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Economics and commerce, all built from scratch.

Japan – Down the Rabbit Hole

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For all we complain about low growth and dimming prospects here in the US, it’s a problem that has plagued the developed world. If anything, we’re doing quite well, thank you. Europe is still struggling to get out of the depression, with high unemployment – especially among their youth. China and other developing nations appear to have hit a wall, unable to round the corner and step up to developed nation status.

And then, there is Japan. “Basket Case” doesn’t begin to describe it.

We last checked in with them over three years ago when Shinzo Abe became Prime Minister and instituted what has been called “Abenomics”. Call it “Supply Side” if you want, as it emphasized growth in the money supply and a cheap Yen to stimulate growth in production. Call it “A license to print money by the Bank of Japan (BOJ)” if you’re a cynic.

But the problems in Japan are much more severe – they are demographic and social. Without a wholesale restructuring they are as doomed now as they have been for an entire generation. There’s a lesson here for everyone.

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The Next Economy – An 8 Point Plan

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The beauty of election season is that every citizen has an opinion and they get to voice it. Because we are a Democratic Republic, it’s usually up to the candidates running to propose very specific platforms for the voters to judge. But these are often thin on details – either because they are hard to pin down before they are fed into the complex process of making sausages, er, laws or because candidates are full of hooey.

Both are usually true. Promises are one thing, delivering quite another.

Barataria has taken the position that the economy is turning over, indeed that there is a new economy replacing the one that gradually failed. The turmoil is what has voters so angry as no one seems to be in charge. It’s also Barataria’s position that complaining without proposing a specific solution isn’t all that helpful, so here is the Barataria platform.

It leaves aside a lot to focus on one thing – turning over our economy into the next one. How do we build a dynamic system for everyone? Here are my immediate thoughts.

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Today’s Pirates – the Panama Papers

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Have you ever wanted to be a pirate? If being free on the high seas has an allure you may want to think again. Today’s pirates don’t have ships or parrots, nor do they take over other ships at sea. They’ve gone bigtime, making a lot more money off of the very lucrative practice of making money disappear even more surely than burying it in the ground.

That’s what has been shown in the “Panama Papers”, a huge stash of 11 million documents taking up about 2.5 terabytes of data. The leak of papers from Panamanian firm Mossack Fonseca is about ten times the size of Edward Snowden’s leak – and none of the secrets revealed are about security.

This is about money. Lots of it.

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Fed Futzes, Fuses Financial Fracas

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Janet Yellen – is there anything she can’t do?

In a speech to the Economic Club of New York the most powerful person in the world, elections be damned, called back the need for continuing “ramp up” in the Fed Funds Rate. The stock market rallied as the happy days of last year returned and everyone had reason to believe that free money was on the horizon.

Funny, they don’t cheer like that for Bernie Sanders.

What is going on? Are we not going to raise rates this year after all? Has Yellen started channeling her inner Greenspan by saying as little as possible in the maximum number of words?

No, this is what we have to expect. It’s really all about China, which is to say all about currency conversion, and the much-hyped “dual mandate” of the Fed that’s really a much more complex triple mandate or more. And we all, sadly, have to stay tuned to find out what it really means.

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A Smaller Government is a Peaceful Government

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A long weekend needs a repeat – this one from a year ago that leads into some of the reforms that should be talked about through the election cycle much more than candidates wives and mistresses.  Back on Wednesday with more about reform and what has to happen when (if?) grown-ups are in charge again.

“Get government off our backs!” It’s a chant we’ve heard a lot of over the last few years, usually in the deep, gruff voice of those old enough to remember the heyday of our parents and grandparents. It’s a call to a simpler time when there was less government, less taxation, and more to go around. At least, that’s the story we are told.

But an analysis of the size of our Federal Government as a share of the economy shows that while it is a shade bigger than it used to be, it’s way below its maximum. There are peaks in Federal Government size which fit not to an increase in social benefits or productive spending, but the very expensive line item that has been pricey enough to bring down governments and cultures for centuries – war.

In short, it’s time for the progressive left to embrace “smaller government” of a kind and to show that world that peace is not idealistic but practical.

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