Does Financial Crisis Threaten America's Central Role in Global Economy?
Reader Comments
Greed
The American capitalistic system has been overtaken by greed.
You cannot preach to others on good governance and transparency when you steal from your own strong room.
This era is an era of shame and uncontrolled lust for money and power. Americans have to do a soul searching especially when you pride yourselves as a role model Christian Nation.
As an outsider I am completely shocked that this nation of your founding fathers can be so rotten having total disregard for principles of hard work and honesty in business.
Americans have been caught with their pants down betrayed by leaders who do not care a damn for the founding fathers ideals.
Malaysia
allencharlesreport of FL has a great idea
allencharlesreport of FL has a wonderful idea. However, the US is not the biggest creditor, rather, the opposite is true.
However, that may not be a big deal. allencharlesreport of FL
should add that we can always take other countries over and put them under the care of our military while we can work with them to manage their financial assets as a team.
The Worldwide DEBT is the problem.
The best solution for the present economic crisis would be a REBOOT or restart of the entire debt system for the ENTIRE WORLD.
1. A data base listing ALL DEBT, government, business and personal needs to be created. The list would need to list the debt and debt holder with a bank that could make an accounting of the debt. Included would be all national debt of all nations, all mortgages car notes and credit cards for individuals. All outstanding bond and other debt for corporations, The idea is to list ALL DEBT of any kind owed.
2 . Every government on the planet would need to call a special session of it’s legislature.
Using the same authority that governments have to use or create FIAT CURRENCY the legislatures and Central Banks need to authorize the creation of ACCOUNT CREDIT in an amount equal to all the listed debts in the world.
3. The Various governments and Central Banking Systems then need to make an accounting change equal to the debt in the form of an ACCOUNT CREDIT or CREDIT zeroing out ALL THE DEBT in the entire world, and crediting all debt-holders in the world.
The following day the economy of the entire world would restart and the Stock Markets of the world would react to the new renewed capital in the banking systems, the Capital now available to restart all business and the disposable income to the individual people would restart and grow the retail sectors and the manufacturing sectors of the entire world.
Allen Charles Report
http://allencharlesreport.blogspot.com/
Outsource of IT jobs
I totally agree with Andy's commnets on the fundemental flaws. I am also deeply saddended about how we, as a nation and people, allow the off-sourcing of our IT jobs in massive ways. This is nothing but suicidal. With high tech jobs going overseas, we are outsourcing our future and hurting our children. IT is what makes American. Now we are losing it fast. In addition, it does not save any company a penny, actually it costs a lot more and makes an American company lose its competitive edge. This absurdity is happening because the way that we manage large corporations has a fatal flaw between the ownership and the management power.
A large national bank has off-shored its IT operations. On the paper, with the salary difference, there are huge savings. The executives get big bonuses as a result. In fact, due to the loss of productivity resulting from the loss of intellectual capital and experience, there are tremendous business losses in IT system stability and impact to the company’s bottom line. However, there are no laws forcing companies reporting how their IT divisions operate. In addition, every company in its right mind will not publish its IT operation problems. Therefore, the fact that this off-shoring strategy is losing a arge amount of money is not generally known. Therefore, the executives who are responsible for the loss continue to harvest huge amount of bonuses. When all the tier one executives have a reward of a few more million dollars, who will speak up and tell the truth that the bank is losing big money on this off-shoring deal of IT operations?
Then, how does this off-shoring impact the company? Let’s have a look at the truth.
1) The large IT infrastructure is very important and critical to our financial security – now the bank has to depend on foreign technical staff to control and manage this critical financial infrastructure of our country
2) The large financial IT infrastructure is not making tennis shoes – it needs a highly educated and very experienced workforce to design, build, and operate. These systems take year to learn. If we do not have our own engineers working on them, soon, (with no exaggeration at all) nobody in the US understands these large and highly complexes, but powerful technical systems. Is this good for our country?
3) Losing these highly paid and highly technical jobs sends out a powerful message to our young people who will not get into engineering and technical areas. For example, our computer science education in the past 5 years has consistently gone down across the country.
Our business leaders know all of these, but they will still off-shore IT jobs. Why? Because by all means, the incentive structure for executive compensation does not give them any real motivation to serve the company or the country, but make themselves richer faster. By the way, they themselves and their friends make the incentive packages for themselves. Since they are not the real owners of the company.
Fundemental Flaws
The first flaw is that we are a nation of consumers and not a nation of producers. What really do we produce that the rest of the world buys? What do we buy that is "Made in America"?
The second flaw is that we are a nation of spenders and not a nation of savers. The past economic boom was largerly fueled by easy credit and we are in such a mess now because credit is not easy anymore.
The third flaw is our goverment has the interest of businesses at heart and not the American consumer. I read that the consumer makes up 70% of the US economy yet he/she is ignored. Over the years consumer protection laws have been weakened as well as the regulation of big business. Our ancestors saw the problems "big business" caused and choose to restrict their influnce. However, over the past 20 years or so this wisdom was forgotten. Now our politicans listen to so called experts that are funded by "big business".
Besides reforming the financial system, we need to reform the political system.
Three fundamental flaws of American leadership model
The first fundamental flaw is the separation of ownership and power of large American companies that are public in nature but private in name. This fundamental problem has proven to be a structural flaw that has made tremendous damages to the economy and the national security of the United States of America due to the indifference of the management to the real long-term interests of these large companies and their business behavior and its negative impact to the US economy.
The second fundamental flaw is the fatal inadequacy of the rule of law. The technology aided economy has experienced fast changes and the regulation and legislation have been dangerously slow and irresponsive. The lack of regulation and the latency of law and the fast changing business reality aided by advanced information technology have opened wide holes for a number of American senior executives to exploit and to get notorious rich at the expense of the America general public (all of us and our children). As a result, the greatest strength of America, the rule of the law, has become its greatest weakness.
The third fundamental flaw is that our politicians and businessmen have converged into one increasing self-serving leadership body without effective checks and balances. No laws prohibit rich businessmen become powerful politicians and vice versa. The most damaging kind of corruption is the kind of “gray” corruption that we see everyday - it is subtle and totally lawful, but tremendous damaging to the health of a nation, when the complex, interconnected, and interdependent network of money and power bring about single-minded pursuit of more money and power that crushes anything on its path, regardless it is national security, the wellbeing of the American people, or the future of our children.
Three fundamental flaws of American leadership model
The first fundamental flaw is the separation of ownership and power of large American companies that are public in nature but private in name. This fundamental problem has proven to be a structural flaw that has made tremendous damages the economy and the national security of the United States of America due to the indifference of the management to the real long-term interests of these large companies and their business behavior and its negative impact to US economy.
The second fundamental flaw is the fatal inadequacy of the rule of law. The technology aided economy has experienced fast changes and the regulation and legislation have been dangerously slow and irresponsive. The lack of regulation and the latency of law and the fast changing business reality aided by advanced information technology have opened wide holes for a number of American senior executives to exploit and to get notorious rich at the expense of the America general public (all of us and our children). As a result, the greatest strength of America, the rule of the law, has become its greatest weakness.
The third fundamental flaw is that our politicians and businessmen have converged into one increasing self-serving leadership body without effective checks and balances. No laws prohibit rich businessmen become powerful politicians and vice versa. The most damaging kind of corruption is the kind of “gray” corruption that we see everyday - it is the subtle and totally lawful, but tremendous damaging to the health of a nation, when the complex, interconnected, and interdependent network of money and power bring about single-minded pursuit of more money and power that crushes anything on its path, regardless it is national security, the wellbeing of a people, or the future of our children.
No MSG!
I wok in restraunt,we wok hard not to break china- owner say must come out of my check.
Like rats deserting a sinking ship!
It would seem that the rest of the world that is being affected by our economis meltdown is of course ready to blame us for their own woes has if we forced them to emulate us! Many countries who did not allow greed to get in the way of common sense are weathering the storm quite nicely. And I suspect that after we weather this storm they will be breaking their necks to hop back on the gravy train which hopefully won't be accepting so many passengers if we have learned anything from all of this!
What the history offers?
I come from China and it is hard not to compare the mess that we have now with the conclusion of each Chinese dynasty. A Chinese dynasty usually ended with the following:
1) Tremendous polarization of the society where a small group of ruling class got absurdly rich. The wealth of the country rapidly concentrated in the hands of a very small percentage of the population.
2) The increased insulation and segregation of the majority of the population and a small group of “super rich” who became increasingly indifferent to the needs and opinions of the people.
3) Long years of expensive wars followed by wide spread civil unrests
4) Intensified “marriage” or “merge” between political elites and powerful property and business owners
The United States of today seems having all of these symptoms. However, the substantial difference is that we are a democratic society where we can get our voice heard to a certain extent through the political system and a free media. Maybe we can fix this mess and continue the American story of success and prosperity. Ancient China had a different political system of feudalism where violent revolutions erupted every three to five hundred years and wiped the old dynasty away and replaced it WITH a new one that treated its people better at the beginning, but gradually was corrupted again by the immense power that it had and started digging its own grave by repeating the same mistakes.
It is worth trying the democratic process, for example, express our opinion here and participate in the soon coming elections. Revolutions are violent and ugly. For example, there have been many dynasties in China, but why only one Forbidden City in Beijing, the home of the last emperor of Ching dynasty, has survived? ALL the other extraordinarily luxurious and splendid royal palaces had been burned by the people with intense hatred and the emperors and their families along with their cadres, as a rule, died violently.
