Common Sense versus the Sophistication of Business and Economics: The case of the Euro overcoming the U.S. Dollar

Common Sense versus the Sophistication of Business and Economics:
The case of the Euro overcoming the U.S. Dollar

Nipawin - Thursday, July 18, 2002 - by: Mario deSantis

"It is not that humans have become any more greedy than in generations past. It is that the avenues to express greed had grown [in the 90's] so enormously"

Alan Greenspan, Chairman of The Federal Reserve Board, July 16, 2002⁽¹⁾

corrupt
word
processor
I have always been leery and perturbed about the sophisticated business gurus telling

us how to think and do. I was working in the late seventies and early eighties 'under' the

Saskatchewan Health-Care Association (today's Saskatchewan Association of Health

Organizations) and realizing that their pension computer system was a corrupt word

processing system rather than a processing pension system.

too
sophisticated
to
understand
I asked why so much information requested on input forms was not entered (and not

processed) into the pension computer system. I was told that the pension computer

system was too sophisticated for me to understand. Guess what, these same

business gurus further enhanced the sophistication of their computer systems with

the assistance of the big businesses SAP and SAIC and in the process, these same

two businesses contributed to the sapping and sacking of Saskatchewan.⁽²⁾

common
sense
We must remember that what we need is intelligent common sense and not the

artificially, fragmented and sophisticated mind set of business and economic gurus.

money
movement
replacing
production
Kevin Phillips, author of the book "Wealth and Democracy: A Political History of the

American Rich", writes today in the New York Times

"the United States economy has been transformed

through what I call financialization. The

processes of money movement, securities

management, corporate reorganization,

securitization of assets, derivatives trading

and other forms of financial packaging are

steadily replacing the act of making, growing

and transporting things."⁽³⁾

real
wealth
What Kevin Phillips says is that our social and economic system has become too

sophisticated and that it suffers from a disconnection of what is really needed as

creation of wealth; in practice, we don't create wealth simply by playing in the stock

market and we don't necessarily create wealth by playing with money either.

unduly
escalated
asset
values
Phillips reminds us that economics is basically the act of making, growing and

transporting things; and economics is not the rationality brought into the Free Market

as implied by Alan Greenspan's well noted expression

"But how do we know when irrational exuberance

has unduly escalated asset values, which then

become subject to unexpected and prolonged

contractions as they have in Japan over the past

decade?"⁽⁴⁾

they
toy
with
us
Few days ago I wrote an article and I criticized the relentless message of

"our business gurus telling us how to learn to

live with ambiguities while these same gurus

along with their corporate and political friends

would make the tough decisions at the right time

and at the right place and at the right price,

and in a cyclical and inconsistent never ending

fashion."⁽⁵⁾

coping
So, the bottom line for ordinary people is to learn how to live with ambiguities while

the gurus and their patrician friends do our thinking for us and dictate their inconsistent

and sophisticated economics.

gurus
are
defeated
by the
stock
market
It was while navigating the Internet that I found the best description for our inconsistent

and sophisticated economics science, that is "on the other hand economics." It is

really a laugh listening to the gurus and understand that they speak a lot and mean

nothing. So, as you listen to the business gurus don't feel overpowered by their

sophisticated speeches as their bubbling is no different from the bursting bubbles of

the stock market.

trade
deficit
and
foreign
investment
Lately, the Euro currency has overcome the U.S. Dollar and the following are two

examples on how "on the other hand economics" explains this phenomenon:

i)American manufacturers are happy to see a weaker dollar as they can

sell more of their goods abroad,⁽⁶⁾

ii)on the other hand, Secretary Treasurer John O'Neill wants a stronger

dollar so that more foreign investments can subsidize the U.S.

economy.⁽⁷⁾

USA
comes up
short
$1.1
billion
a day
We don't need a strong or a weaker U.S. dollar. What we need is just intelligent

common sense. Is it right to have a strong U.S. dollar and rape the resources of

other weaker countries while the American economy continues to maintain a chronic

foreign trade deficit and while the American economy requires $1.1 billion of overseas

cash each day to finance its $400 billion deficit?⁽⁷⁾

devalue
for the
good of
the World
economy
Non conformist economist Dean Baker expressed his intelligent common sense two

years ago as he suggested that a lowered value of the dollar

i)would check the bubbles of the stock market,

ii)would reduce the foreign trade deficit, and

iii)would in the end

provide better growth and stability to our global economy.⁽⁸⁾

References:

1.
-
-
Testimony of Chairman Alan Greenspan Federal Reserve Board's semiannual monetary policy report to the Congress Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, July 16, 2002 http://www.federalreserve.gov/boarddocs/hh/2002/July/testimony.htm

2.
-
Fraudulent SGI and the Sapping, Sacking and Downsizing of Saskatchewan By Mario deSantis, June 25, 2002

3.
-
The Cycles of Financial Scandal By Kevin Phillips, July 17, 2002, The New York Times http://www.nytimes.com/2002/07/17/opinion/17PHIL.html

4.
-
-
-
The Challenge of Central Banking in a Democratic Society Remarks by Chairman Alan Greenspan At the Annual Dinner and Francis Boyer Lecture of The American Enterprise Institute for Public Policy Research, Washington, D.C. December 5, 1996 http://www.federalreserve.gov/boarddocs/speeches/1996/19961205.htm

5.
-
Corruption in Corporate (North) America: the sky is truly falling, trust no one By Mario deSantis, July 12, 2002

6.
-
ANALYSIS-Could dollar slide vs euro, yen turn to rout? By Sumeet Desai, July 16, 2002, Reuters News Service http://www.forbes.com/business/newswire/2002/07/16/rtr662715.html

7.
-
-
O'Neill backs strong dollar Treasury Secretary says euro has only regained half its original value in latest runup. CNN/Money, July 16, 2002 http://money.cnn.com/2002/07/16/news/economy/oneill.reut/index.htm

8.
-
-
Double Bubble: The Implications of the Over-Valuation of the Stock Market and the Dollar by Dean Baker, Center for Economic and Policy Research, June 2000 http://www.cepr.net/columns/baker/double_bubble.htm



Common Sense versus the Sophistication of Business and Economics: The case of the Euro overcoming the U.S. Dollar

Nipawin - Thursday, July 18, 2002 - by: Mario deSantis
	`"It is not that humans have become any more greedy than in generations past. It is that the avenues to express greed had grown [in the 90's] so enormously"` Alan Greenspan, Chairman of The Federal Reserve Board, July 16, 2002⁽¹⁾

corrupt word processor	I have always been leery and perturbed about the sophisticated business gurus telling
	us how to think and do. I was working in the late seventies and early eighties 'under' the
	Saskatchewan Health-Care Association (today's Saskatchewan Association of Health
	Organizations) and realizing that their pension computer system was a corrupt word
	processing system rather than a processing pension system.

too sophisticated to understand	I asked why so much information requested on input forms was not entered (and not
	processed) into the pension computer system. I was told that the pension computer
	system was too sophisticated for me to understand. Guess what, these same
	business gurus further enhanced the sophistication of their computer systems with
	the assistance of the big businesses SAP and SAIC and in the process, these same
	two businesses contributed to the sapping and sacking of Saskatchewan.⁽²⁾

common sense	We must remember that what we need is intelligent common sense and not the
common sense	artificially, fragmented and sophisticated mind set of business and economic gurus.

money movement replacing production	Kevin Phillips, author of the book "Wealth and Democracy: A Political History of the
	American Rich", writes today in the New York Times
	"the United States economy has been transformed
	through what I call financialization. The
	processes of money movement, securities
	management, corporate reorganization,
	securitization of assets, derivatives trading
	and other forms of financial packaging are
	steadily replacing the act of making, growing
	and transporting things."⁽³⁾

real wealth	What Kevin Phillips says is that our social and economic system has become too
	sophisticated and that it suffers from a disconnection of what is really needed as
	creation of wealth; in practice, we don't create wealth simply by playing in the stock
	market and we don't necessarily create wealth by playing with money either.

unduly escalated asset values	Phillips reminds us that economics is basically the act of making, growing and
	transporting things; and economics is not the rationality brought into the Free Market
	as implied by Alan Greenspan's well noted expression
	"But how do we know when irrational exuberance
	has unduly escalated asset values, which then
	become subject to unexpected and prolonged
	contractions as they have in Japan over the past
	decade?"⁽⁴⁾

they toy with us	Few days ago I wrote an article and I criticized the relentless message of
	"our business gurus telling us how to learn to
	live with ambiguities while these same gurus
	along with their corporate and political friends
	would make the tough decisions at the right time
	and at the right place and at the right price,
	and in a cyclical and inconsistent never ending
	fashion."⁽⁵⁾

coping	So, the bottom line for ordinary people is to learn how to live with ambiguities while
	the gurus and their patrician friends do our thinking for us and dictate their inconsistent
	and sophisticated economics.

gurus are defeated by the stock market	It was while navigating the Internet that I found the best description for our inconsistent
	and sophisticated economics science, that is "on the other hand economics." It is
	really a laugh listening to the gurus and understand that they speak a lot and mean
	nothing. So, as you listen to the business gurus don't feel overpowered by their
	sophisticated speeches as their bubbling is no different from the bursting bubbles of
	the stock market.

trade deficit and foreign investment	Lately, the Euro currency has overcome the U.S. Dollar and the following are two
	examples on how "on the other hand economics" explains this phenomenon:
	i)American manufacturers are happy to see a weaker dollar as they can
	sell more of their goods abroad,⁽⁶⁾

	ii)on the other hand, Secretary Treasurer John O'Neill wants a stronger
	dollar so that more foreign investments can subsidize the U.S.
	economy.⁽⁷⁾

USA comes up short $1.1 billion a day	We don't need a strong or a weaker U.S. dollar. What we need is just intelligent
	common sense. Is it right to have a strong U.S. dollar and rape the resources of
	other weaker countries while the American economy continues to maintain a chronic
	foreign trade deficit and while the American economy requires $1.1 billion of overseas
	cash each day to finance its $400 billion deficit?⁽⁷⁾

devalue for the good of the World economy	Non conformist economist Dean Baker expressed his intelligent common sense two
	years ago as he suggested that a lowered value of the dollar

	i)would check the bubbles of the stock market,

	ii)would reduce the foreign trade deficit, and

	iii)would in the end

	provide better growth and stability to our global economy.⁽⁸⁾

*References:*
1. - -	Testimony of Chairman Alan Greenspan Federal Reserve Board's semiannual monetary policy report to the Congress Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, July 16, 2002 http://www.federalreserve.gov/boarddocs/hh/2002/July/testimony.htm

2. -	Fraudulent SGI and the Sapping, Sacking and Downsizing of Saskatchewan By Mario deSantis, June 25, 2002

3. -	The Cycles of Financial Scandal By Kevin Phillips, July 17, 2002, The New York Times http://www.nytimes.com/2002/07/17/opinion/17PHIL.html

4. - - -	The Challenge of Central Banking in a Democratic Society Remarks by Chairman Alan Greenspan At the Annual Dinner and Francis Boyer Lecture of The American Enterprise Institute for Public Policy Research, Washington, D.C. December 5, 1996 http://www.federalreserve.gov/boarddocs/speeches/1996/19961205.htm

5. -	Corruption in Corporate (North) America: the sky is truly falling, trust no one By Mario deSantis, July 12, 2002

6. -	ANALYSIS-Could dollar slide vs euro, yen turn to rout? By Sumeet Desai, July 16, 2002, Reuters News Service http://www.forbes.com/business/newswire/2002/07/16/rtr662715.html

7. - -	O'Neill backs strong dollar Treasury Secretary says euro has only regained half its original value in latest runup. CNN/Money, July 16, 2002 http://money.cnn.com/2002/07/16/news/economy/oneill.reut/index.htm

8. - -	Double Bubble: The Implications of the Over-Valuation of the Stock Market and the Dollar by Dean Baker, Center for Economic and Policy Research, June 2000 http://www.cepr.net/columns/baker/double_bubble.htm