The Money Tree Brigade from La La Land. Do they have a point?
So what were we frightened about? He may be “pig ignorant”, “kind of nuts”, “prone to childishness”, ”coarse mannered” or as one American commentator described him as “crazier than a shithouse rat”, but the fact remains that despite the politically correct liberal elite and the media generally enjoying having it in for him and even our own embarrassment at his tweets and gaffs, Mr Trump has softened his rhetoric and is presiding over an economy which is booming (I’m thinking about putting a tenner on his re-election). And that can only be good for the UK but it ain’t a bed of roses.
I heard a commentator on Radio 4 the other day using the phrase “grubby economic deals” referring to trade negotiations with the wider world following Brexit. I bet she has never put her house on the line in order to start a business and make a living or in order to employ people. I wish I could remember who she was as I would have named and shamed her. They come from the same place, the “money tree” brigade. La La Land.
As Bill Clinton put it; “it’s the economy stupid”. Without a strong economy we do not have the ability to pay for what we want. I tried to explain this very simply to my children when they got their first holiday jobs by paraphrasing Mr Micawber. “Earn £1 spend 95p result happiness. Earn £1 spend £1.05p result misery”.
Whilst both micro and macro-economics are, of course, more sophisticated than that, the point remains that the money either has to be earned before it is spent or there must be a genuine and sustainable way of repaying it if borrowed. And that will depend in no small measure on the successful “grubby economic deals” we are able to do with the wider world following Brexit and the “grubby economic deals” we in business do every day. But the Micawber principle or prudent borrowing doesn’t always hold, and the money tree brigade have a point when shown the appalling example of the unacceptable face of capitalism in the form of Carillion and the directors there having their noses in the trough. No accountability, no responsibility, no risk (no expertise as it turns out). Disgraceful. The point is that there are so few of these fat cats that feed the prejudice against business and so many genuine company owners who should call the likes of Carillion to account. Actually, the fact is that genuine business owners are working too hard to find the time.
The top 500 UK companies are, I am sure, shining examples of propriety and the importance of business cannot be overstated but whilst the likes of Carillion are dreadful examples of when it goes wrong, we must not take our eye off the ball as most people employed in the business sector are outside the top 500 companies in the UK.
The UK economy has proved remarkably resilient despite Brexit uncertainties, but growth has slowed compared with Europe and the US but that improvement, nevertheless is bringing inflation which has crept up to 3% in the UK and now it looks likely that interest rates will rise earlier than expected.
With the cost of borrowing likely to rise and the phoney war so far on Europe soon to hot up it has not been a great surprise to see greater concerns coming from international industry with bases in the UK and from commerce reliant on the European market. The public statements of politicians are aimed at their own sides and I don’t blame Michel Barnier for talking tough as he has 27 countries to keep in line but sooner now rather than later, David Davies will have to find a way of minimising the damage and sustaining confidence where it is clearly beginning to creek.
Mark S. Hanson
18th February 2018