Archives for category: 1989 and the Global Financial Crisises.

Well… Money doesn’t get spoiled as easily as bananas do…

On further consideration, money can be understood as a tool with many uses.
Hoarding, for instance. Bananas, among other things …

And, as with all other tools, the responsibility for its use falls squarely on the user, not on on the tool itself.
Tinkering with the tool won’t change that, ever.

My point being that monkeys would also hoard bananas if bananas were hoard-able.
There’s nothing wrong with that. For as long as the hoard is meant to feed the hoarder till the next crop, of course.

Hoarding is bad only when done for its own sake.

And this is something for philosophers to study, not for scientists.
The teachings of the Chicago School of Economics had been very scientific yet following them was what brought us where we are now. Into a very uncomfortable cul-de-sac…

Blindly following them… mislead precisely because of their scientific nature!

“The most common name this group is given is Gen Z; I call them Generation K, after Katniss Everdeen, the determined heroine of the Hunger Games. Like Katniss, they feel the world they inhabit is one of perpetual struggle – dystopian, unequal and harsh.”

Each successive generation has to make do with the situation they had inherited from the old one.
And whatever it ‘builds’ on top of that will constitute the starting point for the next one.

We – those born between the early 50-ies and the middle 70-ies, and who constitute the vast majority of today’s significant decision makers, have had a ‘once in the entire history’ opportunity. The fall of the communist regimes almost all over the world had lifted many of the ‘practical’ hurdles left around from the previous generations. We had been freed from all limitations but those we’ve imposed – willingly and/or unwittingly, upon ourselves. So much so that Francis Fukuyama had described the situation as ‘the end of history’.

We’ve been, indeed, the first generation in modern history – or ‘contemporary’?!?, which didn’t start a ‘wholesale’ war… if we discard the ‘war on terror’! Or that ‘on drugs’…

The point being that we’ve failed. To use the huge opportunity presented to us.
By Lady Luck… our fathers had done nothing but continued the traditions imposed upon them by their fathers…

We, on our turn, don’t have that excuse.
We didn’t have had to continue anything… Conditions had been perfect for a fresh start!
Yet we had ‘preferred’ to ‘carry on’… As if we had learned nothing from what had just happened!

Fukuyama himself, after having been lionized by his peers and then contradicted by Clio, had ‘relapsed’.
After prophesying that ‘liberalism uber alles’ he had recently attempted to explain away his failure using ‘the need for recognition‘.

In fact, he wasn’t exactly wrong in 1989 – we did have a chance to move in that direction, nor is he totally off the mark now. ‘The need for recognition’ did play a role in our failure.
Fukuyama – along with the rest of us, had made the capital error of over-trusting his own intellect.
Of convincing himself that ‘the world’ can be understood.

Hence predicted.

And who has to make do in the present situation?
To deal with our failure?

As always, the next generation!
Our children…

For the first time in 100 years, Britons are dying earlier.

40 years ago, the car manual was about how to adjust the carburetor.
Nowadays it starts with a stark warning. “Don’t drink the cooling liquid!”
Then it teaches us how to use the infotainment system and how to adjust the electric seats…

In those times, most of us – regardless of what country we lived in, had nothing fancier than a washing machine. And a TV set capable of receiving no more than 12 channels. But we had a lot of time to spend with our friends and relatives.
Nowadays, our houses are choke full of appliances designed to make our lives easier… So we break our backs working to pay for this paraphernalia! And we get so tired in the process that when we finally get back home, late at night, we’re so exhausted that we cannot do anything else but watch one of the 200+ channels our cable feeds into the huge TV which dwarfs everything else in the living room.

Meaning that we wrap up most of our days watching yet another mind numbing news-bulletin… which informs us about how bad tomorrow will be… unless we follow whatever advice that channel is determined to ‘sell’ to us!

You live in a house.
And need a gardener.
You find one.
Because you don’t know him, you hire him for only a year, with the option to renew.
When the contract is due to renewal, you attempt to make up your mind.
The guy wasn’t that bad – for the garden, all things considered, but you’ve learned that he doesn’t brush his teeth and he occasionally beats his wife.
‘What the hell!. I seldom see the guy and I don’t know his wife! Why bother finding another?’

You live in a walled in community. Which is operated as a condominium.
The community needs a gardener.
In the area, there are only two agencies which provide gardeners. Each of them sends somebody. One of the guys is selected.
After one year, the community organizes a meeting to decide whether to extend the contract or to hire another guy. The garden is, more or less, OK only the guy is rude. So much so that he had alienated some of the owners as well as some of the neighboring walled-in communities.
The caveat being that the guy available from the other agency is deemed unreliable by those who would like to continue with the current one.
The owners are so divided that some of them no longer pay their dues while some of the opposition picket the entrance gate.

You live in a village.
You need a mayor…

In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom.” Milton Friedman, 1970

Between 1776 and 1970 the world had leaped forward. Technologically, economically and socially. Not only that we’ve managed to learn so much about the world and to produce immense wealth but we’ve somehow managed to ‘spread around’ the results. The proportion of people who had improved their fortunes had grown constantly during the entire period.

The majority of Americans share in economic growth through the wages they receive for their labor, rather than through investment income. Unfortunately, many of these workers have fared poorly in recent decades. Since the early 1970s, the hourly inflation-adjusted wages received by the typical worker have barely risen, growing only 0.2% per year. In other words, though the economy has been growing, the primary way most people benefit from that growth has almost completely stalled.” Jay Shambaugh, Ryan Nunn, HBR

Isaac Newton hadn’t invented gravitation. He only ‘noticed’ it. Put it in words.
Adam Smith hadn’t invented the free market. He had noticed how it used to work and opened our eyes about it.
For what ever reasons, enough of us had chosen to close those eyes back. And have reached the conclusion that ‘greed is good’.

Milton Friedman was both horribly wrong and exactly right.

He was right in the sense that he had gouged correctly what the ‘general public’ wanted/was ready to accept. “in accordance with their desires, which generally will be to make as much money as possible

He was horribly wrong in the sense that he had perpetuated Marx’s error. Karl’s, not Groucho’s.

Money isn’t everything. Life beats it to the post.
Profit is, indeed, essential. Only it is nothing but an indicator. About how efficient a corporation is.
Meanwhile the role of a corporation is to accomplish – as Friedman himself had dully noted, the will of the shareholders.

The problem arises from the fact that ‘near mindedness’ blinds.
If/when both shareholders and management have nothing but ‘money’ in their scopes the market actually looses its freedom.

Economic agents no longer converge towards the market to solve each-others problems – like Smith had noticed, but to ‘make money’.

Not the same thing. Not by a long shot.

Society exists in two forms.
One in which the individual members have a certain amount of respect towards their peers.
And another one, where John Doe doesn’t give a damn about anybody else. Or even hates everybody else.

The first kind evolves. People talk – and listen, about their problems. Then find solutions.
The second experiences revolutions.

When too many individuals have never had anything ‘substantial’ on their name, and feel they have no chance of improving their lot – because ‘everything’ has already been appropriated by a small minority, that society has a marked tendency towards communism.

Sometimes, too many individuals see their fortunes go down the drain, for no matter what reason. From there, only God knows how, those fortunes go straight into somebody else’s pockets. Any society which experiences something similar has a marked tendency towards fascism.

The problem with both communism and fascism being that they have always failed. Crumbled from within before being pushed into the precipice by those who has seen the situation as an opportunity. As an opportunity too good to be wasted.
Then, if neither had ever survived for long, why are so many people who continue to profess either? So many intellectuals who try to convince their audience that …

Well…, first of all, because ‘intellectuals’ are nothing but regular people. With a twist! Not only that intellectuals have the same ‘passions’ as the commoners – ‘greed’ being the most intense, but they also have a very good opinion about themselves. Hence too many of the intellectuals consider that they are the ones who should be in charge. That they are the ones who know what everybody else need to do if they want to live comfortably.

In a nutshell, too many intellectuals fall into the trap of considering themselves infallible. And ‘deserving’!
Hence those would do everything needed to get what is rightfully theirs.

If a society is ripe for communism, one/a bunch of the ‘intellectuals’ I described above will, for sure, drape themselves in a communist flag.
If another society is ripe for fascism, in a similar manner, one or, probably, more ‘intellectuals’ will drape themselves in a fascist flag.

It’s up to us, who’ve experienced at least one of them, to blow the whistle.
And it’s up to the rest to listen…

One way to interpret Maslow’s pyramid of needs is to consider that an individual might become a full fledged human only after having climbed to the ‘fifth floor’.

The key word here being “might”!

Because nothing mandates that all those who have overcome the material constraints of this world and have successfully integrated themselves in the social milieu will ever become a ‘better version of themselves’.

Need examples? Have you ever heard about people like Bernie Madoff, Martin Shkreli or Myron Scholes?

‘But the last guy, Myron Scholes, was recognized by the Nobel committee as a world class economist!’
Exactly! What more could a person want? Money, fame, worldwide recognition… he was on the fast track to becoming whoever he wanted…
Yet he had chosen to associate himself with one of the deepest financial black-hole ever… Knowingly, unknowingly… doesn’t matter!

‘But what does it mean to become a full fledged human?’

To be free. To consider them-self a free person and to be recognized as such by their peers.

‘Scholes wasn’t a free person?!? Shkreli?!? Madoff?!?’

Nope. Neither was free from greed!
Greed for money, power, public recognition… or any combination thereof.

‘But “greed is good”!!! Isn’t this the current mantra? Aren’t we all driven by this sentiment?!?’

First of all, greed is not good. Read Adam Smith’s Theory of Moral Sentiment.
But yes, we are bombarded from all sides with this notion. That ‘greed is good. That greed is the engine of capitalism, which capitalism has brought us here. Where it is good.’

Yes, here it is indeed good. Only for fewer and fewer of us. It used to be better but since ‘greed has become good’ every ‘bump’ we encounter along the ‘free market’ road has proven to be quite a challenge. An insurmountable challenge for more and more of us.
An unsustainable arrangement. For us, as a community.
And yes, capitalism is the best economic paradigm to date. Only, as all paradigms, it has to be put in practice. By us, the people. In the right way. In the free market way.
Only we are no longer free! Those who cannot escape their sentiment may not consider themselves free. And too many of us have been enslaved by their greed!

‘But greed is written in our DNA!’

Indeed! So is the urge to have sex!
Only we’ve managed to teach ourselves, community wise, that while sex is good, rape is bad!
Not so long ago, rape was more or less condoned. ‘She must have enticed him’. ‘What was she doing there at that hour?’ And so on…
Nowadays, rape is shunned. By most of us.

Only we still live surrounded by rape culture. Seeped in greed.

Will we ever learn?
Will we, as a community, ‘actualize’ ourselves?

US Initial Jobless Claims, provided by the US Department of Labor, provides underlying data on how many new people have filed for unemployment benefits in the previous week. We can gauge economic conditions with respect to employment. As more new individuals file for unemployment benefits, fewer individuals in the economy have jobs. For example, initial […]

The US Unemployment Situation is Stunning — ASYMMETRY® Observations

We make reality.

Each of us: I, you, she, he, brings their individual contributions.
And the end result, our reality, is defined by the quality of the interactions between us.

The new reality, ours, being the ‘place’ where we, the ‘beneficiaries’ of the interactions between us – simultaneously cooperating and competing free agents, and the previous reality, will have to lead our lives.

Until we’ll change it. Again.

Charles Darwin gave us “On the origin of Species”.

We’ve summed it up ‘the survival of the fittest’.
And behaved accordingly. Including some of those who should have known better. “The world of the selfish gene revolves around savage competition, ruthless exploitation, and deceit, and yet, Dawkins argues, acts of apparent altruism do exist in nature.

I reckon all of you know – or at least have heard of, Richard Dawkins.
Compare his celebrity with the relative absence from the public scene ‘enjoyed’ by Ernst Mayr.

And what’s so special about this Mayr guy?
‘Evolution is not as much about the ‘survival of the fittest’ as it is about the ‘demise of the unfit’ ‘

Get it?
In fact, there is no such thing as ‘the fittest’ when we speak about evolution. ‘Fit’ is relative while evolution is a process. Fit is about ‘this moment and this place’ while evolution is about the ability to adapt. To change when needed.

And what has any of these to do with “exploring the consequences of our limited conscience”?

Well, it was us who had interpreted Darwin’s ‘Origin of the Species’ as ‘the survival of the fittest’ individual. It was us who had lionized Dawkins’ ‘Selfish Gene’ and left Mayr’s ‘True’ Evolution in relative darkness…

To sum it up, it is us who are are obsessed with something we call ‘success’.

It is us who keep forgetting that the mighty dinosaurs – maybe the most ‘successful’ animals ever, had been the first to disappear when ‘shit’ had struck. And that is was a meek mammal which had inherited the Earth.

It is our success craving conscience which is highly biased. And I’m not at all sure this is a good thing. In the long run, I mean.

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