COMMENTARY
I follow Bloomberg News more than most ... in fact I might be described as an addict. But it is not because I like what they are reporting, it is more because what they report energizes me and makes me realize how important it is that we make progress in reforming the money profit capialist market economy that works so well for relatively few and works not at all for the vast bulk of the worlds population.

Adam Smith identified the power of the market and set the stage for much of what is done in modern economics ... but he worked a long time before the boom in technology and the surge in productivity that has changed the dynamic of modern society and the economy. What used to be a world of endemic and immediate shortage has change into a world where, for the time being, productivity enables surplus production on almost everything that is needed.

The money profit capitalist market economy has proved much more successful than the totalitarian communist economic model, but only when success is about the wealth created and measured in money profit. For more than half the population of the world, the money profit capitalist market economy does not work well, if at all. I am of the view that a modest reform in the way success is measured would change everything ... instead os simply seeking to maximize money profit from investment, there should be the maximization of true valueadd. Many of the economic activities that are needed ... and possible ... would create huge true valueadd even though they are not going to producte money wealth in the immediate short term.

The true valueadd metric helps to get the money profit capitalist market out of the dangerous trap of short term thinking. True valuadd is a metric that by its very nature takes into account what is going to happen in the future. Economic activity that 'consumes' the future has a likelihood of recording true valuedestruction rather than true valueadd, and the market should respond accordingly.

With respect to the reform needed in Europe, new financing is needed but it should not be focused on 'bailing out banks' that have failed both financially and intelectually, but rather resources should be mobilized into community focused organizations that have true valueadd as their goal. In the main this will mean that money gets mobilized so that people have their quality of life improved, and in large part this will be access to work in economic activities that are needed by the society. There may not be money profit, but their will be true valuadd.
Peter Burgess

Euro Nations Ready To Act On Spain As Yields Surge, Frieden Says

Flags of the EU member states in front of the European Parliament in Brussels. Photographer: Georges Gobet/AFP/Getty Images

The euro area is ready to act to help Spain as the country’s borrowing costs soar, Luxembourg Finance Minister Luc Frieden said.

While Frieden said no work is being done for a bailout of the Spanish government, policy makers in the 17-country euro area must be prepared to move quickly.

“In such difficult times as we are in, one has to follow the situation on a permanent, daily basis and be ready to act at any moment,” Frieden said in a telephone interview today in Luxembourg. “The political decisions in the case of Spain and also of Greece have been taken to be able to act fast. That’s what is important especially now in the summer months.”

Spanish Economy Minister Luis de Guindos will visit Berlin today for crisis talks with German counterpart Wolfgang Schaeuble. After taking on as much as 100 billion euros ($121 billion) of bailout loans to aid banks, the risk for Prime Minister Mariano Rajoy’s government is that the additional burden of helping regions pushes bond yields to unaffordable levels. Spain’s benchmark 10-year bond yield reached a euro-era record of 7.625 percent earlier.

Frieden said an emergency meeting of finance ministers before September isn’t necessary.

July 24 (Bloomberg) -- Robin Marshall, director of fixed income at Smith & Williamson Investment Management Ltd., talks about Spanish bonds, the prospect of a sovereign bailout for the country and contagion risks. He speaks with Caroline Hyde on Bloomberg Television's 'The Pulse.' (Source: Bloomberg)

July 23 (Bloomberg) -- Carl Weinberg, founder and chief economist at High Frequency Economics, talks about Europe's sovereign debt crisis and the region's banks. Weinberg speaks with Tom Keene and Sara Eisen on Bloomberg Television's 'Surveillance.' (Source: Bloomberg )

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net