I was driving into town this morning, along the DN1at 08:30. Suddenly I found myself in a queue in what should have been a clear piece of road. A road sweeping vehicle was working at five kilometers per hour some way ahead and I wondered why this work had been scheduled on a very busy road in the middle of rush hour. I concluded that this is an example of the failure of basic joined-up thinking.
Now, without wishing to cause offense, experience tells me that this kind of organizational dissonance is not uncommon in Romania. However, I remembered that earlier in the day I had been watching an item on an international news program on TV, concerning the current crisis in pensions, and the need in many countries for people to work longer before being able to retire.
There are two issues here, the first of which is that right now, the contracts that millions of people signed with their governments and private financial institutions are being arbitrarily broken, without redress. The financial crisis has made it impossible for the payment of pensions to be undertaken at the previously contracted age. Consequently the life plans of millions of people have been torn up and many old peoples’ planned lives have been destroyed.
The second issue, not mentioned in the international TV program, is that the financial and now economic crisis has created a situation where older people working longer has helped to increase the dreadful levels of youth unemployment seen now in many countries. Not only are there no new jobs being created by what used to be normal levels of economic growth but jobs that already exist are being occupied by older people for longer.
This situation is clearly a more serious example of the failure of joined-up thinking because the efficient performance of national economies require balance and this is not happening. Does paying benefits to millions of young people cost less than honoring the pensions contracts of older people? Do younger people with increased spending power provide more of a push to the stability and growth of a national economy than older people being careful with their pensions? Do millions of younger people, striving to build their careers, pay more in tax than older people biding their time in low paid jobs?
It is the institutions and governments who pay pensions, who squandered a great deal of the money on gambling on the markets and who cannot now meet their obligations to pensioners, who are making the rules because they still have the power to influence government policy. And it is because their fundamental interest is financial survival that the current thinking on the pensions crisis and youth unemployment is absolutely not ‘joined-up’.
Another serious example of the failure of joined-up thinking is to imagine that Greece will somehow be able to repay any of the loans thrown at her by the European Union while the country is forcibly detained in endless economic recession. If Greeks have no money to buy anything, through simultaneous tax increases and salary cuts, how can they be expected to mount a consumer recovery robust enough to create the growth needed to raise the revenue to repay their debt? We can think what we like about how Greece got into her current mess, but the fiscal restraints being forced on her will never solve the fundamental underlying economic problems.
Perhaps we as a species are no longer interested in solving large problems for ourselves? Perhaps we are only interested in seeing large private investors get their money back at any cost; they are not interested in joined up thinking and the Romanian government has done well to keep its exposure to foreign private debt at relatively low levels.
By Ronnie Smith, Guest Writer
(photo source: sxc.hu)