Engpasskonzentrierte Strategie

It would appear that we are all now expected to find work "fun" into our seventies to fulfil our mission as state unsubsidised (and progressively less healthy) consumers - even if there is no work available outside of a supermarket check-out counter - as most people trying to get a new job at 60 might confirm. And as these jobs are now staffed by recent university graduates there's not much of that about. To what end are we working then? The vast majority do it to get into and then out of debt - a microcosm of today's financial market model. The product of Politicians and their economic advisers that have read Ayn Rand (incomparable nincompoop) as non-fiction. And we've recently seen where that leads.

Economists are now spewing forth the should have, could have, would have insights that the whole resultant catastrophe was predictable using the very same indicators that they invented to create it in the first place. The commander of the 18th Panzer Division said, after the battle for Smolensk, that they were winning themselves to death. Free market economics have succeeded in doing just that. Not very surprising then that Goldratt espoused the "weakest link" theory by following on from the German Wolfgang Mewes' "power-oriented management theory " and his later "Engpasskonzentrierte Strategie" - both of which the Wehrmacht could, would, should have borne in mind when they got into but not out of Stalingrad. And that's the Germans and the Euro for you.

There is a geo-strategic phenomenon called the "Eurasian Funnel" that illustrates the inability of a given Western force as it advances East to saturate and control terrain leading eventually to the isolation, exposure and destruction of that force. The same could be said of Economic Globalisation. Unfortunately the cheerleaders for Globalisation didn't follow the first law of military success - Never invade Russia - or, indeed, never march East.

What we have in Goldratt is a Bottleneck theory that ends up as a Funnel - most, if not all, Growth theories do this. That all of this is blindingly obvious doesn't appear to have prevented numerous repeats - the result of over-imagination rather than a limited one. Which brings us to that other financial market chestnut - Risk. Risk is always used to explain why we lost not how we won. It is a weasel word. While banks and bankers thrive and corporations sit on a pile of money a large part of the population is told to expect to spend their old age behind a checkout counter or stacking shelves. Which is the logical conclusion of a finance/retail economy when Economics relies solely on a selfish Dogma.

Work, then, is so that you can buy things you don't need to impress people you don't like. Its the best marketed product in the world, unfortunately for the majority of workers, its not the best paid. Which brings us back to the fundamental Market Economy sine qua non of Supply and Demand. If there is no demand there is no supply so there is no work and thus even less demand- no amount of Goldratt can fix that.

The modern Olympic Games have yet again demonstrated that they are simply an expensive giant monopoly advertising campaign decorated with athletes wearing product. This is best illustrated by the 100m and 200m sprinters wearing wrist watches - what for? These folk shave off their arm and leg hair to go faster. It takes less than 10 or 20 seconds but as they get into their blocks the cameras linger on their arms and hands settling behind the start line. Product gets air time and the athletes get a few more bucks.

It cost NZ an estimated $4 million a medal in London (a rounding error in what it cost London to stage the Games) - a few hip replacements there - so there is very little justification to continue this sporting nonsensical extravaganza - when slashing every other budget. The Ugandans, Kenyans and Ethiopians won a few medals while millions of their fellow Africans starved.

A load of outdated Nation State bollocks that brought us 2 world wars. Move the games to Greece permanently (they really could use the money) and select the athletes on ability not nationality. Also get rid of all this French language waffle - slows the ceremonies down and confuses the Chinese.

Where are the jobs?

Since we've been keeping records all economic recoveries, according to the economists, have been led by indicators of rising employment and a buoyant property market in a hand-in-glove type manner - on this occasion these ingredients appear to be totally missing. If we are to perpetuate the present Chicago School economic model surely this would include actually employing those who provide the market for goods and services and paying them enough to afford both them and a house. Sadly this is not the case. Meanwhile many stock-market listed corporations are announcing record profits. How is this possible one may ask. Globalisation is the answer. Around half of the income of a large part of the S&P 500 companies, for example, comes from overseas. Obviously employment and the attached personal income - along with the associated tax base - are not growing in line with corporate profits.

In reality this is not about to change any too soon. Union bashing and the reduction of workers rights are rampant. Wisconsin's anti-union legislation is only one example of retentive corporatist-infused political thinking removing the ability of workers to bargain for improved wages and conditions. Has anybody thought beyond the dogma as to who is going to support a recovery based upon the usual measurements? Isn't "Demand" part of the mix? "Supply" seems to have escaped the formula. Not only has Supply escaped but Globalized supply-chains confused government's statistical agencies to overstate the size and growth of domestic economies — most importantly the growth in productivity, especially in manufacturing. This misinformation has led to a malignant combination of political and corporate wills to hold down wages while blindly hosting the means of their own eventual economic destruction. 

If we continue to allow increasing corporate profits with no accompanying increase in employment or wages then the tax-base cannot support the public services expected from a government collecting taxes - the answer, so far, has been to demand an evisceration of public services and to continue to punish the workers - or middle class as they are now known. What economic model is this based upon? There are countries with strong unions - Germany for example. Funnily enough they appear to be in much better economic shape than the UK or US. Their unemployment is closer to 6% than 10%. Their wages have kept closer pace with corporate profits. Their wealth has, in fact, trickled down despite all the economic ingredients philosophically anathema to the True Believers of the World Bank, IMF, WTO variety.

Seems that a lot of the money given to the Banks to bail them out and "save" the world's economy hasn't made it's way back into it but instead has headed off into Commodities, Food etc. with the undesirable effect of making everything more expensive for the ever-growing number of, increasingly irate, low-wage-earners. Thereby exacerbating the problem. Everything that can be has been "financialised". Are we tackling this problem from the wrong end? It would appear, according to just not me, that the "Global Factory" models for finance, energy, manufacturing and production have run their course and are now counter-productive. Burdening "customers" with huge debt loads in exchange for dubious value - while "finance" maximises it's profit. Without some equitable redistribution of wealth it will only end in tears - the Arab street offers an informative example.

Tackling these weaknesses will require breaking finance's stranglehold over the economy by allowing governments to regulate and limit their more speculative and avaricious activities. I'd have never bailed the asshole out.