Friday, September 28, 2012

The last thing a business man wants to do is create a job. For the past twenty years the direction of business is to run a bigger entity with fewer employees. This is the tech revolution. This process is the cruel calculus of capitalism. If you don't keep up, you will be left behind. The private sector is doing what it always does in terms of reinventing itself to stay relevant and in business.

The public sector is a different story. The first thing a politician wants to do is create a job. The politician's own job depends on it. The current  recession has slowed this process as states and cities face the fact that they cannot afford to keep paying the salaries and benefits promised to the public workers. One would hope that during our national campaigns there would emerge a meaningful debate about what we, as a society want from our government. The present cost of government is not sustainable yet everyone wants services to remain the same. It doesn't work like that, there has to be a trade-off between costs and services and we need to prioritize. We cannot have it all.

Random thoughts at the end of the third quarter 2012

We have absolutely no idea what is going on in China and how their economy is really doing (not well I think).

Nothing has been settled or changed or solved in re Greece, Spain, etc.

The social unrest in Europe augers for a difficult year ahead for policy makers world wide

Based on the recent European elections it seems that the wealthy euro countries are still committed to working the situation out.

Whatever tenuous grasp Moody's Investor Service had on reality was severed last week with it's announcement about the rating of US Bank corp. Moody'd said it is worried not about US Bank but that the other banks in the area are recovering and they might present more competition. Moody's is apparently worried about  " U.S. Bancorp's long-term ability to sustain its consistent, superior performance in light of increasing competition" to use Moody's own words. If only Moody's had conducted it's business as well as US Bank we might have avoided the financial meltdown of 2008.

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