WHY I HATE ECONOMISTS

Imagine for a moment you were planning a trip from Brighton to Manchester in quite bad weather. You don’t want to screw up and find yourself stuck on the M23 so you get a couple of world famous experts to help - a meteorologist and a renowned geographer - the sort of people whose words count.

They produce a paper “Travel in a time of bad weather”.

You’re delighted and proud to have sponsored it until you find using this paper to help you on your journey means you end up in Mannheim not Manchester. Your two academics are unabashed describing their failure to check their work as trivial and that the general thrust is fine. They also say Mannheim is a very nice city with a much better climate than Manchester with a particularly fine landmark water tower.

Fantasy?

Well, check out the story of Carmen Reinhart and Ken Rogoff, two economists to whom all peers bend their knee. They are the business when it comes to setting governments right. And their paper “Growth in a time of debt” has been helping shape global economic policies.

Very simply it suggests economic growth slows dramatically when the size of a country's debt rises above 90% of a county’s Gross Domestic Product. This pretty well confirms the feeling that many have so…….

QED.

Ah, not quite.

A student (Thomas Herndon and his Professor Michael Ash) have found a few errors in their work.

1. Data from 5 countries out the 20 supposedly studied were accidentally omitted, embarrassingly those with rather better than average economic results (Australia, Austria, Belgium, Canada and Denmark)
2. They averaged their data so one bad year for a small country like New Zealand, was disproportionately emphasised because it was given the same weight as, for example, the UK's nearly 2 decades with high public debt.

The effect of correcting this is to show whilst high debt correlates with somewhat lower growth, the relationship is much gentler and there are lots of exceptions to the rule. So it doesn’t change black to white but certainly to a shade of grey.

Put it this way, you wouldn’t bet your own economy on the Reinhart/Rogoff work. Meanwhile they have made a generous admission of culpability – well not so much generous as rather grudging:
“We do not, however, believe this regrettable slip affects in any significant way the central message of the paper or that in our subsequent work.”

I think it’s why we ought to tell economists to just rog off.

www.colourfulthinkers.com

I KNOW WHAT ITS LIKE BEING A 24/7 GLOBAL PERSON

My brain hurts and I’m jet lagged and I’m convinced there’s something seriously wrong with me. You see I’ve had my radio on all night listening to the Test Match in Sydney and before that I watched an episode of House.

The combination of the two is lethal.

I dozed off and dreamt that Gregory House and Thirteen were peering at me on my bed saying:-

“It’s gone from being a nasty attack of Collingwood to Advanced Hussey, although of course that’s treatable, messy but treatable but now I’m afraid we may have complications…”
“Not Swann’s Disease”
“No worse than that. Haddins”
“If it’s Haddins he’s had it.”
“Poor Richard”…..

Poor indeed….and knackered.

A bit like doing a new job which some will be doing in this new year.

If you think that it’s hard doing your job in charge of the UK try controlling a global empire and hear things like this:

“They don’t like it in Seoul but in Rio they can’t get enough, in Kabul it’s been banned and in Calcutta they’ve diluted it with sheep’s milk”…
“What about Helsinki?”
“…delisted and a court case pending.”

The real issue for anyone trying to run a global brand or company is trying to remember everything that’s relevant and putting a hundred cultural quirks, foibles and differences into a usable framework. Try too hard and your brain may shut down with a deep voice inside your skull intoning “you have tried to perform an illegal procedure.”

Some words of advice to anyone newly doing an international job:

1.    Get a good up to date map of the world and learn where everywhere actually is (most of us last did this at school)
2.    Learn the populations per major country – you can stop at Australia - that come in 50th  (the UK is 22nd in the league table and Germany is the first European country at 14th).
3.    Read “The Week” every week which gives you the best idiots guide to what’s happening where in the world.
4.    And the Economist which isn’t for idiots.
5.    Read this overview drawn from a talk at the RSA by Mike Geoghagan Ex CEO of HSBC which helped me.
6.    Get travelling and keeping notes about anything that defines a culture.

It may or may not help to know that a relatively low % of US International Sales Directors are reputed to have passports. It sounds like an urban myth but pass it on anyway.

A PERSPECTIVE FROM HOLLYWOOD AND BOLLYWOOD ON 2010

We’ll shortly be bombarded in the media by the “anguishings” of economists and gurus about 2010. So I thought I’d start by going instead to the world of film, with which I grew better acquainted over Christmas, for some pointers.

“This is my show” (Anil Kapoor as Prem Kapur the gameshow host from Slumdog Millionaire.)

As he felt his own control oozing away, Prem got more and more frustrated. Yet we’d all better stop trying to run things and start trying to steer them. However much we huff and puff the age of the Fat Controller is over. Events of 2010 proved just how out of control the bullies are.

“Doubt is not a luxury we can afford any more” (Elastigirl from the Incredibles.)

It was Lord Denning who said “people pay us for our certainties not our doubts” and Shakespeare more tersely “our doubts are traitors”. Whilst we have never lived in more complex times with information overload and unprecedented events happening at random we need to have a sense of clarity and an unfailing determination to be decisive if we are to survive. Better to be wrong than die in a sea of vaccilation.

“Your book is going to change the world.” Stanley Tucci (as Paul Child) from Julie and Julia.

As a writer I always believe this secretly although I doubt if it’s true. Yet the optimist that visualises the best result is the one more determined to go for it. Who’d ever start a film like Titanic, Avatar or Lord of the Rings without such an indomitable belief? There’s never been a better time to go for it.

 “Impossible. Impossible. Nothing is impossible. Dig little mouse. Dig.” Matthew Broderick (as Philippe Gaston) from Ladyhawke.

This irrepressible positivism allied to nothing any longer being inviolate, from the corporate reputations of BP and Toyota to the hero to zero slide of various politicians in 2010 (in Nick Clegg’s case from zero to hero to Nero), underpins the new world order. Since nothing is impossible just do it. And remember Rutger Hauer (star of Ladyhawke) in those bizarre Guinness commercials. He said “just keep an open mind”.

Time I’d suggest to watch more films and read fewer Harvard Business Reviews. When truth is stranger than fiction it’s time to go to fiction for inspiration.

This is the first of a series of blogs to mark the New Year – enjoy them.