Nikita, Rahim and Cameron Voyage North to London to see what’s up with the West

On Wednesday the 19^th of June, 3 renegade Epsom Economists ditched the bucolic surroundings of the college in favour of the roaring urban environment of the London School of Economic's Old Theatre. The eventual spectacle was a coalesce of  an interesting , though rather sobering , analysis of the sad future for economic growth under current practices in the west and an indictment of present policy makers infatuation with Quantitative easing, which is the monetary policy in which governments increase bank liquidity and also private company liquidity by purchasing bonds.   The lecture far surpassed the minimum expectation of an eloquent plug of King’s latest book and was fully accessible even to myself as a young dilettante economist. 

Kings book and lecture succinctly detailed the changes in economic growth of Britain sectioning this into time periods across Kings own (half century long) life. The figures substantiating King’s worry for western affluence as he states between 1963-73 average growth per capita was 37%, this figure dwindling to just 4% between 2003-2014 , in spite of much technological  progress, notably the dot com boom. King did not forecast any imminent resurgence, citing fundamental flaws and misinterpretations of behavioral economics as well as an increasing reliance upon mathematical practice as the reasons behind government’s adoration of Q.E and inability to truly crack the problem of this dwindling growth in western countries, the US also sharing a low average of 2.5% growth between 2003 and 2004.  A notably damning highlight of present western policy was Kings humorous comparison between  policy maker’s infatuation with Q.E and Sigmund Freud’s description of the desperate man’s religious 'delusional' faith , something implausible  and sought out and substituted when there is no other viable hopeful solution. With monetarism tending central banks towards 0% base rates, leaving next to no room for central banks to manipulate the money supply to encourage lending and satisfy demands for growth, King alleges that policy makers have found a willful and misplaced hope in Quantitative easing, which he implies is throwing money at the problem and not tackling the heart of the issue which is far greater than that of a recent financial crisis  and what he preempts as the true heart of why western affluence and why the promises of future recovery many of us are inspired by are mendacious attempts to avert attention from the true economic quandary he believes we are in.

In the lecture was a few shots at Krugman and other economists regarding different takes on matters, just  to spice up the lecture. After all an economist rarely stands and speaks without taking a swipe at another economist.

Both the lecture and Book share the title

When the Money Runs Out: The End of Western Affluence

I’m sure that many of you reading this were unable to fit into the cramped and sweaty Old Theatre so for those of you that missed it, here is a link to the podcast and also a link to the book if you so please.

The book: http://www.amazon.co.uk/When-Money-Runs-Out-Affluence/dp/0300190522/ref=sr_1_1?s=books&ie=UTF8&qid=1363792647&sr=1-1

The lecture (on podcast): http://www.lse.ac.uk/newsAndMedia/videoAndAudio/channels/publicLecturesAndEvents/player.aspx?id=1936

picture from yalebooks.co.uk

EU places tarrif on imports of Chinese solar panels: Good or Bad?

An interesting article which highlights some of the arguments around trade and protectionism was released today. 

Tariffs placed by EU on imports of Chinese solar panels

The EU recently announced that it was placing import tariff's on Chinese Solar Panels, which it accused China of 'dumping' onto European markets.

 

Q: What is meant by 'dumping'?

 

Unsurprisingly perhaps, China has retaliated by placing tariffs on French wines. This case highlights the benefits and drawbacks of protectionism, and the arguments in favour of free trade. In this scenario both the UK and Germany voted against the introduction of solar panel tariffs, however were out voted in the European Parliament which meant that the tariff went ahead.

 

What do you think?

 

Q: Was the EU right to put these tariffs in place?

Q: Who benefits and who loses from this action?

Q: Can you think of a better solution which would resolve this problem for all parties concerned?

 

Post your thoughts and answers in the comments section below:

 

Read more at:  http://www.bbc.co.uk/news/business-22778022

An Inspiring Talk by Christopher Hyman

On the 26th of February (Tuesday) 2013, Epsom College invited the Chief Executive of Serco, Mr. Christopher Hyman to talk to us about the company he works in as well as his views and opinions towards having a vision, a strategy and a clear set of values in a business. 

It all started in 1994 where Mr. Hyman was headhunted by Serco to become the European finance director, and in 1999 he was made group finance director. In 2002, his hard work has paid off, allowing him to become the chief executive of Serco. Serco improves the quality and efficiency of essential services that matter to millions of people around the world. The work they do for national and local governments involves  the most important areas of public service, including health, education, transport, science and defence.

In his speech, Mr.Hyman started off with the importance of having a vision and a strategy. He mentioned that the difference between the two is that a vision is a focus, or an aim; whilst a strategy is how you're going to achieve that aim. He mentioned that in every business it is very important to have a vision and a strategy, and somewhere along the lines he seems to be hinting that having a vision and a strategy in life is also as important. In my opinion, the talk given by Chris Hyman was very inspiring in a sense that he was very passionate for the company that it came through his speech. He was willing and able to stick to his values and principles and at the same time encouraging social responsibility and leadership. He also picked up on teamwork and how the people around him helped and supported him to where he is today, and he mentioned: "If you want to go quickly, go alone; if you want to go far, take someone with you."

To me, he was very intellectual, opinionated and ambitious man with a right mindset in which he made me reflect on how I carry out the things I do in my life. For example, he talked to us about knowing how to choose between the wrong and the right, and having the integrity in yourself to make the right decision. He told us the difference between honestly and integrity in which honestly is telling the truth to others, whilst integrity is about telling the truth to yourself.  By doing so, we are able to look at negative situations with a positive outlook. In business, it is very important to have the right intentions as well as making the right and honest decision in which it may affect the people around you including our own self.

Overall, it was a fantastic night with an inspiring speaker, Mr. Christopher Hyman, who left me motivated to learn to look at situations in a different perspective as well as understanding that there is no substitution for hard work. I believe that Mr.Hyman has taught us all to be more responsible, self-motivated and passionate in the things we do. By doing so, we are able to channel that passion and motivation towards our careers in the future.

Sir Mervyn King at Eton College

On a crisp Thursday in January the Epsom College Economics and Enterprise Society were incredibly privileged to hear the former governor of the Bank of England, Sir Mervyn King speak at Eton College regarding the trials and tribulations of a post credit-crunch British economy.

A bustling lecture hall listened attentively as Mr King picked apart the causes of the 2008 crisis, its effects on today's economic activity, and what the future holds for Great Britain. The former governor spoke of how the crisis was not merely the fault of one party or another, but a fault of the whole economic system we rely on. Reckless and irresponsible spending and speculation leading to worsening budget deficits, coupled with a crisis of confidence has seen the effects of the credit crunch continue even today, stagnation, and macroeconomic imbalance. With regards to crisis response, Mr King demonstrated that the UK was experiencing a paradox of policy, where short term actions differ from long term goals, the government wishes for increased wealth in the long run, but this is not possible when government spending is cut in a contractionary fiscal fashion. When queried about the future of the British economy, Sir Mervyn King concluded that “the future is uncertain”, and thus he is joined by many, who believe we are still not out of the woods yet.

  

Gucci owner PPR's shares hit 12 year high 

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Shares in the French luxury goods firm, PPR, have risen more than 7% in Paris to their highest level in 12 years.

That follows a better-than-expected jump in earnings at the company, which owns brands such as Gucci and Yves Saint Laurent.

Net income rose 6.3% to 1.4 bn euros while sales jumped 20% to 9.7bn euros, driven in part by sales of its Bottega Veneta handbags.

PPR boss Francois-Henri Pinault seems confident of improving there operating and financial performances in 2013.

The results are a clear positive, showing PPR to hold one of the most balanced brand portfolio in luxury, which is currently outperforming peers like LVMH, one Paris-based trader told Reuters.

The company pointed out that about 40% of its global sales now came from emerging markets.

The company is made up of two main types of business - luxury goods and sports and lifestyle brands. 

Regarding the recent decrease in demand for luxury goods in China, experts say it is too early to tell whether last year's slowdown was over, but that initial signs were positive and that Sales had picked up in the fourth quarter of 2012. 

Last year, it bought the Chinese luxury jeweller Qeelin.

The source: http://www.bbc.co.uk/news/business-21471664

Euro PMs back large-scale fishing reform to save stocks

The European Parliament has voted for sweeping reforms of the controversial EU Common Fisheries Policy.

http://www.bbc.co.uk/news/world-europe-21358774

Impact of Multi National Companies (MNCs) on globalisation

This week 13EC4B have been creating a video on the impact of Multi-National Companies on globalisation.

Their videos are both creative and informative, covering many of the important point of the costs and benefits to economies created by Multi-National Companies.

Take a look and see what you think. Are there any other economic implications you can think of?

Vlad, Ralph and Connor

Bo, Ceclilia and Eric