… Millennials will have a hard time just to keep the living standard of their parents. (most won’t)
a strong middle-class was the basement of the Western Economy – it has been sucked out.
I blame the utterly unsustainable nature of unlimited free-trade capitalism and THE BANKS (Central and Private) for it.
the current monetary debt-money-by-private-banks-system is a unsustainable catastrophe
monopolies do not work forever
Unlimited (no limit in the amount of wealth a single individual can acquire, like possess a million houses or the whole planet?) to form monopolies = trade in balance (dependencies on things people need to survive: energy, medicine, food/seeds, you name it) – thus the bigger companies get even bigger (right now you can observe a lot of mergers – that is exactly that).
Merge – merge – acquire – until there are only one bank, one oil company, one electricity company, one car company building cars (without jobs, only robots) for the whole planet – but not selling them cheap.
Profit creation without job creation + falling wages?
With what income are people supposed to buy these cars?
More private household debt ain’t going to cut it.
It is the dilemma of in balance by monopolies – it just does not work or is massively unsustainable (works only short term) – the same with trade in balances (it is exactly the same as in-debt house holds but on a nation level).
Yes – you can create more money and give it to the poor to avoid revolution and riots – but we also need sustainable role model lifestyles:
generating your own electricity (learning how to setup solar power systems and batteries)
grow your own food
learn how to recycle your waste
learn how to build stuff yourself
… all of this is a lot of work but greatly REDUCES your trade-deficit = dependency on monopolies – why not praise it with a little extra money from the state?
Great, thanks all involved, what now?
evolution or revolution?
We will have to change the way we live (aka “The World”) – the old ways ain’t workin’ no more.
“Millennials, also known as Generation Y or Gen Y, are the demographiccohort following Generation X and preceding Generation Z. Researchers and popular media typically use the early 1980s as starting birth years and the mid-1990s to early 2000s as ending birth years. Millennials are sometimes referred to as “echo boomers” due to a major surge in birth rates in the 1980s and 1990s, and because millennials are often the children of the baby boomers.”
this dog could rescue the western economies and democracy itself
VideoInterview with Prof Dr Dirk Ehnts
(in German)
Our current theory of money is wrong:
With every new credit (purely digital Giral-Fiat-book) banks generate new money out of nothing
How God created the world, Bankers create money from pure nothing, “creatio ex deo” (imho: this explains why many bankers think they are god-like)
the intermediary function (banks lend only saved money to others) is a folk tale, which even one or the other Banker and finance minister still believes
Banks are not “Intermediaries”
the Bank does not check how much savings money is in the stocking – this fact can not be ignored anymore
Fiat money: since 1971 (Nixon, Vietnam) Gold guarantee for dollars over
now it’s just “modern money,” “Fiat Money” (paper/ones-and-zeros on hard drives without the guaranteed value/exchange for gold/oil/potatoes… you name it)
If the state forces you to pay taxes in a certain currency, this currency gains value just because of this fact
founding idea of the European Union was to create a “United States of Europe” with a single currency.
Problem: asymmetric shock at the abandonment of the National currency
One argument was that the Euro would provide protection against financial markets, the exact OPPOSITE was the case. (Bug or intention? Could also be a Goldman Sachs intention )
German Ex-Minister of Finance Scheuble: “Has called the widening of the wealth gap between rich and poor – fake news”
if private households and private banks and companies save in the crisis, that’s okay, but if the state saves in the crisis, it’s just wrong because the whole economy comes to a halt.
Portugal with left government has ended the austerity course, has returned to growth, contrary to austerity policies of Greece, Spain, Italy but also Germany (“black zero” / zero debt policy)
“state intervention is necessary” “the free market does not guarantee full employment”
either the Euro will be reformed, that unemployment will fall again
“Macron must deliver” or: “Le Pen” is elected
without reform the countries are forced – for political reasons – to stop the €-single-currency project
France’s President Mitterand (until 1995) has made/demanded the introduction of a single currency as a condition for the reunification of Germany. ? (i would say this backfired badly accross Europe)
a current account/export surplus always leads to a debt accumulation abroad and “at some point, that’s not good”
“Money and credit are social constructions without regulation would be unthinkable”
In times when many people take loans, there is also a lot of money created, incomes strongly correlates with debt
In 1929, two crises hit at once:
the largest real estate bubble ever
the largest stock market bubble ever
when people use the money they have for debt eradication instead of consumption, then of course, everywhere the income and also the GDP falls, because the sales of businesses (internal market) stagnates
speculative banks with high yealds but also high risks (hedge fund start collecting at $1Mio)
Consumer banks with state Deposit insurance
so people don’t have to be afraid, that in the next crisis the whole banks die and people run to the Bank, because they are afraid that they can no longer withdraw their money
was de facto cancelled under Bill Clinton but also inactivated before
reason:
Deutsche Bank was not subject to this regulation (it is a universal Bank (consumer – but speculators-Bank))
New York banks complained that this regulatory competition is unfair competition
Consensus during the Soviet Union:
the inequality of income could not be too high
we wanted to show the GDR:
“here we are all rich, even our poor are richer than your middle class”
this consensus has ensured that the redistribution of wealth was “Scandinavian” (massive redistribution)
Consensus: It is good, if the German middle class has more income
In 1970, probably triggered by oil shock crisis, the consensus broke up, corporate profits have fallen, and companies started to downwind wages
breaking with old thinking/paradigm:
lowering wages increases company’s profits
because you think -> company’s investments would also increase -> with increasing wages -> productivity also increases
but this classic “Adam Smith theory” concept has reached limits
Markets can:
produce Innovation, productivity and beautiful product
but you expected too much of them
they simply do not care about society
if you believe that the companies invest so much that we have full employment you are mistaken / taken for a ride.
“Entrepreneurs (unfortunately) technically are not in charge/feel responsible for raising the public well beeing, all they care about is profits” (so do the Banks) (i partly disagree, everyone has responsibility to take, nobody can 100% outsource responsibility)
Solution for the financial crisis: public spending, more government deficits – black Zero exactly wrong policy, therefore recession follows
The concept of the Euro:
we need a European Central Bank, Yes, but we also need a European Ministry of Finance (Paul de Grauwe 1990 Brussels)
because:
if money creation in the private sector is not high enough (as now) i.e. if private investment are lagging – unemployment follows
which can only be removed by government expenditure increase
In my opinion the logical conclusion:
in this structural crisis (which we still feel since 2008)
the state should not only spend more, in a way, so it reaches the “real” economy
the state should also give loans (without large collateral) for:
real existing people who want to build a house (to inhabit themselves)
real existing people who want to pursue a corporate idea
real existing people that have had a company for serveral years and now look for refinincing old loans, more invest more into their own (maybe with a fine, if they just take the money and run… never let them back into the country)
there is no European contract, that austerity policies are the only allowed answer in the crisis
Prof Dr Ehnts sees responsibility to act correctly (like Portugal) and counter-steer until private investment starts again with politicians (that unfortunately are hiring consultants from private Banks and McKinsey and advocate exactly the wrong thing)
Prof. Dr. Dirk H. Ehnts explains the debt-money economic system:
What is debt? – state countercyclical expenditure
In capitalism, we have companies that want to make profits, i.e. their revenues must be above expenditure
in other words, we need another sector where expenditure is (constantly) above revenue (debt)
that means, we always need someone in the economy who is indebted, only then production which is sold and is produced more
only then are companies happy
there must be someone in this System who will inject more money into the system ( long term ) than he pulls out
there are only two options:
private sector: households and businesses spending/debt
state spending/debt
that is, the savings of households and profit of companies are actually generated by government deficits (governmental deficit usually increases by +3% per year, state usually never makes a surpluses, but in Germany now government debt is reduced by Austerity methods, actually not good X-D, will create recession)
the idea behind this: state indebts itself until private investment starts, the state can withdraw with investment again, the state always has the possibility to take money out of the system via tax
Most people would agree, that unemployment is a bad thing
(we can assume that it causes political instability i.e. crime and riots)
if we do not want unemployment:
then one would have to use the state in such a way that the state makes expenditure when the private sector is restrained with expenditure (counter-cyclical)
if you believe that unemployment is nothing bad, because people can do something else, well…
Macron: The last Democrat of France?
if Macron can not deliver an improvement in financial-economic Situation: The winner is nationalism and Le Pen
The election of Le Pen will be the end of the Euro project and will probably lead to a new nationalism in France, but also in Germany, just like Hitler’s election results were always good when the (financial)economy was non functional and many people were unemployed. (after 1929 crisis)
“Fun” fact: France’s president until 1995 Mitterand has made/demanded the introduction of a single currency as a condition for the reunification of Germany, now, among other things, France is also suffering economically from this financial merger.
If France leaves the Euro-Projekt and reestablishs a national currency “New Franc” it could devaluate as much as 30% and thus get an competition gain of +30% ahead of Germany.
Prof Dr Ehnts does not believe that the Euro is a deliberate faulty construction “we all make mistakes” X-D (well some mistakes you only make once… )
One hope associated with the Euro was more protection against financial markets – the exact opposite happened. (who brought this in circulation? Goldman Sachs? another “unwritten” but commonly believed lie?)
The main victims of the crisis: the young people
“we are creating a lost Generation that will rise up against Europe”
Born and raised in Bremen, he studied economics from 1997 to 2002 after graduating from the Georg-August-University in Göttingen.
From 2006 to 2012 he was assistant professor at the Carl von Ossietzky University Oldenburg.
In 2008 he was awarded the doctorate with the grade “summa cum laude”.[1] from 2012 to 2014, he taught macroeconomics, money and currency in Berlin as a visiting professor at the Hochschule für Wirtschaft und Recht Berlin.
From 2017 to 2018 he taught at Chemnitz University of technology.
Ehnts lives with his wife and two children in Berlin.
Memberships:
Institute for International Political Economy (IPE), Berlin
Samuel-Pufendorf-Gesellschaft für politische Ökonomie E. V. (spokesman of the board)
Books:
Dirk H. Ehnts: Modern Monetary Theory and European Macroeconomics. Routledge International Studies in Money and Banking, 2017
Dirk H. Ehnts: money and credit: a €-European perspective Ehnts. Marburg: Metropolis-Verlag, 2016, 2., revised edition
Hans-Michael Trautwein, Dirk H. Ehnts: innovation and international economic relations. Oldenburg: Carl-von-Ossietzky-Univ. Training and education management, 2010
Ole Christiansen, Dirk H. Ehnts, Hans-Michael Trautwein: Industry relocation, linkages and spillovers across the Baltic Sea. Oldenburg: Inst. for Economics, 2007
I thank all those involved who are active against self-destruction of humanity and all life on this planet and in the universe (as long as it is friendly).
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” (src: https://en.wikipedia.org/wiki/United_States_Declaration_of_Independence)
new version: 2.0
We hold these truths to be self evident,
that all conscious life on this planet deserves protection for life is precious in the universe
that life depends on balance and mankind can help stabilize the balance by it’s lifestyle and everyday actions and choices
that only god and nobody is perfect and nobody is god and nobody wants to be nobody
which means: all systems and rules are man made and imperfect so it is the right of everyone to question all man made systems
biodiversity of systems might be key for mankind’s survival (ability to adapt to change)
governments shall encourage alternative ways of government and survival in order for mankind to learn.
“We hold these truths to be self-evident, that if truth is bad for business, it’s not truth’s fault”
Modern (NeoLiberal) Capitalists would say:
Capitalism holds these truths to be self-evident, that some people are born “more equal” than others (born with different rights and privileges to to access resources) which sounds pretty much like an aristocratic system.
