Euro Contrast

Posted on 9 November 2011 by Erik Hare | 15 Comments

This morning the Euro crisis moved on from the still unresolved Greek issue to Italy. There is nothing new here except that Italian PM Silvio Berlusconi said he would resign after an austerity package was passed and move the nation ahead into new elections. How did that happen?

This highlights the critical difference between how the US has been handling the Depression so far, which has been primarily to spend our way out, versus the European belt-tightening austerity being forced on member nations. That difference is stark, but it was not a choice – the Euro system is set up so that it cannot do anything else. It’s that inflexibility that is driving the crisis which has the world running scared.

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What is Money?

Posted on 4 November 2011 by Erik Hare | 21 Comments

The following is a repeat from March of 2009. Little has changed since it first ran – except the urgency of the message. I’ll be back with a current piece next Monday.

People are willing to give up 40 or more hours a week to have it. The lust for it drives some people to betray their friends’ trust, and the lack of it has driven some to suicide. In our culture, there is nothing quite like money as a motivator. So what is it?

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I Read the News Today, Oh Boy

Posted on 2 November 2011 by Erik Hare | 18 Comments

In the financial world, no news is good news. By that measure, boy are things bad.

That’s not to say it’s the end of financial life as we know it, but reading the news out of Europe you might come to that conclusion. What’s astonishing is the growing feeling that the public cannot and should not take on socialized risk any longer, meaning that banks are going to have to fend for themselves. The same medicine appears to be popular for nations that have run up huge tabs.

This is no longer about Occupy Wall Street or even Occupy Main Street. This is turning into a worldwide rebellion.

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Socialized Risk

Posted on 26 October 2011 by Erik Hare | 43 Comments

Risk and reward management are the heart of any investment. Money goes into ideas and efforts that have a chance of paying it back with a little bit of profit at the end. If risk is completely removed anyone will make decisions and try things that they might not have otherwise. When the risk is spread out to people that they don’t know or necessarily care about, disaster is pending.

That’s pretty much what just happened to our economy – socialized risk with private profit.

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Too Big To Be Useful

Posted on 24 October 2011 by Erik Hare | 33 Comments

Protests continue on Wall Street and around the nation calling for a vague program of reform. Polls continue to show that the effort is popular, with opinion against Big Government even stronger than feeling against Big Business. It seems that after many years we are beginning to develop the courage to make small plans once again.

At the heart of it all is 30 years of an applied theory, a history that appears to be discredited but never been properly repudiated. As we move past the dogma of Supply-Side economics there is a lot more than government taxing and spending policy to clean up. There are the banks whose turf is being occupied today, those that are beyond Too Big to Fail and well into Too Big to Understand and simply Too Big. They got that way the same way our government did – by leaving common sense and history behind.

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