship and a free market business environment can create market balance, however, the 2007-09 Recession was not created by the government’s spending or redundancies, but it was a product of real estate overcapitalization in an Economy depressed in any other sectors, which was not growing proportionately. I may bravely concur, that if the US economy in 2007 was growing proportionately in other than the real estate overcapitalization the crash effect of the overcapitalization would have been different.

It becomes obvious that the governments running economies/markets or overcapitalization product of deregulated business could bring very similar consequences.

The productivity as the main tool for economic growth runs on a high gear runoff of industrial production, for which, I believe, is insufficient to steer “noise” in the 1=f noise formula, and in the real life for bringing accelerated business activity and prompt market development (development equals growth). The small and medium businesses and investors have become the main economic agents, in times of high technologies; globalization and rising productivity do spear employment and business activity. However, shady business practices, the lack of international intellectual property protection, the overall high-interest rate lending works better for large transnationals and investors, establishing unfair market competition. But, if artificial tools such as tax breaks and subsidies or low-interest rate loans only are used to promote fair market competition, the long term results would not be any positive, therefore, some market related and natural for the markets economic agents should be adapted to do it.

Which are these natural for the markets agents and tools that could marginalize the unfairness in market competition and steer the “noise” as an addition to “productivity” to prompt market development and maintain market fluency, and thus raise the market security that will lower lending interest rate?

To change a limited corporate liability into unlimited
To enforce business contract lows
To enhance project insurance and bonding requirements
To enhance intellectual property protection, globally
To enforce equal business laws, globally

These and some other points, I believe, would raise market security, and thus establish relative fair market competition by lowering lending interest rate and accelerating business activities.

After these points are implemented and only then, the role of social, educational and infrastructural expenses (which are considered as artificial for the market agents) should be better comprehended, as partial equity market agents for balancing market’s demand to supply.

But the natural for the market agents should have paramount standing in prompting and maintaining market growth.

The Environmental protection, environmentally friendly production and alternative energies are to be implemented under these new more secure market condition as a main agent for market development, because in a more diverse business climate of accelerated business activities the small and medium businesses and investors would explore any possibilities for marker exploration; thus, lower taxes and subsidies would have a more vivid effect on the market development, indeed.

Joshua Konov, 2012

More Secure Marketplace requires Enhanced Insurance and Bonding by Joshua Konov

As directed in my other articles, it is paramount to enforce markets/economies’ fairness in competition between Small and Medium Enterprises (SME) from one side and the Trans-National Corporations (TNC’s) from another that would empower the SME expansion on the markets. By business diversification, by piercing the corporate veil for the decision making corporate structures and by overall enhancing the weight of business contracts SME would prompt employment and business activities. However, such rising markets security may not be achieved without the new much forceful and empowered role of the insurance and bonding of these contracts and projects to deleveraging risk to the contracting out and the contracted parties. A relatively secure business contract most definitely enhance the overall market security, and thus reduce lending interest rate and other expenses, including but not limited to end the necessities for consultants expertise in case of preparing paperwork for loans, subsidies and tax breaks, and to minimize attorneys’ fees in cases of contract breaches, and e.g.

Under the environment of unlimited liability for the corporate managing structures, the guarantees for issuing of liability insurance and bonding should become easier for the issuing parties, because of, from one side, contracting party (usually larger corporate entities) liability for the proper execution of the contract on a personal for their managers level, and from another side, the contracted party (usually SME) better security of being paid when the contract is properly executed, but also very much the contracted party’s high liability when the contract is somehow improperly executed. In many cases, the insurance companies will require from both entities financial bonding to ensure needed financial coverage in cases of default. Nevertheless, I believe the liability insurance policies, under these relatively new conditions, would be much more scrutinizing both contract parties to ensure the needed requirements for coverage, and the details of the contract will be underwritten in much more pre-conditional ways of a setup matrix. In a legal perspective, the business contracts when more secure establish the prejudice of easy enforcement and thus minimize time and resources for specifically SME that usually experience financial limitations. However, the abilities of the insurance companies to waive payments and their flexibilities to limit coverage would be greatly undercut too, thus making their policies more fluent to proper coverage.

The insurance and bonding will greatly contribute to enhancing the security of SME under these new market conditions on purely market-related principles (not artificially, indeed), that farther would lower lending interest rates to SME and the overall markets financial interactions. The high-interest rate’s violent fluctuations particularly affecting SME in a current environment of globalization and rising productivity, of moving and outsourcing of industrial production and intense global competition is particularly harmful to the SME, the diminishing employment and lack of opportunity for the middle and lower classes, therefore it is paramount any changes of the economic/market approaches to lower the interest rate for lending to SME, which are the main employer under these new conditions, and by using natural for the markets agent and tools of economics to lower lending interest rates that will prevent from market redundancies and artificial negative for the markets deficiencies.

At the moment, the governments, in particular, the US administration is using mostly artificial to the markets lowering lending interest rate and different program for lending to the SME, by aggregating monetary supply and pouring a large amount of cash into the financial sector, the administration is trickling down capital to the SME, however using these approaches the administration is risking to pool upmarket redundancies and deficiency, because of its artificial for the markets approaches. (it is more like “putting new wine in old wineskins” see related articles of mine). In this paper, the reasons for the 2007-09 recession and some previous recessions are taken in consideration, but instead of a face-lifting approach as used by the administration, micro and macroeconomic changes and enhancements are suggested that are market-related (not artificial, indeed). This research considers natural for the market as the best enhancements that could avoid market redundancies and deficiencies, thus maintaining somehow demand-to-supply market balance.

The insurance and bonding are very much part of these new approaches of micro and macroeconomic changes to lift-up SME competitiveness, and overall establish a relatively “fair” market competition that will allow more of the so much needed employment, and again on some purely market-related principles. SEE Philosophy of Market Economics

Joshua Konov, 2012

Which are the worst current economics’ compatibility points to the present accelerating globalization and rising productivity? By Joshua Konov, 2012

Relying on high productivity as main economic/market agent for growth (1/f noise), whereas, many economic/market agents and tools should be considered “noise” to diversify business activities to maintain economic/market development
Low economic/market security founded on the shady business practices and lack of rule of law that gives a major advantage to the large transnational corporations, and grieving disadvantages to the small and medium businesses
High-interest rates lending to the small and medium businesses and investors that’s is accumulative in short term cyclical adjustments, and dysfunctional in another way
Industrial production as a main and fundamental economic/market agent for fiscal reserves that could have worked-out short term downturns, whereas, well exampled by the last 2007-09 Recession, the downturns are neither short, nor moderate, and could be followed by long rebuilding term
Business cycles as main and fundamental economic/market agent for adjusting economic/market redundancies, whereas the economies/markets fluctuations are less predictable and cycles progressively untraceable, the economic agents and tools should be used much more random “as it comes, as it goes, instead
The trickle-down approach of capital supported by political and fiscal economic/market agents that in the time of China and rising productivities carries on an accelerated wealth concentration into progressively the very few, in large disadvantage to the middle class in a national plan, and less developed economies/markets in global such.
Short term investment and capitalization by business practices prompted by the high-interest rate lending, and the corporate structures business practices of short term profit and distribution
Practiced corporate limited liability laws mainly serving large transnational corporations thus giving to these competitive advantages and lowering market security over all
Hurting the earth environment short term investment and capitalization business practices, by the high interest rate landing, by the shady business, by the lack of liability and accountability transnational corporations, by the deepening devising between poor and rich people and countries, by the imposed by the developed countries and the international organizations: WB, IMF, WTO austerity and restructuring measures on the less developed and developing economies
The governments growing inept involvement in finances and business actually making the gap between rich and poor wider
The bureaucratization of economic/market agents well presented in the European Union VAT and the EU funds for development that prompt corruption, politicization, and injustice
The lack of laws preventing market and commodity exchanges from shady transactions and activities that gives a market advantage to the large investors, and greatly hurts the small and medium investors
Debit/Credit finance accounting, which because of the low economy/market security keeps very tight economic/market development, whereas the transnational corporation are expected to rouse business and raise productivities attracted by lower taxes and unregulated labor marked: the transnationals not only raise money on the public market exchanges but also are credited on very low-interest rate, however under these new conditions transnationals cannot maintain or expand industrial production any closer to the needs of the global markets of employment
The pro-supply priory economics cannot maintain balanced market demand-to-supply under this new emerging markets environment by Joshua Konov, 2012 joshua.konov@gmail.com

SEE http://mpra.ub.uni-muenchen.de/34588/1/MPRA_paper_34588.pdf

2012 Economics “New Wine in Old Wineskins” by Joshua Konov 2012

The ongoing most recent economic success of the US economy/market may well be considered a consequence of breaking all rules suggested by the majority of the modern day Economics e.g.

Counter-austerity measure
Direct governmental intervention in business such as AIG and General Motors
Expanding unemployment benefits
Infrastructural projects expansion
Quantitative easing and money printing
Directly aiding of the middle class by using programs for lowering interest rate in refinancing,

Instead of enforcing heavy austerity measures and easing business environment to prompt productivity and trickle-down business growth, particularly of the Transnationals that historically most benefit from such governmental interference, the administration exceeded the Keynesian economics and went into more like a total governmental economic/market intervention, indeed.

The Obama’s administration has been acting under the pressure of high unemployment and sharp economic decline contemporaneous of the 2007-2009 Recession, which should be considered emergency circumstances with events prompting immediate action ignoring economic theories of the neo-liberal zeal.

The US political structures compare to the fragmental European Union such, have given more power to the administration to explore unorthodox economic approaches, not being subject of the scrutiny invoked by the EU national divisions and multiple interests.

Finally, the results were….. good! E.g. in the last Quarter theUSeconomy grew with an exceeding the expected growth of 2.8%, the unemployment went down to 8.3%, with an overall positive business outlook. Even the declared for destruction US Dollar is coming up, and up, and up?

Simultaneously, the EU’s economic/markets mess is bringing marginal, if any, economic growth, total Fiscal meltdown, while the austerity measures have been methodically enforced, reducing the governmental expenses in all possible sectors of Medicare, infrastructure, administrative, social and education, following the trickle-down economics to the point?

What is wrong with this picture, and why the liberalism failed?
Is it the Future, for governments to take over and manage a business?
What is going to happen in the next recession, how far the governments should take over?
Is it any better way out of recession by using free entrepreneurial markets approach?

Unfortunately, for the theory of liberalism and fortunately for the US Economy, the Administration did not follow economic a priory ideologies, but their sense and the innovative American spirit took over. However, if the inept governmental involvement in business has helped the US to get out the economic/market upheaval of the 2007-2009 Recession, what would happen if the micro and macroeconomic insufficiencies that provoked the recession in the first place had been outlined and fixed…, is it possible anyway?

Maybe, the cyclical downhill that Karl Marx was talking about is unavoidable? Is it anything wrong with the system, anyway?

Until now, the way economies/markets work had been considered somehow predictable, the cyclical recessions were supposed to reduce excessive market redundancies, such as the production of excessive goods, exacerbated services and bureaucracy, thus bring economies/markets down to their means of market balance between mostly industrial production and fiscal expenses. Recessions have been considered very important economic tools for adjusting economies/markets to the financial realities, thus not allowing the exacerbations to reach points of total economic/market collapse.

However, the China’s industrialization, aided by overall Globalization and rising Productivity has created economic conditions of deindustrialization of many markets, and non-industrialization of others, which processes have taken on the fundamentals of a priory trickle-down economics by practically establishing global market conditions very new and adverse for expecting recessions to be fixed by self-adjusting economic/market forces. (see: http://mpra.ub.uni-muenchen.de/34588/1/MPRA_paper_34588.pdf)

It is obvious that neither industrial production on a global scale could grow to a point to employ these in the US or EU, or those in the developing markets (China, Vietnam, Brazil, India excluded, but even there the shrinking industrial labor is in a progress). As it is well established by these papers and articles, the capitalism is founded on industrial production, rising productivity and relatively high-interest rate, which fundamentals are counterproductive under these new emerging economic/market conditions (see appointed link)

What differs from the past also is the role Transnationals and Large Investors play and could play under these new emerging economic/market conditions, where the main employment should come from Small and Medium Enterprises, instead, the main wealth distribution should come by market exchanges through Small and Medium Investors, instead it of the Large Investors of the past, and the role Infrastructure and Social Expenses should play, which instead of being pure expenses should partially change into equities.

However, for these different agents and tools of economics to work some micro and macroeconomic tools may have to change and others to evolve (see: appointed link).

Another way for managing economies/markets is to give governments progressively more power that I consider marginal and incoherent, no third way could be projected, indeed.

By Joshua Konov

http://bx.businessweek.com/market-economy/

Joshua.konov@gmail.com

The Deindustrialization of Many Markets/Economies

By Joshua Konov, 2012

The ongoing advances in high technologies that simplify manufacturing, the Internet, and the expanding worldwide intellectualization, which are supported by market globalization and rising productivity, make the process of economic deindustrialization in many markets/economies irreversible. It is not just about Marx’s imperialistic overproduction that prompts such processes, but mostly about the enhancing openness of the global marketplace for direct investment by Transnationals and the enhancing intellectualization of the labor-force that have given an immense acceleration of industrial production of China, India and now Vietnam. The role of the Chinese government in promoting and prompting such industrialization by subsidies, tax breaks and technological assistance is very high too. The speed with which production lines were set up, the enhanced infrastructure for shipping goods, the lifted trade barriers, have established market conditions for “limitless” expansion of industrial production in China land; not the least is the internal consumption growth in there too, that makes the conditions there perfect for long term moving and outsourcing of such production, indeed.

These processes of flawless industrialization growth particularly of China affects straightforward the rest of the world advanced and developing economies by promoting high deficit and national debt. With the exception of Germany, Japan and US’s highly industrialized economies that still hold lead in some industrial spheres, all of the rest are struggling to keep up with lowering productivity and harmful fiscal shortages, however, even the most advanced economies are not immune from high national debt too.

If the markets/economies are reviewed from the perspective of deindustrialization, it is clear that the process of shortening industrial employment is irreversible too. The whole world of high-interest rates Capitalism and trickle-down economics of Transnationals and Large Investors superiority is to crumble into constant austerity measures to reduce the middle class and to expanding poverty.

Then it comes the possible alternative of socialization of markets/economies and the expanding governmental role in managing businesses and wealth distribution that brings not very positive prospects for the Future, having in mind their inept inflexible managerial abilities.

Therefore, “Market Economics using Quantum Factor” argues for changing the role of Small and Medium Enterprises and Investors in the markets/economies through a mostly natural enhanced market/economy security by using micro and macroeconomic changes. From generally unfair market competition of the trickle-down capitalism that promote Transnationals and Large Investors to a relatively fair market competition of enhanced “Rule of Law in Business” and by establishing regulated fair market exchanges that allow more secure access to foreign markets/economies. The unnatural/artificial market/economic agent/tools such as social and infrastructural expenses are well taken in consideration under these new market conditions for balancing market’s Demand-to-Supply, however the natural for the markets market/economic agents/tools are preferred to the unnatural/artificial market/economic tools.

What the Quantum Factor represents are the random ways market/economic agents/tools are used, instead of the “predictable” cyclical ways of the trickle-down market/economic agents/tools have been used.

The deindustrialization of many markets/economies brings the issues of diminishing Fiscal reserves on the front, whereas industrial employment is paid higher, and the lack of it brings the question of the possibilities to maintain and expand an adequate market consumption going along with the ever-rising prices of natural resources and national debt. Under such conditions the suggested impact of “productivity” (noise) in economics that brings the less developed markets/economies to closing the frontiers (most developed markets/economies) also should change into more general diversified business activities that could be brought mostly by the small and medium enterprises and social and infrastructural expenses, the productivity could not be any more politicized as an excuse for government’s inaction, the neo-liberalism should well be taken off for their poor economic results of the last 20-25 years.

The industrialization of China, India, Vietnam, and e.g. should not be considered as a negative occurrence for prompting deindustrialization of many other markets, but the system of international business should well take into account the irreversibility of this process and establish a relatively fair market competition as mentioned above by raising market security and thus promoting business diversification.

In such a context, the global warming and Earth reassures exhaustion should be dealt with as additional market/economic agents/tools for business diversification, additional “noise” into the “1/f noise” formula.

Inflation is the main and fundamental problem in such economics, whereas the market balance of Demand-to-Supply is paramount, therefore international cooperation and the same rules play is necessary.

The scientific detailed exposition of Market Economics using Quantum Factor follows at:

The Imperialism of Economics (or as far you are ok I will sell my stuff to you)

By Joshua Konov, 2011

The European Union was founded as an innovation for the unity of many old archenemies in Europe, Britain against France, France against Germany, and Germany against everyone else… After the Second World War two main conclusions were made, the first was that by the means of war nothing could be achieved, while the weapons were too sophisticated and powerful that basically can destroy anything on their way, and the second was that the imperialism is more like liability than equity in terms of economic advantage; to occupying someone’s countries can bring more headaches than benefits the occupiers would gain indeed. Then the Europeans decided to join together into a market and currency union instead…, and they put together the European Union (EU), then the Soviet bloc disintegrated and more countries like Poland, Latvia, Latvia, and etc. joined the Union too, then most recently Romania and Bulgaria did. Some of the European Union countries adopted the Euro as their currency, others retained their old currencies however pegged the Euro directly like many or indirectly like the Pound. Long trusting governments and bureaucracy, the Europeans established in Brussels political institutions which in parallel with the national governments should draw the EU into closest union: political and economic. The doors for the large manufacturers, wholesalers, and retailers mostly German corporations for a no customs duty open marketplace were wide open. The doors for Europeans’ freedom to move through their borders, to find opportunities, i.d. was wide open too. However, what they did not do was the export of the successes in consumer protection, a standard of life, pensions, i.d. of Germany and most of the Northernmost developed Countries of Dania, Sweden, and of France. The bureaucratic approaches these more developed countries used to help less developed ones have been through subsidizing particular industries, farming and some infrastructure by using governmental structures of highly complex procedures (as an example: more than 75% of all agricultural subsidies went to the 10% of large farmers who basically did not need any such subsidies to be competitive), the many scams of fraudulent return of so-called VAT (Value Added Tax) have been so well developed in EU that counted for billions of dollars lost in fiscal reserves (see VALUE-ADDED TAX FRAUD IN THE EUROPEAN UNION).

The bureaucracy has been adopted very well by some countries like Greece that manipulated such programs to raise its own standard of living and to create a very large bureaucratic machine itself. Others like Bulgaria could not adopt at all under these new conditions not being able to sustain even its market development inherited from the communist time, However the large Transnational Corporations (TC) were already prepared for such an open marketplace and have taken over it in the blink of an eye, becoming the rulers of this universe. They the TC on a side the criminal bosses in the world of the post-communist era benefited the most from the corrupted governments in the less developed member countries signing questionable contracts… (example is the interest rates in Bulgaria where banks are lending over 12% up to 18% to individuals and businesses alike, the wireless mobile phone providers are maintaining the highest rates in Europe and the most loose costumer policies elsewhere, the energy wholesalers that are keeping relatively highest prices too, and all of these in a country with no customer protection, in which first residence could be foreclosed in two months).

On top of all of these, the semi-legal privatization done by some of these less developed countries allowed robbery in the midday by those with the money, guess who were those? (example is the privatization of 120 hotels in Bulgaria previously owned by a state own company “Balkanturist” to a criminal founded company owned by Ilja Pavlov (murdered himself) for less than 20M while the appraised value was 3+ billion dollars, or many banks in Bulgaria, Romania and elsewhere that were acquired by Societe Generale and others far under their nominal values..)

The European Union basically allowed Transnational Corporations and criminal bosses to take assets in many member and satellite countries in a way not too far from the methods of imperialism used before the Second War…, thus the consequences of their actions did not differ from those of the old Empires… no development, no progress, no good to the people of these less developed countries, hence, the lack of fairness in market competition and the boost of bureaucratic crime brought market conditions of the neo-liberalism in its full force, that seemingly reflects what happens to the European Union most recently. The even further disadvantage European Union was presented under the new globalized world and rising productivity in where the lack of well-developed marketplace to support the most Developed Germany and France’s production competing to China, Japan, and the United States… (see Market Economics by Using Quantum Factor) reflects the crisis ongoing in EU.

To change the situation in European Union some general macro and microeconomic policies should be adopted, and of consumer protection and fair market competition enhanced while the bureaucracy should be reduced indeed, the subsidies should not go to the rich but to the Small and Medium Enterprises. Governmental bureaucracy channel should not be used but only Commercial banks. The European Union should be a real union of most developed prompting fairness in market competition.

Market Economics Using Quantum Approaches

The number of articles I have written on the subject could be very perplexing for specialists and regular readers alike, because of the complexity of issues evaluated and mostly because of the apprehension of the ideologies have been largely promoted out for centuries, the ideologies that justify the deep division between rich and poor, countries and regions; the Cold War with its profound partition between the ideas of free-market entrepreneurship of the Western Block Countries and the government-run economies of the Soviet Block Countries.

It could be well concluded that all together cultures of philosophical schools and religious conceptions have been exploited to smooth these divisions inside countries and set up conditions for unity and normality in life; nationalism, chauvinism, xenophobia and overall “I am better than you are” aptitude have helped countries prosper competing to others, Empires rose and fall alone; and at presence Economic Powers came up into existence.

Most of these historical developments could be greatly explained by the processes of economic progress because the Economy is a mirror of History indeed. Overall, the further we go in the past when the means of production were less developed and the individual intellectual involvement was far less productive the bigger division between the having and the having not. And, at the same time the closer to the most recent times, the more middle-class participation, the more individual intellectual involvement, and the more enhanced standard of life for the majority. The rise of the technologies, the Internet, the ongoing Global political depolarization and the subsequent Economic Globalization, the ability for investing to another markets not just into the developed part of the Western World for substantial ROI (Return On Invested) capital, had brought general economic explosion of the 1990s, but also these brought the economic upheaval of the 1999 Stock Exchange Crash and the most recent Great Recession of 2007.

- (Reuters) – Societies should not rely on market forces to protect the environment or provide quality health care for all citizens, a winner of the 2007 Nobel Prize for economics said on Monday. http://www.reuters.com/article/idUSN1…

The existing economic and social structures of (I call it) Social Order that was well perfected by the Most Developed Western Economies which is pro supply by nature of more or less trickle-down economics with relatively high lending rates (the set by the Most Developed Economies’ Governments low almost to 0% internal interest rates do not affect that much the inter-countries lending rates nor this do to the majority of the Worlds’ Small and Medium Businesses where these rates are rather higher than before the Last Recession: see the interest rates of the securities sold by Greece, Ireland, Portugal, Spain, or see the rates Small and Medium Businesses are borrowing in the US). The Capitalistic trickle-down economics is based on a relatively shady Business Practices maintained to prompt “easy business” which under the most recent conditions allows better and faster concentration of capital which effect does not result in a possible on the US marketplace business expansion but instead this effect consequences of high growth of and profitable ROI from some Developing Countries than from the US;

The “shady” business practices in which laws and regulations are far from the perfected common laws generally allow easy businesses start-up but then the “security” of these start-ups is quite limited to let lower interest lending, nor the Small and Medium Businesses have easy chances to collect on contracts from their Big Brothers’ Intercontinental Corporations by lengthy court cases, and finally when they (SMB) outsource or move any production to elsewhere trying to stay competitive globally these Small and Medium Businesses easily become a prey of weak international laws for intellectual property and anti damping protection, therefore it could be easily concluded that in the most recent times and under the most recent economic conditions the system of Social Order works better for the Large Transnational Corporations than it does for the Small and Medium Businesses, also the same formula could be well applied to how Global investment affects Large Investors and Small to Medium Investors; the lack of proper Personal Liability Laws and Regulations on National and International levels of Stock, Money and Commodity Exchanges benefit mostly the Large Investors by lowering substantially the security of investment for the Small and Medium Investors.

China Releases Scheme to Support Micro and Small-Sized Enterprises

Posted on August 31, 2012, by China Briefing
Aug. 31 – China’s State Council released the “Scheme on Division of Work for Key Authorities to Further Support the Healthy Development of Micro and Small-Sized Enterprises (MSEs) (guobanhan [2012] No.141, hereinafter referred to as the ‘Scheme’)” on August 2, containing 75 working items and involving more than 10 governmental authorities. The key information of the Scheme can be found below.

Further strengthening financial and tax support to MSEs
- The total scale of special funds for MSEs has been expanded from RMB12.87 billion to RMB14.17 billion in 2012 and will be increased annually. (handled by Ministry of Finance)
- A central finance committee will allocate RMB15 billion to the Development Fund of MSEs on a five-year basis, and RMB3 billion will be contributed to the fund in 2012. (Handled by Ministry of Finance, Ministry of Industry and Information Technology, Development and Reform Commission, and Ministry of Science and Technology)
Making efforts to relieve MSEs from difficulties in financing
- Implementing various financial policies to support the development of MSEs
- Expanding financing channels
- Expediting the development of small financial institutions
- Strengthening the credit guarantee service for MSEs
- Regulating the financing services provided to MSEs
Promoting the innovation development and structural adjustment of MSEs
- Supporting the technical transformation of MSEs
- Improving the innovation capacity of MSEs
- Improving the capacity of inventing, utilizing, protecting and managing the intellectual property of MSEs
- Supporting the development of innovation-oriented, entrepreneurial and labor-intensive MSEs
- Expanding the scope for private investment
- Accelerating the elimination of backward capacity
Intensifying support to the market exploration of MSEs
- Innovating the marketing and business mode
- Improving custom clearance services
- Simplifying the formalities for domestic sales of processing trade
- Implementing the pilot mode of bonded regulatory control on integrated circuit industry chains
Assisting MSEs to improve they’re the operation and management levels
- Supporting management innovation
- Improving quality management levels
- Strengthening human resource development
- Formulating and improving policies to encourage college graduates to find employment in MSEs
Facilitating the cluster development of MSEs
- Arranging the land for industrial cluster development
- Improving the environment for the cluster development of MSEs
Intensifying public service provided to MSEs

By 2015, 4,000 public service platforms will be established and improved to serve MSEs and priority will be given to cultivate and select 500 demonstration platforms of public service. (Handled by Ministry of Industry and Information, Ministry of Science and Technology, Ministry of Commerce, and National Bureau of Quality Inspection).
(Reuters) – Global regulators are split over which electronic platforms can trade derivatives to improve transparency, raising the prospect of banks shifting business in the $600 trillion sectors to less restrictive countries.

How The US Government Used Unconventional Methods to Succeed Higher Growth?

When pro-supply trickle-down economists make an evaluation of the economic actions of Mr.Obamas’ government, rather an imminent economic crash should be hitting America at the moment with very high inflation and total collapse of the US currency value;

The more than $14 Trillion National Dept;

The Medicare Bill that expanded the money spent on Medicare a few times;

The Billions of Dollars injected into Banking, Real Estate, Business, and Social Sector

The Trillion Dollars that is been used for Quantitative Easing, or printed by the Government.

So, what happens in reality that instead of the total collapse of the US economy somehow it maintains economic relative growth of recent momentum, and the dollar value has a relative height?

The answer of these obvious conflict could be called absurd consequences to the actions of President Obama’s government and the real economic indicators may well lay into the question:

How little current ‘Science’ of Economics apprehends the real meaning of Money, Deficit, Industrial Production, Globalization, and etc.? It also may well show, how chaotically and politically motivated most Economists are by choking on old theories of trickle-down economics or Keynesian monetary injections when in the foundation of the recent ongoing Globalization and ever rising Productivity these economic old approaches work less and less.

When Democracy, Liberty and Personal Freedoms have been associated from the time of Adam Smith as a precondition for economic development, then why China has been running constant economic growth even being a totalitarian government?

Why many countries in Europe, Latin America such as Bulgaria, Spain, Greece and etc. that are democratically governed and have relative preconditions for economic development and growth instead are falling into constant fiscal shortages, high national debt and economic recessions?

Why even some Most Developed Countries as UK, France, and even some Scandinavian ones are running very narrow growth if any, constant fiscal shortages and economic disarray?

When balancing Budgets and avoiding Deficit and National Debt is considered a precondition for Economic Growth?

Why in EU (excluding the German Economy which growth is most definitely based on its export of high-tech machinery to China) most of the rest are running high National debt even when the EU pressure on these countries government made them cut on their budgets to the bone?

Why the austerity measure imposed by the EU and the World Bank on the EU and many other countries around the world have not produced any economic growth?

Thus, the US government interference with the trickle-down economics of capitalism which policies were cursed by leading economists forecasting high inflation and devaluation of the dollar instead brought higher economic growth to the US economy and a relatively high value of the dollar, when the EU austerity measures and strictly following this trickle-down economics of capitalism brought only misery.

Chinese economy by all means and predictions are done by many leading economists was supposed to stall because of the lack of Political Freedom and Personal Liberty instead is growing faster than ever.

I will compare the situation of such inconsistency between what many economists are obviously experiencing with the reality that predicted the end of the world when the currencies were not anymore pegged to Gold or other precious metals, or to the same economists when crying high for an end of the world when the modern world economies were changing from Farming to Industrial Production..!? Well, I suggest the conservative and so well standing preachers of trickle-down economics wake-up see the reality of a new Market Economy that is a product of the ongoing Globalization and ever rising Productivity, of China, Brazil, India and Vietnam in which the Industrial Production based economy is changing into something different I called Marketism Economy ruled by random economic fluctuations instead of the preached dialectic self-adjusting trickle-down economics.

It may be noticed with great certainty that the Social Order (a system classified under the conditions of national, regional or ideological interests) of the so-called Capitalism is more in favor of Big Transnational Corporations and Large Investors than of their smaller brothers Small and Medium Businesses and Investors. Well, if such Social Order had worked well under pro-supply conditions of a less connected and less developed world of the past, under the most recent ongoing Globalization and ever rising Productivity such approaches are becoming quite counterproductive by their fundamentals to prompt a consistent economic growth and development:

First, when Small and Medium Businesses and Investors add more than 75% in the US employment and consumption, and the industrial production by the Transnational Corporation has been gradually moved and outsourced to China and elsewhere;

Second, when Large Investors have gradually moved their investing to these Far Eastern Markets where the ROI and the economic perspective are more advanced than those in the US;

Third, when in a Global perspective, there could be considered impossible for all regions in the US and all countries in the World to enhance their Industrial Production to support in order to properly enhance their Fiscal Reserves for handling their ever getting older population, required by the economics of Capitalism approach. It is obvious that high-interest inter-countries lending, the high rate securities controlled by the World Bank and IMF is beyond regressive for these underdeveloped economies,

and

Fourth, may be the most important. The diminishing Earth resources and the disastrous Global Warming may not and cannot be addressed, if the division between rich and poor people, regions, and countries is not overtaken by some new approaches in Economics. In less developed and developing markets the usage of old cars, means of primitive heating, uncontrolled wood cutting, uncontrolled usage of pesticides and etc. may well destroy this Earth much faster than it is expected. Thus, to address these issues a better system of Economics should be used that may accommodate and use flexible approaches.

So, even when the Capitalism or the Social-Capitalism or the Communism systems of Economics which all represent the “Social Order” of the past claim to comprehensively deal with Market Economics, it must be easy to prove that under the new Global market conditions none of these or any combinations of them could properly be called Market Economics: any economics of so-called Social Order is based on the philosophy of cyclical dialectic development that relies on the market economy to fix by itself when market fluctuations of recessions and upheavals occur, which approaches could have worked out in a pro-supply marketplace, but experience real difficulties in a Global ever rising Productivity marketplace; the last Recession, the stalled industrial employees income diminishing Middle Class for the last 10 years in the US;

- http://blogs.wsj.com/economics/2011/0… Nearly a year and a half into the economic recovery, some 43.6 million Americans continued to rely on food stamps in November. More than 14% of the population drew food stamps in November to purchase groceries as high unemployment and muted wage growth crimped budgets. The number of recipients was up 0.9% from October, according to the new report by the U.S. Department of Agriculture. Compared
- “The income numbers for Americans reflect this slowdown in growth. From 1947 to 1973 — a period of just 26 years — inflation-adjusted median income in the United States more than doubled. But in the 31 years from 1973 to 2004, it rose only 22 percent. And, over the last decade, it actually declined.”
- The gross domestic product here — the total value of all goods and services — has recovered from the recession better than in Britain, Germany, Japan or Russia. Yet a greatly shrunken group of American workers, working harder and more efficiently, is producing these goods and services. http://www.nytimes.com/2011/01/19/bus…

The setback in the European Union where maybe only Germany is doing relatively well and it is because of the German export to China of high-tech machinery, most of the other countries are experiencing tremendous economic stress and are literally reducing their once succeeded higher standard of life: their social security, pension funds, Medicare instead of being enhanced and improved is losing quality because of Fiscal shortages;

U.K. Delivers Business-Friendly Budget LONDON—Britain’s Treasury Chief George Osborne delivered a largely business-friendly budget that aimed to dull the pain of belt-tightening and high inflation rates, after already having set the U.K. on a course of aggressive deficit cutting.

Mr. Osborne also announced Wednesday a series of measures to lift economic growth, which he said would be slower than expected when he began the deficit-reduction course—among the most aggressive of the major economies.

“The budget is roughly neutral and won’t alter the economic outlook significantly, but I don’t think he needed to do that, as fiscal plans were set a year ago,” said Michael Saunders, a U.K. economist at Citigroup.

ECONOMY
European Leaders Expand Bailout Fund

A capacity of a fund, formally called the European Financial Stability Facility, increases from about $350 billion to more than $600 billion

Full story »

Submitted on 2010/10/22 at 4:38 pm

–U.K. Budget Debate: Paul Krugman is critical of the budget austerity in the U.K. “The British government’s plan is bold, say the pundits — and so it is. But it boldly goes in exactly the wrong direction. It would cut government employment by 490,000 workers — the equivalent of almost three million layoffs in the United States — at a time when the private sector is in no position to provide alternative employment. It would slash spending at a time when private demand isn’t at all ready to take up the slack. Why is the British government doing this? The real reason has a lot to do with ideology: the Tories are using the deficit as an excuse to downsize the welfare state. But the official rationale is that there is no alternative… What happens now? Maybe Britain will get lucky, and something will come along to rescue the economy. But the best guess is that Britain in 2011 will look like Britain in 1931, or the United States in 1937, or Japan in 1997. That is, premature fiscal austerity will lead to a renewed economic slump. As always, those who refuse to learn from the past are doomed to repeat it.”
Related News

Officials at the commission and the European Central Bank have for some time called for wage-setting mechanisms to allow more wage “flexibility.” That means wages in countries with high unemployment should be allowed to fall to levels that lead to increases in employment, and businesses should be able to adjust their labor costs to productivity levels.
Germany is the only G7 economy whose share of world exports has not fallen since 2000, despite Chinese competition. An increase in net exports has accounted for no less than two-thirds of Germany’s total GDP growth over the past decade, far more than any other big economy. Net exports accounted for half of Japan’s GDP growth and only about one-tenth of China’s.
The debt-strapped country agreed to implement unprecedented austerity measures and unpopular structural reforms that are reviewed every three months in exchange for the €110 billion bailouts inked with the IMF, commission, and EU in May 2010, to stave off certain insolvency. The new funds are critical because January revenues flagged despite being in surplus. The country essentially has no other….

First, it comes China which succeeded in maintaining high growth and withstand the Recession of 2006 by expanding their own marketplace and export even under not very favorable economic conditions: China has done it and is doing it just because the flexibility with which the Chinese authorities use the economic instruments to maintain growth is very proper, the balance between social and infrastructural policies for employment and private sector, the prompt action when the real estate market was overheating last year by regulating second house lending matrix a developer’s specula regulations (2009), the constantly adapted policies of subsidizing exporters and certain economic areas (the photovoltaic equipment as an example), the policies of equity enhancement and values, and the etc. showed that the Chinese approaches are the best in the World now days, and such accomplishments showed to everyone that politics and economics under the most recent economic developments are two separate issues to deal with, and showed that Karl Marx, Adam Smith, John Stuart Mill, and etc. are dead wrong in how the economy works under these most recent economic conditions of the Globalizing and high Productivity marketplace.

“China’s growth is felt in nearly every corner of the globe—in ways not always welcome. Its rise as a trading power is reshaping other economies, shifting national business models from manufacturing back to raw materials, pushing currencies in sometimes unwanted directions and prompting worries about wages in the U.S.”

- “Economy Minister Kaoru Yosano put the issue of China’s growing economic clout growth in a positive light, saying that its high growth rate benefits all of Asia. “We are pleased to see China’s economy rapidly developing,” he said in comments to reporters soon after the figures were announced.A rebound can come none too soon for Japanese workers. Smaller winter bonuses dragged down earnings late last year. The jobless rate hovers around 5% as firms hesitate to ramp up hiring, except for contract positions that pay less and offer fewer benefits.”
- “BEIJING—China’s current and capital account surpluses both rose in 2010, the country’s foreign-exchange regulator said Monday, highlighting the challenges China still faces to reduce imbalances with the rest of the world. Taken together, the twin surpluses give an indication of total money inflows into the economy, which add to China’s foreign-exchange reserves. China’s central bank purchases the incoming foreign exchange with newly issued yuan, thus swelling the domestic money supply and adding to inflation pressures. China acquired $471.7 billion of international reserves in 2010, the State Administration of Foreign Exchange said in a statement, up 18% from 2009’s increase, indicating inflows into the country remain huge, as does its intervention in foreign-exchange markets to hold down the yuan exchange rate.”
- “Bubbles and manias, followed by crashes and hangovers, seem endemic to capitalism. The Wall Street overhaul enacted last year hopes to blunt the impact of such boom-and-bust cycles — by reining in the use of exotic financial instruments, better supervising big banks and limiting the damage if one of them fails. http://economix.blogs.nytimes.com/201…“

Second, no one ever really philosophically explained how the lack of resources and the Global warming could be dealt with, under the Social Order conditions in an open marketplace, because never in History the people were given the opportunity or more exact had the abilities to produce more industrial goods then they consume (because by China, India, Brazil joining the Most Industrialized Economies of the US, Japan, Germany such capability for industrial goods is just very high) and at the same time the exhausting Earth resources are pushing toward Alternative Energies and Very High Technologies, and at the same time any countries, but very few in the World, succeeded an Industrial Production to make up GNP, Fiscal Reserves and so on. Even the “Social Order” systems of Economics, in one way or the other, proclaim the Market Economics as their best; none of them really deals with the most recent market fluctuations by using their established system of economics; so when under the pressures of the last Recession many governments took monetary and fiscal actions to stimulate their economies, which they still continue doing it, these actions include taking off debt from Banks and Large Financial Institution, partially acquiring businesses as it happens with GM, and printing money and quantitative easing as they are doing now; actually what the governments were doing is interfering with the market forces to prevent their economies from collapsing, and at least for the moment they are succeeding, but what they are mostly doing is braking with the philosophy of cyclical dialectic economics of the trickle-down capitalism to not relying on the cyclical dialectic forces of the market to fix the mess of the consequences from the last real estate over-capitalization that brought the Recession of 2006. The Keynesian approach of financial market interference that also was used in the Great Depression, lately, it was well extended by the actions taken to points well beyond Keynesian imaginations and limits. When from Microeconomic prospective: “The cost-push theory basically emphasized the role of excessive increases in wages relative to productivity increases as a cause of inflation, whereas the demand-pull theory tended to attribute inflation more to excess demand in the goods market caused by expansion of the money supply.[1]” none of the conceptions can explain the total disruption result of extensive moving and outsourcing of industrial production and outflow of capital to other parts of the world. Neither Thomas Robert Malthus [2] nor John Maynard Keynes [3] neither most modern economists could or even like to explain an employment shortage not founded on economic development in a particular market economy being replaced by a quickly globalizing marketplace where industrial production went so far out of hand that the question of balancing wages to employment to inflation is cut short of industrial employment, which, as it seems becomes in shortage, not just because of the ever-improving high technologies, but even farther, it becomes such, because the majority of industrial employment is moved and outsourced indeed. Thus the questions from Micro and Macro Economic perspective are beyond existing logic in current economics. The question about inflation started relating more the value of the US Dollar to the Yuan, and the real customer consumption when the customer may not have a job in industrial production when in the same time GDP is founded predominantly on industrial production. Thus, in an economic environment of exploding supply enforced by the new industrial powers in a marketplace of shortening industrial employment for the rest of the world, and reducing industrial employment for even some most developed industrial economies the questions about employment, fiscal policies, distribution and redistribution of wealth are taking more power than ever, if ever, in History, so the questions become…. with depleting industrial production in the US marketplace and almost everywhere: ·
How to manage inflation without industrial production growth? ·
How to keep up and enhance consumption related growth when unemployment is high and may get higher? ·
How to manage Fiscal policies and Monetary quantities without industrial production growth? ·
What is this new world that changed one time from Farming into Industrial Production, and now what change is coming?
Why and what China is doing better to keep up high economic growth when the rest of the world crawls? ·
Why such a good world as the US Economy which with a few exceptions had grown for the last 100 years with at least 20% every 10 years in a case has stalled for the last 10 (2000 – 2010)? ·
Why the hard-working and with the highest in the world productivity US workers are running short of jobs and how far it would go? ·
Etc.?

Actually, let me suggest what is happening and to where things in economy in the US and almost everywhere else may go to: · The Economics of trickle-down Capitalism may have to change (to evolve) to a Market related Economics of variances (I call) Quantum Economics which promotes the ideas of prompt, practical, flexible economic actions, to prevent violent economic fluctuations such as the Last Recession of 2006, Inflation and deflation; · With the self-adjusting Economics gone, economic instruments/tools may be used “as it comes as it goes” approach of pure statistical principles; · The ideological approaches of Republicans against Democrats of how to run the economy may still be in place, but it will be much less intrusive to how the economy is run, because it maybe much clearer the principle system of the Science of Economics as a system of adjusting market fluctuations by using old and some new Instruments of Economics; · Social and Medicare expenses, Infrastructural expenses along with Subsidies for Alternative Energies may have to be considered more on the equity side (in certain percentage) of the governmental books not on the expenses side as it has been practiced until now, which also may have to be considered Instruments of Economics.

The Industrial production US Economy is about to continue changing into a Service Sector Economy, but the already succeeded equity including overall standard of life, Social and Medical Structures, Infrastructures, Educational System, relatively high valued Real Estate and the accumulated Capital may have to play important role in a more regulated Stock and other Exchanges for investment into less developed areas in the US as well Globally by the Small and Medium Investors who now are handy capped by the hostile to them market exchanges; · The business laws and regulations may have to be enhanced for corporate, limited liability and trust management that must improve their security for lower rates “lend-ability” of Small and Medium Businesses, that must prompt more employment in different spheres of business; · The Government may have to start using better tools to subsidize and prompt growth; tax breaks, tax initiatives, employment stimulus, and etc. are part of these; · Internationally, the government may have to promote equal laws and regulations to these on the US market.

The Social Order of the Past may be changing into the Market Order of the Present and the faster these new developments are adopted by an economy the better this economy will stand globally. There may be countries and economies losing their superiority over others and we must really hope the USA is not one of them. As stated above Personal Freedoms, Democracy, Liberties are not necessary preconditions to bring and support the best and most advanced economies, because the game has changed, however, the values of these succeeded extremely important accomplishments of Humanity must be preserved in any cause. http://sites.google.com/site/economicsofmarket/ © Joshua Konov, 2011

Quantum Economics – Philosophy of the Economy

by Joshua Konov

The philosophical comparison of social developments: such as economy to the particle related quantum mechanics may look incidental or incoherent but conceptionally said the human perception has changed from certainty and simplicity to uncertainty and complexity, too. Therefore, the perception of principle understanding processes in economy, philosophically, must change, too; the way it has changed in Physics and Mathematics, because the “uncertainty” of the information for particles in their “position” and “momentum” goes much farther in social sciences where the “uncertainty” of the social-economic developments and processes as reported by Governments or private groups are even more unclear and subjective. The similarity of the old “certain” and “simplified” approaches in Physics where particles were taken as measurable and static was well used in Philosophy and Economics where the processes were simplified and taken as measurable or at least easily put in systems of evaluation; thus there is no difference between the approaches in Physics and Economics in terms of thought and conventionalizing of simplifying processes and what in science seems irreversible is the constant conventionalizing complex reality. More “uncertainty” must go in the same way and apply to Philosophy and Economics as well.

The similarities between science in Physics and Economics goes even beyond the evolving perception from simplicity to complexity into the reality of realization of “unpredictability” and “uncertainty” when the same way when in Physics was realized that a “particle” is in constant change that there isn’t way it could be measured without error. It isn’t just because of the insufficiency of human technology but because of multiple and mutually changing realities and even farther because the reality is extremely unpredictable and unknown. The same way in Philosophy and Economics could be easily realized that social-economic processes are not static but “unpredictability” and “uncertainty” of ever-changing social economic realities are not measurable by any means therefore to think that by using a few statistical measurements might give us a realistic picture of the economic situations is unrealistic and uncertain but even beyond the processes in social and economic structures are so diverse and changing that they are more like the particles in quantum mechanics then to any theoretical explanations of the statistic economics or principle of evaluations of Philosophical conceptions such as Marx’s or John Lodge’s or whoever’s. The ever-changing reality and the uncertainty coming out of it may only be theoretically explained by some theories and philosophical conceptions but these could not provide an adequate picture of the ever-changing and uncertain social-economic reality in which especially economic processes are at the most unpredictable and uncertain. The ideologies of some economic structures such as Communism or Capitalism, or Socialism which are conventionalized based on philosophical conceptions are far away from explaining the social-economic processes but more likely they are providing some “security” in a very diverse and insecure realities; these ideologies did work somehow in a political world of cold wars and ideological confrontations when one was better than the others, but do not work in an open free world where these philosophical conceptions do not find any applications or support.

To measure statistically or anyhow a realistic picture of the social-economic processes is uncertain the developed tools and indicators for such measuring are inadequate and limited but even they were developed to perfection they still would not be able to measure these processes because the processes by themselves are uncertain and could not be measured.

The processes in social-economics could be only given “parameters of expansion or contraction” so they can develop in “certain areas” to “certain extend” and then changed or adjusted, it may be done in a way to disperse accumulating energy so instead of big wave: the ways energies are accumulated and create big waves is the example of Real Estate market appreciation: which is positive for the economy to the extend of providing additional capital and equity thus expanding individual capitalization and investing but as we saw in the current crisis when this process of appreciation expanded over its positive for the economy effect such over appreciation had devastating consequences to literally crashing the existed economic structures; the negative accumulation of energies because of the over appreciation wasn’t dispersed to the rest of the economy so the ripple effect was unavoidable; in case a possible way to minimize such over-appreciation is not by not allowing or even limiting appreciation as all but by establishing “parameters” which will ring the bell for over-appreciations or even better they will automatically trigger “prevention valves” to limit the over-appreciation or under-appreciation as well.

The differences between the self-adjusting so-called capitalism or socialism economics where governments use very political tools to adjust these fluctuations; as well Fiscal and Monetary policies and talk about distribution and redistribution of wealth or limiting or expanding business activities may not necessary be the right economic tools to set the needed “parameters” so “over expansion” or “under expansion” do not occur.

The “Iquanta” is a quanta but is not anymore a part of a particle or an energy, or anything in physical aspect but a philosophical measured quantity of “energy” or just a “word” which could be considered as an abstraction or an “imaginary particle” as well, it will depend from the point of view: when some could believe that social-economic processes have their own energies or some not; for me such believes do not have any meaning because the most important thing is going to be to establish the parameters of it; The same principles would apply to “Iglued plasma” and some others terminology taken from the Quantum Mechanics which will be used in this research.

This research is attempting to challenge the status quo of the ideologically motivated Philosophy and Economics with the principle of uncertainty of the processes of economic development; to show the similarities existing between the Quantum Mechanics of Physics and the Iquantum Economics of Social-Economics Philosophy; to set some “parameters” of social-economic processes which eventually could be used in practical Economics to limit “big waves” of economic recessions or at least explain these “parameters.”

To show that even unpredictable by nature and impossible to be put into one philosophical structure which could explain all of these social-economic processes, though there are still some parameters which could limit the occurrence of big wave and not the least to show that economic downturns and recessions even uncontrollable are not a part or a tool of somehow “free market development”, but the violent adjustments are a result of occasional build-up of energies to a big wave and in the same time some of these energies could be put in parameters /diversified thus it may prevent these big waves from being so frequent or so violent.

What is an iquanta? – it is not a part of any particle it might be part of energies or part of conceptional particles for explaining certain philosophical conceptions which particles move, contract and expand in limited predictability. It is influenced by social-economic processes and developments. It accumulates energies mostly based on social-economic occurrences and fluctuations.

What is igloued plasma?- the powers which connect the iquantas and other parts of a constantly changing and moving occurrences and processes in social-economic processes; we can imagine this terminology as a mirror of these social-economic processes so thus they could be located in their changes and explained in their changes, vibrations, accumulation of energies and creating violent social-economic adjustments. The physical quantities are built up by iquantas and other parts rapidly changing and moving, where the igloued plasma connects these parts and gives them the meaning of occurrence; the “energies” build up by the acceleration of the iquantas and other parts and the fluent economic developments become violent big waves: similar to the monster waves in the ocean. Well, common qualities of such build-up is a concentration of energies between the neighboring waves but this observation is not a principle. In real development of the economies some factors have a positive effect over expansion and progress in certain time and the same factors might have a negative effect in different time or mostly when passing the level of a positive build up: (for example the real estate appreciation has a positive effect on the economic development to the extent when the market prices are not supported by income to expanse ratios, or until the withdrawn and reinvested capital do not bring the supporting profit flow; or until becomes exuberant compared to the other business activities or if etc.), much varieties of conditions hence if particular waves in the physical quantities relate the real estate built energies which might push up the big wave and this wave might well shake a lot of other sections of the real economy.

So comes the difference between quantum mechanics and iquantum economics: the uncertainty of observation of the iphysical quantities do not relate only ever-changing realities but also the ways of observations when in the quantum mechanics the main issue is measuring and observing in the iquantum economics is putting parameters after analyzing of the information when the difference between iphysical quantities and final observations are even greater hence the vectors may start from the same or even totally opposite points so the relevance between and among these vectors is based on their directions, length and the angles of their projections.

The founding formula in explaining the existed uncertainties in the social economic development and processes is

A³Ai

(/Ai/ at one possible statistical or anyhow observation of current social-economic developments and processes)
A is the imaginable real “iphysical quantities” which has its /X,P/ ( /X/ Momentum and /P/ Position) so

X,P ³Ai

X,P»A³Ai

Mathematically:
|A/

http://sites.google.com/site/economicsofmarket/

Article Source: http://EzineArticles.com/?expert=Joshua_Konov

Article Source: http://EzineArticles.com/2444461

01-21-2011 08:36

Joshua Konov – economics
How Globalization affects Countries & Markets

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This is ongoing – updated article/blog reflecting ever changing Global Marketplace and some individual countries’ economies

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While the markets are becoming more globalized and productivity is being propelled by ever improving high technologies, some economies as Chinese and Indian are growing rapidly thus becoming real powers in industrial production, however, the old “science” of Western Economics is changing very slowly not being able to conceptualize these undergoing changes. The “old” system of Economics firmly believes that:

The Treadmill of Production (ToP) is a theoretical model developed by Allan Schnaiberg, which offers an explanation of the expansion of environmental problems in the modern era. According to the ToP model, advances in technology, primarily induced by owners of the means of production seeking to increase profits, drive the expansion of production and consumption synergistically. This process leads to a cycle of production necessitating more production, because all sectors of society (the state, organized labor, and private capital) depend on continued economic growth to solve problems, such as unemployment generated by mechanization, which is created by growth itself. ToP theorists argue that environmental problems cannot be solved in such a system since growth puts ever-increasing demands on the environment by extracting natural resources and pollution. Thus, achieving environmental sustainability requires a radical restructuring of the political economy and a move away from growth dependence.

Further Reading
- Schnaiberg, Allan. 1980. The Environment: From Surplus to Scarcity. New York: Oxford University Press. ISBN: 019502611X
- Schnaiberg, Allan and Kenneth A. Gould. 1994. Environment and Society: The Enduring Conflict. New York: St. Martin’s Press. ISBN: 0312102666
“The main motivations for the rapid expansion of multinational activity are as follows: Higher profits and a stronger position and market access in global markets Reduced technological barriers to movement of goods, services and factors of production Cost considerations – a desire to shift production to countries with lower unit labour costs Forward vertical integration (e.g. establishing production platforms in low cost countries where intermediate products can be made into finished products at a lower cost) Avoidance of transportation costs and avoidance of tariff and non-tariff barriers Extending product life-cycles by producing and marketing products in new countries The urge to merge – the financial incentives created by the global deregulation of capital markets is making it easier to achieve acquisitions and mergers and thereby encouraging the external growth of a business”

Nobel economics winner says market forces flawed: In its statement with the award, the Royal Swedish Academy of Sciences said the market’s efficiency may be undermined because consumers are not perfectly informed, competition is not completely free, and “privately desirable production and consumption may generate social costs and benefits.””Markets work well with goods that economists call private goods” like cars or other consumer durables, Maskin said in his office at the Institute for Advanced Study in Princeton, New Jersey.”If I buy a car, I use the car, you don’t and the market for cars works pretty well. But there are many other sorts of goods, often very important goods, which are not provided well through the market. Often, these go under the heading of public goods,” he said.”How do we ensure in the case of public goods that they are provided at all and that they are provided at the right level, taking into account citizens’ preferences?” he said. A clean environment, for example, is not a private good in that “my enjoyment of it doesn’t preclude yours,” he said.”So the theory of mechanism design asks what sort of procedures or mechanisms or institutions could be put in place which allows us to choose the right level,” he said. Those mechanisms could include taxes to allow the more efficient provision of public goods, he said.
The Rule of Law in Business

From generations, the rule of common law does not apply to business in its force and clarity, because it is considered counterproductive for providing most adequate conditions for business to grow up. Business environment should be foggy and deregulated for an economy to prosper was considered. Unless in the Common Law where clarity was main priority in Business Law the opportunism was its main priority. The ideas about the role of “the rule of law” differs:

“Not surprising, people disagree a great deal about how many laws (and what sort of laws) are just right. For example, liberals tend to think we need lots of laws to control corporations, to protect minorities, to protect the environment and to provide social goods. As another example, while American conservatives claim they are for “small government”, they tend to want more laws limiting things such as sex, drugs and various personal liberties they disagree with. This nicely matches the guiding “principle” of most people is “people should do what I want and not do what I do not want them to do.” So, people tend to favor many laws against what they dislike and many laws for what they like. They tend to be against laws that are for what they are against and against what they are for.”

For businesses an environment of “do not see do not say” with limited business laws is considered the best. Policies of “easy business” are widespread: “Jun 1, 2010

Cameron announces his initiative for change. Picture: Andrew Yates/Getty In his first speech as Prime Minister, David Cameron promised to aid companies by cutting red tape, improving the speed of business start-ups and kick-starting bank lending.” Cameron’s speech reflected the plans for businesses laid out in a new document, which was released last week in partnership with the Liberal Democrats. In the document, the coalition government promised to introduce a one-in-one-out rule, whereby no piece of new regulation would be introduced without the exit of another. It also stated it would find a practical method of making small business rate relief automatic and would aim to level the playing field between small and large retailers, by enabling local councils to take into account competition laws whilst drawing up plans to shape new retail development. The government added it would make the UK one of the fastest countries in the world to set up a new business and would end the ‘gold-plating’ of EU rules so that British companies would no longer be at a disadvantage against their EU competitors.”

Any experienced business attorney can tell you countless stories of corporate management getting away with fraud and not paying on contracts; whole schemes of how to trick the system and avoid legal actions are developed in details: the limited liability of corporate, trust and other organizations are craftily exploited and are examples of this philosophy; countless fake offers on the Internet, through junk mail or even on TV are coming from happy “honest” executives and advertisers with offers for easy money and immanent success, if we buy their product, follow their advice or give them some money in advance. There are some laws that try to curb on such activities of fake advertising and canning promotions, but these laws are so difficult to win in court unless multiple frauds have not resulted in serious financial harm; thus preventive actions against possible fraud are very rarely taken.

However, the biggest harm for the economy does not come from pyramids and financial fraud but from general “insecurity” coming out of such lawlessness. When in the past “easy business” could have been positive to boost pro-supply economies, whereas economies/markets have already changed into pro-demand economies of a global marketplace; so financing have changed : the narrowing profit margins of the US businesses caused large capital well gone overseas particularly to China and now India even in case small and medium businesses have rarely been financed by large investors anyway, the ones left to take over in providing capital on the US market were the small and medium investors, who were the heaviest hit by the last recession.

“What Does Venture Capital Mean? Money provided by investors to startup firms and small businesses with perceived long-term growth potential. This is a very important source of funding for startups that do not have access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns.”

Investopedia explains Venture Capital Venture capital can also include managerial and technical expertise. Most venture capital comes from a group of wealthy investors, investment banks and other financial institutions that pool such investments or partnerships. This form of raising capital is popular among new companies or ventures with limited operating history, which cannot raise funds by issuing debt. The downside for entrepreneurs is that venture capitalists usually get a say in company decisions, in addition to a portion of the equity.”

In a pro-supply economy experiencing growth and in a limited marketplace (before the globalization took over) the system of deregulation and clueless business laws might have worked well, however the situation in the world has changed greatly and the relative insecurity of Small and Medium Businesses as a result of lacking clarity of business laws started having a negative effect: insecure contracting, bonding and limited personal liability of corporate structures consequences of underwriting financing difficulties. Usual for SMB are · limited access to public financing; · limited access to foreign markets experiencing economic growth; · limited ability to outsource production or move some production to somewhere more adventitious Therefore the necessity of stable borrow-ability in volatile economic environment or in direct competition to foreign companies subsidized by their governments is paramount. For SMB to be competitive would be only if better access to financing is available. The overall condition of Small and Medium Businesses and their profitability directly reflects the overall conditions of one’s economy because SMB provides the highest percentage employment of all, thus if SMB struggles to survive as it happened through the 2007 Great Recession so the Middle Class and the Poor in the US economy overall. In an environment of globalization with open borders for business and ever-rising productivity the Large Global Corporations are not anymore interested in maintaining industrial production on US territory, neither are these interested in investing into long term projects on US territory because of the less expensive labor and well ongoing economic growth of China, India, Vietnam and etc., same is with the Large Investors who really are not coming back on the US market either because of the lower Return on Investment ROI, therefore it is up to the Small and Medium Businesses to create employment and simultaneously to go global too, because the diversification needed for surviving market volatility may come only by going global. SMB is the one that still will continue to maintain their main offices on US soil and they are the ones that could be easily persuaded to stay in there by right economics means such as low interest loans, subsidies and tax breaks from purely practical reasons of being close to the US market, the same is with the Small and Medium Investors that are the most important to still retaining their investment on US soil. The clarity of business laws bringing out higher security to SMB and SMI is from great importance to revival US economy and to funnel so needed wealth distribution and redistribution for balancing demand-to-supply ratios. Small and Medium Businesses are much more flexible than Large Global Corporations, SMB could develop in very diverse areas of business and reflect Governmental environmental policies faster. If the Market Economics is used by its best Small and Medium Business borrow-ability should be based on enhanced market “security” of SMB on the market not on artificially general subsidizing by governments in a lack of business laws marketplace as it is practiced until now, because by using genuine market forces lower market volatility and redundancy, and consequently prevent from economic turmoil.

In the foundation of modern days Capitalism is the Transnational Corporations, however, the role of these conglomerates is very limited if not negative in solving problems of rising debt, of accelerating genuine poverty around the world and of environmental issues;

“On today’s Fresh Air, Bloomberg News reporter Jesse Drucker, who has written extensively about corporate tax-dodging, explains how companies like Google, Pfizer, Lilly, Oracle, Facebook and Microsoft have managed to reduce their tax rates by hundreds of millions — and in some cases, billions — of dollars by taking advantage of offshore tax havens.”

Introduction Norms controlling activities of TNC’s in UDHR and ICESCR Why and how these TNC’s are responsible for environmental damages and harms. Three catastrophic disasters in human history International Guidelines controlling TNC’s activities Are these Norms and guidelines are enough to hold these TNC’s liable Need of international binding regulations Recommendations Concluding remarks Transnational corporation liability for environmental harm Before starting my presentation on present topic that is transnational corporation liability for environmental harm, I would like to say that this seminar presentation is only an approach paper presenting set of issues involved which in the course of direction take us to the steps of suggestions as far as the TNC’s liability for environmental harms are concerned. Or I can say that this is the first step of my research work. To begin with let me first briefly explain to you, what TNC’s or MNC’s basically are? Transnational corporation (TNC), also called multinational enterprise (MNE), is a corporation or enterprise that manages production or delivers services in more than one country. It can also be referred to as an international enterprise. The Norms specifically define a “transnational corporation” as “an economic entity operating in more than one country or a cluster of economic entities operating in two or more countries– whatever their legal form, whether in their home country or country of activity, and whether taken individually or collectively.” The working group defines the phrase “other business enterprise” as “any business entity, regardless of the international or domestic nature of its activities, including a transnational corporation, contractor, subcontractor, supplier, licensee or distributor; the corporate, partnership, or other legal form used to establish the business entity; and the nature of the ownership of the entity.” Very large multinationals have budgets that exceed some national GDPs. Multinational corporations can have a powerful influence in local economies as well as the world economy and play an important role in international relations and globalization. It is beyond dispute that TNC’s are now the leading vehicles for economic globalization. According to the UN Conference on Trade And Development (UNCTAD). In 2002, global sales of TNC’s reached $18 trillion for world exports. Throughout the past half century, states and international organizations have continued to expand the codification of international human rights law protecting the rights of individuals against governmental violations. In parallel with increasing attention to the development of international criminal law as a response to war crimes, genocide, and other crimes against humanity, there has been growing attention to individual responsibility for grave human rights abuses. The creators of this ever-larger web of human rights obligations, however, failed to pay sufficient attention to some of the most powerful non-state actors in the world, that is, transnational corporations and other business enterprises. With power should come responsibility and international human rights law needs to focus adequately on these extremely potent international nonstate actors. Transnational corporations evoke particular concern in relation to recent global trends because they are active in some of the most dynamic sectors of national economies, such as extractive industries, telecommunications, information technology, electronic consumer goods, footwear and apparel, transport, banking and finance, insurance, and securities trading. They bring new jobs, capital, and technology. Some corporations make real efforts to achieve international standards by improving working conditions and raising local living conditions. They certainly are capable of exerting a positive influence in fostering development. Some transnational corporations, however, do not respect minimum international human rights standards and can thus be implicated in abuses such as employing child labourers, discriminating against certain groups of employees, failing to provide safe and healthy working conditions, attempting to repress independent trade unions, discouraging the right to bargain collectively, limiting the broad dissemination of appropriate technology and intellectual property, and dumping toxic wastes. Some of these abuses disproportionately affect developing countries, children, minorities, and women who work in unsafe and poorly paid production jobs, as well as indigenous communities and other vulnerable groups. It is no doubt that the environmental consequences of TNC’s behavior are multiple and substantial, and here I am going to discuss these environmental consequences of TNC’s.”

“Crediting” is a economic “tool” of the Capitalism to allow acceleration of startup businesses and higher consumption, however the “crediting” could properly function in economic growth with short self-adjusting recessions but the most recent developments in the world economies do not support such consistent gradual development thus “crediting” started bringing negative value instead;

Debt-ridde in Americans can no longer “borrow and buy” the world’s way toward prosperity, US President Barack Obama said Sunday, warning new drivers of growth were needed to fuel global recovery.

By LAURIE WINSLOW World Staff Writer

Published: 6/17/2010 2:20 AM Last Modified: 6/17/2010 7:09 AM Over the last two decades, peoples’ ability to borrow against their homes or run up credit card balances during recessions has helped create an appearance of a safer environment while actually making the economy more fragile. That is one observation of Mitchell Petersen, professor of finance with the Kellogg School of Management at Northwestern University in Illinois. He spoke Wednesday evening at a private gathering of college alumni at the Summit Club. Petersen took time before his presentation for a phone interview to talk about some of the more pervasive, and overlooked, issues he believes have contributed to the current economic and financial crisis. While the most visible signs of the current crisis include falling home prices, increasing mortgage defaults and record unemployment, the seeds of today’s problems were planted well before the housing boom of the last decade, Petersen says. “A lot of what we call this economic and financial crisis are problems with individuals having too much credit card debt and too much consumer debt,” he said. Consumer debt was relatively flat through the 1960s and ’70s until about 1983, when the level of debt started to increase, Petersen said. He noted that the 1991 and 2001 recessions were relatively mild, as consumption dropped a bit. Unemployment never hit 8 percent in the recession of the early 1990s, and it barely got above 6 percent in 2001, Petersen said. By contrast, the recessions of 1974 and 1981 were much more severe. Normally, during recessions of the 1960s, ’70s or early ’80s, if employees lost their jobs, they didn’t have the ability to borrow against their houses because home equity loans didn’t exist and credit cards were scarce. People decreased their consumption during economic slowdowns and quit buying things, which made recessions more severe coming down. But once people resumed work, they could start buying again, which caused the economy to bounce back, Petersen said. In later years, however, people who lost jobs could take out home equity loans and run up credit card balances and continue consuming, which led to recessions becoming less severe over the last couple of decades, Petersen explained. This tendency to borrow when times are tough and then borrow and buy more when times get better causes debt to rise, Petersen said. “That means that a buffer for a rainy day is no longer there so when we have a severe recession like we are in now, our savings essentially have been consumed,” he said. This ability of middle America to borrow over the last two decades has created the appearance of a “less risky and a safer” U.S. economy, and people, in turn, have changed behaviors and saved less, Petersen said. Whereas the average middle American in the 1960s put money in a savings or checking account, today people put it in the stock market, “which is good when it goes up, but a disaster when it collapses because that wealth disappears,” Petersen said.

The shady business policies that worked so well in a capitalism of growth and short time self-adjustments when “easy” business was considered kicking off and maintaining economic development has begun provoking negative impact under the new conditions; the lack of business laws and personal liability for the risk management, and the deregulated contract laws is not anymore spearing such economic growth and in the opposite:

Crisis Is Over, but Where’s the Fix? “The principle is particularly important because regulatory failures may be inevitable. If multimillion-dollar bank bosses do not see a crisis looming before it is too late, can we be sure regulators who work for far less will be more prescient? Markets clearly did a horrid job of allocating capital, but there is no particular reason to think governments would do better.Even if regulators somehow did design a perfect regulatory system, it would not last, simply because clever bankers would eventually find ways around it, just as people find ways to evade taxes, forcing tax law writers to constantly make changes.“Every decade or so,” said Paul Romer, a senior fellow at the Institute for Economic Policy Research at Stanford and now a visiting professor at New York University, “any finite system of financial regulation will lead to systemic financial crisis.”

Financial Reform: Wall Street Wins, Investors Lose “For example, if a bank knew it could be held liable for actions related to its dealings with a convicted felon, do you really think they would risk litigation in order to make a few shekels? I think not, but as it stands, firms can act with near impunity and support criminal activities knowing they are afforded protection by the Stoneridge decision. As for the fiduciary standard, time will tell whether the members of Congress that loudly supported the standard will regret caving and agreeing to “study” the change’s effect. Apparently, it didn’t matter that the SEC already studied the fiduciary standard and found that investors didn’t know when they were getting actual financial advice as opposed to being sold a product. Without a congressional mandate, it’s unclear whether the SEC will have the gumption to make an investor-friendly decision and adopt the standard broadly.”
Late Payments – A Serious Problem for Small Businesses By incisiveleads A recent study has shown that more than half the small businesses in the UK have to delay payments to suppliers and other parties after being victims of late payment themselves. If you are a small business owner who has been at the receiving end of a customer who keeps deferring his payments, you know how that can disrupt your cash flow. Cracking down on late payments is not easy either, because most small businesses have few clients to start with and have to keep them happy. Well, there is no foolproof way to ensure you get payments on time, but that does not mean you are completely helpless. One basic rule is to print all terms and conditions on your invoices so there is no misunderstanding between you and the customer. Any delay in payments should be immediately followed up, so ensure you have a point of contact that is always available. The Late Payment of Commercial Debts (Interest) Act of 1998 also allows you to charge interest on late payments, but be sure to inform the defaulter that you will be charging interest. Any payment becomes ‘late’ beyond thirty days of the initial payment period, even if nothing was specifically mentioned in the agreement with the client.
However, late payments will happen sometime or the other, and as a small business, you need the right tools to tide you over a period of financial crisis. If you have a cash flow problem and a bunch of unpaid invoices, you should go for invoice factoring. There are quite a few factoring companies who you can approach, and at our website, you can get factoring quotes for free. All you have to do is click right here. It makes the process of deciding on a particular factoring company a lot easier.

Incisive business can help your small business in various ways. To find out how we could assist you in your business activities, click here and visit our website. We can connect you to service providers specializing in business banking, invoice factoring, vehicle tracking and a host of other services.

One of the great joys that men in free societies have long enjoyed is the ability to earn an honest wage for an honest day of work. In particular, the amazing capitalist engine that powered the U.S. economy for decade after decade greatly rewarded the incredible hard work and industriousness of the American people. America was known as the land of opportunity, and we built the largest middle class in the history of the world by working incredibly hard. But today, all of that is fundamentally changing. Thanks to rapid advances in technology, and thanks to the globalization of the workforce, the labor of American workers is rapidly losing value. Automation, robotics, and computers have made many jobs obsolete. Today one man can do the work that a hundred men used to do. Not only that, but today American workers literally have to compete against workers from all over the globe. Global corporations often find themselves having to choose whether to build a factory in the United States or in the third world. But in the third world workers often earn less than 10% of what American workers earn, corporations are often not required to provide any benefits to workers, and there are usually hardly any oppressive government regulations. How can American workers compete against that?

The truth is that labor is now a global commodity. How can an American worker compete against a desperate, half-starving worker in the third world that will work like mad for a dollar an hour?

US jobless numbers hide the scale of the problem “This allows the Bureau to offer “alternative measures of labor underutilization”, which, to the untrained ear, sounds like awful gobbledygook and unemployment by another name. And if you take the widest of these measures, which in plain English counts everyone who doesn’t have a full-time job, and blames that on economic reasons (as opposed to blaming it on being sick, old, or in training) then America’s “labour underutilisation” rate went past 17% at about the time its “unemployment” rate hit 10%. A rate of 17% presents everyone with a picture of an American economy where more than one in six people who want a job, can’t get one.”

Following is the Chinese response to unemployment issues, though China has a surplus and basically could afford many economic measures other countries with Fiscal shortages, deficit, and National debt cannot afford or at least may have to compromise many practices in economics used until today; anyway, Chinese Economics uses economic instruments (tools) I a “as it comes as it goes” approach, when even counting on their growing Private sector as a major employer the Chinese well balance any problematic unemployment by using subsidies, tax breaks, social and infrastructural policies, they are balancing craftily employment Demand-to-Supply market forces:

“China’s Employment Situation and Policies” Major Measures

— Maintaining the relatively rapid growth of the economy, and putting the work of employment and reemployment in a more salient position. China will adhere to the policy of expanding domestic demand and maintain a sustained, rapid and healthy development of the national economy, so as to provide a strong drive for expanding employment. When making policies for economic growth and industrial readjustment, it is necessary to give priority to the strategic goal of creating job opportunities and expanding employment, to make creating more job opportunities an important goal of development and to ensure that it is expressed positively in the making of macro-economic policies, such as in the drafting of plans for national economic and social development, industrial policies, financial and taxation policies, investment policies, and banking and currency policies, so as to attain the dual goal of achieving a rapid and healthy economic growth and promoting full employment.

— Promoting the readjustment of economic structure and the improvement of employment structure in coordination, and expanding the capacity of employment. It is necessary to strengthen the readjustment of the industrial structure, ownership structure, and enterprise structure. Greater attention will be paid to the development of labor-intensive industries to bring into fuller play their important role in absorbing the labor force. It is necessary to direct the major part of future efforts for expanded employment to tertiary industry, and, especially, to utilize the large social demand and broad development prospects of the service industry to give further play to its role in expanding employment.Efforts will be made to continuously support and guide the development of the non-public sector of the economy, further carry out various policies and measures to encourage the development of small and medium enterprises and the economy with diverse forms of ownership, strengthen support to them in such areas as investment and financing, taxation, technological service, market development,information and consultation, and personnel training, and encourage them to play a greater role in promoting employment and reemployment. While continuing to deepen the reform of state-owned enterprises, it is necessary, through the separation of major and subsidiary sectors and reform of the subsidiary sector, to properly place surplus workers, and bring about coordinated progress of the reform of state-owned enterprises, the readjustment of economic structure and the readjustment of employment structure.

— Adhering to the coordinated economic and social development of urban and rural areas, and making overall plans for urban and rural employment. It is necessary to coordinate the development of large, medium and small cities on the one hand and small townships on the other, take the road of urbanization with Chinese characteristics, and remove the institutional and policy obstacles to the development of urbanization, so as to create more job opportunities for farmers. Efforts will be made to cancel restrictive regulations for farmers to find jobs in cities, gradually unify the urban and rural labor market, and strengthen guidance and management in this respect, so as to put in place a system enabling urban and rural laborers to enjoy equal employment opportunities. It is necessary to protect the legitimate rights and interests of migrant workers from rural areas according to law, and give guidance to the stable and orderly transfer of rural surplus labor. It is also necessary to promote the reform and readjustment of township enterprises, make efforts in a developing-county economy, and actively expand the space for employment in rural areas.

— Establishing and improving a market-oriented employment mechanism with free choice of jobs by laborers as the salient feature and the legal system of the government as the foundation. It is necessary to give more play to the fundamental role of market mechanism in the allocation of labor resources, and form, in particular, a new employment pattern characterized by the free choice of jobs by laborers. In view of the trend of diversification of employment demands, it is necessary to introduce flexible and different forms of employment according to circumstances; to improve the environment for starting businesses,and to encourage individuals to start their own businesses, so as to promote employment; to strengthen in an all-round way the building of government-sponsored public employment service organizations, improve job referral, vocational guidance and training, and provide quality employment services. Efforts will be made to improve the legal system, clarify the government’s responsibilities in promoting employment, and standardize the behavior of enterprises in hiring people and the order of the labor market, so as to guarantee laborers’ equal right to employment. In addition, efforts will be made to speed up development of the labor market and to establish an employment mechanism with laborers’ free choice of jobs as the salient feature, market regulation as the foundation, and government promotion as the driving force.

— Raising the level of education, strengthening vocational training, and tailoring the level of human resources quality improvement to the needs of economic development. It is necessary to fully utilize various educational resources, strengthen the improvement of human resources quality, direct major efforts to the promotion of quality-oriented education, stress cultivation of practical abilities, and make efforts in improving education quality, so as to train millions of high-caliber workers, thousands of special talents and a large number of outstanding innovative talents for the socialist modernization drive. In line with market demand and the demand for enhancing laborers’ quality,it is necessary to strengthen elementary education, actively develop higher education, vigorously promote vocational education, adult education and other forms of continuing education, so as to gradually establish a socialized life-long training and education system. In line with the higher and higher requirements of economic development and sci-tech progress for laborers’ knowledge-level and work skills, it is necessary to further readjust the structure of vocational education, increase input, construct a modern vocational education system, and vigorously strengthen training of skilled workers, especially high-level skilled workers and technicians. In view of the demand for the readjustment of rural economic structure and the transfer of rural surplus labor, attention will be paid to elementary education and skill training for farmers. It is necessary to introduce in an all-round way the work preparation system and employment accession system, and achieve the dual goal of improving young laborers’ ability for employment and regulating the supply of labor force. Moreover, it is necessary to establish and improve the vocational qualification certificate system, vigorously introduce the system of paying attention both to diplomas and vocational qualification certificates, introduce the vocational qualification certificate system in all technological professions and jobs throughout the society, and establish a close link between school education and social employment.

— Making rational arrangement in social security and employment, and providing basic subsistence guarantee and employment assistance for the underprivileged group. It is necessary to guarantee the basic subsistence of the underprivileged by continuously improving the unemployment insurance system and urban residents’ minimum subsistence guarantee system. Continued efforts will be made to provide employment aid, develop jobs suitable for the underprivileged group, especially welfare jobs, and help them to get reemployment through preferential policies to encourage enterprises to hire under-privileged persons and provide them with free employment services.

– Raising the level of opening-up, and giving play to China’s advantage in labor resources. It is necessary to vigorously organize labor-intensive production and processing of superior agricultural products. While steadily increasing export of industrial products with high technological content and high added value, efforts will be made to improve the export competitiveness of labor-intensive products and increase their market share, so as to maintain and increase domestic employment. It is necessary to rationally guide foreign businesses to invest in labor-intensive products or industries at once labor intensive and capital intensive, so as to increase as many jobs as possible. It is also necessary to actively implement the strategy of “going global” and open up the international labor market.

Though, neither by not responding to the very important Environmental concerns and to quickly exhausting Earth resources, nor to the poor Wealth Distribution and Redistribution of a deregulated Capitalism that prompted mass Fiscal shortages and poverty thus keeping tight to the ideology approach of the past proved feasible to get any country out of the Last Global Recession.

The coming catastrophe “Under a cuts-only approach, Social Security recipients would see their cost-of-living adjustments reduced. Medicare premiums would rise, as would the public pension retirement age. The Pentagon would have almost no money for new arms systems or for Afghanistan-scale military operations. All another spending would have to be lowered as a share of GDP. If we simply tax our way out of the problem, Penner said, the total federal tax burden would increase by 50 percent by 2040. Assuming income tax rates rose in tandem until the top rate took half of an upper earner’s income, we’d also need a value-added tax that ramped up to 7.7 percent by that date. Further, Social Security and Medicare taxes would also have to rise. A fiscal cons”

It (the last Global Recession) showed to anyone that if Governments of the Most Developed Nations of US and EU did not intervene by expanding Monetary Quantities (through accumulation of high National debt), pouring capital into Financial Institutions (such as Fannie Mae, Freddy Mac, and AIG) and even financing Individual Businesses (such as GM) their Economies and even the Global Economy could have collapsed under the pressure of the bust after huge Real Estate over-capitalization succeeded in “Trickle-down” Capitalism’s “freedom” of speculations of deregulated business and financial structures, the inadequate system of wealth distribution unable to sustain and raise “demand”.

How Globalization affects Economics

Today I found a very appreciative commentary to my work

Substantially, the post is actually the freshest on this notable topic. I fit in with your conclusions and will thirstily look forward to your future updates. Just saying thanks will not just be enough, for the phenomenal clarity in your writing. I will right away grab your rss feed to stay abreast of any updates. Good work and much success in your business dealings!

And there are much more on this site.

It is obvious, there are many commoners and intellectuals who find my articles very important and realistic, however these people are not the ones ruling this world, who I believe are far away from the problems of everyday life, so they could not and do not like to question the establishment, finally they are the establishment themselves or serve it honorably, so it seems they are to hang up themselves if they attempt changing it and who would like such a thing.

“We thought it was important to do,” Mr. Phillips said, adding that his group is already working with activists and state officials in Indiana, Ohio, and Pennsylvania to urge them to take similar steps to curtail union benefits or give public employees the power to opt out of unions entirely. “The Koch brothers are the poster children of the effort by multinational corporate America to try to redefine the rights and values of American citizens,” said Representative Gwen Moore, Democrat of Wisconsin, who joined with others in the union protests.”

There is a great division between rulers, the establishment and the rest of people: it is just so obvious more like a movie: – how when someone is elected by the commoners to become a ruler gets pressured by the establishment and changes his approaches under their pressure!

What is the establishment and History of the establishment?

There were many centuries of human history when many had to work for a few to be rich; neighbors were enslaved and villages oppressed: the productivity of the past was so low and so much off that it was literally difficult to maintain any “normal” standard of life but through oppression, slavery and injustice. The level of “Social Order” was ruling the world: nationalism, religion, and xenophobia were “balancing” this injustice by “we are better than you are” approach. Wars and plaguing others were releasing the valves of social buildup by internal social injustice: nobilities and warlords are competing to show “greatness and sense of destiny” for being oppressive to their own people. The economic order of superiority was the product of these low productivity and supply driven economies.

The Capitalism is a higher level of such “social order”: using the idea of an economy and a marketplace driven by trickle-down economics of over-excessive concentration of capital which by coming down to being invested creates jobs. In a supply shortages driven marketplace, the chosen are wealthy: they are noble, smart: the pillars of the society; doing good by being interested for the society to prosper. Many other individuals are involved in working in such a Capitalistic economy of pro-supply by establishing the middle class of hard-working individuals succeeding to live relatively well. The governments are supporting the establishment, from one side believing in the ideology of free Capitalism economics, and from another side, being pressured by the lobbyists and interest groups. Social, Medical, and Educational expenses in such economics are considered slowing economic growth, “shady” business laws and lack of market regulations are considered prompting economic growth. Transnational Corporations are considered the front-runners of development and economic growth; Industrial Production is considered the main additive of the country’s GDP and its Fiscal reserves. Development in a pro-supply Capitalism is only possible by industrial production with a few exceptions of raw resources or capital lending countries who however invest into other countries’ industrial production anyway.

There are a few major distinguished fundamentals of modern Capitalism: market speculations that allow concentration of capital by the wealthy, shady business laws and lack of market regulations an easy business for the transnational corporations and market exchanges that allow concentration of capital, lack of consumer protection laws, social security laws, medical insurance laws (well things are changing in these points lately), employment protection laws that allow quick globalization and again concentration of capital by the few. Capitalism boosted well Market Globalization in a pro-supply marketplace supported by Social Order ideologies and hardworking workforce constantly improving productivity and company structure. It is considered that unsuccessful could be only people not willing to go to school or to work hard: the lazy and incompetent ones. The Ideology of Capitalism states that everyone can succeed if he or she studies or works hard.

Well, for the last 10 years the US workers’ have improved their standard of life under zero, actually, their income adjusted to inflation has been decreasing when the US workers have kept raising their productivity better than anyone in the world for the same time.

Well, for the past 20 years the majority of industrial production was either totally moved or greatly outsourced to China, now Brazil, India, and Vietnam, because of the obvious reason of better Return on Invested Capital from such industrial production not done on the US soil.

Well, the high technologies have come so high that even retained on the US soil industrial production has reduced the number of industrial employment by far.

Well, the US National debt based on the ever ongoing deficit has risen to $13 Trillion when the US standard of life has stalled.

Well, many other countries around the Globe have deepened in deficit and national debt thus being US trading partners have shortened the marketplace for US goods.

Well, even running a high deficit and national debt the value of the USD has risen substantially instead of declining that added stress to the US industrial production, too.

Well, even President Obama is running a deficit and trying to help many industries, for the US customer, the US Medicare, Education and overall Employment this administration abilities and the results of their actions are very limited or may be called modest indeed. When China posses and exercises much more economic freedom to manipulate markets, industries, social and infrastructural policies, and export by all means considered: having huge fiscal reserves and thus possessing incredible power in time of everyone’s fiscal shortages; China is showing flexible and pragmatic economic approaches balancing private business with governmentally run business, social and infrastructural policies with private employment on a flexible employment marketplace, building equity driven economy by using equilibration “as it comes: as it goes” economics.

Well, the European Union follows closely the old ideology of trickle-down Capitalism tightening budgets and imposing austerity policies but success has been elusive neither for countries like Ireland accepting the austerity economic measures to their fullness, nor countries like France limiting austerity measures despite high-national debt. The question is how low the EU countries must cut their budgets to start the trickle-down effect of modern Capitalism, if ever?

Well, neither Marx’s trickle-down Capitalism, nor Keynes’s modest deficit monetary expansion may only resolve the problems of the modern days Globalization and rising Productivity by pro-demand accelerating market forces, in which, it is obvious that not all or even many countries might industrialize themselves or for already industrialized to maintain industrial consistent economic growth. Used by lending system founded on high interest rates may function well only in economic growth or in short term economic adjustments, but it is impossible to maintain proper financial operations and financial stability in long term economic recessions, and because the Global financial system is alike to the individual markets financial system: it has the same weaknesses as the rest of not being able to go through long term economic adjustments. In such context, the last 2007-2009 Global Recession of which consequences are still in effect showed to all that the ongoing and in the future coming economic adjustments are not going to be short or self-adjustable as these were supposed to be after the ideology of modern Capitalism: thus, if Governments have not intervened into the last recession the probability for its self-adjusting are very improbable indeed.

Well, if the US Government has taken on many economic functions and controls to fight the last Great Recession: what kind of actions by governments could be expected in case of new recessions: it seems an unstoppable trend of governments getting involved in business and financing?

Well, if the modern Capitalism cannot use its economics to self-adjust markets in long term recessions and if trickle-down economics does not trickle down capital into provoking industrial growth but are moving to oversee, and if the recessions are to become longer and the governments taking over business and financing, thus to disrupt normal economic cycles, and, if the financial system that uses high-interest rates cannot sustain longer economic recessions and prompt economic growth, and if transnational corporations cannot be any close to maintain global industrial employment, and if the huge ability of China and others to expand industrial production to unknown levels suppressing such industrial production in many other countries, and if high technologies are prompting lower industrial employment, and if, if then the Capitalism is not able to deal with the new developments of such Globalization and rising Productivity by not being able to establish a system for wealth distribution and redistribution needed to maintain fiscal stability and consumption in such economic environment.

Well, if the alternatives for such inability of the Capitalism to deal with the new global developments are the governments to take over, maybe the only realistic expectations should be evaluating the abilities of the Governments to create employment and consistent growth in some kind of socialism……. unless?

Unless an alternative to the Capitalism or the Socialism system of economics could balance “demand-to-supply” global marketplace; could deal with employment, shortage of industrial production, and economic adjustments by saving private entrepreneurship and personal freedom as main forces and “tools” of economics and for such, I consider, the economic-driven by the markets, I called Market Economics or Quantum Economics, because, it is founded of “as it comes: as it goes” usage of economic tools for adjusting economic fluctuations. Under these new conditions, the “Social Order” and economic principles of the Capitalism are about to be replaced by a “Market Order” of market forces and economic principles of pragmatism and flexibilities.

And here finally I will end with what I was supposed to start: Global Warming and the Earth’s exhaustion of resources. I will just say that the only way for dealing with these most important issues and preserve Earth and Humankind is through pragmatically using economic structures and economic “tools” to enhance renewable energy sources and reduce pollution by dealing with poverty, underdevelopment, and unemployment.

Joshua Konov 07.13.2010

How Economics affects Discrimination

The economics of trickle-down Capitalism has proved to the world its powers to create jobs and the consequential Middle Class of the modern-day society. In times of relative economic growth with short self-adjusting cycles, supported by “easy” business laws and regulations, in times of supply-driven markets this system performed fine by building and maintaining such industrial powers as US, Germany and Great Britain to succeed higher than everywhere else’s Standard of Life and reduction of poverty, and general liberalization by constant fight against discrimination because of color, religion or nationality; such liberalization was brought and was supported by consistent continues economic development. Thus how in the US from slavery a few Centuries ago President Obama was elected, thus how in the current German National Soccer Team some of the best players are from foreign descend; thus how London has become international Mega-polis; in this very developed economies the constant fight against any discrimination has risen people consciousness to higher levels when the economic conditions have given opportunities to people from different descend and background to succeed in life becoming productive members of their societies.

Such economic growth, succeeded by the Most Developed Economies, affected gradually the rest of the world by opening countries and markets to the ongoing globalization and by raising constant attention to the unacceptability of any discrimination: after the fall of the Berlin Wall and after China entering WTO, after the succeeded economic growth and development by China, Brazil, India and many more countries around the globe the acceptance of any discrimination as something normal has become less and less tolerable. It also became obvious that discrimination works against economic growth on a purely practical level: by creating poor market conditions, by destabilizing these markets, by the resistance of the oppressed, and by the resistance of the societies of the Most Developed Economies to accept import from places and countries that tolerate discrimination on their territories. It is obvious from an economic standpoint that for any countries to develop their economies an open border trade policies by the Most Developed Economies is needed, from one side access to high technologies in manufacturing, and from another side access to their markets are paramount. Thus the global processes of liberalization of countries and reduction of discrimination are most definitely to continue.

However, the trend for reduction of discrimination and oppression has turned back in that last decade as a result of the economic stagnation: lack of Fiscal reserves and fast shrinking national budgets. The minorities that usually are in the bottom of these countries are the most affected; the Great Recession of the 21^st Century had a very negative effect on the ongoing liberalization and the economies were greatly affected bringing waves of national sentiments to the majorities of these impoverished nations: from North to South from East to West in countries like Rumania, Bulgaria, Spain, and Ireland less tolerance have been maintained toward minorities and immigrants, even in countries like Nederland and Great Britain immigrants were becoming less tolerated by law or by the societies as a whole. The economic crisis has shown to people: how negative effect economic conditions could have on the general liberalization from excessive nationalism and xenophobia, and even to turn back many succeeded already liberties and ante-discrimination practices: such an example are the open employment policies that numbers were either reduced or totally dismantled by many countries in the conditions of this economic dismay, other examples are the financial policies for when before the Great Recession fiscal shortages were much more tolerable and the inter-financial system in European Union worked very smoothly in time of economic growth with the change provoked by the recession such fiscal shortages made example by Greece, Ireland, Poland and Portugal have become intolerable, thus even when the European Union established a Fund to help these countries in case of major default the accent was not their development or growth but their fiscal discipline by reducing substantially their budgets, and because the minorities and immigrants elsewhere are always on the bottom of these societies the prompted budgetary cuts first and at most affected these unprivileged lower classes of minorities and immigrants.

Gypsies and immigrants, colored and any different from the majority individuals could be on religious or descend were becoming less tolerated and accepted because of the Great Recession; the economic consequences of the Great Recession of the 21^st Century has turned back history by the change of ongoing at the time liberalization and acceptance of difference; economic struggle has brought back not only poverty to many minorities and immigrants, but also it has brought back excessive nationalism and xenophobia to some people who were totally away from such feelings; general unemployment and economic stagnation, difficulties to meet the ends, business reduction are affecting anyone in one way or the other reducing tolerance and philanthropy; the effect economic recessions have on individuals and whole countries is very regressive indeed.

Under the pressures of the European Union to maintain low deficit, Countries as Bulgaria have cut their Medical and Social expenses to the bone depriving many from basic medical and social services, where such drastic cuts have affected at its most the Bulgaria’s Gypsies, who even before the cuts were on the bottom of the society, but after these cuts have become so impoverished that actually such conditions were not seen maybe but at the beginning of the Last Century. The lack of basic food, medical help, and utilities are becoming vital for them to survive: the discrimination is not into physical violence by the majority, but by the economic such that came as a consequence of the Great Recession, and when these hardships affect the majority of Bulgarians in one way or another the “tools” that could take the minorities out of their current situation such as education and economic development are becoming more obscure by the day.

Therefore, to talk about tight budgets and fiscal restraint is synonymous of rising discrimination against minorities and immigrants.

In time of rapidly improving high technologies; prompting rising productivity; fast globalization and fast industrialization of vast economies of China, India, Brazil, and Vietnam the expectations of industrial development of many countries around the world may prove futile; even in most industrialized economies outsourcing of manufacturing and capital outflow may well shrink their fiscal reserves or at least reduce the size and the speed of economic growth that consequentially might devastate even farther the less developed economies fiscal reserves resulting into rising discrimination against minorities, immigrants, and the poor overall. When, at the moment, industrial production adds to the majority of most economies GDP and fiscal reserves the relation between their budgets and industrial production is direct. Such direct relation is supported and maintained by the Global Financial System of the World Bank, IMF and WTO, which system works very well in time of short cyclical global economic growth, but performs very poor in time of long-term recessions and shortages of demand. When lending done by the Global Financial System is smooth while lent capital is returned after short recessions and helps economies revival the industrial production has generally shifted and moved away from many economies of European Union and North America and at the same time improving technologies have reduced employment even when manufacturing employment still remains their that possibly of positive effect from high-interest lending is a delusion. Even farther, with the deepening fiscal shortages for many economies these economies ratings come down and they start borrowing on even higher interest rates. It is obvious that such “double jeopardy” Global Financial System may finally contribute for the impoverishment of many countries and markets and their demise instead of their economic development that lack of economic improvement will directly affect the issue of discrimination against minorities, immigrants and anyone different by somehow.

Another factor that affects discrimination is the rising energy prices: the diminishing quantities of Crude Oil, Natural Gas and other natural recourses has had devastating effect to the less developed economies by rising utility and transportation expenses when at the same time lack of industrialization has prompted their fiscal shortages, thus how many economies have lost their ability to maintain fiscal reserves and budget to deal with the lowest levels of their socio-economic structure where the minorities and immigrants were. Foster Fuels are diminishing by time and these are priced on a Global marketplace, therefore, less developed economies deal with such rising prices much harder than the most developed economies do. Such Global stagnation does not affect only less developed economies but it most definitely affects the most developed too: rising crime, poverty, shrinking consumption and expanding emigration in a process in less developed economies reduce export, industrial production supported by rising immigration the ground for intolerance against anything different is growing too.

The dangerous Global pollution levels ask for prompt action to use technologies for low emissions and maintain a clean environment for the Earth to survive, but these new requirements require a lot more expenditures by all countries, and because most the renewable technologies are quite expensive and with low productivity they mostly go toward expenses then toward profitable industrial production; such technologies reduce competitiveness to even Most Developed Economies on the open global marketplace where even without it lower employment expenses in other parts are more than enough to trigger outsourcing, but the needed such expenses are totally out of reach for many less developed economies with constantly shrinking standards of life and fiscal reserves. Thus the expenses for cleaning the Earth environment will put extra pressures on the fiscal reserves and the impoverishing of minorities and immigrants will go even farther.

Putting in context all of the above, a natural global growth in the conditions of currently used Global Financial System is quite improbable to reduce poverty and enhance fiscal reserves for many economies to respond in constant lack of outsourced industrial production, rising energy costs and expenditures so much needed to enhance renewable energies to protect the Earth from catastrophe. The processes of modern “post” recession very heavily alienate minorities and immigrants by establishing conditions of intolerance and xenophobia and if major changes are not adopted by the Globalizing marketplace these processes are not going to get any better.

Other reason and not the least important for the deadly Global Recession of 2007-2009 could be considered the exodus of Industrial Production and related Capital Investment from the Most Developed Countries and Markets such as US and EU into China and India.

Xinjiang attracts nearly 13 billion yuan of external investments in Q1 – “External investments have played a crucial role in spurring economic growth in Xinjiang Uighur Autonomous Region. Xinjiang attracted nearly 13 billion yuan of external investments in the first quarter of 2010, up nearly 46 percent from last year, marking the highest quarterly growth rate of paid-in investments since the global financial crisis.”

In the past, Social expenses where contra productive for maintaining Economic growth, thus Economies of most socialized countries such as of these of the Eastern Block and then China and India (of the Early and Mid Sixties, Seventies) were not able to keep up enough “supply” to balance the “demand” for goods and services, however with the ongoing Globalization and rising Productivity, supported with huge Capital the system of Social Wealth Distribution is becoming more economically adequate as the economies of China, France, Germany, and in its own ways Japan have shown. These countries were able to overcome the Global Recession by having better than US Social Systems for Wealth Distribution.

After the fall of the Eastern Block and the China’s entering into WTO the Globalization stepped on to establish economic conditions for incredibly fast industrialization of China and now of India; very accessible and easy movable highly technologically advanced industrial equipment for manufacturing combined with already highly capitalized US financial markets leering for ROI found perspective on vastly populated Chinese marketplace (of educated and skilled labor) to move industrial production, outsource and invest huge capital into industrial production and related technologies.

How Globalization affects Equity

In times of Globalization some economies and markets build equity, however, some not only cannot use their equity to enhance their standard of life but lose their equity to lack of business that provokes deterioration of equity or at least discount of equity.

Equity is in the foundation of the economy and the market: in the past, most of the equity consisted to physical property but gradually more intellectual property and subjective market securities have become equity. Thus when an individual or corporate equity is evaluated plus the physical equity if any the intellectual property, the hold securities, and the projected economic growth are considered equity. The trend toward intellectual property and market valued securities instead of physical equity is more than obvious for private and corporate equity equally. However, private equity for the majority in the world consists of physical property equity when intellectual and market securities equity is more possessed by very wealthy individuals and individuals living in the most developed economies.

There is a direct correlation between market individual income and equity value because equity value reflects the general market value of a property which relates income financial statement. A property value supported by higher income statement is higher than a property value supported by lower income financial statement. In some cases, as it happened before the last Great Recession market property value became uncontrollable prompted by pure speculations and compromised lending practices. Consequently, the exasperation of property value burst to bring financial losses and loss of properties to many. Seemingly equity of property values should well reflect the real market property values which reflect general income level in this market. Talking about equity not related to physical property but could be intellectual property, market security, or projected economic growth with very high subjectivity in the real economy the market value of such equity is more related to security of intellectual property, marketable securities, and certainty of projected economic growth. Factors that directly affect these equity are scrutinized historical development of the market, most recent economic indicators showing the direction of this market and consistent indicators of the direction of proximal development, factors that indirectly affect these equity are the level of real acting rule of law and contract laws of such market, the clarity and accountability of the marketplace and trading exchanges, the clarity and accountability of intellectual property laws, and the level of personal liability of the risk management of corporate structures, the fiscal stability and the respective infrastructural maintenance and improvement, and social and medical security in this market.

Globalization has enhanced the need for individual markets of using Social and Infrastructural expanses for balancing “demand-to-supply” when in the past these expenses were functioning as stoppers toward economic growth because the overall productivity was lower and there were many closed for globalization markets, now the conditions are changing the productivity is rising constantly and the almost all markets are eager to globalize. Other major changes at the moment are China’s entering WTO and the global competition and the consistent economic growth for the last 20 years China has succeeded. By attracting the majority of global investment and by becoming economy to which outsourcing and new startup manufacturing China become the industrial power that might well tip-off “supply-to-demand” into “demand-to-supply” market configuration; such processes shorten already shortening employment in manufacturing to the rest of the world. Manufacturing, industrial production could well be considered in the foundation of the modern Capitalism that adds the most to fiscal reserves of most of the global economies by highly paid employment; the most advantageous return of investment and the most secure buildup of equity: the higher growth of industrial production the higher level of equity value.

Most Developed Economies are considered the Most Industrialized Economies.

In such market environment of Globalization (outsourcing and moving industrial production to less expensive economies) and rising Productivity (improvements in high technologies and shrinking employment marketplace cause this rising productivity), industrial employment is shrinking fast at the US. Very few are the economies of Most Developed ones that have succeeded under current forces of industrial competition to sustain industrial production and keep up their industrial leadership: Germany and Japan are the few. The value of equity as stated closely relates industrial production of the modern day economics therefore overall such value will deteriorate in markets with deteriorating industrial production.

Modern economics does not take in consideration the value of already succeeded equity if economic industrial economic growth is not maintained and only short term self-adjustments are project-able. Such positions of equity directly relate the financial system of individual markets and the global financial system which lends on relatively high-interest rates and short term, and in which corporate structures are run on short term profitability. Indeed equity related intellectual property and equity-related market security are long terms corporate equity however the fluctuations of overall market equity value often fluctuate and reflects corporate equity values violently.

In the past when supply was leading and most developed countries were firmly holding onto the global industrial production such fluctuations of individual and corporate equity values were productive because of prompting concentration of capital then prompting consecutive economic growth, than also less developed economies were more like satellites to the most developed ones being able to support fiscal reserves for social and infrastructural expenses. Even some parts of such industrial production were developed here and there in different countries, the majority was still kept by the most industrialized economies. The equity values in most industrialized markets were, therefore, higher than these of in less developed markets and these still are, except that under the new arousing conditions of globalization and rising productivity industrial production has been gradually moved and outsourced to China, and now India, Brazil and Vietnam which are vastly populated countries with inexpensive labor force and some good industrial structures, therefore in terms of value of equity related industrial production the most definitive becomes the issue of lack of such industrial production to many economies and if such is reduced or lost what consequently would be their value of equity. Intellectual property and market security values are much more flexible and adaptive then the real estate equity value because intellectual property and market security equity reflects an economy, country, marketplace achievements in education, social and infrastructural development that requires long term development thus countries as US that very well represent such succeeded development will be hard to be shut away as holders of such equities. However such superiority is a short term perspective even to the mighty US because of the Internet and the constant exchange of information and technologies, because of the outsourcing and moving industrial production the new emerging economies would pop-up if these themselves develop required infrastructure, social structures, and education to respond to the changing realities. In case of China when in the past its communist social policies were contra productive to its industrial growth and development under the most recent globalization and rising productivity China’s Social and Infrastructural expenses proved to be very productive in balancing its “demand-to-supply” and thus succeeding consistent economic growth even when the rest of the world went through the Great Recession, thus China’s equity has risen much because of its economic growth.

Equity values are very sensitive economic indicators more like currencies; the difference between them is that currencies’ values are more related to short term global adjustments and fluctuations when equity works in longer terms. Equity values are harder to build: real estate, infrastructure, intellectual property, market security equity values are to be used in the future as economic indicators for a country, economy, market evaluation, and underwriting. To use equity values, economics must change the ways these values are preserved and enhanced even when industrial production is not going to be the main economic indicator as it has been for some time. Economic “tools” are to be used to sustain equity values in an “as it comes: as it goes” basis and approach, that approach differs from country, economy, market to country, economy, market because of their level of development, mentality, and tradition. In some Social and Infrastructural expenses should be reduced in the short term to prompt economic development in some the Social and Infrastructural expenses should be well enhanced to prompt such economic development. There are some economic “tools” that are for all and these are the expenses for preventing pollution and implementing renewable energies, these are economic “tools” for balancing “demand-to-supply” on a global scale and are to be financed by the global financial structures of the World Bank, IMF and WTO through Commercial Banks on a marginal interest rate or subsidies. For such lending paramount should be the enhancement of businesses security: of business and contracting laws, of personal liability to corporate structures, of corporate bonding. The global financial structures should be given the controlling functions over global balance of “demand-to-supply” to prevent from inflation, the issuing of monetary quantities power to keep interest rates low, the targeting countries, economies, markets weak points for building equity, the controlling over countries, economies, markets compliance with the guidelines and underwriting, the controlling over commercial banks’ execution of these guidelines and underwriting matrix.

The existing equity of countries, economies, markets should be the foundations for low-interest lending therefore overall security should be enhanced thus countries, economies, markets could become eligible for financing

In the new century of market economics industrial production should not be the only way for fiscal reserves but one’s equity that could be built by properly balancing its “possible demand-to-supply” and properly and pragmatically using all economic “tools” to raise its “security”.

China’s Barbie Doll EconomicsOft-quoted, Dong Tao, a heavyweight economist at UBS in Hong Kong, once said: “A Barbie doll costs $20, but China only gets about 35 cents of that.” He was talking about global trade statistics at the time, but that proclamation might help explain why Chinese companies are increasingly shopping for and successfully acquiring storied brands, most recently, Ford’s Volvo.The lesson: the big money is in owning the brand, not just making it for foreign companies, writes the AP’s William Foreman.

Capacity (Equity) building as a China’s National Policies is a balance between Free Enterprises rising Productivity and Social and Fiscal Policies and Infrastructure

Equity, capacity, and sustainability “The concept of equity in the context of capacity building is not sheer ethical. Its mixed with certain practical social and economic meaning, therefore inseparable from sustainability. Equity here contains three folds of meanings: 1) equity between existing generation and future generations; 2) Equity between different social members under the same generation, and 3) Equity in responsibility and obligation that different social members or groups have to achieve sustainable development. Equity between generations, too much extent, is subject to ethical area. The current generation, in a moral sense, should avoid “eat rice from ancestors while breaking future generations ”pot”. They have no right to overconsume and damage natural environment and resources that the future generations will live in. This point was made very clear in the World Committee on Environment and Development Report. In its definition of sustainable development, that not to harm the future generations to meet the need of their own was established as a condition. Although the capacity building of the current generation is helpful to equity between generations, this equity, however, is not the most important problem to solve in the area of capacity building. The equity between different social members under the same generation is closer related to sustainability. On the one hand, from the perspective of social justice, it”s necessary that the society takes into consideration the poor’s interests so as to reduce the gap between the rich and the poor. This was emphasized in the Brundland Report. That is, The basic needs of the poor in the world should be put at the top priority. On the other hand, equity between different social members under the same generation is also a condition to sustainable development. It seems that there is not much connection between equity and sustainability, or not so direct. However, by some analysis, can you find that different social members unequally possession of the resources is an important reason for difficult sustainable development. This is because that even though the society, in general, is rich in resources averagely speaking, yet the gap in term of resources possession will force the social members short of resources to overuse or abuse their limited resources to make a living. Since the environmental problems are interrelated and winter effected, some part of unsustainability in the society will likely lead to overall sustainability. Therefore, equity is also a condition to the sustainable development process. A sustainable environment and equity of social responsibility and obligation have been an issue that developed countries and developing countries keep debating on. Who has polluted the environment? Who is making the environment worse and worse? This is an issue of responsibility and obligation. Even though its an issue of equity between different social members or groups under the same generation, in essence, its a practical issue in international politics and economics. However, even if every social member or group is willing to assume the obligation, does he have the capacity to realize the commitment? There you find that equity, capacity, and sustainability are closely related with one and another.”

State Employment is used as a balance for higher wages in Non-State Employment instead of used by the Economics of Capitalism (mostly and only) Employment Market Forces.

Ⅲ. The Institutional Transition Under the Dual Labor Market From our analysis of the features of employment absorption and wage determination in the two parallel urban labor markets we can make the judgment that the labor market in the newly established sector determined by market forces represent the future direction of development. In other words, the process of transformation from the SOE”s employment system to NES”s is the process of the formation of the labor and wage system of the market economy. How will this system transition take place? Since the two systems of labor and wage in the two kinds of sectors dominate their respective labor market, the competition for laborers between these two kinds of enterprises and therefore the expansion of one labor market and the reducement of another will realize the transition from one system to another. This is the first form that the transition of employment system will take. In the process of expansion and reducements of the two labor markets, caused by the competition between the two kinds of enterprises, the traditional system of the state sector will respond accordingly, namely by introducing reform in order to survive in the competition and shift to a market economy. In this way the second form of system transition takes place. First, we will look into how the first system transition that is characterized by employment transfers between the two kinds of enterprises occurs and the features of its transformation. If we suppose the urban labor market is closed off for outsiders, laborers are distributed merely between the SOEs and NESs. Chart 1 indicates the competitive relations between these two sectors as well as the process of expansion and reducement of the two labor markets.The horizontal axis stands for the labor volume. From O1 to the right, the labor volume of the SOEs can be measured; from O2 to the left that of the NESs can be measured. The domain between O1 and O2stands for a total supply of labor. The vertical axis stands for the marginal productivity of labors or the wage level. The curve tilting downwards from the right to the left is the curve of marginal productivity of labors in the NESs. It tilts because their marginal productivity of labors decreases with the increase of the employed labor’s size. At the same time, the marginal productivity of labors in the SOEs increases with the number of workers leaving their enterprises.Thus, the curve tilting downwards from the left to the right is the curve of marginal productivity of labors in the SOEs. The curve that is steeper is the curve of marginal productivity of labors in the SOEs under the assumption that their wage level is determined by the market (see the name in quotation marks). In this situation, this curve intersects at the point A with the curve of the marginal productivity of labors of NESs during their employed labor volume expansion. This means the wage level of the two kinds of enterprises are equal to the point Wa, and the expansion of labors ”volume in NESs no longer continues. Then the labor’s volume in the SOEs is O1A while that of NESs is AO2. Since the SOEs are overstaffed and wage is not determined by the marginal productivity of labors, however, their curve of marginal productivity should be more flat (might be a horizontal beeline without elasticity), i. e. the curve whose name is without quotation marks that intersects at the point B with the curve of the marginal productivity of labors in the NESs. It is at this point that NESs stop expanding their labor volume, here the wage rate is Wb. As the wage is determined institutionally NESs need to pay a higher wage to attract laborers, and the transformation of the laborers from the SOEs to NESs becomes smaller. In the real laborer’s distribution, the laborer’s volume employed by the SOEs is O1B instead of O1A, that for newly established enterprises is BO2 instead of AO2. So the NESs are limited by their ability to pay higher wage, the difference between labor volume they really employ and that they should employ is indicated by the distance between A and B in the chart. Chart 1 Labor Transfers between Two Sectors Our theoretical analysis reflect the reality of the transformation of laborers between the two sectors. One characteristic of NESs is very labor intense. It is not feasible for NESs to pay very high wage to attract employees from SOEs if NESs are to keep their advantage in laborer’s resource. So competition of employment is limited by the scope of their ability to pay high wages. Within this scope, however, NESs can certainly attract relatively high qualified workers to form the backbone of their enterprises without taking cost into account. As it is not possible for the NESs to obtain all the laborers they need from the state sector it is necessary to have other channels to find labor. If NESs had not had other such channels, this sector would not have been able to develop to the present stage. Our analysis above was made under the assumption that the urban labor market was closed off for outsiders, in our further analysis we will give up this assumption. NESs obtain highly qualified workers from the SOEs by paying a higher wage in order to satisfy their needs for technology. The other source is laborers with common skills from the rural areas.

China has discovered that globalization and international competition work in its favor.

Great exportations “China overtakes Germany to become the biggest exporter of all” “CHINA’S rise has long appeared inexorable. Despite a decline in total world trade, China has seen its exports fall less than those of other big powers. A new report by the World Trade Organisation calculates that the total value of merchandise exports fell by a staggering 23% in 2009. Among the top ten exporters, Japan’s shipments were worst affected (falling by 26%). Although China’s exports also fell (by 16%), the contraction was less painful than in Germany (down by 22%). As a result, China is now the single largest exporter. The global downturn has helped to reduce global imbalances; the leading three exporters accounted for 26.7% of total world exports in 2009 down from a third of the total in 2008. The WTO expects trade to rebound by nearly 10% this year.”
The Real Reason China Resists on the RMB“As I see it, China is asking a question to which there is no easy answer; what right does the US have to lecture anyone on economic matters now, having played so large a part in causing the current global recession through loose monetary policy, poor risk management by some of our most prestigious companies and monumental regulatory failures? They are responding to the continued US belief in American exceptionalism, that we can do whatever we do, right or wrong, and ignore the criticisms and demands of other countries who often bear the consequences of our actions, while we continue to insist on our right to criticize and make demands on them. As Brad Delong and Stephen Cohen have pointed out, the US simply no longer has the economic clout to get away with this any longer, and who better than China to stand up to it?

The problem of the Rest of the World is the ideological almost blind following of Marx’s’ “Das Kapital” financial system controlled by the rules of “trickle-down” Capitalism that happen to be quite impractical even when this system built North Americas, Great Britain, France and Germany: Great Powers envied by anyone in the World, however looking in History things sometimes have to change; it happened to Rome, Persia, Victorian Empires, and etc., thus change could be considered as ongoing now affecting different countries and markets in different ways, but the trend is quite similar ( In the World short term history: once mostly agriculturally driven GDP changed into mostly industrial production is driven GDP, now it is about to change into mostly “artificially” balanced “Demand-to-Supply” Market Economics GDP not the ideological one followed as a mantra by the west, however, if global economy does not adapt to the new upcoming with the globalization challenges very hurtful consequences may occur).

· BRUSSELS (Reuters) –European Union finance ministers will try to agree on the fine points of bank stress tests “when they meet next week and break a deadlock in talks on new financial supervisors, EU diplomats and officials said. Meeting on Monday and Tuesday, they will also press Slovakia to stop balking at signing an accord needed to launch a 440 billion euro (364.7 billion pound) support mechanism for eurozone countries in financial trouble. The euro zone’s 16 finance ministers, whose meeting will be followed by the gathering of all 27 European Union finance chiefs, will also try to push on with negotiations over stricter budget discipline rules so they can take effect next year. “Stress tests will be a major point in the discussions. It will be a follow-up to the presentation of CEBS,” said an EU source, referring to the Committee of European Banking Supervisors, which on Wednesday published broad guidelines on how the bank health check-ups will be carried out. CEBS’ statement lacked some important details, for example the scale of write-downs for banks holding sovereign debt deemed not entirely secure. It will be the last full finance ministers’ meeting before the stress test results are published on July 23. “The ministers will also discuss policy responses by countries where stress tests show pockets of vulnerability, if this is indeed the case,” the source said. Countries should in general have sufficient national funds to recapitalize weaker banks, but some may want to turn to special EU rescue funds set up this year to help governments withstand the turbulence in sovereign debt markets. “Turning to those funds would require strict conditionality and negotiations with the European Commission,” the source said. The funds include a 60 billion euro facility guaranteed by the EU budget, which is operational, and the 440 billion euro mechanism, which will be ready when all 16 euro zone countries sign a relevant framework agreement. Euro zone newcomer Slovakia’s government, formed after an election last month, has doubts over signing the agreement and the country’s Finance Minister Ivan Miklos will face pressure from his 15 euro zone partners to approve it. “We expect Slovakia to make an announcement that will allow us to make the vehicle operational,” the source said. Miklos has told Reuters that all options are open. FINACIAL SUPERVISION, BUDGET DISCIPLINE”

How Globalization affects Currencies, Monetary Policies

With the acceleration of ongoing Globalization market conditions have changed consequently affecting the value and volatility of national currencies. In European Union, the euro EUR has replaced many local currencies. The U.S. dollars even still maintaining its powers has been challenged by the Renminbi (RMB). Many other currencies are pegged to the U.S. dollars and the euro EUR to avoid fluctuations and harmful volatility. The power of such unification of Global currencies is used by some countries such as China and Germany to keep up growth, the weakness of such unification of Global currencies result for many countries such as Greece and Spain to accumulate huge national debt and many more other countries to deepen into genuine poverty. Like everything else in the process of Globalization, there are winners and there are losers as well.

Currencies reflect the economic situation of their issuers: when Japan got into economic crisis in the 90s the yen (JPY) reduced is value, when the US got into 2007 Recession the U.S. dollars lost price far in advance then when Greece got into “high debt” trouble the Euro started deteriorating; it should be clear that major currencies like the U.S. Dollar (USD), the Euro (EUR), the Renminbi (RMB) and the Yen (JPY); however in the new Globalization the accumulation of National Debt as a result of stimulating economies does not necessarily decrease currencies values for which good example is the USD in the last year or so and austerity fiscal policies with promises of cutting deficit and playing sound “old” economics does not necessarily increase currencies value for which good example is the EUR and its most recent developments; nor by expanding one’s Social and Infrastructural policies would necessary decrease their currencies values for which a good example is the RMB which value is considered depreciated instead, nor by heavily subsidizing your industries and SMB would decrease one’s currencies value for which a good example is the JPY.

Many more factors are provoking currencies fluctuation but the trend goes like this: the Globalization has weighed more on

the Demand-to-Supply side of the economies instead of the Supply-to-Demand side as it always had been;
the Deflationary market forces then and instead of the Inflationary such as it always had been;
the Prospective for stable market development then and instead the Prospective for expanding industrial production as it always had been.

However, the variety of “many more factors” mentioned above such as countries:

socio-economic structures
productivity
infrastructure

All of these considered “equity” play a major role in currencies value too.

Here it will be important to mention the “relativity” of the economic “tools” for maintaining currencies value, because even a general trend could be apprehended the currencies value could easily go the other way and supply may overrun demand, and inflation may overrun deflation if proper economic rules are not expanded internationally, but still the possibilities for a very accelerated industrial production in regions of China, India, Vietnam, Brazil are so “easily” achievable because of the mobile highly developed structures of the global conglomerates, the high technologies and the global capitalization basically offset in a short term these possibilities of turn around. However, certainty in the modern economics I believe are quite limited: there are more like of “quantum economics” adjusted by economic “tools” used as “parameters” instead of philosophical “certainty” of the dialectic economics; (for more see: Quantum Economics – Philosophy of the Economy”)

The currencies value reflects the ongoing Globalization and how adequately individual governments follow “the momentum” in history: the Demand-to-Supply motion of possibilities for development; thus, under certain condition lifting one’s Social and Infrastructural expanses might be positive to balance the Demand-to-Supply ratios in another it might be negative for the economy; also these economic “tools” could differ from country to country and from region to region, so proper evaluation of individual countries “current possibilities and momentum” should be paramount when balancing Demand-to-Supply ratios. For some countries giving a bit more freedom to businesses may accelerate their economies for another regulating business to make it more “secure” for easier financing could be the answer of “the momentum”. However, the trend is the trend, and for the most developed economies, the biggest problem at the moment is the lack of proper Demand. Production based economics of the Capitalism when production means mostly industrial production that adds the majority to these countries GDP must well change its (the Capitalism) ideological approaches toward economics and start using more pragmatically inclined approaches of “as it comes: as it goes” economics of market adjusting to keep Demand-to-Supply ratios balanced.

For the last couple of years it became obvious that the system of economics of self-adjusting Supply-to-Demand has become inadequate and governments started taking the role of investors, banks and promoters which trend if followed will move to governments the majority of business if a few more recessions go through when governments are inept in doing and promoting business and lack any flexibility so needed in business: they the governments should be only the final result for correcting economies and the consequential currencies values.

To prevent from recessions is not easy but could be possible if:

· economic “tools” are used pragmatically instead of being used ideologically;

· general business laws start applying to all participants on the Global marketplace which could promote the Small to Medium Businesses (SMB) and Small to Medium Investors (SMI) to become equally competitive to the Big Businesses and Big Investors;

· Global central banking represented by the World Bank, IMF and WTO change their role from being “the lender” into the one of being “the controller” of keeping Global Demand-to-Supply balance trough using low-interest loans and subsidies to SMB to promote Global growth and to impose renewable energies and environmentally friendly enterprises too;

· Global central banking should have issuing monetary power, instead of levying on financial institutions which action will jack-up lending rates instead;

· Global central banking should use commercial banks for marginalized lending on set matrix to promote growth;

· The priorities of the Global “controlling” should change from lending to inflation (Demand-to-Supply balance), because that’s the most important indeed.

Currencies reflect each country adaptability to the new developments in the new Globalizing marketplace but also the currencies are becoming also more like a computer game and particularly when (RMB) becomes a natural balance to the (USD) their (the currencies) value will well lose volatility if this Globalization is executed properly:

Good example of how such Globalization was not executed properly is what happened in the European Union when countries were politically united under the same currencies but their economies differed substantially in development and living standards: the EU did not attempt to equalize these differences by strong social programs and requirements by using commercial banks to get access to SMB and by lifting individual countries standard of life but instead by governmentally run programs, very complicated and inaccessible to the majority of SMB and by general lack of Social Programs. As a result of the EU inadequate actions, some countries like Greece deepened in National Debt and others like Bulgaria (which currency is pegged to the EUR) deepened in Genuine Poverty in which both cases the value of the (EUR) and the overall economic growth of the EU was not improved. The austerity measures approved by the EU obviously were not accepted as positive by the currency traders so the value of (EUR) is drifting away. The way EU has been developing is more like having a million dollar house next to the ghetto and wondering why its market value is very low. It is obvious that the condition of your nationhood is important for your prosperity, the schools in the area, its crime rate and etcetera.

What was referred to EU and the problem of underdevelopment for the EU that brought all of its problems basically applies to the rest of the world where such inequality is huge, and because of the Globalization has become not a problem for these poor underdeveloped countries but for the entire world and mostly for the most developed industrialized countries which capacities of industrial production has long time overrun their own demand (here it is important to mention that underdevelopment exist in some parts of the most developed countries internal areas: in the US some states like Michigan, in EU many countries like Bulgaria and in China many areas).

The model of self-adjusting trickle-down capitalism based on profitability from industrial production mostly does not possess the capabilities to change the Global marketplace because all countries cannot be industrialized when technologies cut on manpower and outsourcing moves production elsewhere; still I believe the freedom of business and the vitality of entrepreneurship should be used but many fundamental changes should be done so instead with the next recessions the governments do not take over business: bureaucratization seems very monstrous way of solving these problems indeed; there goes away with personal freedoms and there goes away with liberty too. But for these freedoms to be saved the Global business, financial system, the ways underdeveloped markets are approached and the ways economics is used must change.

(For “parameters” see my research “Philosophy of the Economy”)

If these new developments of Globalization have a harmful effect on the Most Developed Countries of North America, France, Germany, and Japan to the rest of the World their effect is deadly: rising national debt or genuine poverty are everywhere: Latin Americas, Africa, Eastern Europe, and elsewhere;

Globalization and the Developing Countries: “My task is to talk about globalization and inequality in developing countries, with emphasis on Latin America. I have a simple point to make: globalization puts developing countries at risk of increasing income inequality. The increase in inequality in the United States over the last 25 years (during which the income of the poorest 20 percent of households has fallen in real terms by about 15 percent) has been blamed, rightly or wrongly, on changes in trade, technology and migration patterns associated with increasing economic integration with other countries. For developing countries, any risk of increasing inequality associated with active participation in the global economy is even greater, if only because of the greater inherent institutional weaknesses associated with being poor. Latin America has a special disadvantage: its historical legacy of already high inequality. The inequality that is already high complicates the task of effective conflict management, which Dani Rodrik has just reminded us is a critical input to managing open economies. In the past, for example, high inequality combined with the politics of redistribution led to periodic bouts of populism in Latin America – ineffective and counterproductive efforts to manage the conflicts provoked by the dangerous combination of high inequality and hard times. My task is to talk about globalization and inequality in developing countries, with emphasis on Latin America. I have a simple point to make: globalization puts developing countries at risk of increasing income inequality. The increase in inequality in the United States over the last 25 years (during which the income of the poorest 20 percent of households has fallen in real terms by about 15 percent) has been blamed, rightly or wrongly, on changes in trade, technology and migration patterns associated with increasing economic integration with other countries. For developing countries, any risk of increasing inequality associated with active participation in the global economy is even greater, if only because of the greater inherent institutional weaknesses associated with being poor. Latin America has a special disadvantage: its historical legacy of already high inequality. The inequality that is already high complicates the task of effective conflict management, which Dani Rodrik has just reminded us is a critical input to managing open economies. In the past, for example, high inequality combined with the politics of redistribution led to periodic bouts of populism in Latin America – ineffective and counterproductive efforts to manage the conflicts provoked by the dangerous combination of high inequality and hard times.”

Greece, Portugal, Spain, and Bulgaria are among many economically struggling to couple with ever lack Fiscal and Monetary quantities countries: to maintain the rising productivity of Germany, Japan and China or to industrialize themselves is just futile so they are cursed to high National Debt like Greece, Portugal, and Spain or to high Poverty like Bulgaria whose Government was “hired” by the World Bank and IMF to support strict financial order:

Rating Agency Data Aided Wall Street in Mortgage Deals“In essence, banks started with the answers and worked backward, reverse-engineering top-flight ratings for investments that were, in some cases, riskier than ratings suggested, according to former agency employees. The major credit rating agencies, Moody’s, Standard & Poor’s and Fitch, drew renewed criticism on Friday on Capitol Hill for failing to warn of the dangers posed by complex investments like the one that has drawn Goldman Sachs into a legal whirlwind. But while the agencies have come under fire before, the extent to which they collaborated with Wall Street banks has drawn less notice.

U.S., EU call on Tokyo to ensure fair competition against Japan Post TOKYO — “The Japanese government has received a letter from the United States ambassador and his European Union counterpart calling on Tokyo to ensure fair competition when revising the nation’s postal privatization plan, Chief Cabinet Secretary Hirofumi Hirano said Friday. In the letter, U.S. Ambassador to Japan John Roos and Hugh Richardson, ambassador, and head of the delegation of the European Commission in Japan are believed to have claimed that Tokyo’s plan on raising the deposit cap on Japan Post Holdings Co’s banking unit may breach World Trade Organization agreements.” Commentary: This is very suspicious, to say the least. As the international criminal bankster gangsters enrich themselves by creating havoc around the world(Greece, Ireland, Iceland, Spain, Italy, Portugal, US,)and get countries under their control, a national safe haven for savings is very important.US and EU are claiming unfair competition because Japan wants to enable a safe haven for people’s savings. Japan, hold strong to your national sovereignty, do not let these criminal scumbags and there New World Order agenda in. World Trade Organization creating problems and enriching those at the top through neo-mercantilism.”

However neither of these two approaches (the one that Governments keep raising National Debt nor the one which Governments maintain strict Budgetary austerity) happen to bring “prosperity” to these countries: “high deficit” or “financial austerity” both are not going to make Spain, Portugal, and Greece nor Bulgaria “industrial powers” thus they could cover their ever arising Social Expenses and Infrastructural Deterioration to ever-shrinking Fiscal Reserves.

Profit of Bulgarian Banks Down by 37% in 2010 Q1 “The profit generated by the Bulgarian banking system in the first quarter of 2010 amounts to BGN 170 M, which is a 37.2% drop year-on-year. At the same time, however, the profit of the Bulgarian banks grew by 7.5% in January-March 2010 compared to the last quarter of 2009, showed data of the Bulgarian National Bank released Thursday.

Fed chief: Joblessness, housing still problematic Despite a more stabilized economy, he says, the U.S. is “far from being out of the woods.” “WASHINGTON — Problems in the housing market and high unemployment are the biggest economic challenges the nation faces, Federal Reserve Chairman Ben Bernanke said Wednesday. After suffering through the worst recession since the 1930s, the economy seems to have stabilized and is growing again, Bernanke said. But he warned: “We are far from being out of the woods. Many Americans are still grappling with unemployment or foreclosure or both.” In prepared remarks to business people in Dallas, Bernanke said he saw no evidence of a “sustained recovery” in the housing market, noting that foreclosures keep rising. Commercial real estate remains a trouble spot, too. The toughest problems are in the job market. Even though layoffs have slowed, hiring is “very weak,” Bernanke said. He noted that unemployment, now at 9.7 percent, is still close to its highest levels since the early 1980s.”

The impossibility for many countries to industrialize joined by constant lack of capital means “no solution” under the control of the World Lenders (World Bank. IMF, WTO) that “control” their borrowers tightly.

Could not be denied that some of these less developed countries might have corruption, improper bureaucracy, insufficient markets, and etc. but whatever WB and IMF could present as reasonable for lack of development: the ongoing processes of Fiscal shortages for these and many other countries are to be unavoidable: and because most of the World economies are 80%+ based on consumption these countries lower life standards prompt weak market demand boomerang back to the Most Developed Industrial Countries’ export and so it goes on and on.

Unless in the Past, these new conditions of decreasing industrial production, following consumption and demand affect the US, many countries in EU, and the rest of the World in a very harmful way seen at the Last Global Recession.

U.S. rebound on good footing: Fed’s Fisher (Reuters) – The U.S. economic recovery is gathering speed as business activity picks up pace, despite lingering weakness in employment, Dallas Federal Reserve Bank President Richard Fisher said on Tuesday.

I’m Sure Glad The Recession Ended “It’s a good thing the recession ended. Otherwise, key economic charts might look something like this.

Alternatives to appreciating the Chinese yuan “Recent debate has focused on how to increase US exports and savings and increase Chinese imports and consumption in order to correct the trade imbalance between the US and China. In America in particular, focus has been placed on Chinese exchange rate policy. American leaders would like the RMB to appreciate significantly and quickly. They hope that this would lead to an increase in US exports and employment.”

H-man – Thursday March 04, 2010 08:06AM EST “I was a manufacturing executive for the past 30 years. I directly observed our manufacturing base disassembled and outsourced. The pace only increased and unfortunately continues unabated. The manufacturing jobs sent out of the country were much better paying than the service jobs that replaced them. The bottom line is now Americans can no longer just “BUY AMERICAN” and don’t have the $ to do so anyway. Greed (Corporate, Political, Individual) has killed the American Dream.

The New Poor “Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed. Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.”

America tied-up by Record Debt “Smoothing out the economy’s ups and downs, however, has a cost which is now tying America’s hands. At this time when fears of a double-dip recession are rising, it’s an obvious moment for the government to apply more stimulus spending as it has in the past. But the U.S. finds itself more leveraged than ever before, limiting its options.” Small businesses need a disaster plan — and plan B(AP) — NEW YORK – Small business owners in the Upper Midwest have just gone through a disaster preparation drill as the Red River rose and threatened to repeat last year’s catastrophic flooding. The region dodged a bullet this time, but more floods may well come, and other parts of the country could see tornadoes and hurricanes. Disaster preparation is one of those tasks that many small business owners say they’ll get around to, soon. But it often gets pushed down the priority list, especially when a company is focused on bringing in new business or improving cash flow.

President Obama is doing a lot of positive economic actions in an attempt to revive US economy: currently signed in-laws Health Reform, imposed support for homeowners mortgage defaults, financing SMB and helping Student Financing are moved into a right direction.

A Progressive Agenda to Remake Washington With the Senate’s passage of financial regulation, Congress and the White House have completed 16 months of activity that rival any other since the New Deal in scope or ambition. Like the Reagan Revolution or Lyndon Johnson’s Great Society, the new progressive period has the makings of a generational shift in how Washington operates.

First came a stimulus bill that, while aimed mainly at ending a deep recession, also set out to remake the nation’s educational system and vastly expand scientific research. Then President Obama signed a health care bill that was the biggest expansion of the safety net in 40 years. And now Congress is in the final stages of a bill that would tighten Wall Street’s rules and probably shrink its profit margins.

If there is a theme to all this, it has been to try to lift economic growth while also reducing income inequality. Growth in the decade that just ended was the slowest in the post-World War II era, while inequality has been rising for most of the last 35 years.

It is far too early to know if these efforts will work. Their success depends enormously on execution and, in the case of financial regulation, specifically on the Federal Reserve, which did not distinguish itself during the housing bubble.

In regard to Wealth Distribution by following the last Global Recession facts are showing an indiscriminate link between using Social and Infrastructural Expenses as Economic “tools” for balancing “demand-to-supply” ratios. Such a trend could be changed by using an enhanced Stock and Commodities Exchanges regulated structures that would be sufficiently allowing Small to Medium Investors to invest Globally and to be able to profit from thus going Global growth: the ROI (return on investment) such as SMI (small and medium investors) could become Market driven ways for Wealth Distribution; Other Market-related ways for such Wealth Distribution could be by imposing common Global Markets’ regulations (for making Small and Medium Businesses equally competitive to the Large International Corporations), enhancing Business Contracts and Bonding Laws, enhancing Intellectual Properties laws and Risk Management Personal Liability laws to prompt SMB Global expansion.

President Obama has a few key economic messages for the world: China needs to buy more stuff from other countries; Europe (and the U.S.) shouldn’t be too hasty in the push for austerity, and banks need to hold bigger rainy-day funds.

Those are the messages (some implicit, some explicit) in this letter to world leaders, written ahead of the upcoming G-20 summit and obtained by the Washington Post.

Here are a few of the key passages:

The letter doesn’t mention China by name. But it includes a passage that clearly applies to China.

For years, the U.S. has imported more than it’s exported, while China has done the reverse. Obama writes:

A strong and sustainable global recovery needs to be built on balanced global demand. … I am concerned by weak private sector demand and continued heavy reliance on exports by some countries with already large external surpluses.

This is followed by a bit that’s aimed at China’s policy of tying its currency to the dollar. U.S. officials have called for China to allow the value of its currency to fluctuate. That would make U.S. goods cheaper for Chinese consumers. (It would also make Chinese goods more expensive for U.S. consumers.)

… I also want to underscore that market-determined exchange rates are essential to global economic vitality. The signals that flexible exchange rates send are necessary to support a strong and balanced global economy.

Elsewhere in the letter, Obama addresses Europe and the U.S., when he argues that governments shouldn’t cut spending too quickly:

We need to commit to fiscal adjustments that stabilize debt-to-GDP ratios at appropriate levels over the medium term. … But … we must be flexible in adjusting the pace of consolidation and learn from the consequential mistakes of the past when stimulus was too quickly withdrawn and resulted in renewed economic hardships and recession.

Finally, he argues for a few reforms of the global financial system. This section of the letter is pretty general.

On one key subject — how much money banks should hold in reserve, and what form that money should take — Obama basically says banks should hold bigger cushions, but doesn’t get into specifics:

We want our negotiators to reach agreement on a new capital framework … that will include higher common equity requirements, tighter definitions of capital, a simple mandatory leverage ratio, and appropriate liquidity requirements.

Update: Thanks to the commenters who pointed out the typos in the post. They’ve been fixed.

Lack of funds & late payments force MSEs to perform billow capacity

Dearths of funds and delayed payments have forced the Micro and Small Enterprise (MSE) sector to perform below capacity, a study conducted by the industry lobby ASSOCHAM said Sunday. “Most of the MSEs are running at close to 70 percent capacity utilization due to paucity of funds, arising out of unduly delayed payment of their dues, resulting in serious suffocation,” says the ASSOCHAM study.

There is a Global trend toward enhancing Personal Liability laws for Corporate Risk Management. (article: “Quantum Economics-Philosophy of The Economy: Corporate and Business Structures in Market Economics”)

Mutual fund workers get whistle-blower cover: judge(Reuters) – A U.S. law protecting whistle-blowers at publicly traded companies also covers mutual fund firms, a federal judge ruled in a case involving two former Fidelity Investments employees.

Monetary and Fiscal Policies are to be adjusted to the Globalization and rising Productivity by Global Centralized Banking System

EU

Greek turmoil puts pressure on markets as loan costs soar: “The yield or return on Greek 10-year bonds topped 7.5 percent for the first time since Athens adopted the euro in 2001 but later came back to 7.35 percent — still more than double the rate on the German 10-year bond at 3.09 percent. Finance Minister George Papaconstantinou said Athens “is borrowing and will keep on borrowing” despite the record high costs imposed by financial markets.
Ireland hits banks with hefty penalty, to inject billions (Reuters) – Ireland hit its banks with a hefty penalty to take loans off their hands and said they needed at least 22 billion euros ($30 billion) in extra funds to recover from a property collapse that was worse than feared.
U.S. Stocks Retreat as Iceland, Greece Temper Economic Data March 30 (Bloomberg) — U.S. stocks retreated as concern that deteriorating government finances will derail the global economic recovery overshadowed better-than-estimated reports on American consumer confidence and home prices. Citigroup Inc., Goldman Sachs Group Inc. and Bank of America Corp. lost more than 1.6 percent as Standard & Poor’s cut Iceland’s credit rating and Greece failed to sell half the 12-year bonds it offered. Exxon Mobil Corp. and Chevron Corp. retreated as oil declined after yesterday’s 2.7 percent rally. Stocks also fell after London-based Gartmore Group Ltd. suspended the manager of its two biggest hedge funds amid an investigation.
Ten Years of Pension Reform in Bulgaria: Achievements and Challenges These are difficult times for Bulgaria, Europe, and the world. For more than ten years the World Bank in Bulgaria has been a steady partner, supporting reforms in the area of social security and pensions, both in terms of investing in the modernization of the social security administration and in terms of analytical support to ensure fiscal sustainability of the pension system – and we are delighted to respond to the Minister’s request for continued support and work with all partners towards an effective, just and sustainable pension system.
Government aims to boost sluggish export growth ” The Economy Minister rejected recent criticism of Germany’s export boom voiced by his French counterpart Christine Lagarde. Last week Lagarde argued that Germany’s huge trade surpluses with countries in Europe had created imbalances that were partly responsible for the budget problems in Greece and other EU nations.”Such criticism is unfounded,” Bruederle said. “Germany’s exports are increasingly becoming a motor for the economies of other European Union countries to overcome the crisis.”
Greece: It’s a Deal France and Germany have brokered an emergency financing mechanism to help Greece, following extensive bilateral negotiations between the two sides earlier on Thursday (25 March). Under the deal, approved by eurozone leaders after late evening talks, a funding package will be created, made up of voluntary contributions from euro area countries and cash from the International Monetary Fund. The Pain in Spain: An Economy in Crisis “JesusManson323 Spain is a leech economy. Much of its “new economy” is just Bernie Madoff-style banking sucking their blood out of Latin America. It really says something that Spain did NOT start Europe’s Industrial Revolution, despite being an early colonial power that imported massive amounts of gold and silver from North/South America.”

Latin America

Some Latin Currencies May Be Too Strong “That will be a big challenge, because right now the region gets only 2 percent of the world’s overall investments in research and development, compared with 28 percent received by Asian countries, according to RICYT, a region-wide science and technology research network. While China invests 1.4 percent of its gross domestic product in research and development, Brazil is investing 1 percent, Argentina 0.6 percent, Mexico 0.4 percent and Colombia and Peru 0.1 percent, respectively, RICYT says. Even more worrisome, the bulk of Latin America’s investments in research and development are state-funded projects on theoretical issues of no commercial value. Consider this: While South Korea registered 80,000 patents worldwide last year, Brazil registered only 580, Mexico 330, and Argentina 80, according to the World Intellectual Property Organization.

Industrial Production moved to the Fast Developing Vast Countries as China and India

China

India, China to Reap Reward of Global Power Shift, “Roubini SaysThe size of the emerging markets is going to become larger and larger, and it’s going to become greater than the GDP of the United States,” Roubini said. “It may take 20 to 30 years, depending on relative economic growth, but the process will occur” and “we should get used to it.”As the U.S., Europe, and Japan struggle to recover from the worst recession since World War II, India’s main stock-market index has soared over the last 12 months and its economy may grow 8.2 percent in the year starting April 1, the fastest in two years, the Finance Ministry said in February. Chinese gross domestic product grew 10.7 percent in the three months through December, the quickest pace since the fourth quarter of 2007.“China has been a hare and India a tortoise but growth is accelerating in India,” Roubini said. Emerging markets are set for a V-shaped recovery, even as India still has a “massive” need for human and financial capital as well as economic-policy changes to achieve double-digit growth like China, he said.
It’s China’s World We’re Just Living in It “It’s easy to forget that big international bodies like the IMF and the World Bank were created by just a few nations, led by the United States. These economic organizations have global reach, but that globe used to be dominated by the American superpower, and their policies were suffused with U.S. values. When Beijing was a small-stakes player its leaders didn’t always like the setup, but they lived with it, even facing down fierce grassroots opposition to join the World Trade Organization. But now China has more worldwide clout, and public opinion at home has taken on a combative (and sometimes downright jingoistic) tone. So with one eye on China’s national interests and the other on domestic critics accusing the regime of “coddling” the West, Beijing has begun to push harder to reshape international systems to make them more China-friendly (and, in the process, to raise the regime’s chances of survival).
China Exports Soar 45% Growth” CHINA reported Wednesday exports soared for the third straight month in February. The fastest pace in three years as most analysts believe it could leave Beijing more open to a stronger yuan. Overseas shipments grew 45.7 % on-year last month to US$94.5 billion, the China customs bureau announced. The consistent data cements a turnaround that began in December when a year-long”

The success of China and India is not because of the cheap labor only: such cheap labor could be found around the Globe, neither it is because of the vast population only: as a whole South America counts about 400M but could not succeed in consistent economic growth, nor because of “right time in history”: for the last 20 years number of recessions have plagued the World Economy (1999,2008 deadliest ), hence, why these countries succeeded in economic growth even when recessions were ongoing?

Countries with very strong Social policies and Wealth distribution and redistribution? – Maybe just because in modern Capitalism the biggest problem is Wealth distribution and redistribution, maybe because they ignored following the taboos of “trickle-down” economics and used flexible economic policies “as it comes as it goes”, maybe because the Great Industrial Nations of US, Japan and some in EU were not flexible enough in adjusting their Economic policies to succeed Economics growth, maybe because the Big Internationals and Big investors moved to China and India as a better choice: their consistent at the same time flexible economic policies, social stability, vast population, work ethics and discipline, or finally, may be because China and India pretty much ignored the Parish Club, the World Bank and the IMF in the ways they conducted their Economic Policies: supported by strong foreign investments they changed the rules of the economic game “as it comes: as it goes”: example is the devaluation of the Chinese Currency, the strong business and financial laws against Corporate Risk Management fraud, and etc.

India

“Industrial output in February grew at a slower rate of 15.1 percent, official data showed on Monday. The production in January was 16.7 percent. The index of industrial production (IIP), which measures factory output, stood at 10.1 percent during April 2009-February 2010 against 3 percent in the same period of 2008-09, data released by the Central Statistical Organisation showed. While basic goods grew 8.4 percent during the period under review, capital goods grew 44.4 percent. Consumer durables and consumer non-durables recorded growth of 29.9 percent and 2.3 percent respectively.”

‘Extension of interest subvention for garment sector by April’ Namrata Kath Hazarika | 30 Mar, 2010 The extension of two percent interest subvention to the garment sector should be given by April 2010 Read more…. » Many of the govt. schemes for MSMEs are irrelevant: Anil Bhardwaj » Budget allocation would address the additional needs of SMEs: H.P.Kumar » ‘Increase in rural demand will accelerate growth of SMEs’ » ‘Hardware + Tools exhibition a solid platform for industry players’ » Consolidation need of the hour for SMEs in textile industry

‘Indo-Canada trade standing at USD 4 bn annually’“He also mentioned that India stands out in the world, as an emerging market with a strong democratic base, fully functional in English – the worldwide accepted business language, as a country where the rule of law pervades and as a country that survived the economic recession. During the interactive session with Canadian business associations – Canadian Council of Chief Executives and Canada-India Business Council, organized by CII, it was widely recognized that India’s growing middle class and national policies for inclusive growth present a tremendous opportunity for participation by Canadian companies.

Govt. clears 23 foreign direct investment proposals“Among the approved proposals were Tikona Digital Network’s Rs. 1,142.21 crore offer for raising the FDI to 74 percent by an issue of compulsorily convertible debentures and Pune-based Bharat Forge’s plan to issue warrants worth Rs.576 crore. Opto Circuits India’s proposal to issue convertible warrants worth Rs.376.27 crore and a request by Intel Capital — the Mauritius-based investment arm of the computer chip major Intel — to acquire equity in the Multi Commodity Exchange of India for Rs.66 lakh also received the nod. The government put off a decision on several proposals, including the offer of Gurgaon-based S Tel Private Ltd, a joint venture between Chennai-based Shiva Group and Bahrain Telecom, to issue fully paid-up fresh equity shares to undertake the business of providing telecom services in India.

Indo-African trade to grow by 22 pc in next two years’ “The bilateral trade between India and Africa is likely to grow by 22 percent in next two years, according to an ASSOCHAM paper released in the capital on Friday. “It is projected that bilateral trade between India and Africa could be around USD 55 billion in 2012 from the current levels of close to USD 45 billion,” said Arun Agarwal, chairman of ASSOCHAM’s Africa Committee.”

The exodus of Capital from North America and E.U. had a deadly effect on their Fiscal Quantities (GDP of any country in the World and the most of Developed Industrialized Nations is based mostly on Industrial Production and Return On Investment ROI mostly from Industrial Production).

Japan, Germany and France succeeded in retaining some of their High Tech Industrial Production but both Japan and Germany among others were overrun by China: Japan as the Second Biggest World Economy and Germany as the Biggest Industrial Exporter, however Germany, France and Japan have balanced their internal demand by strong Social and Infrastructural Policies much better than many other countries have done it.

Japan

Applications for employment adjustment subsidies fall in Feb The government grants subsidies to companies which have opted to maintain employment instead of dismissing workers by shortening the hours they work, for example. The subsidies are to make up for a wage decrease resulting from shorter working hours. The number of workers for whom subsidies were applied came to 1,608,149, down 119,066 from January, the ministry said.
The Global Debt Bomb: “Today Japan can borrow all it wants from its own citizens. Over the decades they have dutifully (if mechanically) piled up a $7.7 trillion cache of savings they keep mostly in low-yielding bank deposits. Those savings equal two-thirds of the total household wealth of Germany, France and the U.K. combined, says John Richards, North American head of strategy at RBS”

Japan’s consumer prices continue to fall

By Roland Buerk BBC News, Tokyo Japanese exports are rising, but deflation at home is cause for concern Japan has been in deflation for 12 straight months, figures released by the government show. Prices fell by 1.2% in February from a year earlier, threatening the country’s recovery from recession. Japan’s economy has been periodically plagued by deflation since the “lost decade” of the 1990s, which led to years of stagnation. The prospect that goods will become cheaper in the future makes consumers reluctant to buy today. This leads to a vicious circle of falling company profits and wages. Downward trend The latest figures – where the core consumer price index fell by 1.2% – is not as bad as in previous months.

Germany

Eurozone deal points to a more German Europe (Reuters) – The masks have fallen. From now on, we will all be living in a more German Europe, with economic policy driven by Berlin’s hair-shirt export-or-die model. That is the lesson of a deal among eurozone leaders on a financial safety net for debt-stricken Greece, adopted largely on German conditions on Thursday after months of wrangling that battered confidence in the single European currency.” The politics of the EU are undergoing a fundamental change at present, with Germany becoming increasingly willing to cast off the shackles of the past and make its voice heard,” said RBS analyst Timothy Ash in a research note.

China And Germany Unite To Impose Global Deflation “Chindia, invented by Jairam Ramesh, an Indian politician, to describe the composite new Asian giant. Let me introduce you to Germany, a composite of the world’s biggest net exporters: China, with a forecast current account surplus of $291bn this year and Germany, with a forecast surplus of $187bn (see chart).”
MF: German economy to grow faster than expected The International Monetary Fund is cautiously optimistic for Europe’s biggest economy this year. It expects the German economy to expand by 1.5 percent in 2010. Global growth is estimated at 3.9 percent. (26.01.2010

German economy records biggest slump in post-war history The Federal Statistics Office announced on Wednesday that Germany’s largely export-driven economy recorded its biggest-ever decline since World War II last year. The country also breached the EU’s deficit limit. (13.01.2010)

Breakthrough thrombosis drug wins German innovation prize A German research group has developed new thrombosis medication that can make life a lot easier for patients and doctors alike. The scientists were rewarded with the German Innovation Prize for their work. (03.12.2009)

Audios and videos on the topic

· The new OECD survey (26.03.2010)

· The OECD offers a cautious forecast for Germany in its 2010 survey

France

Sarkozy ready to trigger EU ‘crisis’ to protect farm subsidies “President Nicolas Sarkozy addressed the nation Wednesday for the first time since his party’s defeat in regional elections. He vowed to push on with reforms and said that he is ready to provoke a “crisis” in the EU to defend French farm subsidies.”

Slight upturn for Paris region but no new jobs yet “2010 will be a slightly better year than 2009 for industry and service sector companies in the Ile-de-France region which includes Paris and the surrounding area. According to the Bank of France’s annual report – based on a survey of some 2,000 companies – 2009 was a year of stark decline in both sectors. But for 2010, companies are expecting business volume to rise again – slowly but surely. “The Ile-de-France region is particularly dependent on big companies which have a high degree of international exposure, and it has suffered” from the global crisis, the Bank of France says in its report.” Change in performance per sector (2009) Intermediate goods (wood, rubber, paper etc): -19.7 % Automobiles: -15.2 % Plant and equipment (electronics, aeronautics, rail etc.): +0.5 % But it expects the region’s industrial activity to see an upsurge of some three percent in 2010. The companies rely on consumer borrowing to individual households, which has remained stable. But there was a sharp decline in investment in 2009. Rejecting claims this might hinder growth this year, the bank’s regional director Bernard Tedesco said, “If we’re dealing with full order books, growth can happen quickly. Investment activities have simply been postponed. And never have conditions been as favorable for companies as now, with interest rates at a historic low.“ But the outlook for employment remains grim, according to the report. In 2009 companies in the region laid off 4.5 percent of their staff, and another 1.4 percent are likely to lose their jobs this year. “Low profits mean that the CEOs are cautious. The job sector will be the last one to grow,” says the report. Industry and service sector performance (2009 and 2010) A survey among industry and service sector companies in Ile-de-France The study was conducted among 1,022 companies from the industrial sector (producers of industrial or electronic machines, textile, automobile, consumer goods), as well as among 947 service sector companies (transport, merchandising, computer engineering, temporary work). In the Ile-de-France region, more than 300,000 people are employed in these two sectors. Industry: Business volume: -12.3 % (2009), +3.0 % (2010) Export volume: -13.6 % (2009), +2.8 % (2010) Service sector: Business volume: -5.2 % (2009), +1.7 % (2010) Export volume: -10.8 %, -5.6 % (2010)

The information and links provided above are to prove that the new trend in Economics differs from the “trickle-down” Capitalism: just because there is not trickle-down of capital to the US market but only trickle-up and trickle-down capital to the Chinese market, also to prove that all tools of economics are to be randomly used “as it comes as: as it goes” as these are used in China and India instead of ideologically used as in the US. Pragmatism is about to rule the Science of Economics to the rest of this Century.

Quantum Economics-Philosophy of the Economy

Production (only) based economics tighten its monetary policies and financing guidelines on economic indicators reflecting growth in production (could be agricultural, industrial and partially services). Thus it (production based economics) curtails inflation by preventing economies from harmfully over-expanding monetary supplies. Production based economics are all currently used systems: radical capitalistic (like US, Japan), socio-capitalistic (EU, China) and anybody else cracking in between, and communist (Cuba, Venezuela). The Paris Club, World Bank, IMF and WTO (lenders-which capital quantities are coming from the developed capital markets of the developed countries such as the US, Great Briton, and now China) are establishments that follow the ways of production based economics; these establishments’ policies and lending matrix require tight deficit and budgetary control over borrowers mostly less developed countries and markets; lending is done on relatively high-interest rates and borrowers are watched closely; their budgetary policies are scrutinized. Thus borrowers are controlled on a daily basis so borrowers are prevented from wrongfully overextending their budget (social, infrastructural, etc. expenses); the usage of Internet has helped lenders to tighten control over borrowers, therefore, the countries borrowers have much fewer flexibilities to avoid this “hug” or spent a few dollars over the limit for Social expenses or fix a bridge or two over the limits set to them by lenders. The brightest of the brightest minds are hired by lenders, these mostly young guys would not spare a thing some time to their own nations if borrowers twist the rules anyhow, they thoroughly believe in the system of production based economics.

Production based economics is a reasonable philosophical conception defined very precisely by Karl Marx in his “Capital-Critique-Political-Economy” and clearly very precisely explains dialectic cyclically self-adjustable periods of an economy of Capitalism, which economy in different proportions apply to the economies of Social Capitalism and Communism and overall to any system of economics taught ever after by any educational institution from East to West; when even in Communist economics throughout nationalization of industrial tools of production the people as owners of industries are sharing the profit “equally” instead of big fat capitalists smoking cigars taking the profit, then the people (whatever in reality it means) were reinvesting ROI and enhancing their standard of life ( in reality blah, blah , blah), but still the economics of Communism is a production based economics;

Has the production based economics really worked?

Most definitely: yeas, it worked even by experiencing difficulties such as the Great Depression the production based economics and its following financing and controlling practices were in the foundations of any most developed and developing country and market in the world: from the USA and Germany to Japan, these countries and their economies were developed by the system of production based economics: that how they avoided economic crashes, inflation, and deflation, that’s how they enhanced their standard of life reaching far better-living conditions compare anybody else’s; for any poor country these guys reached the sky…. And they did, but

What new happen that makes production based economics inflexible and inadequate?

Actually, what happens were mostly products and achievements of production based economics:

Eastern Block Communist countries change their totalitarian systems and embraced Freedom (which wasn’t a political act but a consequence of inadequate economics: these were the most sensitive to the new developments in a Globalizing marked with constantly rising productivity in the rest of the world: lock of competitiveness knock them off)
Almost any country in the world started pushing toward normalizing international relations and opened their markets
China become a member of WTO, open Her economy for investment and private enterprises
European Union started expanding East and Southeast following aggressive anti-corruption policies in any member country and establishing a number of low interest and subsidiary funds for development and promotion of environmentally friendly projects
In the USA productivity was raising wild when risk-management and intellectual properties were becoming most powerful weapons too ?!? getting into the China market. The capital was concentrating into the smallest and smallest percentage of the population, and middle-class income growth after 2000 came to a hold
High technologies and concentration of capital were making industrial production and farming easier to export: start-up, expand and enhance very quickly elsewhere in a short time limits
The Internet allowed people from elsewhere to exchange information and ideas thus making the world a small place; access to self-education and new inventions, new marketing strategies, and new media approaches
Etc

All of the above and many others were the new events and developments brought by the new Globalization some of which (events and developments) are totally experienced for the first time, but the most important is the Environmental issues result of long years of indiscriminate pollution by most developed and developed countries industrial revolutions. Environmental issues of Global warming are not just concerns but scientifically proven facts that affect anyone living on Earth; production based economics is based on industrial production profit driven therefore high technologies for generation of renewable energies, technologies for cleaning emission of manufacturing plants are very expensive proposition in a highly competitive world: for the US practically implementing Environmentally friendly technologies would make for many businesses difficult to compete to China, Russia and India when even without such burthen competition is fierce. Not the least is the widespread poverty around the world in where countries and markets are barely having enough production to feed their populations than to seriously consider adopting expensive Environmentally friendly technologies and working toward a better environment.

Production based economics does not use economic tools to deal with most of these new developments:

Not all countries in a Globalizing market could become industrial: first, because they cannot compete to countries like Germany, the US, China, and Japan that basically are capable to flood this Global market with manufactured goods; second, if all these countries go through industrial revolutions to become industrialized the pollution would be unbearable to the Earth environment
Even very developing countries like China and India should not go throughout industrial revolutions in the old known ways themselves that they could destroy the world easily
In the existing financial system of lending, no country but the lenders could subsidize their economies if needed to reduce emissions and improve the environment (when even these countries as explained could not do it on a large-scale to not becoming uncompetitive)
Last Global recession showed that deregulated production based “trickle-down” Capitalism did not establish “release valves” for handling over-capitalization neither “preventive regulatory policies” to avoid it: the wild-wild-west trickle-down theory of economics did not estimate that instead to trickle-down the capital went oversees being invested in more stable markets, or just was not invested in man-engaging industries in the US particularly when in there these were not competitive and less profit generating)

What kind of economics could enhance production based economics to address the above issues, and make ongoing Globalization possible?

Changes in Western economies are naturally ongoing: governments are financing lending institution and insurance conglomerates, buying shares in manufacturers and subsidizing agriculture…. Governments in most developed countries are doing what they can to save their economies from total collapses and this process will continue in the future in and out, but:

Is this kind of Governmental interferences in markets most helpful to these markets approaches to handle world recessions and are there better ways?

The change of production based economics could be changed possibly by the economics of Marketism based on parameters and economic tools to accumulate over-capitalization, and deal with inflation by using “artificial methods” to avoid recessions, using central banking with allowance to issue capital and lend under low-interest rates to a World with better security

21st Century Global Financial System of Market Economy In the 21st Century currently existing Global Financial System leaded by US and other Most Developed Nations (incl. China) and managed by the Parish Club, WTO, IMF and the World Bank must change their approaches to apprehend the most recent developments of chronically becoming indebted World, in which except for a very few countries and market as China and India, most of the rest Most Developed Economies as US and GB, Developing Countries as Spain, Portugal and Greece, and Undeveloped Countries as Bulgaria, Rumania and many South American Countries, Asian and African Countries are greatly indebted or very underdeveloped. A Central Banking System is needed to control the global “demand-to-supply” balance by being able to issue capital, instead of the current global financial system which performs more as a “lender”. (SEE:“How Globalization affects Countries & Markets” below There have been many indications that the process of running fiscal shortages for many countries cannot be reversed by using current Economics of Production based “trickle-down” Capitalism, because the Production based Economics is generally founded on industrial production that adds the highest percentage to any country GDP (General Domestic Product) and the consequential fiscal reserves for a country or a market to develop most definitely such country following the economics of production must industrialize, or for an industrialized country such must keep being Globally competitive in industrial production to maintain intact its deficit. The Globalization of the market place propelled by the great Capitalization and the rising Productivity has boosted the economies of China and now India to industrialize rapidly, that industrial power added greatly to the current industrialized economies of Japan, Germany, US capacity by how the Global industrial production capacity overall is coming to a point of great concentration of such industrial production into a very few industrialized economies. The possibilities for other small or even big countries to become competitive in industrial production and maintain their fiscal policies and reserves intact are diminishing. SEE: “Market Economics” From the Most Industrialized Economies US is particularly vulnerable under these new Global developments of ongoing exodus of industrial production and capital investment to the Far East. The Capitalism of US Economics is very inept in distributing and redistributing Wealth so to speak the “demand” side of Capitalism correlates the “supply” and works well in a closed marketplace in size of US market when “trickle-down” capital first “trickle-up” to concentrate wealth then comes “down” to create industrial production, but than when such “trickle-down” does not go to the US market but to elsewhere the shortage of consumption cannot be avoided, following in not properly balancing “demand-to-supply”, thus, to avoid economic catastrophes US Government steps up with infusing capital into the system: exactly what happens at the last Great Recession of 2007-2009. Also in time of narrowing ROI (Return Of Investment) particularly for the SME (Small & Medium Enterprises) and from the SMI (Small & Medium Investors), in time of Governmental policies promoting and tolerating pro-Big Business and Big Investors deregulated “trickle-down” Capitalism which was mostly the only ones benefiting from the ongoing Globalization, the possibilities in such times for occurrences of Economic Bubbles are quite common. The 1999 Stock Exchange Bubble and the 2007 Great Recession are products of appointed lack of Wealth Distribution. Thus become obvious that the Government in situations like that step into actions by infusing capital, save even individual businesses and prompt social distribution: The Healthcare Reform, the Finance Reform, and the US SME Tax Reform are good examples how the system in distress works, though the consequences are up to be seen. It is hard to believe that the US Government could constantly manage the Economy and create a business. In the Next Recession, the Government will appropriate more function in financing and business that overall is a scary proposition having in mind how inflexible and inept a Government could be. SEE: “Business Exchange – Market Economy“ Environmental pollution and Earth exhaustion of resources under the current production economics based on industrial production mainly is unavoidable, because when even most developed industrialized nations could introduce and follow policies of protecting the environment, or even the developing nations of China and India follow up which is highly doubtful, there are many countries that will try to manage their fiscal shortages by compromising the rules for Environmental protection thus they can bring to their soil industrial production. In the World of ROI mostly from Industrial Production, the prices of Environmental protection technologies are making businesses hardly competitive with others that do not implement these. Pollution comes also from cutting and burning woods to farm or from heating with coal, or from driving old autos, or from disposing sewers into open rivers. So to speak, without curbing on the Global poverty can not be ways to curbing on pollution. But to curb on poverty industrialization cannot be used thus the possibilities for saving the World from Environmental disaster by using industrial production are highly unlike. SEE: “Environmental Issues of Market Economics” To avoid multiple economic crashes and upheaval, to avoid The Government take over when next recessions, to avoid fiscal shortages and deficit, unemployment and poverty, to avoid Environmental destruction a new system of economics is needed, one that will allow countries to develop without being industrialized. Is it possible to manage Global development without using current production based economics system?

Well the most recent US and any Governments’ infusion of monetary quantities, business involvement and social distribution of wealth is not based on production economics.

The Chinese approaches in handling Economy is not production based only economics: their interference in the ways “trickle-down” capital works in the marketplace does not follow Capitalism but is more like “artificial” flexible usage of economic “tools’.

The Greece bailout by the EU and IMF is not “trickle-down” economics; it is an interference with the powers of Capitalism.

There are many more examples of how Governments and organization interfere with freely flowing Capital and therefore using “artificial” methods of economics.

At the moment he mounting debt accumulated by almost any country in the World horrify economists and they predict imminent bust-and-doom (there was a suggestion by some German politicians to Greece to sell some Greek islands, but then funds have been appropriated help Greece). Though economists should be horrified only from high imbalance of “demand-to-supply” ratios, which imbalance provokes inflations and deflations; thus should be the biggest concern to the Global Financial Institutions instead these are fighting deficit and debt: this institution as mentioned above are acting more like a “lender” then a “controller” these should be. If the Global marketplace is seen in its vastness as a common marketplace mass industrialization should not be expected and cannot be achieved, therefore. Thus, for balancing “demand-to-supply” ratios, the Monetary Policies should be used instead industrializing the entire Earth. Comprehensive Monetary Policies by Global Financial Institutions flexibly using Monetary Quantities as Economic “tools” and Business and Financial Regulations as enhancing business “security” are “the way to Rome” only. Less Governmental involvement in business, more business laws and regulations on business contracting, business and project bonding, intellectual properties’ laws, risk management personal liability laws, and etc, these the supplements to an appropriate Monetary Policies: because these “regulatory” actions will enhance SME and SMI “security” and make these much more adequate to be financed. Low-interest rate financing and subsidizing are economic “tools” to be used by a Global Financial System in promoting environmentally friendly renewable energies and agriculture, environmental tourism and sustained growth. This new financial system must use commercial banks to invest in countries on a project by project basis on a set matrix and low margin. joshua.konov@gmail.com ©Joshua Konov, 2010

Bonding as a Tool for Sustained Economic Growth

In the modern financial system, bonding is requested on large and governmentally subsidized construction projects. To be sure that a project will be executed with needed quality General Contractors and even the Subcontractors are required to be bonded as a precondition for even bidding on these projects. To acquire bonding a company is underwritten by the issuer or the bond holding company. “Construction bonding is a risk management tool used to protect project owners and developers. A bond constitutes a legal guarantee that the project will be completed as expected. In instances where a bonded contractor fails to perform, the bonding company will provide some form of restitution to the owner. While bonds are not required on all projects, there are strict bonding standards on government work. Many private owners and developers might also require bonds to protect the interests on various projects. Read more: What Is Bonding in Construction? | eHow.com http://www.ehow.com/about_5295907_bonding-construction.html#ixzz1D5BP7nzH” Bonding is a financial tool that enhances the security to investors, developers and owners on projects. Another tool used in construction business is Mechanics Lien that basically is an overall security for GC and Subs so they can get paid on construction projects: Mechanics Lien is used on any kinds of projects large to small, and even it (Mechanics Lien) may slightly differ from State to State the difference is not any great. A mechanics lien is a financial tool used in the construction business that provides additional security to General Contractors and Subcontractors to ensure proper payments on construction projects. These economic tools are not perfect bringing lawsuits and long financial disagreements, however without them, construction business would be in total chaos bringing these disagreements to longer terms. Bonding and Mechanic Liens are tools that could be well adapted in other sections of the business law which could enhance Small and Medium Enterprises security and afterward make SME lending much easier and less risky. Breaching contracts by not executing payments by Big Businesses to the SME is a very painful to the whole US economy with consequences taking many SME to bankrupts, and putting on the streets many SME employees: it is well-known that more than 80% of all employment comes from SME. Especially when economic crisis occurs Big Businesses tend to stop payments or negotiate Contracts price reduction in accelerating rate, thus, economic crisis deepens and effects US economy most painfully. Unless Big Businesses that are Global and could switch operations or even file multiple bankrupts and then rise as winners, for SME such bankruptcy filing are very often deadly and many are getting sold looking for equity or even close operations. The trickle-down approaches of currently used Economics of Capitalism promotes and serves mostly Big Business, and the system worked well because the concentrated capital through such “trickle-down” brought industrial productions down to the US marketplace, but this process of Free Capitalism was totally interrupted by the Globalization and rising Productivity on an ever-expanding Global marketplace where the previously “trickling-down” to the US marketplace capital started “trickling-down” to China and elsewhere else. Large Corporations and Big Investors are moving, outsourcing, and investing to elsewhere in where ROI and projections for better ROI were much better, thus, US marketplace was left to SME to employ the majority of the US workforce when in the same time the “old” support for these Big Guys is still in place. US Government intervention to the Great Economic Upheaval in the last few years as a result of the exodus of the Big Businesses and Investors from the US marketplace. However what was done was a natural reaction to the Globalization and if rightly used it (the Globalization) could bring good to America, as long as these processes are rightly evaluated and actions for improving the situation are taken promptly. One of the things needed for such Globalizing economy is the Bonding, ability to put Lien and correlated Business Contracting business law and regulations that can help SME to become more lend-able. joshua.mcng@yahoo.com (For more see: Business Exchange: Market Economy) ©Joshua Konov, 2010

Quantum Leap in Market Economics

Quantum Economics-Philosophy of the Economy-Quantum Leap in Market Economics In market economics economic tools (quantum economics: parameters) are used indiscriminately (not politically motivated but statistically formulated) to maintain balance (quantum economics: grid or quantum quantities) demand-to-supply ratios; Compare to currently used production (based economics that should be using self-adjusting dialectic economics of trickle-down approaches for development. Because, economic tools (parameters) are “artificially” applied to limit over-capitalization or under-capitalization effect on real economies and markets, these (economic tools, parameters) may well be used to increase or decrease different parts of economies, markets by artificially accelerating or slowing business activities. In modern times ecological issues are becoming extremely relevant to Earth survival: developing and less developed countries’ industrialization (considered by the standards of production economics only ways for development) will destroy Earth either by polluting the environment to point of no return or by exhausting Earth resources to point of no return: both scenarios Earth will not survive such mass industrialization; In third scenario if developing and less developed countries and markets are pressed to stay as these are by using financial means and these (developing and less developed countries and markets) remain in such underdeveloped condition these still are growing in population and gradually polluting Earth and destroying Earth resources in much higher than most developed countries and markets rates; also in deregulated global market environment when environmental rules and regulations are obeyed by most developed countries and markets but not obeyed by other markets then industrial production will move to deregulated areas thus pollution is unavoidable in current production profit (only) based economics. Quantum Economics Leap or Quantum Leap is ‘controlled’ economic jump executed by pointed use of financial means (low rate business loans and subsidies) to different areas of real economies and markets {particularly less developed countries, markets or parts of markets (in this category: parts of most developed countries and markets’ underdeveloped areas could be considered)} Predominantly, development of less developed countries and markets, or parts of markets should be directed toward environmentally friendly technologies: renewable energy sources, organic farming, environmental tourism and etc. In the economics of Marketism countries and markets should not necessarily become industrialized to raise their living standards and development is not (only) related to industrial production: Question: Where industrial good will come from to bring needed supply to such growing demand from non-industrial development? Answer: It will come from globalizing rapidly expanding production of countries and markets of US, Japan, China, India, etc. Globalization of industrial production and rapidly rising productivity could provide needed industrial and high-tech “supply” to growing by quantum leaps consumers “demand”; to prevent from imbalances of demand-to-supply ratios central banking system should be established that uses formulas for monetary quantities and fiscal quantities and precisely applies economic tools (parameters) to limit economic recessions (quantum economics: energy buildups and consequential big waves). (See: Quantum Economics-Philosophy of the Economy-Monetary Quantities Formulas and etc related articles). Joshua Konov, 2010 joshua.konov@gmail.com Carnegie Endowment for International Peace Globalization and the Developing Countries: The Inequality Risk “My task is to talk about globalization and inequality in developing countries, with emphasis on Latin America. I have a simple point to make: globalization puts developing countries at risk of increasing income inequality. The increase in inequality in the United States over the last 25 years (during which the income of the poorest 20 percent of households has fallen in real terms by about 15 percent) has been blamed, rightly or wrongly, on changes in trade, technology and migration patterns associated with increasing economic integration with other countries. For developing countries, any risk of increasing inequality associated with active participation in the global economy is even greater, if only because of the greater inherent institutional weaknesses associated with being poor. Latin America has a special disadvantage: its historical legacy of already high inequality. Inequality that is already high complicates the task of effective conflict management, which Dani Rodrik has just reminded us is a critical input to managing open economies. In the past, for example, high inequality combined with the politics of redistribution led to periodic bouts of populism in Latin America – ineffective and counterproductive efforts to manage the conflicts provoked by the dangerous combination of high inequality and hard times.”

Quantum Economics-Philosophy of The Economy-Environmental Policies

Some people probably would suggest I started the conception of Marketism with the effect such economic expansion would have on the Global environment, to whom and anyone else concern about pollution very close to destroying our World this article is directed to. Here, I would directly disagree with the “Theory of Scarce Resources” and this is not because the Global Resources are limitless or somehow these resources are enough for the entire population in the way these resources are used and have been used: in the opposite the Market Economics called Marketism is about economic growth synchronized and constantly adjusted to the most advanced renewable energy sources and high technologies reducing and totally eliminating pollution. In context I am tired of hearing about how the majority of the World population should live in poverty not using the existing Global resources in order a very small percentage to be rich and prosperous to live as they do, therefore the majority should be artificially kept less developed. For these “philosophers” I have the following answers: · Deregulated “Trickle-down-Economics” mixes “freedom” in business is more like “wild-wild-West” where alone with the “good guys’ obeying laws and protecting the weak are the “bad guys” disobeying laws and skimming the World as much as they can. To the proponents of such “freedom” of business, I will say freedom is about the rule of law and the goodwill of the wealthy guys to take care of us the rest might well be not there. Same with the Environment that has to be protected by the rule of law not by the trickle-down freedom and will be better protected as well. · The constantly enhancing the way of protecting the Global environment is in conflict with the production based economics of Capitalism, Socialism or Communism and in synchrony with the investment and intellectual properties based economics of Marketism which Monetary Policies are adjusted by current possibilities of the Markets. · An advance of High Technologies and Expanding Investment combined with regulated Global economics structures including tight Ecological regulations will reduce wasting of these resources. · Until now the pollution has been mostly generated by the most developed areas of North America and Western Europe, but in the same thought the biggest reduction of pollution for the last 10 years has been there too, so unless the rest of the World does not jump over the industrial revolutions already gone in the West the pollution coming from these under-developed markets will finish us all. · The use of resources could be a lot less by developed markets than by slowly developing markets, cutting of wood and using of coal for heating is a perfect example of that. Resources such as petroleum and even water are wasted much faster by developing markets than by developed markets when these markets are part of the Marketism. · High Technologies could be adopted only by advanced markets to lower pollution. · And here I will come back to the rich or wealthy as a better description: in a World where more then 80% of all production is based on consumption only by expanding the consumption could expand their capital too, finally they are the keepers of the Capital and in a foreseeable future I do see them replaced. · To use renewable sources of energy and enhanced system of production with no pollution in a short and only way to avoid total Global crash is by changing the economics into market-driven Marketism. © Joshua Konov, 2009

Inflationary and Deflationary Forces “Artificially” adjustable in Market Economics

Inflationary or deflationary forces are to be curtailed by using economic tools (in quantum economics ‘parameters’) indiscriminately (non-politically motivated but based on statistical indicators and formulas) to limit real economy (in quantum economics “grid”) from violent fluctuations and vibrations that could provoke economic recessions (in quantum economics’ big waves’). General balancing of demand-to-supply ratios is needed to avoid economic recessions;

Quantum economics is founded on uncertainty, therefore, avoiding big waves is probability not certainty: in such system of probabilities parameters and probable expended grid (quantum quantities) should be used by first, parameters to disperse and limit over-capitalization or other imbalances, and second, probably expended grid to absorb such economic over-capitalization or other imbalances.

There are close similarities between currently used system of production (based) economics and management of monetary quantities and fiscal policies in ways inflation or deflation is curtailed{see: related articles ‘Quantum Economics-Philosophy of the Economy- Inflation and Marketism, ‘Quantum Economics-Philosophy of the Economy-Monetary and Fiscal Policies’, ‘Quantum Economics-Philosophy of the Economy- Formulas for Monetary Quantities’};

Main difference between production (based) economics monetary quantities and fiscal policies, and market economics of Marketism monetary quantities and fiscal policies is additional expansion of monetary quantities and fiscal quantities because of added expendability of industrial production by ongoing globalization and rising productivity, and because of extra security added to markets by enhanced regulatory system (business structures personal liability, business contracting equalization and personal liability, financial and commodity exchanges’ laws and liability, etc); thus from one side accelerating business activities in global marketplace and low-interest rates and subsidiaries financing of social and infrastructural’ projects, and environmental projects can provoke ongoing growth of demand added security on the marketplace may provoke high growth of industrial and other production; Extra business regulations and laws effect on business activity is overall balanced weights on business activity makes it more complex and difficult from another side such (effect from enhanced business contracting and business laws) adds security to business: making businesses more lend-able, and also equalizing SME to big businesses competitiveness on marketplace: by clear business and intellectual property laws and regulations, and codes in long term will establish a stable equalized competitiveness to all participants and will prompt economic growth, therefore problems will relate balancing such growth to the demand instead supply side inflation: deflationary forces (fluctuations) may become bigger issue then inflationary forces (fluctuations): however economic tools of social policies, building infrastructure and environmental protection’ equitability are to be used as balance against deflation as well. where from another side because from one side such Globalization of industrial production and rapidly rising productivity could provide needed industrial and high tech “supply” to growing by quantum leaps consumers “demand”; to prevent from imbalances of demand-to-supply ratios central banking system should be established that uses formulas for monetary quantities and fiscal quantities and precisely applies economic tools (parameters) to limit economic recessions (quantum economics: energy buildups and consequential big waves). (See: Quantum Economics-Philosophy of the Economy-Monetary Quantities Formulas and etc related articles.

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However, the variety of “many more factors” mentioned above such as countries:

All of these considered “equity” play a major role in currencies value too.

To prevent from recessions is not easy but could be possible if:

· economic “tools” are used pragmatically instead of being used ideologically;

· general business laws start applying to all participants on the Global marketplace which could promote the Small to Medium Businesses (SMB) and Small to Medium Investors (SMI) to become equally competitive to the Big Businesses and Big Investors;

· Global central banking should have issuing monetary power, instead of levying on financial institutions which action will jack-up lending rates instead;

· Global central banking should use commercial banks for marginalized lending on set matrix to promote growth;

· The priorities of the Global “controlling” should change from lending to inflation (Demand-to-Supply balance), because that’s the most important indeed.

(For “parameters” see my research “Philosophy of the Economy”)

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