TERRIBLE ADVICE

Rubbish solutions are in fashion

I’m not sure why this appealed so much to me but recently I was driving through Brighton behind a van emblazoned with a sign “Brighton Rubbish Solutions” and it occurred to me this was great name for a second or even third rate marketing consultancy. Mostly I guess because most advice nowadays is so suspect. Ask any economist – or rather don’t bother. I reflected further on businesses taking bold and sometimes strange decisions.

Like Jaguar. I saw their brand new Jaguar F-Pace recently. "Gosh" I thought “smart Renault!”.  It bore no resemblance to Jaguar refinement. If it were a painting it would be called a forgery. An SUV solution but a bad one.

Or Tesco’s secret plans to launch a new retail concept to fight Aldi (the UK’s favourite supermarket say  consumers) and Lidl. The conversations in Cheshunt where the mighty Tesco is headquartered have historically revolved around the risks to the brand and of confusing consumers in introducing a really cheap Tesco as opposed to a quite cheap Tesco. Trouble is Aldi is remarkable for its quality not just its prices. In a recent survey of 10 great value/quality grocery items in the Sunday Times Aldi had two – their prosecco and their new coffee pods – and Lidl one, their aged beef. Revealingly Tesco had none.

 

If they aren’t careful Tesco will end up with a rubbish solution. As Coca Cola have done in reversing their one brand strategy and relaunching their sugar free brands in isolation.

And in the world of economics  Bitcoin is either a genius introduction to the future of money or it’s the  next South Sea Bubble. Confusingly  it could be both. Which is a rubbish situation.

In the world of politics some weird things are happening. Politicians used to yearn for “clear blue water”  separating parties. Today an ocean lies between the wrathful disciples of left-wing-Momentum and the pinstriped intolerant Tory right-wing.

Let me introduce you to Jacob Rees-Mogg. America astonished the world by electing a game-show host who’s reckless, rude and crude. In the UK the bookies have two favourites for the next Prime Minister – Jeremy Corbyn (described by an American friend as Bernie Saunders without the brains) and Jacob. Ladbrokes and Coral actually make Jacob the narrow favourite.

Who is he?  48 years old. Educated Eton and Oxford. Co-founder of a Hedge Fund. He and his wife have around £100 million allegedly. He is strongly anti-Europe and advocates abrupt and total separation from the EU. He has six children. Their names are revealing: Peter Theodore Alphege;  Mary Anne Charlotte Emma ;Thomas Wentworth Somerset Dunstan; Anselm Charles Fitzwilliam ; Alfred Wulfric Leyson Pius; Sixtus Dominic Boniface Christopher. The names tell a story.

He has an icy charm. He’s clever, well mannered, calm and very dangerous. But chances are – if you believe the bookmakers – he could be the next Prime Minister. Or possibly another rubbish solution.

We live in strange times.

DECKCHAIRS, ICEBERGS AND FARCE

Maybe I’m tired or maybe the world really is falling apart. My day had started badly. I’d read the papers and the name Trump was getting me down.

He loves breaking eggs but does he know how to make omelettes? And with omelettes in my mind I started worrying about France. Marine Le Pen? They can’t, they won’t … will they? According to comedian Andy Hamilton they won’t because she’s a fake. Never served in the armed forces and has certainly never been a marine. Truth will out. But I’m no longer sure of that
   

Life is all smoke and mirrors. Take this morning. I bounded happily from the house and clicked my key at my silver, shining beast of a car expecting that welcoming beep, flash of lights and wing mirrors opening like a butterfly’s wings. But nothing happened. I tried again. Peering in I saw the lights had been left in the ‘on’ position. Flat battery. A vivid torrent of language flowed from my lips. First Trump and then this. Fate had taken advantage of me once too often, once too often. This was payback time. I kicked the car’s tyres and vowed vengeance. I called Jaguar and shouted a bit. And then I sulked. After a while bored with sulking I went out to whack my car again. And when I got to it I realised it wasn’t …my car that is. The same make, the same colour, the same interior but different number plate. Looking up I saw my own car further down the road. My blameless silver beast.

Laughing at myself my mood lifted. I thought about grandchildren and great nieces with whom everything seems so much simpler. Their games are more fun. I’d played shops with my two year old granddaughter whose pricing concepts are strikingly at odds with dynamic pricing. Everything seemed to cost £30 although everything my wife bought seemed to be cheaper. Tea, wine, Eurostar rail tickets all £30 until I trumped (sic) her strategy by asking “do you sell trumpets?” She gazed at me saying “I think I have one - can you ask your friend there what the price is?” My wife chipped in with a price “£12.50 will do” and so off I trotted with an imaginary bargain trumpet.  This interlude compared favourably with our grown up world.

Donald has a certain bully-in-the-playground, childlike quality as have virtually all our politicians. Last week they meekly voted “yes” despite most of them strongly disagreeing with it, to the motion to action the Brexit article 50. Jazz fan, portly, Tory Kenneth Clarke stood alone in saying “No” and therefore representing the 16,000,000 who voted remain. First past the post referendum politics has served us very badly.

Yet the country’s economy is outstripping expectation. So all is well then? Not exactly, no. However fast we go there’s still an iceberg ahead. And there’s a farcical belief that we can avoid it. As our granddaughter would say “oopsy.”

OUR PRODUCTIVITY PROBLEM

Philip Hammond in his autumn statement last week lamented Britain’s poor productivity:

“The productivity gap is well known, but shocking nonetheless. It takes a German worker four days to produce what we make in five, which means, in turn, that too many British workers work longer hours for lower pay than their counterparts.” 

Is that really true? Are our Nissan and Jaguar plants really 25% less efficient than German car plants? I doubt it. The problem is that productivity’s a tenuous means of measuring performance. Apparently we lag all G7 countries apart from Japan for productivity and our performance rather than improving has stayed flat over the past decade. GDP per hour worked seems a loopy way of assessing things because when I was working fulltime I reckoned my contemporaries worked much harder than their French, American and German counterparts. It was only in heavily unionised businesses like the film industry that productivity was really held back.

On a personal level I’m very concerned about my wife’s productivity. She seems to be working harder and harder despite my reducing the housekeeping budget in view of the current economic uncertainty and a reduction of “narrow money”. In other words less GDP per hour worked. Her productivity gap is shocking and she refuses to accept my solution that by doing less we’ll improve our productivity. Indeed when I mention productivity now she gets quite shirty and hands me a tea towel.

So the solution to this “national problem” is for us to reduce the number of hours we work. In the UK the number of hours worked per head per annum has gone down by just 1.5% in the past 15 years (it’s down 6% in Germany). The Germans work 18% less than we do - yes a whopping 18% fewer hours.

The original definition of Parkinson’s Law was this:-
"Work expands so as to fill the time available for its completion."

So if follows if we worked less we’d produce about the same and our productivity would shoot up; as an economist might say - “sorted.”

Sathnam Sanhera wrote about the “gig economy” last week. This is where people do things other than just for money or proper money for the job done. Like speakers at conferences and virtually all writers. If an author were to apply a minimum hourly rate for their work no one would ever publish their work. Yet our world is full of wannabe writers. According to a report from the International Publishers Association UK publishers released 184,000 new and revised titles in 2013. That’s 2,875 titles per million inhabitants, and places the UK 1,000-plus titles ahead of second-placed Taiwan and Slovenia with the US publishing only 959 titles per million inhabitants.

So we work too much, we charge too little for our work and we spend too much time writing books.
We don’t actually have a real productivity problem at all. As my wife so aptly said it’s just another piece of claptrap.