Opinion (Professor Klaus Schwab, from the World Economic Forum): “Over the last three years, the world has been engulfed by political, economic and, particularly, financial crisis management. We have lost sight of the fundamental transformation that the world is undergoing and of where conventional modes of decision-making have become outdated. What we clearly need are new models for global, regional, national and business decision-making which truly reflect that the context for decision-making has been altered – in unprecedented ways.

“Let me outline the four new models I consider ‘musts’ if we are to successfully push beyond the current impasse in addressing the critical challenges.

“First, a new model is needed to account for the fundamental power shifts that have already and are continuing to take place. I am thinking not only of the seismic shifts of geopolitical and geo-economic power from West to East and from North to South, but also of the need to integrate new non-state actors who want to have their say and the capability to do so. Power has become much more distributed.

“Thus, we need new models where governance processes on all levels integrate these newcomers in the most collaborative way. In the old world, it was hard power – hierarchical power – that was decisive. Then came soft power – the capability to have a convincing message. But today, we need to integrate empowered newcomers in what I call ‘collaborative power’ – the capability to exercise collaborative power will determine the future on the business, national, regional and global levels.

“A second new model is needed to acknowledge that we live together in a multicultural, multi-ethnic and multi-religious world. Prevailing values will have to increasingly accommodate diversity with substantial challenges for national and individual identities. We will only make lasting progress by recognizing that we are different but interdependent. Thus, we have to cultivate a much greater feeling of regional and global togetherness.

“A third new model is needed to seriously address the social impact of globalization and the new wave of technological innovation. Growing inequities within and between countries and rising unemployment are no longer sustainable and are triggering social protests, as witnessed throughout the world. We must rethink our traditional notions of economic growth and global competitiveness, not only by focusing on growth rates and market penetration, but also, equally – if not more importantly – by assessing the quality of economic growth.

“How is growth to be achieved in the future? How sustainable is it and at what cost to the environment? How are the gains distributed? What has become of the family and community fabric, as well as of our culture and heritage? The time has come to embrace a much more holistic, inclusive and qualitative approach to economic development, based on the ‘stakeholder’ and not on a pure ‘shareholder’ concept.

“We need a fourth new model for job creation. The global economy is growing more slowly, productivity is still making substantial progress and unemployment is skyrocketing. We also know that hundreds of millions of people will enter the job market in the next decade. In addition to the productivity increases driven by greater resource efficiency, the industry model is changing and moving upscale, where fewer people can produce much more value.

“The key to mitigating a catastrophic situation is to provide young people with the capability to create their own jobs: to move from the pure concept of unemployment to the concept of micro-entrepreneurship. This will require fundamental changes in educational systems, nurturing a societal spirit of entrepreneurial risk-taking, allowing true gender equality – to integrate the other half of hidden talents – and making innovation and the support of innovation a key imperative in public and private life. The success of any national and business model for competitiveness in the future will be less based on capital and much more based on talent. I define this transition as moving from capitalism to ‘talentism’.

“I have outlined only four of the new models that form part of the great transformation regionally and globally to illustrate that we are at a historic inflection point. In Davos, we will discuss many more aspects of the great transformation, particularly how they create new business models.

“To respond to the expectations of the young generation, we have to provide them with the hope and confidence that they will not have to pay for the mistakes and excesses of the present generation. There is a tipping point where velocity, interconnectivity and complexity become so pervasive that the whole system collapses, regardless of whether certain elements at the surface have been addressed.”

Comment: Frankly, I have heard a lot of enthusiastic feedback about this lecture, but, after reading it, I became disappointed. Doubtless, it is necessary to do the following:

1. Develop a new economic model of rational consumption

2. Distribute the limited amount of work that will remain after the economic bubble bursts and with the excessive production capacity

3. Create a system where people are occupied with integral education and upbringing, rather than with production activities

4. Restructure welfare and social relations upon the new meaning

 Until we begin to implement these objectives, the crisis will not leave us. After all, it reveals the flaws in our system.
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In the News (from EurekAlert): “Researchers at London School of Hygiene & Tropical Medicine and Oxford University estimated that soaring stress brought on by job losses could prompt a 2.4% rise in suicide rates in people under-64 years of age, a 2.7% rise in heart attack deaths in men between 30 and 44 years, and a 2.4% rise in homicides rates, corresponding to thousands of deaths in European Union countries, such as the UK…..

“The report also suggests that in poor countries, where investments in active labour market programmes are much lower or virtually non-existent, the death toll brought on by the financial meltdown would be much worse….

“The study, entitled The public health effect of economic crisis and alternative government policy responses in Europe: an empirical analysis was written in the wake of concerns that health might suffer as a result of the financial crisis….

“’Financial crisis causes hardship for many ordinary people, but it does not have to cost them their lives,’ social epidemiologist David Stuckler, who led the research said.”

Comment: Educating people toward a new lifestyle, rational consumption, and necessary production will lead to a healthier population. Otherwise, while we reach the same results against our will, forced by nature, through recessions and bankruptcies, the number of deaths will increase.
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Opinion (Stephen Harper, Prime Minister of Canada): “…In the developed world too many of us have in fact become complacent about our prosperity, taking our wealth as a given, assuming it is somehow the natural order of things leaving us instead to focus primarily on our services and entitlements?

“Is it a coincidence that as the veil falls on the financial crisis, it reveals beneath it not just too much bank debt, but too much sovereign debt, too much general willingness to have standards and benefits beyond our ability, or even willingness, to pay for them?”

My Comment: To live within one’s means suggests that we consume as much as necessary and no more because Nature cannot endure giving more. It strives towards relative equality of income, as the interconnected world requires of us.
[68904]

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In the News (From BBC): “Prime Minister David Cameron has said the UK must ‘build a better economy’ that is ‘fair and worthwhile.’

“He said ‘popular capitalism’ should allow ‘everyone to share in the success of the market’ and criticised an ‘out of control’ bonus culture in the City.

“A Co-operatives Bill will be introduced to help employees take a greater stake in their companies, he said.

“Labour leader Ed Miliband said in a speech earlier the PM would be judged on ‘his deeds and not his words.’

“In a wide-ranging speech in London on the economy, Mr Cameron said he wanted to encourage firms to show ‘social responsibility’ and said that the chancellor was considering new tax rules to prevent abuse.

“He used his speech to discuss his vision for a transformed capitalism, based on two principles ‘which have been at the centre of Conservative thinking for centuries.’

“‘The first is a vision of social responsibility, which recognizes that people are not just atomized individuals, and that companies have obligations too. And the second is a genuinely popular capitalism, which allows everyone to share in the success of the market.’

“The prime minister said that ‘where they work properly, open markets and free enterprise can actually promote morality’ by creating ‘a direct link between contribution and reward; between effort and outcome.’

“‘So we should use this crisis of capitalism to improve markets, not undermine them, because I believe that out of this current adversity we can build a better economy, one that is truly fair and worthwhile.’”

My Comment: It reminds of a heartfelt eulogy (of an English lord, with a bowler hat in the hands and a rose in the buttonhole, at the funeral, over the fresh grave, before the aristocratic audience) about how great and wonderful the deceased was.
[68757]

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Opinion: (Mohamed El-Erian, CEO of RIMCO, a global investment management firm): “The year 2012 is Europe’s moment of truth. If their dithering continues, European politicians will soon lose control of the continent’s economic and financial future. After all the excitement of 2011, it is also a make-or-break year for some Middle Eastern countries in the midst of tricky political transitions. Even the United States is being shaken out of its social slumber as concerns mount about income inequality and, more generally, the fairness of the ‘system.’

“In an attempt to shed light on the key issues in play, what follows is an attempt to identify four factors that could wreck the global economy in the next few years, and four factors that could propel it to greater stability and prosperity. Let’s hope our leaders choose wisely.

“European economic and financial fragmentation: As of today, the biggest risk for the global economy this year is the disorderly collapse of the eurozone. It would bring economic and financial activity to a standstill across the continent, cause widespread corporate bankruptcies and bank runs, and destroy millions of jobs. …A complete eurozone collapse would be both chaotic and an unmitigated disaster.

“Disruptions in the Middle East: The greater the instability in these two countries [Iran and Syria], the higher the risk of regional contamination and, accordingly, worrisome global repercussions. This could include surging oil prices, leading to an ugly global stagflation.

“Central bank exhaustion: Unconventional measures by central banks have, up to now, played a critical role in avoiding debt deflation and economic recessions in advanced economies. In the process, the banks have ballooned their balance sheets to previously unthinkable levels (from 20 percent of GDP for Britain and the United States to 30 percent for the European Central Bank).

“Social unrest: Enabled by social media technologies that facilitate broad-based coordination, the world has witnessed an astonishing outburst of grassroots social movements that are pressing for greater social justice… Having come together on the basis of legitimate grievances, these movements now face the challenge of pivoting from complaints about the past to helping to build a better future. The longer it takes the pivot, the higher the probability of frustration and of the protests turning violent — and governments reacting inappropriately.”

My Comment: Everything is correct except for the reason for the crisis and its only possible resolution that stems from its cause.
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Opinion (Stanley Fischer, Governor of the Bank of Israel): [Dr. Laitman’s comments are in bold.]

“The International Monetary Fund predicts 3.3% growth in the global economy this year, and when I was at the IMF ten years ago we considered 3.5% growth in the global economy as the borderline between normal growth and recession. We are on the brink of a global recession.”

My Comment: We have been talking about the crisis for years; there is nothing new. It speaks only of shortsightedness.

“The big question is whether there will be a recession in Europe or whether we are facing a financial crisis. If there is a financial crisis in Europe, then so many things could happen such as Greece going bankrupt, or actually leaving the euro bloc with other countries following after. It’s hard to know.”

My Comment: The crisis will be financial; so be prepared for the worst because today none of the “decision makers” thinks about the transition towards an integral economy.

“The good part of the story is that they realize that they too don’t know what will happen to them if they keep the current framework. I was certain when I returned from the IMF Annual Meeting that the situation was difficult and bad, and they that didn’t understand what was happening there. Meanwhile, the European Central Bank has taken creative steps to deal with the liquidity and debt problem. There’s an improvement, but there is still uncertainty.”

My Comment: They will do nothing and will be able to do nothing, as has been the case in recent years due to lack of understanding of the trend of human development.

“Yossi Bachar [Israel Discount Bank Chairman] wants to send me messages, and finds it more convenient to use this stage. That’s fine. He wants to tell me that the capital adequacy ratio must not be raised. So I say to him: The Bank of Israel must not avoid raising it. There is the question of the rate of increase; we are aware of the problem, and I’m not fond of the expression ‘choking credit’, because that creates an unpleasant feeling, as though I’m strangling something, and I find that distasteful. We are aware of the problem.”

My Comment: This might be possible for a different small country, but not for Israel because it has the method of correction of the world, and without its interference the world will continue to slide down towards a Nazi regime and a world war.

“I respect Judaism, but this must change, the situation in which the Haredim [ultra-orthodox Jews], the fastest growing section of the population, does not participate in the workforce. Fewer than 40% of them work. This cannot continue, and it must be stopped. If it continues in the long term, it will be very hard for the economy to provide what people expect: life at a respectable standard.”

My Comment: If they enter the market now, you will get another half a million unemployed people, which will cost much more than today. We need to restrict various “political” subsidies instead of inviting them to the labor market.
[68463]

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In the News: “European Union (EU) leaders have finalized a new fiscal treaty for tighter budgetary discipline and pledged to boost economic growth and youth employment in the eurozone’s latest efforts to combat debt crisis.” (Source: English.xinhuanet.com)

“Without economic growth, the problem of 23 million unemployed in the EU cannot be solved. Therefore, European leaders propose to rely on job creation, especially in the advanced science-intensive industries, energy, digital technology, and e-commerce.” (Source: rosbalt.ru)

My Comment: It is impossible to create more jobs, develop the market, and establish artificial workplaces where they will have to be reduced even more. The new EU program is designed to delay the time.
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Opinion (Sharan Burrow, the General Secretary of ITUC): “The chief of the International Trade Union Confederation, Sharan Burrow, said ‘we’ve lost a moral compass’ and said that if governments don’t invest in social protections now, ‘nobody will like the social unrest that will follow.’”

My Comment: For some reason, the rich have no sense of fear. The history is repeating itself, though….
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In the News (from Time Business): “Capitalism needs a fundamental overhaul. …The most rational arguments have pointed out that not only is capitalism the best system yet devised for enhancing the well being of the greatest number of people, but that it is also immensely supple and flexible. But a surprising number of attendees (and these are the world’s most direct beneficiaries of the current system) seems to agree that something is wrong.

“The Arab Spring must end happily. …The powers at the very core of the World Economic Forum are interested in the Arab Spring as a matter of paramount global importance. (That said, among the regular attendees, the Eurozone is of far more interest. At one panel discussion on ‘The Future of North Africa,’ the auditorium was about 10% full. For a ‘Future of the Eurozone’ panel taking place immediately after, it was standing room only.)

“The Eurozone crisis will continue to muddle along, but muddling may be enough. The European finance ministers in attendance are all staying on message: Eurobonds are not happening, austerity measures are the way forward now, greater fiscal union is the end goal, and Greece will not default or leave the Eurozone. Interestingly, for the first time in a long time, most of the policital/policy/media hive mind is cautiously optimistic that the Eurozone may actually be starting to heal itself.

“China is still the star. Brazil has come to Davos in a big way. As has Mexico, and India, and Azerbaijan. But the panels on China are packed, and everybody wants to talk about China, and while the cult of the Chinese technocrat has long been on the rise, we are now reaching the full flower of absolute reverence. American business people speak in hushed tones about the new generation of Chinese leaders as if they are supermen: They are well-educated, worldly, wise, and compared to the haplessness and paralysis that western governments have demonstrated over the past two years, they are paragons of good governance.

“Americans and Europeans are pointing fingers at each other. Why is the global economy not in full recovery? The Europeans complain that none of this would have happened if the Americans had not taxed the global financial system when its housing bubble burst. To which, the Americans respond that that may be true, but they claim to have put their house in order and the only thing that’s holding America’s economy back now is European uncertainty. Then, arguments commence.”

My Comment: So far, most important is to demonstrate to the world that somewhere the smart guys are concerned about it day and night
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With each passing day we feel more and more that we live in a very complex and interdependent world. This is why we speak of the law that affects us all that binds us all together, and this law is called the mutual guarantee.

At first glance this law seems to pertain more to governments or large corporations. But does it also apply to the regular Joe? It turns out that it does, and from year to year we feel this truth more acutely. For example, if there’s a malfunction in one of the European or American banks, its consequences are felt in all countries, and especially in, say, China, which sells all the things it manufactures there. And this, in turn, impacts half the world. In other words, we have become so thoroughly bound by commerce, economy, and finance that we perceive these things as a threat to our existence. Indeed, they determine the availability of food, clothes, energy to supply residential heating, the function of international pharmaceutical companies, and so forth.

Today there isn’t a single country in the world that satisfies all its needs, whereas even 100 years ago all countries were almost fully self-sufficient. It all changed when India became a British colony, and the English decided that it would be easier to import fruits and vegetables from India via the Suez Canal, rather than grow the produce themselves. Instead they began to develop their industry. With time people began to realize that specialization—where everyone manufactures only certain goods —was the way to go.

In contrast, in the past, every individual factory would manufacture absolutely everything, starting with the smallest bolt and ending with the complete machine and all its components (motor, electrical wiring, etc.). Moreover, the same plant also utilized small generators to supply electricity. All these processes took place in the same location. But then began the division of labor: one plant manufactured bolts, another screws, another yet electrical components, and so on. And today every automaker receives their supplies from many different countries.

In recent years this trend was taken even further. Instead of developing the auto industry on their own land, Japan began to build their factories in Europe and America, its target markets. Japan continues to manage the production from afar; what’s more, instead of managing them directly, Japan is doing it via their representatives, which are hired right there on location.

Thus, everything became so mixed together that you can no longer tell who’s producing what. One country’s territory contains factories and gas stations that actually belong to another country. There are corporations with owners in several countries, each of which has its share. The economies of many countries have foreign investors , and the local governments don’t interfere since it’s advantageous to them. Their citizens get jobs, and everybody is happy.

And we thought that everything would continue developing in this direction…
[67799]
From KabTV’s “A New Life” Episode #5, 1/2/12

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