Tuesday, 5 May 2009

General Election 1979 BBC Parliament 4th May 2009

It was thirty years ago that Margaret Thatcher was elected.  On the exact anniversary the BBC broadcast the whole of their election coverage from the day itself.  I was eighteen at the time and I don't remember taking that much interest at that time.  It was the first general election in which I had the vote.  I didn't actually cast that vote but I was living away from home at the time. I remember that I had decided to vote Labour, but without much enthusiasm or conviction. It didn't seem that important and I didn't think that how you voted was anything that would make much difference.  Mrs Thatcher had a big impact on the country and radically altered the way a lot of people thought about politics, including me.  By the summer of the following year I had become very interested in politics indeed. I had become a convinced socialist, but only after going through the stage of thinking whatever can we do to get rid of this bloody woman!

Watching the unfolding of her election victory was for me a bit like watching the starting bit of a film you had missed the first time you saw it.  I knew all the characters, but somehow I had never seen them in quite this context before.  And of course, looking back thirty years gives you the benefit of hindsight.  And I am forty eight now, with a son the age I was then.  That gives you a certain perspective too.

What a different world it was then. The election was covered as a news story with a degree of detachment that it is hard to imagine now.  The media was, no doubt, very important even then.  But it was somehow not central.  You got the distinct impression that a proper campaign was going on in the streets and at the meetings. Trade union leaders were treated with great reverence, and it was clear that everyone was expected to know who they were and to be interested in what they had to say. I don't think I could name a single current trade union leader.  I am struggling to remember the names of more than a couple of unions.

But the other thing was the characters who I was later to get to know from avid following of the political pages over the next fifteen years.  Shirley Williams seemed like a sweet lost little girl. She was rather surprised by losing her seat and had obviously not got a clue what to do next. Of course I knew the disastrous course she would take in the next few years. But I don't suppose at the time she thought that things were going to get even worse.

Jim Callaghan came over as the hero of the night.  Calm, courteous and unphased by a virulent protestor at his last, as he no doubt knew, count. I wondered if the woman who blighted his night was watching. If she has mellowed with the passage of time like most of us do I wonder if she regrets it now. She certainly did her cause no good and the dignity which the old statesman showed really impressed me.  For the first time in my life I began to feel sorry for missing my chance to vote Labour.

Mrs Thatcher did not cut nearly so sympathetic a figure.  I don't think I can get away from my dislike of her and what she stands for, but I think that objectively she certainly appeared confident and knew what she was doing. Even I, a convinced socialist, don't think that she set out delibrately to wreak havoc and throw millions out of work. I can only conclude that although she knew what she wanted and knew what she was doing- she clearly didn't actually understand what the consequences of her actions were. But it was easy to see how people could have got carried away with her charisma and sense of purpose. I now have a lot of experience behind me, and I am always worried by people who seem too sure of themselves. 1979 was the first time I felt that way.

Roy Hattersley, hard to imagine him today as the rather arrogant young know it all he was then. Of course he was to spend most of his life in opposition, but then he was a young minister from the party that had been in power for most of the previous 15 years. No doubt he thought it wouldn't be too long until he was back. But this was the first time I had ever noticed just how punchable his face was.

I had never really understood why Keith Joseph was called the Mad Monk.  Seeing him interviewed it all became clear.  He was as crazy as a bucket of frogs. But he also clearly had a plan.

Tuesday, 25 November 2008

Mr Darling to the rescue

Britain it seems to me, has changed radically in the last few days.  We are no longer a free market economy - the package of measures put forward by Mr Darling mean, in effect, that Britain has become a command economy.   It is a bit ramshackle and ad hoc as command economies go.  We haven't become the Soviet Union overnight.  But we quite clearly aren't leaving things to the invisible hand of the market either.

Reading between the lines I think I can see what is being attempted.  At the height of the property boom about 8% of consumer spending was funded by what was called Mortgage Equity Withdrawl (MEW), i.e., borrowing against the increased equity in your property.  This source of new spending has, to say the least, become untenable.  The chancellor's proposals in the short run seem to amount to replacing this missing spending with government spending based on borrowing.

In so far as it goes, this sort of makes sense.  The shock of a sudden removal of spending would benefit nobody.  We need to get out of the debt dead-end we are in, but going cold turkey isn't the best strategy. 

Will it work?  I hope so, although there is a lot that can go wrong.  And I really don't think that in reality there was much alternative.  The big question is whether it is part of a sustained effort to redirect us to an economy based on generating real value.  I will wait and see.

Tuesday, 18 November 2008

Bail outs for car giants

The big news today is the big American car giants are tapping the US government for loans. These are big companies with big problems and they need big money. I forget the numbers even though I listened to it with great attention on the radio only this morning. But frankly, once it gets beyond billions it doesn't really register anyway. It is worth taking a step back to think about how these companies got into this state. American industrial strength was not the result of a quirk of history or uniquely favourable natural conditions on the North American continent. It goes back to the country's puritan roots.

From the days of its first settlement the Americans have been uniquely well organised, success orientated and probably most important of all hard working. The great corporations of the twentieth century that made the country great and bestrode the globe like colossi were above all great feats of management and organisation. Where did it go wrong? I think it was when they lost sight of the meaning of what the organisations were actually doing. Managers who understood the products were replaced with management scientists from the big universities. The top leaders became financial whizzes who understood money but not the actual products they were making. At first it didn't matter because the financiers understood the balance sheets. In fact they seemed, on paper, to be doing an even better job.

They started to become reliant on borrowed money. It went fine when things were going well in the economy. But it doesn't look so good when things turn down. Once again, debt is behind the destruction of wealth. Not maybe on the scale of the banking crisis, but the same principle is in play. Fortunately there is probably something to be salvaged from the wreck. There are still car plants, engineers and a skilled pool of workers that can be turned to some good purpose. It will probably turn out to be what you would least expect. But Ford and GM as organisations? They have had a great past but it is hard to see what keeping them alive is achieving.

If I were the next US president I would let them go as quickly as I could. 

Sunday, 16 November 2008

Writing a book based on a website

My main blog is Colin's Beauty Pages, a blog devoted to the science of beauty and its practical applications. I want to reproduce some of the key content as an e-book. Having a full time job, a sideline business and a half dozen blogs to maintain I have to work out a way of keeping this project going in very very small chunks. I find I can usually manage to scrape an odd 15 minutes together at some point most days, so ideally I want to be able to fit this project into 15 minute chunks.

I don't know how it would work for other people, but I find that I can often get a blog post done in 15 minutes. Sometimes I bite off more than I can chew, and I have to spread a post over several 15 minute sessions. A 15 minute session to tart up and extend an existing blog post also works well.

So my challenge is to get writing a book into that format. The trick to it seems to be to set things up so you can sit down and start working straight away on what you want to achieve - the organisation has to be pretty fluid. Blogging fits in fine with this because it is so immediate - and a short blog post is worth doing.

Can I make it work for a much bigger project. The key will be getting the organisation right. I will try the following approach.

Set up the chapters on Scribd.

Set up the drafts of the chapter as drafts on Ecto - publish them when they are sort of readable and then transfer to Scribd.

Keep a master file of my progress on this blog. Nobody ever reads this blog so that shouldn't annoy anyone, but if they do I will have links to the Scribd documents to look at if they are interested. I know that statisitically speaking it is unlikely that many people will stumble across this blog as I make no effort whatever to promote it and it doesn't have any keywords. But the fact that someone might look at it is quite a good discipline - it forces me to write in a way that is intelligible, or at least intended to be, for the sake of my theoretical but probably non-existent readers.

Saturday, 1 November 2008

How to cope with the Credit Crunch

Some parts of the media seem to be treating the current financial turmoil, the credit crunch, as if it is some kind of wierd abnormal happening that we don't understand and which will eventually be solved and we will all go back to normal.

I think this is completely the wrong way to look at it. I think the abnormal period has been the last seventy years. What is happening is that we are now returning to normal. Cheap fuel. cheap credit and widespread borrowing by governments, companies and individuals are not coming back. The World has changed and we need to change with it. There are some people suggesting we are heading towards deflation. I don't know enough to offer an opinion on how likely this is, except to say that when it comes to houses we are already seeing rapidly falling prices. If falling prices spreads from the housing market to the general economy then we are looking at huge problems, and problems that we are not used to. Saving up for something rather than buying it becomes the best strategy. The longer you save the lower the price and the more interest you receive. Of course if everyone does this then lots of jobs get lost. If you are one of the unlucky ones, you will find that losing your job in a deflationary world is no picnic. Prices are falling including the price of labour, i.e., your wages. You are unlikely to get a new job that pays as well as your last one, As unemployment mounts you will in any case be lucky to get a job at all. The good news is that your savings will last longer. The bad news is that if you need to sell something to raise some cash, you won't get much for it.

Of course there are other folks who say we are heading for rampant inflation as spent out governments cheerfully turn on the money printing presses to inflate away the value of their huge debts.

I am not an economist and I can't judge which scenario is more likely. Indeed I can imagine one following the other in baffling succession derailing the most conservative of personal financial policies. Got savings? Inflation can wipe them out. Got assets? Watch deflation turn them into illiquid liabilities.

In other words, I am saying that I think that the economic system has become so unstable that there is no way to guarantee a comfortable future simply by saving/spending/investing - though I dare say if you are very wealthy indeed you will probably be all right.

Is this a council of despair?  I really don't think so.  I think it is much more a call to look at what is really important.  Money in the bank is handy and a nice house is great, but at the end of the day what really makes us happy?  I think it is how we get on with people around us and how we feel about what we are doing.  If you lived in a small community where you knew everyone, would you really want to be the person who worked out how to skive while everyone else did all the work?  I know I wouldn't.  And I know what I would think about the people who dodged their share.  Of course, we are human and know that some people are brighter or stronger or just have more energy and imagination than others.  Of course these people are going to get more out of life - but they probably put more into it.

I think the way to live is to behave as if you live in a village and you want to be a good neighbour and to pull your weight in the community.  This means doing what you can to help other people.  It means keeping your skills and abilities at their highest level.  We might not live in small communities any more but we can still behave as if we do.  I think this is probably the best bet for our mental health, and it is probably the best option for our general well being as well.  We can't get out of the fact that we live in a world dominated by money - but that doesn't mean that we ourselves have to be dominated by money.   And when you look at what the world of money is likely to do to us over the next few years that may well be just as well.

Wednesday, 29 October 2008

Banks - They always go bust

Every bank ends up going bust.

This seems to be as true as every man dies. The fact that there are some men still alive that haven't yet died doesn't disprove this. We know we are mortal and we ought to know that banks are as well. The fact that some banks haven't yet gone bust, though by the time you read this there may well be fewer than when I wrote it, likewise doesn't alter the inevitability of them going bust.

Banks collapsing here in the UK hadn't been very common until the last couple of years. The run on Northern Rock came as a real surprise to a lot of us. In fact, there had been a bank failure in the early nineties. BCCI, Bank of Credit and Commerce International was quite a spectacular failure but hadn't really directly impacted on people. The only run on a bank that had really made an impact had been the one in Mary Poppins.

But taking a longer view, bank failures are not only commonplace, they are an inevitable part and parcel of the way banks operate. One of the most illustrious banks in history was Barings. Despite being a British bank during the Napoleonic wars Barings played a key role in the financing of Napoleon's war effort. They really did believe in light touch regulation in those days! Amongst many notable activities they actually put up the money for the Louisiana purchase. This netted Napoleon some eight million dollars which he used to wage a series of disastrous wars across the continent. Still, I guess business was business. Napoleon himself was wary of the power of bankers -

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." -- Napoleon Bonaparte, 1815

We all need to get used to treating our relationships with our bank as a Faustian bargain with the Devil. We might get riches and success out of it, but there is always the prospect of ending up in Hell.

Postscript - a lot of people are scared by banks, see http://www.californiapredatorsclub.com/lofiversion/index.php?t9754.html