The Keynesian honeymoon period lasted quite a long time in United States. Frank D Roosevelt (FDR) started after defeating Herbert Hoover in the 1933 American presidential election and became the longest running president in American history, four terms. The market failure that occurred during the Great Depression brought Roosevelt to move slightly to the left. Through tough negotiations between FDR, the Unions represented by the two left parties, and the private sector (big business), FDR succeeded in formulating a new economic path to get out of the Great Depression, namely the New Deal.
Minimum wages and unemployment benefits were agreed upon, infrastructure and manufacturing projects to absorb labor were initiated, and the balance budget model was changed to a deficit budget. The Great Depression which made the US unemployment rate jump from 14 percent to 25 percent showed a significant change after Roosevelt’s policies were implemented. The Second World War provided oil to the American economic engine where American manufactured products, from weapons to food and clothing, were urgently needed by all the allied nations. Although in power until 1945, the Keynesian regime continued into the 1960s, leaving unemployment at only 4.6 percent.
A year before FDR died, 1944, on the other hand, John Maynard Keynes also formulated a new trade and finance formula at the Bretton Wood Agreement. The currency that originally referred to gold was converted to the Dollar and the Dollar was the only one that referred to gold which also acted as the global reserve currency. This is what makes all world economies finally affected by the Dollar, because all currencies are tied to the Dollar.
So, the FDR policies became a arena for the actualization of Keynesian concepts related to the role of government in the economy, aka a continuation of Keynes’s thought that the Great Depression was the result of the overconfidence of the free market (self-regulating market) which led to market failure in the Great Depression crisis. So that it needed the touches from the government or the state, in the form of stimulus and regulation, and with a deficit budget model.
Until the late 1960s, the fruit of the first stone which was laid by FDR was sweet. Unemployment narrowed, income inequality decreased, job opportunities for women widened, and the standard of living for people increased. As a result, demand increased sharply beyond domestic production capacity. Automatically the Dollar strengthened sharply and the first trade deficit occurred in 1971. The Dollar went crazy, reducing the appetite of trading partners, because American commodities and manufacture production automatically became expensive which resulted in imports exceeding export capacity, aka trade deficits.
But president Nixon refused to exercise austerity policy. Nixon even canceled the Bretton Wood System by cutting off the dollar’s reference to gold in 1971. A fiat currency was born, which is based on debt. All world currencies ultimately refer to the Dollar which rests on nothing more than debt securities. And this is what we live for today. It was unexpected that two years later, 1973, after the Yom Kippur war in the Middle East, Arab countries did not accept America’s position which did not take a clear stand, and even seemed to tend to support Israel. The Arab world punished America by imposing an oil embargo.
Oil prices went crazy. The crisis was getting worse. Keynesians never thought that unemployment and inflation could go hand in hand, but that’s what happened after the Arab world took its deadly kick, namely stagflation. Then recession ensued. The dollar was finally saved by the lobby of Henry Kissinger telling OPEC to use the Dollar as a tool for oil transactions, which eventually gave birth to the Petro-Dollar. But inevitably, the Keynesian regime was finally evaluated. Milton Friedman emerged as an angel carrying the message of neoliberalism-libertarianism, namely a lean government that did not intervene and regulate much on the one hand and private sector that did not come under much regulatory and taxes pressure on the other.
America was starting to breathe again, but based on the actions of the big private sector and free market principles. The risks were that income inequality widened, the socioeconomic conditions of the middle to lower classes begun to be vulnerable, the role of the Unions almost disappeared, and the neoliberal crisis finally took hold in the early 2000s, starting from the dotcom crisis to the big financial capitalist crisis in 2008. From these time till today, the big capitalists are too big, so the solution is no longer like what FDR thought. Because the situation was “Too big too fail.”So the big company must be saved first. What happened then was the emerging of Quantitative Easing, cheap money, super low interest rates, etc . To treat guilt towards FDR, Obama-Biden introduced Affordable Housing Policy and Obamacare (Affordable Care Act).
Actually, in the years 1970-1980s, Americans economic were also exacerbated by Japan which began to rise to the top, exporting manufactured commodities at lower prices. Imports from Japan were rampant, making domestic manufacturing even more inefficient, so imports made more sense. Automatically, the deficit would be more and more. Then in 2000s, China entered the World Trade Organisation (WTO) which has been causing worse effects than Japan. The cheaper investment costs in China have brought capital to the land of the Bamboo Curtain. Millions of manufacturing jobs have been lost. Trump is finally the first and most outspoken president, just like he spoke in 1980s to Japan effects to American economic
The two school of thought seemed to fail, tarnished the self-esteem of the Keynesian principles and worshipers of Milton Friedman. Capitalism, which breaks the boundaries of the state, does inflame the economy in one hand, but if it is not limited, it will end up destroying the socio-economic and cultural root of society in other hand, as Karl Polanyi wrote in “The Great Transformation.”When countries that trade with each other experience surplus, produce a lot of money, their economy rises, and the value of currencies will also rise, which ultimately makes investment costs in the country expensive. Investment expansion will slow , then labor absorption also begins to slow down. Even finally, many are leaving from work.
Then many of them will begin to tighten the economy (austerity)and make structural adjustments, making rules which make everything possible into economic system, sell land and labor cheaply, so that the economy would continue to run well. But if the economic remains stuck, moving slowly because the competition at the global level is getting crazy. At that time, many are trapped into so called “only two options” trap, socialism or fascism. Some pundits try to understand the Trump’s victory not only due to the personal frustration of voters over a situation that tended to be stagnant here and there, but also because of the unrest among whites who had begun to lose their dominance. And they see it as fascism wrapped in white supremacysign. Whereas, voters really bought Trump’s tough narrative on global trade (especially with China), which has taken away millions of manufacturing jobs in America.
So Biden, of course, understand very well the above dilemma that the market cannot be kept away from government intervention, but also not too close attached. Imagine if Congress and the Trump administration did not pass a budget relief policy for businesses at the start of the pandemic a few months ago? And imagine if there was no relief policy for workers who are victims of dismissal and unemployment? No doubt, the American economy will fall apart. However, the combination of pro-business, (pro-Wall Street) and pro-Main Street policies, will determine America’s economic fortunes in the future.
Like other democratic presidents, Biden will certainly raise corporate taxes and the upper middle class. Biden will also improve the Affordable Care Act, invest a very large amount in climate change policies and R&D projects, and strengthen the domestic supply chain. Biden is likely to use large federal authority to intervene in the economy. But, the American public will be watching him. That’s why, Joe Biden must also be able to distinguish which economic policies continue to preserve American values which are completely different from China’s. It is not an easy responsibility, it will be a big deal for the American economy in the coming years. In other word, Biden will be expected to improve the economy while remaining on the American economic path
On the other hand, to realize his grand plan, Biden will be trapped in large amounts of new debt and all efforts to pump capital into the economic system, so that the American economy can keep moving. But the 1.9 trillion dollar stimulus will increase US domestic demand without being followed by an increase in domestic production capacity. This step will cause two things, firstly is inflation and second is an increase in the trade deficit, particularly with China, because the increase in demand will be met by imports. These two risks will make Biden return to bring the American economy into a new crisis. The more inflation increases, the purchasing power of Americans will also be depressed, without being followed by a significant increase in labor absorption and wages, and the end is a new stimulus and new debt, which will make the economy warmer and more contracted.
United World of Job Seekers and Job Creators Will Boost Recovery
Why is there so much disconnect between entrepreneurial thinking and bureaucratic thinking? Has the world of education, certification, occupation divided us, have the organizational structures slotted us so wrongly, have the populace fragmented us and now our combined talents and productive mindsets are all going astray. Why is technology confronting us on mindset issues, forcing us to stand up together to face post-pandemic recovery to deliver real productivity results? Can we review factors and try to come together towards rapid progress, fix and advance?
As an overview, across the world, people always struggle hard to acquire special skills and qualifications to pursue their desired goals, some end up as job seekers and some as job creators, but both types equally work hard, build economies, and create prosperity. However, it is extremely important to face this fact; “Job-Seekers” help build an organization while “Job-Creators” develop the real cause to create that organization in the first place. Study what the last 100 earth shattering entrepreneurs across the world did or observe some 100 small and medium businesses right in your own backyards, on exactly what they are doing.
As the post-pandemic recovery world morphs towards entrepreneurialism, this critical difference of mindsets now demands deeper understanding amongst the economic development leadership of nations and their multi-layered complexities of their management teams. After all bureaucracies and economic growth agencies are primarily highly-qualified job seekers themselves, but now facing establishing a “job-creator” economic thinking, therefore facing a new national agenda as if a chess game, where moving pieces randomly is not the game, strategic command on movement of each piece is victory. The brutality of the message is now exposed as wide-open global debate because post pandemic recovery will take no prisoners.
To create an army of job-creators, academia is not the solution; academic mindset on tackling entrepreneurialism is like scratching and sniffing from old case studies on famous job-creators, telling those stories as if their own, throwing in their own analysis to claim some belonging and highlighting the entrepreneurial errors and mistakes as their own special victories. Always, never admitting the facts that it took special temperaments, zeal for venture, out of box thinking and guts to make those crazy moves while everyone else laughed, however, universities always tabling their own new improved strategies as the real correct and right way. Therefore, how many armies of Steve Jobs alike if they ever created, you decide. Business education is unnecessarily far too expensive and too disconnected. Know the fine differences in order to reshape economic progress.
Entrepreneurialism is neither academia born nor academic centric. However, observe how entrepreneurs always attract other mindsets and academia to join to carry out specials tasks, in comparisons where other mindsets will apply extreme reluctance to allow inviting entrepreneurial mindset in fear to exposure of their own business knowledge limits or facing any criticism by someone without any institutionalized certification center staging as a solo free thinker. Imagine how much laughter persisted what opposition created for entrepreneurs on their earth shattering ideas, from razor blade to treadmill or from bulb to mobile phone.
This time around, on the line are the entire global business models of economic productivity, performance and profitability, juxtaposed with climate change and sustainability where ‘worklessness’ of the future and digitization will place the world upside down. Get ready for a war of mindsets. Critical thinking and lifelong learning will save occupationalism. The absence of the long awaited fourth industrial revolution is proof that unless mindsets are aligned we are going backwards.
Today, economies trapped, digitization stalled, small business crushed and middle class destroyed is the new post pandemic world. Unless such mindset differences are understood, the tug of war of creating powerful economies with entrepreneurial flavor will fail. Provided there is open mindedness, alliances with job-creator mindset will assist jobseeker centric bureaucracies currently surrounded by monstrous challenges allow immediate implementation of deployment ready solutions for national mobilization of entrepreneurialism to uplift midsize business economies.
Today, the majority of nations would like to save by shrinking their highly paid public service staff with hopes to transform them into an entrepreneurial mindset to become producers of goods and services and add to the local economic landscapes. However, despites funds available in some nations still no success as such narratives strangled by job seeker bureaucracies already closed the doors.
Just look around, nation-by-nation, why are their problems so similar, solutions so identical? Is this because the differences hidden between leadership styles committed as nation-builders or as nation-sellers? Is it because jobseekers have already peaked on the pyramids of power, now at the top of the heap, their respective levels of incompetence make them unfunctional to grasp the new challenges and missing greatest market opportunities. The fact is with so many new and repeated elections, so many New Cabinet Changes and appointments, unless root cause issues brought into open, the local-global fiscal propositions keep sinking.
Out there, somehow there is a global rise on mobilization of entrepreneurialism, the fact that world is starving at local grassroots prosperity levels, hungry at midsize economy level but gluttonized and partying in vomitoriums at the very untouchable top levels, nevertheless, the new awareness is cross-fertilizing at rapid speed. The whispers, murmurs, the trembling of the messages are still inaudible to the top leaders but a good positive change in the air.
Recommendations: What will it take for the national economic development leadership along with all affiliated trade groups and agencies to open up to critical analysis of policies and development programs evaluated from new perspectives of entrepreneurial mindsets? What would it take such agencies to have some permanent authoritative and proven entrepreneurial representation of continuous dialogue to improve and adjust? What would it take to create high-level selective immersions of jobseekers’ mindsets to come closer to job-creator mindsets to combine talents and achieve extraordinary results in the marketplace? What will it take to have some closed, open, or national level debates to bring talents and ideas together as a national agenda? What will it take to apply the similar approach of Truth and Reconciliation, after all the damage to grassroots prosperity now visible from space. Time has come to bring our minds closer and not disperse them as conflicting enemies.
The day has arrived to face the change. All mindsets are good but appreciating the difference and their respective strengths for special outcomes are critical. Working all like a team of various experts in a mutual goal is a huge victory. If during the last two years, such topics during pandemic recovery were never on your boardroom table, and mindset selection criteria never applied to determine the outcomes, you may be in a job-seekers centric enclave. Possibly, in deep silence already slotted in a wrong organization, should you now hastily leave the building? Should you help them? In any case, no further proof required. The future of pandemic economic recovery now demands a job-creator mindset. Select your mindset of your choice, acquire and add mastery as a prerequisite, and advance to newer heights.
The rest is easy
Sustainable Agriculture in Modern Society
Now everybody is seeing the world is changing fast in this 21st century and many industries and modern buildings are also developing all over the world. But the land areas for farming are becoming narrower and narrower. Moreover, the global population is increasing rapidly and the earth becomes a crowded planet. But the younger people who are interested in agriculture are becoming less and less. There might be some young people who even think that they get foods from grocery stores because the younger generation are used to buy many kinds of ready-made foods such as fruits and vegetables easily from supermarkets. Recently, in the developed countries, the average age of many farmers is over 50 years old and the numbers of young farmers are decreasing. The shortage of young farmers can become a crisis in the future of the developed world.
In modern days, most young adults cannot see the difficult lives of farmers beyond the curtain. The farmers have to pass their whole life through a tough living in farming and sell their products at very low profit to many profiteering companies because they don’t have much choices. It is a sad story for farmers but truly happening in these modern days.
Today I would like to point out that we should not forget the role of agriculture which is very fundamental and essential for building a nation. Farming is an age-old profession that supported the settlement of human beings for thousands of years to survive on this planet. Agriculture is very important for the development of a nation because it provides the trading and employment, supply the foods and textiles and that can lead to the rise in gross domestic product (GDP) of a nation. Agriculture plays a crucial role in economy of a developing nation where majority of population is in rural areas and agriculture is the main source of job in many underdeveloped areas. Many families in developing countries live depending on farming for their livelihood. So, it can be even said that developing agriculture is an important step to reduce poverty and hunger in many developing countries. Agriculture support nutrients rich foods that are essential requirements for our healthy life because nutrients rich foods provide energy for our body, essential nutrients for our vital organs such as brain and heart etc, and enhance our immune system. So, agriculture is necessary for a flourishing and joyful life of human being.
Especially let’s see my home country, as data from Food and agriculture organization (FAO) of the United Nations, “The agriculture supports 37.8 % of gross domestic product of Myanmar, contributed to 25-30% of total export earnings and employs 70 % of the labour force”. Humans cannot survive without agriculture. When there is no more agriculture, it will end with starvation and collapse in economy. It will cause a serious failure in modern civilization.
Nowadays, modern farming is largely evolved into industrial agriculture where many kinds of chemical fertilizers are being used to induce massive production. Industrial agriculture is beneficial to economic development because it can cause the crops growing faster than in the traditional agriculture. The industrial agriculture can provide more enough foods for growing population in modern civilization. However, it is not sustainable because it cannot protect the benefits of the society and our green planet in the long run. Chemicals used in agriculture are destroying the soil where is left with damaged soil fertility and this area can’t be reused in the future. This is a huge affect to sustainability of our green environment.
Modern agriculture has many issues related to water scarcity, soil erosion, climate changes and etc. To be sustainable in agriculture, we must focus on solutions of these issues. The sustainable agriculture will focus on three bottom lines that is environmental, economical and social.
The sustainable agriculture involves many practices such as using the organic fertilizers in farming, growing drought resistant crops, breeding biodiversity in farms, modified irrigation systems and others. Sustainable agriculture is more suitable to practice for the future of the green earth than industrial agriculture. It is very important to promote awareness of sustainable agriculture and issues related to environmentally toxic practices in agricultures among local farmers. And I believe that it can cause many advantages for economic development if farmers can work systematically with sustainable practices in their farming and the local authority can provide farmers with more technological skills and lending some funding to practice sustainable ways in agriculture. With the willingness to participate for environmental heath at the enough profit for incomes of daily living life, I hope famers will become socially responsible persons.
And another one more point, in this digitalization era, we should certainly apply digital technologies in sustainable agriculture. By developing digital farming, it will help farmers to get easier access to source of many information related to agricultural practices. Government in developing countries should support to develop digital farming as rapidly as possible for the poor farmers to get proper profits and to work in environmentally friendly practices. Since poor countries already have enough labour force, they just need many financial aid and technology supports to grow into sustainable agriculture.
I believe that it is a responsibility for our humans that we should not forget something that had supported our existence on this earth. We should work out for development of traditional agriculture into modern agriculture with the best sustainable ways. As being a part of this society, we must help each other, we must protect the sustainability of this green earth, Biodiversity and this is also beneficial for long-term existence of our human beings on this earth. Let me end this talk by suggesting everyone to promote sustainable agriculture in your surrounding local farming.
The Blazing Revival of Bitcoin: BITO ETF Debuts as the Second-Highest Traded Fund
It seems like bitcoin is as resilient as a relentless pandemic: persistent and refusing to stay down. Not long ago, the crypto-giant lost more than half of its valuation in the aftermath of a brutal crackdown by China. Coupled with pessimism reflected by influencers like Elon Musk, the bitcoin plummeted from the all-time high valuation of $64,888.99 to flirt around the $30,000 mark in mere weeks. However, over the course of the last four months, the behemoth of the crypto-market gradually climbed to reclaim its supremacy. Today, weaving through national acceptance to market recognition, bitcoin could be the gateway to normalizing the elusive crypto-world in the traditional global markets: particularly the United States.
The recent bullish development is the launch of the ProShares Bitcoin Strategy ETF – the first Bitcoin-linked exchange-traded fund – on the New York Stock Exchange. Trading under the ticker BITO, the Bitcoin ETF welcomed a robust trading day: rising 4.9% to $41.94. According to the data compiled by Bloomberg, BITO’s debut marked it as the second-highest traded fund, behind BlackRock’s Carbon fund, for the first day of trading. With a turnover of almost $1 billion, the listing of BITO highlighted the demand for reliable investment in bitcoin in the US market. According to estimates on Tuesday, More than 24 million shares changed hands while BITO was one of the most-bought assets on Fidelity’s platform with more than 8,800 buy orders.
The bitcoin continued to rally, cruising over the lucrative launch of BITO. The digital currency rose to $64,309.33 on Tuesday: less than 1% below the all-time high valuation. In hindsight, the recovery seems commendable. The growing acceptance, albeit, has far more consequential attributes. The cardinal benefit is apparent: evidence of gradual acceptance by regulators. “The launch of ProShares’ bitcoin ETF on the NYSE provides the validation that some investors need to consider adding BTC to their portfolio,” stated Hong Fang, CEO of Okcoin. In simpler terms, not only would the listing allow relief to the crypto loyalists (solidifying their belief in the currency), but it would also embolden investors on the sidelines who have long been deterred by regulatory uncertainty. Thus, bringing larger, more rooted institutional investors into the crypto market: along with a surge of capital.
However, the surging acceptance may be diluting the rudimentary phenomenon of bitcoin. While retail investors would continue to participate in the notorious game of speculation via trading bitcoin, the opportunity to gain indirect exposure to bitcoin could divert the risk-averse investors. It means many loyalists could retract and direct towards BITO and other imminent bitcoin-linked ETFs instead of setting up a digital custodianship. Ultimately, it boils down to Bitcoin ETFs being managed by third parties instead of the investor: relenting control to a centralized figure. Moreover, with growing scrutiny under the eye of SECP, the steps vaguely intimate a transition to harness the market instead of liberalizing it: quiet oxymoronic to the entire decentralized model of cryptocurrencies.
Nonetheless, the listing of BITO is an optimistic development that would draw skeptics to at least observe the rampant popularity of the asset class. While the options on BITO are expected to begin trading on the NYSE Arca Options and NYSE American Options exchanges on Wednesday, other futures-based Bitcoin ETFs are on the cards. The surging popularity (and reluctant acceptance) amid tightening regulation could prove a turn of an era for the US capital markets. However, as some critics have cited, BITO is not a spot-based ETF and is instead linked to futures contracts. Thus, the restrain is still present as the regulators do not want a repeat of the financial crisis. Nevertheless, bitcoin has proved its deterrence in the face of skepticism. And if the BITO launch is to be marveled at, then the regulations are bound to adapt to the revolution that is unraveling in the modern financial reality.
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