What is the US of A?

Watching the BBC's Panorama program on poverty in the USA lately I was shocked at the levels of homelessness, hunger and lack of healthcare in the US, still the richest country in world and still pushing their way of life on the rest of us. Even more shocking to me was the attitudes of the Republican politicians, it's your life, it's your responsibility and if you can't afford to go to the doctor, well that's your problem.

To me that is not civilized. I think one of the measures of a civilization is how it treats its weak and how it treats its animals. Even the more sophisticated animals look after their sick, their younge and their old.

But then I realised America is not a civilisation, it's not a culture, it's an economy. As an economy the measure of their success is how strong their economy is and weeding out the weak is a necessary part of maintaining that success. But has that always been so?

I don't think so. American is given us much to experiment with, some of it we love, so we don't and much we absorb without question and I think the love of money and this concept that the economy is our lord and master that cares only for sort term profit, falls in that latter category. Where that came from I don't know, but I don't think it was part of the plan of any of the cultures that found themselves there over the centuries.

Personally I am happy to live in less affluent Ireland, despite it's many problems, where we care for each other, are embarrassed to hear of people falling through the net and ashamed of our greed getting the better of us in the last years. I'd much rather be poor and part of caring community than rich and living behind locked gates.

An alternative to pouring money into banks

I think it is a top priority to help people stay in their homes and like many people, I feel most uncomfortable with our taxes being poured into a seeming black hole.

Here is my idea for helping the banks indirectly and helping people directly - please shoot it down!

A family can't meet their mortgage payments. The Government redeems half the mortgage and gives the family 2 years payment holiday and then expects them to pay 3% interest per year. BUT, the loan belongs to the site not to the people. If the house is sold, the loan goes with it with the obligation to pay, what becomes in effect a property tax. However, the loan can be repaid in part or whole at any time without penalty. Why won't everyone do this? Because there is a public register of properties with loan amounts and payments made, no names attached, but it would not be hard to work out who. This could also be done where the landlord cannot meet the payment.

This has the benefit that the money is not going direct to the banks.
People are given every support to stay in their homes
The country has a SECURE revenue stream for the future


What do you think?

Buy different

There is an assumption that the solution to both peak oil and climate change would be to buy less and I think this needs to be challenged. And I'm not saying I wouldn't welcome a much less frenetic consumerism!

Without doubt, a rapid reduction in Carbon (so much easier than saying greenhouse gas emissions but we must remember it includes a number of other gases) would lead to a reorganisation of the economy. When this is something the powers that be want, it is a 'good thing'. Like moving away from manufacturing to a service economy, which will increase the number of jobs in high value businesses and create growth in new areas. But when it is forced upon them it is a 'bad thing' because it will mean loss of jobs and closing businesses and unemployment. Change always causes pain for some and gain for others whether the long term result is good or bad overall.

But if we all suddenly reduced our carbon usage by not travelling, not buying stuff, not heating our homes and not using electricity the economy would suffer badly, jobs would be lost, businesses close and because we were busy not spending, there would be little to replace them.

So we need to find a way to continue spending AND reducing carbon usage by choosing more carefullly how we spend our money. Do we fly to Rome for the weekend or buy a painting? Do we buy an apple from China or a local apple? Do we buy a plasma TV or a subscription to a movie channel?

Low(er) carbon spending usually involves not buying things but experiences or services.
Instead of buying a lawn mower, pay someone to mow the lawn for you (hopefully travelling around by electric vehicle)
Think quality before quantity
Eat at local resteraunts that use local foods
Get stuff repaired
.....

UK Budget 2008

Three thoughts on the UK budget.

I think consumers main concern now is their mountain of debt and how they are going to pay the interest, never mind the capital. Are their jobs secure? Is the value of their house going to go back up again? Negative equity on the car and a mountain of credit card debts. I think, and may be wrong because not everyone is in debt and not everyone worries about if they are, that people are more likely to save or pay off debt with a little extra cash than go out and spend it. So I don't think cuts in taxes are going to do the business in encouraging consumer spending.

The stock markets liked the budget, today at any rate. Well that's okay then. Is part of the success criteria for the budget, that the city will like it? I suspect it is, and is this not the kind of short term thinking that got us into trouble in the first place?

What do we need new roads for? Peak Oil has not gone away and neither has climate change. In fact the problems of Peak Oil just got worse because the low price of oil has stiffled investment in both oil and renewables. I struggle to envisage any scenario that does not involve a decrease in driving in the short term, even the most positivie scenario where we replace some of our transport needs with technology. This budget was a huge opportunity to invest in the energy infrastructure of the country and show that the UK was a sound long term investment. Instead the gamble is that we are all going to start buying again and that energy prices, energy security and climate change are not going to cause a problem any time soon.

My new toothbrush is a Ford Fiesta

While in the UK last week, I went to buy a new electric toothbrush for my mother. Having bought electric toothbrushes before I went straight to the electrical section of a large 'sells everything' store. No toothbrushes to be found - toasters, kettles, hair tongs, all kinds of electric gizmos but no electric toothbrushes. Finally I asked and was directed to the toothbrush shelves where they are to be found for £3 next to old fashioned electrically challenged toothbrushes. Last time I bought an electric toothbrush, the refill brushes cost more than that!

I was on the lookout for new brushes for my 5 year old toothbrush but got a new one (as I was supposed to) instead. This new toothbrush feels cheap to use - like putting a Ford Fiesta in your mouth instead of a BMW. Personally, I am a less happy consumer. I would prefer to have the BMW toothbrush for 10 years (with new brushes) than drive the Ford Fiesta round my mouth morning and evening, but I guess I will get used to paying more (overall) for less after a while.

So I understand that the commodisation of electric toothbrushes is a 'good thing'. More goods produced, more jobs, higher GDP, Hurragh!

But it's not so good for me personally and the general approach of making things cheaper to buy and more costly to maintain is not so good heading into a recession. If money gets tight, you want the flexibility to spend less of it for a while. No new coat of paint for the house, cancel the subscription to the weekly magazine and buy an old fashioned toothbrush when the cheap electric one breaks after 6 months. But that still leaves cartriges for the ink jet printer, sky subscription, tivo subscription, new video camera as the old one records but can't get the movies off...

The same is true for many businesses with just in time ordering and tight cashflow - bills only paid when suppliers start chasing. Is there is too little financial flexibility left in the way we run our lives or businesses? What options do we have when so many capital purchases have been turned into overheads?

FT headlines this week

Here are a few headlines that caught my eye this week:


Spectris lifted by growing demand for efficiency

Instrument and manufacturing controls maker doing well with wide range of products used in increasing energy efficiency. eg. engine testing equipment used in developing lighter, more fuel-efficient cars. CEO says "rising fuel and raw material prices had imporved demand for products that could help manufacturers reduce waste and control costs". "Efficiency of manufacturing has become a hot topic".

Wealthy Indians let trains take the strain

Frequent flyers are moving back to long distance trains. Airline tickets up 20% in the year with a drop by 12% in passengers numbers. At the same time, luxury class train travel has increased by 50%.

Indonesia to limit tin output to lift market

Indonesia is the world's biggest exporter of tin. Cap of 90,000 tonnes to be introduced this year and 100,000 next year. 140,000 produced in 2005 but declined since. Estimated global deficit recently revised upwards to 20,000 tonnes for 2008. Estimated reserves in Indonesia 800,000 tonnes.

Price of homes falls for 10th month
Year-on-year fall into double figures.



Shirtmaker has his work cut out for him

Robert Boyd Bowman bought his english shirt manufacturer in order to secure his supply of english made shirts to his despoke City clonthing retailer Alexander Boyd.

Energy Price increses in the UK

PRICE INCREASES THIS YEAR
4 Jan - Npower
Gas up 17.2%, electricity up 12.7%
15 Jan - EDF Energy
Gas up 12.9%, electricity up 7.9%
18 Jan - British Gas
Gas and electricity up 15%
1 Feb - Scottish Power
Gas up by 15%, electricity up 14%
7 Feb - E.On
Gas up 15%, electricity up 9.7%
19 March - Scottish & Southern
Gas up 15.8%, electricity up 14.2%
5 July - EDF Energy
Gas up 22%, electricity up 17%
30 July - British Gas
Gas up 35%, electricity up 9%
21 Aug - Eon
Gas up 26%, electricity up 16%
21 Aug - Scottish & Southern
Gas up 29.2%, electricity up 19.2%
29 Aug - Scottish Power
Gas up 34%, electricity up 9%
29 Aug - Npower
Gas up 26%, electricity up 14%

Irish Economy in Recession - It's official

I have a low opinion of economists in general (with a few notable exceptions), especially when it comes to forecasting. They seem blinkered by their world of numbers and seem only able to roll forward the current situation and add a bit of sugar (after all if they predict bad news it will happen) and hope for the best. The housing boom wasn't going to end, until it did. Then we were going to have a soft landing, despite the experience of every other country, and today they announce we are not. 

But never fear, our predictions for 2009 are a smart recovery. On what basis might I ask? Oil has peaked/plateaued and the outlook is for a period of unstable but overall rising prices. Food prices are on the increase worldwide for reasons mainly liked to climate change and the increase in energy price. The price of many commodities such as copper and steel are on the rise, and at home the housing boom has ended and it is hard to see what is going to pick up the slack. Which leaves me wondering why do we keep listening to economists when they've got it so wrong lately and look set to get it wrong again?

I know we are not supposed to talk about the economy in a negative way because we will talk ourselves into a depression, but is that not child-like behaviour? Wouldn't it be more grown up to say, "Yes we have a problem, we understand what it is, and this is what we are going to do about it. There may be some pain for a while but this will give us a sustainable economy in the longer term." It's called leadership and it's sadly lacking in my view.

Yes the problems are very big - out 20th century economy was based on cheap oil - but there also many opportunities and much we can do, if we want to.

Economists are not without a sense of humour however, I saw this title of an ESRI report which made me smile: "A Stern Reply to the Reply to the Review of the Stern Review"