Tuesday, January 10, 2017

Why East Germany failed Morningstar

Romowe Rikoito - Dēinawas deināina (Morning Star in Dainava - in the countries of the East)



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Contains data, news and research on shares and funds, unique and independent research Morningstar comments on a wide range of investment products and portfolio tools and asset allocation to help take better investment decisions.
Economic Outlook We examine why a bad education, a non-competitive domestic car and a lack of creativity can cause stock markets and economies to flounder.



Before returning to Europe in Chicago recently, I took a short trip to Berlin All the contrast of Paris latter, being the northernmost of the Mediterranean cities offer sequins, espresso and mopeds Everyone wears black Berlin, however, has a distinctly European flavor North, offering an open space, bikes bikes bikes, and bio-organic food.
Free markets collectively make stronger decisions that planners do top down.
My favorite time in Berlin was my visit to the small DDR museum which documents the former country of East Germany is not only visually stop, fun show, and a memory trip for those who remember the days before Justin Bieber, but s also fabulously informative sometimes we learn more about the success by examining the failures and failures go, east Germany was quite spectacular.
As West Germany prospered, is remaking into a global industrial power, East Germany sank into economic ruin has been trapped in a vicious circle, where he needed to spend money for buy raw materials for its economy based on manufacturing enough, but could not generate revenue from exports to pay for the raw materials it built property, all right, but no pay big money for them were so shoddily built the country's exports, and so outdated that they could not be sold at prices well below east Germany was a country background the power was so desperate for money that outside exported cobblestones.
One main reason, of course, is that free markets collectively make stronger decisions than do top-down central planners tight controls Eastern Germany cut the flow of information that comes from exercise free markets, leading planners make poor allocation decisions of supply chains and labor in production volume and the price Adam Smith, Karl Marx yes, no.
This is the answer we all know, however, there was more to the demise of East Germany that only the problem down planning.



One was the approach to education in East Germany of the country has been little investment in higher education, as believed the government that the practice training, work was sufficient for the vast majority of workers Few who need the knowledge and expertise that had just witnessed Making matters worse university, the lower levels of primary education and secondary education the focus was learning by heart critical thinking and working in creative class were actively discouraged the result of these policies was a drone workforce that was able to follow simple commands and performing basic tasks, but a little more.
Strengthening the skepticism about advanced knowledge were the remuneration of the country-wide chemical researcher has roughly the same monthly salary as a laborer Former need several years of university to do his job; it was to remain in school until age 14, not only the supply chain for the limited education but was demand.
The shortage of trained thinkers was exacerbated by a national culture that rewards conformity and individualism Penalized From infancy, children in East Germany were taught by state organizations on the importance of obedience, the authority does not dispute.
As adults, they have learned to keep my head down, so as not to alert the pervasive internal security system of the nation at the time of the demise of East Germany, at least May 2 adults worked as informants of the country for the Stasi, the internal security Police Some argue that the real figure is much higher, as the Stasi files are incomplete and, naturally, those who are not identified not forward to acknowledge their involvement There was a culture of paranoia.
As potential enemies of the state, the artists were strictly controlled rock musicians were singing in German if they did, they received before game time to the German radio, which received a quota music with us the need to play a little like the old days wire internal mutual funds in the uS, where brokers were charged to at least 50 of their sales of mutual funds with internal funds theater, film and television production has been followed and restricted content.
The result is a product that not only could be exported the East German government never realize that, as manufactured products, intellectual property could also be sold for money but do not serve the internal market East Germans, especially East Berliners who had easy access to West Berlin radio and TV programs, refused home products and have instead opted for Western artists This preference for things the West was true for clothing as well as a pair of Levi's sold 25 of the average monthly wage in East Germany.



The country of multiple failures all gathered in its national car, the Trabi displayed at the National Automobile Museum in East Germany had the advantage of being cheap, easy to use, easy to repair and capable of carrying a high load cargo for its size and the Trabi wasn ta complete joke when it was launched in 1957, but it has not changed ever in 1991, it was essentially the same car in 1957, with another two-stroke engine which delivered 26 horsepower what was once vaguely competitive become completely, totally non-competition.
The DDR Museum shows the conditions for innovation Innovation benefits from a high level of national education; critical thinking; a culture that allows experimentation, questioning and nonconformity; and a system that rewards those who innovate with East German success had none of these features Consequently, he could not change the Trabi East Germany, as its national car, was sentenced to slip into extinction .
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