House of Eratosthenes

Distribution-of-wealth: The very phrasing is based on a premise that’s questionable, at the very best. You want an economy to get better, what you need is some wealth that is not, and has never been, “distributed.” Need to think in terms of creating it, growing it, and earning it. Distribution? That’s what a momma-bird does when she barfs into her babies’ mouths. If the people running your economy think that’s how it ought to work…well then, there’s your problem.

“redistribution”?
I’ve always kind’a liked the idea of circulation.
But THAT requires a closed loop, rather than a starting, finishing, and “recycling” system.

“Credit”-until when?
I can understand the foresight to hold onto potential profits to buy next years seed corn.
I can’t understand the apparently eternal need to get “credit” until next years crop MIGHT come in.
Of course, all that ANNUAL “interest” artificially bumps the cost to potential consumers (if any-see your Senator).
Next thing you know, half the population “needs” a higher mandatory minimum “wage” to survive sitting idle from actual productive work.

I guess just “redistributing” the wealth cuts out the whole debt/interest/labor value thing.
But then there were TWO broken windows….
and so on, and so on….
- CaptDMO | 11/06/2013 @ 11:16
[…] For File CLXXXV Ask a Swede If You Like It You Can Keep It A Suggestion For the healthcare.gov Mess Memo For File CLXXXIV […]
- House of Eratosthenes | 11/07/2013 @ 07:38
Sweden has one of the most robust market economies in the world, by a number of measures, along with high per capita income.
http://www3.weforum.org/docs/GCR2013-14/GCR_Rankings_2013-14.pdf
- Zachriel | 11/07/2013 @ 18:20
Yeah, and there’s a reason for that. Suggest watching the video.
- mkfreeberg | 11/07/2013 @ 19:14
We did watch the video.

Since their financial crisis in the 1990s, Sweden has instituted a number of crucial market reforms, including deregulation, disinvestment in key sectors, and budget discipline. Meanwhile, they have universal healthcare, a strong public pension system, an array of automatic economic stabilizers, such as generous unemployment and training benefits, crucial during the 2008 fiscal crisis, and a government sector which is almost half of the economy.
- Zachriel | 11/07/2013 @ 19:43
So it’s an impure example, since they’ve been feeding both the host (private sector, with failing businesses allowed to fail) and the parasite (government). Fortunately for them, at this point there’s enough fatty tissue in the host for the parasite to keep snacking.

That’s not a criticism of government, by the way, it’s a simple statement of fact. There are symbiotic relationships and there are parasitic ones. A flea may say, “I’m healthy and the dog is healthy, this is working out great for both of us!” But that doesn’t make it a symbiotic relationship.
- mkfreeberg | 11/07/2013 @ 19:51
mkfreeberg: So it’s an impure example

It’s called a mixed economy. Most industries are highly competitive, while the government provides a strong social safety net, a rational regulatory environment, and economic stabilization, which was more effective than the ad hoc approach of the U.S.

mkfreeberg: Fortunately for them, at this point there’s enough fatty tissue in the host for the parasite to keep snacking.

Swedish GDP growth has been substantial over the last few years.
- Zachriel | 11/07/2013 @ 20:02
Yes, we could learn some things from them. As the narrator makes it clear, they’ve been allowing their failing businesses to fail.
- mkfreeberg | 11/07/2013 @ 20:12
mkfreeberg: As the narrator makes it clear, they’ve been allowing their failing businesses to fail.

Generally correct, though the Swedish government took substantial equity interest in their banks during the 1990s crisis, then imposed stringent regulations. Meanwhile, they have strengthened their social safety net, including automatic economic stabilizers. They are an example of a mixed economy, as are most other successful economies.
- Zachriel | 11/08/2013 @ 05:28
And as we have seen here in the United States, it is the success of capitalism that inspires the impulse to try out this mixture, not the mixture that inspires the success.
- mkfreeberg | 11/08/2013 @ 06:32
mkfreeberg: And as we have seen here in the United States, it is the success of capitalism that inspires the impulse to try out this mixture, not the mixture that inspires the success.

The economic engine is the market economy, certainly. Sweden, with a strong government sector and an extensive social safety net, also has one of the most robust market sectors in the world.

Turns out that the public sector has been crucial for continued growth in the private sector. A couple of examples are infrastructure and pollution control. But social programs are also crucial. For instance, during the recent financial crisis, which had its epicenter in the U.S., Sweden already had extensive automatic stabilizers built into the economy, including generous unemployment and retraining for displaced workers. Furthermore, universal healthcare and pensions mean that workers are more portable between industries, resulting in a more flexible response to changing economic conditions.

Thank you for the example of a nation that has developed a successful mixed economy.
- Zachriel | 11/08/2013 @ 06:49
Turns out that the public sector has been crucial for continued growth in the private sector. A couple of examples are infrastructure and pollution control. But social programs are also crucial. For instance, during the recent financial crisis, which had its epicenter in the U.S., Sweden already had extensive automatic stabilizers built into the economy, including generous unemployment and retraining for displaced workers. Furthermore, universal healthcare and pensions mean that workers are more portable between industries, resulting in a more flexible response to changing economic conditions.

Ah, Pelosi logic! And I guess if we want to find out what’s in a bill we have to pass it.

It’s all nonsense. For the economy to work, to grow, someone somewhere has to get richer. That means new assets are going to have to be created, or else old assets will have to increase in worth.

“Goldfinger‘s gold is worth more because he irradiates Fort Knox” increase-in-worth is not going to cut it. Something has to get made, or something already made will have to be refined or repositioned into something more precious. Without that, it’s a bunch of busy-work. And “turns out” busy-work is not enough to get the job done.

Were that the case, we would have tried out Keynesian policies in the middle of the twentieth century and said to ourselves, all across the first-world, “Hey, this works slicker than anything!” and kept it up. But busy-work and everybody-has-some-coins isn’t good enough, it “turned out.” There has to be new wealth, and an incentive for those who can create it, to create it.

Without creation there is no growth. And that is logical, like 2 + 2 = 4.
- mkfreeberg | 11/08/2013 @ 07:06
mkfreeberg: For the economy to work, to grow, someone somewhere has to get richer.

Markets require inequality, the possibility of success and failure, profits and losses.

Markets are the engines of economic growth. However, government has a role also. The public sector has been crucial for continued growth in the private sector. A couple of examples are infrastructure and pollution control. Mixed economies are the most successful.

What’s interesting is that you pointed to Sweden as a “good example” when it has a much stronger public sector than the U.S., but still maintains a very robust market sector. Sweden has allowed inequality to grow somewhat, to increase competitiveness, but is still significantly less than the U.S.
- Zachriel | 11/08/2013 @ 09:17

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Tuesday, November 5th, 2013