Big Society: If it smells like BS…it probably is!


Call me a cynic if you like but things, literally, aren’t adding up and guess who’s going to end up paying AGAIN!?

“Big Society”: Just a stinking acronym…

The link to this article is shown below and it makes for some pretty staggering reading but I would also recommend the source “Duncan’s Economic Blog” tends to be a pretty informed read:

Change in debt by 2013 under Osborne's plansHere we can clearly see the impact of Osborne’s changes over the next three years: public debt down by £43bn BUT private household debt up by £245bn – five times as much.

This shouldn’t come as a huge surprise. In today’s Financial Times one city economist notes that:

‘With real household disposable income set to fall this year through a combination of flat employment, negative real wages, tax rises and benefit payment cuts, the only way we are going to see spending grow in 2011 is if the savings ratio falls.’

Given the tax and benefit changes Osborne is presiding over, households have little choice but to borrow more to make ends meet. And that is how Osborne plans to drive down public debt: by increasing the household debt that helped cause the crisis in the first place.

 

via Far from cutting debt, Osborne’s plans will make it soar | Blog | False Economy.

Please read this article

Revisited: Ulrich Beck on Complex societies and politicians

but don’t miss out on any of these…

Murphy’s Laws & Business Risk Management


The origin of the well known Murphy’s Laws may be traced to Edwards Air Force Base in 1949. A few of the most popular of these laws:

      • If anything can go wrong, it will
  • If there is a possibility of several things going wrong, the one that will cause the most damage will be the one to go wrong
  • If you perceive that there are four possible ways in which something can go wrong, and circumvent these, then a fifth way, unprepared for, will promptly develop
  • Left to themselves, things tend to go from bad to worse
  • Everything goes wrong all at once.
  • Nothing ever gets built on schedule or within budget.
  • Nothing is as easy as it looks.
  • Everything takes longer than you think.
  • It is simple to make something complex, and complex to make it simple.

Murphy’s Laws may sound funny but most of us will agree that they correctly reflect the reality more than simple anecdotes. Because of this, one may see behind Murphy’s Laws the hand of Nature. Consequently, we may attempt to come up with a “scientific interpretation” of these laws. There are thousands of Murphy’s Laws and we will not get into the details of any single one of them. However, we can state that they essentially point in the following direction:

Things tend to become more complex and not simpler.

In other words, Murphy’s Laws state that, when given a chance, complexity will go up rather than go down.  In effect, when we say that a “situation is bad” or has “gotten worse” we often imply that it has become more complex. Highly complex situations are difficult to assess and to manage and frequently spawn unexpected behaviour and this is why humans prefer to avoid them. In other words, Murphy’s Laws are saying just that.

via Ontonix – Complex Systems Management, Business Risk Management.

Rick Bookstaber: Human Complexity – The Strategic Game of ? and ?


It is so much easier when someone else…particularly someone with such a high profile…puts their mind to something about which you have thought and written so much. Especially when the vast majority of Mr Bookstaber’s writing echoes what you have been “SCREAMING!” to try to get such an important message heard.

What is Complexity?

Complexity can be either an annoyance or a boon, depending on one’s enthusiasm for tricky problems. We all know intuitively that complexity makes accidents both more likely and more severe. After all, any machine with many parts has more risk of having something go wrong, and with more interconnected mechanisms there is more risk that a single failure will propagate to cause the entire machine to fail. For markets, the accidents are market crises

via Rick Bookstaber: Human Complexity: The Strategic Game of ? and ?.

Basel III: Why bother when the prequel was a “flop”…


…and the warnings weren’t heeded?

The prophetic words in this extract weren’t written post crash but in 2001! The full report can be read here. Of course this was not the only warning.

image

Well before the banking collapse, the US National Academies/National Research Council and the Federal Reserve Bank of New York collaborated on an initiative to “stimulate fresh thinking on systemic risk”. The main event was a high-level conference held in May 2006, which brought together experts from various backgrounds to explore parallels between systemic risk in the financial sector and in selected domains in engineering, ecology and other fields of science. The resulting report was published late 2007 and makes very interesting reading.

So if the warnings were ignored…why and why have those who ignored them not been punished alongside those who, knowingly, flouted regulations in relentless pursuit of personal and Corporate reward at the expense of all else? 

WHO in their right mind thinks for one minute that more, different, regulation is ever (ever) going to be the answer???

More regulation is more complexity, more cost, greater fragility and less customer value…

Black Swans: A Corporate Governance “blind spot”

“…complexity breeds complexity, and is subject to diminishing  returns. Eventually the costs of increased complexity exceed the benefits” Prof John Kay

Regulators v Barbarian hordes

Last “gravy-train” to Clarkes-ville


This Government (like the last) continue to look like little boys trying to discipline their fathers as we all continue to feel the after-effects of the banking collapse. But, at least, they are picking fights that they can win (with their “little brothers”) by putting a stop to a practice that has added an increasing amount to claims settlements and, therefore, insurance costs

The government will announce plans for a major shake up of civil justice later today. Central to their proposals will be reform of so called “no win, no fee” agreements, which ministers say has led to spiralling legal costs. Muiris Lyons, president of the Association of Personal Injury Lawyers, and Justice Secretary Kenneth Clarke, debate the proposal. http://news.bbc.co.uk/today/hi/today/newsid_9439000/9439334.stm Read more of this post