Irrefutable proof the business cycle exists

[Kriminal99]

Consider the physical

 

What is rock bottom for America? America cannot hit a rock bottom that equates to the situation in a third world country. Why? Because we have capitol. Imagine every company went out of business, and every person was unemployed. (of course this point would never be reached but this is the best possible justification of the actions of someone like obama). We are left with a ton of capitol. Since there are no businesses and no one is using that capitol, the capitol is cheap. What happened to the money that was previously in the system? It didn't just evaporate. Someone has it. Who? Whoever has it, they got it using some degree of intelligence. Thus there is some evidence they are equipped to make use of the available capitol. This point is never going to be reached in reality, but it is proof of the business cycle. It shows that all counter arguments involve imaging the bottom of the cycle far higher than it can be, and then objecting that the bottom of the cycle was passed.

 

Obama's economics

 

It's my belief that modern economics rejects the business cycle because it defines the bottom of the cycle as the thing we want to avoid.

 

The bottom of a business cycle is supposed to be a rejuvenation period for the economy. Old stale businesses that have adopted inefficient strategies and behaviors are supposed to be destroyed. Perhaps american car manufacturers SHOULD go out of business because they make bad cars inefficiently. But the government doesn't want them to because they employ a lot of people.

 

Guess what? Those people getting fired and retraining for new jobs or new more efficient companies (or perhaps founding them) is part of the business cycle in "leave it alone" economics. You can't save their current jobs forever - all the government is doing is prolonging the inefficient use of resources. They can lose their jobs now with a much more efficient economy resulting, or we can subsidize the inefficient so they can develop even MORE inefficient behaviors with the conditioning that their prolonged existence doesn't depend on their efficiency.

 

That means for the same amount of american resources, GDP and standard of living is lower in the long run because we still have inefficient companies that were saved by the government.

 

Business hit a downward efficiency spiral the moment they become successful

 

When a person starts a new company, everyone is ready to jump ship at the drop of a hat. Everything the leader says is considered based on it's logical value and not his social status (which doesn't yet exist). Brilliant leadership is required to mold the less experienced or successful people a new business has access to into perfectly efficient workers - and that leadership ability extends into making the most of more experienced workers when they become available. All of this changes for the worse once a company becomes successful.

 

With capitol that can absorb some shock, it is no longer necessary to squeeze every last drop of efficiency out of the company. People are more trusting of the leadership conditioning said leaders to be less vigilant in their thinking. More established workers are available lessening the motivation to remold them into perfectly efficient workers. etc etc.