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Nurture, nurture, nature

December 29, 2010

Ah, the age old trust in the new enlightened humanity continues…

“Let us answer [the euro’s critics and current crisis] by having more solidarity,” he said. “Overcoming history is an imperative for us.”

Yeah – so what does ‘solidarity’ look like given the fact that the Germans saved, the Greeks did not & the Greeks are unwilling to give up their comfortable way of life?

Mr. Lamont highlighted the disparity in inflation, budget deficits and employment levels that separated poorer southern nations from core European economies. “So long as such divergence exists,” he said, “a move to a single currency would represent a massive leap in the dark.”…“I have always said that the euro will break up,” Mr. Lamont said 

How does one “overcome your history” given the disparities in the different cultures, and the impact of culture upon what is considered sound economic decision-making starting from an individual up to the highest levels of local government? What culture “wins?”

Marketwatch talks today about a number of actions that have been taken indicating “Magical thinking” in the anthropological sense has been the basis of much of the decisions by individuals all the way up to the highest levels of government in more than one region.

Magical Thinking: thinking that if a person hopes for something enough or performs the right actions that an unavoidable event can be averted

Market watch:  As I look at the world, wherever possible, elected officials have traded more contingent liabilities for time…..I am very concerned that our years of magical thinking have widened an already tenuous divide between the classes. And not just here at home, but in Europe as well…

I would again note that phrases like “overlord” (used to describe Germany by those in the periphery) clearly capture the feelings of rage and envy of those experiencing the second stage of grief.

Which brings me back to the question around “overcoming Europe’s history”. If overcoming history implies overcoming humanity….nurture, education, philosophy, “enlightenment” or “an enlightened caste” always seem to lose to nature’s more base tendencies.

Currently, the focus is more towards the “Robin Hood” economy

what I think is most interesting about our most profitable companies today, is how susceptible they are to a populist wave….substantially all of the firms listed above also demonstrate oligopolistic (if not monopolistic) behavior, which combined with their Main Street “popularity” make their earnings extremely vulnerable to government “taxation” of one form or another

Salon:  Where are the jobs? Overseas of course – Harvard Business School Dean Nitin Nohria…, says that if U.S. businesses keep prospering while Americans are struggling, business leaders will lose legitimacy in society

 Makes it easier to annex their companies & treat them like crap when they’re illegitimate, no? One thing Freakonomics did seem to get right is that people, businesses and countries will operate in their own self interest. Smart policy creates incentives such that the interests of others benefit when a decision maker operates in their own self interests. “win-win” accomodates nature AND nurture. Punitive policy? not so much

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