April 23, 2015


One key issue during the immigration era

If you prefer a pdf-version: http://www.lilliput-information.com/growth and immigration.pdf

Economic real growth:

Welfare must be financed either collectively through taxes or by private insurance, while the countries must be able to maintain and even develop their technological skills, because welfare funding sources originate from earnings. The value of the profitable production creates wage basis and tax basis, of which welfare can be funded either privately or collectively. There are no other sources.

More production to meet demand for consumption is the problem, it appears to be valid. More production requires more resources. Germany is not self-sufficient in energy resources, the UK is not in agricultural products and food, Norway has focused mostly on financial investments and homely infrastructure improvements, but invested very little of the wealth in real production outside the oil industry. What you are not self-sufficient must be purchased abroad. With econo-mies in a near standstill, there is no solution in sight that can be exchanged enough goods and services to be able to support twice as many welfare payments and by no means 3-4 times as many as in Germany and the UK.

Real growth in Norway, Germany, UK and Denmark was respectively 0.6, 0.5, 1.7 and 0.4 per cent. in 2013. Real growth is the growth in the profitable production adjusted for inflation. In the EU28, the overall real growth of 0.1 per cent. in 2013. And in the first quarters of 2014 even real stagnation.

Can sufficient difference or margin be realized by a lower level of production, implemented production in earning companies might continue at the lower level, also in terms of employment, if the best alternative is worse. The latter is not the case when we look at the situation in most of the welfare-ridden European countries. Passive return outside the production line or production abroad may be preferable. Therefore, the purchasing power flows to private capital outside the production line or out of the country. The labor-intensive company relocate in these years, and it did not come as a surprise here in recent years. It began with the increased international competition already from the end of 1970s. US and UK took the first steps to adapt to this inevitable development.

Businesses/companies do not invest due to price margins, but due to sufficient profit-making price/cost margins. The problem is not one-dimensonal, but at least two and often multi-dimensional. The economic reality is that it is the manufacturers who drive the economy forward in any country, the savings are con-sidered to be fuel in the process. Private consumption and government consumption produces nothing but maintenance of production equipment with no new initiatives, state debt (especially in a foreign dependent country like Denmark) and waste.

What consumers give out or expect from the future make no walk in the economy, but consumption maintains as mentioned the apparatus, possibly to sleep; the second has never happened and will never happen. Sometimes we hear economics commentators report that the cost of private consumption represents so many percent of the total demand. It has no other meaning than that private consumption rises even more damage to the immediate funding problems countries face with and draining the undertakings to the capital. The country’s leaders are still of the opinion that their initiatives will work regardless it never happened.

October 1996: The 1000 major Danish companies are planning to invest 45 bill. kr. and create 50,000 jobs outside the country for the next 5 years (1997-2002), reported in the study done by Monday Morning Weekly. It was the very beginning to discouragement at home. There are worrying feature at all levels of the country’s competence pyramid. Denmark to focus on creating jobs with high knowledge content. There is no future in low-wage production and ditto jobs. They will greatly move abroad caused by globalization of markets (ie competition) , as it is impossible to protect themselves against with anything other than by trade restrictions. It was 18 years ago. Workers of free travel for work is almost entirely relevant in Europe. High-IQ immigration from Southeast Asia began to USA and UK in the 1980s, and there is no more to get.

”30 percent of school leavers do not get a professional education and training (1996). Large unemployment. Criticism of content and effect of the adult educations. Increasing criticism of the folk school results. High-tech and knowledge-intensive environments is not only created in businesses, but the basis is created in the research, vocational schools and already in the early years of teaching. Knowledge intensive jobs is an end product where the quality of what goes on in preschools and elementary school, also plays a role, and in what can be called Denmark’s competence pyramid. It beginns down at the pre-school, creches, then comes Primary school, so working without business skills training, upper secondary and vocational education, higher educa-tion, public and private research, production methods in business and finally business products” (Monday Morning Weekly wrote)

November 5, 2014 survey shows Entrepreneur Of The Year, the number of companies with strong growth in Denmark has fallen by 16 percent in one year. It’s the same companies that create new jobs.

The basic problem is that we simply have no other nature granted in Denmark to do good than salt, lime, clay, a little oil, a little gas, a little farming and beaches if we do not educate ourselves by the market and IQ dictates and provides production results of our knowledge. Everything else should be purchased abroad. But sooner than many imagine it will not do to buy raw materials and other things abroad because we have become so expensive even with our goods and even much lower educated compared to earlier when goods prices are taken into account, fewer and fewer will buy the products that come out of it from here. Denmark has simply been dormant (with a few notable exceptions in business) since the beginning of 1980s under the successive governments that have promised this and that; Unfortunately, without really knowing the consequences of what they were doing prematurely and what they did not do in time.

The real economic downturn (the lack of growth in production) due to competition on wages, other labor costs and a sea of charges, leading the labor-intensive productions away to low-wage areas or to knee and closure. Since we can not compete in the same productions with wages that are 8-10 times lower than under the Danish taxation-welfare-wage level, was a conversion of programs, productions and industries essential. This situation of wage competition will be in effect for many years to come, and the transition has been neglected the first least 35 år.The tax base is simply being eroded while the reflag and closures continue with increasing speed. In addition a dominant immigration has been accepted from high-fertile low-IQ countries/regions, of which half or less than half are suitable for training and labor: The following percentages of the foreign origins are unfit for work and education in Denmark (DK), Ty (Germany), No (Norway) and in the United Kingdom (UK):

                                                                            Percentage of foreign origin not skilled for work and education
1 January 2014 48.5 to 52.8 per cent. of all immigrants and their children in Denmark had a foreign origin in countries with less than IQ90 on average (depending on choice of birth rates in the projection model for IQ). That is, more than half are not suitable for education and work in Denmark. With IQ average of 90 or less in a group, regardless of ethnic background less than 50 per cent of the individuals in the group is suitable for education and work demonstrated by Arthur Robert Jensen (1923 to 2012). With the new projection of 6 April 2015 and proposed birth rates (CBR) of Alsagerskolen: The percentage of foreign origins with IQ less than 90 grew from 39 to 59 per cent. from 1980 to 2015 and continues steadily to 66 in 2058 and 71 per cent. in the 2072.

Government debt has to be settled at least kept strictly under control in Germany, England and Denmark, and in addi-tion growing aging problems to become bigger and bigger throughout Europe with additional public expenditure on older upheld the approach to the working ages increasingly deteriorated due lack of births. The problem with the lack of births over Europe was created by pervasive welfare systems elitist promoters (not citizens). Since the effects of which turned out to mainly lack of population reproduction, the same responsible felt the need to consider the most fertile immigrants to come. The ideology promised just the elite that education was simply a matter to anyone who came here.

A country like Norway might make such an idea real due its oil fund and the country’s huge outstanding debts, but it did not. Every country has to create an active future, a dynamic business and educational development with demand generation and earnings purposes. Otherwise welfare can not be financed in the long run. UN warned against the taxation financed higher education with free access already known in Danish Perspective Plan II in 1974. The listed problems, Europe cannot solve at the same time by changing some of the items on the finance laws, cut a little here and there, order some more payment instruments issued and thus create nominal or only inflation growth, so the increase in production display similar to real growth, but is nothing more than nominal growth equivalent to inflation or less. This will just worsen the problems and slow down/make it impossible to do any conversion. It is the traffic that is driven so far in this country. Not only Denmark is threatened by the killing stagflation (stagnation and inflation at the same time), but also the other European countries with a few exceptions. With negative growth for three consecutive years, while the go-vernment debt increased with the increase in domestic consumption has been running and was started with the so-called financial crisis as a result. The expansion must therefore be ensured by production life to get a solution that is not tempting inflation-prone.

The production process in all its ramifications consists of a myriad of complex stages in earnings. The total combined cost of all these stages/levels of labor exceeds the cost of consumption in the traditional sense significantly. As an illustration, one could imagine the value of the total fixed capital stock gradually put into final consumption; it will only take place over several years. US consumer spending was estimated at only about 8.5 per cent producers’ cost of production factors and other producer goods already a lifetime ago. That is, almost 12 times greater than private consumption (here almost 12 if 8.5 per cent carefully assumed). What is spent on consumption – private and public – come from the production, while production comes from capital (including the cost of factors of production, in which wages would include central), as in the first part comes from savings. Therefore, it is the case that more savings the more ca-pial is formed and accumulates in order to produce, and there can then be consumed more. One could abide by the following fact: government spen-ding and private consumption do not stimulate, but drain the economy. This is true whether you find these expenses and/or consumption righteous.

EDP created international competition from the 1970s – a comparable if not similar competition upheaval in the 1800s was better prepared.

The agricultural crisis in the 1800s was in one way bigger and more important for Europe because absolute dominance of agricultural activity in the occupational structure at the time when the cheap grain from the United States, because the hard steel-manufacturing process via the bessemer method and the puddling sub-process became possible, resulting in super sturdy rails and thus just because of that far low freight rates from the US Midwest in 50-tonne trucks for disembarkkation ports. 1800s European agricultural crisis was also larger than we today might imagine, but at the same time the initiatives for the necessary restructuring chan-ges (including for livestock production) in Denmark were taken by the farsighted/lucky leaders who began agrarian reforms in the 1700s. This time the responsible has not been willing to listen to farsighted and insightful, but guided blindly by an ideology devoid of rational sense.

Inventions promote living conditions – ideologies hinder them.

J. E. Vig, M. Sc. (Economics)

11 December 2014 and 6 April 2015

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