I read today that the UK is set to raise the VAT rate back to 17.5 pct. This is guaranteed to put the UK back into the 2nd cycle of a double dip recession. You only have to look back at the collapse or the Japanese bubble in 1990. As soon as there were signs of economic activity after the big sell of the Japanese government raised consumption tax from 3pct to 5 pct. The result 20 years of stagnation and zero growth.
The UK is effectively copying Japan's mistake. Why? I know that polytricians are hindered by the "Next Election" but its less than 20 years ago. Less than a generation. Surely someone in the UK government must realize this.
There is also underlying strong inflation. Good! Every economy needs a cycle of inflation every so often. Don't try and cripple it like Reagan and Thatcher did. Inflation was not the bogeyman then, They were!!!
The trouble with tax is it is a compound instrument.
Lets assume 1Kg of raw meterials.
* Raw material producer provides the materials. His cost is GBP100, for profits he adds 33pct. The cost is now GBP133. He has to add VAT at 17.5pct (GBP 23.28) making the sell on price GBP 156.28
* The Factory or fabricator buys the raw materials for GBP 156.28. He makes a widget with the raw materials, adds his profit of 33pct to cover salaries, labour and packaging. The price is now GBP 207.85. He has to add VAT at 17.5% (GBP 36.37), so now the sell on price is GBP 244.22.
* The wholesaler/retailer purchases the widgets for GBP 244.22 and he adds his profit 33pct to cover storage, staff, heating and lighting costs and now the price is GBP 324.81. He adds 17.5%VAT (GBP 56.84) and the price now to the user or purchaser is GBP 381.65
The revenue has received GBP 116.49 the overall cost is nearly four times the raw materials. When you consider that the average working person probably pays 30pct income tax, the end consumer has to earn GBP 496.15 before tax to buy one widget.
It is clear that our not only is our taxation system wasteful and extravagant, but our system of making and producing and selling goods is also wasteful. We need to integrate and streamline. One company has to collect raw materials, fabricate, deliver, sell for one profit margin. This company has to be run efficiently and fairly.
Wednesday, January 20, 2010
Monday, January 18, 2010
What is the difference?
What is the type of human being you hate most, who you would never want to meet or move in next door to you?
* A terrorist?
* A rapist?
* A child molester?
* A murderer?
A person of a different race?
A person with a different spiritual or religious belief?
The first 4 groups which I listed with an asterisk all have the same profiles. They use manipulation of others for either their sexual or Utopian beliefs. Destroying the lives of many (slowly or quickly) for their own cause.
How different then is the capitalist (Crapitalist from now on since everything a capitalist touches turns to crap. Like a negative modern day Medusa)
Terrorists, rapists, child molesters, people in fanatical groups are all listed and recorded in databases and monitored by the police and other government agencies. I strongly recommend that we do the same with the crapitalists who are proven to have destroyed the lives or livelihoods of others for the sake of their own greed. treat the crapitalist like a child molester. Don't hail him as a hero of industry blame him as a leach on the but of society.
* A terrorist?
* A rapist?
* A child molester?
* A murderer?
A person of a different race?
A person with a different spiritual or religious belief?
The first 4 groups which I listed with an asterisk all have the same profiles. They use manipulation of others for either their sexual or Utopian beliefs. Destroying the lives of many (slowly or quickly) for their own cause.
How different then is the capitalist (Crapitalist from now on since everything a capitalist touches turns to crap. Like a negative modern day Medusa)
Terrorists, rapists, child molesters, people in fanatical groups are all listed and recorded in databases and monitored by the police and other government agencies. I strongly recommend that we do the same with the crapitalists who are proven to have destroyed the lives or livelihoods of others for the sake of their own greed. treat the crapitalist like a child molester. Don't hail him as a hero of industry blame him as a leach on the but of society.
Old Housing, Old Ideas, Vested Interests = High Price.
I was thinking this weekend about the system that Japan had until the mid 90's. The average employee or "salaryman" would work for the same company for pretty much all his working life. The company if big enough would provide subsidized apartment style accommodation, which while cramped would be adequate for a small young family of 4.
Japan has changed and the "Lifetime Employment" norm has changed. However there were some good things about this system because although it allowed the company to keep salaries down and keep more wealth to reinvest back into the company and products, the Japanese banking system and Pension systems set up to supply the company provided a good payoff at retirement. It usually provided the employee with enough of a cash bonus at retirement to buy a piece of land and build at least a modest home within commuting distance to a large city such as Tokyo, Osaka, Sapporo etc.
Japan was not and is not aloof from corruption itself, but still the system kind of worked in its day. I am about to suggest something similar that would work in England. English housing is a mish mash of old bricks and mortar semi-detached houses built in the 1940's and 1950's. They were planned as temporary housing, but these ill equipped houses make up a big chunk of the UK housing market. Originally sole for around 5,000 pounds they now command 100 times that amount. The alternative is modern timber framed houses on an estate purposefully built buy a large building conglomerate. The modern estates will cosmetically have several house designs to make them appear unique, but inside they are tiny box rooms not useful by today's living standards.
The third alternative is a self build where the individual has to seek land for purchase, apply for planning permission (from the local council), upon acceptance of his building plans he has to employ a builder or builders to complete the work.
Eventually, he may end up with his dream house on a piece of land that is too small for the house and a 5 mile drive from the nearest railway station where the main line to London does not run on time and has frequent cancellations.
One of the reasons is that when a site (for example and old factory that has been relocated), comes up for redevelopment, the council does not look at individuals who want to purchase small plots from the large area, the councils will set up a bidding system with national sized building firms. These firms have the financial clout to pay backhanders, bribes or other incentives to secure the lot for their own purposes. This must be outlawed.
Basically, the government should set up a scheme to encourage people to work. An agency which is a subsidiary of the Central Bank (Bank of England), and the National Land Registry would have total and absolute control. Long term employees would have a 20 or 30 year plan to fund their own house. (Private purchase would not be outlawed, but the same agency would control all land title matters and purchases. In the first ten years of service his employer (via the agency) would provide the employee with a savings scheme to buy a piece of land). In his second 10 years or more his savings would be attributed to building costs. If the employee has enough good work experience and enough credit he can buy the land before 10 years is up. Changing company will not be a problem like the old pension plans of yesteryear, since the agency will be a semi government agency, contributions will be portable. The agency would collect contributions from the employee and the employer. The Employee could elect to have any bonus included as well.
The "semi-detached" problem would have to be dismantled. U.K. zoning and planning restrictions haven't been changed for years and years. In the old days having everything all the same and all in a line was thought to be good. These days people want to be individual and as much as possible custom build their house. There are others who think that post war semi detached houses are the greatest thing since sliced bread and would refuse to change for anything.
The agency would be responsible for finding out which current semi-detached owners would be willing to tear their half down with their neighbor and divide the plot for an individual detached house. Zoning laws would change in these areas to allow a 2 or 3 story design with or without basement.
Local builders in association with local architects would design portfolios of suitable, customizable houses. Large builders could offer an all-in-one service including fixtures and fittings where the builder would act as project manager for the buyer.
Those living in semi detached homes and did not want to change would be offered relocation with financial assistance to do a house swap into a street where the majority of semi-detached owners prefer not to change.
Some will argue that the saving scheme may not keep up with inflation. In response I say that if we fix capitalism with national schemes that cut out the "Greedy Crapitalist", the price will more or less be the same this year, next year and in 10 years time.
It would revitalize the nation and provide competition and value for money in the sleepy monopolistic housing market that exists today.
The U.K. also needs to draft a constitution to protect peoples rights and a tier 2 constitution like protected law base. This second tier law base would protect laws that have proved to be excellent or successful from being changed by alternating governments. The qualifications to get into the protected laws would be strict, changing them would be difficult, but they would be reviewed annually. However the public would have the vote to change by electronic terminals for these laws, not the polytricians with vested interests that inhabit and inhibit parliament.
Japan has changed and the "Lifetime Employment" norm has changed. However there were some good things about this system because although it allowed the company to keep salaries down and keep more wealth to reinvest back into the company and products, the Japanese banking system and Pension systems set up to supply the company provided a good payoff at retirement. It usually provided the employee with enough of a cash bonus at retirement to buy a piece of land and build at least a modest home within commuting distance to a large city such as Tokyo, Osaka, Sapporo etc.
Japan was not and is not aloof from corruption itself, but still the system kind of worked in its day. I am about to suggest something similar that would work in England. English housing is a mish mash of old bricks and mortar semi-detached houses built in the 1940's and 1950's. They were planned as temporary housing, but these ill equipped houses make up a big chunk of the UK housing market. Originally sole for around 5,000 pounds they now command 100 times that amount. The alternative is modern timber framed houses on an estate purposefully built buy a large building conglomerate. The modern estates will cosmetically have several house designs to make them appear unique, but inside they are tiny box rooms not useful by today's living standards.
The third alternative is a self build where the individual has to seek land for purchase, apply for planning permission (from the local council), upon acceptance of his building plans he has to employ a builder or builders to complete the work.
Eventually, he may end up with his dream house on a piece of land that is too small for the house and a 5 mile drive from the nearest railway station where the main line to London does not run on time and has frequent cancellations.
One of the reasons is that when a site (for example and old factory that has been relocated), comes up for redevelopment, the council does not look at individuals who want to purchase small plots from the large area, the councils will set up a bidding system with national sized building firms. These firms have the financial clout to pay backhanders, bribes or other incentives to secure the lot for their own purposes. This must be outlawed.
Basically, the government should set up a scheme to encourage people to work. An agency which is a subsidiary of the Central Bank (Bank of England), and the National Land Registry would have total and absolute control. Long term employees would have a 20 or 30 year plan to fund their own house. (Private purchase would not be outlawed, but the same agency would control all land title matters and purchases. In the first ten years of service his employer (via the agency) would provide the employee with a savings scheme to buy a piece of land). In his second 10 years or more his savings would be attributed to building costs. If the employee has enough good work experience and enough credit he can buy the land before 10 years is up. Changing company will not be a problem like the old pension plans of yesteryear, since the agency will be a semi government agency, contributions will be portable. The agency would collect contributions from the employee and the employer. The Employee could elect to have any bonus included as well.
The "semi-detached" problem would have to be dismantled. U.K. zoning and planning restrictions haven't been changed for years and years. In the old days having everything all the same and all in a line was thought to be good. These days people want to be individual and as much as possible custom build their house. There are others who think that post war semi detached houses are the greatest thing since sliced bread and would refuse to change for anything.
The agency would be responsible for finding out which current semi-detached owners would be willing to tear their half down with their neighbor and divide the plot for an individual detached house. Zoning laws would change in these areas to allow a 2 or 3 story design with or without basement.
Local builders in association with local architects would design portfolios of suitable, customizable houses. Large builders could offer an all-in-one service including fixtures and fittings where the builder would act as project manager for the buyer.
Those living in semi detached homes and did not want to change would be offered relocation with financial assistance to do a house swap into a street where the majority of semi-detached owners prefer not to change.
Some will argue that the saving scheme may not keep up with inflation. In response I say that if we fix capitalism with national schemes that cut out the "Greedy Crapitalist", the price will more or less be the same this year, next year and in 10 years time.
It would revitalize the nation and provide competition and value for money in the sleepy monopolistic housing market that exists today.
The U.K. also needs to draft a constitution to protect peoples rights and a tier 2 constitution like protected law base. This second tier law base would protect laws that have proved to be excellent or successful from being changed by alternating governments. The qualifications to get into the protected laws would be strict, changing them would be difficult, but they would be reviewed annually. However the public would have the vote to change by electronic terminals for these laws, not the polytricians with vested interests that inhabit and inhibit parliament.
Friday, January 8, 2010
Because of the old money lobby groups.
Once again, the question of why America does not mine or exploit its own natural resources instead prefers to be not self sufficient in energy is making headlines. Why is this?
Because families (Old American Money with vested interests), such as the "Bush" family do not want to mine their reserves. It is not theirs to decide however. (Read my previous article on public goods).
Oil and mineral wealthy families do not want to mine under their land. They want to people to keep buying from overseas sources and they want political instability in these areas to keep prices high.
That means the value of their "unexploited" holdings also goes up. They are quite happy to have their untapped assets increase in value since they can borrow against it and buy land, property, oil commodities to create more asset bubbles so they can make profits when they sell and keep repeating the process.
These type of people create NO VALUE! They are value destroyers and leaches.
That is why the US will not use its own resources. It has nothing to do with keeping the countryside pretty (Take a look at Michigan and New Jersey), its all about keeping the old money families happy.
Send the capitalists to the moon (The back side) and let them continue their destructive ways there.
Because families (Old American Money with vested interests), such as the "Bush" family do not want to mine their reserves. It is not theirs to decide however. (Read my previous article on public goods).
Oil and mineral wealthy families do not want to mine under their land. They want to people to keep buying from overseas sources and they want political instability in these areas to keep prices high.
That means the value of their "unexploited" holdings also goes up. They are quite happy to have their untapped assets increase in value since they can borrow against it and buy land, property, oil commodities to create more asset bubbles so they can make profits when they sell and keep repeating the process.
These type of people create NO VALUE! They are value destroyers and leaches.
That is why the US will not use its own resources. It has nothing to do with keeping the countryside pretty (Take a look at Michigan and New Jersey), its all about keeping the old money families happy.
Send the capitalists to the moon (The back side) and let them continue their destructive ways there.
Thursday, January 7, 2010
Will the last vulture on Earth please activate the "Nova Bomb"
For the first post of 2010, I want to go back to the problems of patents and copyrights.
Although copyrights have their roots in publishing in England in 1662, It was mostly in the latter part of the 20th century that we saw these laws being abused by capitalists.
We now fund a whole industry of lawyers, leeches and venture capitalists who all want their piece of the action. They are all "Value Destroyers" and create no value. I suggest that first of all governments should fund inventors, start-ups and research and not allow it into the hands of the vulture capitalists. The vulture capitalists want total control of the finished product for many decades, plus a piece of the action in the company, plus the product due to the high cost of licensing may never be used in combination with other products.
If the government starts to fund research, inventions and start-ups, the results can be listed and labeled as public goods. free to be used and modified by everyone and covered in law by something similar to GNU General Public License.
More people could use combination of products to produce new ideas and products and accelerate research. The current "Pay the Vulture" system limits the full development of any invention beyond what it was invented for because the licensing costs are too high.
Imagine you have a brilliant idea for making a wonderful new product, however to make the product you need to incorporate 3 other products that are protected by patents and copyrights. This wonderful new product may never be developed and marketed because the licensing costs are too high, and the owners of the core products may not want to license them due to vested interests.
Take General Motors for example. It is quite well known that GM in the 1970's and 1980's went around buying up every patented and copyrighted idea for the electric car. Had they perused the ideas we could be driving around in 2nd or 3rd generation electric cars by now. However, old money, old wealthy American family money, large shareholders of GM stock made it clear that it was in their interests not to develop the electric car. A lot of this old American money was heavily invested in oil, and they were oil barons themselves.
I firmly believe that if a person owns land or a ranch that sits above mineral wealth whether it be oil, gold, uranium or whatever. These goods should be classed as public goods. Enabling the government to force and seize and develop these assets after fairly compensating the landowner for the inconvenience, plus a reasonable premium to move house, home and expenses etc. The land owner should also be given the option to stay there so long as he does not impede the development.
The old money and "Vulture Capitalists" must learn that you cant own genes. You cant own oil reserves. You cant own gold mines. These are all public goods. They were created by exploding stars and billions of years of history. They were not created by an Ivy League wide boy on Wall Street.
The "Vulture Capitalist" will squeek " Without our investments, no one will ever start a company or invent anything". Well excuse me. I beg to differ. Before the modern crazed system of over-protection. People still invented and discovered things that changed our world. The telephone, Steam and internal combustion engines, Radio, Television. We didn't have greedy "Vulture Capitalist firms in that era, but we still had inventors that invented computers, modern medicine. We can live without the vultures, it is just we have forgotten how to. People still wrote great music before the invention of the gramophone and therefore the Tin-Pan-Alley vultures.
If every discovery and invention was in the public domain, for public use and the public good imagine how quickly society would advance and what a better place for mankind this planet could be. We could easily fix our planet's environmental problems, find cures for currently incurable diseases with cheap and easy to produce medicines. Make energy self sufficient homes, Have our farms produce an excess of food cheaply and efficiently with machines creating the wealth without the "vulture Capitalist" tax.
Our governments will never make a profit. Neither should they. The government is also a public asset and it should be used by all for the public good. We should ensure that governments invest in everyone's future, not just those with money.
In the future we will need philosophers, artists, musicians, inventors, engineers, scientists, medical specialists and many more. People will be able to work shorter hours for the same if not steadily improving standard of living and more of us will leave the poverty zone for good.
However we must grasp this idea and make it happen. If a government doesn't want to work for the people, then let them resign. Politicians are "public servants" i.e people that work for the people, the mass populous, everyone.
The human race is truly on a precipice. We can either reach out to the stars and become a peaceful, advanced race having mastered Artificial Intelligence, fixed all the problems on our planet and travel to the stars. Or we can allow the laws of the jungle to rule and let dog eat dog, and I guarantee there will be only one man left standing at the top of a mountain of paper money. A worthless struggle to accumulate a worthless paper mountain.
Will the last vulture on Earth please activate the "Nova Bomb"
Although copyrights have their roots in publishing in England in 1662, It was mostly in the latter part of the 20th century that we saw these laws being abused by capitalists.
We now fund a whole industry of lawyers, leeches and venture capitalists who all want their piece of the action. They are all "Value Destroyers" and create no value. I suggest that first of all governments should fund inventors, start-ups and research and not allow it into the hands of the vulture capitalists. The vulture capitalists want total control of the finished product for many decades, plus a piece of the action in the company, plus the product due to the high cost of licensing may never be used in combination with other products.
If the government starts to fund research, inventions and start-ups, the results can be listed and labeled as public goods. free to be used and modified by everyone and covered in law by something similar to GNU General Public License.
More people could use combination of products to produce new ideas and products and accelerate research. The current "Pay the Vulture" system limits the full development of any invention beyond what it was invented for because the licensing costs are too high.
Imagine you have a brilliant idea for making a wonderful new product, however to make the product you need to incorporate 3 other products that are protected by patents and copyrights. This wonderful new product may never be developed and marketed because the licensing costs are too high, and the owners of the core products may not want to license them due to vested interests.
Take General Motors for example. It is quite well known that GM in the 1970's and 1980's went around buying up every patented and copyrighted idea for the electric car. Had they perused the ideas we could be driving around in 2nd or 3rd generation electric cars by now. However, old money, old wealthy American family money, large shareholders of GM stock made it clear that it was in their interests not to develop the electric car. A lot of this old American money was heavily invested in oil, and they were oil barons themselves.
I firmly believe that if a person owns land or a ranch that sits above mineral wealth whether it be oil, gold, uranium or whatever. These goods should be classed as public goods. Enabling the government to force and seize and develop these assets after fairly compensating the landowner for the inconvenience, plus a reasonable premium to move house, home and expenses etc. The land owner should also be given the option to stay there so long as he does not impede the development.
The old money and "Vulture Capitalists" must learn that you cant own genes. You cant own oil reserves. You cant own gold mines. These are all public goods. They were created by exploding stars and billions of years of history. They were not created by an Ivy League wide boy on Wall Street.
The "Vulture Capitalist" will squeek " Without our investments, no one will ever start a company or invent anything". Well excuse me. I beg to differ. Before the modern crazed system of over-protection. People still invented and discovered things that changed our world. The telephone, Steam and internal combustion engines, Radio, Television. We didn't have greedy "Vulture Capitalist firms in that era, but we still had inventors that invented computers, modern medicine. We can live without the vultures, it is just we have forgotten how to. People still wrote great music before the invention of the gramophone and therefore the Tin-Pan-Alley vultures.
If every discovery and invention was in the public domain, for public use and the public good imagine how quickly society would advance and what a better place for mankind this planet could be. We could easily fix our planet's environmental problems, find cures for currently incurable diseases with cheap and easy to produce medicines. Make energy self sufficient homes, Have our farms produce an excess of food cheaply and efficiently with machines creating the wealth without the "vulture Capitalist" tax.
Our governments will never make a profit. Neither should they. The government is also a public asset and it should be used by all for the public good. We should ensure that governments invest in everyone's future, not just those with money.
In the future we will need philosophers, artists, musicians, inventors, engineers, scientists, medical specialists and many more. People will be able to work shorter hours for the same if not steadily improving standard of living and more of us will leave the poverty zone for good.
However we must grasp this idea and make it happen. If a government doesn't want to work for the people, then let them resign. Politicians are "public servants" i.e people that work for the people, the mass populous, everyone.
The human race is truly on a precipice. We can either reach out to the stars and become a peaceful, advanced race having mastered Artificial Intelligence, fixed all the problems on our planet and travel to the stars. Or we can allow the laws of the jungle to rule and let dog eat dog, and I guarantee there will be only one man left standing at the top of a mountain of paper money. A worthless struggle to accumulate a worthless paper mountain.
Will the last vulture on Earth please activate the "Nova Bomb"
Subscribe to:
Posts (Atom)