The French drove the campaign for the Euro thinking that with a unified Europe the incessant wars that have characterized Europe for a thousand years would stop and France would once again be the dominant force in Europe and Germany would be contained. Alas the Euro-Zone had fatal flaws from the outset and instead of France becoming the dominant force in Europe it has turned out to be the Germans. Now the Euro-Zone must dance to the German tune because it is Germany who has the money necessary to keep the Euro from collapsing and it is this power that is being displayed in the Greek Debt crisis now rocking the Euro-Zone. But Greece is just the tip of the socialist iceberg that is threatening Western Europe. Eastern Europe isn’t affected because they learned their lesson about Socialism and Communism from the USSR, a lesson Western Europe did not heed, so a review of Greek Socialism seems to be in order.
Greek Underground
For the 2004 Olympics it was necessary to install a modern transportation system in order to avoid the mass traffic jams that characterize Athens. The cost of this system was roughly $2.4M of which the Greeks paid very little with the bulk of the money coming from the Euro-Zone. One would think that the revenues from this system would eventually pay off the debt, but that is an outmoded capitalist concept. In Socialist Greece they have the “honor” system where they installed “honesty machines” where the passengers are urged to pay for their passage. Apparently the Greeks are not very honest because virtually no one pays so not only is the new underground not paying off the debt it isn’t even covering the maintenance costs – so the underground is totally supported by the government and the government is supported by tax revenues. In a capitalist country the government would simply raise taxes to cover the cost but Greece is a socialist paradise where taxes are more of a nuisance than a reality.
Greek Railroad
If the Greek Underground is a disgrace the Greek rail system is even worse and typical of how socialism operates. The average salary for railroad employees is an incredible $90,000 which includes cleaners and track workers. This is a salary treble the average private sector salary. The wages – just the wages – for the Greek railroad system is $750M but the annual ticket sales is only $120M. In a capitalist society this would call for immediate action but not in socialist Greece where the government is focused on employment and not profit.
Greek Tax Policies
While the Greeks aren’t paying for their underground tickets they aren’t paying their taxes either or at least no where near the amount of taxes they should be paying. In fact only 5000 people out 12 million admit to earning over $100,000 a year where studies have shown that more than 60,000 people have investments over $1.5 M and this doesn’t include money in overseas banks. How is this possible? Very easy since the individual taxpayer is allowed to state their own earnings for tax purposes and these are rarely challenged. Consequently many Greeks state their taxable income to be below taxable threshold of $15,000 even they own vacation homes, boats, and other luxury items. To call the Greek system corrupt is just accepted and is so accepted that there is a semi- official rate for bribes for passing false tax returns and each Greek family is estimated to spend an estimated $2500 per year in bribes. If this isn’t bad enough the Greek shipping magnates – some of the wealthiest people in the country are tax exempt because of the benefits they bring to the country even though the Greek shipyards are virtually idle employing about 500 people.
Greek Pensions
Naturally in a socialist country pensions are very dear to the people who expect the government to take care of them even if they don’t pay taxes or work very hard to earn the pensions. In Greece the retirement age is 50 with a pension of 95% of their last year’s earnings and this includes pastry chefs, radio announcers, hairdressers, and masseurs whose work is classified as “arduous and perilous” to justify the 95%.
Greek Schools
Once Greece was allowed into the Euro-Zone money began to flow into the country and into public life making life better for all Greeks. This allowed salaries to increase without requiring more production and this impacted virtually all aspects of Greek life including the school system. In a socialist country performance is not measured because the objective is employment and not efficiency. Consequently the Greek school system hired more people to manage the system so now that system is overstaffed and employs four time more teachers per pupil than Finland who has the highest rated educational system in Europe. Not surprisingly the teachers, who are in fear of being discharged are hopelessly ineffective so now parents must hire private tutors for their children.
Greco-America
Does any of this sound familiar? Is America on a similar path to financial disaster? Consider the power of the unions who demand ever higher wages without increasing productivity and quality. Consider the educational system now dominated by unionized teachers who are turning out graduates who cannot read, who have no clue of history or geography. Consider the growing underclass supported by first one welfare program than another. Consider the large pensions and salaries being paid to public employees that far outstrip those of private industry. Consider the growing demand by the underclass for higher taxes on the rich to pay for their welfare system. Consider the growing interference by the government with private industry. All of these things are indications that our government is slipping inexorably into the financial quagmire that we find in Greece.
Thursday, November 17, 2011
Wednesday, November 16, 2011
Germany Resurgent
Historically Europe has been the battleground of the West with France and Germany playing dominant roles with Britain and Russia playing important but secondary roles. This pattern has existed up until 1991 with the creation of the Euro-zone which was intended to link Europe financially in an effort to prevent any future wars due to the interdependence. This effort recognized the nationalism within the zone so the interdependence was strictly financial. It left borders intact along with languages but most importantly it left financial controls intact, meaning financial policies continued pretty much as they had in the past but with a common currency.
Unfortunately Europe has been held in thrall by its socialist programs – generous social programs that rewarded workers with lavish health and retirement benefits without demanding a great deal of work. While the taxes have been high in order to support these programs tax collection has been a challenge and the great national game has been to avoid paying taxes. The result has been the cost of government has far exceeded the revenues and the imports have exceeded exports. But the European problem isn’t totally theirs alone. China manipulates its currency keeping it an artificially low rate which drives its export based economy. The US has allowed the government to increasingly get involved in the financial structure which has caused instability both at home and abroad. But the serious problems remain in Europe because the objective of the common currency was unification and stability and the creation of an economic power – United Europe – to rival the United States – politically and economically. All of these objectives are seriously threatened.
The Maastrict Treaty created the Euro as a common currency but left the countries control of their individual fiscal policies. This meant that the countries in the Euro-zone had their own tax policies and would not share banks but would share interest rates. This allowed countries like Greece to continue their socialist programs supported by borrowed money but without any control over the value of money. In effect the Euro remains under central control but at the expense of national sovereignty. The result is the fiscal crisis in Greece and the imminent crises in Italy, Spain, Ireland, and Portugal. But these financial problems are jeopardizing the objective of a Unified Europe as well as the Euro itself, because of the resurgence of nationalism.
The Maastrict Treaty was intended to unify Europe and suppress the nationalism that has plagued Europe since the fall of Rome. But unlike the other members the German economy was designed to be export based unlike the other members in the European Free Trade Zone. . Germany became the dominant financial force in the Euro-zone and the unwilling source of financial support for the less responsible members. This is a role the German people quickly tired of as they couldn’t see why they should subsidize the irresponsible Greeks while the Greeks see the Germans as manipulating the financial system in their favor. The first bailouts by the Germans did not go well with the German people and when it became obvious that more bailout money was needed the Germans demanded action. The result was the creation of the European Financial Security Facility (EFSF) which raises money on the bond market and funnels that money to the weak Euro-Zone members, but the EFSF is run by Germany and it is the Germans who call the tune – not the French and certainly not the weak governments who depend on German money.
With the EFSF in place Germany can demand economic reforms before loaning money and are doing so. These reforms are austerity reforms which strike at the very heart of the socialist programs in place in these countries. In effect they can’t continue as they are without financial aid and they can’t get this aid without meeting Germany’s demands for reform. At a stroke and without firing a shot Germany has achieved the control over Europe that has been it’s objective since Bismark. The result has been a rise of nationalism that threatens the Euro and the concept of a unified Europe. At the very least the generous socialist programs that the Europeans have enjoyed for a long time cannot survive without extreme restructuring. This means fewer government jobs, longer work weeks, reformed pension plans, and higher taxes that are actually collected. These reforms are being resisted in Greece and Italy but when implemented will bring them more in line with the rest of the world. The question of what the European Union might become is now less relevant that can it survive at all without significant changes.—changes dictated by Germany. Welcome to the Fourth Reich.
Unfortunately Europe has been held in thrall by its socialist programs – generous social programs that rewarded workers with lavish health and retirement benefits without demanding a great deal of work. While the taxes have been high in order to support these programs tax collection has been a challenge and the great national game has been to avoid paying taxes. The result has been the cost of government has far exceeded the revenues and the imports have exceeded exports. But the European problem isn’t totally theirs alone. China manipulates its currency keeping it an artificially low rate which drives its export based economy. The US has allowed the government to increasingly get involved in the financial structure which has caused instability both at home and abroad. But the serious problems remain in Europe because the objective of the common currency was unification and stability and the creation of an economic power – United Europe – to rival the United States – politically and economically. All of these objectives are seriously threatened.
The Maastrict Treaty created the Euro as a common currency but left the countries control of their individual fiscal policies. This meant that the countries in the Euro-zone had their own tax policies and would not share banks but would share interest rates. This allowed countries like Greece to continue their socialist programs supported by borrowed money but without any control over the value of money. In effect the Euro remains under central control but at the expense of national sovereignty. The result is the fiscal crisis in Greece and the imminent crises in Italy, Spain, Ireland, and Portugal. But these financial problems are jeopardizing the objective of a Unified Europe as well as the Euro itself, because of the resurgence of nationalism.
The Maastrict Treaty was intended to unify Europe and suppress the nationalism that has plagued Europe since the fall of Rome. But unlike the other members the German economy was designed to be export based unlike the other members in the European Free Trade Zone. . Germany became the dominant financial force in the Euro-zone and the unwilling source of financial support for the less responsible members. This is a role the German people quickly tired of as they couldn’t see why they should subsidize the irresponsible Greeks while the Greeks see the Germans as manipulating the financial system in their favor. The first bailouts by the Germans did not go well with the German people and when it became obvious that more bailout money was needed the Germans demanded action. The result was the creation of the European Financial Security Facility (EFSF) which raises money on the bond market and funnels that money to the weak Euro-Zone members, but the EFSF is run by Germany and it is the Germans who call the tune – not the French and certainly not the weak governments who depend on German money.
With the EFSF in place Germany can demand economic reforms before loaning money and are doing so. These reforms are austerity reforms which strike at the very heart of the socialist programs in place in these countries. In effect they can’t continue as they are without financial aid and they can’t get this aid without meeting Germany’s demands for reform. At a stroke and without firing a shot Germany has achieved the control over Europe that has been it’s objective since Bismark. The result has been a rise of nationalism that threatens the Euro and the concept of a unified Europe. At the very least the generous socialist programs that the Europeans have enjoyed for a long time cannot survive without extreme restructuring. This means fewer government jobs, longer work weeks, reformed pension plans, and higher taxes that are actually collected. These reforms are being resisted in Greece and Italy but when implemented will bring them more in line with the rest of the world. The question of what the European Union might become is now less relevant that can it survive at all without significant changes.—changes dictated by Germany. Welcome to the Fourth Reich.
Monday, October 31, 2011
ASK MR. MANAGER
The time has come once again when we turn to “Mr. Manager” to explain exactly what manager’s mean when they say such things as “people are our most valuable asset” or “we are looking for entrepreneurs” or “we want people who are not afraid of taking a risk” or the ever popular “we don’t shoot the messenger”. As everyone – including Mr. Manager – knows there is a huge difference between English and Management Speak. While the words sound the same the interpretation or meaning in Management Speak can be quite different from what the average employee may have understood. For example exactly what DOES a manager mean when he says people are our most valuable asset?
Well the typical employee hears and interprets this statement as focusing on “people” while the manager focuses on the word “asset”. The employees will see this statement as showing care and concern for the “people” and as an expression of concern and dedication to those who do the work but this isn’t precisely what is meant in Management Speak. While it is true Mr. Manager shows care and concern for his “people” he does the same for his Ferrari, after all one doesn’t mistreat an “asset” because it depreciates its value. So the focus by the Manager is not on the word “people” but the word “asset” because to the Manager these are interchangeable terms.
The proof of this assertion lies in the actions taken by the Manager when he is called to task by the accounting team and told he has to reduce his overhead, budget, or burn rate. Now the Ferrari, like most of the tangible assets have depreciated so the disposal value is much less than the cost of replacement, but not so that most valuable asset – the people. Disposing of a few hundred people immediately reduces the payroll, the travel, the healthcare, and all of the associated overhead. All of this falls to the bottom-line and thus demonstrates that People truly are the most valuable asset.
When the boss says “we are looking for entrepreneurs” or “risk takers” does that mean he wants people who are creative and willing to take a risk – as in high risk high reward? Mr. Manager can assure you that when the boss says he is looking for entrepreneurs he is telling the absolute truth. The boss is searching for entrepreneurs with the same verve and enthusiasm as the FBI is looking for serial killers with the same objective in mind – to eliminate them from society. Entrepreneurs are people who take risks, who see new ways, who – in short – upset the apple cart and threaten the status quo. No manager worth the name is going to tolerate having his apple cart turned into applesauce by some wild-eyed loose cannon who is out to reduce costs, improve efficiency, and show higher authorities that his boss is a moron. So yes indeed, the boss is certainly on the look out for entrepreneurs so he can give them the rewards they so justly deserve.
Periodically the boss will assure the staff that he is always looking for input from the rank and file and that he will reward good performance and sound suggestions. At some point, usually at some large gathering the Boss announces that he wants suggestions and that he wants to know what we think. Of course this is another one of those times when the English and the Management Speak don’t mean the same thing. The employee hears the Boss asking for the employees to give him assistance in determining the future – he hears a request for input and suggestions. But that is English and when you filter this through Management Speak, you immediately realize that while a cat might look at a King, it isn’t recommended procedure for an employee to take this statement seriously and to suggest anything to the Boss. When the boss says he is looking for input it is in the same category as the flashing “Applause” sign you see in TV studios. The Boss is willing to accept your compliments, applause, and congratulations but any actual advice is about as welcome as a bad case of hives – in fact your advice might just bring on the hives.
Of course the boss is always telling the employees that he wants their input and feedback and that he will reward their performance. Mr. Manager can assure you that when the Boss says “we reward performance” he is telling the absolute truth. Of course, you have to understand what is meant by “performance”. The more effusive your compliments, the higher your performance rating, while the more you actually offer advice or move outside of the established boundaries set by the boss, the lower your performance rating will sink. So my little Grasshopper, don’t be deceived when the Boss seeks your advice. When that happens, you smile, bow your head, and mumble that you cannot hope to improve upon the wisdom and brilliant incisive thinking that the Boss displays everyday. Assure him you hope to achieve only half of his wisdom and your performance rating will soar – as will the rewards.
It seems to me that you are telling us that we shouldn’t be candid when dealing with the boss, even though he tells us that he “won’t shoot the messenger”.
Well my little Grasshopper “We don’t shoot the messenger” is one of the most common management phrases that Mr. Manager is asked to comment on. Obviously your boss actually won’t shoot you – it’s against the law, besides it makes a mess on the carpet and possibly his Armani suit as well. But just because the boss won’t actually shoot you doesn’t mean that he is anxious to hear what you have to say. However, no manager is going to shoot the bearer of good news, effusive compliments, or outright flattery. Therefore, if you find yourself in the position of having to deliver bad news to the boss be sure that you wear your bullet proof vest. Well – not really because as we said it is unlikely the Boss will actually shoot you but come armed with some one to whom you can attribute bad news – sort of a human shield. Once the bad news is delivered don’t confuse the Boss’s silence or dumbfounded expression as acceptance. More than likely the boss is sitting there in stunned amazement at your complete lack of understanding of the issue instead. So while he won’t actually shoot the messenger he certainly will comment to his management colleagues on your lack of insight, reliability, and inability to grasp complex management problems. So in Management Speak, he really doesn’t shoot the messenger anymore than your typical crime boss actually disposes of an undesirable colleague – it just seems to happen.
I was due for a performance and salary review but my Boss promoted me from Bottle Washer and Coffee Maker Associate to the more prestigious position of Associate Coffee Maker and Bottle Washer and said that he would give me a review in six months. Why can’t he give me a review based on my previous position and another one on my new position in six months?
Mr. Manager must tell you once again that your question by itself shows you are not management material because you do not think like a manager. You look at this as performance review where the boss will tell you how well you are doing and give you tips on how to improve and possibly put yourself in line for his job. (Insert boss’s hysterical laughter) For the manager, the real reason is that he would have to increase your salary. The higher his operating costs the lower his performance bonus and no review means no increase in your salary. So when the boss tells you that he will conduct your review in six months what he is really saying, is that he will conduct your salary review after management bonuses are paid.
So there it is my little friend – all of your questions regarding what the Boss means when his actions don’t seem to fit with his words – have now been interpreted for you by Mr. Manager. Keep studying and watching how REAL managers operate and one day you too can become an oracle like Mr. Manager.
Well the typical employee hears and interprets this statement as focusing on “people” while the manager focuses on the word “asset”. The employees will see this statement as showing care and concern for the “people” and as an expression of concern and dedication to those who do the work but this isn’t precisely what is meant in Management Speak. While it is true Mr. Manager shows care and concern for his “people” he does the same for his Ferrari, after all one doesn’t mistreat an “asset” because it depreciates its value. So the focus by the Manager is not on the word “people” but the word “asset” because to the Manager these are interchangeable terms.
The proof of this assertion lies in the actions taken by the Manager when he is called to task by the accounting team and told he has to reduce his overhead, budget, or burn rate. Now the Ferrari, like most of the tangible assets have depreciated so the disposal value is much less than the cost of replacement, but not so that most valuable asset – the people. Disposing of a few hundred people immediately reduces the payroll, the travel, the healthcare, and all of the associated overhead. All of this falls to the bottom-line and thus demonstrates that People truly are the most valuable asset.
When the boss says “we are looking for entrepreneurs” or “risk takers” does that mean he wants people who are creative and willing to take a risk – as in high risk high reward? Mr. Manager can assure you that when the boss says he is looking for entrepreneurs he is telling the absolute truth. The boss is searching for entrepreneurs with the same verve and enthusiasm as the FBI is looking for serial killers with the same objective in mind – to eliminate them from society. Entrepreneurs are people who take risks, who see new ways, who – in short – upset the apple cart and threaten the status quo. No manager worth the name is going to tolerate having his apple cart turned into applesauce by some wild-eyed loose cannon who is out to reduce costs, improve efficiency, and show higher authorities that his boss is a moron. So yes indeed, the boss is certainly on the look out for entrepreneurs so he can give them the rewards they so justly deserve.
Periodically the boss will assure the staff that he is always looking for input from the rank and file and that he will reward good performance and sound suggestions. At some point, usually at some large gathering the Boss announces that he wants suggestions and that he wants to know what we think. Of course this is another one of those times when the English and the Management Speak don’t mean the same thing. The employee hears the Boss asking for the employees to give him assistance in determining the future – he hears a request for input and suggestions. But that is English and when you filter this through Management Speak, you immediately realize that while a cat might look at a King, it isn’t recommended procedure for an employee to take this statement seriously and to suggest anything to the Boss. When the boss says he is looking for input it is in the same category as the flashing “Applause” sign you see in TV studios. The Boss is willing to accept your compliments, applause, and congratulations but any actual advice is about as welcome as a bad case of hives – in fact your advice might just bring on the hives.
Of course the boss is always telling the employees that he wants their input and feedback and that he will reward their performance. Mr. Manager can assure you that when the Boss says “we reward performance” he is telling the absolute truth. Of course, you have to understand what is meant by “performance”. The more effusive your compliments, the higher your performance rating, while the more you actually offer advice or move outside of the established boundaries set by the boss, the lower your performance rating will sink. So my little Grasshopper, don’t be deceived when the Boss seeks your advice. When that happens, you smile, bow your head, and mumble that you cannot hope to improve upon the wisdom and brilliant incisive thinking that the Boss displays everyday. Assure him you hope to achieve only half of his wisdom and your performance rating will soar – as will the rewards.
It seems to me that you are telling us that we shouldn’t be candid when dealing with the boss, even though he tells us that he “won’t shoot the messenger”.
Well my little Grasshopper “We don’t shoot the messenger” is one of the most common management phrases that Mr. Manager is asked to comment on. Obviously your boss actually won’t shoot you – it’s against the law, besides it makes a mess on the carpet and possibly his Armani suit as well. But just because the boss won’t actually shoot you doesn’t mean that he is anxious to hear what you have to say. However, no manager is going to shoot the bearer of good news, effusive compliments, or outright flattery. Therefore, if you find yourself in the position of having to deliver bad news to the boss be sure that you wear your bullet proof vest. Well – not really because as we said it is unlikely the Boss will actually shoot you but come armed with some one to whom you can attribute bad news – sort of a human shield. Once the bad news is delivered don’t confuse the Boss’s silence or dumbfounded expression as acceptance. More than likely the boss is sitting there in stunned amazement at your complete lack of understanding of the issue instead. So while he won’t actually shoot the messenger he certainly will comment to his management colleagues on your lack of insight, reliability, and inability to grasp complex management problems. So in Management Speak, he really doesn’t shoot the messenger anymore than your typical crime boss actually disposes of an undesirable colleague – it just seems to happen.
I was due for a performance and salary review but my Boss promoted me from Bottle Washer and Coffee Maker Associate to the more prestigious position of Associate Coffee Maker and Bottle Washer and said that he would give me a review in six months. Why can’t he give me a review based on my previous position and another one on my new position in six months?
Mr. Manager must tell you once again that your question by itself shows you are not management material because you do not think like a manager. You look at this as performance review where the boss will tell you how well you are doing and give you tips on how to improve and possibly put yourself in line for his job. (Insert boss’s hysterical laughter) For the manager, the real reason is that he would have to increase your salary. The higher his operating costs the lower his performance bonus and no review means no increase in your salary. So when the boss tells you that he will conduct your review in six months what he is really saying, is that he will conduct your salary review after management bonuses are paid.
So there it is my little friend – all of your questions regarding what the Boss means when his actions don’t seem to fit with his words – have now been interpreted for you by Mr. Manager. Keep studying and watching how REAL managers operate and one day you too can become an oracle like Mr. Manager.
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