Athens IS lost - Europe IS deadly ill!

Comment to

http://www.spiegel.de/international/europe/0,1518,814523,00.html

The only way to really save Greece is to let it default, and then subsequently help it restructure and start to grow.

But the whole debacle is not about Greece, it is about the EU as such.

A few months ago everybody was running screaming towards the abyss.

As a miracle "Mercosy" managed to stop the crowd!

Everything that has happened since then has been aimed at letting the economic crowd get used to the fact, THAT EVERY INVESTOR IN BONDS FROM THE SOUTHERNEUROPEAN COUNTRIES IN THE END MUST ACCEPT A WEALTH REDUCTION ON THEIR HOLDINGS, and that that is PREFERABLE to everybody loosing everything in a European break up or melt down.

Although I am a left leaning Scandinavian I am a great fan of Angela Merkel. No other living politician would have been able to calm things down.

The sad fact is never the less that everything that has been done so far has just been gap stop procedures.

The fundamental problem, that Europe by and large are uncompetitive and therefore will be unable to claw its way back to prosperity, has not been addressed yet.

To understand what fundamentally has gone wrong go to

http://unifiedscience2.blogspot.com/2011/02/deeper-causes-of-downturn.html 

Comment to: The Yin and the Yang of Corporate Innovation

http://www.nytimes.com/2012/01/27/technology/apple-and-google-as-creative-archetypes.html?ref=stevelohr

Thank you for the above mentioned introduction to present day "state of the art" innovation.

The very successful fundamental dynamic mechanism of the capitalistic system is founded on the systems ability to motivate the individual through (economic) self interest.

Internally though firms never the less expects employees to perform optimally and creatively for a fixed salary and pep talk! That is parallel to how the feudal system was functioning!

As long as a firm is spurring enthusiasm and attracting the best and most creative employees such a model functions well.

When firms (however great) no longer do that, even massive investments in R&D do not pay off! As can be seen with GM, IBM, Microsoft, Nokia - and so on. 

As you will see

http://unifiedscience2.blogspot.com/2011/02/single-algorithm-can-save-western-world.html

 there exists a much more dynamic approach which takes several crucial human factors into account.

Firstly the present mental barrier against giving the creative employees a fixed % of the proceeds derived from their creative achievements has to be overcome.

The apps. marketplaces are primitive forerunners of such a development

Secondly the inventive process has to be split so that the creative do not have to bother with developing their ideas into products or marketing those products.  

WHEN THE FUNDAMENTALS ARE WRONG THE CONCLUSIONS WILL BE WRONG TOO!

Comment to
http://www.nytimes.com/2011/11/29/opinion/nocera-germany-cuts-off-its-nose.html?_r=1

It is fine to learn from past historic events, but unfortunately this is not a 1930tieth crisis and the major problem is not the most indebted Southern European countries but the fact that all the Old Industrialized Countries continue to be uncompetitive. In that situation there is no chance of a speedy recovery and to continue to prop up everybody and everything will just weaken those countries that we expect to help us out of the crisis some time in the distant future!

A part from the fact that this crisis by now has lasted almost 4 years where the suggested remedies have been tried and retried without producing the desired results it is important to understand the real cause of the malady.

http://unifiedscience2.blogspot.com/2011/02/deeper-causes-of-downturn.html

There is a lot of focus on what we should do in the present disastrous situation, but it is conspicuous how little energy is used to understand the fundamentals. It is just assumed that we have been overspending!
It is thought inspiring that on the basis of that assumption the best remedy should be to continue spending by bailing out even the most inefficient countries that furthermore have cheated!

By now it should be obvious that something is fundamentally wrong. Up to the point where the crisis emerged the Old Industrialized Countries had had growth rates of 2 – 4 %. If all the unveiled “overspending” shall be accounted for it will amount to much more than 4 % a year since the last dotcom crisis! The implication of this is that ALL the Old Industrialized Countries have had huge and growing deficits for years. Such deficits does not build up in ALL the Old Industrialized Countries at the same time without there being a fundamental flaw!

Wishful thinking!

Charlemangne  http://www.economist.com/node/21540244/comments#comment-1141128 
writes as if Angela Merkel is in a position to save the Euro. Angela Merkel lives in one of the truly democratic countries where it is the Bundestag and the citizens that decide what is best for the country.

Although stopping the absurd propping up of unwilling and uncooperative Southern European countries will have grave consequences, it is hard to imagine that the German electorate will sacrifice their own rather stable position in order to continue the dubious attempts to maintain a status quo situation.

It is not only the South European countries that are in trouble. All the old industrialized countries including Germany are in trouble. Apart from the present attempts to construct a viable solution through a new treaty, the focus should be redirected from the “howling and screaming money industry”  to  the much graver problem, namely that the old industrial countries no longer are able to earn enough money to maintain their present socio economic position.

The fundamental and much graver problem, that even the best functioning European countries no longer are competitive, are getting too little attention.

The cause of the economic crisis has up till now primitively been explained as the result of too much spending, how can anybody be satisfied with such a primitive explanation?!!!

The economic crisis and the production crisis are in reality two sides of the same coin

    http://unifiedscience2.blogspot.com/2011/02/deeper-causes-of-downturn.html

until that is understood and accepted no real cure can be implemented!

Comment to: Four Things to Fix

http://www.nytimes.com/roomfordebate/2011/08/16/a-chance-to-reshape-the-economy/four-ways-to-fix-the-economy?emc=eta1

Wishful thinking!

If insight and good will were the dynamics of development, the human race had reached the perfect nirvana ages ago!

It is important to have visions and suggestions, but the driving forces of society are fundamental mechanisms. Even if you understand those fundamental mechanisms, it is only possible to change the direction of society if that mechanism is in a balanced state where a small push can make it alter cause.

In France at the time of the Revolution the feudal forces had been so oppressive that it resulted in a brutal revolution, and short after a regression to dictatorship (Napoleon). 

In Denmark the intelligentsia of the nobility saw what was coming and started a process where the land laws were changed and the peasants freed from serfdom. No violent revolution took place and instead a modernisation process was started leading to one of the most societal advanced countries in the world. 

The positive development was instituted by changing the fundamental flaws of society and subsequently a dynamic process developed where a massive popular cultural and educational ideology contributed to changing the feudal society to a modern democratic society. 

Had the fundamentals of  landownership not been changed to the satisfaction of both the nobility and the farmers, a smooth and non violent transition would not have been possible.

To understand the fundamental mechanisms of today go to.

http://unifiedscience2.blogspot.com/2011/07/origin-of-long-term-growth.html

http://unifiedscience2.blogspot.com/2011/02/deeper-causes-of-downturn.html

http://unifiedscience2.blogspot.com/2011/02/single-algorithm-can-save-western-world.html

Comment to "Who Is to Blame if Shares Continue Steep Declines?"

http://www.nytimes.com/2011/08/15/business/whos-at-fault-if-stocks-continue-to-plummet.html?_r=1&ref=global

Thank you for an informative and well written article.

I will join the blame chorus!

My blame falls upon the prevailing economic understanding.

The theories have not been able to mirror what has happened in the real world. Consequently the economic indicators did not flash warning lights as the gap between “paper value” and real (production) value gradually widened.

Of course somebody exploited this by selling various sorts of junk, but had the economic understanding and the economic indicators been functioning there would not have been an overwhelming amount of loos cash that chased ever higher returns, returns that were without connection to the rate of real value creation.

The old industrial societies have gradually lost competitiveness ever since globalization started.

We look at share prices as indicators of national economies, but the firms and their shares are international!

It is today scientific documented that only those firm activities that are situated in a country benefit that country!

The basis for prosperity has seeped away from our national economies!

For a deeper understanding of this read:

http://unifiedscience2.blogspot.com/2011/02/deeper-causes-of-downturn.html

http://unifiedscience2.blogspot.com/2011/07/origin-of-long-term-growth.html

There are still an awful lot of loos “paper value”/money and debt out there, and as long as interest rates are kept unrealistically low the markets will continue to gyrate wildly.

Continuing to keep interests artificially low is the same as robbing ordinary people and the comming generations.

No sane doctor would just continue giving blood transfusions without doing anything about the injury that causes the continued bleeding!

Real remedy must come from Western politicians!!!

A comment to
http://www.economist.com/node/21525900

Real remedy never comes from politicians.

Politicians can change course, politicians can stop holes, but to ask politicians to remedy what the market and the academics cant find solutions to, is to admit that there are no real remedy available.

At present there are two options, the politicians can continue making stop-gap solutions as they have done ever since the crisis started in 2008.

The second option is to stop repeating the mantra about a temporary crisis which will pass. (The crisis is now called a new crisis, a “double dip” which implies that “we know what this is all about!)

When it has dawned to even the feeble minded that this is not a monetary crisis but basically a production crisis, it will be time to reconstruct the legislation 

http://unifiedscience2.blogspot.com/2011/02/single-algorithm-can-save-western-world.html 

so that the western societies again can become competitive.

In the meantime the biggest challenge will be to keep society in balance and that is not done by bailing out financial firms but by balancing all of society.

What are looming heavily in the horizon are political upheavals when the middleclass is squeezed enough!

The only way of keeping the societal balance will be by letting inflation run until the western countries are in balance with the international community.

Hopefully the new legislation stipulated in 

http://unifiedscience2.blogspot.com/2011/02/market-for-ideas-within-firms-or.html 

will start to generate the jobs and the competitiveness needed if we are to avoid a 3 world war between the old industrialized countries and the new industrialized countries.

Remember that in democracies it is the (angry) majority that rules. Of course a war will not solve anything, only postpone the inevitable decline (as did the 2nd World War to the British Impire), but tell that to a dissatisfied, angry and agitated electorate!

 http://unifiedscience2.blogspot.com/2011/02/deeper-causes-of-downturn.html