“Shatterface”, over at LC ::
I have to laugh everytime I read that money from pirate DVD’s goes towards funding the drug trade.
I mean, if you can’t make a profit from selling crack and have to subsidised it with hooky copies of Transformers you are in the wrong business.
Heh.
Stefan Stern at the FT ::
“[The American Business Model] remains the working hypothesis of most business people and consultants,” [John] Kay writes. But, he argues, it is mistaken in its core belief that greed can be a benign and sustainable force. He cites the economists Ken Arrow and Frank Hahn, who asked in 1971: “What will an economy motivated by greed and controlled by a very large number of different agents look like?” The economists answered their own question: “There will be chaos.”
The good times are over. Glutton is gone. Lean is back in vogue.
If there is one thing that will be our ultimate undoing, it will be our ignorance and our arrogance. Our business leaders love nothing more than criticising our governments, yet in reality, many of them are unaware of their own inadequacies and shortcomings (even if they do work incredibly hard).
We do have professional bodies that work to propagate best-practice, but they also enforce age-old Anglo-Saxon business techniques that in many cases have become outdated. If we are to return to a level of effectiveness that will equip us to compete in a tight global market, we have to open our eyes to techniques from other cultures.
The top-down, greed is always good ethos has been vanquished. Markets have not failed, we have failed them. And the fallout – the toxicity of American economic calamity – is poisoning global industry. We need to become more than what we have been.
It’s time for British managers to visit the world. Not as travelling titans, but as humble students. To share and learn.
We have some excellent companies and some brilliant managers, no doubt. But in the main, we suffer institutional stagnation in many of our businesses, a culture of unjustified remuneration for executives, and a chronic lack of appreciation for investing in training.
I have worked in industry for over a decade, within the much-derided manufacturing sector in fact. Contemporary management theory, in many cases, is non-existant and formal training is viewed as a waste of time and money (not only by senior managers, but by the junior-level managers themselves).
In a new post-crash global economy, skills and education will become more and more necessary as fat is trimmed – only the smartest businesses will survive. We need to start with our children, but we must not forget education when people leave formal education.
Blair once made a commitment to “Education. Education. Education.” Yet, despite over a decade in power, and “improving” exam results, our economy is still strangled by a lack of basic numeracy, literacy and the capacity of our young people to adapt to industry.
The reinvention of Labour – if it is to reinvent itself in this parliament – must be a commitment to lead the country in a national project to reform education and skills. We need not only investment, but a leadership with the charisma to inspire change.
If not, we must be prepared to rot on the vine, and say good-bye to any ideas of global economic leadership.
From Dizzy “Thinks” ::
From former Spanish PM José María Aznar López on whether the current economic crisis signifies a failure of the free market.
It is certainly not a failure of the free market, but a failure of the current mechanism of state regulation and intervention in a sector which is already highly regulated, the banking system. It is the same with politics – democracy is not discredited merely because a bad government has been elected.
Spot on.
Spot on? You sure?
A lack of regulations in the CDS market, meant that when one institution collapsed (Lehman Brothers – or taking it further back and looking at another unstable financial instrument, Bear Sterns), the others lost confidence in each other as they had no idea as to each other’s level of exposure to the crisis.
The day-to-day borrowings between financial institutions seized up, and businesses in the real economy couldn’t secure short-term lending to continue operating (I used to arrange this borrowing myself when I worked in finance). This sparked the inevitable market correction that many of us had been predicting for years.
It was absolutely a lack of regulation of the these complicated financial markets that meant there was no transparency, and credit traders couldn’t calculate risk with any level of confidence. Fear spread quickly, and governments – rightly or wrongly – decided they had no option but to step in and try to grease the system, to prevent many companies having to cease trading because capital they relied on had dried up.
(History: The Republican legislature and Clinton White House took a pass on regulating this emerging economy, who along with our own European governments, share responsibility for the initial collapse.)
I don’t like regulations per se, but they’re often a necessary evil to ensure the stability of a system we all rely on. Good governments write good laws and set sensible, lean and robust rules.
Maybe some of the existing regulations in the banking system are crap, but you’d be a fool to suggest that it was regulation that caused the initial collapse, when it’s the exact opposite that’s true (in the specific cases of CDSs, CDOs, and short-selling).
It’s no use taking an ideological laissez-faire attitude, if you don’t understand the fundamentals of the system, and how a lack of transparency (see rules) can lead to massive ‘systematic risk’.
I’ve just read Justin’s piece on the bailiffs story. I feel I need to revisit the issue as I don’t think I was pissed-off anything like enough the first time.
Also, check out the reader comments. Get a measure of just how fucked up these proposals are, and how people who’ve done bugger-all wrong, can find themselves caught up in the system and on the wrong end of an ass kicking a dose of reasonable force.
Justin writes ::
You could call this another front in New Labour’s war on the poor but the thing is, they way things are going right now, the number of people who could end up on the receiving end of this is growing by the day. It’ll probably take a nice, respectable white middle-class stockbroker, who’s down on his luck and has photogenic children, to be killed or seriously injured before people realise that this isn’t just about keeping the underclass nervous.
It’s teaching all of us to never, ever, be poor. To never, ever, have a run of bad luck. Keep your head down and keep kissing the boss’ arse. Bite your tongue over your pay and conditions. Come in a bit earlier and stay a bit later. Don’t forget you’re the smallest of cog in this economy – a little fear should keep you lubricated and in good working order a little while yet.
Indeed. Are we going to continue to take this shit? I know, we’ve swallowed this god-awful system of governance for centuries. What other choice is there?
I’ll tell you what, you just sit there and flick-trough your latest copy of Heat. Read that front-page tabloid story about Amy fucking Winehouse’s recent trip into rehab. Send a text to create yet another convey-belt star live on TV. Have you seen Britney recently? She’s really got her shit back together, no?
What the hell is wrong with you? Are you bat-shit crazy or just thick as shit?
You’re being played. They’re taking the piss out of you.
Your Prime Minister has spent a decade telling you how gaaawwwd-damn awesome he is, yet as soon as the credit-fuelled good times ended, your emperor was left with no clothes. Some of us predicted this. Brown said he’d overseen an “end to boom and bust”, but those of us who own a history book and a calculator knew that it would all come crashing down.
And now who pays?
The politicians who encouraged you to borrow and spend beyond your means? Don’t be daft. Labour and the Tories are both just bigger cogs in the same system – the democratic window-dressing, if you like. Brown doesn’t get to go for drinky-poos with the financial elite because they love his books, you know?
So what about the bankers who “managed” the system? Will they be strung up and be flogged? Fuck no! Your taxes are “re-capitalising” the banks and the champagne still flows and private shindigs continue.
You see when those at the top of the hierarchy fuck-up, you have the pleasure of bailing them out. Yet when you and I fuck-up, they send the heavies around to give you a slap and make off with your wife’s favourite necklace. And in this scenario, you’re the criminal.
Justin is right. We have zero stake in this system – we are the smallest cogs.
They feed us a constant stream of mind-numbing celebrity guff to keep us disinterested as they ram us up the collective arse. And they’re wise enough to understand that we like the occasional terror story or bogeyman to keep us all needy and placated.
We’re the batteries that power the establishment. We just need to be kept stupid and distracted. You’ve seen The Matrix, right?
Call me a bitter bedroom nihilist if you like. I’ve had faith in politics in the past. I once believed that, while the realities of office may blunt our politicians effectiveness, they have our best interests at heart really.
Do they fuck. Is giving private debt collectors the power to kick down your door and restrain your screaming family, in your best interested?
I don’t want to resort to a burn-the-palace-down Libertarian politics, but what choice do I have? We thought we had voted in progressive and liberal politics a decade ago, yet all we got were a bunch of authoritarian warmongering halfwits, who couldn’t organise a cutlery draw.
So I’ve come to a conclusion: The house is against you. It wants you to lose. So it’s time to stop playing the game.
Considering Alistair Darling “controls” the greatest proportion of the cost of fuel, he’s got some nerve to be taking these sort of cheap, populist positions.
Where was the tax relief when the oil prices pummelled working families and businesses over the summer?
Everyone has to do their bit, Mr. Chancellor.
Talk about cheap populism?
I suppose it does sound good on paper. A lot of businesses rely on short-term credit to achieve their payroll commitments – the modern economy is built on such casual lending. But ultimately businesses will have to begin repaying the missed VAT payments in 6-months. Do we really think this situation is going to be that much better when we’re deep in a global recession?
It would be better that the government impose that banks – many of which we’re about to buy into – continue to grease the wheels of the ‘real economy’. The tax-payer’s stake in the banking system should be worth something.
David Cameron has to try something. Brown’s stock is rising and the impossible now looks probable – that Brown could well launch a significant fightback.
What really pisses off Tories is that Labour propaganda, with regard to the economy, has worked. Brown enjoyed huge kudos during the financial boom – when credit was dirt-cheap, and to be fair he didn’t have to do a great deal. And yet now, when the economy is fucked, he’s still gaining points!
Tories can’t quite get over the fact he’s winning both ways. I’m not saying it’s fair, but I am saying it’s piss-funny.
Apparently, he robbed the entire plan from Hillary Clinton.
Obama needs to open the wagons for the Clintons. To continue as if Bill and Hillary don’t exist may not help if it means McCain can gain traction by association. Of course we don’t know the ‘history’, but Obama doesn’t seem to be making the most of their promises to help. Call them out. Make the call.
If they refuse, then we know where the Clintons stand.
President Bush tried to reassure the nation today that the economy is strong enough to weather the current crisis, but by the time Bush stopped speaking nine minutes later, the market had dropped another 107 points.
tygerland archive 