If a measure has a 300% ROI it is a positive one. If even the hard economist measures indicate a positive return versus cost, then, why not do it? But, if the positive effect it has in a society outruns all the costs by far, how can we not do it? The evidence is there! When will we move to ensure retro-viral medicines are widely available and affordable to everyone?
Friday 22 February 2013
Monday 18 February 2013
2 cents on bonuses
The debate has been raging on - but has been misconducted. European Union's proposal to limit bank bonuses to 1 month worth of salary assumes (has usually politicians do) that the world is immutable - and it is not. The truth is such a measure will have 2 short-term effects (and no long term benefits) - it will move talent out of European banks, to geographies where this limit doesn't exist (I thought France had learnt something with their 75% tax measure, but it doesn't seem so), and it will increase wages to compensate for lower performance bonuses (exactly the opposite effect you want to have in an economy that desperately needs growth). So, alas, once again, European politicians show their short-sightness and why the continent is now in serious troubles, with the increasing integration of all the economies on a global one.
Now, I understand and accept the root of this measure (except the populist part, please). The fact is that shareholders have lost control on corporate performance bonuses and they are increasingly biased to consider only short-term performance. This is a fact and problem. But the solution should be to tie bonuses to sustainable longer-term growth - and not short term spasms.
Thursday 14 February 2013
Irreversible spiral?
The news that unemployment in Portugal is now at 16.9% level (above IMF and Portuguese Government predictions) and that employment levels have never been so low is a very bad sign - it results from low economic competitiveness and short-sighted financial policies. I sadly predicted that a couple of months ago ( http://www.my2centsontheworld.blogspot.com/2012/09/how-to-kill-economy-with.html ) - and believe me, I would prefer to be wrong!
The fact is the irreversible spiral that I predicted in September is now happening - and will only get worse if we don't break it. Portugal now needs the courage to deepen its unproductive public spending on Public Administration, avert from tax raises and understand how to efficiently invest using European Union funding - if we want to get out of this doomsday spiral, this is the way to do it. But we have to do it now!
Never forget the lessons from the past!
When you try to re-write history, you lose information that might help you in the future. Politicians often forget that, though. It is a huge mistake!
Monday 11 February 2013
Good!
I must say I am considerably relieved by the news that Portuguese Distric Attorney Office rejected the complaints against blood diamonds revelations. Freedom on Speech is a keystone in Western civilization, and, by doing so, Portuguese Law reaffirms its commitments to both Human Rights and equal justice.
Tuesday 5 February 2013
Figuring out...
I am still figuring out what are the Portuguese Government plans to reduce public spending in order to allow taxes reduction and thus economic growth. If this isn't done, we will only see a constant choking of the economy, pretty much as we are seeing right now....
Friday 1 February 2013
Why are we discussing costs without mentioning service?
I will never understand how is it possible to issue a report that focuses solely on costs - without any reference to service levels! The highlight that Portugal has cut twice the amount of negotiated costs might be good or bad - it depends on service levels. If service levels hold at the level that they were supposed and Portugal's has got twice the savings, that is good. If not, that is bad! But costs can't be discussed without pairing them it service! Portuguese tax payers want to have a specific level of service for the minimum cost - of course! So, don't try to look at costs separately, please!
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