Predictions for 2012 and further on

2012 will overall be a continuation of the years since the economic crises erupted in 2008. The sovereign debt situation is similar to the situation around 1908 and 1930. You only have to read history to predict what will happen.

The low interest rate is causing massive capital dislocations and we will see the economy declining with increasing speed. With declining economies business will close down which in turn will cause bank failures, unemployment and even more strain on the government’s finances. This in turn will cause social unrest as people lose their jobs and the government is unable to meet expectations for outlays.

The unrest will be met with one more rounds of interventions of the kind that caused the problems in the first place; The unemployment will be met with subsidies, customs, trade restrictions, stricter labor laws, public employment schemes and debasement of currencies. This again will increase tension among nations.

The parliaments will face very tough choices reducing public expenses.  This in combination with increasingly violent unrest will raise demand for strong leadership and we will see a trend towards more authoritarian governments if not dictatorships.

We will see more rounds of quantitative easing (euphemism for money printing) to save the currencies, the banks and public finances. The end of paper money is closing in, increasingly authoritative measures will be necessary to save the paper being worthless.

To sum up we will see declining standards of living, increasing domestic and international tensions, reduced liberty and a tendency towards dictatorships. I think this tendency will continue for some years to come.

To look at little further within the time frame of 3-5 years  I  think there is hope for a global revival of liberty and economic prosperity;

Socialism as a political system lost its popularity with the fall of the Berlin Wall. Everybody saw that it did not work nobody wants’ it back. Since then the world has been fascist, a middle of the road no principles political system. The governments are continuously trying to please well organized vocal powerful minorities sending the bill to everyone through numerous taxes and deficit spending. Bureaucracy and regulations have steadily been growing.

Now the time for fascism is beginning to run out. Just as the wall fell when people understood that socialism didn’t work I think fascism will fall as it is dawning that it don’t work either. Then there will be a case for liberty and I hope and believe we will see a number of countries making constitutionally limited governments.

The world is on the tip of the edge. There is currently a nasty drive towards dictatorships, decline and the dark ages. The final outcome depends on people standing up for liberty.

How to end the economic depression

The world is in a serious economic crisis which erupted in 2008. The governments have pursued the policies that created the crises for 3 years and the situation is predictably getting steadily worse. There is a dire need to change course and get over the crises. What to do?

The most serious problems are:

  • The economy is in a depression.
  • The government has liabilities (pensions) which it cannot possibly meet.
  • The economy is swamped in debt which cannot possibly by repaid.
  • The monetary system is on the verge of collapsing.
  • The government’s expenditures are unsustainable.

The most important criteria of the plan is to put the world economy back on a viable path. Second point is for the plan to be as just as possible.

How to justly redistribute the economic resources?

It is impossible to undo misdeeds. As examples consider a Russian farmer who got his farm expropriated in 1917 how to compensate this when Communism collapsed in the early 1990’s? Probably the farmer is dead and the property may be considerably changed, maybe someone else is living on the property now. It’s difficult to find a just solution. Undoing socialism is not easy.

The unsustainable debt will not be repaid. One man’s debt is another man’s asset where to cut? “Millimeter justice” is impossible.

A final point is that the policies that have pursued have been supported by the vast majority of the citizens either enthusiastically or by just drifting along. This system of universal plunder could not grow without public support. Hardship is well deserved for everyone.

How to fix the banks

Money and debt must be separated. The banks must be put under administration and privatized through the following steps. The depositors are generally not to blame for the crises and should overall no loose in the process. The banking business is unlawful and the stockholders may justly loose there stocks.

  • The depositors  must choose whether their accounts are on demand accounts or investments.
  • The demand account and the investment business are separated.
  • The investment banks are organized as mutual funds where the assets are the loan portfolio.
  • The government prints up physical money to the amount of the checking accounts and transfer the money to the vaults of the banks. The demand account banks are requested to keep 100% reserve and get their revenue from payment and storing. This step will secure the monetary system from a bank run and end inflation.
  • Next step is to require the deposit  banks to buy gold or silver for the cash.
  • Final step is to hand the banks over to civil life.

How to end the depression

The cause of the depression is a combination of inflation, regulations and taxation. Inflation is brought to a halt by 100% reserve banking. For the regulations I suggest making a constitution based on property rights and contractual freedom. Then burn all laws and make new ones based on the new constitutions. In the process most governmental agencies will be closed down. It will be a little tough to find new jobs for everyone but their businesses have been illegal and some hardship is well deserved. The taxes should also be slashed to the bone with the goal of making them voluntary payments.

The current recession is deep. But there are enormous productive forces waiting to be released when the chains of the governments are removed.

What to do with the debt?

Taking up dept is generally an advantage as you may buy assets before the prices are driven up by the extra money of your loan. So generally all private debt should be repaid. But how about the state debt? This debt is just a promise to tax. The debt should be written down to zero in one big blow. Tough chance for those trusting the government mafia.

What to do with the governments expenditures?

The government’s activities should be slashed to the bone leaving anything but a minimum administration, the legal system, the police and the military in the government. I have already commented on the regulatory entities. All possibly commercially viable services like communications, schools, hospitals etc should be handed over to civil life. If no one wants’ to run something it should be closed down. The experiences from Eastern Europe suggest some rules for the dismantling of the government:

  • Leading bureaucrats should be prevented from getting ownership in the civilized enterprises.
  • All jobs in the reformed government should be applied on anew. Bureaucrats known to be corrupt or with a record of harassing the citizens should be excluded.

What to do with the pensions?

Sound pensions are invested productively so that there are extra productive capacity to fund your retirement. The governments however have just spendt peoples pension so there is nothing left when they are old. What to do?

The banks has substantial assets. Probably there are assets left after the mutual funds customers have had their share. Also the handing over of state assets to civil life should bring some revenues. I suggest these assets are transferred to pension funds to be privatized. The total value of these assets I don’t know. But most people have ideologically been supporting this ‘pay as you go’ scheme and hardship is well deserved.

This is my proposal for the overall principles to deal finish the crises. It’s really a sketch and certainly room for improvements both on the ethical and economic level. Comments are welcome!

Hvordan redusere kriminaliteten i bymiljøene?

Oslo gjennomlever en voldtektsbølge, Oslo’s innbyggere er også regelmessig plaget av ran, innbrudd og lommetyverier. Det er mange forslag til løsninger: mer  politi, kameraer og lys. Innvandringskontroll og endrede lukningsvedtekter.

Jeg vil isteden fokusere på rammebetingelsene for å kunne gjøre noe med alt dette nemlig eierskapet til våre offentlige rom. Disse har nå en eier, den norske stat, som derved har eneansvar for å lage et trygt miljø. Uten eierskap kan ikke brukerne av området sette opp vakter ( kan avlaste politiet ved å overvåke og avskrekke ) , kameraer eller lys. De kan ikke kontrollere hvem som er på området (”innvandringskontroll”) eller fastsette regler (som lukningsvedtekter).

Det er kanskje en fremmed tanke, men vi er vant til eiendomsrett i områder som kjøpesentre, fotballarenaer, museer, svømmehaller, båtforeninger, borettslag og veienlegg. Det er ingen tilfeldighet at kriminalitet er nærmest fraværende i et parkanlegg som f.ex Tusenfryd sammenliknet med Karl Johan og Slottsparken. Det er fordi eierne av området har tilpasset sikkerhetsnivået til trusselnivået.

Et hus uten låser er nærmest utenkelig. En hekk eller et gjerde markerer eiendommer. Den som beveger seg innenfor grensen blir lagt merke til. Mange har alarmer med video og vekterutrykning. Bygårder har vanligvis en ytre sikring med låst dør og autentisering over lydanlegg. Mange har kikkehull og lignende. Tilsvarende tiltak er nærmest totalt fraværende i de offentlige bymiljøene bortsett fra private områder som kjøpesentre, restauranter osv.. Straks du beveger deg ut i gatene går du ut i en jungel.

Beslektet med manglende eiendomsrett er byplanlegging. Byen deles inn i ulike soner for næringsliv, uteliv og boområder. En uheldig sidekonsekvens er at områder visse tider på døgnet blir folketomme med lettere spillerom for kriminelle. Uten byplanlegging ville vi få en mer harmonisk blanding av bebyggelse, næringsliv og uteliv med en jevnere strøm av folk til alle døgnets tider og vanskeligere forhold for kriminelle.

Innføring av eiendomsrett vil løse flere konflikter i byene;

Narkomane, gatemusikanter og gateselgere jages fredløst fra sted til sted av politiet. Adgangskontroll virker begge veier: Uønskede individer kan vises bort, men samtidig kan avvikere finne seg ett fristed ved å gjøre en avtale med en eier og være i fred for politiet.

En annen konflikt er åpningstidene. Utesteder pålegges å stenge tidlige av hensyn til den offentlige orden. En bedre løsning er at utestedene selv holder uroen virksomheten skaper på et akseptabelt nivå.

En tredje konflikt er forsøpling. Forsøpling kan være avtalt, slik det er på restauranter, eller forbys.

Fordelen med å overlate mer ansvar til det sivile liv via eiendomsrett er at de berørte kan håndheve det sikkerhetsnivå og reglement som anses økonomisk og praktisk passende. Med dagens statlige løsning er de praktisk avskåret fra dette. Sikkerhetstiltak blir best om de planlegges og gjennomføres lokalt av de berørte.