Archive for December, 2010

Our financial system must be fixed

Monday, December 20th, 2010

The financial system collapsed – again – a few years ago – it is not over yet – what have we learnt? The fictitious world of high finance is all taking place in your mind, the link between value creation and money value has been broken, it is all about fictitious values: short/long, investors stampeding greedily, a game is played, bonuses are still there, the central parts of the system are just the same – no change – and new disasters will come. Why is there such a hardline resistance to betterment?

The economies of the world are feeling pain, people are out of jobs. Financial services have broken down: savings, hedgefunds, shares, banks. Who took the money? They are still there?

Crises keep coming, we cant have that, we must mend the system. Basically we must aim to have an open dynamic innovative system, but regulation must be dynamic too and open to risks and excesses coming up. It seems the name of the game is bubble watching – or greed watching – the picture of human nature is of irrationality, greed, optimism, following the herd etc… There is also the case of the big operator going bust – too big to fail syndrome. Product development – derivatives, synthetics – should clearly be allowed, but risk assessment and transparency must be ensured. Much should be evaluated: Collateralized debt obligations, perverse incentives, models of mortgage financing.

New basic thinking about value creation, money, the real versus the financial economy is required. It is rather bizarre: Values are created through daily work, but financial losses are allowed again and again to destroy peoples lives. Finance is clearly not a science, it is emotional by nature and must be regulated much tougher than it is today. Let us start by demanding more reserves, better risk regulation,

The aim of the banking system should be aligned with society’s aims which is to allocate and deploy money long term, geographically distributed for purposes that are socially beneficial, sustainable – banks and financial institutions are servants of the people doing their daily work.

Further lenders as a matter of principle must face the losses, there are no no-risk loans. The state is not safe, systemic crises should be dealt by making changes, not just paying our way out of it, investors are running in a stampede, investors should assess risk and cover themselves.

The banking system should be mended so that everybody including the poor and unemployed have access to credit and finance. We should separate retail banking and “financials” – split up reporting, add geographical aims, go by type of business, book-keeping to show what is going on, reduce size of banks – we don’t want to hear too big to fail.

We should arrange finance for the journey towards a sustainable society, align bankers incentives to suit this long term goal. We must ensure there is competition between banks financing governments and big companies. The size of financial institutions should be limited, and new cooperation practices evolved for large scale financing.

Banks must take the consequences of insufficient risk evaluation and risk coverage, and face the full consequences of bailouts. Banks must also have more capital and risk coverage. Default of banks are their own business. Owners of debt and shareholders should take the blame, and the senior debt-holders should share the blame. The size of the banks should be regulated and they should be allowed to fail. Insolvency should lead to losses among shareholders and creditors, and we need modern resolution regimes to handle that.

We should institute a national bank available everywhere to solve the problem of exclusion and poverty, and an independent ecological investment bank to finance all ecological investments, and as a prototype of future banks.

Why should we  pay back debt, and not accept the forfeiture of state debt? When the borrower is a state that can not pay, the lender loses his money. If a debtor can not pay he stops paying. This risk should always be in the creditor’s mind. Who are these losers? Why can’t a state go broke? There is also the question of who can create money in a society, in the world?

Why is this a political game – should money matters be removed from politics and put into independent stewardships?? Investors should be getting used to banks being a normal business that can go bust.

Excess bonuses should be curbed – now.

Is there a natural and good order to be found? Is anybody interested? We can’t go on like this – we are intelligent people – behind our emotions.

Is China dangerous?

Friday, December 17th, 2010

The power and influence of China is increasing. Will it take over for the US and do what the US has done? Or will it improve the world’s lot? The world has for a long time been engaged in power games – economic interests coupled with military power – with the Europeans and US meddling everywhere, with a military presence everywhere. If China develops it own thinking along the same lines, there will be conflict. Some say that China has a form of stagefright now, but surely that will vanish.

So China may be dangerous to the US, but hardly to the rest of the world. But the power balance must be adjusted, and that could be dangerous.

China has lived in its own closed society for a long time, and is now opening up to new experiences. Many other societies/civilizations  has come and gone during this time. It will take time for China to learn the new ways of international cooperation and find its place in the world. We do not know what it will be, the global role, military world role, the power game with the US, protection of trade interests with military forces.  As an example China and India now pledges to increase bilateral trade, support prohibition of nuclear weapons and make 2011 the year of China India cultural exchange.

Debate inside China is not heated, and there are limits to what can be said, what you have the right to know and the internet is tightly controlled. Facebook is not open.

The economic power of China is increasing rapidly, it already has the second largest economy in the world, it is hunting for resources all over the world. China is now a country of building sites and new factories, concentrating on making its people materially better off, but is also enlarging its military power, while at the same time building international relations widely. Big industries like the the car industry, civil aviation is growing. China is also scouring the world for technology – buying or lifting it into its own industries.

There are territorial claims, incidents in international waters, in the South China Sea, India, Pakistan. Many countries in Asia are arming up to prepare for what may come: Vietnam, Australia, Indonesia .. The future role of Korea is part of it. China also has “projects” going on near the Indian border, and it seems Tibet is negotiating for the future. Water matters are also part of international discussions. International principles of law should be established concerning maritime conflicts, border disputes.

So who will balance  the power game in Asia? What China does when it is ready is a great question. American centrality is waning, Europe has become a leftover, Japan is in a sad state. Western influence is not what it was. Latin America also trades with China and India, and explores new opportunities in Africa. Chinese foreign policy is developing, and the Foreign Minister is not included in the top level of Chinese politicians.

The essential global divide today is between the West  and  emergent nations like India, Brazil, Turkey, South Africa, China. The West is obviously feeling the heat. Most of the world’s population lives in the developing countries, and for billions of these opportunity is expanding rather than contracting

The Nobel Peace Prize  to Liu Xiaobo is an acknowledgement of the importance of  China on a developing world stage. The message is that basic human rights are necessary if China shall have it’s rightful place in a basically good world. Opennes is good for business too – ideas flow more easily. Governments should be open, power should be distributed and used wisely, never to harass individuals.

Controlling the expressions of a billion people is pure fantasy. The real long term power lies in the ideas, ideas presented by a few are often stronger than formal power.

China surely will use its power, and so will India, and the rest. A new situation is developing – so let us prepare ourselves the best we can. Go to China and see things for yourself – you may find it rewarding, and see that the Chinese are very cultured people.

The US is already in the process of creating pictures of China as an enemy and trying to recruit members to this enemy-club. Let us see to it that this strategy is not successful – first of all cooperation must be the aim. This kind of remark is called naive, but humanity must eventually come to their senses.

Getting the youths of the nation into adulthood

Friday, December 17th, 2010

Reflections on film “The King of Bastøy” about juvenile delinquents in a youth-prison in Norway about 1915 with harsh methods, non-evolved thinking about we really do. Things have improved markedly since then, but a bit of thinking about what goes on could be useful.

Many youths and children do not fit in and become delinquents and have to be taken care of by representatives of society. This is complex, difficult and a source of debate about methods.

This may clearly be about estrangement, lack of understanding, social problems, many kinds of conflict. These unlucky people now become clients in the client society we are creating – professionals take care of them. This is often felt like “society is brainwashing me, making me into what they want”.

So should we try new methods? Should we be more active in such transition processes, admit that we have to put more effort into it, look upon it as a consciousness-building process that many people need or want?

Should we think more widely and offer new ways of approaching the situation, mainly based on listening to the people involved, creating solutions formulated by the youths themselves, and looking at it as an initiation program where you can find your place in society, as a way of finding your adulthood. Where social and local support is good this often happens by itself, but surely it would be possible to include all kinds of people in a broad programme offered by society. This way it becomes an option for all kinds of youths to find their own way.

The idea could be to change your location, test other locations, change your social environment, try other locations and try to find what you like to do with your life. You can do it in your own country, or preferably you move abroad. You should do this on your own, and you get the support – preferably from your own “nearness” – you need money-wise and programme-wise.

In this way you can test your own limits, find who you are, what you can do, see your problem-solving ability, how you can enter into other societies, try and learn other languages. This should also be exciting, an adventure. The length of such a programme must be appropriate, open to evaluation. The control and measurement of results should not be too strict, as it should also function as a safety valve for society.

Many societies have initiation rites, and a common platform like this for for many young people could be part of the solution.

The formalized society must be changed

Tuesday, December 14th, 2010

The lawmakers keep pushing new laws and regulations at us, and so-called researchers of society are finding ever new problems or activity that must be regulated. System, order, reporting, coordination, follow-up, obligations without personal choice – much of this has been good, but we have to stop now and think what we are doing.

When all is tightly regulated from birth to grave a sort of heaviness or burden may materialize. There is enough system, there may even be too much system in everything we do. People are voicing this kind of concern in many places now – they don’t want to be part of it anymore.

It is all preordained – children must have pre-school methodical supervision, school is systematic and you have to be there, higher education is heavily targeted at what society needs, work is tightly regulated and disciplined and takes 40 years of your life, work is organized in large companies or the bureaucracy, life as a pensioner is full of rules too – maybe you can not live where you want and take your money with you. We spend our whole life in institutions.

It all starts when you are a child: you must have supervision all the time, when you are a year or two it starts. Individual playing and gaming is not allowed, you must participate in the grand scheme that will make you a useful contributor to the welfare state. Gradually you are becoming what you are supposed to: a tool in the development of a grand system. You no longer have free will, you are ruled by habit, there are rituals to follow. But the compensation is great for the material wellbeing is great – no wonder because you are working hard – you can shop many things large and small, watch TV, go to the movies, play golf, drive a car, travel…..

And criticism is increasing, the system is a creaking one . School dropouts are huge, depression is increasing, 20% of the workforce is sick or on welfare, children are bored.

So we must think about changes: “Your life must not be a burden every day – you must make your pain go away” (The Byrds)

And we should start with the children: They should be able to do what they want, and they should be able to do it on their own, we should try to foster creativity by letting them think what they want, then let them do it, so they can have fun. We should teach them that they must find what they love to do and then we must help them do it. This is the principle of a good life too – this is what you should do for the rest of your life. Decide for yourself – do not let the system do it.

Rules must be broken too – there are too many – and the unneccesary ones must be taken away.

Adding to the structure and rigidity of society in a never ending process is surely not the aim. We tie up people physically and mentally – they become production machinery, sleepwalkers and animals of habit – and unhappy too.

Our politics should change, many essential systems like the systems for money, fair distribution of goods and wealth, ecology, power politics need amending. It all ties in.

The possibilities are obvious. We can all do our part by thinking independent thoughts, being ourselves, find our essence and act it out. This is your choice: just do nothing and be engulfed by the system, or do something nobody else does. When we all do the latter it will be good to be here.

Aging – the riddle

Friday, December 10th, 2010

We all age and die. The length of our lives vary a lot, but expected lifespans in most countries are increasing all the time. People older than a 100 years are no longer a rarity, there are more and more in many countries. Reaching an age of 125 is not uncommon any more. We say that this is due to better fitness, nutrition, cleaner air, good medicines and so on.

But recent research is introducing doubts: It seems the fittest, the vegetarians and others do not live longer than others – when data are “cleaned” and made comparable. Do we really know what is causing the process of aging in humans? It is rather amazing that we can not say for sure – yet.

Researchers are trying to find the mechanisms in the body that controls it all. It seems they are rather complex, and of both the physical and mental kind.

The chemicals in the body are many, and one called telomerase has been tested in connection with aging. Adjusting the level of telomerase was thought to affect aging but so far no certain effect has been seen. Research is continuing. Other substances may be effective, and the search is really on for a drug that can combat aging.

But there are other angles: genes seems to be important – it has been established that some genes make life longer, and this has been seen in special groups of people with similar genes. It also seems that some genes are bad, leading to diverse illnesses like diabetes, cancer, heart failure. Research into the mechanisms of genes is continuing. Many people with so called good genes can live very long whatever kind of life they lead.

Nutrition and fitness are constantly referred to in connection with aging, and physical wellness seems to be a contributing factor. It seems that compensating for weaknesses by sound nutrition and training gives good results.

But increasing importance is being given to your mental state: What do you think, how do you feel, how do you behave. If you can manage a good mental life, happiness, give and receive love, plan ahead, be optimistic, be selfsufficient in practical matters,  your chances of a good long life is improved. And then it will be good to – being active, laughing  and loving your way into old age.

So there  we are: We do not have a complete picture of what causes aging, it surely is complex, but if you do not sit back and let yourself grow old your chances of a long and good life will improve.

May be medicines are a bad idea, and unnecessary too, for most people?

The bottom of the sea is our future

Thursday, December 9th, 2010

The oceans and the deep seas are not well known to man. We know the extent, the depths, etc. but the processes going on, the influence on the environment, the lifeforms down there are not well known. We  know about most fish, some plants, surface currents, some metals, maybe there is oil down there – but a lot is lacking in what we know. The high water pressures are a challenge.

These areas are huge – Norway alone has a seabed area 7 times as large as the country itself. Large areas are common to humanity – many parts of the big oceans. We know more about the surface of the moon than about our own seabed.

This is about to change. Many nations are now starting cooperative efforts to map the bottom, establish time series of data that can be used to describe the processes taking place, getting hold of samples of materials, finding out more about life-forms in the deep. Environmental and sustainability questions are also part of it. Volcanic processes of the seabed are different, and we need more knowledge about how the magma moves and forms in the deep sea. The lack of light in deep waters make the processes different also.

There are now recommendations from European researchers that a system of marine observatories should be put in place. Canadian observatories are already in place near Vancouver. The Russians are at it already, so is the US, and further international cooperation will be sought.

The observatories will be high tech marvels that can collect data from the surface to the bottom many thousands of metres down there. They can measure currents, acoustics, water properties, sonar, tempeatures …., and they can be connected to each other in a network. Remotely controlled vessels, communication systems will be needed too.

Industrial partners are coming in as well – there may business to be done.

There is also a big administrative challenge: How do we share these resources, what kind of rights do nations have, what will be the extent of international cooperation.. Get your fair share or occupy what you want?

Surely much of these waters are a common pool resource for humanity?

Surely we could establish underwater communities at the bottom of the oceans, working, living, finding food there?

The core of society: the core economy

Wednesday, December 1st, 2010

Public services and formalistic management systems don’t value or see their most attractive resource: their own customers or clients and the social networks and neighbourhoods they have. Ignoring these assets make the action slow and inefficient, tending towards soulless practice. This is where the idea of co-production enters.

Co-production came up with professor Elinor Ostrom: the police need the community and the community need the police, doctors need patients as much as patients need doctors. Professor Edgar Cahn used it to explain how important neighbourhood level support systems are – families and communities – and how they can be rebuilt, and that this is economic activity in the broadest sense.

The Greeks understood that these critical family and community relationships were a second economy, the non-market economy, the ‘core economy’.

Co-production points to ways in which we can rebuild and reinvigorate this core economy and realize its potential.

We could use co-production in many ways: public service, health care, modernizing business.

Co-production means a fundamental partnership between the monetary economy (public, private and non-profit sectors) and the core economy of home, family, neighbourhood, community and civil society. The distinction must be blurred.

We must value the effort invested in giving love and comfort, approval and disapproval, caring and mentoring, civic engagement like attending meetings, making phone calls, mobilising social protest. The labour force must include children, teenagers, persons on public assistance, the disabled, the elderly and even the bed-ridden and housebound.

Social problems are now solved by paid professionals or volunteers with restricted roles. The core economy of the future will be based on relationships and mutuality, trust and engagement, speaking and listening and caring, with authentic respect.

The core economy produces love and caring, coming to each other’s rescue, democracy and social justice.

The consequences of present policies are all around us: isolation, time poverty, low levels of trust, engagement or social infrastructure.

Future public service reform models must value the core economy. Social networks are the immune system of society – they can establish the link between the professionals and the non-market economy/core economy.

The objective of the core economy is:

Provide mutual support systems that can identify and tackle problems before they become acute, encourage behaviour that will prevent them happening in the first place, and advise people who find themselves in difficulties.

Build social networks that will prevent crime, support enterprise and education, keep people healthy and make things happen locally.

Provide supportive relationships that can help people or families continue to survive and thrive when they no longer qualify for all-round professional support.

Provide opportunities for personal growth and development to people, so that they are treated as assets, not burdens on an overstretched system.

Invest in strategies that develop the emotional intelligence and capacity of local communities.

Use peer support networks instead of just professionals as the best means of transferring knowledge and capabilities.

Reduce or blur the distinction between producers and consumers of services, by reconfiguring the ways in which services are developed and delivered: services can be most effective when people get to act in both roles – as providers as well as recipients.

Allow public service agencies to become catalysts and facilitators rather than simply providers.

Devolve real responsibility, leadership and authority to ‘users’, and encourage self-organisation rather than direction from above

Offer participants a range of incentives which help to embed the key elements of reciprocity and mutuality.

Of course – this is what we all do to our dearest – why not expand and include all?

See link nef

WikiLeaks – the context

Wednesday, December 1st, 2010

WikiLeaks is publishing documents showing the attitudes, opinions, characterizations of US diplomats all over the world – this information is entering the public domain. It is not nice to see. The US leaders do not like it.

So what is the point of what WikiLeaks is doing? Is it just gossip or does it serve a deeper purpose?

It surely should be seen in a wider context.

Diplomats from all countries send information back home so that information can be collected, action taken, policies developed. This has always been done.

The published memos show an unprecedented degree of power arrogance, deceit, lack of ethical standards, ignorance of local methods and ways. There is spying on friends, turning blind eyes to corruption and abuse. This is disturbing. The worlds only superpower should not be seen to behave like this. Other countries must take countermeasures to protect themselves. Trust is harmed.

The leaks should be seen in a wider context. WikiLeaks influences the power basis of governments.

What should be the standards of the people we employ to do service for us, how much information should be publicly available? Public discussion is part of forming public opinion, thereupon policies and this must be based on true information. Or should there be separate processes above our heads, things we don`t know  about, materializing in policies we do not understand or agree with?

There is more: Lobbying is rife in most countries, more resourceful and purposeful than ever, pressure groups are working hard to promote their interests, political spin is also in there. All this can easily damage good processes, and goes to the roots of democracy itself.

If such processes becomes the norm we will not know a thing about what is going on. So therefore we need  publication of all kinds of information – transparency, correction of negatives, participation. We do not employ people to do what they want, politicians must share information with their voters – they are all representatives.

We must demand ethical standards of high class and to know what is going on – the big picture must be seen – a good future depends on it.

Publish, man, publish!