Friday, 27 March 2009

Are MBA's worth it?

A great article has appeared in the Times over the link between MBA's from Harvard and the current crisis, particularly in relation to RBS and Sir Goodwin. What is particularly striking when reading the article is the fact that the RBS success was hailed as am management success rather than investments in high risk assets.

One is worried that as MBA'a have become a commodity, the emphasis is now to place the art of management above and beyond the art of financial account and good business sense.

Tuesday, 24 March 2009

Action against farsical Justice - Alert group!

It took a while to find it but here it is - this is an independent action group ALERT. A great organisation using non-violent methods to show our concern on the repeated injustices. If you can go and take a Banana with you. For those who don’t know why this case is referred to as reminded of a Banana republic see here.

On the funnier side there is a song by the Boomtown Rats (whose singer, Bob Geldof, is of LIVE AID fame) called “Banana Republic” the lyrics are below:

Banana Republic
Septic Isle
Screaming in the Suffering sea
It sounds like crying (crying, crying)
Everywhere I go, oh yeah
Everywhere I see
The black and blue uniforms
Police and priests

And I wonder do you wonder
While you're sleeping with your whore
That sharing beds with history
Is like a-licking running sores
Forty shades of green yeah
Sixty shades of red
Heroes going cheap these days
Price; a bullet in the head

Banana Republic
Septic Isle
Suffer in the Screaming sea
It sounds like dying (dying, dying)
Everywhere I go, oh yeah
Everywhere I see
The black and blue uniforms
Police and priests

Take your hand and lead you
Up a garden path
Let me stand aside here
And watch you pass
Striking up a soldier's song
I know that tune
It begs too many questions
And answers too

Banana Republic
Septic Isle
Suffer in the Screaming sea
It sounds like dying (dying, dying)
Everywhere I go, oh yeah
Everywhere I see
The black and blue uniforms
Police and priests

The purple and the pinstripe
Mutely shake their heads
A silence shrieking volumes
A violence worse than they condemn
Stab you in the back yeah
Laughing in your face
Glad to see the place again
It's a pity nothing's changed

Banana Republic
Septic Isle
Suffer in the Screaming sea
It sounds like dying
Everywhere I go
Everywhere I see
The black and blue uniforms
Police and priests

Friday, 20 March 2009

Etravisan tzie ton sxini kai to paloutzi!

After the ridiculous mess of the "Al Capone" affair the aquital of the police men beating up students was really the final straw.

Similar events have created riots in other countries - and it is no good pointing at the judges; in the end ultimate reponsibility lies with the elected representatives of the people.

Its is now or never - if President Christofias does not seize the chance to radically alter the way the police and justice system works then he will find it hard to convice people that he is any different from the politicians of an older, more compromised, generation.

President Christofias has avoided any real reform up until now, possibly keep parties more strongly represented in the police force happy. Although the above statement would seem ridiculous to a non-cypriot, anyone who knows about Georkatzis and his enduring influence over the police and the National Guard will understand that upseting the police and the judiciary will tearing further the President's relationship with Disy, Diko and other "central forces".

Thursday, 19 March 2009

Malta copes so much better with the EU than Cyprus

The fact that the Maltese government has managed to retain its stipends in terms of VAT on food and medicine exceptions is just one more example on how much better Malta is maximising its possibilities. The university and companies are capitalising the Leonardo and Da Vinci programs, as well as funds for innovation.
This is not a coincidence – there is a much better co-operation of government and the non-for-profit sector than in Cyprus. Cyprus has failed to make the most of the possibility of the EU and is incurring fines due to its failure to capitalise developmental funds. In many ways the issue in Cyprus is partially due to the inflexibility of government contract procedures and the instinct of the government to be a central factor in coordinating funds and the economy. Although government in Cyprus now is perhaps less open to clientalism than in Malta, the resulting procedures set in place make government mechanism inflexible – just look at slow progress on the marinas and desalination plants.
There is much we can learn from each other in terms of governance.

Saturday, 7 March 2009

Dr. Orphanides vs Deutche Bundesbank? - not really.

I thought they were rumors but it seems Bloomberg also hints at a rift within the ECB. According to the article the Fed trained Dr. Orphanides, president of the central bank of Cyprus, is pushing the ECB to drop interest rates even further.

What the article seems to ignore here is that the ideological division within the ECB is taking place between people who accept the same principles of economics, i.e. this is not a rift between Catholicism and Protestantism but a debate over the proper reading of the scriptures within the Catholic orthodoxy.

All in the ECB believe in the basic monetarist tenets: the money market has a direct impact on the real economy and peoples incomes, and thus interest rate reductions stimulate the economy (or increasing inflation) even in the current economic climate.

Thus this so called "battle" is not battle of ideas but more a disagreement of versions of history. Dr. Orphanides is evidently a believer of the Bernanke (Head of the US Federal Reserve) / C. Romer (Chair of the US Council of of Economic Advisers) view of the Great Depression. The Romer / Bernanke synthesis argues that the recovery from the Great depression was due to an expansionary monetary policy and the restructuring of the banking sector. Others in the ECB, possibly led by Professor Axel Weber, president of the Deutche Bundesbank, have the horrors of stagflation of the 1970s and the hyperinflation of the 1920s firmly entrenched in their mind. In their interpretation of the same monetarist tenement, inflation is dynamic and comes after a lag of 6 months to a year after a interest rate cut; it is simply not worth having future inflation in order to prevent a possible reduction of output today as the cost of inflation in terms of future lost productivity far outweighs the effects of a current downturn. Both schools see the restructuring of the banking sector as crucial, and i am sure they feel hampered by the diverse responses of the EURO-area countries in terms of bank restructuring, where the ECB has no direct input.

However the issue facing the world is that economics are not united in providing responses to the current crisis. Rather than accepting any one school of thought, a collection of different policies drawn from all schools would surely provide a better outcome, due to the fact the objectives of each school are as diverse as the needs of the policymakers.

It is not clear if the monetarism has the answer to the needs of politicians in increasing output and providing employment; some economists argue that interest rates are so low that we have fallen below the threshold where monetary policy ceases to be effective, thus falling in a "liquidity trap". According to Neo-Keynisian economists (who also sit in the council of economic advisers) what is needed is direct investment in the real economy by the government (more schools, roads, ect) in order to safeguard jobs and increase output - interest rates cuts simply will not work anymore.

While there might be a definite disagreement on what the monetarist solution is for Europe, both parties within the ECB accept that the ECB holds the answer and fiscal policies of the respective European countries are at best complimentary but at worst unhelpful. However, the debate for the way out of the current global mess needs to take place by taking all schools of economic thought into account in order to have a correct policy response. Yet strangely enough the focus has been on global action without having a global discussion on what is the way froward in terms of economic theory.