Keeping it simple, # 1: Eating your customer base is wrong

If everyone was socially selfless, we wouldn’t need laws

‘Regulation’ is a form of professional law backed by Government overseers

It’s there because many human beings are greedy and lawless if left to themselves

Deregulating the Labour market in the US, UK & EU has resulted in the exact same average wage value loss in real terms since 1993: 30%

Without consumer purchase acceleration, the neoliberal growth model can’t keep going and can’t be restarted

Consumers thus need easy credit to keep on spending

Even with that, consumers with 30% less money to spend will not spend 30% more and be able to pay off the credit.

This is the steady, inevitable process we can see taking place around the world. By not sharing the spoils with the customer, the corporacrats are literally eating their customers….ie, themselves.

The real amount of global gdp growth from 1990-2003 has been outstripped by the levels of household debt.

Unless the neoliberal model is torn up, the doom of every advanced economy and banking system is a 100% certainty.

Ignore the media, pol, banker bollocks. The above argument is as close as economics will ever get to science.

Yesterday at The Slog: Why the Resistance must keep it simple

23 thoughts on “Keeping it simple, # 1: Eating your customer base is wrong

  1. 100% on the nail. Perhaps this is one of the reasons why the Pope and Queen both hinted that this Christmas may well be our last?

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  2. Could not have been summed up more succinctly. Of course, such clear unemotional analysis is beyond the wit of the governing classes and the consciences of their masters in the corporate/banking world; we are therefore hurtling towards the eventuality outlined above as surely as night follows day. I just hope I have equipped my children and grandchildren with the necessary skills to survive what is to come …

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  3. So what s your answer; helicopter money and Zimbabwe inflation– how would that equitably benefit the already pummelled savers?
    Truth is the world is debt – screwed whichever system is now adopted as it is crassly too late to remedy the financial global abortion we have collectively created.

    Queen and Pope probably right. Very rude awakenings beckon for all but the filthiest rich……so I m persevering with the Lottery.

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  4. Nailed it. No recovery is planned by those banksters responsible.
    http://www.thedailycoin.org/?p=55858
    A brilliant summary of our present predicament. 3 videos from PCR. A Must Watch.
    PCR blames neocons, I blame banksters who planned this going back to 1st May 1776.
    Book: Pawns in the Game, by William Guy Carr.
    It has taken a long time to corrupt the West to the depths to which it has sunk.

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  5. The Poe’s main science & ‘climate change’ adviser is a Knight of the Brit Empire, courtesy of the Queen, bless her.
    ‘John’ (Hans Joachim) Schellnhuber believes there are 6 billion too many people on this planet.
    notrickszone.com/2011/05/18/schellnhuber-carrying-capacity-of-the-planet-is-less-than-a-billion-will-die-eart-will-explode-with-9-4-billion-in-2050/#stash.hjNn

    Customer base not required.

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  6. brills and lovely and simple.thanks JW. so we are all tied to a cart called central banks which is heading for the cliff asap. our politicians are there to look out for us but their prevailing weakness has led to them selling us all out. we need a leader with integrity who does not lie and we should give him the power to flush the rubbish, the rats and cockroaches away.

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  7. The ‘system’ has been consuming itself for long while now. It will gather momentum as there becomes less to consume.

    Did anybody see that Chinese troops are now on the ground in Syria supporting Assad?
    Obama’s biggest nightmare, apparently the US is scrambling to invent enough lies to to tell the American public.

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  8. They do not just devour their customer base they devour their employee base too.

    The customer base cannot borrow more to keep the credit bubble going but the employee cannot earn more neither. If any extension of the credit bubble and this economy was to occur it has to be earned and that is not happening. Before Gideon starts talking about the living wage nonsense that just elevates the overall inflation resulting in those earning being no better off.

    The current working model is the ever growng number on the minimum wage (you can call it the living wage if you want it is the same) that if wage increases are continually suppressed those just above the minimum wage are sucked into the minimum wage expanding the UNABLE TO SPEND BECAUSE NOT ENOUGH IS EARNED. Gideon Osborne will not point this out.

    A vicious cycle too, if it is not spent then it can never be earned hence any legislation to make things compulsary purchases even if it puts you into debt will occur. Think this is the way health and pensions will be privatised because government will declare them bankrupt (or unsustainable without private investment) allowing all those with money to step in and cherry pick profits.

    The population base will not see a reduction in taxes but now you are paying extra for services and against the law if you do not pay. Obamacare is a prime example of this but it shows the path and you get penalised if you try to go without because YOU CANNOT AFFORD IT.

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  9. GDP is a measure of transactions. It is not a measure of human health, societal harmony etc etc.

    The assumption is that GDP correlates with more important and relevant measures, because GDP is:
    1. Measurable.
    2. A single number.
    3. An indication of transactional activity across an economy, be that national, regional or global.

    If you want to make society healthy, you have to have far more direct measures of what indicates societal health.

    1. House prices being very high is great for those already in ownership, those looking to downsize (and hence release capital value) etc. It is useless for the next generation wanting to get onto the housing ladder. The higher house prices are, the more house sales contribute to GDP. The ineluctable effect of higher prices is greater concentration of ownership, for better or worse.
    2. All financial trading does is distribute wealth through gambling. It does not grow anything, make anything, preserve anything. It is the easiest way to increase GDP, since you can recycle capital many, many times in a single year through short-term trading. One interesting measure of economic health might be the percentage of capital that is diverted into short-term trading. That would indicate what is actually available for productive areas of the economy. I see zero difference between derivatives trading and government taxation, except that one is taking from the poor and giving to the rich and the other is taking from the rich and giving to the poor.
    3. GDP can be grown effectively using inflation, however that is not a measure of ‘consumer purchasing power’. It is a measure of fiscal indiscipline.

    Perhaps the most important thing to discuss is not GDP per se, but what suite of indices should be used to measure ‘sustainable societal health’?

    That would cover:
    1. Economic well-being.
    2. Quality of life indicators from birth to death.
    3. Signals of societal damage (mental ill-health, use of food banks, % of population requiring help with housing costs, effects of adverse weather on society etc etc).
    4. Effectiveness of pension provision.
    5. Etc etc.

    My view is simple: in order to know what kind of a society you want to create, you have to know how to tell whether you have created it or not and that means measuring a few things.

    It is important to spend slightly more on that measurement to be sure you get the right answers, rather than waste a bit on some flim-flam to claim that you are doing your job.

    But until the discussion focusses solely on: ‘what are the key indicators of a healthy, sustainable society?’ you can’t ask: ‘what do we have to do to get there and how do we measure how far we have got?’

    Is that discussion too complex and painful for the majority?

    If so, someone must confront them gently and compassionately and tell them that, if they want a healthy society, they have to engage in understanding what a healthy society actually looks like, because if they don’t, they won’t recognise when a bunch of robber barons come along to destroy it, prevent it happening, commit acts of societal vandalism to undermine it etc etc.

    100+ years ago, the Labour Party, rightly or wrongly, decided it knew what a better society looked like and engaged in campaigns to educate the people about that.

    I don’t think the Labour Party is capable of doing that any more.

    Question is: who can take their place??

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  10. Unless the neoliberal model is torn up, the doom of every advanced economy and banking system is a 100% certainty

    When a businessman owns the machines in his business how many employees does he need? He can make his profits without having to employ nasty little upstarts like Red Robbo of British Leyland fame. Nor do they have to pay them – put in ‘businessman’ language, that is to waste money” by paying them. That money is wasted because it is not buying something for that businessman.

    The sole reason for having a business is to make money, not spend it. If it is spent, it is spent on buying things that are tangible.

    Such people have no other interest in their lives,

    Mr Ward, you essay is testament to the foolishness of their patterns of thinking. Only this forgets one crucial element: the business owner cannot conceive of any other way to think. It’s as far from his mind as an understanding of homeopathy is to a person who believes in vaccination and anti-biotics. Such peoples’ minds are closed to any other alternative.

    That is what we must deal with.

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  11. @Gemma

    Sorry, I certainly do ‘believe’ in anti-biotics as they have saved the life of one of my children. The huge number of deaths and amputations that occured due to bacterial infections prior to their discovery is a testament to their efficacy. This does not in any way mean that my mind is closed to alternatives, although I would require some evidence to ‘believe’ in a treatment.

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  12. Canexpat, I appreciate the use of anti-biotics in certain circumstances.

    My own point of view is this: modern medicine can help someone who has had a serious accident. This stands as a clear advance on medicinal practices even from the 1940s. However, homeopathy can return them to health a little faster – and often without the need for anti-biotics (and their side-effects).

    Naturally, evidence in favour of homeopathy is hard to come by. After all – and this is precisely why this comment is apposite to this post – is because all the money is spent in proving that anti-biotics work and homeopathy doesn’t. People like proving the things they already know, believe in or whatever. Or what makes them money using their current machinery.

    Furthermore, whilst homeopathy clearly works, it is part of science that stands outside the ‘peer-reviewed factual science’ so beloved of universities. They believe in a science that is evidently repeatable.

    In the world of living nature, nothing ever happens twice. No two snowflakes – no two leaves – are ever the same. I’ll put this the other way around: evidence can only describe things where there is no life. Homeopathy is a living science and cannot be proven using a science that cannot accommodate it. It’s like trying to open a bottle of wine with a tin-opener.

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  13. John
    I think in my simple analysis posted on 28th (obvious I fired from the hip .. I have never known so much stuff to be getting out and I am now more aware, but giddy, as to how much my generation has been twated ).
    I attempted to open up a direction of thought, which, to my mind, would discomfort those not in the rewards loop (bunkers and dosh)….yet continue support the present dangerous direction things are taking!
    It is my belief that: paradoxically our own and American military held Tricky Vicky and her cohorts back from war with Russia. I fear her and her ilk are… more driven by faith, than logic and greed!
    I think they had one hell of a wakeup shock on their visit to Russia and the possible consequences of the their actions in the Ukraine and the ME. One would think that they would have to mind, that the holdomour was enough for any country …. in one century!
    dofornow

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  14. jdseanjd:

    from Ecoscience:

    “p787-8: Adding a sterilant to drinking water or staple foods is a suggestion that seems to horrify people more than most proposals for involuntary fertility control. Indeed, this would pose some very difficult political, legal, and social questions, to say nothing of the technical problems.”

    My money’s on wheat, barley and sugar as being the staples they tampered with the last decades. Corn (HFCS) also.

    Chilling to think of but plausible.

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  15. @dfn

    History certainly rhymes. One of the main architects of the holomodor was Lazar Kaganovich. Vicky Nuland, Assistant Secretary of State and ex-foreign affairs advisor to Dick Cheney and notorious Ukraine coup facilitator is married to Robert Kagan, cofounder of PNAC, and a rabid neocon. The U.S. deep state persists, regardless of which puppet is in the Whitehouse.

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  16. Not sure where people got the idea that the Queen’s speech contained a hint/reference to ‘our last Christmas’? Or the Pope’s come to that but, his was translated from Italian..

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  17. @ Gemma
    Totally agree wrt homeopathy. As someone who has seen its curative effects over the past 40 years in friends and family, I deplore the witchhunt/persecution by the medical establishment in the UK and USA to try to banish a form of medecine used for decades throughout most of the rest of the world, which has no damaging side effects and is relatively cheap, depending on one’s luck with finding an effective practitioner. Any form of medecine that challenges the status quo/power/profits of the medical Establishment in our allegedly “advanced” and “enlightened” countries inevitably meets the same fate of being hounded by all means fair and foul (see Dr Brzysynski in Texas or before him Dr Gerson). Fortunately, the public are slowly becoming more aware.

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  18. Pingback: RANK BAD SCIENCE | Doomstead Diner

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