EX : Focus inversion : "The little Dutch Boy Strategy"

An example of focusing on the result in stead of the cause "Focus-inversion and some "Good news Show" as well  : Harvard Business Review

Apple and the "Little Dutch Boy" Strategy

8:55 AM Friday May 11, 2012
by Gregory Unruh |

Apple is the latest company to execute what I like to call the "Little Dutch Boy" approach to CSR strategy. The apocryphal Dutch legend tells of a boy who, upon seeing a trickle of sea water coming through a hole in a dyke, pokes his finger in to stem the flow.
Many companies have taken a similar approach to CSR. Instead of acknowledging the rising tide of social expectations on the other side of their corporate PR bulwark, executives respond reactively to each individual activist or community complaint. Apple is the latest example of this. The story begins in 2006 and continues to this day.
Accustomed to being perceived as the forward-thinking company that could do no wrong, Apple was blindsided by a 2006 Greenpeace sustainability ranking that placed it near the bottom of computer manufacturers in terms of environmental performance. The response from Apple was defensive and ham-handed with executives calling Greenpeace's work "bullshit." However, in 2007 Steve Jobs belatedly poked his finger in the dyke by posting an "open letter" laying out the case that Apple wasn't an eco-laggard.
Fast forward to 2009 and the news that a Foxconn worker in Shenzhen China committed suicide after losing an iPhone4 prototype. The harbinger was ignored and 14 additional suicides followed in 2010. Then came an 86-page university report documenting the conditions in Foxconn factories as inhumane and abusive. After sustained pressure, Apple was again compelled to stick a finger in the dyke and commission a study by the Fair Labor Association that this year confirmed abuses. Last month, an agreement was announced between Apple and Foxconn to improve working conditions.
Now Apple has been challenged on the environmental-friendliness of its cloud. Last month Greenpeace published a report entitled "How Clean Is Your Cloud" and singled out Apple for having some of the dirtiest cloud computing data centers. Unfortunately for Apple, it apparently had the chance to plug this leak before it sprung. The company claims to have data that could show the environmental performance of their cloud is better than Greenpeace estimates. But for whatever reason, Apple failed to stem the bad publicity.
With so many holes in its CSR dyke, Apple is running out of fingers. The only solution now is to admit that the leaks are caused by a tidal wave of social expectations about corporate responsibility, not one-off anomalies. Apple needs to get serious and commit to a comprehensive CSR strategy. For a number of reasons Apple has been able to avoid this step up until now.
Apple has benefited from a Teflon reputation fostered by the public's love of its products, its iconoclastic brand promise and its charismatic leader, Steve Jobs. But while reputations have inertia, like Wile E. Coyote they can't defy gravity forever.
Apple's success means it is now the biggest kid on the block. Having displaced Exxon, Apple can no longer claim to be the "Think Different" David battling the Goliath of Microsoft. In fact, for many people Apple has become Microsoft, a quasi-monopolistic behemoth. As that perception takes hold, activist and competitive complaints against Apple's impacts will begin to stick in the public's mind.
With the passing of Steve Jobs, Apple has lost its Chief Reputation Officer and its most eloquent spokesperson. Jobs was able to plug the company's reputational holes single-handedly. But as many other companies have found, the Little Dutch Boy approach to social responsibility can't hold back the rising tide anymore. Instead, Apple needs to get out there and show that they are not only innovating to serve their customers, but that they are innovating to serve society and the planet as well.

Ex : JP Morgan Chase

Another example of Hiërarchical info filtering (and other) which leads to bad decisiontaking
I UNDERLINED THE SENTENCES THAT ARE IMPORTANT TO ME AND WHICH ARE "TO BE PROCESSES&CONTAINED" , MY TOOL CAN TACKLE THESE ISSUES, CONTACT ME FOR MORE INFO... 

JPMorgan Discloses $2 Billion in Trading Losses

By JESSICA SILVER-GREENBERG and PETER EAVIS

JPMorgan Chase, which emerged from the financial crisis as the nation’s biggest bank, disclosed on Thursday that it had lost more than $2 billion in trading, a surprising stumble that promises to escalate the debate over whether regulations need to rein in trading by banks.
Jamie Dimon, the chief executive of JPMorgan, blamed “errors, sloppiness and bad judgment” for the loss, which stemmed from a hedging strategy that backfired.
The trading in that hedge roiled markets a month ago, when rumors started circulating of a JPMorgan trader in London whose bets were so big that he was nicknamed “the London Whale” and “Voldemort,” after the Harry Potter villain.
For a bank that earned nearly $19 billion last year, the trading loss, which could go higher, will not cripple it in any way. Still it demonstrates how a market blunder can shake even a financial giant that celebrates its “fortress balance sheet.” Close

It is a rare blow to the reputation of Mr. Dimon, 56, a native New Yorker known for his hands-on management style and a confident swagger. After successfully steering his bank through the market turmoil of 2008 and the recession, he is perhaps the most influential bank executive in the country — and a vocal critic of the efforts to write rules under the Dodd-Frank regulatory overhaul.
The setback for JPMorgan may strengthen the hand of regulators in Washington who are now writing the rules for Dodd-Frank — in particular the Volcker Rule, which restricts banks from trading with their own money.
JPMorgan’s setback “casts doubt on Jamie’s opposition and adds fuel to anyone who has been pushing for greater regulation,” said Mike Mayo, an analyst with Credit Agricole Securities. “Oh, how the mighty have fallen.”
Throughout the debate around the Volcker Rule, which is named after Paul A. Volcker, the former Federal Reserve chairman, Mr. Dimon has said the rule goes too far. Mr. Dimon told CNBC earlier this year that under the Volcker Rule, “if you want to be trading, you have to have a lawyer and a psychiatrist sitting next to you determining what was your intent every time you did something.”
Questions over whether banks have been engaging in such trading for themselves while calling it “market-making” or “hedging” came into focus last month, when the reports emerged that a trading unit of JPMorgan in London was taking such large positions in the name of hedging that they were distorting the market.
At the time, Mr. Dimon played down concerns about that trading, in what the bank calls its chief investment office, telling analysts in an April 13 conference call that it was “a complete tempest in a teapot.”
In a hastily organized conference call with analysts on Thursday, Mr. Dimon sounded more humble, saying that “egregious mistakes” were made. “They were self-inflicted and this is not how we want to run a business.”
Yet while conceding that the bank had “egg on its face,” Mr. Dimon refused to concede that the losses necessitated a stronger regulatory framework. Although he did says that it “plays right into the hands of a whole bunch of pundits out there.”
And he defended the trading unit, saying that “the C.I.O. has done a great job for a long extended period of time.”
The troubles are expected to weigh on the bank’s broader earnings. For example, the corporate group, which includes the chief investment office, is now expected to lose $800 million in the second quarter, the company said in the filing. Previously, JPMorgan estimated that the group would report net income of about $200 million.
Shares of JPMorgan tumbled 6.7 percent in after-hours trading. Its Wall Street rivals were also down sharply.
The $2 billion loss came from a complicated trading strategy that involved derivatives, financial instruments that derive their value from the prices of securities and other assets. JPMorgan said the derivatives trades were part of a hedge, meaning they were set up to offset potential losses on the bank’s large holdings of bonds and loans. But, in the sort of nightmare situation that bankers dread, the ostensible hedge backfired, producing losses of its own.
Since the financial crisis, several financial institutions have been rocked by risky trading, although under very different circumstances. At UBS, $2 billion in trading losses was attributed to a rogue trader, while MF Global collapsed not because of its bet on troubled European sovereign debt, but as a result of a loss of confidence that trade produced.
But JPMorgan’s trade was not so obviously fraught with risk. It produced large losses even without extreme movements in the derivatives markets or underlying bond markets. Indexes that track derivatives tied to corporate bonds have recently increased — reflecting a gloomier outlook for corporate bonds — but the move has not been jarring.
JPMorgan likely structured the trade in such a way that effectively magnified losses. Specifically, the bank bought insurance against losses on corporate debt through credit derivatives that increase in value if the underlying creditworthiness of companies is perceived to have deteriorated. But JPMorgan stumbled when it tried to modify that trade by also making an opposite bet with credit derivatives. Mr. Dimon said that the strategy “to reduce the credit hedge” was “poorly constructed and poorly monitored.”
The trades took place in the chief investment office of JPMorgan. These big trades are designed as hedges. Last month big derivatives trades executed in London by the unit appeared to be throwing markets out of kilter. The trades were reportedly put on by “the London whale” — a French trader, Bruno Iksil. On Thursday, Mr. Dimon said losses on the trade could grow.
The loss-making trades will further stoke the debate over whether banks make big bets under the guise of hedging. An old market adage says the best way to hedge is to simply sell an asset, rather than offset it with potentially dangerous derivatives. The Volcker Rule attempts to distinguish between true hedging and trading.
The losses will also raise enduring questions about JPMorgan’s ability to manage its risks. When it reported first-quarter earnings in April, it released a metric of risk-taking in the chief investment office that made it look as if the unit was taking risks in line with other parts of the bank. But on Thursday, the bank released a new measure of risk-taking that was nearly twice as high.
“JPMorgan Chase C.E.O. Jamie Dimon has been a relentless critic of financial reform,” said Dennis Kelleher, president of Better Markets, which supports tougher regulation of banks. The surprise loss, he said, “proves him wrong.”
Michael J. de la Merced contributed reporting.

Ex : Berlusconization (Net-not-working)

How bad networking gets a Nation into trouble, for companies this is also true !!! Networking is a potential threat !

http://www.economist.com/node/13576329

IF ANYBODY is having a good recession, it is the Italian prime minister, Silvio Berlusconi. Italy is certainly suffering: the IMF expects GDP to fall by 4.4% this year, a bigger drop than in Britain, France or Spain. But Mr Berlusconi remains significantly more popular than most other European leaders. His approval rating this month, measured by IPR Marketing for La Repubblica’s website, actually rose to 56%.
Part of the explanation is that, after more than a decade of underperformance relative to the European Union, Italians are used to economic distress. And since their banks were less enterprising (or reckless) than those in America and Britain, none has collapsed so far, sparing Mr Berlusconi the politically lethal fallout from using taxpayers’ money to save the hides of rich financiers. Yet his approval rating had been slipping—until the earthquake that hit L’Aquila on April 6th.
Mr Berlusconi’s response to the earthquake seems to explain the latest uptick. He spent almost a week in the disaster zone and even offered to accommodate some survivors in his own homes. On April 23rd he went a daring step further, saying he would switch the venue of the G8 rich-country summit in July to L’Aquila, partly so as to divert funds towards the city’s reconstruction. On the same day he announced a seemingly generous €8 billion ($10 billion) in aid for the earthquake zone (it has since emerged that this will be spread over no less than 22 years).

---

Mr Berlusconi’s response to the earthquake highlights another factor that his supporters claim explains his poll ratings. As one minister puts it, “this is the first government since the second world war to give Italians decisive leadership of a kind that is entirely normal in Europe.” That contrasts with his previous period in power in 2001-06, when he had to deal with repeated internal revolts. Many were caused by the centrist Union of Christian Democrats, which split from the centre-right coalition before the April 2008 election that returned the right to power.
Mr Berlusconi’s present government is far more homogenous. In March its two biggest components—his own Forza Italia and the National Alliance, which grew out of the neo-fascist movement—united in a single entity, the People of Freedom. Of the two other coalition parties, only the Northern League has the parliamentary clout to bring the government down.
To Mr Berlusconi’s critics, the explanation of his popularity is quite different. It is that he is reaping the benefit of a long-term influence on the views of his compatriots that no contemporary politician can rival. Every Italian under 30 has grown to political maturity in a country where Mr Berlusconi and his family control half the television output, one of four national newspapers, one of two news magazines and the biggest publishing house.
His hold on the media has changed attitudes and even the meaning of words. When he entered politics in 1994, few gave credence to his claim to be a victim of conniving communist judges; now it is widely believed. Fifteen years ago, an azzurro represented Italy in international sporting competitions and a moderato was a centrist. Today, an azzurro is somebody who represents Mr Berlusconi in parliament; a moderato anybody who votes for him.
The subtle Berlusconisation of Italy may help to explain a trend that has swept the country in the past 12 months. It is not only that the opposition has divided and the unions are split. It is that a conviction has gripped much of society that the prime minister will stay in power indefinitely. “I have to say that I see no alternative to Silvio Berlusconi,” declared Gabriele Muccino, a film director and one of several intellectuals and artists who have recently voiced similar opinions. This is ironic in a country whose politicians spent 15 years working towards a two-party system. It augurs ill for future economic reforms, in which Mr Berlusconi has shown little interest. And it is also troubling in any democracy, especially when seen in the context of the prime minister’s own words and actions.
His new party is as undemocratic in its form as Forza Italia was. He was acclaimed, not elected, leader at a founding congress last month that empowered him to appoint the executive. Mr Berlusconi routinely denigrates the judiciary and, since returning to power, has become increasingly dismissive of the legislature as well. His government’s use of procedural devices to cut short parliamentary debate has even been criticised by his ally, Gianfranco Fini, former leader of the National Alliance and now speaker of the lower-house Chamber of Deputies. Mr Berlusconi has sought to justify this by arguing that the myriad checks and balances in the system make Italy ungovernable. But, as President Giorgio Napolitano retorted recently, such views pointed to “authoritarian solutions”. After all, the system was put in place precisely to prevent the return of a dictator like Benito Mussolini.
Few believe that there is a serious risk of reverting to those dark days. But several recent books have highlighted the extent of Mr Berlusconi’s ascendancy and asked questions about how he intends to exploit it. Massimo Giannini, author of one, argues that his aim is “not a dictatorship in the classic sense, but…a modern form of post-ideological ‘totalitarianism’”.
The most powerful reason to worry comes in Mr Berlusconi’s own words. At his new party’s inaugural congress, he reminded the 6,000 or so delegates that “sovereignty belongs to the people”. But he also claimed that his was “the only party that defines the identity of our people”. In fact, he said, “we have to be a people even more than a party”. That smacks of pure populism.
Mr Berlusconi’s supporters dismiss all such misgivings, insisting that his sole long-term objective is the presidency (albeit, perhaps, after a constitutional reform to make it more powerful). On April 25th, the day when Italians mark the 1945 Allied liberation, the prime minister offered support for the view that he aspires to lead the nation, not just the right. He took part for the first time in the celebrations. Later he withdrew a controversial bill that would have given honours and pensions to Mussolini’s diehard militia.
But Mr Berlusconi also took the opportunity to suggest that the name of the holiday should be changed. It should not be the day of liberation but of freedom. As in, for example, the People of Freedom?

EX : (Net (not) working) "THE VATICAN "

ANOTHER EXAMPLE OF NET(NOT)WORKING

Corruption scandal shakes Vatican as internal letters leaked,

By Philip Pullella

VATICAN CITY | Thu Jan 26, 2012 3:20pm EST

VATICAN CITY (Reuters) - The Vatican was shaken by a corruption scandal Thursday after an Italian television investigation said a former top official had been transferred against his will after complaining about irregularities in awarding contracts.

The show "The Untouchables" on the respected private television network La 7 Wednesday night showed what it said were several letters that Archbishop Carlo Maria Vigano, who was then deputy-governor of Vatican City, sent to superiors, including Pope Benedict, in 2011 about the corruption.

The Vatican issued a statement Thursday criticizing the "methods" used in the journalistic investigation. But it confirmed that the letters were authentic by expressing "sadness over the publication of reserved documents."

As deputy governor of the Vatican City for two years from 2009 to 2011, Vigano was the number two official in a department responsible for maintaining the tiny city-state's gardens, buildings, streets, museums and other infrastructure.

Vigano, currently the Vatican's ambassador in Washington, said in the letters that when he took the job in 2009 he discovered a web of corruption, nepotism and cronyism linked to the awarding of contracts to outside companies at inflated prices.

In one letter, Vigano tells the pope of a smear campaign against him (Vigano) by other Vatican officials who wanted him transferred because they were upset that he had taken drastic steps to save the Vatican money by cleaning up its procedures.

"Holy Father, my transfer right now would provoke much disorientation and discouragement in those who have believed it was possible to clean up so many situations of corruption and abuse of power that have been rooted in the management of so many departments," Vigano wrote to the pope on March 27, 2011.

In another letter to the pope on April 4, 2011, Vigano says he discovered the management of some Vatican City investments was entrusted to two funds managed by a committee of Italian bankers "who looked after their own interests more than ours."

LOSS OF $2.5 MILLION, 550,000 EURO NATIVITY SCENE

Vigano says in the same letter that in one single financial transaction in December, 2009, "they made us lose two and a half million dollars."

The program interviewed a man it identified as a member of the bankers' committee who said Vigano had developed a reputation as a "ballbreaker" among companies that had contracts with the Vatican, because of his insistence on transparency and competition.

The man's face was blurred on the transmission and his voice was distorted in order to conceal his identity.

In one of the letters to the pope, Vigano said Vatican-employed maintenance workers were demoralized because "work was always given to the same companies at costs at least double compared to those charged outside the Vatican."

For example, when Vigano discovered that the cost of the Vatican's larger than life nativity scene in St Peter's Square was 550,000 euros in 2009, he chopped 200,000 euros off the cost for the next Christmas, the program said.

Even though, Vigano's cost-cutting and transparency campaign helped turned Vatican City's budget from deficit to surplus during his tenure, in 2011 unsigned articles criticizing him as inefficient appeared in the Italian newspaper Il Giornale.

On March 22, 2011, Vatican Secretary of State Cardinal Tarcisio Bertone informed Vigano that he was being removed from his position, even though it was to have lasted until 2014.

Five days later he wrote to Bertone complaining that he was left "dumbfounded" by the ouster and because Bertone's motives for his removal were identical to those published in an anonymous article published against him in Il Giornale that month.

In early April, Vigano went over Bertone's head again and wrote directly to the pope, telling him that he had worked hard to "eliminate corruption, private interests and dysfunction that are widespread in various departments."

He also tells the pope in the same letter that "no-one should be surprised about the press campaign against me" because he tried to root out corruption and had made enemies.

Despite his appeals to the pope that a transfer, even if it meant a promotion, "would be a defeat difficult for me to accept," Vigano was named ambassador to Washington in October of last year after the sudden death of the previous envoy to the United States.

In its statement, the Vatican said the journalistic investigation had treated complicated subjects in a "partial and banal way" and could take steps to defend the "honor of morally upright people" who loyally serve the Church.

The statement said that today's administration was a continuation of the "correct and transparent management that inspired Monsignor Vigano."

(Reporting By Philip Pullella)

EX : Banca Monte dei Paschi di Siena

ANOTHER EXAMPLE OF MISMANAGEMENT BY TAMPERING INFO !
This is one of my points I want to make in my essay :-) , love it when I get unpayed help :-)


http://www.reuters.com/article/2012/05/09/us-montepaschi-taxpolice-searches-idUSBRE8481CI20120509?type=companyNews

By Silvia Ognibene

SIENA, Italy | Wed May 9, 2012 4:11pm EDT

SIENA, Italy (Reuters) - Italian police searched the headquarters of Banca Monte dei Paschi di Siena (BMPS.MI) on Wednesday, investigating whether the world's oldest bank misled regulators over its pricey 2007 purchase of smaller rival Antonveneta from Spain's Santander.

A statement from prosecutors in Siena, where Monte dei Paschi is based, said the offices of the bank's main shareholder as well as those of several Italian and foreign financial banks that had dealings with the Tuscan lender were being searched.

Sources close to the situation told Reuters police visited the Milan offices of Intesa Sanpaolo (ISP.MI), Deutsche Bank (DBKGn.DE) and J.P. Morgan (JPM.N) as well as other banks in connection with the probe. None of those banks are under investigation, the sources said.

The sources also said police took documents from investment bank Mediobanca (MDBI.MI), one of the advisers to Monte dei Paschi during its purchase of Antonveneta, the target of a bitter cross-border takeover battle that shook Italy's traditionally closed banking system.

The searches targeted also the private homes of several past and present Monte dei Paschi executives, including former chairman Giuseppe Mussari. Sources close to the probe said four past and present executives of Monte dei Paschi had been placed under investigation.

The prosecutors' statement said the probe concerned "a series of activities that were carried out starting from 2007, at the time of the acquisition of Antonveneta bank from Spain's Santander, and that continued until 2012".

The investigation alleges possible market manipulation and obstruction of regulators in connection with raising funds for the 9 billion euro ($11.7 billion) cash acquisition of Antonveneta that stretched the bank's finances just ahead of the subprime crisis.

Santander bought Antonveneta as part of a three-way break up bid for Dutch bank ABN AMRO in a deal valuing the Italian lender at 6.6 billion euros. The Spanish bank almost immediately sold it on to Monte dei Paschi, netting a hefty gain.

Monte dei Paschi is being investigated because prosecutors believe that it did not give regulators a true picture of the repercussions on its finances of such an expensive purchase. There are also questions surrounding an unexplained sharp drop in the bank's share price earlier this year.

The Antonveneta acquisition catapulted Monte dei Paschi, advised on the deal by Merrill Lynch (BAC.N) and Mediobanca, into the big league of Italian banks and gave it a foothold in Italy's wealthy northeast.

The crisis at the bank, founded in 1472 to extend loans to the needy and still a major source of employment for the 55,000 people who live among medieval Siena's frescoed palazzi, has raised the alarm among locals.

Monte dei Paschi, with its headquarters in a 13th century fortress, is the "jewel in the crown for Siena", a prominent resident told Reuters in March as the bank's problems worsened.

VULNERABLE

Despite two capital increases since the Antonveneta purchase, the Monte dei Paschi is regarded as one of Europe's most vulnerable since it must plug a capital shortfall of 3.3 billion euros by June to meet tougher European regulatory requirements.

An investigative source told Reuters that prosecutors had started looking at the Antonveneta deal last October, at the height of the euro crisis, because of the pressure the acquisition had placed on Monte dei Paschi's finances.

"The question is whether the operation and its impact on Monte dei Paschi and its shareholders were assessed properly and whether the rules were followed and a proper picture of the situation was given to (market watchdog) Consob and the Bank of Italy," the source said.

Monte dei Paschi said the searches were connected to a 5 billion euro capital increase it carried out in 2008 to pay for Antonveneta.

A bank spokeswoman pledged "maximum collaboration" with authorities. She said the probe was focused on 1 billion euros of so-called Fresh convertible notes that the bank issued as part of its capital hike, which was underwritten by J.P. Morgan.

A source with direct knowledge of the matter said prosecutors believed Monte dei Paschi had misled the Bank of Italy, at the time headed by current European Central Bank President Mario Draghi, on the terms of the convertible notes.

Based on the information received by the bank, the regulator allowed Monte dei Paschi to calculate those notes as core Tier 1 capital, boosting its financial base, the source said.

Monte de Paschi's top shareholder, a charitable foundation with close links to Siena politicians, said prosecutors were also looking at an "anomalous" drop in the bank's shares in early January, when the stock tumbled around 26 percent in the space of a few days, hitting a record low of 0.19 euros.

Back in January the foundation was negotiating with creditors how to pay back around 1 billion euros of debts it had ran up to fund the bank's 2008 capital increase and another 2.5 billion euros cash call in 2011.

The foundation's debt was guaranteed by its shares in the bank. As the share price fell, the foundation was forced to put up more shares as collateral, at one stage giving creditors almost full control over its 49 percent stake.

A recovery in the stock price since mid-January allowed the foundation to sell down its stake and partially pay back 12 creditors, including JP Morgan, Credit Suisse and Mediobanca.

Monte dei Paschi's Chief Executive Fabrizio Viola and its newly appointed Chairman Alessandro Profumo were "following the matter closely," a senior executive at the bank said outside its Siena headquarters.

News of the probe hit Monte dei Paschi's shares, which closed 7 percent lower after repeated suspensions from trade.

The foundation now holds 36.3 percent of Monte dei Paschi. It faces a May 15 deadline to agree with creditors the rescheduling of outstanding debts worth around 350 million euros.

($1 = 0.7695 euros)

(Additional reporting by Silvia Aloisi, Lisa Jucca, Stefano Bernabei and Gianluca Semeraro; Writing by Silvia Aloisi; Editing by Jane Merriman and Giles Elgood)

PV : Social Capitalism 2035

Social (?) Capitalism 2035

NO, I am not a communist, no, I don’t hate money, if you would wonder!

I don’t need all the data in the world in realtime to see that capitalism as we have it now, is finite.

There is no infinite growth, or an infinite pile of money to be made. ( Very important to keep in mind if you want to talk long term capitalism and global economics)

If all companies want to grow ,let us say 7% pro year, than they will double their profit in 10 years.

How can every company do this ? There is basically not enough money there.

Actually the only way companies grow is by other companies doing worse (or even stop) and the constant growth of the population.  This cannot go on, we need another society and another capitalism.

But there still will be rich and poorer people, companies and government and all the things we have today , but we can do without poverty, war, famine, etc.  and “profit” will have another connotation .

This means a capitalism based on personal commitment ,responsibility and effort and the choice of how much work we do and the rewarding of innovative ideas, regardless of who had it AND no greedy grabbing culture (sorry for all those … ) .

But bear with me for a moment and follow me into my way of (disruptive, chaos ) thinking  which , on this subject started as early as the age of 10…

I LOVE Fibonacci, he has been  in fact a big help in developing my personal way of problem solving : “Fractal association”  , this always pushes me from a small , domestic   “problem-solution “ issue towards the same thinking on national or global scale. I was very upset when I was thinking on why my wife works so hard and gets so little money ( she is independent and has her own F&B ).

At the same time I was frustrated on the amount of money spilled by my department (National Defense) and the reluctance of “management” to do some fundamental “change”.

…Of course one day, they added up into a concept … Social capitalism.

I divided economy into two sorts of ” companies”  the PORG and the BORG. ( Nothing Star Trek-like)

The PORG  (in Dutch, my native tongue, it’s WORG)  is actually a “Profit ORGanization” and a BORG is a “Budget ORGanization” (e.g. government).

The difference between them is that PORG needs to produce Profit and BORG provides a service, coupled to the BUDGET they get.

( * I need to stress that there are some inconsistencies in this way of cataloging companies but for the sake of the explanation I keep to these two )  

For PORG this means :

Cost (resources , personnel, support, operations, growth, profit) add up to the price of the provided product or service

For BORG this means :

Cost ( personnel, support, operations, growth ) add up to the budget needed to provide a product or service

Notice that the main difference is that the C (resources) in a BORG is gone. These resources are the assets that are bought and are altered to obtain value adding (such as raw materials) , resources bought in a BORG are only needed to produce the service ( paper for printer, computers , etc ) and are situated in the C ( Operations) as with PORG .  And of course there is no “profit” to be made in a BORG.

In a way this is a different presentation of OPEX and CAPEX.

In a PORG , the goal today is to keep , or better augment the C (profit) , with profit I mean the volume of money not strictly needed for all the first C ‘s ( thus money that can go towards extra bonuses, dividend payment, expansion, etc )  When C (Profit) tends to drop, there will be a price augmentation of the product  or the discharge of personnel  ( other options aside) this has two major (and very important ) effects : the cost for the people or companies who need these products will go up , thus provoking there product price to go up (etc, etc , etc) and the drop in workforce stresses the community by poverty , crime, welfare to be provided etc.  so two things we realy can do without !   .

I don’t see “Profit”   to be measured in absolute figures for me means it only means  happy shareholders ,  so we should STOP making more profit each year , the same is good enough! Prices of products or PORG services should NOT get higher because of the rise of the cost of all those C under the influence of extra, needed capital for government , key there is efficient government ! 

The other issues towards companies are explained below.

In a BORG there is a certain service to be provided  ( police , defense , hospitals , public schools , welfare etc.) these services could be seen as constant or expanding towards “more” .

Budget is adapted in accordance of the need. (so also bad government means higher budget…) , these kind of businesses should have a separate way of being taxed  or not taxed at all , because of the common service for the society, which will reduce their costs and provide a cheaper service which benefits the community and government expense  .

In general terms , the only really relevant point to be taken in account for buildup op “price” is the cost of harvesting raw materials (oil, electricity, minerals, textile, … ) if the cost goes up because of higher effort to produce them , this is the ONLY reason for price augmentation…

This PORG & BORG thinking has also some other implications but these are not relevant for the following explanation on “Capitalism 2035”

Facts to work to  :

Government  as explained above will need to get as efficient as possible, because bad governing provokes higher need of budget and thus higher taxation for individuals and companies.

(taxation should be as low as possible and standardized and constant with a minimum of savings the government is obliged to have each year (or budget period) , so ONLY SPENDING 85 % of the total GDP (!) , and a big part of expenses can only be done AFTER a budget period (which is one year) , like expenses for things NOT directly linked with the basic functioning of the government, such as welfare or extra financial help (premiums) for whatever purpose  ) so this government cost , instead of getting bigger, will stay  constant for companies and individuals or will be extremely logical and well monitored ( a new function of the banks) and there will always be a certain financial buffer  .

This has an important basic fact : the government long-term business plan, but again basic  (BORG) thinking here :  Max number of public servers per capita and the max cost of this, the max OPEX cost , the cost for infrastructure and other community works, … these will all be estimations but after a certain reference period they will become pretty stable and predictable .  (and the obligation of course for everybody to try to cut the costs with more efficient working or processes)

 Exceptional extra cost for the government (new not foreseen infrastructure, disaster relief,.. ) should be taxed in a common sense and spread for everybody  concept . This extra taxation should be presented simple and stupid ( for example :  each company gets a bill for $ 10,000 (or better a percent of its profit ) every individual for $ 100 (or better  a percent of their pay)  , with the reason ( a new bridge that got broken unexpected )   total extra taxation should also be limited per year ) , this taxation should also be done automatically from the paycheck.

Companies that do the work or deliver goods, could be asked to be paid over a couple of years , with a little interest .

Companies , instead of having the urge to grow , driven by higher costs and greedy (?) shareholders, will have no need to augment prices  of a product, because there is no higher  (government) cost . (…)

Companies and society in a whole should get rid of the unbalanced and ridiculous  pay scales or remunerations !

There is a need for a standardized pay scale for all functions and positions, this will facilitate business planning .  This also means that you will be able to plan your entire career, and yes, I’m sorry for the opportunists, no bonuses ,or extra’s  or whatever in this concept . (you can get more, don’t worry  , see below)

This pay scale should be well thought over. What do you pay a doctor, a policeman, a builder? It will be something like now , the differences will be there, just fixed for everybody and also here because there will be no currency depreciation  (fixed prices will do that…)  .

I can live with some extra’s ( like additional payment for night work, but this list will be limited ! )

The profit a company makes will be maxed out but in a logical, balanced way ( no exorbitant wages and fixed , low taxes ) , and all companies will need a minimum of capital buildup (savings) and a minimum and maximum on dividend payment ( this will be regulated and can only be altered if there are major changes in business such as a fire with costs or other drastic  costs not coverable with its minimum capital buildup or share capital and reserves )

This means that shareholders will be able to see the company business prediction based on exact figures in the beginning of a year (budget reference period), with an exact idea of dividend in normal conditions  (besides those unforeseen costs .)

If companies want to do investments, they will do so in a planned and controlled way, writing a “Call for investors” .Anyone can participate for this  (also banks or the company itself ) and the “crowd “ will do the financing , the company can decide the interest themselves ,and taking full responsibility if it fails and a will pay a minimum taxation on this investment for  government ,this means that this money will be REAL money, money that already is there (!)  and not virtual money. If the investment fails, everybody loses his money , but the risk is contained to the investors and for this investment and this amount only .

Banks will be government owned or at least controlled, there sole function : managing the REAL money , they need to have (for instance)  95% of their tradeable money in their possession .

They should be funded by  a small amount of  fixed cost per client ( amount for every bank the same  ! ) and will have some new functions such as the management of automatic deductible costs and payments for individuals and companies and the monitoring of allowable investment credits and the management of those call for investors.

Individuals will work 25 to 30 hours a week for their function, this mean that a bigger amount of people will do the working ( further industrial automation will produce less  work available, which shouldn’t mean less workforce  but less hours for the same pay !  ) Actually this is the only logical way of thinking because the only other solution is higher unemployment with all its negative fallout.

If the mass of needed man(labor)  hours in a company  drops, the total amount of work hours per person will be dropped accordingly .

(* So a company having 1000 people working for them ( times 30 hrs)  will buy a machine that reduces the need for manual labor with 200 , than they will keep the 1000 , and divide the labor hours over the 800 people ( 24 hrs  ) but keep paying them the same money (so they keep the same standard of living,(*) this is a tricky part : what’s in it for the company or the CEO/CFO/ … ? THEY GET EXTRA MONEY FROM THE GOVERNMENT AND THE BENEFITED WORKERS , one time and modest ! , the amount should be in function of the downgraded workload, and of course still to be studied  )

EVERYONE should contribute with working !!!!!! So there WILL NOT be unemployment. If needed, adapted work will be provided  based on the capability of the person if we talk about disabled or even chronically ill people , not dying is close enough of being “fit for work “ .

… this idea is far from complete, has some (or even many) lose ends  but this should be the way we rebuild our society and capitalism . ( my complete study is in a primary fase, but I didn’t want to wait to share, …) 

As I said, there will still be rich people ( CEO/.. ) you can still get more money, by working extra hours in facilities where there is extra temp work  or by investing into companies (your own ? ..) or by handing out ideas, or studying for a new function or starting your own business… but most important, this could be a great social model, and adapted to the reality of the not so far future where there will be lesser work available, and we don’t want a polarization with a rich part and a very poor part of society…

This society will, in the end evolve to a society where the world will work together with common goals and with common responsibility for global assets and the entire community.

And everybody will have quality of life, ample free time , time to study or do whatever.

Monetary system will be based on REAL money, the only factor that is going to influence the price of  products and services will be the cost of elementary, natural assets (which should cost, to produce , actually nothing or minimum in relation to their use ) 

Companies  will all be profitable  (because investments and risks are trapped in modules and separate investments )  and bases on need only (and not on greed)  

Determining  the official share value is just a yearly event with simple mathematics… ( you could say based on the difference between the planned business plan & profit and the effective. ) So you can trade the shares, but the real value setting will be done after one year (budget period) .

TRADEABLE ITEMS

Oh yes trere are some “tradeable items” : as said, shares are only officially revalued each year. In between they are freely tradeable but this will not (directly)  influence the value at all  !

Workhours ,  every individual needs to work x hours (between 25-30 for example) for an amount of money, however he could decide to work only 15 hours (maybe he has a wife that makes a lot more money..) and trade the hours to somebody else that would work these hours in him/her place.

 Ideas, innovation, will level up our society constantly! And it will tend to a society with maybe no work at all, but every idea that makes it to a developed ( AND positively evaluated) concept , will be rewarded with money, and this for everybody which was involved in the development and decision making/taking, regardless of position, education, former accomplishments etc. ..... that’s actually involving the creative class permanently.

And of course “personal items” or goods.

Housing  will be a challenge ! Everyone should be able to have a house, but only for personal use !

This means NO RENTING !!

You can have more than one house , but you cannot rent them to others, you may sell them with “profit”, but that’s it. (So YES, also here you can make money and even speculate ! ) And the payment for housing will be deducted from your paycheck automatically.

This implicates that there will be NO homeless people ! AND ( this will be a big challenge) we need mixed communities where richer and poorer people are blended … this will stop polarization between “rich” and “poor” but will emphasize the difference in “ more” or “less” - working  people as a choice rather than a social , educational or financial imbalance . And so you will have big and small houses mixed at a lakeside.

(* Social nuisance ( littering, rumor, theft  etc.) will be points to be solved by other means that just repressive fining , this could mean that one could get relocated BY LAW if there are repeated  problems… (objective data gathering is of course an important fact !This rather touchy issue has also still some loose ends , but This should be a socially balances way of living together, so if someone gets relocated his house can come free for anyone else who wants to live there, and the can swap houses ( this actually means a better house for the new inhabitant with better value (although not necessary)  and a loss in value for the one getting “ deported”, but after this he can of course  try to change houses  again.

There doesn’t need to be a sort of “ghetto” thinking (preferably NOT) because of this mixed community there will be a higher social awareness and checking and this should also attack the perception of individuals that they are born in poverty and that this is their habitat for life… I was born poor , so I know how poor people think ! )

All  planned “investments” and used assets such as electricity, water , telephone and internet  share, house, other will be deducted of the individuals paycheck automatically, and can only be part of his total paycheck or the family paycheck , so nobody can overinvest with bankruptcy as a treat !  (…)

YES THIS MEANS THAT BASIC NEEDS SUCH AS ELECTRICITY WATER TELEPHONE INTERNET AND HOUSING WILL BE PAYED IN ADVANCE !!!

Social Capitalism, let go a part of our absolute freedom, regulate (automate) basic payments and cut the unsocial exorbitant remunerations and government as a tool, etc. …

PV : STUCK IN THE MIDDLE WITH YOU

Clowns to the left of me jockers to the right, YEAH ! 1972 song by Stealers Wheel http://www.youtube.com/watch?v=OMAIsqvTh7g

My oh my, funny how a song combined with a situation can stick !
Really I am NOT the person breaking down the institute of "Management" but sometimes it is too obvious that many organizations are better off  if some "managers" just stayed home !

The polarization of an organization where you have two sides , management and executors has soo much negative impact with sooo much "waste" it's almost normal that the world cannot cope with the buildup of management f*ckups.

Imagine a fishers boat , casting its nets and getting 150 kilograms of fish with every cast. (And the fishermen being happy with the catch)

Imagine the net down below wondering why he twirls down on a spot where there are only a couple of fish while 100 meters further there are 200 times more fish.

The net gets to the surface and yells at the boat to the men to go 100 meters further to get to better fishing grounds and then try to get the impression the net gets when the fishermen just ignore the information.

... yep , clowns to the left of me, jockers to the right ....

The information organizations need for excellent decisionmaking is probably inhouse and free of charge !

Just ask or just listen  ;-)