Lincoln Drill Hall

Monday, 17 November 2008

Keynes, Bretton Woods 2, Citigroup and Alice

These really are heady days and feel rather like Wonderland. Is Mr Brown the Rabbit?
Last weekend was billed the great Bretton Woods 2 and those closet Keynsians amongst us perhaps felt our eyes water a little as the great man was dusted off. The difference is that last time he had spent months of preparation and even then only just manged to get his point across. It strikes me that the extent and level of thinking is a shadow of what went before.

Thursday, 13 November 2008

BT and efficiency

It is the old story, our work force has reduced from 250,000 to 160,000 and may well fall further as we seek to be more efficient for our customers. The announcement of BT's figures this morning showed a business that was growing but whose profits had fallen slightly. The market actually responded positively, having previously fallen on a profits warning.
Is a business more efficient if it employs fewer people? It is more profitable if it has lower costs. It is more effective if it gives its customers the service they seek. This perhaps naive, but there is scope for a debate. Last time businesses shed people and those people cost huge sums in unemployment benefits. The question is, who really benefits?

Tuesday, 4 November 2008

So the real culprit was economic growth

The new chief executive of RBS, Stephen Hester, interviewed by Robert Peston on this morning's Today Programme (4 November 2008) blamed the years of good economic performance for the excesses that led to the tidal waive of bad debts. This links in an interesting way to Saturday's Guardian Review and the book by Niall Ferguson The Ascent of Money. It would seem that there is a point at which the financial markets detach from anything resembling real economy. The knee jerk reaction to this is evident in politicians of the left who now queue up to preach the gospel of manufacturing, failing to notice that cost profiles make this a pipe dream for western economies. Yet the answer is not the focus on financial services from which we are now all reeling. It boils down to finding new ways to add value.