Zombie economics

One of the most astute economics observers in the world today is John Quiggin, author of the outrageously honest book Zombie Economics: How dead ideas still walk among us, published by Princeton University Press. 

Professor Quiggin has become one of the rare economists still warning of the inherent behaviours and theories that the ‘financial industry’ adhered to – right up until they created the Global Financial Crisis (or, in US parlance, the Great Recession) –  are hardly dead yet.  In fact, they are rising from the grave again. 

Here is a particularly apt piece of wisdom from that marvellous book – published in 2010 when the GFC was alive and well and zombie economics should have been put to rest. It examines all that elegant and perspicacious economic stability theory that completely missed the onset of the GFC – and in fact helped cause it – and so Zombie Economics should be required reading in all good schools of economics and, perhaps, politics:

“For many years economists have worked like the anecdotal drunk who searches for his dropped keys under a lamp post because the light is better there. In the future, and particularly in macroeconomics, economists will need to look where the keys are and build tools that will improve the chances of success.” 

And this cracking analysis of the curious growth of the ‘financial industry’: 

“The growth of the financial sector since the mid-1970s has been staggering. The financial services industry’s share of corporate profits in the United States rose from around 10 percent in the early 1980s to 40 percent in 2007, at a time when the profit share of national income was also growing strongly …

“Volumes of financial activity grew at rates that defy any simple interpretation. The Bank for International Settlements has estimated the global volume of outstanding derivative contracts at around $600 trillion, about ten times the world’s total output. In the normal course of events, most of these transactions net out to zero, but even a small miss-match can produce losses or gains of many billions …

“Along with all this, the income and wealth of those working in the financial sector grew massively, as did their numbers. The salaries of financial sector executives outstripped those prevailing in other industries , at a time when executive salaries in general rose to huge multiples of the incomes of ordinary workers …

“But the political power of the finance sector does not depend solely on command over economic resources. After the economic dislocation of the 1970s, the financial sector became, in perception and to some extent in reality, the most important guarantor of economic stability and prosperity. Governments sought desperately to gain and maintain the AAA ratings issued by agencies such as Moody’s and Standard & Poor’s. The alternative was the political disgrace of a downgrading and the ultimate threat of capital flight …”

The Bottomline? Prof. Quiggin says it elegantly:

“The Global Financial Crisis gives the economics profession the chance to bury the ideas that led the world into crisis, and to produce a more realistic, humble, and above all, socially useful body of thought.”

That was written in 2010. How are our most respected and quoted economists going? How are our politicians, who listen to them, going? Back to our pesky Bottomline: How are we going?

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AUSTRALIAN business coach and author, Ric Willmot, is renowned as one of the most ardent collectors of impactful sayings in business and social wisdom.

He not only collects these sayings and distributes them, he is an astute applicant of those gems of wisdom as he incorporates it in his coaching and business courses. Here are some recent insights from Ric Willmot’s collection … 

“Strive not to be a success, but rather to be of value.”
— Albert Einstein.

“Start by doing what’s necessary; then do what’s possible, and suddenly you are doing the impossible.”
— St Francis of Assisi.

“What I like about sceptics is that in good science you need critics that make you think: ‘Crumbs, have I made a mistake here?’ If you don’t have that continuously, you really are up the creek. The good sceptics have done a good service.”
— James Lovelock.

“A life spent making mistakes is not only more honourable but more useful than a life spent doing nothing.”
— George Bernard Shaw.

“Anybody can become angry — that is easy. But to be angry with the right person and to the right degree and at the right time and for the right purpose, and in the right way —​ that is not within everybody’s power and is not easy.”
— Aristotle.

“Stupidity is a talent for misconception.”
— Edgar Allan Poe.

“Respect your efforts, respect yourself. Self-respect leads to self-discipline. When you have both firmly under your belt, that’s real power.”
— Clint Eastwood.

And, finally, some practical business advice from Ric himself:

“Buyers will pay more for better solutions, intellect, dignity, confidence, trust, and a smile.”
— Ric Willmot.

 

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EVERY now and then a technological innovation comes along that is both magnificent and magnificently named.

FarQR codes fall magnificently into that category. 

If you don’t get the joke, then you probably also have never laughed at directions being given to the Far Canal, strong advice to join the Far Queue, and the unfortunately named 1900s American sculptor, Phil McCracken.

Apparently the firm Sodyo is either blissfully unaware of the inference of its new brand, FarQR – or they are marketing, as well as digital, geniuses.

While it’s true that FarQR is a groundbreaking new QR Code system that is poised to “forever change the TV advertising business model” – it allows viewers to point their smartphone at the TV screen and scan a FarQR Code placed in programming that presents other information and deals on the smartphone – it’s most disruptive element is surely its own brand name.

Here is how one of the co-founders, Rina Alon, described Far QR in a media release: “Broadcasters place a FarQR Code on a commercial. The viewer points their phone to the screen, and interactive content from the broadcaster instantly appears on the phone from any viewing distance. FarQR Codes allow interaction between the two most important screens in our lives – TV and smartphone. Thanks to FarQR Codes, broadcasters can enrich content, engage and captivate the audience in ways they never imagined possible.”

And give everyone who gets it a laugh along the way.

Look out for these, and similar, expressions being added to the global lexicon …

FarQR stupid.

FarQR serious.

FarQR savvy.

FarQR legendary …

The shame for Australia is that the Israel-based developers of this new technology beat Queensland Rail to the naming rights.

Then again, they seem to be well ahead in the clever branding stakes and don’t much care what anyone thinks, or whether others get the joke or not.

The company name, after all, is Sodyo.

But Bottomline legal teams have been dispatched to try to beat this innovative information technology company to an even cleverer brand name … SodIT, of course.

www.sodyo.com

 

 

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WHO SAYS virtual reality is not yet up to scratch?

This inspirational home in Brisbane seems to prove that there is nothing virtually wrong with using the children’s construction computer game, Minecraft, to bring your home design dreams to reality.

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A CIGARETTE – that is, a smoking – company has been recognised as a global leader in climate change.

No, seriously, Bottomline will repeat the accolade, as all great WTF news reports (Editor’s Note: does that stand for World Tobacco Federation? ) are wont to do:

A cigarette company – in fact, Philip Morris International Inc, creators of Marlboro, the number one global cigarette brand.— has won international accolades for the action it is taking on climate change. 

The announcement was made in one of the most serious, official and no-tongue-in-anybody’s cheek towns in the world: Lausanne, Switzerland. So it’s gotta be as sound as a Swiss timepiece and a yodel put together.

To put this into context, a company built on putting carbon dioxide, monoxide and particulate tobacco smoke into people’s lungs – and then inevitably into the atmosphere – has been acclaimed by ‘climate authorities’ for helping to reverse dangerous global warming and probably apocalyptic climate change.

The official statement read:

“For the third consecutive year, the company is on the CDP’s ‘Climate A List’ for taking comprehensive action to reduce greenhouse gas emissions and mitigate climate change, and for its transparent disclosure process.”

CDP, by the way, was formerly known as the Carbon Disclosure Project. Even as an acronym of its former self CDP is pretty confident in claiming it is “the leading international not-for-profit organisation assessing the work of companies worldwide in the area of climate change”.

What happens is, “Thousands of businesses submit annual climate disclosures to CDP for independent assessment against its scoring methodology.”

Now, here are the facts as we seem to know them from the CDP news release:

Philip Morris International’s ranking places the company among the top 9 percent of corporations, known as ‘A Listers’.

And, get this, CDP’s Climate Change benchmark report is produced at the request of 827 investors with assets of US$100 trillion. (Editor’s Note: What the hell does that mean – and who … what … how much money?)

By way of explanation, for our Bottomline Editor, as much as anyone else, Philip Morris International’s head of Environmental Sustainability (Editor’s Note: usually we would present his title as Environmental Sustainability head, but that just does not sound right …), Andy Harrop was delighted to say:

“We’re very pleased to be included on the CDP A List again, and remain dedicated to playing our part in limiting global warming. Building on the reduction of 200,000 tons of CO2 since 2010 across our operations, and our continued action to promote sustainable tobacco production and environmental improvements across our value chain, next year we will announce a suite of new targets based directly on climate science.”

And there is more good stuff from Mr Harrop. He exhaled::

“PMI (Editor’s Note: That’s Philip Morris International, right? Not the Project Management Institute or Private Mortgage Insurance or Private Medical Insurance?) encourages strong action on climate change and supported an ambitious outcome to COP21 in Paris last December. With the Paris Agreement now entering into force, we look forward to working with others in facing the challenges and opportunities of climate change mitigation and adaptation.”

Now, here’s how all this works: The Climate A List is released in CDP’s report, Out of the starting blocks: Tracking progress on corporate climate action. This, CDP says, “establishes the baseline for corporate climate action and recognises that global corporations have started the transition towards a low-carbon economy, with some already capitalising on the opportunities this affords”.

Makes sense.

Such a report is used to show companies’ progress on reducing greenhouse gas emissions. This is in line with the goals of the Paris Agreement and companies will be tracked against this baseline in future annual reports by CDP. Beaut.

And as CDP points out, the 1089 companies it is working with globally would, if they could kindly stick to their plans, take 1-gigatonne of carbon emissions out of our beloved atmosphere (which, CDP cleverly acquaints to the same emissions as 291 coal-fired power stations in one year).

So, the bottom line is that Bottomline is not critical of any of that, in fact Philip Morris’s actions are surely to be applauded.

We just think it would seem incredibly ironic that a tobacco company may be heroically saving the world from carbon-emission induced global warming.

Maybe it will make more sense when the Marlboro man’s trusty steed canters to the high snowy mountains of Switzerland, where the real flavour is, then rears up and our cowboy draws nothing but a broad smile upon his lips, punctuated by a hi-tech carbon-free reduced-risk e-cigarette.

Ahhhh … Marlboro Country …

www.cdp.net

WORK-TO-RULE notice on an inoperable electric office glass door at Nundah, Queensland, puts a whole new perspective on industrial action – or inaction in this case.

 

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Bottomline has been  mysteriously sent a copy of the CV of David Brent’s – star of The Office documentary and now featuring in a film about his triumphant new life as a rock star, video hit maker and, importantly, salesman. Or, as he more modestly likes to call himself David Brent: Friend, Boss, Entertainer.

THE BRAVE people at stationery and office supplies specialists, Euroffice, have forwarded Business Acumen a peculiar – but timely – CV of a man who may or may not be the star of the popular UK ‘documentary’, The Office: David Brent.

Apparently Euroffice cannot employ him at this time, so are passing his CV ‘down’ to Australia in an effort to assist this man of immense and intense talent – who also happens to be starring in a feature follow-up documentary at the moment, David Brent: Life On The Road.

We, too, do not have a suitable role for Mr Brent at this time, so in the true spirit of his up-and-coming hit single, Equality Street, we present his CV here for the esteemed consideration of HR departments and other ilks Australia-wide.

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