America's Downfall

Before making an analysis of America’s downfall, I can sum up in this phrase: “free lunch for the poor, and taxes for the rich.” It resumes the idea of an interventionist and statist state, which under the premise of looking for welfare of its citizens distorts all the economic apparatus. 

America is being blood feed by Welfare State, where immigrants are no longer settlers, and these new incomers are looking for easy benefits granted by the State, and haven’t immigrated to come true the American dream. For this reason, it explains the fact of that seven out of ten Latin American voted for Obama in the 2012 election.

So, in part, the American dream of hard work and economic success have been replaced with Welfare State. Then, what America is cultivating for the future is people who repudiate work and are dissociated with the idea of work as generator of wealth.

Besides, America is sunk in higher taxes which affect profoundly income with distortion, the Government’s expenditure has no limits as the public debt, the Federal Reserve’s monetary police is based in huge expansion; and, on top of all this, there are numberless regulations for the free initiative, then companies and firms are strangled which prevents their expansion and curbs the new creation of employs.To evidence this, American government decides the number of the employer that companies or firms can have in their payrolls, and determines the kind of jobs that companies and firms can create according to the government’s regulations.

In conclusion, the government is the agent who set barriers to the companies and firms to produce, and it is the one element against work. So if an state doesn’t generate wealth through production, then this seeks it through high taxes and the issue of inorganic money through deficit. One consequence of this is that the high class, who are the owner of means of production, begins the search of stability and friendly financial conditions in other countries, because the stuck of the economy can lead to social disturbances.

To prevent America’s downfall is needed to unhook the American citizens from the magical thought that has impoverished the Latin American nations, and return to the former principles: hard work, economic success mirrored in the market, and no government’s intervention. 

In case that a Democratic candidate gains the presidential elections, then the American have a secure passage to the path of turning United States of America into United States of Latin American, so another hellhole country.

The Dis Unite States Of America

If you think that you know what happen with the economic political chaos of the Century 21th, this new book of Julio Camino is certainly not for you. But if, on the contrary, you have doubts, questions and concerns, rather than elaborated opinions, or if you are not very sure about them, this book is for you. Especially if you want to learn about what is going on in the USA and some parts of the world: what is happening and why? Generally, in the United States, upon hearing the word "secession", most people think of Abraham Lincoln, the "deep South" and the Civil War. But there are currently other secessionist movements gaining strength in the U.S., and not only in the South, but in the entire territory, because the same "Big Government" federal emerged from the War of Secession, has gone out of control, causing many States huge frustration and discontent. Along these pages you will find something that you need, even if you are not very conscious of what is missing: information, good information from not well-known but truthful and liable authors. Download it on: THE DIS UNITE STATES OF AMERICA Or buy it in paperback from: THE DIS UNITE STATES OF AMERICA

The Third Way

Before defining the Third Way or what it is considered to be by his author, it is convenient to state what the Third Way is not, and put forward the argument that criticizes some principles of Anthony Giddens upon such a theory.

First, the Third Way is not a technocratic project tainted with utopian feature nuance, nor a politic and ideological new direction in the search for a new place in politics for the emerging social sectors that want to have a position in the political scenario.

Secondly, it is not an empty concept –without a real sense, nor a coined expression by Giddens –which has been adopted by the left to adhere just itself to right-centre wing.

Thirdly, it is not defined either as Giddens does as a programme of modernity on economy, political system and the state of welfare. Neither does the Third Way in its postulates seek for a renovation of public institutions.

The Third Way does not linger on what is accepted from what is denied. It is not the best of the economy of market –productivity – neither is it the reward of social democracy –a distributive system.

Upon the postulates of the Third Way by Giddens, some of them are unthinkable practical and utopian ones.

The first one: “New politics or a second wave of democratisation.” In a sense: “the people are consulted.” As this theoretical postulate lingers on a fundamental element of democracy that the majority governs, so public opinion should be counted. However, this cannot be done by abolishing the traditional democratic institutions and replacing them for such units of public debate for referendum. This one as another is a medium through which is conveyed the interests of people, so that it can be manipulated. And, it is prone to be under pressure in a major degree in the latter than the former.

Just have a glimpse of some Latin American countries where the rotted traditional institutions have been replaced for referendum and an emerging new leader, who becomes a Messiah, uses it for his own political benefit.

The second one: “New relationship between State, Market and civil society.”

The role of the state is to have due participation according to the moment. And, this should be assured by some rules that would be applied –independently its nature– on the circumstance.

A relationship between the state and civil society should be on the terms of one that defines a judicial, legislative and executive frame, where civil society can act.

Finally, upon the market, the state should encourage the private entrepreneur who is a principal factor in the economy, but it should regulate this when it is out of the equilibrium point.

And the third one: “A commitment with the entrepreneur.”

If a country’s decisions as well as its activities are based on the international sector it means the loss of democracy and the own national interest.

To have a real scenario of this principle, it is advisable to screen out Latin American society in which the higher classes, dominant but not leading ones and beneficiaries of the system by the political influences and alliances with foreign monopolies, are not interested in the development of their own country because this would imply the alteration of their supremacy; besides their profits would be in jeopardy.

The Third Way is the way as the state –in its main role of the head of the nation– deals with all the areas of the system. And, this way is just adjusted to the conditions of the moment.

The Third Way in the practice could be evidenced as El Partido Socialista Obrero Español had made the way for economic and social agents to go in a free-market economy coming from an autarchic and corporate economy. As in France, the Third Way is considered as the socialists update themselves having more Anglo-Saxon socialism rather than interventionist socialism.

But, one relevant example by the political system and complexity of the thought of the men in Asia, it is the case of China with respect to Taiwan.

Alberto Moreno Rojas, IV Seminario, “Los Partidos Terceravia y Socialismo y una Nueva Sociedad”, Ciudad de Mexico, Febrero del 2000.

Anthony Gidens, “La Tercera Via”, Ed. Taurus

Article part of the Notes from Through Existences.
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The Answer Lingers in Productivity

Nowadays some people argue on the reason for the critical situation of Europe in its economy, meanwhile others turn to study the factors that originated all this crisis in order to comprehend the chaotic economic condition.

An analyst having a reasonable level of intellect shouldn’t cast doubt over any other reason than the one linked to productivity, which turns to be uneven among the members of European Community. Before delving into the subject, it should be defined productivity as concept firstly.

Productivity by Alexander J. Field, The Concise Encyclopedia of Economics, gives this example if your bakery business buys flour and yeast, rents a shop and equipment, and pays for fuel, its contribution to GDP is not the sales price of the bread made, but the difference between gross revenues and purchased materials and services except hired labor. Your firm’s output is what you and your employees have added to the value of the materials and services purchased from other firms. He adds if you discover a way to rearrange your labor force and equipment so that production is more efficient, or discover a great new recipe for a loaf that is equally tasty but costs you less to bake, multifactor productivity in your firm may go up, increasing your output (value added) per hour even in the absence of any capital deepening.

Obviously this bakery would operate very different in any country member of the European Community. This is a revealing example the reason for the chaos that has been created.

According to Wikipedia, Productivity is a measure of the efficiency of production. Here it is possible to highlight that what determines the efficiency of production is human capital, and -some will argue that this is a key factor but not the only one- there could be others like technology.

However, this argument is refutable on terms of that it is not only the accessibility of the existent technology that a country whether might have or not; despite having a very high degree of technology but what determines its efficiency is the use of this and, there human capital comes along.

Wikipedia also says that Productivity is a ratio of what is produced to what is required to produce it. In Productivity by Alexander J. Field, The Concise Encyclopedia of Economics, the growth of productivity –output per unit of input- is the fundamental determinant of the growth of a country’s material standard of living.

This concept discloses the importance of labour productivity –which offers a dynamic measure of economic growth, competitiveness, and living standards. So if the labour productivity is rather variable from one country to another, no analyst or economist could expect to have the same indexes in both economies. One of the both will show clearly any increase or decrease in their numbers comparing with the other.

Here, two questions come along. If economies present enormous differences in their labour productivity how can these come together as one country in a community of members and even how could these countries associate them in a non-commercial barriers trade?

It is studied that human and social capitals together with competition have a significant impact on productivity growth. One paramount factor that exercises a determinant influence on human capital is culture –values and concepts with which a man is brought up, and which varies from one country to another. A relative example of disparate concepts from one country to another in Europe is the vision on work. For European southern countries this is appreciated as curse meanwhile for European northern ones work is the medium to create wealth and, therefore bring as result an increase in the growth of a country’s material standard of living.

In fact, we can find that EU’s GDP is shrinking as a proportion of world GDP. A deeper integration brings as consequence less competition among the member states, so the benefit is higher taxes and more regulation.

Therefore, it could be stated that for better job opportunities and higher quality education are need to improve labour productivity and boost growth, besides if the countries of a community don’t have the same vision about how wealth is created and their productivity index is uneven between them their union will have some countries bearing the burden of the less productive members and bringing chaos into their economies, plus don’t give any chance to those countries already in chaotic conditions take some rules on their own

America’s Supremacy: Immigration

In previous articles I attempted to analyse the causes for some countries still in the condition of underdevelopment in a global world, also such a reasoning tries to have understanding about this new tendency - which will help to develop in a better society – denominated The New Socialism of XXI Century; socialism that supposedly is not the same one as that of the last century. In the following lines, I will expose the reason for America is always in steps ahead from the rest of the world, which absolutely grants supremacy to the country.

            One aspect that many countries overlook, due to the fact of their underlined regionalism, or aversion or just simply not being in capacity of taking in, is Immigration.

            America owes its increasing specialization, the enhancement of its productive capacity and innovation to Immigrants. They allow American workers to boost their degree of specialization and become more productive –earning high wages. This is a key factor that produces as result supremacy above other nations. As the economist Giovanni Peri states in his research “Technological and scientific innovation is the acknowledged engine of United States economic growth and human talent is the main input in generating this growth.”

            In many countries a skilled immigrant is not considered on the terms of having not been a native-born, and he is catalogued as a disestablishing element in the opportunities for native professionals. This contra juxtaposes with Peri’s description “A team of engineers may have greater productively than an engineer working in isolation, implying that a foreign-born engineer may increase the productivity of native-born team members.”

            Although, it could be stated that immigration is harmful for the economy and society of a country, some papers have found out that immigration has a little adverse impact on natives.

            “Foreign-born workers complement rather than substitute for native-born workers because they have a different pattern of education and skills…” Diana Furchtgott-Roth, Director of the Hudson Institute’s Center for Employment Policy.

            In the United States, in the field of scientific innovation, the leaders are foreign students, skilled immigrants and doctorates in science and engineering. And, America supremacy is summed up in this “For every 100 international students who receive science or engineering Ph.D.’s from American university, the nation gains 62 future patent applications.” According to a study by Keith Maskus, an economist at the University of Colorado, Aaditya Mattoo, Lead Economist at the World Bank’s Development Economies Group, and Granaraj Chellaraj, a Consultant to the World Bank.

            The bottom line conclusion of their research is that “Reducing foreign students by tighter enforcement of visa restrains could reduce innovative activity significantly in the United States.”

            So those countries that restrain immigration are deprived of innovation. It is hard for them to attain a high level of advance and supremacy over other nations.

The Usual Mistakes in Small Business

     
  

   A difficult task is to identify all mistakes that could be made in a small business because of that these might pile up in numbers to the skies. Anyhow this article will attempt to point out some common ones.     

 At the time of setting up one small business, the idea for seemingly has matured in the new entrepreneur's head that the next step is to commercialise it; however the process of maturity hasn't reached the climax if it isn't identified the nature of the product. This is the first mistake when the new entrepreneur overlooks the fact of being dealing with a new product or just selling a one already in the market. Not having clear what kind of product is trading, his marketing strategy will be wrong at very beginning. It mustn't be designed the same marketing plan for a new product or that existent in the market. Anyhow, it is very common mistake to trade the same product as the others do with no any peculiar difference in price or service. Then for the customer, it means no a great deal to buy the same product from anyone in the market.

       A fatal omission for a small business -even a capital sin for corporations, it is not having done a market research on the product which is going to be traded or manufactured. If this research is overlooked, the manufacturer or trader doesn't know about any relation between the product and the market in terms of price, plan and promotion -what make a product saleable. So the business doesn't recognize the potential or real customers when it is unknown its market target.

       It is important to highlight the sort of business where family plays an important role. Family business.

       A family business is considered the Crown Jewel. Any advice that comes from outside is often regarded like vicious on account of that it hasn't welled up in the bosom of the family, though. No member of the family has expertise on the area on which the suggestion was made. So the wrong decisions are taken putting behind the good ones by this fact.

       One common mistake in a family business, it is not to difference what is family matter from business one –here is where money is tied down to heart. So all this creates entanglement in the daily operations of the business. Besides, one business is not the chance for the unemployed member of the family to get a job.

       About finances and administration of a small business, I should mention those mistakes for aping low-tax strategies of corporations, sometimes the new entrepreneur incurs costly procedures no proper for the size of his business -what could stifle his working capital to the worst. It is quite important to keep books adjusted to the real situation of the business. There shouldn't be a double accountancy, one for the taxes and the ideal for the eyes of the owner.

       Lastly, the owner of small business always considers the incomes of this his petit cash, so it can bring him into cash flow problems at the time of paying his liabilities.

       In the business world, where opportunities are challenging every day, the beginner will probably fail at the very start, but the real entrepreneur should be aware of his goals, the opportunities to achieve them and the direction to take, but, above all, what differences himself from the rest. 

Poor Rich Countries

‘And do you think that we should lay the country’s destiny on my perception?’ Marcio asked, ironically. ‘To redefine your national plan.’
‘It seems that my plan doesn’t sort out the real problem,’ said Raul Menendez.
‘Well, we have inherited all the chaos created by Orallez,’ commented Nuria.
‘I’m completely aware of you are in the spot. You need to unload the government’s finances of the burden of the bulged red-tape. But if you throw onto the streets all those people, so you will create a major problem if they don’t have where to go. And if you instrument a plan for the private sector to absorb them, so the economic factors tell you not to intervene in the economy.’
‘These jerks like the American system, but they don’t learn from them. There you see that the government now watches and put its hand on the economy,’ told Raul Menendez. (1)

It is a paradox –a complex one– of being rich, or a potential one, but being actually poor. This condition brings us into memory the title of the book: "Father rich Son poor". And also, the idea makes us think this: the head of the family did not instruct his descendants with the secrets of how he had made and kept his fortune. But, this is not the case to which I attributed the title to this article. When I had sat down to write this piece I did with my mind on those countries –especially the Latin American ones- whose potentiality is limitless owing to the fact of having a considerable wealth in natural resources, but they are those which terribly face serious hardships in their economies and societies.

In spite of having a considerable potential wealth by their innumerable natural resources –some of them are worth in the international markets enabling some countries have their gross income coming from exporting one or two of those resources; these haven't able to develop their economies and their societies which face extreme poverty, rather misery.

Before this dramatic reality, these countries -through the last century- adopted several rules and even radical changes in the economic model to vary this awful condition of underdevelopment in an attempt to grant prosperity to societies. So, we have the postulates of Cepal that orientated –in the fifties- the economic model through the substitution of imports for national production forcing the process of industrialization in the countries, which had to eliminate the barriers that impeded industrialization in the sixties; the same ones that in the seventies looked for diversifying their capacity of exporting and to bring equalization into their society. However, in the sixties and seventies, some countries did not adopted these principles issued by Cepal, and they opted to change their economic model by switching from their particular capitalism into socialism and even communism.

After the evident failure of the postulates of Cepal, some countries adopted the tendencies of the moment that was neo-liberalism in the nineties, so that they applied an adjusting program to their economies (which it had had an impressive success at macro level but with a big social cost). So, the majority of them abandoned their programs and shunned neo-liberalism. Then, they went back into retrospective tendency labelled now as New Socialism or Socialism of Twenty Century, which is not defined and have elements of socialism, but in practice it is a sort of neo-liberalism exercised by the State.
Obviously, as in the past, this brings as consequence debacle and entanglement of economies.

 ‘And what do I have to do?’ The president demanded.
‘It is hard. You have to change Venezuelan mentality. Before coming along oil, this country was physiocratic. I mean our growth was defined by agricultural production. So the Venezuelan was not used to the concept that work created value. His idea of his yielding was the outcome of his work. And all of a sudden, we have an industry where is introduced the terms of productivity and revenue. Then, we talk about a lucrative economy, but we still thought as a physocratic one. So we have the concept of rentable and lucrative in conflict. Our system works thanks to the state’s intervention. In some period –according to the government’s vision, the state has become almighty. And this happens when all the powers concentrated in the government’s hands at the time. So the habitants of this country perceive that their economic future or activity is tied to the state’s structure. And, in order to have a position in the system –I mean a profitable one, or to keep their fortune is a key factor to be linked with the state.’(1)


What the governors nor the voters have considered is the real reason of their underdevelopment, which it is the disassociation of wealth with work and it comes since the Conquest.In these countries, especially the Latin American ones, where there was no colonization just conquest –and it differs from one to another, are those in situation of underdevelopment.The colonist is a man along with his family who has settled down in a new land to work on it to create better conditions or a new way of living that he does not enjoy in his own country.

The conquer is the man who has come to the new land looking for wealth, and he is in search of treasures to be a lord, because in the Spain then work was despised and this disqualified a man in the social rank, so to be in the Court nobody could live from the work of their own hands.This kind of man was who set foot on the Latin American land. And, he did not come with the idea of work and equality. So they embarked themselves on the adventures that led them to treasures, and they left work to aborigines who did not understand what work was like, because they lived off hunting and fishing –activities that were not paid and without scheme.

As the aborigine could not stand the burden of the daily labour the slaves were brought, who associated work with curse since for them work was slavery -which was not paid off and restrained their freedom.

The solution to their underdevelopment condition is not the adoption of an economic model –sometimes divorced from their culture heritage. It is just the change of attitude of their society.

They have to modify their conduct pattern, which have been based so far in that character of the Spanish literature: el picaro, who ideated the most astute things for not working and considered the government as a great loot which has to be taken by assault.

Once these countries have societies with a high appreciation of that through work comes wealth –and not matter the kind as long as this is a legal one- and politicians whose ideas convey development and honesty, their society will evolve from poverty into prosperity.

 (1) Excerpts from Through Existences by Oliver Frances