Corporate Stupidity No. 392

 General  No Responses »
Oct 092009
 

My local supermarket which is part of one of those immense corporate empires, has started doing something immensely stupid. Not exceptionally inconvenient, but just one of those irritating examples where some bright spark has come up with an idea that has not been fully thought through (or even tested properly).

What they have started doing is printing in addition to your standard till receipt, a little note about some loyalty scheme. Which means you have two silly little bits of paper to collect.

Which is hardly very environmentally friendly and probably costs them a surprising amount. Just a small amount of stupidity really – a simple poster would be just as effective and far less wasteful.

However when you get to automated tills, the receipts are dispensed automatically. The printer has a mechanism by which it drops any uncollected receipts on the floor before it prints your receipt. Except when two receipts are printed you have a window of opportunity of about a second (whilst you are fumbling with bags, and change) to collect the first. And guess which one is your real receipt ?

Yes, it is the first one printed. So everyone ends up with a note about a loyalty scheme rather than their real receipt. Kind of useful if you need to return something, or prove that you’ve just bought something to the security guard on the door!

The conspiracy theorists would come up with something about collecting the receipts to discover your shopping patterns or something. Nothing of the sort. This is just corporate stupidity!

Bumper Banker’s Bonuses Are Back

 General, Politics  No Responses »
Aug 072009
 

… goes the headline, but did they ever really go away ?

All that really happened was that last year the bankers did not get much of a bonus because their banks were losing money, and now that things are looking better the bonuses are back. This should not surprise anyone; plenty of people get bonuses. What is really happening here is that people are questioning the size of the bonuses.

In fact when you look around, you will realise that there are plenty of people who get ridiculously large amounts of money for doing their jobs. When someone questions whether someone is earning too much, the first thing that occurs to everyone is “Is this jealousy?”.

Well perhaps a bit. I would not mind earning a bit more money, but I am reasonably comfortably off. And to earn more money at my current type of work, I would have to resort to working to make rich people even richer. Which I would much rather not do.

I have no great solutions to solve the problem of income inequality, but it is something that is worth trying for. And screw those who whinge about how taking money away from people with high incomes will drive talent overseas.

The most obvious thing to start with is to start making tax avoidance an activity that brings contempt from the public so that someone at a social gathering who admits it is likely to be shunned. There is a tendency to believe that money that one has earned is solely one’s own, and that tax is somehow “theft”. Whilst the anarchist within me would agree that governments taking money off individuals by force is theft, those who usually complain about this theft are merely being selfish.

No man is an island, and the cleverest banker who earns millions in bonuses, would not be able to do that in any sensible way without public services – police to protect their property, firefighters to try and save their property (and life), and health service workers to try and fix them up when their health fails. The more tax you pay the more proud you should be.

Perhaps we should encourage people to pay more tax than they are required to.

Whatever we do, we should remember that a society that pays some arsehole more money in a week than a nurse earns in a year just for kicking a pig’s bladder around a field has something wrong with it.

Banks, Government Intervention, and Capitalism

 Politics  No Responses »
Sep 202008
 

Lehman Brothers collapse, Northern Rock run, HBOS takeover. All were in theory good stable banks suffering slightly because of bad debt (US subprime) which may be why the financial markets are so twitchy about them. Even though the markets were in large part responsible for the takeover of HBOS (nothing apparently wrong with them – they just suffered an inexplicable share price collapse).

Now the US government is promising to throw hundreds of billions at the problem by buying up bad debt on top of the trillion dollars already used to protect the banking system. Probably a very sensible move.

But it is slightly peculiar that a freemarket government (and a particularly keen one at that) is bailing out private companies. Perhaps banking is a special case; after all we have seen a housing crisis in the US cause financial panic world-wide, even in industry sectors that have very little to do with banking. But if banking is a special case, it needs special treatment.

The traditional view is that intervention to save banks is wrong, because to rescue banks would encourage banks to take risks they would otherwise avoid. There would be some truth in that if in fact only banks with poor practices failed and the people responsible for bad practices did in fact suffer. Well, HBOS only “failed” (actually got taken over at a rock bottom price) because their share price collapsed for no good reason and because other banks may have been reluctant to lend to a bank in that situation. Lehman Brothers? Well their CEO isn’t suffering too much … he was paid a $22 million bonus last year, which is more than enough to last any reasonable person a lifetime.

Going back to the root causes of the current problems, we can see that it was initially caused by a great deal of irresponsible lending done in the expectation that with rising prices, there were huge profits to be made. Indeed the US is investigating numerous cases of fraud committed by the lenders.

Over the last thirty or so years, the trend has been to remove regulation from the banking sector to give it more freedom on the grounds that regulation was stifling the free market in its quest to make ever greater profits. As it has turned out the greed and irresponsibility of some lenders has shown that bankers cannot be trusted to behave responsibly without strong regulation or close supervision.

First of all, because banking is world-wide, any action by governments has to be done on a world-wide basis to avoid distortions in the banking market where a bank in a country with less stringent regulation would have an unfair advantage.

Secondly because bailing out bad banks has been and will always be so costly, banks should pay a higher rate of tax than other companies.

Finally each bank must have a supervising member on its board of directors who would attempt to identify bad practices and stop them.

US Writer’s Strike: Something A Little Odd …

 Politics  No Responses »
Feb 032008
 

There is something a little odd about the Writer’s Guild Of America’s strike for a better deal on “residuals”. In fact there are a couple of odd things about it. Not that I am against what they are trying to accomplish … anyone who wants to fight the big studios for whatever reason has me at least half on their side before I’ve started to think. And what they are trying to get sounds more than a little reasonable.

The first odd thing is that the workers are trying to get a bigger share of the profits. Not a share but a bigger one! Now there are other industries where workers can sometimes get a share of the profits, but it is very rare. Now why is that ? It would seem both sensible and fair to give the workers a cut of the profits … after all profits cannot be made without workers to make a ‘product’. But perhaps the bosses are too greedy to cut their workers in.

I am sure an apologist for the corrupt capitalist system will claim that entrepreneurs deserve to be rewarded for the great risk they are taking when starting an enterprise, and that share-holders also deserve a reward for the risk they take. Maybe so, but workers also deserve some of the reward.

Of course the writers of the WGA are already more successful than many other workers; one suspects this is because they are on the “posh” side of the pool of workers. Can you imagine coal miners getting a similar deal ?

The other odd thing about the whole issue is just how much support the WGA seems to get in their strike action. The US is not the first place one thinks of as places sympathetic to organised labour. In fact you would expect to see large numbers of US citizens frothing at the mouth with outrage at cheek of the workers. Perhaps this is again something to do with how writers are perceived as opposed to coal miners ?

Or perhaps the bosses in this particular case are so widely hated that even their natural supporters in politics (the Republicans) do not want to be seen supporting them.

Uk Housing

 General  No Responses »
Jul 112007
 

The UK government today announced tentative plans to encourage the building of low cost homes that would be affordable by ordinary people. The idea of affordable homes is definitely good in a country where most young people will probably never be able to afford a home of their own given that in many places average homes cost ten times an average salary.

However the interesting thing is not so much about homes, but about the failure of the capitalism system to provide a product at a suitable price point. Since WWII, the government has taken the lead in home building for the lower end of the market although the vast majority of government built homes were for rent (and in fact old council houses are still fantastic buys because of the build quality and relatively low prices). Since the early 1980s the government has pretty much left it to the private sector to provide housing. They have failed.

To demonstrate this, look at house price inflation … it vastly exceeds ordinary inflation. The Halifax House Price Index shows that since 1983, house prices have increased at a rate of 8% a year whilst ordinary inflation increased at 4.5% a year. Even more dramatically (and expanding on statistics given earlier), the ratio of house price to salaries has a long-term average of 3.5:1 whereas in 2006 this ratio was 6:1 and a later survey shows that in some areas 10:1 is being exceeded.

There are a variety of reasons given as to why house prices are so inflated including :-

  • Increased life expectancy means homes are released back into the available housing pool more slowly.
  • Greenbelt legislation means land for homes becomes more difficult to find and is more expensive.
  • An increase in the tendency of people to live alone means a greater increase in the level of demand for homes than would be suggested by the increase in population.

But the fact remains that the original Thatcherite theory that the market would provide has failed. In theory entrepreneurs would seek to find a way to produce homes in a quantity and at a price point to fill the gap in the market … cheap homes for first time buyers who could not otherwise afford to get onto the housing ladder. There is plenty of demand for such homes.

As an example, it should be possible to build much more densely in cities than is currently the case … not far from where I am writing, there are large amounts of land occupied by single-story garages and this in one of the most densely populated cities in the UK! Another example, why are there not property developers experimenting in alternate building strategies to produce homes cheaper ? For instance using pre-fabricated modules to provide a snap together set of prepared rooms would probably be cheaper than doing things as we currently do.

Not that I am covering all possibilities here … after all that is what the property developer is supposed to do. The one that comes up with a way to build cheap high quality homes in bulk will probably make far more money than the property developers who produce high value homes … “pile it high and sell it cheap”.

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