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The Big Answer


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Head to Head: The Coming Economic Battle Among Japan, Europe, and America

a book by Lester C. Thurow

(our site's book review)

Teams versus Individuals

The author makes the point—eloquently—that American firms tend to be staffed with individuals out for themselves, full of John Wayne delusions of heroic individualism, and not eager to work cooperatively with others, and much of the reason for this (beside the fact that their upbringing and the media conditioned them to think this way) is the way they’re perceived by their bosses. CEOs often think of their shareholders as their team members, rather than thinking of their workers as team members.

John Wayne delusions of heroic individualism
John Wayne delusions of heroic individualism

To the degree workers feel expendable and like “rented factors of production,” they will not be loyal, sacrifice, or work hard. But if there’s a team to join in a company that provides for the security of a worker and offers social opportunities to work with people that the employee likes, s/he will wish to join the team, obey the rules, and even sacrifice for the common good. He says this is the best way for companies to generate “effective production groups that can win, that can conquer market share, that can become number one.” Japanese business firms know this, and do this, as do some of the best American companies. But all of them need to be this way.

A team in a business
A team in a business


Selling Off Our Future

Thurow also clearly states that in general Americans save little and sell off existing American assets to finance a trade deficit that allows them to consume more than they produce. They’re selling off their kids’ futures and going into debt to do so. “Instead of investing in the future, Americans borrow from the future . . .” This is good strategy only if one dislikes one’s offspring or one is sure there will be an all-out nuclear war soon so we’d better live for today and not count on tomorrow.

Nuclear bomb explosion
Nuclear bomb explosion


Paying Just to Breathe

In a section related to environmental concerns, Thurow uses the systems logic that Americans and other modern nations are going to have to pay for good air to breathe and pay to avoid skin cancer—they’ll have to pay the poor people of the world to grow trees to keep oxygen up and carbon dioxide down. Long-term health doesn’t permit us to allow the continuance of the fiasco of putting countries in an economic bind so that they end up cutting down rainforests in order to make a few dollars to pay back debts. That plan leads only to ecological disaster.

Cutting down forests to make a quick buck
Cutting down forests to make a quick buck


Cooperation versus Competition

Thurow has paralleled the thinking of Darwin, who said that the world is full of competition, and that’s how the game is played, but in order to play the game at all, one must play on the basis of cooperation. Thurow reminds us that the 21st century is going to be as much one as the other—it’s the combination of the two that make it all work. This will mean to the most enlightened that win-win people are the needed players, and to produce this type of player, we need to utilize the age-old wisdom of flat-gradient nurturance childcare methods as opposed to the recent, failed, historically aberrant experiment: steep-gradient nurturance.


Our Education Policy: Put Our Heads in the Sand

He cites statistics that show that if America is to remain strong and rich, it will have to improve its K-12 educational system. He looks at parts of the system that are guiding the country’s education to relative failure year after year, and says no one tries to change this system because it’s so entrenched and has such a great union. Sane policy would be to try something new when a policy fails. Actual American policy is to put our heads in the sand and ignore all the failures. This is suicidal and foolish, and further proof that many in this country have never been educated as thinkers; the few people that know how to think end up running corporations or as high-paid professionals, but do not end up on very many school boards. Other countries see the U.S. as having good universities, but poor training for real jobs, and no plan to deal with this problem.

Our education policy: put our heads in the sand
Our education policy: put our heads in the sand


Pay Teachers More: Problem Solved. Or Not!

The weakest portion of Thurow's book claims that if we pay middle-school teachers more, we’ll be on our way to fixing the problem. This seems naïve, since as teacher salaries have been going up in the past few decades, educational performance has gone down. Since when does an entrenched bureaucracy—whose intrinsic goal is survival and prolonging the status quo—respond to more money being fed into the system by changing its ways and becoming good performers? It responds by higher expectations of input (salaries) to get the same output (performance). Perhaps he should read what we had to say about education in our website that comments on Arlene Skolnick’s book Embattled Paradise. He is correct, however, that it would be well if many of the school administration jobs were abolished, as they are unproductive and even parasitic.

The NEA has a choke-hold on American education that only the MC movement could alter
The NEA has a choke-hold on American education that only the MC movement could alter


Bureaucrat (input: money; output: very little except excuses
Bureaucrat (input: money; output: very little except excuses


The Little Red Hen Has Our Number

“When it comes to skill investments, individual rationality (let someone else do it) produces collective irrationality (it doesn’t get done).” Individuals don’t want to invest in skills that may not be needed tomorrow in their area, local governments don’t want to pay for great schools because the students will so often move away and the local area won’t benefit from the investment, firms don’t want to invest in worker training because of high worker turnover, etc. Just like the fable (The Little Red Hen) where no animal wanted to help make a loaf of bread but all wanted to eat it, all entities in the skills training chain pass the buck expediently along to the next entity. As in the fable, the only one that got to eat the bread was the one who did the work (the little red hen), and the Americans who get to benefit the most from the system are those that invest the most in themselves as skilled workers: study hard, learn much, get high grades, train hard, develop a great resume, save lots, persevere, and become very computer-savvy.

The Little Red Hen
The Little Red Hen


America Is an Oligarchy, Not a Democracy

Thurow points out that we have a functional oligarchy in this country, not really an establishment or a democracy. Without good strong domestic leadership, to get the country out of its debt and denial phase, America is an oligarchy by default, he says. It’s a good, and somewhat obvious, point. But he also says that we have low taxes in this country and they ought to be higher—like in Europe. He is right that higher income and gas taxes are good idea, but only if the money brings down the national debt. He mentions this as a use, but doesn’t make it a must. And, of course, if more taxes end up in government coffers, you can bet that the special interests will get their greasy paws on it, and there goes our chance to lower the debt! The people don’t trust the government with their money. Too often the government has shown its true colors in this area. (See The US is an oligarchy, study concludes.)

national debt

Unless American citizens start defecating money, the debt has put us all in deep doo-doo
Unless American citizens start defecating money, the debt has put us all in deep doo-doo



The 2008 Financial Crisis and the Bailouts

Let's think about the 2008 financial crisis. It is "considered by many economists the worst financial crisis since the Great Depression of the 1930s. It resulted in the threat of total collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. In many areas, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment. The crisis played a significant role in the failure of key businesses, declines in consumer wealth estimated in trillions of U.S. dollars, and a downturn in economic activity leading to the 2008–2012 global recession . . . "

In 2008 Obama robbed $700,000,000,000+ from the middle class—without warning and without asking
In 2008 Obama robbed $700,000,000,000+ from the middle class—without warning and without asking

The cause of it was the bursting of the United States housing bubble; the use of high risk, complex financial products that lacked regulatory oversight; also undisclosed conflicts of interest all over the place; also the massive failure of regulators and credit rating agencies and the market itself to rein in the excesses of Wall Street. (Far from reining anything in, from 1880 to 2004 Carter, Reagan, Clinton, the S.E.C. and Greenspan all participated in an orgy of deregulation.) The crisis reflected systemic breaches in accountability and ethics at all levels, as well as insufficient regulations in place to prevent financial sector personnel from using Wall Street as their own personal Las Vegas in which no table limits were observed. The problem of rotten ethics in the greedy, irresponsible crisis causers was one thing, but the problem of rotten ethics in the administrative branch of the U.S. was even worse.

As most parents know, bad actions need to have consequences. Without consequences, the perpetrators will continue doing bad actions. And no parent on earth is insane enough to actually REWARD BAD ACTIONS. And yet, that is exactly what happened the second Obama took office in 2008! There were three reasonable responses to the greed-caused "crisis":

  1. Natural consequences—let the companies that were struggling simply fail as a lesson to all who will overextend, overborrow, overlend, overpromise, overtrust, overrisk, and overspend in the future, rather than following the dictates of prudent management that prizes safety and security over sky-high profits with sky-high risk.
  2. Bail out only the companies that hadn't been key players in the crisis but only if they first changed management and risk policies and only if the government first passed emergency regulations that prevented the type of things that got us in so much financial trouble in the first place, and only if the bailout money recipients signed sworn and witnessed documents that not a penny of the money would be used for bonuses and golden parachutes.
  3. Bail out all companies struggling from the crisis but only if they first changed management and risk policies and only if the government first passed emergency regulations that prevented the type of things that got us in so much financial trouble in the first place, and only if the bailout money recipients signed sworn and witnessed documents that not a penny of the money would be used for bonuses and golden parachutes.

What did the thugs who caused the 2008 financial crisis get? They got bonuses and golden parachutes!
What did the thugs who caused the 2008 financial crisis get? They got bonuses and golden parachutes!

And yet, the second Obama took office in 2008 our so-called "leader" proved just how corrupt the oligarchy had become as he rewarded all the bad actors with a huge, unconditional, free cash infusion for their terrible behavior! It was the public's money, but he didn't even bother to ask. He just took it like a robber would take it. He gave it to his rich buddies in these rich companies. The public was shocked, and they wondered, once Obama gave $700,000,000,000+ to the "struggling companies," why we were giving all this free money to the very same people who caused the crisis and taking the money from the public assets of the victims! We expected impeachment, but the Congress wasn't about to do this since their buddies in the Corporatocracy were very pleased with this unprecedented robbery of the middle class. The public felt swindled—rightly so. Especially when they learned that bailout money that was supposed to bail out struggling companies went instead for bonuses and golden parachutes. So it truly was a swindle and the bailouts were just the powers-that-be taking advantage of the poor unsuspecting public—the sheep were sheared as the newly-rewarded in the financial sector partied on, laughing all the way to the bank.

The 2009 bailouts Obama gave out were a disgrace to our country, and the financial sector getting such a generous reward for their bad, irresponsible behavior was shocking to the public, but the financial sector partied on, laughing all the way to the bank
The 2009 bailouts Obama gave out were a disgrace to our country and the financial sector getting such a generous reward for their bad, irresponsible behavior was shocking to the public, but the financial sector partied on, laughing all the way to the bank

The Dodd–Frank Wall Street Reform and Consumer Protection Act (which finally reformed the financial sector) was passed in 2010 but many say it is not enough to prevent another financial crisis or more bailouts—partially because it didn't restore Glass-Steagall. Anyway, given the 2008 financial crisis and the stock market crash and the 2008–2012 global recession and the high unemployment numbers and especially the way the powers-that-be rewarded the crooks behind the crisis with nearly a trillion dollars of the public's hard-earned money, you can see why the people don’t trust the government with their money. And in fact, they don't trust the government—period! Or Congress. Or the corporations. They understand that the fix (which began when Bill Clinton screwed the public by supporting and signing the repeal of Glass-Steagall in 1999) is in, and they want to be out from under the rule of the Corporatocracy/oligarchy. But how?

Note: The Glass-Steagall Act, also known as the Banking Act of 1933 (48 Stat. 162), was passed by Congress in 1933 and prohibits commercial banks from engaging in the investment business. It was enacted as an emergency response to the failure of nearly 5,000 banks during the Great Depression.

Yet again the rich shake down the poor public in a 'crisis' most likely manufactured by the oligarchy so they could rob the middle class of all its wealth at an even faster rate of speed
Yet again the rich shake down the poor public in a 'crisis' most likely manufactured by the oligarchy so they could rob the middle class of all its wealth at an even faster rate of speed


Win-Win versus Win-Lose

America requires a paradigm shift to team playing, cooperation, and general win-win thinking now, for the good of its individuals as well as its collective good
America requires a paradigm shift to team playing, cooperation, and general win-win thinking now, for the good of its individuals as well as its collective good

Even though his book purports to be about the 21st century economic battle among Japan, Europe and America, its subtext is about what has always been a main theme for Thurow: win-win versus win-lose. America requires a paradigm shift to team playing, cooperation, and general win-win thinking now, for the good of its individuals as well as its collective good. Industry, schools, parents, government, and financial institutions all need to work together to avert financial disaster in the 21st century and to avert a drastic lowering of our standard of living. We needn’t lose any individualism in this cooperative effort, any more than settlers of the Western U.S. lost individuality in their cooperative efforts in wagon trains. In truth, cooperation can empower and increase the potential for individuality. The naïve notion that there’s an either-or relationship between the two needs to be dispelled.

Settlers cooperated in wagon trains and maintained individuality at the same time
Settlers cooperated in wagon trains and maintained individuality at the same time


The Individual-Society Continuum

Our Founding Fathers created a document that set up a republic that manifested the best possible balance of rights versus responsibilities, individual versus society, and I versus we. They meant for all this to give us the maximum freedoms possible without stepping on the toes of others. But the individual-society continuum was never looked at as an antagonist relationship. Each empowers the other. And it is not the conflict between the two but rather the dialectical synthesis of the two—transcending the continuum by the creation of a win-win political entity surpassing any yet known—that made it all work and created the longest living political system on Earth.

Americans need to restore their faith in the wisdom of our Founding Fathers by dropping the antagonistic context that has held so many back from cooperation and community participation for so long, and that has fueled the litigation obsessions and many of our other major social symptoms. One more time: the we empowers the I and the I empowers the we via dialectical synthesis. Period. No conflict, antagonism, or win-lose—none whatsoever. And that’s why Thurow is so right on with his call for win-win cooperation. It’s more than a call. It’s a recall.