Food and Water

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The FT article below highlights the situation facing us. It is absolutely critical that we work to find innovative solutions to problems of poverty. Rising food prices and water supply shortages will prove to be one of the most important catalysts for social and political unrest and reform over the next few decades.

Opportunities abound for those who can move ideas from concept to manifestation. Often, creative folks are not the same one’s who can put structure around their ideas. Likewise those who are successful manager’s frequently do not have the “powerful vision.” These people need even more simple, sophisticated and productive ways to come together. We have one format for unleashing creativity in the “hollywood producer/artist model.” Are there other new ideas for creating an environment where ideas people and the formation and management people can work together to create shared value? What do you think?

Unrest is the price of soaring food costs

The Neverending Story

American consumers are facing continuing high debt and barely improving unemployment. Will they be able to support the burgeoning economic recovery?  Consumer debt has fallen in the last 2.5 years but it has primarily been due to defaults.  In this recovery, it is reasonable to expect consumers to be more wary about accruing debt.  It is unlikely that consumers will provide enough demand to stimulate a recovery in and of themselves.  The consumer debt situation seems unlikely to improve for the time being.

An answer would seem to lie in individuals finding their own solutions to unemployment.  There continues to be a need for innovative services an products. Exploring entrepreneurial opportunities is a way of supporting growth in the long-term rather than the short-term effects of consumerism.  Over time entrepreneurs provide job growth and demand for services and products.  The added benefit of empowered and engaged individuals is transformative.


Number of the Week: Household Debt May Be Accelerating Again - http://pulsene.ws/15BVk

Related articles

• U.S. Consumers Cut Credit Debt for Seventh Straight Month (dailyfinance.com)
• Household Debt Falls for 9th Quarter (economix.blogs.nytimes.com)
• Consumer Debt Rises, but Credit-Card Use Falls (blogs.wsj.com)

China From the Bottom Up

Image by Getty Images via @daylifeOften in discussions of China’s economic progress the role of the private sector is forgotten. The economist article below quotes an official saying that more than 90% of businesses operating in China are private. Development of the entrepreneurial sector has never been more important than it is today. Innovation, creativity, and nimbleness are the strengths of small and emerging businesses. In a rapidly changing environment where the playing field and rules keep shifting, the ability to turn on a dime will be critical to survival and success.

Trompe L'Oeil Budgets

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There is no doubt that there is a need for our country to manage our budget and trade deficits more prudently. The problem with election agendas is that, inevitably, we end up with policy changes that are more for show than substance.  The current budget proposals are in essence "more of the same."  There is a great will for change but no one, including "we the people," is prepared to have the difficult conversations.  We cannot make the difficult decisions until we talk about the important issues. The economist article below has an excellent discussion of the details.

It's a New Day

 Image by Getty Images via @daylifeThe burgeoning freedom and democracy in the Middle East/North Africa is truly an opportunity to shake out much of the corrupt infrastructure in developing countries in their natural resources industries. This is a new day for multinational corporations and their involvement in the oil rich region. There will be a new set of players and many more voices and interests at the negotiating table. Corruption and collusion cannot hide for long in the light and transparency of openness.

Contagion Libya

Image via WikipediaAs of today Eastern and some of the West coast of Libya appears to have freed themselves from the vice grip of Qaddafi’s regime. This situation highlights the problem of the economics of class and hierarchy. When an economy is structured to create a gap between the ‘haves’ and the ‘have nots’ it is, by its own nature, unstable. When that gap is allowed to widen, the situation becomes a powder keg needing only a spark to ignite it.

Labor Flux

The global economy is moving, more rapidly than most of us could have imagined 10 or 20 years ago, towards a true competitive advantage model. But these falling barriers to labor flows create other dislocations. Even at first glance, it is clear that labor as an input to production has radically different characteristics than natural resources. We typically think of the issues of structural rigidity because of individuals attachment to their countries and families, as well as, language barriers. In this post EU environment, barriers to labor flows have been rapidly declining, but there have been significant social costs to these freedoms.

China Eyes Egypt

This week's Economist has an excellent article on China's response to the events in Egypt.  There is no doubt that China will have some critical choices to make in the next couple of years.  Given the changes in the country since Tiananmen Square, it is difficult to imagine that less social and political liberty will be a viable option.  The question remains whether or not the Politburo will manage to shift its priority from pure economic growth to a more balanced agenda.  There is no doubt that establishing a strong economic base is critical to having an orderly transition to social and political freedoms, but where is the tipping point? At what point will the marginal returns to economic growth no longer contain the rising impulse for freedom?

http://www.economist.com/node/18178177

Change is Gonna Come

Image via WikipediaOver the last few weeks, I have been watching events in Egypt unfold with optimism and hope. Although it has been over twenty years since my last visit to Cairo, I have such fond memories of the people and their extraordinary hospitality. This country seems to be an excellent environment in which to develop a new prototype for balanced economic, political and social reform.

Conventional wisdom tells us that social and political democracy is not necessarily a strong first step to the opening and democratization of markets. We have the case of Russia as a relatively current example of the challenges of managing market expansion in a burgeoning democracy. Similarly, many would argue that the market reforms in China have been successful although political and social reform has happened at a much slower pace.

Economic Misnomer

The word economics comes from the Greek word oikonomos meaning manager or steward. Or in other words the science of economics is the science of stewardship. That is a slightly different spin on things than you might have imagined.

Stewardship is an interesting word in that it does not have any connotations of ownership or control. Instead it is more generally used to refer to the act of taking care of something that belongs to someone else. A steward is someone who attends to the needs of another (i.e. a wine steward or a cabin steward). In essence, it is a form of service.