Why Printing Money and Buying Back Paper should be supported by Reforms in Business Law, Corporate Liability and More

Why Printing Money and Buying Back Paper should be supported by Reforms in Business Law, Corporate Liability and  More

In my previous article “Why Printing Money and Buying Government Securities is better for the Economy then EU Austerity Measures”

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

the new actions of the Administration to flow $600B into the Monetary System is considered quite adequate and responsive to the recent developments on the Global marketplace: high rising productivity and the outflow of capital and industrial production to China, India and Brazil have created consistent industrial unemployment and Fiscal quantities shortages: the only possible employment in the real economy (military and government excluded) is becoming either lower earners service sector or farming why excluding professionals, thus the Middle Class has been hit very hard by these new developments and rapidly shrank, so did the consumption and the following business activities. The Large Transnational Corporations have been decreasing their employment because of mechanization, outsourcing and even relocating big chunks to the Far East; while, all low interest commercial lending, public financing, business laws and regulations very well supported Big Business, considered the motor of the economy. The ways business laws and regulation are constructed for the Small to Medium Businesses and Investors who are becoming more like the main and almost only employer under the new market conditions for them to startup business entities llc’s and corporations is quite easy, however to build up credibility for acquiring low interest rate loans is complicated.

Why is so? – Because of the weak contract and bonding  laws that make payments on finished orders or services hard to get consequential to these contracts weakness to be lent against but on high risk absorbing interest rates. In such a context, further in these analyses: the limited personal liability of llc’s and corporate structures prompted  “shady” business practices have been used for Centuries to boost “easy” business and risk-taking; However, under these new market conditions Small and Medium Businesses and Investors (SMB&I) need to enhance their security and become more lend-able than to startup business easier; thus by tightening the overall liability on the corporate structures the SMB&I may become naturally lendable – by the market forces in the marketplace – instead of as it is widely practiced by the Governments artificial injecting capital through subsidized SMB loans.

Moreover, by becoming more “lendable” through enhancing their security the SMB&I are to become a more powerful force to compete globally. Under enhanced corporate liability laws SMB&I will be much more empowered in competing to their big brothers nationally and internationally, as well corporate bonding will make easier to these corporate structures to get reworded when doing responsible business under the law. Under enhanced business contract laws the SMB&I are going to thus enhance strength when in business disputes and stand up against “multi-lawyers” approach in court. The Government expanding current Monetary Supply with $600B on top will affect the employment only and mostly if this money go to the 80% of all employers the Small and Medium Businesses and the supporting them Small and Medium Investors, but in order this to be done these entities must become “lend-able” more secure so this money does not sing. Other ways for enhancing SMB&I profitability is by getting the right regulations on the Financial Markets so these ever been outsiders Small and Medium Investors start benefiting from the ongoing Globalization by able to get Return on Investment from markets with better then the US market growth such as China, India and Brazil, but in order this to be achieved the Personal Liability of Corporate Structures should be extended over the large financial broker houses, banks and traders, thus the Financial Market will stop servicing the few wealthiest but become a carrier for investors to access the more profitable markets in the world.    Combining low interest rates financing, easier bonding, security of contracts founded on personal liability with the access to the fast growth global marketplaces is one of the answers of how this modern day economics should work to replace draining out industrial production and the shift Transnational Corporations have done by moving their production elsewhere. There are some other changes the Administration should use: such as subsidizing and low interest rate financing of Alternative renewable energy projects, stabilizing Social Security and Medicare, building Infrastructure: but all of these should not be expanded artificially without being supported by overall economic growth, because such expansion could be deadly and provoke recession; however, these economic instruments (subsidizing and low interest rate financing of Alternative renewable energy projects, stabilizing Social Security and Medicare, building Infrastructure) should not be considered anymore as Expenses as these have always been but Partial Equity as these are becoming, these instruments are carriers to balancing market “Demand-to-Supply” too, together with the SMB&I employment and investment.

There should become clear that in the new economy the old mostly trickle-down economics of an industrial based Capitalism cannot provide the tools to maintain strong Middle Class, ever rising Fiscal Expanses in such new developing conditions of high tech industrialization, moving and outsourced production of an accelerating Globalization and ever rising Productivity. However, the free entrepreneurship should be used in its best instead of the Governments taking over business and finances, and such could be accomplished by following the patterns of the marketplace called by this research Market Economy.The research of mine called “Quantum Economics -Philosophy of the Economy” explains in details how such changes and enhancements of the currently used Economics should be done. http://sites.google.com/site/economicsofmarket/ © Joshua Konov, 2009