Economic distress: cause for blame or for adaption?

Regarding: http://www.businessinsider.com/rich-people-create-jobs-2013-11

Roads and freeways in metropolitan Phoenix

Roads and freeways in metropolitan Phoenix (Photo credit: Wikipedia)

The author‘s point about “consumer spending” contributing to the job market is quite valid. However, what is the real point? Is the article about promoting practical clarity (that would be useful in guiding an individual’s choices) or just promoting a change in regard to political idealism?

If the best possible result of reading the article is a new opinion about “here is what OTHER PEOPLE should do,” then what value is that to me NOW? The closing comment is a political idealism that “what we need is to understand that we are in this together.” I understand all of the points that the authored references, but I have a different conclusion:

“What makes a difference for me is when I am being responsible. When I am being responsible and lots of other folks are so jealous of me that they also start being responsible, that may be what WE really NEED.”

the dominoil effect

As a reminder, a decade ago, I forecast the decline of the economy worldwide, and especially in the US and Europe (with publications starting in 2003). In 2004, I specified the issue of a pending rise in fuel prices (and explained why I forecast such a huge rise and exactly what the diverting of funds to pay for fuel would mean for real estate markets and stock markets- below is the last few years of the US stock market index for the “housing sector”).

hgx

A few years after my initial publications, when fuel prices hit $11 per gallon in parts of Europe, prior economic trends quickly destabilized. What has happened since then is precisely the sequence that I called “The DominOil Effect” in 2004. 

first use of the phrase "the dominoil effect" in my 2004 publication "the real U.S. deficit: OIL!"

The recent cries of “relief” that gas prices are back down below $3 are absolutely “on schedule.” People are simply reacting. They have no comprehension of the issues or of the “predictable and almost certain future,” which might be so terrifying to some of them that they distract themselves with arguments about which form of political idealism is the least idealistic….

San Francisco, California

San Francisco, California (Photo credit: Wikipedia)

So, I back up further now to explore “what creates jobs/earnings/revenues.” To answer “the economy,” like the other author did, is absolutely worthless. Let’s explore a bit further.

Demand for services (and goods) plus an available labor force “creates” specialization (like learning the skills of plumbing or video editing or building cabinets, etc). What “the economy” values (after being influenced through commercial advertisements, government mandates, and so forth) gets supported with funding. People who are most “in tune” with that demand can make the largest rewards.

For instance, in the 1850s in San Francisco, thousands of poor men flooded the area prospecting for gold. A few became rich from the gold they found. Most did not. The group that had the biggest profits with very low risk were *suppliers* who sold equipment to the men who came for the gold rush. Also, because there were so few women in the area, women who worked as waitresses, strippers, and so on were able to earn money that was far beyond what was available for similar “services” at the peak of the famous Las Vegas “sin economy” of the 20th century.

English: Flag of San Francisco Español: Bander...

English: Flag of San Francisco Español: Bandera de San Francisco (Photo credit: Wikipedia)

If the author wanted to offer a serious commentary on tax regulations, I deem him “way off target” so far. People like me who forecast the economic decline of recent years (and near future) have demonstrated competence and clarity. However, how many of our articles that promote “personal responsibility through personal adaptiveness” have you seen shared on your facebook thread lately?

We forecast the economic shift as well as forecasting the political reactions attempted rather consistently in the US, EU, and Japan – we forecast the economic change, the public reactions and political reactions to the same sequence of FUEL-PRICE DRIVEN changes. We also noted which government responses (which tax regulations) would be most de-stabilizing or most reliable for promoting economic health.

English: San Francisco Peaks seen from U.S. Ro...

English: San Francisco Peaks seen from U.S. Route 89, Arizona, USA Français : San Francisco Peaks vus de la U.S. Route 89, Arizona, États-Unis (Photo credit: Wikipedia)

Further, while politicians in the State of Arizona argue over budget cuts, the State of Alaska has had record profits from taxes collected from the sale of oil at over $100 a barrel – even over $140 a few years ago.  That state can afford to give out thousands of dollars per year to every single resident as a “dividend” simply to attract them to stay in Alaska. Why? Because the state of Alaska is eager to keep people there where the population can work to keep all of that oil flowing to the rest of the US.

The lack of maturity (and lack of responsibility) in how most people relate to financial change is something that radically effects what behaviors are practiced and what results are produced. Those who have demonstrated clarity, competence, maturity, and so on may get increasing attention from a select group of motivated individuals. What will motivate them? In many cases, fear is what will motivate people to consider that some of their presumptions may be inaccurate and even “expensive.”

The waves of fear seen in 2007-8 in the US and EU were just hints of what is to come. Let those who have the courage to be responsible and lead give up conversations for who to blame and “what other people should do.”

Advertisements

Tags: ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: