Monday, November 19, 2007

Financial Notes

Excuse me. Yes you. Sorry to bother you but do you remember Farepak? That's right the Christmas hamper savings scheme people who went bust and left a lot of the poorest people in the country completely stuffed, unlike the turkeys they no longer had.

Well why, hope you don't mind me asking, did the government not help those people? Yes I know that it would be wrong to set a precedent of bailing out a commercial organisation. Floodgates and all that. People sailing their businesses closer to disaster because there was always a government hand-out if they hit the rocks. I thought you'd say that.

My problem is, what is Northern Rock if it isn't a commercial enterprise which navigated out of its channel? How many millions have they been loaned to keep going? Try to remember. And the queues outside the branches. Would you not have said there was the teensiest little hint, in fashion sense, newspaper carrying and general demeanour that these were people who weren't that badly off? Very unFarepak.

While you're wrestling with that one tell me, is inflation a bad thing? Oh, lots of it is but we need a bit of it because a stagnant economy is bad and a deflating economy is bad. You read that in the Times did you? But house prices? They should go up a lot? Then most of the sorts of people who vote for the government will feel good and do it again. Yes, I am a bit of a cynic. I either need an economics lesson or someone needs to tell everyone else they're stupid.

People talk a lot about consumer confidence. It means that when the going gets tough the people stop shopping (apart from those who use retail as a therapy and we all know what happens to them eventually). But we have built an economy, I reckon, on people finding more and more things to produce and sell which people didn't know they wanted when they didn't exist. It's a bubble and there must be a pin. It's all fake. If you are in retail better make sure you stock a high level of 'necessaries.' Unnecessaries are going to stop shifting, and I reckon sooner rather than later.

Money eh? It's so annoying. I think I'll give a bit extra away today. You?

2 comments:

Anonymous said...

As someone with an economics degree, I would say you don't need any lessons in economics, but it is about time somebody told everybody they're stupid (in a loving, Christian kind of way).

We seem to think we can continue to have exponential growth in the economy and get worried if some company has only a 3% growth in profits this year when they had a 5% growth last year, even though they've still made more profits than ever before. And all this on a finite resource. What are we going to do when the earth is all used up?

Martin said...

Very interesting, and good to see that there is an alternative (and quite probably better) way of thinking about economics.

At the moment, I feel I can enjoy some extra things I don't need as such, such as CDs, but I need to remind myself every so often that these, despite being enjoyable to listen to are not actually the most important thing in existence.

As for the last sentence, I think a few of us are considering how much of this we should be doing at the moment, with gift day, near enough Christmas to be thinking about some related things, and the like.