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Thread: How to create wealth and jobs out of thin air

  1. #1
    Site Caretaker Dave A's Avatar
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    How to create wealth and jobs out of thin air

    Just print the money!
    The central bank should target employment when deciding on interest rates, and worry less about inflation when the economy is struggling, a top Congress of South African Trade Unions (Cosatu) official said on Thursday.

    Head of policy Chris Malikane also said in an interview with the weekly Financial Mail magazine that the country should rather print money than take on debt.

    Malikane -- an economics professor at Johannesburg's Wits University -- said targeting only one variable limited the extent to which the central bank could manage the economy.

    "The key variable to include is employment. And to target employment you need the to use the growth rate as an intermediate target."

    Malikane said targeting demand to fight inflation did not benefit the poor, as the good they spent money on, such as food and electricity, were influenced by monopolistic behaviour.

    Printing money to boost the economy would be a better option than taking on debt -- as the Treasury has announced it will do over then next three years to plug a tax hole.

    "Why borrow when we can print money?" he asked.

    This, though, should be measured so as not to hurt the economy and done in conjunction with lowering interest rates and weakening the currency.

    "But in the process of stimulating the economy, we should make sure we don't overprint. It's better to have 10% inflation and the protection of one million jobs than inflation of 6% and the loss of one million jobs," Malikane said.
    full story from M&G here
    Malikane is an economics professor at Wits University? A prodigy of the Robert Mugabe school of macro-economics, perhaps
    The trouble with opportunity is it normally comes dressed up as work.

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    Platinum Member Marq's Avatar
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    Apparently Mug a bee has a new plan.
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    Site Caretaker Dave A's Avatar
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    I do so wish COSATU would head up to Zimbabwe to see their pet theory in action...
    The Congress of South African Trade Unions (Cosatu) on Thursday renewed its demand for inflation targets to be scrapped, dismissing Treasury suggestions that the framework would focus more than before on jobs and growth.

    Finance Minister Pravin Gordhan kept the inflation target of 3% to 6% intact in Wednesday's budget but added he had written to the central bank stressing the need for it to be flexible in its approach, taking other factors into account.

    Cosatu said the move to make the central bank's focus more flexible was not enough, as the South African Reserve Bank had always claimed it was not overly focused on the target.

    "We had expected that monetary policy will be changed to target employment directly, as a primary focus of policy, as pointed [out] in the election manifesto of the ANC and in the various meetings of the alliance," it said in a statement.

    "We will, therefore, escalate our struggle for the scrapping of inflation-targeting, because we are of the view that the persistently high unemployment rate, strong exchange rate and de-industrialisation of our economy are due to the policy of high interest rates, of which inflation-targeting is a form."
    full story from M&G here
    If deliberately driving inflation higher worked, Zimbabwe wouldn't have any unemployment - South Africans would be queing up to get into Zim for jobs

    I honestly don't know which part of the mix they don't get.

    Is it that monetary value has sweet blow all to do with embedded relative value? Making everything earn ten times more money doesn't help when everything costs ten times more money too.

    Is it that higher inflation means higher interest rates? Bear in mind you can't sustain interest rates below inflation otherwise there wouldn't be any money available for loans in the first place.

    Or maybe they're confused about the relationship between cause and effect? They've seen better employment rates in periods of higher inflation and somehow believe this is because of higher inflation. No, you bl**dy idiots - in those situations the upward pressure on inflation is because of the healthy underlying fundamentals that also happen to be creating those jobs, not because of inflation itself

    Thank goodness for Pravin.

    Even Rob Davies (despite his SACP connection) seems to have a much better grip on what we really need.

    Thinking about it, maybe I'm being a bit rough on Rob's communist connection. That strategy could easily be inspired by how China's going about their business at the moment.

    And on the subject of China - COSATU, please note what one of China's big challenges is at the moment...

    You guessed it - keeping inflation under control
    The trouble with opportunity is it normally comes dressed up as work.

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    Platinum Member desA's Avatar
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    Get South Africans working & producing products that other countries want to buy, then things will get back on track.

    While everyone is trying to work out who to blame for their lack of income, or how to steal from the next bloke, SA will only go downwards.

    It's a dark world you see, when your your forward vision is buried up your own rectum.
    In search of South African Technology Nuggets(R), for sale & trading in South East Asia.

  6. Thank given for this post:

    Dave A (19-Feb-10), Superscenic (19-Feb-10), wynn (19-Feb-10)

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    Email problem Superscenic's Avatar
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    I think we (SA) have great ideas. Now if only we can overthrow the criminals running the country. A lady told my mom:" Why doesn't the whites say anything?"

    Of course "we" feel like we have no right (colonial guilt), but maybe "we" need to look at this and speak out. Apparently many Black South Africans are wanting whites to get back in the fight.

    Of course who has the time?

    Quote Originally Posted by desA View Post
    It's a dark world you see, when your your forward vision is buried up your own rectum.
    Now where did I put that lighter?

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