In a “Trading Floor” interview, Saxo Bank CIO and chief economist Steen Jakobsen, discusses the role of central banks in the global economy with Saxo Bank’s Michael McKenna.
“Central banks can do nothing,” says Jakobsen.
He calls the current central bank low to negative interest rate policies the “New Nothingness”.
What follows is a guest post interview, courtesy of Steen Jakobsen, Michael McKenna, and the Saxo Bank “Trading Floor”.
Original Link : Central Banks Can Do Nothing
In guest post format, I have no block quotes or indents. I offer my comments at the end.
Central Banks Can Do Nothing by Steen Jakobsen
- 2016 has seen a popular reaction against zero-bound policies
- Political elites are struggling to preserve an unfruitful status quo
- ‘The world has become elitist in every way’: Jakobsen
- Political middle has become crowded, stagnant; new spectrum of ideas needed
- Investment in education and research needed; zero rates are a dead end
- Saxo chief economist remains ‘very positive’ overall
In April 2015, Saxo Bank chief economist Steen Jakobsen said that zero rates, zero growth, zero productivity, and zero reforms have left a great many countries adrift in a “new nothingness”.
The products of this nothingness, said Jakobsen, include apathy, stagnation and “an economic outlook based more in peoples’ heads than in reality”. On the cultural level, he continued, the widespread lack of dynamism and new ideas has empowered a political class that is “mainly interested in maintaining the status quo”, even as that status quo provides sharply diminishing returns.
US GDP growth, for instance, is hugging the zero line:
Source: Federal Reserve Economic Data
A little more than one year on and we remain, in terms of economics and monetary policy at least, profoundly entranced by this combination of zero-bound policies and continual “emergency measures”.
Culturally and politically, however, the past 12 months have demonstrated time and time again that nature abhors a vacuum.
In Europe, for instance, we have the spectacle of the European Union’s second-largest economy voting on whether it wants to leave the union next month. In the United States, the candidacies of Democratic senator Bernie Sanders and Republican front-runner Donald Trump have benefited enormously from widespread frustration with the current consensus, particularly in the realm of trade where both candidates – one hard left, one populist right – point to a declining US manufacturing sector and a recovery bereft of “breadwinner” jobs as signs that the country has been led astray.
The list doesn’t end there. From the European migrant crisis to the rise of far-right political parties such as Germany’s Alternative für Deutschland and France’s Front National; from the the apparent stalling of the Federal Reserve’s policy normalisation plans to the European Central Bank’s continued adventures in quasi-permanent stimulus, the past 12 months have demonstrated that “nothingness” breeds restlessness.
This restlessness, as we have seen, will find release on the cultural level despite the hesitancy of central bank policy mandarins and political elites.
With this in mind, we sat down with Jakobsen to discuss the new nothingness, the even newer reactions to such, and his outlook for the global economy
TradingFloor.com: The “new nothingness” thesis was based on zero rates, zero growth, zero reforms. But you hinted that all of this nothingness has spilled over into culture and politics as well… do these macro facts hinder peoples’ imagination, or their ability to deal with the problem?
Steen Jakobsen: Yes, I think so. This year, we see a growing gap between the central banks’ narrative – which is that you have a trickle-down impact from lower rates – and [the situation on the ground].
People understand that zero interest rates are a reflection of zero growth, zero inflation, zero hope for changes, and zero reforms.
In my opinion as an economist and a market observer, people are smarter than central banks. And because they are smarter, they can live with policy mistakes for a while because the narrative is very strong and because people like (European Central Bank head Mario) Draghi and (Federal Reserve chief Janet) Yellen have these platforms from which they not only talk but occasionally shout, and they are deemed to be “credible”, scare quotes mine…
We see [this gap] in the Brexit debate as well, where the elite and the academics talk down to the average voter. By doing that, of course, they alienate the voters from their representatives.
Counterpoint?: “Too many politicians are listening to their [voters]” says European Commission president Jean-Claude Juncker.
That’s what we see globally, that’s why Brazil is going to change presidents, why Ireland could not get its government re-elected with 6% growth. It’s not about the top line, but about the average person seeing that we need real, fundamental change.
TF: Earlier this year, you said that the social contract – the agreement between rulers and the ruled – is broken. It made me think of this year’s Davos meeting, which showed a leadership class terrified of slowing jobs growth and enamoured with the idea that population movements might be used to address this. Given the current unpopularity of globalisation and its effects, would you say that there are some things it is impossible for 21st century leaders and the led to agree upon? Is a social contract impossible?
SJ: No, it could be re-established, but it needs to be established on terra firma. Right now, we have a panacea in the form of low rates and the idea that things will somehow improve in six months. This has led to buyback programmes, a lack of motivation [and all the rest].
We as a society have to recognise that productivity comes from raising the average education level. People forget that all the revolutionary trends, the changes we’ve seen in history, have come from basic research. I don’t mean research driven by profit, but by an individual’s particular interest in one very minute area of a specific topic. This is what creates new inventions.
The second thing we often forget is that the military has been behind a lot of the industrial revolution. Mobile telephony, for example, had nothing to do with private citizens or companies – instead, it had a lot to do with the US military.
The key thing here is that we need to be more productive. If everyone has a job, there is no need to renegotiate the social contract.
The world has become elitist in every way. Before, you could start a company and build a small franchise; now, you have to be global, you have to have a billion users (if you’re an IT company), and [the pursuit of this] does not necessarily provide the best technologies, but only the biggest ones, the ones backed by [the firms with] the deepest pockets and largest web of connections.
We need to democratise the ability to be educated because we don’t know what’s going to work and not going to work. What we do know is that the social contract needs to come from better education levels.
There exist a huge number of studies that show a correlation – in mathematical terms, an R squared value – of 80% between the average education of a country or company and the productivity of same.
Source: Federal Reserve Economic Data
TF: Last week, you retweeted an article claiming that $127 billion in labour and services could be replaced by drones. Is automation, and the consequent lack of working-class jobs, partly responsible for “the new nothingness”?
SJ: Like everything else, there is an equilibrium between supply and demand at work here. On the supply side, we must consider that, in Western Europe at least, the amount of people needing jobs will be smaller in 10 or 20 years […] we need automation to pay for the lack of people in the workforce.
This is probably the first period in the evolution of technology where tech is deducting rather than adding jobs. But I think it ultimately will add jobs again, because productivity will pick up
The demographic component here is that we will have less supply in labour markets in the future, so we need a more efficient way of doing things, a cheaper way.
That’s the good news. The bad news is that the next decade will be very, very challenging, and you haven’t even spoken about immigration and refugees – [this phenomenon] is adding to the labour market’s net supply while the net demand from employers is very low because of indirect taxes, regulations and the like.
So again, we need to go back and address what is feasible, or possible. I very rarely agree with the International Monetary Fund, for example, but if Germany can borrow at negative interest rates and invest in infrastructure, why wouldn’t they do it?
Infrastructure is and always will be productive; productivity improvements don’t happen because of silly shenanigans concerning politics…
There are a lot of things that can be done in the short term, but underneath all of this is a long-term view that you need to make people smarter. If they’re smarter, they’ll be more productive, more self-reliant, they’ll have better lives.
Yes, the political system is doing us a disservice, but we as individuals have also become extremely lazy and we are not intellectually challenged.
TF: You mentioned supply and demand and demographic changes. Before German chancellor Angela Merkel launched the refugee programme that has seen over a million people arrive in Germany, there were several reports from EU banks and think tanks calling for an injection of new working-aged people into Europe. Why were they calling for that if growth and the jobs market are stuck at zero?
SJ: Again there are two sides. Looking at the Organisation for Economic Co-operation and Development’s report on immigration and migration, for example, it shows that in the history of European immigration, 75% of all immigrants have been put into some kind of work and become productive taxpayers within one year of their arrival.
A refugee family arrives in Greece: Despite concerns about jobs and culture, Europe has historically had a great deal of success economically integrating newcomers. Photo: iStock
If you can retain that 75% inclusion rate, immigration will provide a huge boost in terms of injecting workers into a faltering demographic context. These are young, aggressive, multicultural people who are going to add colour and flavour to a continent that has been too homogenous for too long.
TF: But isn’t this very difference what is currently unpopular, what is fueling the rise of right-wing nationalism and other such movements?
SJ: People are always afraid of change. We are programmed to want today to be very much like yesterday. We don’t have high aspirations.
On the other hand, people thrive when they are challenged. While the political narrative on refugees might follow the script you just laid out, for an economist like me it’s very clear: immigration is positive.
Of course, you can get too much of a good thing in too short of a time. If we knew now that the maximum amount [of incoming migrants] would be, for argument’s sake, 3 million over the next 10 years, then Europe could easily adapt and put these people to work.
The problem is that we currently have an infinite number and it is seen as an issue in the political spectrum – it’s not an economic issue.
There is nothing empirically that says refugees are a negative. It can challenge the social fabric, it can challenge the political spectrum, but to me that’s a good thing – we need openness.
Are there problems with this? Yes, but there are also problems with being a startup, or with riding your bike for the first time. I don’t think there is anything in life that doesn’t come with some pain. I think you need to play through the pain to become better.
TF: We mentioned the expansion of the political spectrum, how we’re seeing more interest in the far left, but I think notably we’re seeing more interest in the far-right with FN, with AfD and with Donald Trump in the US. Now, a huge amount of his support comes from the perception that globalisation – NAFTA, the TPP, Chinese manufacturing – has harmed US workers, and his solution is protectionism. What would a world in which the US enacted protectionist policies look like?
SJ: The irony is that we already have protectionism. Trade volume and trade value has been collapsing for the past 24 months. If you look at the trade talks that happen under the umbrella of the World Trade Organization, they have achieved absolutely nothing since China’s inclusion.
“Bad deals!” Photo: iStock
There are also signs, practically and economically, that you can have too much of a good thing in terms of the division of labour. You can actually come to a point where you end up with an endless deficit in one country and an endless surplus in another if the deficit country does not have the ability to respond to the deficit, whether through a weaker currency or by being more productive.
The US is the prime example of this phenomenon which is why Trump is having so much of a tailwind.
The US has basically been living off of cheaper imports for a very long time. There is a lot of pain in the US, but for the middle class the pain has been cushioned by the fact that Chinese imports, Vietnamese shoes and the like are just so much cheaper.
Trump is having a good time right now, but it is not because he is right about protectionism versus free trade. It’s because we are at the end of the cycle where the US benefitted massively from lower import prices on consumer goods, which make up 70% of US consumption.
If, like Trump wants, an iPhone were to be produced in the US, it would cost $2,000 or more. This is why Trump is wrong – if that were the case, we wouldn’t see the sales that we do, we wouldn’t see the share price that we do.
TF: Wouldn’t his argument, or the protectionist one, be that real wages are stagnant, and if working class or manufacturing jobs had remained in the US, then people might not be so dependent on low prices?
SJ: That’s a circular argument. The fact is that the US doesn’t have a competitive productive base anymore. In some industries they do, like in cars, but to a large extent the car industry is subsidised.
It’s not that the US worker can’t do the work, he’s just massively more expensive. The price difference between producing Nike shoes in the US versus Vietnam is, in my best estimation, one to 10 if not one to 20.
The amount of US workers at or below the minimum wage is decreasing:
Source: Federal Reserve Economic Data
If you want to pay $500 for trainers, you can have the Trump version. The reality, as with so many things in life, lies between Trump and globalisation.
Let’s look at a Danish example: I never understood, for example, why [pharmaceuticals giant] Novo Nordisk don’t use some of the money they put into funds and trusts and [architecture] for basic research, for something – like penicillin, for example – that might do some good in the world.
Of course, they don’t do it because there’s no profit in, but [they are overlooking the fact that] something could come out of that research, something that would give them a new product…
Everyone in the world is just looking out for number one. We’ve lost the coherent belief that underlies the social contract.
Historically speaking, the most successful examples of social contract formation occurred under benign kings, under regimes that tolerated a sophisticated bureaucratic class and a robust opposition.
You have the [Russian president Vladimir] Putins and [Turkish president Recep Tayyip] Erdogans and these people who can execute power… they destroy society. You need both sides, and that’s why I talk about the far left and the far right creating a new spectrum a new middle ground.
The problem now is that the middle has effectively disappeared. Everyone wants to be in the middle, and the result is that there are no new ideas.
The media are always considering demand independent of supply and vice versa – nobody is covering the balance.
TF: Finally, you have said that continual emergency measures are unhealthy, and that’s very much where we are with central banks – negative rates, zero rates. But following the one US rate hike that happened, we saw a huge retreat from the US normalisation narrative.
If continual emergency measures are unhealthy, but the world’s arguably strongest economy has stalled on the road to normalisation, what can central bankers do?
SJ: They can do nothing. They should do nothing. They should go away.
If you look at monetary history prior to the formation of the Bank of England – the world’s first central bank – you will find that economic cycles were more stable then. Since the founding of the BoE and the Fed 102 years ago, we’ve seen an increased amount of business cycle up and downs.
The Old Lady of Volatility Street? Photo: iStock
The problem is that the fractional monetary system is based on access to credit, and the only institutions that create credit in this system are the banks.
Central banks keep these institutions alive with one hand, but choke them with the other. [The result, as we see this year] is that they are underperforming relative to the broader indices, so their ability to go to the marketplace and get more money is diluted.
We have a very vicious negative cycle that is initiated by the central banks. They’re not exclusively guilty, of course, and central bankers would rebut this argument with one saying that monetary policy cannot work on its own, you also need fiscal stimulus… but that’s all nonsense.
The way societies survive is by creating frameworks in which people can be productive. This is based, again, on basic research, which is in turn based on general education levels.
Let me end this little talk by saying that I am very positive. I think [the reaction to the new nothingness] is the best news that has happened in the last 10 years, because now people are starting to ask about the social contract.
We are now questioning the central banks’ model.
I could be wrong with all my criticism, but I am not wrong in saying that if you give people incentives and if you educate people, you become more productive.
If I’m running a football team, I don’t try and improve my players’ performance by feeding them pizza every day, but this is what the central banks are doing. They’re feeding us burgers and pizza when we need food – training programmes, education, intellectual stimulation.
The “Janet and Mario diet” is known to cause bloating, fatigue, and a loss of motivation. Photo: iStock
That is unarguably the way to go. And it’s beautiful, it means our kids can be better-educated, can have more access to information, and hopefully down the line we see better practices in terms of politicians laying out both the supply and demand cases.
That, of course, is a big reach in any political sphere, but the ones who will survive will be the honest ones and the ones who take both sides into account before proceeding in a rational and disciplined manner.
Michael McKenna is an editor at TradingFloor.com; Steen Jakobsen is Saxo Bank’s chief economist.
End Guest Post – Mish Comments
There is very little above I disagree with. Like Steen I believe technology creates jobs over the long haul, even if it is not doing so right now as part of a “creative destruction” process.
However, those displaced now feel like the “social contract is broken”, a topic we have discussed before.
This explains the rise of Donald Trump in the US, Marine Le Pen’ National Front party in France, Beppi Grillo’s Five Star Movement in Italy, and the rise of Pablo Iglesias’ Podemos (We Can) party in Spain.
Refugee Crisis
My main disagreement with the article deals with the European refugee crisis. While I do agree that a smaller more controlled number of refugees could be handled, I debate how positive that might be.
Steen notes “that in the history of European immigration, 75% of all immigrants have been put into some kind of work and become productive taxpayers within one year of their arrival.”
That may be history, but it does not reflect today’s reality. Today, many come simply for economic handouts.
In Germany, virtually none of the refugees speak German. Reports suggest most speak no German after five years. Few have skills when they arrive. Some tiny percentage are terrorists.
On average, the refugees are a huge monetary drain and an even bigger social drain. Perhaps a decade or two from now this will change, but few will wait that long. Meanwhile the rise of the protectionists is relentless.
Tariffs Not the Answer
Donald Trump is flat out wrong on tariffs being the answer. The US has benefited from global trade more than any other nation on earth.
The problem is inflation, not wages.
Placing the Blame
Central banks are the blame for this mess. Their inflationary policies have fueled the wealth inequalities that the central banks and socialists rail against.
Misguided inflationist policies explain the “broken social contract”, the shrinking middle class, rising wealth inequality, and even the rise of Donald Trump and Bernie Sanders.
Rising productivity is a good thing. It’s a result of innovation and it improves standards of living.
I have discusses these ideas many times before. Here are a few related posts:
- Hello Ben Bernanke, Meet “Stephanie”
- Top 1% Received 121% of Income Gains During the Recovery, Bottom 99% Lose .4%; How, Why, Solutions
- Reader Asks Me to Prove “Inflation Benefits the Wealthy” (At the Expense of Everyone Else)
Bernanke, Yellen, Larry Summers, and most of mainstream media has everyone convinced that lack of inflation is a problem.
The inflationists insist prices must go up, whereas technology and free trade suggest prices should fall.
Middle Class Shrinks – Blame Central Banks
Central banks are the key reason the middle class is shrinking: See Middle Class Shrinks in 203 of 229 Metropolitan Areas.
Mike “Mish” Shedlock
Well, that was refreshing.
For once, I don’t have to bust on Steen for his constant drumbeat of “$US will weaken at any moment”.
Oh, did I mention? Another good day for King Dollar.
Yep, and the US dollar will soon be well over 100 on the DXY and headed much higher.
The owner and creator of the world’s reserve currency is powerless? The hell, you say!
Or,,,
In a Keynesian system, he who issues new fiat currency to it’s first users, wields a lot of power.
The total M1 money supply in the US is only $3 trillion and only $1.3 trillion of that is printed currency. This is confirmed by the Federal Reserve H.3 report:
http://www.federalreserve.gov/releases/h3/current/
M2 which includes M1 plus savings balances is only around $13. None of the QE funds increased the money supply at all but only served to increase the MONETARY BASE with 100% of those funds remaining inside the Federal Reserve.
That LITTLE BIT OF MONEY supports the largest economy in the world which is now an $18 trillion a year economy.
“Donald Trump is flat out wrong on tariffs being the answer. The US has benefited from global trade more than any other nation on earth.”
Where I grew up, you were taught to bring a knife to knife fight … not a bouquet of flowers.
Of course, if you are talking about owners of capital – who have been made fabulously wealthy by offshoring everything not nailed down – I see your point….
So, you reap no benefit from $500 computers and 4k tv sets? Consumers get enormous benefit from global trade.
Makes no difference if a TV costs $500 or $5000 if you have no job (money).
But,I guess you are in favor of current regime of widening wealth inequality and the have nots making ends meet by taking on ever increasing amounts of debt.
No Thanks.
Not really, and how much of that junk do they even need to buy?
“People are smarter than Central Banks. The banks should do nothing. They should go away”
So, the Fed goes away, taking it’s note with it? Then what? Go to gold? OK, the Fed takes away it’s 8000 tons, as well. Seashells?
Central banking power structure.
First tier;
He who owns the ‘printing press’ makes the rules.
Second tier;
He who owns the gold makes the rules.
Third tier?
There is a power sharing agreement at play here between Congress and the Fed. This constitutes a big club, and you ain’t in it. Play the game or be washed away.
Gold is of ABSOLUTELY ZERO FINANCIAL RELEVANCE in today’s world.
As to size, China’s $10 trillion economy is about HALF THE SIZE of the US $18 trillion a year economy, yet China has printed more than $30 TRILLION of renminbi (RMB / yuan) whereas the Federal Reserve has only printed less than $4 trillion of US dollars and all of those US dollars have always remained INSIDE THE FEDERAL RESERVE in the required and excess reserves accounts there of the member banks of the Federal Reserve from whom the Federal Reserve purchased securities consisting of US Treasuries and MBS instruments. There are currently around $2.6 trillion in the excess reserves accounts of those banks inside the Federal Reserve as is confirmed by the current Federal Reserve H.6 report.
http://www.federalreserve.gov/releases/h6/
There is no “ZIRP” at all in the real world in the US and credit card interest rates are at record high levels and corporate borrowing rates are at around 8.5%. Mortgage rates are around 3% to 4%. All interest rates that do matter in the US economy are set by the yields on US Treasuries in the $13 trillion a year US Treasuries market.
By the way, banks in the US do not borrow money to lend money and the Federal Funds Rate at which they borrow from each other is rarely even used. The Federal Discount Rate which is the rate of interest at which banks borrow from the Federal Reserve directly is virtually never used these days. The only other interest rate set by the Federal Reserve is IOER which is Interest On Excess Reserves which is what banks are paid by the Federal Reserve on the around $2.6 trillion in their excess reserves accounts inside the Federal Reserve and which doubled on December 16, 2015 from 0.25% to 0.50%. Banks get all of their money to lend from CUSTOMER DEPOSITS and demand is so low presently that the outstanding loans to customer deposits ratio is at a record low 67%.
Banks do not get all their money to lend from CUSTOMER DEPOSITS. Far from it.
Andrew, your assertion is dead wrong. Banks do in fact get all their money to lend from customer deposits. No bank in the US can borrow a single penny from the Federal Reserve to use to make loans. The only borrowing from other banks at the Federal Discount Rate or from the Federal Reserve at the Federal Funds Rate CAN ONLY BE USED FOR SHORT TERM (TYPICALLY OVERNIGHT) LIQUIDITY PURPOSES to clear transaction imbalances in the Federal Reserve System and MAY NEVER BE USED TO LEND MONEY TO ANYONE OR FOR ANY OTHER PURPOSE EVER.
Banks in general do not get money to lend from deposits
Rather, lending creates deposits
For more about this read Prof Richard Werner:
http://m.youtube.com/watch?v=wDHSUgA29Ls&autoplay=1
The truth will set you free.
The nothingness of the zero sum game.
http://thehillsgroup.org/depletion2_020.htm
Interesting graph. I wonder if all that “waste heat” at the top is the real “cause” of global warming (not CO2, per se). A lot of waste heat turned into productive energy is the type of innovation we need. Instead we work on elaborate treaties designed to get us a global carbon tax.
Definitely a thought-provoking interview. No mystery to me why Novo Nordisk puts the money into trusts rather than research: A regulatory structure that can cost a billion dollars and 15 years to navigate, and maybe return nothing but lawsuits and other headaches.
For the past 10 years China has been on an unprecedented and egregious WILD MONEY PRINTING SPREE and has increased their money supply to around $30 trillion from little more than $2 trillion and that is what is causing the renminbi (RMB / yuan) to become worthless.
I’m sorry but not a word about total private debt? We are joining the zombie economy club. Private debt stuck around 150% of GDP. CB trying to hang on by dropping rates and buying assets to support prices else banks will fail. Soon China will join the club too. Japan of course is founding member.
Steve Keen is right. We fail to understand how our version of capitalism actually works so we are blind to viable solutions. Our credit based economy is well described by a system of non linear coupled ordinary differential equations. The solution to that system is doomed to evolve into a zombie state if policy makers do not actively intervene once total private debt gets too high. CB’s should not go away. They should listen to Steve Keen and they should bring their friends in Congress and at Treasury with them.
So private debt… isn’t private debt… anymore?
The public will love that!
The total debt outstanding in the US is right around $64 trillion and less than one-third of that is US government debt. The breakdown of the $64 or so trillion of DEBT outstanding is approximately as follows by big picture category:
30% Federal Government Debt
20% Total Consumer Debt
23% Total Corporate Debt
27% Other debt including Municipalities
The federal government debt is presently around $19 trillion, Total consumer debt is around $12 trillion which includes about $1 trillion in consumer unsecured credit, $1 trillion in vehicle loans, $1.36 trillion in student loans, and about $8.64 trillion in real estate loans secured by mortgages.
The total corporate debt is around $14 trillion with a large percentage of that outstanding on corporate bonds which now have average interest rates of around 8.83%. The balance is a mix of all other types of debt outstanding with the largest portion of that $16 trillion being municipal bonds issued by state and local authorities and agencies.
As to percentages, the total debt of around $64 trillion in the US is about 356% of the around $18 trillion a year US GDP, but is only around 36% of the about $180 trillion total of US assets.
Wait until Trump is elected. We are going to crush the Chicoms. Walmart’s aisles will be empty because they won’t have any Chinese crap to sell. We will repudiate every cent of the US debt that they own and bankrupt them. Finally we will nuke all the ragheads and camel jockeys in the Middle East.
Donald Trump will be our next most excellent President, but none of the nonsense you state will happen at all.
[There exist a huge number of studies that show a correlation – in mathematical terms, an R squared value – of 80% between the average education of a country or company and the productivity of same.]
The solution to increase the average education level is not as easy as it seams. Inflation adjusted cost per student in the US is higher than 30 years ago, and yet, high school graduates are worse off. Government backed student loans lured many with poor academic skills or maturity into debt slavery. The approach of throwing money at a problem simply does not work. Because the entire education system needs to be analyzed and redesigned.
1.) LESS federal and state government influence is needed. The power that comes with strong centralized government and planning is not going to be relinquished willingly. Common Core has to be replaced with 50 Incubators.
2.) Students don’t take their studies seriously. Drop-out rates indicate there is much room for improvement. Even high school graduates don’t have basic reading, writing, arithmetic skills.
3.) Parents don’t take education seriously. Too many believe learning comes only from the teacher; or worse, “That’s not my job. I’m paying teachers to teach.” Simple actions on the parents’ part, such as checking up on homework or discussing what was covered in school that day, set the tone that education is valuable and reap huge dividends in the long run.
4.) Teachers attitudes need to improve. Too many believe students can’t/don’t want to learn, so they act like babysitters. This includes assigning little homework, watching videos instead of lecturing and interacting with the students. Colleges that train teachers need to go back to the basics. The learning techniques used up until the mid- 1980’s worked best; memorize and drill. Once a fact base is well-established, thinking begins to take place because there are facts to manipulate. As an engineer, I attribute my success to a solid foundation built that way.
What do you want to educate Americans in? Just using the term “education” is pretty much utterly meaningless. The public schools in the US ever since massive federal government meddling have become about EDYOUKAYSHUN and people are vastly more clueless than if they never attended those pitiful and pathetic facilities.
Do you want more folks to lean TRADES, do you want more liberal arts or science majors? What “education” are you talking about and desire to see?
“Central banks are the blame for this mess.”
Why are you always blaming CB’s, and not Congress, who is responsible for continuous deficit spending without any intention of ever paying anything back; the Executive branch, that will not equally enforce the rule of law and does end-runs around the Constitution; and the Judicial branch that does not provide equal protection and exercises discretion over the cases it hears instead of hearing all cases as dictated by the Constitution (https://www.armstrongeconomics.com/history/americas-economic-history/is-the-supreme-court-acting-unconstitutional/)?
No sir. Govt largess, and all of the abuses that go with it, are the heart of the problem. Just as you will likely not turn away a $10 million account, the money center banks are going to sell Congresses debt, as long as there are buyers. Sure, CB’s protect their self interest, hubris, and theoretical ideas that lack all experience; but the increased amplitudes of the business cycle they create would be muted if Congress did not deficit spend, and all branches of govt actually defended the Constitution as they pledged.
I have countless times blamed both central banks and governments.
But central banks are the enablers.
“Central banks are the blame for this mess.”
Why are you always blaming CB’s, and not Congress, who is responsible for continuous deficit spending without any intention of ever paying anything back; the Executive branch, that will not equally enforce the rule of law and does end-runs around the Constitution; and the Judicial branch that does not provide equal protection and exercises discretion over the cases it hears instead of hearing all cases as dictated by the Constitution (https://www.armstrongeconomics.com/history/americas-economic-history/is-the-supreme-court-acting-unconstitutional/)?
No sir. Govt largess, and all of the abuses that go with it, are the heart of the problem. Just as you will likely not turn away a $10 million account, the money center banks are going to sell Congresses debt, as long as there are buyers. Sure, CB’s protect their self interest, hubris, and theoretical ideas that lack all experience; but the increased amplitudes of the business cycle they create would be muted if Congress did not deficit spend, and all branches of govt actually defended the Constitution as they pledged.
SCANDALOUS PORKFEST FEDERAL BUDGET WRITTEN BY LOBBYISTS
Who Wrote the 2009 page Omnibus? Four Lawmakers, Many Lobbyists
It fully funds ObamaScare, Planned Parenthood, and PORK FOR DAYS and is beyond coprehension and is a total squandering of moral authority and total breach of fiscal responsibility. The number of visas that Obama wanted for foreign workers is quadrupled selling American workers down the river, not to mention all of the idiocy regarding climate change.
BETRAYAL is not even the word here. This was all about out and out in your face LYING from the Republicans and RINO RYAN. The Republicans have the largest majority in Congress since the Civil War. All of the votes for Republican candidates resulted in total BETRAYAL of everything their campaigns promised to the voters, and there is no reason to even have two parties if Harry Reid and Nancy Pelosi continue to run Congress as is apparent they are as a result of passing this PORK BARREL GARGAGE.
No wonder Donald Trump’s ratings are soaring and most Americans want a stop put to this garbage and lying and disenfranchisement of the American voter.
“The key thing here is that we need to be more productive. If everyone has a job, there is no need to renegotiate the social contract.” – Right (sarcasm) jobs are “the” solution to “all” the problems.
“If you can retain that 75% inclusion rate, immigration will provide a huge boost in terms of injecting workers into a faltering demographic context. These are young, aggressive, multicultural people who are going to add colour and flavour to a continent that has been too homogenous for too long. “ – Young, aggressive, multicultural….going to ad flavour…that has been homogeneous too long” is trite progressive bull shit. The entire Third World African continent IS young, aggressive, multicultural, with lots of colour, and flavor. So why is it emigrating to Europe if its mix (not homogeneous) is so successful? And, how do you inject hundreds of thousands of illiterate workers into the EU to achieve a 75% inclusion rate? The “best and the brightest” are definitely not among the migrants.
“People are always afraid of change. We are programmed to want today to be very much like yesterday. We don’t have high aspirations. “ This is typical elitist/progressive bull shit and where I stopped reading.
S.J. should emigrate to an African. All its countries desperately need a change in leadership, just like the EU.
One of the problems with statistics, especially in macro-economics, is the blotting out of the key details (micro-stuff). A million PhD immigrants with degrees in business, engineering and computers landing in the EU, USA or even poor African countries, is going to give a very different result than a million unskilled immigrants whose motivation is to get to the country with the highest dole. I have no statistical proof. Just a hunch. But it could be tested experimentally:
Instead of paying Erdogan to take back immigrants, separate them into two categories, those with advanced skills and those with no skills who answer yes to one question (“Do you want to go to the country with the best dole?”). The EU pays Germany $3 billion (instead of Turkey) to take in all the unskilled. The highly skilled immigrants are paid to stay in Greece. You could cap the numbers at a million per month going to Germany, and take annual measurements to see if Germany can get to that historic rate of 75%. Alternatively, you could measure how long it takes for Germany to develop a Greek economy versus how long it takes the skilled immigrant pool to turn Greece into a German economy. You could have annual betting pools, like a lottery, with the funds helping subsidize the immigration experiment. A much better alternative than the current mess. Though, I concede, it might not be “zero” enough to past bureaucratic muster.
The whole “what we need in more education” spiel is problematic. Not that it’s wrong, but it is so poorly defined as to be entirely unactionable. And worse, the way the world is currently structured, and nowhere more so than Europe, it’s arguably flat out detrimental.
In the current West, what gets bandied around as “education” is at best 50%/50% education vs rash indoctrination to get kids to fit nicely into a failed social model, and be good, unquestioning underlings who don’t complained too loudly as they are being pushed off cliffs and put to work under a whip.
I’m sure it ain’t on Trump’s agenda, but you’d actually see much better results for Americans, if 70% of all US “education” budgets was wholesale shipped overseas and spent in Africa.and other third world locales. Where there are still people who are poor enough to not be able to provide literacy and basic numeracy. Ditto of you took the 70% and handed it back to taxpayers, which I suspect Trump won’t bother with, either. Of course, the probability he’ll do it is still hundred times bigger than it is for Hillary.
“Basic research” is all fine and well, but no bureaucrat will ever be able to separate the wheat from the chaff. And believing that all, or even much at all, acquisition of knowledge happens in academia, is simply la-la land thinking. People come up with things because they have a pressing need. Hence why the Military, back when there was a “social contract”, or at least general societal understanding, that the Soviets would run us over unless we beat them in the brain game, got so much out of the research they were involved in.
But aside from the big moonshots, by far most new knowledge is acquired by babysteps. By millions of companies, and billions of people, figuring out how to do small things a little better. Day in, day out. And seeing how others may do something better than them, and learning from it. Basic freedom, IOW. Not planned “education” or “research.”
What has happened over the past 4 decades, is that we have moved away from keeping this small scale tinkering and learning as friction free as possible. By empowering lawyers, banksters and others who couldn’t come up with a dog turd if they ran a kennel. So that the focus now, across all industries, is not on coming up with new improved ways, but on “monetizing” them. Meaning spending untold hours on lawyers similar ilk to write patent applications, research “prior art”, be concerned about doing anything “unless you are sure you are not violating anyone’s IP” blah, blah. All of it in order to transfer money, power and influence to the legal and financial class that have taken over government. While in the process killing the millions of little geese whose golden eggs once made the West the envy of the world.
There exist a huge number of studies that show a correlation – in mathematical terms, an R squared value – of 80% between the average education of a country or company and the productivity of same.
And of course there could be significant causation in the opposite direction, since advanced education is difficult to afford.
Steen Jakobsen is blind when it comes to the migrant problems and the consequences of an Islamic invasion of the West. Obviously he is ignorant of the massive problem with rape and violence which invalidates everything he is saying about immigration in Europe.
Yes his opinions of the immigration catastrophe engulfing Europe are nuts, for want of a better word. Scary insight in to the mentality of the elites, and why Merkel unleashed the tidal wave from the third world.
In Britain EU immigrants have been found to have a slightly negative impact, those from the third world an enormous cost, especially when infrastructure expansion costs are factored in. Anyway it is not really an economic question anyway.
There is a rape epidemic in Europe — and it is linked directly to the influx of Muslim migrants who are not compatible with Western culture especially when it comes to their attitudes towards women, young girls and sex. Nevertheless, European politicians and American mainstream media are refusing to acknowledge the obvious for reasons of political correctness. Islamic migrants are waging a real jihad on women in Europe – and government officials are collaborating.
The European migrant crisis is tearing Europe apart, both ideological and literally as well. Despite the clear evidence that the immigration and refugee policies of the West are leading to a rise in sexual violence, pathetic politicians continue to bury their heads in the sand while repeating platitudes about being “compassionate” and “generous.”
Governments are increasingly making themselves into hated institutions and the most disgusting things European governments are doing gets their women raped. In the new Europe, Europeans matter far less than migrants do, and for that, most present European politicians should be forced into permanent retirement or worse. For many years, in Sweden, for example, it has been possible to cover up the rapes, partly because the Swedish media chose to call the perpetrators “youth gangs,” and never mention that they were usually immigrants from Muslim countries.
It was recently reported that 100 percent of rapes in Oslo, Norway were perpetrated by non-European migrants, with nine out of 10 of the targets being European women. Denmark’s rates are also alarming, with a majority of sexual assaults committed by Middle-Eastern migrants. And Sweden is the rape capital of Europe, with 77 percent of rapes in the country committed by the two-percent Muslim population. The rape epidemic in Scandinavia has gotten so bad that some blonde women are dying their hair black and only going out in groups in order to avoid being targeted by Muslim men.
Sexual violence in Germany has skyrocketed since Angela Merkel allowed more than one million mostly male migrants from Africa, Asia and the Middle East into the country. The crimes are being downplayed by the authorities, apparently to avoid fueling anti-immigration sentiments. “The moment they [male migrants] see a young woman wearing a skirt or any type of loose clothing, they believe they have a free pass.” — Restaurant owner at a mall in Kiel.
Rape destroys part of a victim’s soul; it brands them with a type of suffering that even a lifetime of working on it does not totally cure. So this topic is deadly serious meaning one really has to study up on the issues and all the information that is coming to us from all points of the compass.
I don’t like to express this view openly, but eventually you will have victims, or relatives of, simply walking up to members of the group thought responsible, and putting bullets in their heads.
No government or bureaucrat has the slightest ability at redeeming what has been lost, ever. They and their past indoctrinations will also be held responsible, and maybe in the same way.
It is a route to some kind of civil war, which those on top now, plan to master so securing their positions, ones which are currently only partly consumed by society so far.
Rate hike odds spike across board after Fed minutes – CNBC
http://www.cnbc.com/2016/05/18/rate-hike-odds-spike-across-the-board-after-fed-minutes.html
Dudley Says June-July Fed Hike Reasonable
The Federal Reserve is moving closer to raising interest rates at one of its next two meetings and the fact this message is getting through to financial markets is welcome news, said New York Fed President William Dudley.
http://www.bloomberg.com/news/articles/2016-05-19/dudley-says-june-july-fed-hike-reasonable-unless-economy-wobbles
U.S. stocks sink on heightened worry of June hike
http://www.marketwatch.com/story/wall-street-stocks-in-holding-pattern-ahead-of-fed-minutes-2016-05-18
There isn’t a government/country on this planet that is operating off of the basic, common sense principles or laws required to make a country stable, productive, affluent, contributory (to other countries) and able to maintain longevity. Our civilizations/empires continue to disappear into history because man lacks the key points of knowledge about himself, organizations, economy, productivity, etc. Man continues to repeat the same mistakes over and over.
There isn’t a government/country on this planet that is operating off of the basic, common sense principles or laws required to make a country stable, productive, affluent, contributory (to other countries) and able to maintain longevity. Our civilizations/empires continue to disappear into history because man lacks the key points of knowledge about himself, organizations, economy, productivity, etc. Man continues to repeat the same mistakes over and over.