EUROPE --- Repeating History: More World Wars?

Criticism of America is popular, ubiquitous and most-often well-deserved. And because it is the central actor on the world stage, it is also the easiest target.

But what of Europe? Remember - those people who consider themselves the paragons of a higher humanity, greater sense of justice and who seem to make the world's luxury goods eat equally well....

Are also the Idiots who've plunged the world into - not one - but TWO world wars. And as the threat of a disorderly breakup of the Euro (which is a question of When - not If) grows greater by the day ---- it may well be Full-Of-Itself Europe that AGAIN plunges the world into chaos.

Below is a quote from an article in the WSJ that accurately illustrates the risks to Europe --- A sort of Damned if it does and damned if it doesn't scenario in regard to Greece's bankruptcy:

http://online.wsj.com/article/SB10001424052970204422404576593122004251398.html


"The cost to Greece of exiting the euro could be up to 20% of GDP, according to Credit Suisse estimates. But once the taboo of euro exit is broken, other fiscally troubled countries will be at risk of similarly catastrophic bank runs, raising the specter of a disorderly euro break-up. That could trigger losses of up to €300 billion in core euro-zone banks and €630 billion among peripheral countries' banks, Credit Suisse estimates."

And if that happens, the vaunted Europe will likely sink back into a second Dark Age. At least in such a state of barbarity, they are less likely to be a menace to the world again anytime soon.

Twilight of America: Waiting in a vacuum...

Most people would consider this fantasy, but America is already no longer the great superpower. The signs are everywhere. Daily. Problem is, because most people cannot conceive of such a world, it is not even within the realm of possibility in most minds.

Like an "OFF LIMITS" sign hangs inside the brain.

But, push the sign aside, embrace the possibility and the signs are EVERYwhere.

Just today, there are two articles in WSJ. Most people probably read and pass on thinking "Oh, that was interesting/sad/great...." Whatever the individual sentiment. But failing to see the connection.

Hong Kong is planning for the DEpegging of its dollar to the US.
http://online.wsj.com/article/SB10001424053111904060604576574640464933236.html?mod=WSJAsia_hpp_LEFTTopStories

Then there is an article about America's aging military hardware.
http://online.wsj.com/article/SB10001424053111904103404576561053811426640.html

Two paragraphs really tell the story in a nutshell:

"The Aegis guided-missile cruiser, a warship designed to counter the threat of Soviet warplanes armed with antiship missiles, entered service in 1983. Today, the bridges of older Aegis ships are reminiscent of the video arcades of the 1980s: monochromatic consoles with push-button controls. "The systems that we are replacing are Commodore 64 technology," says Navy Capt. Brian Eckerle, invoking the primitive home computer to describe ongoing efforts to modernize Cold War-era ships.

One Air Force pilot describes the navigation systems in his unit's C-130 cargo planes, which entered service nearly three decades ago, as "antiquated." A navigator in his unit, he says, bought an off-the-shelf Global Positioning System device that can better provide weather information and the latest civil aviation notices, and even check the accuracy of the government-issued navigation system."

When commercicaly available technology is superior to the elite military goods  - you know the powers that be are asleep. The important takeaway is to note the inflection point has probably already passed. America is probably already no longer in control of the seas in Asia.

And...

The US dollar is already no longer the world reserve currency. IN FACT. Yet, the world continues in its fantasy that it is. Why? - because most of us have never known a world any different. We simply have trouble imagining it is even possible or fear what it might mean.

Even those who hate America - like an opposition party in parliament - are often at a loss when faced with the possibility of ruling.

So the world sits and waits for a new world leader or leaders, or whatever system will emerge. Meanwhile - it is just easier to pretend nothing has changed.

Business-Enviro Trend To Watch

The Wall Street Journal has what seems to be just another article about Foreign Direct Investment by an internet company - Google. But it is much more profound than that. Welcome to the Enviro-Business Model.
http://online.wsj.com/article/SB10001424053111904836104576560551005570810.html

Companies all over the world have been shaving and sawing off costs everywhere they can for a long time.
Old News. People call these frictions. Or basically anything that inhibits or slows down, any barrier to business.

Whether that means more time, more money, more materials, more info processing, higher labor costs, operational costs.... Everything is on the chopping block.

And this article points to the next trend: Enviro-Restructuring. That is, businesses looking for ways to make their business more harmonious with nature so as to save money with the ultimate aim of becoming more competitive.

In Google's case, they've come to the not-hard-to-understand conclusion that their data centers eat up an enormous amounts of energy. Energy that impacts their expenses and competitive position vis-a-vis rivals.

Solution? Locate the data centers somewhere cold. Where the ambient temperature helps cool the servers.

When you think about it, it's so perfectly logical one almost wonders why it hasn't been done already. Why? Because in the West, since the Industrial Revolution and the advent of Germ Theory and vaccines, we have tended to ignore nature.

There has been a lot of arrogance. A real attempt to defy and live beyond the laws of nature. What has followed in its path is a destruction and degradation of the planet. And of course, the reaction to that - Environmental Extremism.  

But I see a reversal. A tacit, quiet admission. Tentative. But unmistakable. Business is realising that while it has never been cost effective - now the competitive pressures are laying bare costs that were formerly hidden or ignored.

Internet companies are truly on the leading edge of so MANY trends that are reshaping our world, but look to see more and more companies around the world following Google's lead.

First it will be internet and other technology companies. But within a year or two it should start to broaden to other industries.

Here's the takeaway: Is your company ready when this wave hits? Or will you be left behind?
Watch the wave...

Conventional Thinkers ALWAYS Get It Wrong In Times Of Change

http://english.aljazeera.net/indepth/opinion/2011/08/2011816104945411574.html


Nouriel Roubini is Chairman of Roubini Global Economics, Professor of Economics at the Stern School of Business, New York University, and co-author of the book Crisis Economics.

WOW!
You'd think a big wig like that should know something. But don't be fooled. He doesn't know what he's talking about because...

He is a conventional thinker in times of extraordinarily breathtaking change. Not a recipe for accurate, actionable thinking.

He is feeding us prescriptions from the past. Like a Hollywood writer who's long since run out of material, he just keeps writing the same story with changed names.

He misdiagnosis the problem as Capitalism. No. Capitalism is fine. Alive and well. It is Government which can no longer meet the needs of a changing world. A world that is becoming one big market. It is government that is standing in the way of progress on nearly every front.

It is government which steals vast amounts of our money at gun-point and then squanders it on the most unbelievably inane and ghastly projects. It is government which has bankrupted itself with greed and the most grotesque mismanagement of resources possible.

So gross in fact, many times the return on capital by government is not even 1 - 1, but negative.

And we will not have a 1930's style depression. No. This will be a long soft, recession, more reminiscent of the 1970s. The West or center of the empire is now beginning its own lost decade like Japan. Only without the benefit of huge piles of savings.

He is right. Many people in the middle class ARE losing ground. But that is because they've been overpaid in protected markets. Markets which governments can no longer protect as they become deeper and more integrated. More integrated as they become ever more exposed to global competition. That is why the Middle class are losing ground.

And Roubini's MIS-diagnosis, and MAL-prescription that we return to policies and ways of thinking from the past are a good example of why the old adage "Ivory-tower idiot" is still so apt.

Riots and Protests Everywhere - WHY?

As the title suggests, there are demos and riots happening all over the globe. And most of them share a common theme. Or rather two...

See if you see the pattern in these various exhibits:

A. Recent demo in NY against Wall Street in particular and the rich in general. Message: The rich should pay more tax. Submessage: People protesting should be getting that money.

B. British riots. We hear there is some a whiff of race and a dollop of police brutality, but the real chicken in the pot seems to be  about "class". 'About the exploitation of the working class by the owning class'.
Message: The owning class needs to 'give' to the "exploited".

C. 'Watts (L.A.) remembers 1965. As they reflect, many say the problems of poverty that fed those riots haven't been addressed or improved. There are fears of a repeat.

D. Riots in Israel continue...  They are outraged that market forces have made it too expensive for many to live in the posh, cultured areas. Message: The government should take money from somebody and give it to them - subsidize their lifestyle.

E. And in Chile. (University) Students are demanding the government make their education free.

What these all have in common:

The President of Chile summed it well when he told the students: 'You ask for free education, but someone has to pay for that.' He went on to point out that if he gave them what they were asking for, the poor would also end up paying for the relatively well-to-do students.

And that is the crux of every demo in this first list : They want some other class of people to subsidize their living.

These are the GIMME DEMOS.

Then there is another set of demos with a separate theme:

In Japan people are demonstrating against their government's secrecy about the extent of the nuclear fall out. (Interesting this is happening right after the Hiroshima and Nagasaki anniversaries...)

Then, there is the ongoing story in the Middle East.
In this latter group, the common theme is DISTRUST. In Japan they want transparency and accountability. In the Middle East they are demanding Transparency, Accountability and Equality of opportunity.

The Difference?

The demos in first group LOOK TO GOVERNMENT FOR SOLUTIONS to problems of living they can't or don't want to deal with on their own.

The second group realises, GOVERNMENT IS THE PROBLEM. And they are demanding reform.

Yes. Riots and Demos are taking place across the globe, but not all demos are created equally.

The Difference Between Israeli and Arab Protests

http://english.aljazeera.net/news/middleeast/2011/07/201173020161903849.html
Equality!
A much vaunted word. Bandied about on banners and bulletins. But take a closer look and people are often talking about VERY difference ideas.

In the various Arab countries, the fight, the laudable and noble protests almost all started over a minor grievance. Security forces reacted brutally using live ammunition on peaceful, unarmed civilians.

As a result - the protests widened their original intent to demanding the government be tossed out.

But behind, the initial and the latter, broader demands was one common element. People wanted an end to corruption and ---here it comes--- an equal opportunity under the law.

Because from one country to another people struggle with basic rights. Certain favored groups have the power and the others are left forever to live on the bottom rungs of the caste.

In Bahrain, for example, the ruling MINORITY bars the majority from many, many opportunities. And to insure loyalty, the monarchy imports security forces from Pakistan. 

Yes - this is very broad brush, but essentially all these people are saying is: Give me a fair chance. I'll study. I'll do the work. Just give me the same shot this other group has: EQUALITY of OPPORTUNITY.

BUT....
In Israel, they are taking to the streets for very different reasons. Something called: "Social Justice".

One protester summed it up well when he said:  "...We want affordable housing, health, education and welfare." Translation? We want that which we haven't earned. We demand others subsidize our lifestyle. We demand our entitlements. And here it comes: We demand EQUALITY of RESULT.

We want to share equally in what OTHERS have created!

And isn't that the whole thrust of socialist dogma? That no matter how hard or smart someone works, no matter how much value she creates - everyone should receive the same payment. The same reward. Whether she works hard or not at all.

And I might add, this is also the problem in America. Too many people have their hand out. Too many people are protesting, begging and throwing fireballs at the other team in order to get their sticky paws on loot and goods they didn't earn.

Today, like Israelis, when Americans talk of Equality, they most often have the second - the socialist, entitlement, welfare grasping - meaning in mind.

Jobless Recovery and the Slide to Socialism

http://online.wsj.com/article/SB10001424053111904772304576468820582615858.html?mod=WSJAsia_hpp_LEFTTopStories

The great media outlets are finally waking up to something that's been apparent to thinking people for years... Recoveries no longer presage JOBS.

The sad thing is, the WSJ is starting to sound like La Liberation, (The organ of the Socialist Party of France).

The article blames the jobless recovery on companies - painting a picture of them reaping mega profits while creating "disposable workers".

But there is another side to the story: A businessman who WANTS to hire but who's decided NOT to.

Why....?

A businessman and would-be employer explained the reasons why he would NOT be hiring. And it had NOTHING to do with the qualifications of applicants or the fact that his business DID in fact need workers.

So - why the hell was he refusing to hire? Isn't this akin to some sort of business suicide?

Nope!

To summarize his article:
As a businessman I MUST be able to control costs. This is fundamental. And because the government keeps increasing the entitlements, payments, taxes, obligations and various and sundry requirements for me to hire and keep an employee,

THE GOVERNMENT MANDATED EXPENSES HAVE BECOME A BLANK CHECK I CAN NO LONGER AFFORD TO SIGN.

That's it in a nutshell. Since he can't control the ever-increasing, ever more onerous government imposed costs and obligations, the only way to achieve some level of cost-control is to CEASE hiring.

Sad, but true.

And while his business suffers from lack of qualified people on staff, ie growth is stunted. He's chosen this as the lesser evil to the voracious dragon in his office suite that threatens to devour his whole business if he just goes about hiring people when he needs them.

He ends his essay with this:  "From where I sit, the government's message is unmistakable: Creating a new job carries a punishing price."

Consider this situation multiplied millions upon millions of times and the jobless recovery suddenly makes perfect sense.

Fancy, intellectual sounding arguments are often very seductive and can easily mask the true, often simple causes of problems.

Could this man's explanation reveal the real underlying cause?

I believe so. 



His original essay is included below:
By MICHAEL P. FLEISCHER

With unemployment just under 10% and companies sitting on their cash, you would think that sooner or later job growth would take off. I think it's going to be later—much later. Here's why.

Meet Sally (not her real name; details changed to preserve privacy). Sally is a terrific employee, and she happens to be the median person in terms of base pay among the 83 people at my little company in New Jersey, where we provide audio systems for use in educational, commercial and industrial settings. She's been with us for over 15 years. She's a high school graduate with some specialized training. She makes $59,000 a year—on paper. In reality, she makes only $44,000 a year because $15,000 is taken from her thanks to various deductions and taxes, all of which form the steep, sad slope between gross and net pay.

Daniel Henninger discusses how Robert Rubin and Alan Greenspan agree that Americans should send more of their paychecks to Washington. Also, Fannie and Freddie ask for more cash within weeks of an Obama pledge to end taxpayer rescues.

Before that money hits her bank, it is reduced by the $2,376 she pays as her share of the medical and dental insurance that my company provides. And then the government takes its due. She pays $126 for state unemployment insurance, $149 for disability insurance and $856 for Medicare. That's the small stuff. New Jersey takes $1,893 in income taxes. The federal government gets $3,661 for Social Security and another $6,250 for income tax withholding. The roughly $13,000 taken from her by various government entities means that some 22% of her gross pay goes to Washington or Trenton. She's lucky she doesn't live in New York City, where the toll would be even higher.
More

Employing Sally costs plenty too. My company has to write checks for $74,000 so Sally can receive her nominal $59,000 in base pay. Health insurance is a big, added cost: While Sally pays nearly $2,400 for coverage, my company pays the rest—$9,561 for employee/spouse medical and dental. We also provide company-paid life and other insurance premiums amounting to $153. Altogether, company-paid benefits add $9,714 to the cost of employing Sally.

Then the federal and state governments want a little something extra. They take $56 for federal unemployment coverage, $149 for disability insurance, $300 for workers' comp and $505 for state unemployment insurance. Finally, the feds make me pay $856 for Sally's Medicare and $3,661 for her Social Security.

When you add it all up, it costs $74,000 to put $44,000 in Sally's pocket and to give her $12,000 in benefits. Bottom line: Governments impose a 33% surtax on Sally's job each year.

Because my company has been conscripted by the government and forced to serve as a tax collector, we have lost control of a big chunk of our cost structure. Tax increases, whether cloaked as changes in unemployment or disability insurance, Medicare increases or in any other form can dramatically alter our financial situation. With government spending and deficits growing as fast as they have been, you know that more tax increases are coming—for my company, and even for Sally too.

Companies have also been pressed into serving as providers of health insurance. In a saner world, health insurance would be something that individuals buy for themselves and their families, just as they do with auto insurance. Now, adding to the insanity, there is ObamaCare.

Every year, we negotiate a renewal to our health coverage. This year, our provider demanded a 28% increase in premiums—for a lesser plan. This is in part a tax increase that the federal government has co-opted insurance providers to collect. We had never faced an increase anywhere near this large; in each of the last two years, the increase was under 10%.

To offset tax increases and steepening rises in health-insurance premiums, my company needs sustainably higher profits and sales—something unlikely in this "summer of recovery." We can't pass the additional costs onto our customers, because the market is too tight and we'd lose sales. Only governments can raise prices repeatedly and pretend there will be no consequences.

And even if the economic outlook were more encouraging, increasing revenues is always uncertain and expensive. As much as I might want to hire new salespeople, engineers and marketing staff in an effort to grow, I would be increasing my company's vulnerability to government decisions to raise taxes, to policies that make health insurance more expensive, and to the difficulties of this economic environment.

A life in business is filled with uncertainties, but I can be quite sure that every time I hire someone my obligations to the government go up. From where I sit, the government's message is unmistakable: Creating a new job carries a punishing price.

Mr. Fleischer is president of Bogen Communications Inc. in Ramsey, N.J.