A PEP Talk

Really - a pep talk? You mean one of those rah rah things to get everyone jumping up and down to happy clappy music and pretending to feel good about life in general afterwards? About life in a world that seems to be full of mostly bad news?

Umm, well no, actually! I mean PEP as in People, Economics and Politics. I have, of course in previous Blogs admitted to knowing not a lot about Economics, and I have never been particularly Political - so this could be mercifully short!

The initial inspiration for this Blog actually came from a musically related piece I read recently, together with some discussions I have been a part of during the last week concerning Europe in particular.

Look at the picture below and before reading on, see if you can identify the person - and consider the impression you get from the picture.

Identity? Anyone?

If of course you said it was probably an early and previously unpublished picture of me in an earlier life - wrong!!

But if you said it was obviously Gene Simmons, the frontman of the hugely successful rock group Kiss, congratulations, although I suspect that few of the people who I believe read this Blog would have been terribly sure! But whether you knew or not, I suspect the image in your mind created by the picture would have led you to stereotypical thoughts about someone who dresses and looks like that - musically talented probably, but not terribly articulate or capable of original intellectual thought or business sense, and definitely someone you hoped your daughter didn't fancy! If that was your view of Mr. Simmons you would be ... mostly wrong.

Kiss is one the world's most talented and awarded rock bands, and have maintained their appeal for over three decades. But what is perhaps less well known is that frontman Simmons is also a successful businessman who recently made a speech at the London Business School where amongst other lines were things like:

- Countries are businesses — they have imports and exports and you want your exports to be higher than your imports so you can have a profit.

- Government makes money by taxing and spending. It's so simple. If you spend more than you tax, you're out of business. MPs don't know what they're talking about.

- And we created this miserable economic state. It's like fat people who think it's the bakery's fault they got fat. No, you kept going in there and you kept eating cake. It's not the bakery's responsibility to tell you not to eat so much.

- (In the same way that) banks shouldn't have to tell you not to borrow so much. They're banks — they're supposed to lend you money. If you can't afford to take out £100,000, don't take out a £400,000 mortgage.

And I particularly like the last one

- It's your responsibility to be a grown-up and take care of yourself.

This all sounds remarkably like common sense to me. For too long have some people believed in the theory that the world owes them a living. In some countries it seems to be worse than others. When they have worked for a few years, they believe they now have earned the right to put their feet up aged 50, and take a full pension - to which they have not contributed nearly enough - for the rest of their lives (Greece). Or they have been politicians whether for 30 years or 30 days, they are also entitled to a full pension (Italy).

You know what? When Chancellor Bismarck first thought, back in the days when life expectancy was around the late 40s, that it would be fair to let someone be looked after by the State if they worked beyond a certain age, he came up with the idea of a retirement age of 65. Given today's longevity tables, I am told that to qualify for a pension now on the same terms, you would need to live to be 112.

So, that's something about "people". Don't judge people by the way they look, for a start. And wake up to the idea that we need to fend for ourselves more. If you are in debt, is it because the banks have forced money on you ... or because you were undisciplined in your spending? Our society - at least some of it in parts of Europe (and elsewhere I am sure) - needs to temper its expectations. Do these people who want to "occupy" things (like Wall Street, St Pauls) really think they are hard done by, or is it just rent a crowd becasue it's something to do?

And so, as we move to the "E", I now realize this is getting to be longer than I had intended. Let me attempt some brevity.

You are not paying attention to the world around you if you are unaware that Europe is in an economic mess. But it will all be sorted out soon, won't it?

Actually ...... it doesn't look like it any time soon! And to add more depressing news to fuel the fires of uncertainty, there are not going to be (m)any places anywhere in the world unaffected to some degree or another. The American Financial Crisis has now hit Europe hard. There is more to follow.

According to Gene Simmons, you cannot spend money when you don't collect enough to spend. You certainly can't run your household like that can you? If you do not have enough money to pay the butcher, you don't eat meat. If you live in Greece, where people do not seem to pay their taxes, for example, then the country does not have enough money to pay for pensions or their other obligations - like loan repayments.

Already some banks are in as much trouble as the countries themselves, and a continuation of this situation will spill over into business and growth. This will lead to a slow down in their economies and unemployment. I wonder how many people have grasped this yet, because judging by many media articles the potential seriousness of this has not got through.

But in the interests of space and time, let's keep that for the next Blog.

Comments

I enjoyed this post, and also Wolfman's comment.

My contribution towards alleviating the gloom and doom is to point out that Alan Greenspan seems to be attempting something of a comeback nowadays.

Greenspan was quoted as saying ''Today’s competitive markets, whether we seek to recognise it or not, are driven by an international version of Adam Smith’s “invisible hand” that is unredeemably opaque. With notably rare exceptions (2008, for example), the global “invisible hand” has created relatively stable exchange rates, interest rates, prices, and wage rates.

This has since gone viral with readers contributing quotes containing the term 'notably rare exceptions'

It was so fun, I could not resist. My entries are:

'With notably rare exceptions, Greek politicians have usually been a paragon of thrift and fiscal responsibility'

'With notably rare exceptions, the Titanic had a successful voyage.

'With notably rare exceptions, Gordon Brown has always respected and got along well with Tony Blair''

'With notably rare exceptions, Clinton has always refrained from having sexual relations with his interns'

'With notably rare exceptions, David usually makes the important decisions in his household'

Full article:
http://krugman.blogs.nytimes.com/
2011/03/30/the-exceptional-mr-greenspan/

Posted by: Jeremy | 29 November 2011 at 06:24

At the Friars Club roast of of Gene Simmons, the comedienne began her remarks by saying, "We're here to honour Gene Simmons. What do you call a man who has achieved greatness in music, has written numerous award winning songs that have sold millions and has inspired tens of millions of young people? You call that man John Lennon, not Gene Simmons!"

Posted by: Wolfman Jack | 26 November 2011 at 17:08