More on fundamentals of demand side economy and its planning?
Demand side economy is fundamentally, population and its standard of living. We can grow by child birth, and we can grow by going to higher standard of living.
Child birth is the fulfillment of life itself. Without children, life is empty. We are going back to 2 and 1/3 child per family average as in the 1950s in our present planning. Unfortunately, the sex revolution in the 1970s have permanently damaged our structure in society, leaving us with a population growing older without much younger people. An army can not be raised without recruits of a certain suitable age group. Right now, children born just equal the death statistics by less than 1% more.
Higher standard of living is much easier to plan. It is the savings of time spend on chores. By vertically integrate products available, you can buy ready made products to save time in preparation of meals, in preparation of work and even in entertainment of yourself. Such progress is then maintained by "obsolescence and replacement then recycling" theoretical approaches.
The problem is then how to get smooth changes in the product cycles? Intel failed us by not being able to bring new products into the market on time. For that, the new economy suffered a little beyond the interest rate scare of the Greenspan foolishness. FEDs by not understanding economical planning, foolishly raised interest rate beyond the ideal 5% overnight discount rate. We ran that rate successfully back in the middle 1990s for two years without adjustment.
The answer to smooth, demand side economy planning is learning how to hold FEDs constant(no changes). Then obsolescence and replacement will be yearly(9 month plus 3 month of liquidation of inventory, to achieve market saturation; not a half-yearly project like Intel tried to do). The obsolescence and replacement theory was born out of the depression. When M.I.T. went to General Motors, in order to create a constant demand for automobiles, a plan to introduce new cars each year was born. Every three years, a totally new design had to be done. Car sales had been steady for 50 years in the range of 15-16.5 million units sold each year. This year, aided with a new design of crossover cars, sales are 17.5 million(estimated).
So, what else is new? Nothing much, except all the old case history of successes are being copied in this new economy. No invention of uncertainty is needed, so far so good is our report. |
