20-20 Hindsight - The Wisdom of Politics

If you had asked 50 random people in any High Street of any sizable town in Britain what the effect of a reduction of 2.5% off the rate of VAT would actually do to their spending habits, I think the answer would have been little or nothing.

Why then, several weeks after the rate cut was introduced, are Opposition Politicians like David Cameron and Nick Clegg only now questioning what effect it would have? Suddenly, with the benefit of Retail Spending data, which revealed exactly what any person in the street would have predicted that the rate drop had no effect, why now have these Politicians suddenly become wise and are haranguing the daft Ministers that introduced it?

Probability Theory

I watched an absorbing part of the Christmas Royal Institution Lectures yesterday where an able Professor showed that if you drop a small ball into a box which had a triangular set of wooden pegs to interrupt its path, the ball would randomly drop into one of eight slots. Do it again to an individual ball and again the next ball randomly chooses a slot. If, however, you suddenly drop a whole jar full of identical balls into the box, the balls would fall into the slots so that the height of each stack of balls in each slot exactly followed the pattern of the mean distribution of probability. In other words, individually the balls are random and hard to predict but when taken over a whole sample, they behave according to plan.

So applying the same theory to a minor 2.5% cut in VAT rate to an individual's spending pattern it seems you can't predict it but when an overall saving of £12.5bn is at stake, surely the great mass of people would spend according to plan - i.e. a lot more?

When Theory Does Not Mirror Reality

Probability Theory isn't actually applicable in this instance. Common sense would tell you that 2.5% off VAT would not do a jot to spending patterns, because the individual gain in savings is pathetic. After rising tax bills, fuel and energy prices, food bills, plus a fall in the available credit supply, people are looking to far greater savings to stimulate spending. Although John Lewis reported a good start o the Sales Season, anecdotal evidence on the number of people in town centres and the High Street generally show that people are simply not spending as much.

And that's because it is not about minor savings, it's about the lack of money generally and the uncertainty surrounding the future as the recession bites and hits jobs.

Reality has a habit of proving theories to be just what they are - theories.

The Progress of The Bail Out

Mervyn King has been pretty succinct. It is his belief that the £800bn so far pumped into banks is not enough to stop more toppling. In fact, he has alluded to potential wholesale public ownership of banks - a far cry from the theories of free market forces. The money pumped in has merely kept fat cat executives in a job and worrying about how they get the gravy train going again and to generate the vast bonuses of before. Meanwhile, those loiterers at the cash tills and backrooms get made redundant on mass as they are nothing more than hangers on.

What the bail out did was shore up a status quo, a way of life. These besuited people, while feeling some remorse allegedly for the mess we are in, still do not slash their own salary bills and get back to the core business of capital raising and lending, instead they want to continue along the lines of before. We spent £800bn to keep a slim population of elite executives in their jobs while a further 600,000 to 1 million people will pay with their job for their lack of talent.

I may be being a bit harsh and slightly left of the truth, but I don't see the economic benefit filtering through from this huge bail out - in fact I have seen pretty much the opposite. So when Darling and Brown gave out all the money we will have to fund, where were the tight stipulations on how it would be used and spent? The answer is they just followed what the Theory said in their old books. Spend and it will all come right.........probably?

Accountability vs Responsibility

For those who follow my Blog, I have consistently picked on themes of management in business and one theme is Accountability vs Responsibility. In the worst economic crisis since The Great Depression, I would like to see more than just theory used but some hard nosed common sense and the bearing of accountability for the mistakes - the ones so far and future ones. I cannot help thinking, after 10 years of flowering up our economic position thanks to a false boom based on unrealistic asset growth, that we are allowing a Government that so horribly got it wrong to try and rekindle the same bonanza.

Common sense says it cannot work again - so why are we letting them get away with it a second time?

A Nice Little Earner, Thank You Very Much

Have you ever thought of being a Non-Executive Director (NED) in the UK? It's tough as old boots to get in unless you are one of the old school tie brigade or risen nicely in a well named company.

Once you're in, it's equally tough to get back out and in fact many NEDs sit on the Board of between 7 and 10 companies while supposedly doing a day job.

It's little wonder that Royal Mail continues to languish in no-man's land when their sparkling Chairman, Allan Leighton, shuttles between 8 other companies and still gets home for tea each day.

Obviously, their roles are not day to day ones and usually require no more than 1 or 2 days a month if that, generally listening to well-prepared management-speak on the company performance beautifully phrased and presented to deflect any nasty questions about how the company is actually doing. The art of the NED is to look as interested as possible, ask a few non-specific questions, name drop some names you may or may not call in search of some contacts and have your free lunch.

And the money isn't bad. Depending on your 'glitter' factor you can command a very happy living as an NED - usually in the form of flat fees and some companies offer maybe a few shares or stock options.

So Get This

Electric power and fibre optic cable maker, Volex, has just proposed a long term incentive scheme for its NEDs. Principal beneficiary is the newish Chairman but a small host of other 'lottery winners' get at the trough and some with little or no experience of the power or cable market like an ex-HP UK Director who joined the Board last year. They stand to split a £2m pot if they can increase the share price more than eightfold in 3 years.

Quite how they are going to do this on a couple of days a month is very curious, but it may set a new pattern of NED bonanzas for those in the tight old network.

I am sure, in these austere times, the workforce will be delighted to hear that a bunch of well-paid NEDs will bear the fruits of their labours for so little commitment - but let's be honest, if there's no money in banking how else are the poor lambs going to earn their crusts

Funfzig lashes if you please, Judge

Max Mosley is some guy. If secretly filmed in a sordid sex session with a bunch of dominatrix paid-for ladies I would wager most people would be horrified and embarrassed, and possibly shrink from public life. It surely would be difficult to look loved ones in the eye and friends too - and goodness knows about work colleagues and business associates. Wouldn't we? Or am I living in a different world?

Not so Mr. Mosley. He actually turned the tables and made the whole thing a breach of his privacy. That takes some chin, but then again he's from a family not short of sticking its neck out and indulging in something repellent to most sane and decent-minded individuals.

What Are The Real Implications?

It was a bizarre affair that you couldn't have made up.

When a key witness did not show up the Judge in the case, Mr. Justice Eady, invoked the Human Rights Act to support legal action against the News of The World which had published the story and film to effectively expose his moral shortcomings, an age-old right of newspapers. Former Lord Chancellor Lord Falconer stuck with his old chum and said the Judge did the right thing. Interesting.

Mr. Justice Eady ruled that the paper had breached Mr. Mosley's privacy while he had taken part in a sado-masochistic sex session with five prostitutes, in the process falsely claiming that it had a Nazi theme - which confused all of us who actually looked at the thing. I wonder why Max and the ladies didn't speak in menacing West Wales accents - surely it would have had a similar effects or perhaps we should ask the Judge.

In fact Justice Eady claimed Mr. Mosley was entitled to privacy for consensual 'sexual activities (albeit unconventional)'. It seemed to omit the fact he paid the ladies for the consensual activities, but no matter.

Enter The Daily Mail

I don't have a massive amount of time for newspapers editors, I think they do regularly overstep the boundaries of privacy. But in this instance, frankly Mosley had it coming. Paul Dacre, Editor-in-Chief at the Daily Mail, at the Society of Editors annual conference contended most people would consider Mr. Mosley's activities to be perverted and depraved.

I would draw readers' attention to my previous blogs on Denial as a Coping Mechanism. Psychopaths use the power of denial to distance themselves from their actions otherwise they surely would be overcome by their enormity while we regularly use denial to cope with deal with bereavement or similar. Mr. Mosley uses denial to make us believe the problem is with a warped newspaper who think his privacy is more sacrosanct than his depraved activities.

Dacre rightly points out the particular Judge has 'Form' on such rulings and contends that he is effectively passing laws. Even the PM would have had to set out a bill and get it passed by both Houses, a passage which everyone knows is no 'slam dunk'. Not so Justice Eady, asserts Dacre.

'...one judge with a subjective and highly relativist moral sense can do the same with a stroke of his pen,' said Dacre. 'I would personally would rather have never heard of Max Mosley and the squalid purgatory he inhabits. It is the others I care about - the crooks, the liars, the cheats, the rich and the corrupt sheltering behind a law of privacy being created by an unaccountable judge.'

Do We Agree?

Clearly the power of the vote of motorsport's governing body for whom Mr. Mosley works, do not agree - they gave him a vote of confidence although it might be alleged Mr. Mosley was happy to have accepted lashes instead.

I do agree this has a an implication for newspapers and society generally. If we extend Justice Eady's judgement then we may never know if politicians like Mandelson, Mellor, Blunkett, Conway, Hamilton or others far worse are doing anything which we ought to know about. It does have implications - it's called trust. While sexual activities may be a private matter in general, if you are in a high profile position or indeed in any where your actions may be construed by others as odd, depraved or unusual, do not be surprised if you take a fall. This applies to everyone when you think about it.

But here's the rub. Max Mosley slipped out of the situation because he has money. A great deal of it. If an employee, whatever rank in a company, had a video of his or herself published on YouTube of even an embarrassing incident let alone sexually depraved act they might possibly be disciplined or worse if their employers got to know. While they might argue a breach of privacy, the fact is they took the risk knowing the repercussions.

As usual in life, just as Formula One getting dispensation to get cigarette advertising a special dispensation even when it is clinically proven smoking harms health and can kill possibly with a greater risk than driving an F1 car, money talks.

Conclusion

All senses of morals say that a man in his position has betrayed the trust of his employer, wife, family and friends but that doesn't mean a jot and it outraged a lot of people who cannot understand how he keeps such a highly paid, high profile, ambassadorial job in a sport we love - in year when we have a British world champion to be proud of.

It makes you think it's a sport, much like banking, that is unhealthily in the hands of very few people who make more money than we could imagine. Perhaps it's time they joined the real world and got some sense of values and perspective, then they may actually realise this wasn't about privacy it was about trust.

Storm In a Tea Cup

‘There’s us and there’s them,’ commented Noel Gallagher chillingly about the resignation of his friend Russell Brand in the wake of the lewd answerphone messages Brand and fellow presenter, Jonathan Ross, made to Andrew Sachs about the latter’s granddaughter.

Gallagher was assessing the intervention in the affair of people like Conservative Leader David Cameron and I assume the Prime Minister but also on the fact that it took several days for around 10,000 people to lodge complaints about the broadcast. Since, the figure has risen to 30,000 complaints but anecdotal analysis seems to put the complainers in the camp of ‘old fuddy-duddies’ while those who support Brand and Ross as young people who considered it at worst a prank by silly boys but still quite funny.

Us and Them

I find it hard to take sides. I guess as I grow older I am more aware of the thin line between good taste and bad in comedy. Recently I watched the irreverent Little Britain USA where Matt Lucas and David Walliams took their successful formula of unique British humour to an American setting. I cringed. The humour was forced and erred on the side of shocking in an attempt to take the familiar characters and situations into small and large town America. I visibly shrank as I saw the stereotypical suggestion that the new President (I assume it was meant to be Obama ) had a ‘Weapon of Mass Destruction’ in his trousers and baulked at the scene where the ‘Laydee’ who gave her dog a voice made it tell her to defecate behind a bush. Not exactly their best material.

Maybe I would have laughed a few years ago but I got the distinct uncomfortable feeling that this was the best of British humour being aired in the US and it was awful and painful. Curiously much of it was directed by ex-Friends actor, David Schwimmer, who had done a great job on the very British humour in the immensely enjoyable film, ‘Run, Fat Boy, Run’. Maybe Americans like it that way?

Ruining a Successful Formula

And so to Brand and Ross. Both have enjoyed great success in taking things to the limit. Ross’ ‘cheeky’ style as described by Tom Hanks in a great interview has both shocked and been hilarious. And it’s a combination that has worked even though you are constantly feeling at any moment he could offend people terribly. I have not endured much of Russell Brand, but generally he is funny too.

So it came as a great surprise that they had pushed the envelope just that little too far as perhaps the real skill in their humour was to know the boundary and flirt with it just enough to cause a gasp but never to go far enough to ruin the formula and really offend. Whether this was humour, a prank gone wrong or whatever wasn’t really the issue. The fact was they called a granddad and made lewd insinuations about his granddaughter. It had to be offensive no matter who they were calling.

Perhaps the real sin was that as a recorded program it was allowed to be aired. The judgement by the BBC editorial staff was pretty grim and accordingly, Lesley Douglas accepted responsibility and resigned, as has Russell Brand.

Accountability vs. Responsibility

In an age where responsibility and accountability has been disconnected particularly in Government and business, I think that both Brand and Douglas should be commended for taking it on the chin and stepping down.

Whatever side we all take and whatever we may think of Russell Brand, his humour, his apparent lack of contrition, his sense of taste, I think we should actually applaud his being accountable for his actions – and for that he gets my respect.

Contrast it to the bank executives, regulators, politicians, police chiefs and more of this world and how they avoid blame and accountability, at least one guy who overstepped the mark had the decency to accept the criticism, draw a line and resign.