trying to defend globalisation – and its indefensible.

So there’s hope yet!

don’t honestly believe they were wrong….they’re tryiing to put humpty together again, thinking he never was fragile, it was just a very strong

wind that blew him over!

We know better….Which is why we have to get in there and have the argument, publicly, and put the

alternative…so many people are awestruck by the words of ‘oracles’ like Greenspan and Mervyn King…We have to encourage them – that is, our

fellow citizens – to be a little less respectful, and a little more confident of the alternatives.

Dunfermline Building Society – was it £1.6 billion dumped on us taxpayers?

So yes, the balance is really important. Bailing out banks is

not government spending in the productive and income generating sense that Keynes intended it….So you may be right on that one…

have been following the wrong policies all these years. We all know they have got us into this mess, but they are not about to say sorry and really

mean it, any more than the bankers who brought down Northern Rock, RBS, etc! They cannot allow themselves to be seen as wrong, and thus as unworthy

of our respect, and the large salaries they currently receive!

leading the global drive toward trade liberalization by signing the Global Agreement on Tariffs and Trade in 1947, America has been transformed

from the wealthiest nation on earth – its preeminent industrial power – into a skid row bum, literally begging the rest of the world for cash to

keep us afloat. It’s a disgusting spectacle. Our cumulative trade deficit since 1976, financed by a sell-off of American assets, exceeds $9.1

trillion. What will happen when those assets are depleted? Today’s recession is the answer.

Why? The American work force is the most

productive on earth. Our product quality, though it may have fallen short at one time, is now on a par with the Japanese. Our workers have labored

tirelessly to improve our competitiveness. Yet our deficit continues to grow. Our median wages and net worth have declined for decades. Our debt

has soared.

Clearly, there is something amiss with “free trade.” The concept of free trade is rooted in Ricardo’s principle of comparative

advantage. In 1817 Ricardo hypothesized that every nation benefits when it trades what it makes best for products made best by other nations. On

the surface, it seems to make sense. But is it possible that this theory is flawed in some way? Is there something that Ricardo didn’t consider?

At this point, I should introduce myself. I am author of a book titled “Five Short Blasts: A New Economic Theory Exposes The Fatal Flaw in

Globalization and Its Consequences for America.” My theory is that, as population density rises beyond some optimum level, per capita consumption

begins to decline. This occurs because, as people are forced to crowd together and conserve space, it becomes ever more impractical to own many

products. Falling per capita consumption, in the face of rising productivity (per capita output, which always rises), inevitably yields rising

unemployment and poverty.

This theory has huge ramifications for U.S. policy toward population management (especially immigration policy)

and trade. The implications for population policy may be obvious, but why trade? It’s because these effects of an excessive population density –

rising unemployment and poverty – are actually imported when we attempt to engage in free trade in manufactured goods with a nation that is much

more densely populated. Our economies combine. The work of manufacturing is spread evenly across the combined labor force. But, while the more

densely populated nation gets free access to a healthy market, all we get in return is access to a market emaciated by over-crowding and low per

capita consumption. The result is an automatic, irreversible trade deficit and loss of jobs, tantamount to economic suicide.

One need look

no further than the U.S.’s trade data for proof of this effect. Using 2006 data, an in-depth analysis reveals that, of our top twenty per capita

trade deficits in manufactured goods (the trade deficit divided by the population of the country in question), eighteen are with nations much more

densely populated than our own. Even more revealing, if the nations of the world are divided equally around the median population density, the U.S.

had a trade surplus in manufactured goods of $17 billion with the half of nations below the median population density. With the half above the

median, we had a $480 billion deficit!

Our trade deficit with China is getting all of the attention these days. But, when expressed in per

capita terms, our deficit with China in manufactured goods is rather unremarkable – nineteenth on the list. Our per capita deficit with other

nations such as Japan, Germany, Mexico, Korea and others (all much more densely populated than the U.S.) is worse. My point is not that our deficit

with China isn’t a problem, but rather that it’s exactly what we should have expected when we suddenly applied a trade policy that was a proven

failure around the world to a country with one fifth of the world’s population.

Ricardo’s principle of comparative advantage is overly

simplistic and flawed because it does not take into consideration this population density effect and what happens when two nations grossly

disparate in population density attempt to trade freely in manufactured goods. While free trade in natural resources and free trade in manufactured

goods between nations of roughly equal population density is indeed beneficial, just as Ricardo predicts, it’s a sure-fire loser when attempting to

trade freely in manufactured goods with a nation with an excessive population density.

If you‘re interested in learning more about this

important new economic theory, then I invite you to visit either of my web sites at OpenWindowPublishingCo.com or PeteMurphy.wordpress.com where

you can read the preface, join in the blog discussion and, of course, buy the book if you like. (It’s also available at Amazon.com.)

Pete

Murphy
Author, “Five Short Blasts”

easy prey to global capital. This is all about saving the globalization agenda – nothing else.

the current figures being almost half a million a month and rising, to me a very scary prospect.

I am concerned about the lack of general

cohesion among the various protest groups, though some have gotten together, and the seemingly testosterone-fueled attitude of the police – who

appear to be looking for a fight. Given the likely dismal prospects of any significant inroads into many of the problems facing the world today

being made by the G20, and the go-ahead given to the police by the government to rely on terrorist legislation procedures even on peaceful

protesters make the summit look like a disaster even before it has begun. And Boris Johnson flippantly referring to the summit as a Jamboree does

nothing to defuse tensions surrounding the event.

While agreeing with you in general about King’s indecisiveness, is it not possible that King’s recent public

statement about there being no more money in the kitty is the stark statement it is because Brown is deaf to anything else, so committed is he to

supporting the banks and related institutions – that is, he listens but does not hear.

What I mean to suggest is that King may be coming to

see that putting more money into insolvent banks would be like putting money into a black hole from which no return is possible. According to

physics, a black hole emits a little radiation, but it doesn’t go very far and it is toxic. Ditto the toxic bank.

Of course, King may be

unable to imagine putting money directly into works projects like Roosevelt’s WPA, even though such projects will bring tax revenue in their train,

as you have argued before. Roosevelt’s projects were less successful than they might have been for many reasons, some of which are in the air

around us today. The rich fought Roosevelt every step of the way, even to the extent of trying to organize a military putsch, which failed in the

end because of the democratic ideals of Brigadier General Smedley Butler whom they believed they could suborn to their ends.

As an

aside, Blanchflower being the only member of the MPC to advocate lowered interest rates when they might have done some good: does anyone know why

he is being replaced at the MPC?

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former

chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that

more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the

U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking

essential reform. And if we are to prevent a true depression, we’re running out of time.

by Simon Johnson

http://www.theatlantic.com/doc/200905/imf-advice

something to get economic activity going..economic activity rather than economic growth….Work is fundamental to our social cohesion, and there is

plenty of work to be done..insulating our homes; renewable energies; caring for our elderly…but of course it has to be productive work within the

finite limits of the ecosystem…