Sunday, October 05, 2008

The Rightness of Incrementalism by Louis Evan Palmer

It's October 2008 and we're in the midst of another financial crisis. If we count wars as social crises then it's safe to say, that crisis mode is our norm. Although its impact varies.

One of the key characteristics of a financial crisis is an obvious imbalance usually in the form of an excess of one type or another. Too many sellers, too many buyers, not enough, too much product, etc.

The incrementalism I'm calling on is not just gradualism in terms of economic growth but an anti-revolutionary brake on any rapid expansion. That is, even "good" expansion which seems favourable should be measured out. We currently have all kinds of controls and visible and invisible brakes on various types of activities. This would bring that into the open and cover gaps and make it work for the benefit of the many.

We should not allow events, specifically financial events, to go their own way. Up 100%, down 300%, etc. Whatever the so-called free market dictates. It would more like up 5% or down 5%, closed for the day.

We put controls in place to regulate the numerous flows in an advanced economy. This is nothing more than prudent management. Why should we allow speculators to move vast amounts of currency and financial instruments around in a given economy or among nations and larger economic units at will?

Prudence and common sense tells us that we should not allow financial instruments to be created or allowed to enter our economy unless they are well understood - especially in their negative implications. The starting position is that a given financial instrument is probably going to have a negative effect on the ecomony over time. The onus would be to prove that this is not the case. It might be a good idea to have the creators of these instruments, if they are approved for use in a given economy, to post the equivalent of bonds that they forfeit if damages are incurred. Again, we should only allow a small number of new instruments to enter the economy with controls on how much value they can have, they can affect, etc.

Secondly, if they are permitted to enter a given economy, it should be done in a gradual and controlled way. It should also be controlled in terms of its ups and downs. We should only permit a small percentage uptick or downtick in individual stocks and indexes. If that gets exceeded, trade in that stock or index is over for the day.

Flows of currency and other financial instruments should be taxed. In addition, the flow size and its variance from day to day and week to week should be stipulated.

This is also meant to apply to wages & prices although this seems to be what is happening already to wages right now.

This is not as difficult or intrusive as it might seem. It's going on now except it's being dictated by a much smaller unaccountable group of hedge fund managers, high bank officials, government & government agencies and criminal & intelligence organizations.

Almost everything would be the same except with leeway for only small specified upward or downward movements in price, supply, and other relevant factors. The economy changes in a healthy controlled way.

Incrementalism would also apply to the money supply, taxes, government expenditures and the whole gamut. If strenously implemented, this would act as a tremendous brake on war and military expansion as they both need rapid expansion of the public debt and spending. This would also act as a brake on criminal & black-op intelligence operations spending and hopefully by extension, their extent and power.

The thing about incrementalism is that it can be implemented over a long period if that's the only way to do it. Let's bring it to the fore and make it work for us in building stable steady peace-based economies.

The Rightness of Incrementalism, Louis Evan Palmer, The Way It Can Be, --------------------------------------------------------------------------------------------------------------------------------------------
Copyright 2008 Louis Evan Palmer lives in Ontario Canada. His short stories have appeared in numerous publications.


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