Posts tagged European Union

LinkedIn Editor’s Pick: From Black Swans to Gray Rhinos

LinkedIn Black Swan Gray Rhino

September 2, 2016

The European Union has known since the creation of the euro that the currency was bound for trouble if did not create workable ways to adjust for the wide differences among its national economies. Yet well into its second decade, its failure to do so threatens the currency’s future. The deadly defects in ignition switches and airbags at General Motors and Takata, and the emissions test fixing at Volkswagen were hardly a secret inside the companies, which covered them up instead of correcting them. Despite overwhelming scientific evidence of climate change caused by human activity, temperatures keep rising, with this July marking the hottest month ever recorded.

The reasons are different in each case, but the pattern is the same: humans consistently fail to respond to looming dangers, at astronomical costs in lives, money, reputation, and lost opportunities. Once you start looking at how many crises began with clear but essentially ignored warning signals, it becomes strikingly clear how often we miss opportunities to head off predictable problems.

Too many people take for granted that we cannot react in time to change the course of the disasters even when they are right in front of us. It’s well past time to challenge this assumption.

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Europe’s Debt Crisis: CNBC Video and Commentary

I’ve been arguing that Europe needs an orderly debt restructuring for Greece to avoid much worse consequences.  There’s video below of my guest host appearance on CNBC’s Worldwide Exchange with Nicole Lapin May 23, 2011, discussing the challenges facing Europe as it struggles with Greece’s debt crisis.

A CNBC follow-up article, “Will Eurobonding Save the Day?” further discussed a proposal which I support -originally made by the Brussels-based think tank Bruegel- to pool European debt into a more liquid Euro-bond. Actually, it would involve two kinds of Euro-bonds: senior “Blue bonds” representing debt under 60% of each nation’s GDP, and junior “Red bonds,” for higher amounts, which would trade at much higher yields reflecting the increased risk.  The Bretton Woods Project also has cited my argument for an orderly pre-emptive default in a June 13 article, “IMF’s European Austerity Drive Goes On Despite Failures and Protests

Books

The Gray Rhino

How to Recognize and Act on the Obvious Dangers We Ignore

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Why the Cocks Fight

Dominicans, Haitians, and the Struggle for Hispaniola

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Lockout

Why America Keeps Getting Immigration Wrong When Our Prosperity Depends on Getting It Right

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