Imminent Recession? Now there's a Surprise!

Various agencies are now 'forecasting' a return to recession for our economy either in this quarter or the first quarter of 2012. How very profound. Government ministers seem shocked and set to pin the blame on Europe this time. The 'blame their predecessors' tactic is past its sell-by date and, if you are into blame, there's an odd reluctance to pin most of the blame where it truly belonged in the first place - with the banks.

But would a further recession be so surprising? Not a bit of it! As I and many others have been saying all along, if you are already in or near a recession and you introduce deep cuts just what do you expect? The economy will be bouncing along the bottom - or worse - for years.

Well, the government expected the private sector to leap in and not only replace all the lost jobs and more but to produce overall growth in the climate of cutting. The least uncomplimentary way I can think of to describe this view is 'wishful thinking'. More likely paid advisors have been telling ministers what they wanted to hear - Tea Party level Reaganomics MkII.

There are three important factors in determining industrial expansion - demand, demand and demand. So what happens to consumer demand when you generate massive job losses and put those employees who survive the chop this time in fear of their jobs? Could there just possibly be a bit of a dip in domestic consumer demand? Could the reduced requirements for goods and services by national and local government, the health service etc possibly take the edge off business demand? And what about international demand?

Hey! How about this for a strategy: cut the domestic component and have an 'export-lead' recovery. So dazzlingly brilliant a wheeze that every other struggling economy to whom we export does the same! Result? Refer to Mr Micawber on an income of £19 - 19 - 6.

So what do we need to do? First stop the latest blame game - these are useless distractions. Second, increase the buying power of those on lower incomes. This could be done at no net cost to the exchequer by redistribution (more below) and would, as well as righting injustices, be stimulating through the Keynesian balanced budget multiplier (see previous postings). Third, scale back the cuts on the local government, health service and defence budgets.

Fourth, start a major programme of capital investment with incentives for firms and, most important of all, government led projects (such as a Severn barrage discussed elsewhere on this blog). HSII if you must - but don't believe those jobs figures and alternative transport projects including conventional upgrades would give a better result. Make sure that the contracts go to British companies (you can do this if you really want to), that employment is maximised and the opportunity to train young people taken up.

How to pay for this? The first thing to note is that the total net expenditure will be less than the apparent cost in economic stasis. The government seems to be realising that as the economy shrinks they miss their financial targets. The other side of this coin is that as the economy grows tax revenues increase and benefit payments reduce. But this process shouldn't be relied on to cover it all. There's no economic magic and we have our friends in 'the financial markets' to take into account. Oh what nice people they are (another story).

So, where's the money coming from? If you read most of the newspapers we're blessed with, experts are scratching their heads having considered all options. But wait! What's that elephant there in the corner? Could we just have overlooked the possibility of taxing the rich a bit more? OMG, think of all those directors who might up-stumps! But let's say we've heard 'wolf!' before and see if we could struggle along with a few less of the over-indulged variety anyway. I'm old enough to recall that when Mrs T's chancellor reduced the top rate of tax on the rich to 60% they thought they'd gone to heaven rather than just Switzerland. I'm not suggesting 60% again - I'm too kindly for that. So how about a total top deduction of around 55% inclusive of a flat rate NI over all income levels?

So there could be a Plan B after all! But will we see something like this? No more chance of this I fear than an Xmas time-warp, again a la Dickens, taking the government back to the 1930s for a refresher course on all that they have so clearly and so conveniently forgotten.

The Hungry Hobbit

How utterly pathetic and how absolutely typical of corporate anti-social attitudes these days. A local cafe a stone's throw from Sarehole Mill near to where JRR Tolkien grew up, has been threatened with legal action by lawyers working for a US film company. Wouldn't they be better employed chasing ambulances?

The Hungry Hobbit at the corner of Wake Green Road and Swanshurst Lane has been accused of copyright infringement by lawyers representing an outfit calling itself the Saul Zaentz Company (SZC). A household name if ever there wasn't one.

The company apparently owns the worldwide rights to several Tolkien 'brands' including The Hobbit and The Lord of The Rings. How on earth did this come to pass?

The cafe has traded responsibly under this name for the last six years and changing signs, menus, etc would be very costly for them. How unreasonable and how silly that they should be required to do so.

As a child JRR Tolkien lived in what is now Wake Green Road in what was then the village of Sarehole. Sarehole Mill across the way and Moseley Bog provided the inspiration for Tolkien's Shire and many of the places and people described in The Hobbit and The Lord of The Rings.

SZC's lawyers stated that "Only those who qualify for a trademark licence may use Hobbit and other marks registered by SZC". The letter states that use of the name Hobbit "is likely to cause confusion, mistake or deception among prospective purchasers, who are likely to believe that your business is licensed, authorised, sponsored or endorsed by SZC". Confusion? What utter rubbish! Who cares about SZC? Who has even heard of SZC before this? Things Hobbity are part of our local heritage and our national literary tradition. JRRT would have been disgusted.

I suggest that as many of us as possible now patronise The Hungry Hobbit by taking our 'second breakfast' there in true Hobbit style. Perhaps we should get hundreds of useful lawyers to see if a name change to The 'Ungry 'Obbit would pass muster! Meanwhile, pass the mustard!

The Age of Impatience

We are said to live in an age of austerity - as indeed we do and shall continue to do for many years. And there is much about today's society that is a lot less good than it was a few decades ago. Here, for example, I refer to values and conduct rather than technology and medicine.

We also inhabit an Age of  Impatience. This is often reflected in the use and setup of technical devices and worsened by adverse management practices that treat customers as punters to be dealt with (rather than served) quicker than is reasonably possible even when face to face.

We come across chronic impatience frequently on the phone (if we can contact a human being at all) and also in person at 'service' counters, for example in banks where staff do not seem to have the time or even the ability to concentrate in between distractions from their colleagues.

Incoming business landline calls, a high percentage of which are the detested robotic financial services plugs, often only give four or five rings which is never really enough if the phone is not directly to hand. Some personal callers have adopted this practice too, alas. Most mobile phones automatically end a call unless answered in a few rings.

Why do we do this? In some cases it's about money, in others it's a practice that has spread, unconsciously for many people, producing nervous and twitchy ways of living in as it were a personal 'short-now'. We do not need to do this and of course we can adjust as individuals when we become conscious of this habit.

There's been a campaign for some time (the Slow Movement) which seeks many ways of regaining a more human and civilised tempo. And if you'd like to find out about a project to give a really long term perspective, then there's a great book of essays entitled 'The Clock of the Long Now' and a website for the Long Now foundation - if we can find the time to visit it of course!