Wednesday Night #1567

Written by  //  March 14, 2012  //  Herb Bercovitz, Reports, Wednesday Nights  //  No comments

Although we tend to complain, with reason, about the increasingly uneven distribution of wealth, there are still amongst us, those who use their accumulated wealth to better the well being of their fellow humans. Pierre Arbour has done so through the establishment of la Fondation Universitaire Pierre Arbour, a low operating budget foundation that sponsors Quebec residents at the Masters and PHD level. Operating costs remain low as potential scholars are screened by the Universities for academic excellence, community involvement and need. The process enriches the entire population to an extent even greater than it does the selected scholars. An intriguing indication of the changing face of Quebec is the number of scholars whose names are not de souche, an indication of the quality and quantity of eager, highly qualified students who come from ‘ethnic’ or minority backgrounds.

The economy
What is the value of a fine engraving of Queen Elizabeth II ? In fact, if it is printed in green on excellent quality paper and issued by the Royal Canadian mint, it is worth twenty dollars. The value of twenty dollars, however, will be a function, not of the quality of the engraving, nor of the esteem in which the personage is held, but entirely on its stability and the value of what it can be exchanged for. When a state of the United States such as California, or a province in Canada is deeply in debt, there is hardly a ripple, except, perhaps an occasional note on page thirty-four of a daily newspaper. With the exception of the United States, when any nation defaults, the world trembles. Bankruptcy of a national entity is to be avoided at any cost. It is Greece that is centre stage at the present, although other European Union nations such as Spain, Portugal and Italy wait in the wings. Mighty England no longer waves the rules and is said to be held intact only thanks to the relative prosperity of London. Unemployment has been measured at 14.6%, even higher than that experienced by Greece. There is some talk of even Germany being caught up in the problem.

In Greece, the imposed austerity has been as severe as that experienced in World War II, with similar measures anticipated for Spain. There has been a backlash and it is anticipated that the elections planned for May or June will see an end – or at the least a modification of the austerity regimes. Some Wednesday Nighters (in the company of such luminaries as Paul Krugman and Joseph Stiglitz) believe that austerity exacerbates the problem, and will most likely lead to civil strife.

The current situation is but an exaggeration of how nations solve their debt problems with inflation; the European Union should follow the U.S. example and permit the central bank authority to print money. The problem, of course, is the effect of inflation on future retirement benefits. The population throughout much of the world is aging, exacerbating the problem. Some countries have reacted to this fact by raising the retirement age. Jobs can be created in infrastructure and health services, paid for over time with inflated money, or raising pensionable age. Tax evasion is to be found everywhere but is not really Greece’s prime problem. If a solution is to be found, it will not be found in controlling short-term, but in controlling long-term costs. Universally, inflation is an important factor in paying national (or provincial) debt. In the European Union, however, control is in the hands of the German Central Banks, which will not tolerate inflation. In a sense, however, the Greek crisis has given Germany an exceptional advantage in export, through the devaluation of the Euro.

California’s per capita debt is greater than that of Greece. If California were to declare bankruptcy it wouldn’t be expelled from the United Sates. The solution is to issue long-term bonds permitting breathing space to correct problems, repayment made with inflated money. If the European Central Bank (ECB) behaved like a real central bank, it could monetize the loans and solve the problem, however, the ECB does not have the authority and until/unless the situation is corrected, we may expect continuing problems. It was noted that in Canada, in 1932, Saskatchewan defaulted on its bonds. Social Credit wanted to print money. Québec has borrowed almost to the limit, but a debtor province cannot print money.

Hungary, on the other hand is described as an “ad hoc democracy.” The current autocratic government is a source of major concern – not to mention considerable misery for its citizens. The European Union has told Hungary that it will withhold funds until it gets its house in order. Unfortunately the present government has stripped the checks and balances from the constitution and further amendments will henceforth be possible after two votes four years apart.

Prologue

We have had the weekend from Hell with first a virus infection of David’s computer (beware Internet Security exe, it takes professionals to remove it) and then, thanks to David Mitchell, who was hoping to read last Wednesday’s write-up, Diana learned that while she has been merrily posting and tidying her site, something called Exploit Blackhole seemed to have taken over. We were VERY Nervous Nellies until help came in the form of Robert from MARZ IT Solutions. Meantime, much of this week’s gleanings relate to technology in one form or another.

The “Kony 2012” campaign.
Activist video targeting LRA’s Kony goes viral
A 30-minute video called “KONY 2012” produced by activist group Invisible Children documenting the human rights abuses of Uganda’s Joseph Kony has gone viral, racking up more than 50 million views in a week. The campaign to urge the arrest of the fugitive leader of the Lord’s Resistance Army, a splinter group that is widely reviled for abducting children and forcing them to serve as soldiers, has attracted the interest of teenagers around the world and is getting attention on Facebook and Twitter. PBS/NewsHour (3/8), Los Angeles Times (3/8)
There is no doubt that it is a brilliant use of all the social media tools (see Mitch Joel A Social Media Master Class ), but there is much serious debate about the cause that Invisible Children is (are?) promoting and whether it should be embraced because we are dazzled by the technology that conveys the message. The New York Times asks: Social media definitely have the power to bring attention to terrible problems — but is there a downside, if the “call to action” is wrong-headed or if these campaigns give young people a false sense of what it really takes to create change?

As one Ugandan commentator points out: The scary part of this campaign is that it raises expectations too high. “If you care enough to send $30 dollars and wear this here bracelet, we will go and get rid of this evil for you. Trust us,” it says. The world isn’t that simple or easy to fix. The campaign missed a huge opportunity to instill agency in Uganda’s civil society, to encourage citizens to act on their own behalf. That would have been hugely transformative. But instead, Ugandans are left wondering, “What is this?”
We would also submit that there is an element of bullying (another topical issue, but not this week) in the active promotion of tweets to “culture” and policy makers.

Last Wednesday’s discussion with Reuven Brenner of the weaknesses of the education system – at least at the Business School level – was most challenging. Therefore, we are doubly pleased to have Pierre Arbour with us this week. Our admiration for the work of Pierre’s Fondation Universitaire is well-known and we look forward to his comments about the OECD findings regarding the significant negative relationship between the money countries extract from national resources and the knowledge and skills of their school population (Knowledge and skills are infinite – oil is not) from Andreas Schleicher, Deputy Director and Special Advisor on Education Policy to the OECD’s Secretary-General. Canada, so far, seems to be exempt, but perhaps we should not be too complacent (that at least was Reuven Brenner’s message). Tom Friedman has embraced the cause — Pass the Books. Hold the Oil with emphasis on the effects of the “Dutch disease”.

In case you missed the Manning Centre conference that ended on Saturday, in his concluding speech, Preston Manning cautioned his fellow Tories that the conservative movement in Canada must practice as well as preach ethical policies, be open to new ideas and better train political candidates. Not exactly novel ideas, but we guess they had to be reinforced in light of current news of Robocalls and voter suppression. He is reported to have highlighted the three challenges facing the governing party — ideas, training, and ethics — during his keynote speech. … Specifically, he said training is needed in ethical politics and the ethical use of new political technologies such as automated voter calling and social media like Twitter and Facebook. So we are back to the beginning of this message. But we would add that we found even more important – and applicable to all parties was the caution that “Far too often, political parties provide no guidance or training to constituency workers on candidate recruitment prior to an election or support for the elected official after the campaign.” Andrew Coyne’s somewhat brutal address to the conference is worth reading and re-reading: Question isn’t where conservatism is going, but where has it gone … there was a party, once, that believed in these things, to a somewhat greater extent than the other parties. That party called itself conservative, whether with a small or a large C, so I suppose you could call the things it believed conservatism. He reiterates the refrain But you are no longer that party.

Lest you think this is all too Canadian in its focus, be assured that we are also watching the rest of the world, including the commemoration of the first anniversary of the Fukishima disaster and its impact on nuclear energy development policy around the world. The BBC offers a neutral view. We are also watching developments in China (China sacrifices growth to satiate inflation dragon), and in Burma, where John Baird has just conferred honorary Canadian citizenship on Aung San Suu Kyi, a gesture we applaud.

U.S. politics continue to fascinate even though Mitch Romney is charismatically challenged. Looks like a long haul to the Republican convention. Udo has directed us to We Are Running Out Of Easy Solutions – a thoughtful analysis of presidential power and an intriguing set of what-if scenarios – well worth your consideration. Meanwhile the Christian Science Monitor suggests that As Republican candidates pummel each other, Obama can only smile

Europe, the EU and Greece – what can we say that hasn’t already been said?
In Deficit target fetishism could deepen EU recession Reuters’ Pierre Briançon writes that “The euro zone is turning into a cult whose members think the best way to survive is to chant hymns to austerity to the rhythm of a German tambourine.” (Guy Stanley and Diana think this is a brilliant lead sentence, but wonder about the choice of instrument) Austerity is not the answer for Kimon and an increasing number of observers. We prefer to point you to What would Aristotle say?, a title that will surely please Kimon and our Wednesday Night Greek colleagues.

In the Middle East there are multiple concerns (read hot spots). The news of Kofi Anan’s mission to Syria is far from reassuring. There are a number of reports from what we might term fringe media that Obama insisted that any attack on Iran should be postponed until after the US presidential elections in November, possibly even until next spring. We wonder whose purpose these reports serve.

For your calendar
World Congress on Information Technology to be held in Montreal October 22 to 24, 2012
Every two years, the WCIT is organized in a different country under auspices of the World Information Technology and Services Alliance (WITSA) and it has become the world’s leading information technology gathering, with prominent speakers, leading thinkers, and business leaders from all over the world invited to participate.
This year’s WCIT will bring something new, and perhaps unprecedented, to the world stage. A World Tech Jam kicks off WCIT 2012 from June 5-7, with 20,000 online contributors collaborating and sharing their ideas, their passion, and their insights on a massive scale into the creation of a true bottom-up Global Digital Society Action Plan

And in conclusion: this item from The Mark will either entertain or terrify you.
Watson: Jeopardy! Champion, Wall Street Analyst?
Seeing as how humans have made a spectacular cock-up of Wall Street these past few years, the minds at Citibank have decided to hire Watson, IBM’s Jeopardy!-destroying computer program, as an adviser, of sorts.

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