The death of the full-time job . . . ?

February 18th, 2010

Very thoughtful piece by Sean O’Grady in the Independent this morning – So where on earth have all the proper jobs gone?

He observes that while full-time jobs are going down, part-time jobs are increasing. I remember 20 odd years ago some futurist forecasting that in the future, we would all have 3 or 4 jobs and I just couldn’t imagine it, less still than that would be happening to me now.

On one level, it’s great that not everyone has to become conformist corporate wage slaves anymore.  But the self-employed, portfolio jobber requires a surplus of work to make it work for him and must generate higher savings because cash flow is much less predictable and work much less secure.  Benefits are in short supply.

On that last point, I was at an excellent seminar at Civitas with Dr Irwin Stelzer this lunchtime. I was very taken during the discussion about China, that the savings rate there was as high as 50%, because there was absolutely no welfare to fall back on, which is why – even after years of growth – the Chinese consumer is still something of an oxymoron.

In Ireland – deep public sector cuts are working . . .

February 14th, 2010

There’s been a lot of policy chatter  over the last year in the UK about the lessons the Britain can learn from Canada and Sweden-  at least a decade or more ago – on cutting government expenditure harder and faster than anyone really wants. That’s all fine, but why not look across the Irish Sea and watch it happen  in real time?

Almost exactly one year ago, spreads on Ireland’s five-year credit default swaps rose to a record 377 basis points – about where Greece is now.Today, they are nothing like that. The difference is, Ireland got ruthless with the public sector and Greece almost certainly won’t.

Of the PIIGs, the markets have far more confidence in Ireland’s ability to recover at a sustainably higher rate, because they chose the roughest medicine early on and swallowed it whole.  The PIIGs (Portugal, Ireland, Italy, Greece and Spain) are becoming the PIGs without Ireland.

No one is talking about an Irish default any more.  Go figure.

So three cheers for Ireland for showing Britain not only what can be done with ultra-competitive low taxes to attract investment and generate exceptional growth in the good times. And more cheers for demonstrating how to deal with a severe financial crisis like we have now – tackling it head-on.

The Alternative Manifesto – By Dr Eamonn Butler

February 12th, 2010

The other day, we had our inaugural private EPC dinner with politicians, thought-leaders and leading members of the business community – it was terrific. And we had a real treat, because Dr Eamonn Butler of the Adam Smith Institute agreed to step in at the last moment to speak about his new book;

The Alternative Manifesto – a 12 step programme to remake Britain

I haven’t yet read the whole book, but having read the chapter on tax, I can tell you, it’s very fluently written and cogently argued in a non-technical, accessible way. I’m sure it will do well. I’m also quite into the can-do, will-succeed ethos that pervades this oeuvre. And, more than that, as well as being without ego, I’m very struck by the way Eamonn goes out of his way to give credit to other people – all too rare in today’s plagiaristic copy and past world. In my view, those two character traits show true intellectual class.

The good doctor is also pretty nifty with an iphone – he was asked to speak for 10 minutes and did so to the second, timing himself, as I noticed out of the corner of my eye, with some slick countdown app !

Don’t bail out Greece – give back the Elgin Marbles instead

February 11th, 2010

Everyone is getting pretty worked up about Greece. Now it’s heading for a bailout, some of us think it’s pretty ridiculous that as non-members of the Euro, the UK may have to contribute to the bailout package. Others like Hamish McRae on the Independent argue that helping Greece is akin to helping Northern Rock because it represents a systemic risk to the entire European Banking system just as Northern Rock was to the UK.

Well, I’m not so sure. My gut feeling is that we should hold on to as much capital as we’ve got – especially if you think as Prof. David Blanchflower does, deflation remains a serious risk two years out from now.

However, there is one long overdue action that will create an enormous amount of intangible goodwill between Britain and Greece – returning the Elgin Marbles.

So get on and do it !

A double-dip recession? It’s the anecdotal evidence that troubles me

February 9th, 2010

One of the things I always like to ask shopkeepers, restaurant owners and small businesses in general when I’m out and about is this;

How’s business?

What’s interesting is I always get a pretty detailed response, usually with a fairly upbeat spin. This last month it has been markedly different. What troubles me is that those answers have been decidedly negative over the last couple of weeks.  January is always bad for retail, but the volume of snow, renewed concerns about the housing market, the end of QE and a rumbling crisis in euroland have conspired to make it a lot worse.

That’s why with the UK only emerging out of recession by a measly 0.1% could drop back yet into recession – double-dippers may yet be right.