Tag Archives: business

*Off topic* Economics: an incredibly simple way to change the world…

4 Oct

A few things in the news recently have gotten me thinking about economics and a book I read a few years ago which gave me a pretty decent idea of the state of the world (‘The shock doctrine’ by Naomi Klein, read it. read it now.). The events in question are the Wall street protest, and present republican muffin/possible future american fucknut Rick Perry.

I read an article in which he reasserted his opposition to regulation of greenhouse gases and pollution in general. Whatever you believe about global warming*, you can’t argue that having factories belching out smoke and chemicals into surrounding areas is a good thing. It’s not. Whatever you think about the grand scale of things, on a small scale it’s bad for us. Simple as.

*(I hope I can make this brief, it’s a big subject: Global warming is real. The majority of scientists who believe in it are well respected, qualified professionals who measure data and present their work to be peer reviewed so that any mistakes can be picked up by other well respected and qualified professionals. Those who deny climate change, usually keep their research to themselves or else have it laughed out of the community if they release it to proper scientists for review -usually because they’ve carried out that research for a dummy corporation/foundation set up by an energy industry company…yes that does happen. More than you think. A lot more. In fact, next time you hear/read about a climate change denying piece of research, do a quick search to see what company/institute it was done in the name of. After that, do a quick search to see who’s behind that institution.

Food for thought; the term “Global Warming” was phased out in the mid-90’s in favour of the more friendly and ambiguous “climate change” because, after all, who hates change? change is progress isn’t it? change isn’t bad- it’s damn good!! Lobby groups for the Energy industry used this confusion to soften the debate, and appreciated the long term decline in interest it helped contribute to…Oh, and one more thing; There is no debate about climate change. There are scientists who do their job properly, and then there are others who say what they’re paid to say. Simple as.)

So anyway; Rick Perry is hugely opposed to regulation, because it would harm the business interests of the companies involved and therefore do damage to the economy of his home state. Fair enough, he’s looking out for his own I suppose. The thing is though, that’s the exact same reasoning as that of a CEO.

The CEO of a company has a legal duty to look out for their shareholders’ interests. Doesn’t sound like a bad thing, does it? If an investor puts a chunk of money into a company, they should expect a reasonable return, right? In the beginning of the 20th century this logic was well accepted and needed because big business was only starting out. People needed to have “investor confidence” (which had a totally different meaning back then), so this logic was inshrined in law. It’s a CEO’s/board of director’s legal obligation to look out for the interests of the shareholders.

But; and here’s the rub ladies and gentlemen, the almighty rub that has our mighty planet -socially, economically and politically- slowly crumbling under the weight of its own people collectively mumbling “Hey I’m just looking out for #1, fuck you I’ll do what I want!”…

That obligation is defined in simple money. You want to look out for your investors*? Make them money!!

*Investors nowadays are a far cry from the 19th century pioneer family plowing all of their mattress money into a travelling snake oil salesman. Sure, that used to be the majority of investors: small families hoping to improve their lot by investing in business but nowadays, it’s just a bunch of bankers.

And here’s where we tie back into good ol’ boy Rick: take those energy companies operating out of his constituency. They don’t have regulations because he’s so supportive of them, so to cut costs and make money-money make money-money, they dump a little waste into a sinkhole somewhere.That waste makes its way to an underwater aquafer somewhere else and contaminates a local river. Hey, doesn’t matter; those shareholders want money, not a damn conscience! Will a conscience pay for copious amounts of Viagra and Champagne?! Fuck no!

Let’s move into the world of business: A good old american car company wants to cut costs, so that the shareholders can see a return on their investment, see their stocks rise in value a little and maybe even cut them a nice profit. How can that be done? Well I’m glad you asked because it can be done easy-peasy: Move the damn factories to China! Their labour costs are a fifth of what they are in America, so the company’s stock will skyrocket! Happy days!

Then the company naturally hires The Fonz to deal with the redundancies, because nobody can get mad at the Fonz!
“eeeeeey; your security clearance has been revoked, go live under a bridge or sumtin alright”

One of the main reasons the world economy has been shitting itself like that old man who sits at your local bar every night, is this legal obligation and it’s interpretation. Sure, you could argue greed, self justification, irresponsibility, general dumbfuckery and all sorts of other human conditions laid waste to the fragile game of Jenga we were playing (…you don’t know how fitting that comaprison is..you really don’t…) but it all comes back to that one legal obligation: the CEO must look out for the shareholders, and that is taken to mean “the CEO must do everything possible to continue cutting costs and making profit, regardless of the ethical ramifications”. Everything that comes after is just icing on the cake.

SO. there it is. one simple way to change the world: Alter the definition of the basic duty of the CEO to take into account not only the monetary obligation to the shareholder, but also the moral health and social responsibility aspect. Simple as…

hahahaha, yeah right. Never gonna happen. Here: console yourself with a sweetbeat…

London Riots: Big society gives itself a big pat on the back…

10 Aug

(*for the benefit of those across the seas, the ‘Big society’ initiative was announced a good while ago by David Cameron and the conservative party as a remedy to all of Britain’s woes. It was designed to create a more harmonious society by encouraging people to take an active part in their community…

…It was quickly laughed out of the country when it became depressingly clear that it was nothing more than a nice sounding metaphor for drastic budget cuts and general political fuckery…George Orwell working in conjunction with Douglas Adams and a crate or two of Jameson couldn’t have thought of something more ludicrously twisted.)

Don’t panic…that’s just a ‘community participation liaison’ coming round to check you’ve done your share of the nations’ tax returns…

Some of the more heartwarming reports to come out of the london riots are those of people gathering together to protect and serve their own community. Yesterday, large groups of people organised themselves on twitter and facebook to clean up the scenes of the riots, showing that even though people were angry enough to destroy, people were also angry enough to rebuild. Heartwarming stuff.

“Gentlemen: TO BROOMS!”

It has only been mentioned in passing, but there have been rumours of people arming themselves and standing guard by their local businesses, ready to chase away anyone that might have an eye for trouble. This is particularly motivating because along with the large chain shops that have been looted, rioters have also targeted small family run cornershops and businesses in what is nothing more than senseless destruction. Tesco? yeah fair enough I can maybe understand that; they’ve got a nationwide organisation to back them up…Mr Singh the friendly man who runs the local chipshop? He’s got nothing more than yesterdays earnings to see him through.

I read a clip in the paper this morning about looters being confronted by a teary eyed woman when they emerged from a local fashion boutique, because the boutique was built and run by one woman who hand made all of the clothes herself. When confronted with this, a lady-looter stood there with a freshly stolen wedding dress draped across her arm looking very sheepish (but, importantly, she didn’t do anything about putting the dress back as far as I know). Heartbreaking stuff.

But wait! People gathered themselves of their own free will with those good old english brooms to clean up the mess! jolly good show, as Boris johnson would say.

Ah…Boris Johnson. Again, for the benefit of those across the seas: The hithchiker’s guide to the galaxy defines Boris Johnson as ‘ a floppy haired being, known to appreciate a glass or two of cucumber sandwiches soaked in Gin, who is so out of touch with his constituency, and the Earth as a whole, that he has been regularly sighted talking to a tree along the A127 dual carriageway, having stopped there for a rest on his way to pick up a mess of cricket bats from Basildon for use in his regular bi-weekly tap-dancing class. It is not known how the cricket bats felt about this, although the tree is said to be surprisingly despondent.

So he turns up to shouts of “Where’s your broom!” from the crowd being carefully kept far enough away from him that they won’t actually notice he’s probably goggle-eyed, and yknow what? he actually gets one and marches down to the crowd. Fair play to him I must say. He gives a speech about how he appreciates their work and effort and how they won’t let these hooligans represent London proper, and that they will all persevere in their efforts to show the world that London can not and should not be defined by that awfully obvious/lazy headline: ‘London’s burning‘.

But, unfortunately, this is where I have to put a dampener on it. I don’t want to, not really, especially with the solid example the people of London are showing in the face of mindless violence and destruction, but I have to say it.

The groups of people who protected local businesses could be described as taking part in the big society….but then again that’s what the police are for. They’re trained, insured and paid for that sort of thing. And of course, the people of london pay taxes so that the police can be trained, insured and paid to do that sort of work.

The groups of people who cleaned up the mess could very well be held up as a prime example of the big society, as I have a feeling they might when the smoke clears…but then again, things like cleaning up the streets are what streetcleaners are for. They’re trained, insured and paid for that sort of thing. And of course, the people of London pay taxes so that they can be trained, insured and paid to do that work.

…like in…some sort of…-oh gosh I’ve forgotten the word-…so..soci…God I’ve completely forgotten it. You know what I’m talking about: Where a nation, through thousands of years of hard work and perseverance, gathers itself together enough to say “Hey! why don’t we all pool our money, so that we can create neat things like a police force, who we can train for that job alone, then we can pay people to clean the streets, cos we don’t want our Janet from number 12 doing it anymore- she’s got a very bad back nowadays especially since the operation and she can’t miss anymore work- and then we can maintain it properly and find a place for everyone and look out for each other so that when people need protecting the police will be there in full force; well trained, insured and paid, and the cleaners too! when there’s a right big mess to clean up they’ll be there: well trained, insured and paid…

A SOCIETY! I knew it…it was there right at the tip of my tongue.

To drastically cut funding to schools, services and society as a whole is taking political fuckery to a completely new level. To then gather round for a press opportunity with the very people you’re fucking over and telling them they’re contribution is valued, is bullshit you could smell from the far end of Baltimore. They make a contribution. Every fucking week. It’s called ‘Taxes’, and you are crippling them with it. Don’t repay them by cutting essential services. Don’t repay them with a jolly good show. Repay them with the services they pay for: Well and fully trained, insured and paid.

(I am not in any way trying to imply that the people who did the good things that they did shouldn’t have. I am inspired by the things they are doing for their city.I am trying to imply- no sorry; I’m saying– that if the governments had actually focused on actively making society better, rather than just throwing everything in the air and hoping for the best, maybe they would have been in a better position to deal with the reasons and ramifications of the riots)

Off topic: economics, fear and loathing.

22 Jun

Just so you know: I’m creating a new category with this post because there’s only so many times I can repeat the same, very simple, message without boring you to death. Yeah I know there’s a lot of different ways to tell it, but in the end it’s the same point.

Besides; I’d like to write about larger things in the world that are indicative of the smaller problems we face without having to, badly and awkwardly, tie it back in to the main point of this page. The point is always there, you just have to look for it.

Like a hawk…a sexy, sexy hawk.

Anyway, banks. I was watching a programme about the rise of the drug trade a few days ago, when I heard something interesting. I had heard it before, and knew the process well- seeing as I’m pretty sure I smoked a mix of rubber tyres and plastic a fair bit in my day- but this was the first time I realised it applied to something else.

The banking collapse around the world, and particularly in America, happened because mortgage companies packaged the bad debts with a bunch of good ones, then sold them off to investment companies. To break it down, here’s how it went:

– family on low income want a house but can’t get a mortgage. Because of good markets around the world, loan companies and banks start giving credit free and easy based on the assumption that, well, shit’s never been so good!

-Banks then, in an effort to create some easy money, package one bad loan with a chunk of good loans and sell it off for instant cashmoneymoney. This is appealing to investment companies, many of them pension funds and the like, who figure  if things go wrong then their loss from the bad loans will be covered by all the good ones.

-Crash.

-Banks, investment funds and economic institutions realise that, rather than some of the loans being good and foolproof, they’re all bad when packaged together seeing as they all rely on each other for their value.

Simple enough? sure is (…I’m no economist though, so don’t quote me on that). What does this have to do with drugs? Everything.

– Man buys kilo of heroin,then cuts said kilo of heroin with chalk because he wants to capitalise on his investment, and double his money.

-customers figure its doing them good, because pure heroin has a reputation for being very dangerous when taken on it’s own.

-crash.

-people realise that, wait a minute, it’s all bad! Even when something that’s seemingly good, in a certain contex: chalk, is cut with the bad it gets spoiled, resulting in people getting allsorts of health problems because of it.

Business models are notoriously easy to transfer from one discipline to another, and the ancient art of cutting the product is no different. Of course no one would ever admit that it was the same thing, god no.¬† This might also be one of the reasons things went to hell in the first place: If you think of a mixture of Heroin and chalk, you only think of that bad- the Heroin. Doesn’t matter how good the chalk is, it’s mixed with Heroin! Apply that same logic to an investor shitting his pants: Good loans mixed with a few bad? Doesn’t matter, I don’t want the bad!

There’s been a lot of hoo-ha about Greece in the past few days, because they need another bailout to keep the country running. Me? I’ve got absolutely no problem with Greece needing a bailout, none at all. What I do take offense to, is the word ‘bailout’.

A bailout is something you do for your friend who’s penniless and needs to feed his children. He needs to keep them alive and healthy? give him money, just give it to him. You don’t however, attach all sorts of terms and conditions to this bailout, because then it becomes a loan. A loan, plain and simple. Not a bailout, a loan.

If those terms and conditions dictate that your friend must…

A: tax his children on everything from food and board to education, denying them a good chance to grow into mature adults who can help alleviate their father’s plight.

B: tear down a few supporting walls of his house, only so that they can then be rebuilt by a private company at twice the cost (and he must be happy about this, naturally. No complaining allowed when it’s a bailout: You’re doing him a favour after all)

C: pay you back at the equivalent of his total yearly salary (providing he finds a way to make a decent living, somehow) plus the same in interest over the next seven to ten years

or D: accept the debt created by his, non rent-paying food-eating beer-drinking, friends as his and his alone.

Well then… I smell a shark.

…and a blind hobo. Who took fourth place in the national chalkshark finals.

One of the main reasons all this contributes to a mad mad world, is that we here in the west have fallen so in love with privatisation, cost cutting and outsourcing (to the East, mainly) that we have nothing to trade anymore, leaving us to rely on devious banking methods to create our wealth.

It’s a lot harder to predict what will happen to your money when you ring up Vegas and drunkenly shout down the line “Put it all on a fat man wearing a fur coat walking through your hotel lobby at exactly 10:15 during the summer solstice”, and a hell of a lot harder to control when someone else then says “NO! I wager he’ll be wearing high heels!” and you then have to reasess and revalue your original bet and compensate for it. (this is starting to sound like nonsense: sorry, but it’s hard to boil down the worlds financial system into a single sentence…I think that’s pretty close anyway)

Actually, the Vegas thing rings true. If you want to get a decent idea of the mindset of a financial employee, either watch or read ‘Fear and Loathing in Las Vegas’.

We can’t stop here, this is VAT country.

My point? we’ve got nothing to trade anymore. Privatisation, and the ‘magnificent’ economic system we have today destroyed the coal mines (and the unions) in England during the 80’s, leaving england without any exportable natural resources to make money money make money money. The car industry in America was shipped off to Asia because of cheaper labour, leaving the country without a decent industry to call its own.

Of course America has full access to a host of oilfields…but they’re in the hands of private companies. Here in Ireland, we could use our oilfields to wipe out our national debt within ten years and get out country back on track…but it doesn’t belong to us. It belongs to shell (another long story, I’m sorry about this I really am).

What does that mean? well, when you’ve got nothing to trade and no proper industry to create wealth from, you tend to make money by betting on other people’s money and invisible products, then hang on to it for dear life when you get it. Sadly.

If you’d like to actually understand what’s going on with the European Union, the International Monetary Fund, our current economic model and the countries involved, I highly suggest you read ‘The shock doctrine’, by Naomi Klein. It’s an invaluable tool for understanding the world.