What's with Europe and the G-7? 2/15/09

More complaints about the US economy out of Europe? Is anyone shocked? This is after all the group of economies that ride US coat tails in good times, and blame the US in bad times. Does anyone find it amazing that a group of economies whose governments run their heavy industry off of government subsidies is complaining? These are subsidies that artificially inflate the cost of labor while simultaneously enabling their goods to be competitively priced for export. These same economies "prefer" buying European and selling to the US, Middle East, and Asia. And now they are complaining that the US stimulus plan favors buying American?

World Bank head, and former Goldman Sachs Executive, Robert Zoellick agreed with the G-7 ministers saying how crucial it was to keep the world economy open and to "avoid the protectionist policy errors of the 1930s. The Buy American provision is very dangerous,” he said.

In fairness, the US and its lax economic management created our recent economic debacle. Leverage and more leverage was used to prop up the value of non-competitive companies while their market share eroded. Market share was taken by Asian manufacturing and frankly a boom in non-leveraged investing led by the Middle East.

Add to this commercial bankers thinking they should be paid like investment bankers, commercial bankers who levered their balance sheets at the expense of their shareholders, and ultimately the US dollar to take value from others...and the US is fair game for criticism. But not by the Europeans..they were simply the last to the party.

Has anyone really thought about what leverage really does? It allows those who are able to use it the ability to take more value than they are due. And when you as an individual or executive can leverage your shareholders wealth to super size your personal wealth and returns without repercussions should you guess wrong, that creates an environment for economic disaster. Sound familiar?

Isn't it time that all these grey haired heads of finance, heads of economies, heads of banks determine what their real value is today? Give us a starting point to rebuild the economies of the world. Stop pointing fingers while more and more people get laid off. We can't create value until we know what values exist today. THINK ABOUT IT. How can we buy or sell anything if we don't know what it is worth?

In order to build value, we all must define value. Value must be defined by each industry's leader. Why do we keep looking to the Government while the Government keeps looking to the Finance Industry for a definition of value.

NOT ONE OF THOSE GROUPS WANTS TO ADMIT TO THE REAL VALUE OF THE DOLLAR AND THE US FINANCIAL SYSTEM. If they were forced to truly admit to the results of their errors, they would never work in government or finance again.

Once more, in order to build value, we all must define value. And today, value must be defined by each industry's leader. They are the experts NOT ELECTED or APPOINTED officials.

Build value every day.

Brad van Siclen