$this->bbcode_second_pass_quote('patience', 'S')timulus Package? It's a short-term fix for a junkie. It's basically the same as transfer payments, only with the cost deferred.
Definition: Government aid = A transfusion from one arm to the other, with a LEAKY hose.
Bah! Humbug!
PeakOil is You
THE Stimulus Package Thread (merged)
Re: What exactly is a "Stimulus Package"?
by Iaato » Fri 18 Jan 2008, 14:30:20
I like your analogy. I can go you one better, stealing from something I read this morning.
Ras and others over at Prudent Bear suggested that rate cuts and free money giveaways are like using a bucket to take water from the deep end of the pool and pouring it into the shallow end for the kiddies. Nothing changes, but the kiddies are impressed by the bucket and the action of the water pouring. And I guess you could say that money is still moving. Meanwhile the water is pouring out of a hole in the side of the pool (credit deflation) and TPTB are getting ready with a fire hose to add more water as the level goes down. If it were my kiddie in the shallow end, I'd be removing them from the pool at this point.
Or you could just say that we are using bad money to fix bad money. Does anyone else get the impression that GWB is sitting there with three different speeches, with three different dollar amounts on the poster, waiting to see what today brings? What was that giveaway game show? The Price is Right? He's like a bad carnival barker or used car salesman--what kind of a deal can we make to get you in here?
We just are not going to be able to fix these problems with fixes from the top. It's too far gone for that. Here's an interesting article on the problems with topdown decision making.
$this->bbcode_second_pass_quote('', '"')US banks have shown that being in a free market doesn't make them immune to market abuse as well as reaping the fruits of such actions. Their ability to attract capital will hopefully be accompanied by a new humility with respect to financial innovation, but also an acknowledgement of new economic realities that put developing Asia in front of all other constituents. Group of Eight economies are a drag on the world now (Dear Dinosaurs Asia Times Online, October 20, 2007); the only choice for these banks is to focus all their energies on Asia.
Thus, what unites all the stories is the fallacy of top-down decision-making that ignores ground realities and more importantly the integral impact of decisions on each other. The unwinding of one bubble will almost always set off another, targeting areas of uneconomic decision-making. If the authorities in China and India do not wake up to this reality, the current asset bubble in stocks and property will also blow up in much the same way as the American dream has. "
Asia Times-Chan Akya (via PB Chat)
This article above illustrates another reason why all this will not end happily. You can't fix your problems at the same level and with the same thinking that got you there in the first place. In this case, the fixing needs to come from the bottom up. And energetically speaking, centralized decision-making is much more energy-intensive, and tends to be very wasteful, as the Asia Times article points out. The decision-making for the fixes needs to be at a local level and from the bottom up. And diminishing energy resources dictates that that is what will happen, once this structure is totally laid to waste.
Sharon below illustrates a nice model for helping us get out of top down thinking mode, and to move us more effectively to a lower energy world.
CasaubonsBook-The Church Model for Env. Groups
$this->bbcode_second_pass_quote('', '"')We also have to lower political barriers - the truth is that environmentalism is associated with the American left. But the left has been too powerless too long to bring about massive social change in most regions. The nation is too politically divided for that. Thus, for these groups to thrive, they must avoid political purity tests - it doesn't matter whether your neighbor hates Bush or loves him. What matters is that the two of you have common ground in other areas. I don't deny this can be tough - but it is necessary. In some regions, the political idea of environmentalism will be a positive advertisement - in other places, the emphasis will have to be on personal security, autonomy, conserving what we have, saving money. We will need to be culturally flexible to create such a network.
The second and perhaps most important thing that such groups have to do is offer members an immediate reason to work together. There are some of us, who will do thankless work for long periods with no reward, but most of us join groups for selfish reasons – we want to find community, we want support, friendship, a platform for our ideas. We may also care about the larger world, but we get some gratification from being together and doing the work. Churches do this well – when people join a church, eventually they are asked to do their share of the work, to donate money and volunteer, but initially, they are offered something – friendship, a pleasurable worship experience, a meal, religious education for their kids. We need our groups to provide something now, not just hypothetical help in the future.
This is even truer because we are now in the early stages of a crisis, and many of the people who join with us may be undergoing personal difficulties and troubles. It is not feasible to have a “climate change” group that has no support or solutions for the victims of climate change now, for example. That doesn’t mean we have to be able to fix everything, or that we have to immediately have the funds for major investments, but we do have to be able to offer emotional support, a lift for someone out of gas, a casserole for a neighbor dealing with illness. We need to start where we are again. We also need plans for the longer term, but we have to start small, with the ordinary work of human exchange – I think too often, our community building efforts have ignored the importance of these small things.
Finally, such groups need to begin creating a plan for the longer term. How will people in your neighborhood get water? Who has space in their yard to grow food? How will you check in on the elderly and disabled? Where will the kids go to school if the buses stop running? Your first steps should take you towards your next ones – today, a carpool to get neighbors to the grocery store, tomorrow a bulk buying club and a Victory garden group to make fewer shopping trips necessary."
I wandered off into issues of hierarchy and control here, but my main point is that none of this stimulus/rate cut stuff is going to do any good. It sounds like we are almost universally in accordance with that on this thread.
“Paper money eventually returns to its intrinsic value ---- zero.” --Voltaire
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Iaato - Heavy Crude
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Re: What exactly is a "Stimulus Package"?
by Iaato » Fri 18 Jan 2008, 22:41:10
$this->bbcode_second_pass_quote('Iaato', 'O')r you could just say that we are using bad money to fix bad money. Does anyone else get the impression that GWB is sitting there with three different speeches, with three different dollar amounts on the poster, waiting to see what today brings? What was that giveaway game show? The Price is Right? He's like a bad carnival barker or used car salesman--what kind of a deal can we make to get you in here?
Uh, how about $250 billion? Do I hear $600 billion? What's your best offer?
Reuters-Romney proposes $250 billion-what a criminal
Anybody here still in the deflation camp?
“Paper money eventually returns to its intrinsic value ---- zero.” --Voltaire
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Iaato - Heavy Crude
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