Post of the Day
October 8, 1998
Communion of Bears Folder
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Subject: Re: Big Picture
IMHO, you are way too bearish! You are focused entirely on market mechanisms which have failed! Nothing of economic value has been destroyed - the real "lived in" world is in great shape - global stockmarkets are not. What you are reading is the death throes of a group of "greedy pigs" that are asking to be spared from their fate! ( A redistribution of wealth from the highest classes to lower classes.)
(Even here the LTC bailout - demonstrated how the "insiders" tried to shore up the gambling mess of the super-rich!)
For 20 - 30 years, the media said U.S.-style capitalism was spreading throughout the world! Wrong! What spread was rampant "crony" capitalism - to every country outside of Europe. These non-European countries have long-term ruling parties where the "family" connections are in Government, banking, trade, and manufacturing. All decisions made are to benefit the "family" - laws passed, loans arranged, unions outlawed or limited, importing competitors restricted, local markets protected, so that the "family" gains - even at the expense of the people. Foreign corporations have to agree to "joint-ventures" with "family" members to gain access to the markets.
The point is that totally NON-ECONOMIC decisions were made as a result..it was a waste! I worked in Far East shipping for 20 years..except for Japan, every single deal with Asia was mired in kickbacks, bribes, nepotism, and "cronyism". In Japan, there was an unwillingness to step outside the "family" to conduct business regardless of whether it made economic sense or not. The vast majority of cotton to Japan moved on Japanese ships at inflated rates - the vast majority of Japanese electronics moved across the Pacific in Japanese ships (again, on ships with higher rates). Why? Because the trading company that shipped the cotton or electronics had financed the ships and the shipyards that built them.
So the party has come to an end - Japan, Korea, Mexico etc. etc. talk of it but have no desire to see true economic "reforms" - they don't want to file bankruptcy, open up their markets - they want the "status-quo" restored at miminal cost.
The world is better off without them!
So the stockmarkets have taken a hit but the vast majority of the inhabitants of Asia, S.E.Asia, Russia, and Latin America were not sharing that wealth, they are still skilled, talented, hardworking and life will go on..recovery will be swift and hopefully genuine.."reform" is coming because the people will DEMAND it - not because the ruling class wants it..
Remember, the Republican congress increased the minimum wage not because they are soft-hearted but because the demand for labor was rising anyway and a small shift in wealth to the lowest was justified to keep the economy rolling along. You see, we have the mechanisms in place here so the "reforms" are gradual.
IMHO, six months and it will all over!
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