“It is difficult to make any kind of forecasts with any great degree of confidence. In my area it’s got to the point where it’s very hard to say anything... but you’ve got to take a view, that’s what you’re paid for.”
According to a recent CNN report, the above quote was provided by a U.K. financial equity analyst with Oriel Securities. That statement is emblematic of how the financial industry has metastasized into a pathological cancer that mostly transferred and decimated wealth and value, rather than creating it.
The premise: Pontificate for payment, regardless of its merit or how it may impact others. It is the manifestation of a prevalent, irresponsible value system that favors monetary acquisitions in lieu of learning, knowledge, and wisdom.
Our education system has failed miserably over the past three decades. This failure reflected and exacerbated the deteriorating ethics and morals of our society.
A recent CNN special featured one of my son's high school robotics competitions (his team was highly ranked worldwide). During the presentation, a former U.S. governor admitted that he and his administration explicitly lied
to his constituents. During his tenure in office, he proclaimed more than 80 percent of the state’s children performed at or above grade level.
He then stated: in reality, the correct figure was less than 30 percent!
This is precisely why the excess labor supply has not been adequately resorbed into the employment pool. These individuals simply lack the requisite skills to compete in the global environment: skills that include creative, critical, and strategic thinking as well as persistence.
Several years ago, my son said (paraphrase): “Dad, the schools don’t teach the kids how to think.” A prescient account from an eighth-grade child.
The current economic phenomenon is structural, not cyclical. It may take a decade or more to rectify, if (if and only if) it is managed prudently. It also helps to explain why this financial crisis may be as devastating as the 1930s debacle.
Today, the official unemployment figure is between 9 percent and 10 percent. The real figure is closer to 20 percent when the following is included: underemployed; part-time workers, who seek full-time work; discouraged workers, who stopped seeking employment; and first time job seekers, who are not permitted to file for unemployment insurance unless they are terminated from employment.
While unemployment was near 25 percent during the early 1930s, the economic demand was more closely matched to the skills possessed by labor. As such, the system retained an adequate capacity to effectively resorb the labor pool. Certainly, the inception of WWII facilitated this absorption rate.
For several decades, the financial industry stewards would emphatically, and hypocritically, emphasis its prowess in “value creation.”
Ironically, the dissipation of our financial deficit is predicated on the dissipation of our values deficit.
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