An Efficient Phone Call? A Little Story for Our Times

After the American Century

The story I am about to tell is representative of a larger trend. Over and over, administrators proclaim that they are going to become "more efficient" and save money. Who can be against that? But in practice, becoming more efficient means just the opposite. 

Once upon a time, if I needed to make a conference call, I pushed one button on my phone, reached the operator, gave the numbers of the other parties, and then waited at most two minutes before our telephone meeting began. Clearly, my university found this terribly inefficient, I found out yesterday. I called the operator in the usual way and was told that now I am to arrange conference calls directly. To do so, I needed a set of instructions, which were emailed to me. After printing them out (3 pages) there were several points that were unclear. So I called the operator again for a discussion, focusing particularly on what my customer code number might be. That was something only the Department Secretary knew. Being hellbent on efficiency, I left my office immediately and found the Secretary, who was on the phone herself. After ten minutes I was back in the office with the code.

I was then ready to call the phone company. I listened to an automatic answering machine recite a list of options, managed to select the right one, and within another minute was talking with an operator in a faraway place who had never heard of my university. I gave him my name (would I spell that please?), my email, my department's name, the three phone numbers to be linked with, plus my phone number, plus the secret code number. The gentleman then promised to send me an email confirming the arrangement, with all the phone numbers listed so I could check them. Several minutes later the email came, with an attachment. I opened it, printed it out, and read it over. The numbers were correct. Time ellapsed: 45 minutes.  Time saved: minus 43 minutes (so far).

I still have not had that phone conference, which I ordered for later today. But I am proud of having mastered this new efficient system.

[I had imagined the call would be dialed automatically, but in fact an operator called me and then linked up to the others who were to take part in the meeting. All the preparation time was completely unnecessary.]

Greeks Undermine the Euro by Underpaying Their Taxes: $30 Billion Each Year

After the American Century

Since writing the previous posting about the Greek debt crisis, the New York Times has published an article about the widespread failure of wealthy Greeks to pay income tax. Estimates are that the Greek government has failed to collect $30 billion every year. In other words, there really should be no debt crisis, but there is a corruption crisis. 

How can the European governments be conned into bailing out a country that is systematically being ripped off by its own citizens? See the Times story here.

The idea that the Euro should drop in value because of corruption is Greece is absurd. The rest of Europe should punish Greece for bad faith and for harming the common interests of the rest of the EU member states.

And the bankers, who were willing to loan money to Greece, assuming that they could pressure the rest of the EU to secure the loans, should be more tightly regulated. The EU should put in its constitution that each nation is responsible for its own debts, and that no other nation has any responsibility to make them good. Rather, EU nations might turn to their federal government in times of natural catastrophe, invasion, or other calamities over which they had no control.


Why does all this matter? Because Greece is only the worst case. The EU has been too lax. It has allowed member nations to ignore fiscal responsibility. It has allowed bubble economies to grow in Spanish and Irish real estate. After the collapse of the Spanish bubble unemployment has risen to 20%. Entire housing estates in Ireland have been built without finding buyers, and thousands of houses stand empty there.

This is the first crisis of the Euro, and if it wants to be taken seriously as a world currency, the EU has to put a stop to fiscal irresponsibility. As it is, the EU members such as Sweden, Denmark, and Britain, that have not joined the common currency are likely to wait a good long time before they can muster a majority to take the plunge.

A Greek Crisis Should NOT be A Euro Crisis

After the American Century

When my neighbor down the street goes on a spending spree, no one thinks all the neighbors should chip in and pay for his extravagance. The neighbor has to learn to live within his means. The same applies to nations. Greece has for years been living far beyond its means. It has allowed people to go on pensions at an earlier age than they can in other nations. It has not collected taxes from some of its citizens. It has allowed its public sector to grow and grow. It has routinely had much larger deficits than are allowed in the European Union.

Now the bill is coming due, and suddenly the world's stock markets see this as a crisis of the Euro. It is not. There is no reason for Germans to work a year longer before retirement so that Greeks can retire early. There is no reason why British home owners should pay higher interest rates because the Greeks have not lived within their means. There is no logic to the idea that the Euro will be stronger if other countries pay Greece's bills. Rather, it is logical that the Euro will be stronger if its nations enforce fiscal responsibility and prudence.

It sounds harsh but it is only fair that, if the Greeks cannot pay their bills, they must find their own solution to the problem. Greece is not a poor nation. It has many wealthy people. It has not suffered an earthquake or some other unforeseeable natural disaster. Greeks saw the problem for years and failed to deal with it. Greeks have to take responsibility for their own fate, rather than expect the International Monetary Fund or the other EU counties to pay their bills. Loans to Greece are fine, but only if they are going to be paid back.

People seem to think it terrible to contemplate Greece defaulting on their national debt. Yes, it is terrible, but it is even more terrible if other countries pay their bills. The Germans are quite right to resist loaning the Greek government money before they demonstrate that they can bring their economy into balance. The banks should have been equally hard on Greece years ago. International investors have over-extended credit to profligate nations, and they want others to pick up the tab. Sorry, but that is not how things are supposed to work.

Ah, but we are told, the poor Greeks will suffer under the austerity of budget cuts. Indeed, they will. That is the logical consequence of fiscal irresponsibility.  The Greeks as a whole are not poor,  and if they really want to they can invest their considerable wealth in government bonds, and then, as voters, make sure they get their money back. The Greek pension funds could be heavily invested in the Greek national bonds.  Or the Greek's could hold a massive telethon and get their own citizens to buy ten year government bonds at 5%. That would inject some reality into the situation. If Greeks don't want to buy their own debt, then why should anyone else?

Beware of Greeks demanding gifts. Beware of investment banks wringing their hands and saying the Euro is at risk, when it is their  poor judgement that led them to keep loaning money to Greece. And stop this nonsense of thinking that if Greece goes bankrupt due to a lack of political integrity and national will, somehow that means that the Euro itself is weak or that Germany or France or Sweden suddenly are not good places to do business. It should be just the opposite situation. The reluctance to pay the Greek bills should signal that the EU nations as a whole are sensible, that they will not be stampeded by incautious bankers into paying someone else's bills.

If all this seems a rather harsh argument, consider that other common market, the United States. The 50 individual states each has its own budget, and some of them at times get into trouble. California has overspent and under taxed itself into a corner at the moment. But that is California's problem, and it does not mean that the dollar is suddenly a bad currency.

California's economy is larger than that of Greece. Time to get some perspective on this issue.

The Ipad Commeth

After the American Century

Apple announced that it has sold 300,000 Ipads in the first two days. Toss in some accessories, and this works out to be roughly  $200 million in sales. Not at all bad for a new item that does nothing you cannot do with Apple's previous products.

Is it an Iphone on steroids? Or a mouseless computer that cannot multitask? Or truly a new category? The answer to this question is probably up to Apple. I assume that after selling these models for a bit less than a year, the new and improved versions will appear, including much of what is not there now. This would include a USB connection, now notably absent, and presumably the ability to have more than one application open at the same time.

Another guess: Apple eventually will have so many applications and peripherals for the Ipad that it will replace the low-end computer and the portable DVD player and the Ipod. If Apple also decides to integrate the Iphone into it, this device would become a portable television/phone/computer/music player. In other words, it has the potential to become a universal device that contains everything the modern nomad needs.

It is also possible, of course, that the Ipad will end up a commercial disaster, like Apple's earlier product, The Newton. That was a sort of Ipad, and it worked well enough, but no one bought it.

This time, however, the new tablet may be the portal to the electronic future. If it sells extremely well, its price may come down to just slightly over cost, because Apple will really make money selling all the apps, songs, television programs, and peripherals. Kodak did that with cameras for years, selling them cheaply to make money on the film, processing, and specialized paper.

Whatever happens, this will be fun to watch. When the Ipad eventually gets to Europe, it will be time to decide whether to buy this first version or wait a little longer for the successor which is sure to be packed with more things, cost no more, and have any bugs eliminated.