Philip Whiteley's Blog

December 7, 2012

You’re doing it all wrong, politicians

Filed under: Uncategorized — felipewh @ 10:57 am

Recent events expose the weakness of the two-party system that many of the West’s leading economies have. The credit crisis and associated economic forces are close to overwhelming our elected representatives as they grapple with problems on a scale for which they are unprepared.

National Government debts keep rising, economic development is faltering, zombie banks keep their toxic assets hidden by opaque accounting, while skills and business development and leadership continue to be neglected. The set narratives are to pitch ‘old normal’ supply side remedies of cutting the state and making labour markets more flexible (right-wing) against the ‘old normal’ Government stimulus in the hope that the next tranche will somehow turn out to be magically fruitful and create enough investment and growth to make both new and inherited debt affordable (left-wing).

There is no meaningful debate if the biggest subjects are taboo, and no counter-balancing when the respective dominant interest groups have overlapping interests; exhibit similar behaviour; share some common beliefs, and maintain more or less complete ignorance of the importance and the nature of business leadership, from which ultimately most wealth derives.

Deregulated markets, instead of creating the efficient markets that were expected, have created destabilising credit bubbles that inevitably burst, and the ‘zombie’ banks. This is the cause of what is called ‘austerity’: it’s not a policy choice, it is a by-product of collectively living beyond our means. The ‘growth’ that we pretended we had was based partly on money that we never really had. Governments made this worse by making use of easy credit to spend on programmes to keep their electorates happy. So centre-left governments, in Washington, Paris and London, have not counter-balanced the hated markets, but rather encouraged them.

We get political pantomime like this week’s debate in the UK Parliament on the Autumn Statement. What needs to happen instead is the following:

  • End the ‘left-right’ way of looking at politics, and look at the actual money flows and needs of business and society.
  • Make business development, and the development of business leaders, employee skills and engagement, the top priorities for economic development.
  • End use of Gross Domestic Product. It doesn’t even measure growth, it hides liabilities, and it encourages short-termism. Similarly, scrap quarterly reports for businesses. Ditch completely all talk of economic ‘projections’, and start to understand economic data as nothing other than the by-product of human endeavour and behaviour.
  • Develop long-term decision-making processes into the Constitution, so that a single-term government is never again able to build up massive debts for future generations to deal with.
  • Do all of the above while protecting the most vulnerable.
  • Regard environmental protection as an economic opportunity, in which societies can become more efficient and self-reliant.
  • Buy New Normal Radical Shift, available from Gower Publishing in April 2013. <smiley face>

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