Common Sense versus the Sophistication of
Business and Economics: |
|
Nipawin - Thursday, July 18, 2002 - by: Mario deSantis | |
|
|
|
|
corrupt |
I have always been leery and perturbed about the sophisticated business gurus telling |
us how to think and do. I was working in the late seventies and early eighties 'under' the | |
Saskatchewan Health-Care Association (today's Saskatchewan Association of Health | |
Organizations) and realizing that their pension computer system was a corrupt word | |
processing system rather than a processing pension system. | |
|
|
too |
I asked why so much information requested on input forms was not entered (and not |
processed) into the pension computer system. I was told that the pension computer | |
system was too sophisticated for me to understand. Guess what, these same | |
business gurus further enhanced the sophistication of their computer systems with | |
the assistance of the big businesses SAP and SAIC and in the process, these same | |
two businesses contributed to the sapping and sacking of Saskatchewan.(2) | |
|
|
common |
We must remember that what we need is intelligent common sense and not the |
artificially, fragmented and sophisticated mind set of business and economic gurus. | |
|
|
money |
Kevin Phillips, author of the book "Wealth and Democracy: A Political History of the |
American Rich", writes today in the New York Times | |
"the United States economy has been transformed |
|
through what I call financialization. The |
|
processes of money movement, securities |
|
management, corporate reorganization, |
|
securitization of assets, derivatives trading |
|
and other forms of financial packaging are |
|
steadily replacing the act of making, growing |
|
and transporting things."(3) |
|
real |
What Kevin Phillips says is that our social and economic system has become too |
sophisticated and that it suffers from a disconnection of what is really needed as | |
creation of wealth; in practice, we don't create wealth simply by playing in the stock | |
market and we don't necessarily create wealth by playing with money either. | |
unduly |
Phillips reminds us that economics is basically the act of making, growing and |
transporting things; and economics is not the rationality brought into the Free Market | |
as implied by Alan Greenspan's well noted expression | |
"But how do we know when irrational exuberance |
|
has unduly escalated asset values, which then |
|
become subject to unexpected and prolonged |
|
contractions as they have in Japan over the past |
|
decade?"(4) |
|
they |
Few days ago I wrote an article and I criticized the relentless message of |
"our business gurus telling us how to learn to |
|
live with ambiguities while these same gurus |
|
along with their corporate and political friends |
|
would make the tough decisions at the right time |
|
and at the right place and at the right price, |
|
and in a cyclical and inconsistent never ending |
|
fashion."(5) |
|
coping |
So, the bottom line for ordinary people is to learn how to live with ambiguities while |
the gurus and their patrician friends do our thinking for us and dictate their inconsistent | |
and sophisticated economics. | |
gurus |
It was while navigating the Internet that I found the best description for our inconsistent |
and sophisticated economics science, that is "on the other hand economics." It is | |
really a laugh listening to the gurus and understand that they speak a lot and mean | |
nothing. So, as you listen to the business gurus don't feel overpowered by their | |
sophisticated speeches as their bubbling is no different from the bursting bubbles of | |
the stock market. | |
trade |
Lately, the Euro currency has overcome the U.S. Dollar and the following are two |
examples on how "on the other hand economics" explains this phenomenon: | |
i)American manufacturers are happy to see a weaker dollar as they can |
|
sell more of their goods abroad,(6) |
|
ii)on the other hand, Secretary Treasurer John O'Neill wants a stronger |
|
dollar so that more foreign investments can subsidize the U.S. |
|
economy.(7) |
|
USA |
We don't need a strong or a weaker U.S. dollar. What we need is just intelligent |
common sense. Is it right to have a strong U.S. dollar and rape the resources of | |
other weaker countries while the American economy continues to maintain a chronic | |
foreign trade deficit and while the American economy requires $1.1 billion of overseas | |
cash each day to finance its $400 billion deficit?(7) | |
devalue |
Non conformist economist Dean Baker expressed his intelligent common sense two |
years ago as he suggested that a lowered value of the dollar | |
i)would check the bubbles of the stock market, |
|
ii)would reduce the foreign trade deficit, and |
|
iii)would in the end |
|
provide better growth and stability to our global economy.(8) | |
References: | |
Testimony of Chairman Alan Greenspan Federal Reserve Board's semiannual monetary policy report to the Congress Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, July 16, 2002 http://www.federalreserve.gov/boarddocs/hh/2002/July/testimony.htm | |
Fraudulent SGI and the Sapping, Sacking and Downsizing of Saskatchewan By Mario deSantis, June 25, 2002 | |
The Cycles of Financial Scandal By Kevin Phillips, July 17, 2002, The New York Times http://www.nytimes.com/2002/07/17/opinion/17PHIL.html | |
The Challenge of Central Banking in a Democratic Society Remarks by Chairman Alan Greenspan At the Annual Dinner and Francis Boyer Lecture of The American Enterprise Institute for Public Policy Research, Washington, D.C. December 5, 1996 http://www.federalreserve.gov/boarddocs/speeches/1996/19961205.htm | |
Corruption in Corporate (North) America: the sky is truly falling, trust no one By Mario deSantis, July 12, 2002 | |
ANALYSIS-Could dollar slide vs euro, yen turn to rout? By Sumeet Desai, July 16, 2002, Reuters News Service http://www.forbes.com/business/newswire/2002/07/16/rtr662715.html | |
O'Neill backs strong dollar Treasury Secretary says euro has only regained half its original value in latest runup. CNN/Money, July 16, 2002 http://money.cnn.com/2002/07/16/news/economy/oneill.reut/index.htm | |
Double Bubble: The Implications of the Over-Valuation of the Stock Market and the Dollar by Dean Baker, Center for Economic and Policy Research, June 2000 http://www.cepr.net/columns/baker/double_bubble.htm |