Wednesday, 29 April 2009

Wednesday 29/04/09

Yesterday’s post on the rail union demands that jobs be safeguarded at the expense of shareholders stimulated some comments from regular reader Kapgaf. She said that any company that is making a profit should not be allowed to cut jobs and went on to say: “Even the French right wing are saying something along those lines (although they're not putting it into practice). Seems odd to me that when people are being told to tighten their belt, shareholders just want to go on raking in the profit at the same rates as before and that people are losing their job in order for this to happen.”

Firstly people aren’t being asked to tighten their belts. Belt tightening just makes the situation worse, as no-one buys goods and the recession lasts even longer. Every government policy since the start of the year has been targeted at getting people to spend. I’m certainly not tightening my belt and have made no changes to anything – in fact I’m getting a better deal now on almost everything, with the single exception of interest rates on my savings.

The problem with any proposal to safeguard jobs at shareholders’ expense is that it has to be implemented world-wide for it to stand any chance of working. We’re in an international market and investment gravitates to wherever a decent return can be expected. The UK’s experience with nationalised industries was a salutary lesson in the folly of trying to buck the market in order to employ as many people as possible – we had the most expensive and shoddy cars in the world, and we’re still left with that legacy in terms of foreign cars costing more here than anywhere else in Europe.

Interest rates are their lowest in living memory and many people actually have no source of income other than savings – pensioners, for example. Pension funds invest in industry and expect a decent rate of return, as do pensioners themselves. Most of anyone’s savings are invested in business via banks. If you see a bank up the road offering a higher interest rate, would you keep your money where it was in order to save a few jobs at your bank? I’d bet a pound to a pinch of poo that you wouldn’t and your account would be transferred quicker than you could say Jack Robinson – and that’s exactly what business investors do too.

Business is lubricated by the oil of investment capital. It’s business’ duty to operate efficiently in order to repay the trust of the investors. If times are tough, efficiency savings have to be made in order to remain competitive and continue having a business. That means staff are expendable, as customers are not. It’s a harsh fact of life. You either operate efficiently or die, and in the latter case there are no jobs at all.

Did you realize that in England all men over the age of 14 have to carry out 2 hours of longbow practice every day by law? How does industry manage to cope with that?

Apparently it’s also prohibited for Welshmen to be in the city of Chester between sundown and sunrise. If caught they risk decapitation. It’s an old law dating back to the 14th century that has never been repealed.

Saw a headline saying: “Brown to unveil Afghan strategy.” I wondered whether it would be to make us all Afghan nationals.

Iggy Pop has been fronting a TV advert in the UK for the insurance company Switfcover. The Advertising Standards Authority has deemed that it is misleading, as it implies that Mr Pop has a policy with said insurance company, when in fact he can’t possibly have one, as they don’t actually insure people from the entertainment industry. Nice one!


  1. You’re right, people aren’t being asked to tighten their belts. The price increases over the last couple of years together with pretty small salary increases have ensured that the belt-tightening among lesser paid mortals has happened without anyone asking. And if you haven't got any money, you can't spend it!

    As far as pension funds are concerned, please tell that to a friend of mine whose pension money was invested by his company and whose pension has just lost more than 60% of its value (and what about all those people whose pensions Robert Maxwell buggered off with ?). And this is like your post a while back about lots of people not even having one month’s salary in savings – a lot of people can’t afford to have savings, in fact the majority can’t. Would I keep my money where it is to save jobs? Yes, actually, I would. But that’s not the point. What is the point is that speculation on shares gets a few people richer but does nothing to help people trying to scrape a living.

    “It’s business’ duty to operate efficiently”. Yes, as long as you accept that the definition of “efficient” is “at a profit” and that it’s better for people to be out of work than it is for less profit to be made. But I do like to think that “efficient” could mean “best for the population” because that would entail, for example, everyone being fed and people who are sick receiving the medication that they need. Did I hear you say “Utopist” ? Yes ? Why thank you, yes, I do believe the world could be a better place.

    I’d forgotten about the longbows but did you also know that, thanks to Oliver Cromwell, it’s illegal to eat Christmas pudding ?

    Has anyone in recent years pled not guilty to decapitating a Welshman on the grounds of that law ? And been acquitted ? Quite frankly, anyone from anywhere apart from Chester who is in Chester between sundown and sunrise is asking for it.

    The Brown unveiling thing, does it apply to Afghan women ?

    Hah. We’ve had Iggy Pop advertising music on mobile phones here in France (can’t find a link for it) but, even if he doesn’t have a contract with the phone company, I would imagine he has a mobile phone. Ah, but does he know how to use it ?

  2. Kapgaf: You said: "Speculation on shares gets a few people richer but does nothing to help people trying to scrape a living."

    It's not meant to. Companies compete for investment, and if you can't give a decent rate of return - at least better than your competitor, then you don't get the investment.

    How else can companies attract inward investment if not by offering shares?

    The only way to ensure full employment is communism - and we all know where that leads. Shoddy goods that only those within the communist state will buy, as they won't have enough money to buy exotic imports.

    Is it fair? No - obviously not. But it's not meant to be fair. If you want a fairer society, then you mustn't live in a capitalist democracy.

    What we do have is the welfare state as a backstop, but it's pitifully inadequate for the real hardship cases. However, the welfare state is paid for in taxes, and the Catch 22 is that no-one will vote in a party that wants to increase taxes.

  3. The choice today usually lies between a capitalist democracy (and I think the term "democracy" is a little misleading) and some form of dictatorship. If I could bend over far enough, I'd kiss my bum goodbye !

  4. I don't have anything to say, as I'm knackered, but I just wanted you both to know that I'm here and I'm listening - Not in a stalky kind of way, but definitely interested...

  5. Oh, we're just arguing amongst ourselves here !