Monday, April 30, 2012

Corporate Social Responsability

Corporate Social Responsability

The most advanced companies have adopted the principles of the Corporate Social Responsibility (CSR), understood to be the voluntary integration of environmental and social concerns, beyond strict compliance with legal obligations, into business management.

The adoption of these principles in the company's philosophy generates confidence among the different groups with which the company relates:

  • Clients
  • Suppliers
  • Employees
  • Shareholders
  • Society

The Management at GRUPO TECOPY is committed to the ideas reflected in its Quality and Environmental Policy, which seeks to encourage its employees, suppliers and customers to undertake projects and make decisions, which have a positive impact on society.


Rodrigo González Fernández
Diplomado en "Responsabilidad Social Empresarial" de la ONU
Diplomado en "Gestión del Conocimiento" de la ONU
Diplomado en Gerencia en Administracion Publica ONU
Diplomado en Coaching Ejecutivo ONU( 
 CEL: 93934521
Santiago- Chile
Soliciten nuestros cursos de capacitación  y consultoría en GERENCIA ADMINISTRACION PUBLICA -LIDERAZGO -  GESTION DEL CONOCIMIENTO - RESPONSABILIDAD SOCIAL EMPRESARIAL – LOBBY – COACHING EMPRESARIAL-ENERGIAS RENOVABLES   ,  asesorías a nivel nacional e  internacional y están disponibles  para OTEC Y OTIC en Chile

New York Fed: Leave the Building!

New York Fed: Leave the Building!

Mises Daily: Monday, April 30, 2012 by


[At the invitation of the New York Federal Reserve Bank, Robert Wenzel spoke and had lunch in the bank's Liberty Room on April 25, 2012. Below are his prepared remarks.]

New York Federal Reserve Bank

Thank you very much for inviting me to speak here at the New York Federal Reserve Bank.

Intellectual discourse is, of course, extraordinarily valuable in reaching truth. In this sense, I welcome the opportunity to discuss my views on the economy and monetary policy and how they may differ with those of you here at the Fed.

That said, I suspect my views are so different from those of you here today that my comments will be a complete failure in convincing you to do what I believe should be done, which is to close down the entire Federal Reserve System.

My views, I suspect, differ from beginning to end. From the proper methodology to be used in the science of economics, to the manner in which the macroeconomy functions, to the role of the Federal Reserve, and to the accomplishments of the Federal Reserve, I stand here confused as to how you see the world so differently than I do.

I simply do not understand most of the thinking that goes on here at the Fed, and I do not understand how this thinking can go on when in my view it smacks up against reality.

Please allow me to begin with methodology. I hold the view developed by such great economic thinkers as Ludwig von Mises, Friedrich Hayek, and Murray Rothbard that there are no constants in the science of economics similar to those in the physical sciences.

In the science of physics, we know that water freezes at 32 degrees. We can predict with immense accuracy exactly how far a rocket ship will travel filled with 500 gallons of fuel. There is preciseness because there are constants, which do not change and upon which equations can be constructed.

There are no such constants in the field of economics, because the science of economics deals with human action, which can change at any time. If potato prices remain the same for 10 weeks, it does not mean they will be the same the following day. I defy anyone in this room to provide me with a constant in the field of economics that has the same unchanging constancy that exists in the fields of physics or chemistry.

And yet, in paper after paper here at the Federal Reserve, I see equations built as though constants do exist. It is as if one were to assume a constant relationship existed between interest rates here and in Russia and throughout the world, and create equations based on this belief and then attempt to trade based on these equations. That was tried and the result was the blow up of the fund Long Term Capital Management — a blow up that resulted in high-level meetings in this very building.

It is as if traders assumed a given default rate was constant for subprime mortgage paper and traded on that belief. Only to see it blow up in their faces, as it did, again, with intense meetings being held in this very building.

Yet, the equations, assuming constants, continue to be published in papers throughout the Fed system. I scratch my head.

I also find curious the general belief in the Keynesian model of the economy that somehow results in the belief that demand drives the economy, rather than production. I look out at the world and see iPhones, iPads, microwave ovens, flat-screen televisions, which suggest to me that it is production that boosts an economy. Without production of these things and millions of other items, where would we be? Yet the Keynesians in this room will reply, "But you need demand to buy these products." And I will reply, "Do you not believe in supply and demand? Do you not believe that products once made will adjust to a market-clearing price?"

Further, I will argue that the price of the factors of production will adjust to prices at the consumer level and that thus the markets at all levels will clear. Again do you believe in supply and demand or not?

I scratch my head that somehow most of you on some academic level believe in the theory of supply and demand and how market-setting prices result, yet you deny them in your macro thinking about the economy.

You will argue with me that prices are sticky on the downside, especially labor prices, and therefore that you must pump money to get the economy going. And, I will look on in amazement as your fellow Keynesian brethren in the government create an environment of sticky non-downward-bending wages.

The economist Robert Murphy reports that President Herbert Hoover continually pressured businessmen not to lower wages.

He quoted Hoover in a speech delivered to a group of businessmen:

In this country there has been a concerted and determined effort on the part of both government and business … to prevent any reduction in wages.

He then reports that FDR actually outdid Hoover by seeking to "raise wages rates rather than merely put a floor under them."

I ask you, with presidents actively conducting policies that attempt to defy supply and demand and prop up wages, are you really surprised that wages were sticky downward during the Great Depression?

In present-day America, the government focus has changed a bit. In the new focus, the government attempts much more to prop up the unemployed by extended payments for not working. Is it really a surprise that unemployment is so high when you pay people not to work? The 2010 Nobel Prize was awarded to economists for their studies that showed that, and I quote from the Noble press release announcing the award,

One conclusion is that more generous unemployment benefits give rise to higher unemployment and longer search times.

Don't you think it would make more sense to stop these policies, which are a direct factor in causing unemployment, than to add to the mess and devalue the currency by printing more money?

I scratch my head that somehow your conclusions about unemployment are so different from mine and that you call for the printing of money to boost "demand" — a call, I add, that since the founding of the Federal Reserve has resulted in an increase of the money supply by 12,230 percent.

I also must scratch my head at the view that the Federal Reserve should maintain a stable price level. What is wrong with having falling prices across the economy, like we now have in the computer sector, the flat-screen-television sector and the cell-phone sector? Why, I ask, do you want stable prices? And, oh by the way, how's that stable price thing going for you here at the Fed?

Since the start of the Fed, prices have increased at the consumer level by 2,241 percent. that's not me misspeaking: I will repeat, since the start of the Fed, prices have increased at the consumer level by 2,241 percent.

So you then might tell me that stable prices are only a secondary goal of the Federal Reserve and that your real goal is to prevent serious declines in the economy but, since the start of the Fed, there have been 18 recessions including the Great Depression and the most recent Great Recession. These downturns have resulted in stock-market crashes, tens of millions of unemployed, and untold business bankruptcies.

I scratch my head and wonder how you think the Fed is any type of success when all this has occurred.

I am especially confused, since Austrian business-cycle theory (ABCT) — developed by Mises, Hayek, and Rothbard — has warned about all these things. According to ABCT, it is central-bank money printing that causes the business cycle and, again you here at the Fed have certainly done that by increasing the money supply. Can you imagine the distortions in the economy caused by the Fed by this massive money printing?

According to ABCT, if you print money, those sectors where the money goes will boom; stop printing and those sectors will crash. Fed printing tends to find its way to Wall Street and other capital-goods sectors first; thus it is no surprise to Austrian School economists that the crashes are most dramatic in these sectors, such as the stock-market and real-estate sectors. The economist Murray Rothbard in his book America's Great Depression went into painstaking detail outlining how the changes in money-supply growth resulted in the Great Depression.

On a more personal level, as the recent crisis was developing here, I warned throughout the summer of 2008 of the impending crisis. On July 11, 2008, at EconomicPolicyJournal.com, I wrote,

SUPER ALERT: Dramatic Slowdown In Money Supply Growth

After growing at near double digit rates for months, money growth has slowed dramatically. Annualized money growth over the last 3 months is only 5.2 percent. Over the last two months, there has been zero growth in the M2NSA money measure.

This is something that must be watched carefully. If such a dramatic slowdown continues, a severe recession is inevitable.

We have never seen such a dramatic change in money supply growth from a double digit climb to 5 percent growth. Does Bernanke have any clue as to what the hell he is doing?

On July 20, 2008, I wrote,

I have previously noted that over the last two months money supply has been collapsing. M2NSA has gone from double digit growth to nearly zero growth .

A review of the credit situation appears worse. According to recent Fed data, for the 13 weeks ended June 25, bank credit (securities and loans) contracted at an annual rate of 7.9 percent.

There has been a minor blip up since June 25 in both credit growth and M2NSA, but the growth rates remain extremely slow.

If a dramatic turnaround in these numbers doesn't happen within the next few weeks, we are going to have to warn of a possible Great Depression style downturn.

Yet, just weeks before these warnings from me, Chairman Bernanke, while the money-supply growth was crashing, had a decidedly much more optimistic outlook. In a speech on June 9, 2008, at the Federal Reserve Bank of Boston's 53rd annual economic conference, he said,

I would like to provide a brief update on the outlook for the economy and policy, beginning with the prospects for growth. Despite the unwelcome rise in the unemployment rate that was reported last week, the recent incoming data, taken as a whole, have affected the outlook for economic activity and employment only modestly. Indeed, although activity during the current quarter is likely to be weak, the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so. Over the remainder of 2008, the effects of monetary and fiscal stimulus, a gradual ebbing of the drag from residential construction, further progress in the repair of financial and credit markets, and still-solid demand from abroad should provide some offset to the headwinds that still face the economy.

I believe the Great Recession that followed is still fresh enough in our minds so that it is not necessary to recount in detail as to whose forecast, mine or the chairman's, was more accurate.

I am also confused by many other policy-making steps here at the Federal Reserve. There have been more changes in monetary-policy direction during the Bernanke era then at any other time in the modern era of the Fed. Not under Arthur Burns, not under G. William Miller, not under Paul Volcker, not under Alan Greenspan have there been so many dramatically shifting Fed monetary-policy moves. Under Chairman Bernanke there have been significant changes in direction of the money supply growth five different times. Thus, for me, I am not at all surprised at the current stop-and-go economy. The current erratic monetary policy makes it exceedingly difficult for businessmen to make any long-term plans. Indeed, in my own "Daily Alert" on the economy, I find it extremely difficult to give long-term advice, when in short periods I have seen three-month annualized M2 money growth go from near 20 percent to near zero, and then in another period see it go from 25 percent to 6 percent.

I am also confused by many of the monetary programs instituted by Chairman Bernanke. For example, "Operation Twist."

This is not the first time an Operation Twist was tried. An Operation Twist was tried in 1961, at the start of the Kennedy administration. A paper was written by three Federal Reserve economists in 2004 that, in part, examined the 1960s' Operation Twist.Download PDF

Their conclusion:

A second well-known historical episode involving the attempted manipulation of the term structure was so-called Operation Twist. Launched in early 1961 by the incoming Kennedy Administration, Operation Twist was intended to raise short-term rates (thereby promoting capital inflows and supporting the dollar) while lowering, or at least not raising, long-term rates. (Modigliani and Sutch 1966).… The two main actions of Operation Twist were the use of Federal Reserve open market operations and Treasury debt management operations. Operation Twist is widely viewed today as having been a failure, largely due to classic work by Modigliani and Sutch.…

However, Modigliani and Sutch also noted that Operation Twist was a relatively small operation, and, indeed, that over a slightly longer period the maturity of outstanding government debt rose significantly, rather than falling … Thus, Operation Twist does not seem to provide strong evidence in either direction as to the possible effects of changes in the composition of the central bank's balance sheet.…

We believe that our findings go some way to refuting the strong hypothesis that nonstandard policy actions, including quantitative easing and targeted asset purchases, cannot be successful in a modern industrial economy. However, the effects of such policies remain quantitatively quite uncertain. (emphases mine)

One of the authors of this 2004 paper was Federal Reserve Chairman Bernanke. Thus, I have to ask, what the hell is Chairman Bernanke doing implementing such a program, since it is his paper that states it was a failure according to Modigliani, and his paper implies that a larger test would be required to determine true performance.

I ask, is the chairman using the United States economy as a lab with Americans as the lab rats to test his intellectual curiosity about such things as Operation Twist?

Further, I am very confused by the response of Chairman Bernanke to questioning by Congressman Ron Paul. To a seemingly near off-the-cuff question by Congressman Paul on Federal Reserve money provided to the Watergate burglars, Chairman Bernanke contacted the Inspector General's Office of the Federal Reserve and requested an investigation. Yet the congressman has regularly asked about the gold certificates held by the Federal Reserve and whether the gold at Fort Knox backing up the certificates will be audited. Yet there have been no requests by the chairman to the Treasury for an audit of the gold.This I find very odd. The chairman calls for a major investigation of what can only be a historical point of interest but fails to seek out any confirmation on a point that would be of vital interest to many present-day Americans.

In this very building, deep in the underground vaults, sit billions of dollars of gold, held by the Federal Reserve for foreign governments. The Federal Reserve gives regular tours of these vaults, even to school children. Yet America's gold is off limits to seemingly everyone and has never been properly audited. Doesn't that seem odd to you? If nothing else, does anyone at the Fed know the quality and fineness of the gold at Fort Knox?

In conclusion, it is my belief that from start to finish the Fed is a failure. I believe faulty methodology is used. I believe that the justification for the Fed, to bring price and economic stability, has never been a success. I repeat, prices since the start of the Fed have climbed by 2,241 percent and there have been over the same period 18 recessions. No one seems to care at the Fed about the gold supposedly backing up the gold certificates on the Fed balance sheet. The emperor has no clothes. Austrian business-cycle theorists are regularly ignored by the Fed, yet they have the best records with regard to spotting overall downturns, and further they specifically recognized the developing housing bubble. Let it not be forgotten that in 2004, two economists here at the New York Fed wrote a paper denying there was a housing bubble.Download PDF I responded to the paper and wrote,

The faulty analysis by [these] Federal Reserve economists … may go down in financial history as the greatest forecasting error since Irving Fisher declared in 1929, just prior to the stock market crash, that stocks prices looked to be at a permanently high plateau.

Data released just yesterday now show housing prices have crashed to 2002 levels.

I will now give you more warnings about the economy.

The noose is tightening on your organization. Vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or, if you stop printing, another massive economic crash will occur. There is no other way out.

Again, thank you for inviting me. You have prepared food, so I will not be rude — I will stay and eat.

Let's have one good meal here. Let's make it a feast. Then I ask you, I plead with you, I beg you all, walk out of here with me, never to come back. It's the moral and ethical thing to do. Nothing good goes on in this place. Let's lock the doors and leave the building to the spiders, moths, and four-legged rats.


Here are the details surrounding my speech at the New York Federal Reserve Bank. First, I am surprised it actually occurred.

Reaction inside the New York Fed to news of the invitation for me to speak was fast and furious, once it became public inside the bank.

I am not going to go into the specifics of who invited me. I believe that economist had a true curiosity about my views, but when he put out a formal invitation via email within the New York Fed (I received a copy), it was cancelled within 15 minutes of being put out (I also have a copy of the cancellation). So much for overall curiosity at the Fed about true differing views.

The economist who invited me assured me that he was still arranging the speech. Yet as the day grew closer, I feared that I would get word that my speech time would be cancelled.

When I arrived at the bank, the economist who originally invited me told me that there was a "schedule conflict" with a seminar and that the group meeting would be smaller than originally planned. That really didn't bother me, I was in the Fed, and those wanting to hear my speech would.

However, I did detect tension in faces, while I gave my speech, and perhaps some anger. But the anger soon dissipated.

As soon as I finished my speech and to defuse the tension, I asked an immediate question as to whether the economists present believed that Austrian theory had a legitimate case to make. The eventual response came down to the statement by a Fed economist that there had been worse crashes in the economy before the start of the Fed. (Side note: this is a regular argument used by those supporting the Fed. They will claim that crises were worse before the Fed. I have seen fragmented work demolishing this view, but I think there is the opportunity for some economics student to delve into the pre-Fed period in America and delve into the crashes from an Austrian business-cycle viewpoint and point out clearly how government was involved in such crises, if they were — which I suspect they were. Such a study would be extremely valuable in knocking a peg out from under the Fed supporters who attempt to justify the Fed by this argument.)

I then asked one economist (a 20-year-plus veteran of the Fed) if he was familiar with Austrian economics. He said that in college he had taken two history-of-economics courses and then said that the Austrian School is part of the classical tradition. This told me that he was not aware of the important differences between the Austrian School and classical economics (and also the neoclassical tradition).Download PDF

Later on in the Q&A, one economist remarked that he understood the Austrian School and that they were the group that wanted a constant increase in the money supply and developed the equation PV=MT. This, of course, is not the Austrian view, but a view held by the Chicago School. Thus, in one swoop, this economist demonstrated not only his ignorance of Austrian views on monetary policy but also confusion about Chicago School views.

To diffuse the tension a bit more, when one economist made a particularly Keynesian statement, I said, "It does not sound like you are going to be walking out of here with me after lunch like I recommend." That brought laughter.

At another point, I told the story of how in a phone conversation with Lew Rockwell, Lew and I were discussing why I had received an invitation by the Fed, and Lew said, "They are probably sick and tired of all those boring speeches that they have to listen to." That really brought laughter.

A good deal of the Q&A was about my Rothbardian view that prices should be allowed to decline. They were really fascinated by this view and clearly had never heard it before. One economist raised the question of how falling prices would impact assets. The answer is, of course, that an asset is valued based on its discounted value stream and that falling prices would be taken into account in the discounted-present-value models. However, I do not believe this view has yet been developed fully, and it is another good project for a budding economist.

Overall, I was simply amazed at the lack of knowledge of these economists about the Austrian School. It was very close to nonexistent. This points out the extremely important work being done by the Mises Institute and also Ron Paul. The number of students with an understanding of Austrian economics is increasing at an exponential rate. I can't imagine that future economists, even those who work for the Fed, won't have some acquaintance with Austrian economics thanks to LvMI and Ron Paul.

My experience at the Fed points out the importance of intellectual debate and study. Clearly, the economists whom I met at the Fed were brought up in an intellectual tunnel, where they had no exposure to Austrian economic theory. They read and study within a limited range of writers. But they were very curious about my view.

One economist asked me how I knew the housing market was going to crash. I responded that because of Austrian theory, I understood that money created by the Fed enters the economy at specific points and that it was obvious the housing market was one of the those points. I told him that I also knew that this would eventually result in price inflation (as the money spread through the economy) and that at that point the Fed would slow printing and the housing market would collapse, which is just what occurred.

I suspect that at the top of the Fed, there are some very evil types who understand that the game is to protect the banksters, but I don't think that is the view held by the outer ring. They have been brought up in the system, and they don't ask questions that threaten their pay checks (it was most difficult impossible to get the economists to discuss any of the erratic moves made by Bernanke) and work developing models within the twisted Keynesian model.

If you set a firecracker under them, like with the speech I gave, and then treat them with respect while discussing their opposing views and lighten things up a bit after the firecracker has gone off, perhaps some impact will be made to the tunnel thinking that they have been exposed to their entire professional life. Even more important, hopefully my speech will help budding students to understand that the Fed propaganda machine claims lots of justifications for their money-printing machines that when looked at closely can not be justified. The greater the number who understand the failures of Fed thinking and operations, the closer we will be to ending the Fed.


Rodrigo González Fernández
Diplomado en "Responsabilidad Social Empresarial" de la ONU
Diplomado en "Gestión del Conocimiento" de la ONU
Diplomado en Gerencia en Administracion Publica ONU
Diplomado en Coaching Ejecutivo ONU( 
 CEL: 93934521
Santiago- Chile
Soliciten nuestros cursos de capacitación  y consultoría en GERENCIA ADMINISTRACION PUBLICA -LIDERAZGO -  GESTION DEL CONOCIMIENTO - RESPONSABILIDAD SOCIAL EMPRESARIAL – LOBBY – COACHING EMPRESARIAL-ENERGIAS RENOVABLES   ,  asesorías a nivel nacional e  internacional y están disponibles  para OTEC Y OTIC en Chile

Friday, April 27, 2012

Why the African Oil Connection is Still So Attractive

Why the African Oil Connection is Still So Attractive

by | published April 27th, 2012

After almost two weeks, Marina and I will be flying back home to Pittsburgh on Sunday.

It was relaxing… mostly.

Earlier this week, we were dealing with brush fires. This is the season for it in the Bahamas. March and April are dry months, just before the rains that will be coming down for most of May.

But the primary culprit behind the fires down here is a very irritating one – beer bottles thrown in the scrub by partygoers. Some explode from the heat. But whether intact or in pieces, they magnify the sun's rays and start fires all over the island.

I'll shortly be dealing with another kind of brush fire. There will be a quick turnaround period between our landing in Pittsburgh at 8 pm on Sunday and my 6 am flight out to Houston the next morning.

I'll be attending a meeting on West .

In Houston, I will be meeting with officials of the Nigerian National Oil Company and the Nigerian government. This has become the normal way my official advisories take place these days – an initial session in the U.S. and then follow-up advisories in the home capital on more substantive matters.

But this situation is a little different. Normally, it is the U.S. State Department that initiates such contacts. This time, given the political difficulties of a nation that seems forever teetering on civil war, the request comes from the Nigerians directly.

There are three reasons why this country remains one of the most difficult in which to conduct business. The first addresses security amidst regional differences and a delta region that is a tinder box of revolution, secession, tribal warfare, and flat out criminal activity. It is hot, sticky, bug-infested, and dangerous…

But it holds a great deal of light, sweet crude.

Such oil is highly desired these days. There is little of it left worldwide. It requires less processing, since it does not have much sulfur to remove or weight to thin out.

And that increases profit margins.

Still, it also guarantees competition, political intrigue, and ecological damage, along with kidnappings of company personnel, attacks on rigs and pipelines, inter-village conflict, and even the occasional revenge homicide.

The second factor making life difficult for oil extraction in Nigeria is the corruption. We're talking about one of the most corrupt nations on the planet. There are laws on the books, plenty of them. But they are regularly ignored by officials who see an easy opportunity to make a lot of money for themselves.

A Nigerian newspaper editor summed it up a while back by telling me (in all seriousness), "If the amount of the bribe is less than $10 million U.S., it isn't even worth the newspaper space to report it. We would also need to double the size of a daily edition to cover them all."

Third is the criminal factor. Whenever there is a great deal of money available, that attracts fraud, deception, and worse, especially when it is a developing country with deep-seated historical divisions.

Remember, Nigeria is the place that invented those email frauds requesting assistance in moving money for an apparent "can't miss" chance to make some big bucks quickly. After all, all you need do is set up an empty bank account, right? These are known around the globe as "409 scams" – after the Nigerian Commercial Code section they violate.

But the crime goes deeper. Little, if any, importing of oil products takes place outside organized crime. Sounds strange that one would import into an oil-wealthy country like Nigeria, doesn't it? But the fact is, there is little refinery capacity. So most oil produced there is shipped out as crude. Then, the country produces only 15% of the electricity needed daily. That means 85% must come from private generators operating on diesel, and that fuel must be bought into the country.

The diesel traffic into the Nigerian market may be the most criminally controlled and nasty business anywhere in the world. The tankers park (that is, "bunker") out beyond the eight-mile national jurisdiction zone, and shuttle craft – directed by the Nigerian mob – ferry the fuel to shore.

So, with all these problems, why bother setting up operations there?

Simple, Africa is one of two places left in the world where there is a great deal of potential oil, needed by a world becoming concerned over supply constriction. The other place is the Arctic.

Africa is much cheaper.

In West Africa, Nigeria and Angola have ushered in an oil rush that has spread to neighboring countries as the true expanse of these basins comes to light. In addition, the deep water off the coast of the region is developing into one of the most promising large field locations remaining in the world. Royal Dutch/Shell (NYSE: RDS-A), Chevron (NYSE: CVR) and ExxonMobil (NYSE:XOM) are already there with huge projects.

But it is a range of smaller companies (mid and small cap) that are likely to make the biggest impact for investors. Thus far, while many trade only on the London Stock Exchange (LSE) or the U.K.'s less-regulated Alternative Investment Market (AIM), there are a couple that are available for trade in the U.S. I have already advised my subscribers of both Energy Advantage and Energy Inner Circle on the best and most liquid of these moves.

Others will be coming into play shortly.

Problems in places like Nigeria have developed over generations and will be very difficult to displace.

But the oil riches coming from Africa will oblige us to keep going back and trying.




Rodrigo González Fernández
Diplomado en "Responsabilidad Social Empresarial" de la ONU
Diplomado en "Gestión del Conocimiento" de la ONU
Diplomado en Gerencia en Administracion Publica ONU
Diplomado en Coaching Ejecutivo ONU( 
 CEL: 93934521
Santiago- Chile
Soliciten nuestros cursos de capacitación  y consultoría en GERENCIA ADMINISTRACION PUBLICA -LIDERAZGO -  GESTION DEL CONOCIMIENTO - RESPONSABILIDAD SOCIAL EMPRESARIAL – LOBBY – COACHING EMPRESARIAL-ENERGIAS RENOVABLES   ,  asesorías a nivel nacional e  internacional y están disponibles  para OTEC Y OTIC en Chile

Thursday, April 26, 2012

France's election

France's election

The rather dangerous Monsieur Hollande

The Socialist who is likely to be the next French president would be bad for his country and Europe

IT IS half of the Franco-German motor that drives the European Union. It has been the swing country in the euro crisis, poised between a prudent north and spendthrift south, and between creditors and debtors. And it is big. If France were the next euro-zone country to get into trouble, the single currency's very survival would be in doubt.

That is why the likely victory of the Socialist candidate, François Hollande, in France's presidential election matters so much. In the first round on April 22nd Mr Hollande came only just ahead of the incumbent, Nicolas Sarkozy. Yet he should win the second round on May 6th, because he will hoover up all of the far-left vote that went to Jean-Luc Mélenchon and others and also win a sizeable chunk from the National Front's Marine Le Pen and the centrist François Bayrou.

Mr Sarkozy has a mountain to climb. Many French voters seem viscerally to dislike him. Neither Ms Le Pen (who, disturbingly, did well) nor Mr Bayrou (who, regrettably, did not) is likely to endorse him, as both will gain from his defeat. So, barring a shock, such as an implosion in next week's televised debate, Mr Hollande can be confident of winning in May, and then of seeing his party triumph in June's legislative election.

This newspaper endorsed Mr Sarkozy in 2007, when he bravely told French voters that they had no alternative but to change. He was unlucky to be hit by the global economic crisis a year later. He has also chalked up some achievements: softening the Socialists' 35-hour week, freeing universities, raising the retirement age. Yet Mr Sarkozy's policies have proved as unpredictable and unreliable as the man himself. The protectionist, anti-immigrant and increasingly anti-European tone he has recently adopted may be meant for National Front voters, but he seems to believe too much of it. For all that, if we had a vote on May 6th, we would give it to Mr Sarkozy—but not on his merits, so much as to keep out Mr Hollande.

With a Socialist president, France would get one big thing right. Mr Hollande opposes the harsh German-enforced fiscal tightening which is strangling the euro zone's chances of recovery. But he is doing this for the wrong reasons—and he looks likely to get so much else wrong that the prosperity of France (and the euro zone) would be at risk.

A Socialist from the left bank

Although you would never know it from the platforms the candidates campaigned on, France desperately needs reform. Public debt is high and rising, the government has not run a surplus in over 35 years, the banks are undercapitalised, unemployment is persistent and corrosive and, at 56% of GDP, the French state is the biggest of any euro country.

Mr Hollande's programme seems a very poor answer to all this—especially given that France's neighbours have been undergoing genuine reforms. He talks a lot about social justice, but barely at all about the need to create wealth. Although he pledges to cut the budget deficit, he plans to do so by raising taxes, not cutting spending. Mr Hollande has promised to hire 60,000 new teachers. By his own calculations, his proposals would splurge an extra €20 billion over five years. The state would grow even bigger.

Optimists retort that compared with the French Socialist Party, Mr Hollande is a moderate who worked with both François Mitterrand, the only previous French Socialist president in the Fifth Republic, and Jacques Delors, Mitterrand's finance minister before he became president of the European Commission. He led the party during the 1997-2002 premiership of Lionel Jospin, who was often more reformist than the Gaullist president, Jacques Chirac. They dismiss as symbolic Mr Hollande's flashy promises to impose a 75% top income-tax rate and to reverse Mr Sarkozy's rise in the pension age from 60 to 62, arguing that the 75% would affect almost nobody and the pension rollback would benefit very few. They see a pragmatist who will be corralled into good behaviour by Germany and by investors worried about France's creditworthiness.

If so, no one would be happier than this newspaper. But it seems very optimistic to presume that somehow, despite what he has said, despite even what he intends, Mr Hollande will end up doing the right thing. Mr Hollande evinces a deep anti-business attitude. He will also be hamstrung by his own unreformed Socialist Party and steered by an electorate that has not yet heard the case for reform, least of all from him. Nothing in the past few months, or in his long career as a party fixer, suggests that Mr Hollande is brave enough to rip up his manifesto and change France (see article). And France is in a much more fragile state than when Mitterand conducted his Socialist experiment in 1981-83. This time the response of the markets could be brutal—and hurt France's neighbours too.

Goodbye to Berlin

What about the rest of Europe? Here Mr Hollande's refusal to countenance any form of spending cut has had one fortunate short-term consequence: he wisely wants to recast the euro zone's "fiscal compact" so that it not only constrains government deficits and public debt, but also promotes growth. This echoes a chorus of complaint against German-inspired austerity now rising across the continent, from Ireland and the Netherlands to Italy and Spain (see Charlemagne).

The trouble is that unlike, say, Italy's Mario Monti, Mr Hollande's objection to the compact is not just about such macroeconomic niceties as the pace of fiscal tightening. It is chiefly resistance to change and a determination to preserve the French social model at all costs. Mr Hollande is not suggesting slower fiscal adjustment to smooth the path of reform: he is proposing not to reform at all. No wonder Germany's Angela Merkel said she would campaign against him.

Every German chancellor eventually learns to tame the president next door, and Mr Hollande would be a less mercurial partner than Mr Sarkozy. But his refusal to countenance structural reform of any sort would surely make it harder for him to persuade Mrs Merkel to tolerate more inflation or consider some form of debt mutualisation. Why should German voters accept unpalatable medicine when France's won't?

A rupture between France and Germany would come at a dangerous time. Until recently, voters in the euro zone seemed to have accepted the idea of austerity and reform. Technocratic prime ministers in Greece and Italy have been popular; voters in Spain, Portugal and Ireland have elected reforming governments. But nearly one in three French voters cast their first-round ballots for Ms Le Pen and Mr Mélenchon, running on anti-euro and anti-globalisation platforms. And now Geert Wilders, a far-right populist, has brought down the Dutch government over budget cuts. Although in principle the Dutch still favour austerity, in practice they have not yet been able to agree on how to do it (see article). And these revolts are now being echoed in Spain and Italy.

It is conceivable that President Hollande might tip the balance in favour of a little less austerity now. Equally, he may scare the Germans in the opposite direction. Either way one thing seems certain: a French president so hostile to change would undermine Europe's willingness to pursue the painful reforms it must eventually embrace for the euro to survive. That makes him a rather dangerous man.


Rodrigo González Fernández
Diplomado en "Responsabilidad Social Empresarial" de la ONU
Diplomado en "Gestión del Conocimiento" de la ONU
Diplomado en Gerencia en Administracion Publica ONU
Diplomado en Coaching Ejecutivo ONU( 
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Thursday, April 19, 2012

Obama’s manipulation

Obama's manipulation

Barack Obama delivering the State of the Union

Photo Credit: White House

By Rick Manning — In his latest attempt to seem relevant to the economy that is sinking his re-election chances, President Obama demanded that Congress give him $52 million to seek out and end oil market manipulation.

"None of these steps by themselves will bring gas prices down overnight," Obama said. "But it will prevent market manipulation and make sure we're looking out for American consumers."

However, in looking at the quote, one has to wonder who is responsible for "manipulating" the oil market?

Dictionary.com defines the term manipulate as, "to manage or influence skillfully, especially in an unfair manner." When someone buys the commodity at a high price and the market brings the price down, they lose money, sometimes lots of it.

When someone buys the commodity at a low price and the market takes the price up, they make money, sometimes lots of it.

And while sometimes so-called speculators can drive prices up, the President of the United States can have a much greater impact on these prices simply by the policies he embraces.

This definition makes one wonder if the markets were being manipulated or if they were responding rationally when Obama appointed an Energy Secretary who publicly argued to the Wall Street Journal for higher gas prices only months before his appointment?

The definition of manipulate makes one wonder what the President himself is doing as he continues to threaten to veto a highway funding bill that would mandate approval of the Keystone XL pipeline.  Is he manipulating the market by denying the Keystone XL pipeline that will allow the vast oil reserves in Alberta, Canada to reach the market, and increase the overall supply of oil?

The truth is the oil market is neutral.  Investors and consumers compete to purchase the commodity in the open market making individual judgments on how the supply, demand, inflation and other factors will impact the price in the future.

If there is anticipation of a potential war in the Middle East, then concerns about supply will drive prices up, as they should.

If, there are significant new sources of oil coming on line, and investors believe the supply is secure or even abundant, the prices come down.

While Obama has attempted and failed to impact the demand for oil by throwing billions of taxpayer dollars at various failed new age energy schemes, he has succeeded in cutting the anticipated supply of oil that is being produced on federal lands, even as those sources he doesn't control are increasing production overall.

All this leads to the obvious question: would a government assigned to root out manipulation of the oil market which has led to politically untenable high gasoline prices investigate someone who:

  • Had a high ranking executive express a strong desire to have gasoline prices significantly higher; and
  • Engaged in policies that are designed to choke off the supply of domestically produced oil?

If so, then perhaps the first person perp-walked for manipulating the oil market should be the man who lives in the big White House on Pennsylvania Avenue in Washington, D.C..

Of course, that would require that this President engage in some self-examination of the wreckage created by his policies rather than constantly seeking someone else to blame.

Rick Manning is the Communications Director of Americans for Limited Government

Read more at NetRightDaily.com: http://netrightdaily.com/2012/04/obamas-manipulation/#ixzz1sUbwd9nn

Rodrigo González Fernández
Diplomado en "Responsabilidad Social Empresarial" de la ONU
Diplomado en "Gestión del Conocimiento" de la ONU
Diplomado en Gerencia en Administracion Publica ONU
Diplomado en Coaching Ejecutivo ONU( 
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Wednesday, April 18, 2012

From Innovation to Rent Seeking

From Innovation to Rent Seeking

Mises Daily: Wednesday, April 18, 2012 by 


It's often thought that the technology sector is the least regulated and therefore has been the most productive during the past couple of decades. Famously, Bill Gates had no interest in politics. "In the beginning, Microsoft tried to ignore the powerful political forces arrayed against it, hunkering down in Redmond, Washington, to focus on its core businesses," William F. Shugart wrote in the Freeman. Of course, the Department of Justice snapped Mr. Gates to attention.

And while Mark Zuckerberg says he doesn't like to vote, since hiring Sheryl Sandberg, who served in the Clinton administration, Facebook's DC presence has increased, and President Obama himself stopped by the FB office.

The news of AOL's patent sale to Microsoft reminds us that there is plenty of government force channeling money toward the coffers of the big tech companies. It's not all warm and fuzzy corporate slogans, cool workplaces, and upscale company cafeterias in Silicon Valley.

Battalions of intellectual-property (IP) lawyers keep constant watch over the government-erected barriers and monopoly privileges that lock up ideas and create corporate value out of thin air.

AOL is considered so old school, kids snicker if they see someone with an aol.com email address. In 2001, old-school media giant Time Warner consolidated with American Online (AOL), the Internet and email provider of the people, for a whopping $111 billion. However, eight years later, the CEO of Time Warner, Jeff Bewkes, announced that the marriage of AOL and Time Warner was dissolved.

Last year, AOL bought the Huffington Post for $315 million or reportedly five times revenues: the multiple to profits being unknown, as there were none.

But Microsoft had $1 billion burning a hole in its pocket, and AOL had 800 patents it didn't need; a deal was made, and AOL shareholders loved it. However, this is no aberration. Steve Lohr writes for the New York Times,

The lofty price — $1.3 million a patent — reflects the crucial role that patents are increasingly playing in the business and legal strategies of the world's major technology companies, including Microsoft, Apple, Google, Samsung and HTC.

Patents that can be applied to both smartphones and tablet computers, which use much the same technology, are valued assets and feared weapons, as the market for those devices booms. Companies are battling in the marketplace and in courtrooms around the world, where patent claims and counterclaims are filed almost daily.

The AOL-Microsoft deal is just a continuation of the red-hot patent market. Last April, Novell sold 880 patents to a consortium of companies, including Microsoft and Apple, for $450 million.

Two months later Apple, RIM, Sony, and others bought 6,000 patents from Nortel Networks for $4.5 billion.

Last August, Google paid $12.5 billion for Motorola Mobility and its 17,000 patents.

RealNetworks sold 190 patents and 170 patent applications to Intel for $120 million in January of this year.

Last month, Facebook bought 750 patents from IBM for an undisclosed sum, shortly after the social networking giant was hit with a patent lawsuit by Yahoo.

David J. Kappos, director of the United States Patent and Trademark Office tells the NYT these legal battles are nothing new. Whether it was steam engines or automobiles, when big markets open up, patent wars begin.

But this is a lot of money chasing something that, Stephan Kinsella writes,

is not really property at all, and is just an umbrella term linking distinct, mostly artificial, positive rights created by the legislature out of thin air — "legally recognized rights arising from some type of intellectual creativity, or that are otherwise related to ideas."

Most people think of patents as an exclusive right to manufacture, use, or sell an invention, but as Kinsella points out, what patent law really does is exclude others from making, using, or selling that particular invention.

It used to be that specialty patent holders, aka trolls, would buy up patents with the hopes of extracting payment from big tech firms either before, or in, court. But now it's the big companies doing legal battle with each other. "These major companies are using patents to gain competitive advantage rather than just seeing patents as financial assets," Colleen Chien, an assistant professor at the Santa Clara University School of Law tells the NYT.

So is Microsoft for instance, with its 20,000 patents, in the technology business or has it become the world's biggest troll, lurking to opportunistically pummel other tech firms in court and out?

Of course the whole idea behind patent law is that it is supposed to fuel innovation. Who would spend time and talent thinking up any new inventions, if the idea could quickly be stolen and the inventor not assured of a large windfall?

Society is thought to benefit because more inventions mean greater wealth. Kinsella points out that this utilitarian argument falls flat. Societal wealth, even if it could be measured, cannot be justified by aggressing against one group's rights to benefit others.

But studies have not shown any net gain from patent-law-induced innovation. Kinsella suggests,

Perhaps there would even be more innovation if there were no patent laws; maybe more money for research and development (R&D) would be available if it were not being spent on patents and lawsuits. It is possible that companies would have an even greater incentive to innovate if they could not rely on a near twenty-year monopoly.

Instead of spurring innovation, IP appears to be a rat's nest of litigation. For example, Google's chief legal officer, David C. Drummond, estimates that a modern smartphone might be susceptible to as many as 250,000 potential patent claims.

In a study published in 2008, James E. Bessen and a colleague, Michael J. Meurer, professors at the Boston University School of Law, concluded that the costs of litigation were twice the benefits in the areas of software and telecommunications, where "the claims are often so broad and vague that it is completely unpredictable what the patents cover and don't."

Professor Chen admits that the "patent system is making innovation more expensive," but she doesn't think there's been enough focus on the benefits. After all, she says, "In a case like AOL, this patent sale is keeping it alive and giving it a chance to innovate elsewhere."

What were once great companies furiously innovating to generate returns have become rent seekers collecting war chests of state privilege to compete in the court room rather than in the marketplace.

While government force may keep companies like AOL alive, consumers will surely be worse off and ultimately pay the price.


Rodrigo González Fernández
Diplomado en "Responsabilidad Social Empresarial" de la ONU
Diplomado en "Gestión del Conocimiento" de la ONU
Diplomado en Gerencia en Administracion Publica ONU
Diplomado en Coaching Ejecutivo ONU( 
 CEL: 93934521
Santiago- Chile
Soliciten nuestros cursos de capacitación  y consultoría en GERENCIA ADMINISTRACION PUBLICA -LIDERAZGO -  GESTION DEL CONOCIMIENTO - RESPONSABILIDAD SOCIAL EMPRESARIAL – LOBBY – COACHING EMPRESARIAL-ENERGIAS RENOVABLES   ,  asesorías a nivel nacional e  internacional y están disponibles  para OTEC Y OTIC en Chile