It is Obvious

Chris Rick has got altogether too much to say

The meaning of life

Posted by chrisrick13 on November 29, 2011

It is obvious: good news

I have been infected by reading some philosophers.  I’m sure that they say in a thousand pages what could be said in ten.  Occasionally I come across interesting words though often I feel there is something in what they say but I’m blowed if I can work out what it is.  I just read one who said that a circle is all the points equidistant from a stationary point all in the same plane.  I suppose a sphere is all the equidistant points but more definition might be needed.  This is basic geometry.  Then he goes on to say that if you draw a circle on paper you have something less and something more.  The line has thickness and is made of graphite.  It has colour.  It is not perfect and as it is drawn on paper it is not all in the same plane because paper is rough.  I have to agree with him…so what?  No women philosophers so far…perhaps they have better things to do with their time?

I read today that Hilton Hotels are going to build a load of hotels and create 1,500 jobs.  They did not say that there also will be a some temporary jobs building the new hotels.  But there is imprecision in those words.  There will be 1,500 new jobs in the Hilton organisation.  If one of their hotels that sleeps 200 people in an area where there are habitually 1,000 people in hotels each night, then if it fills its beds the hotels already there will lose 200 person-nights.  They will likely shed some workers or stop trading.  The number of people employed in hotel work in the area will not increase.  Hilton may be more efficient than the others, it might pay less or work them harder.  So the amount of hotel worker money in the area might decrease.  If all the hotels keep all their staff and Hilton employ more staff, then by one mechanism or another the wages of the hotel staff will decrease.  A step on the way down to a dollar a day wages.  What would be interesting is would be a statement that somehow the money was going to magic’d up get 200 extra people paying for hotel rooms in the areas where Hilton is going to put its hotels.

Nationwide published its house price survey showing a surprising strength as houses increased in price by 1.6% over the last year.  At the time when inflation (RPI) has been 5.6%.  Thus the value of the houses in real terms have reduced by 4% or about £6,600 for an average house.  Add in the running costs and your house has cost you a great deal.  I know it is where you live and the government has done all it can to keep the interest costs low but wouldn’t you have been better selling and renting?  You would have an extra £10,000 plus of buying power.  The point is that while it is better than house prices going down, it is not un-qualified good news.

It seems to work the other way with bad things.  Inflation at 5.6% (I like to use RPI because few of us live under the railway arches at Charing Cross) and wage inflation at 2% (ish).  So we are all poorer by 3% a year.  I say all because it is an automatic reducer of the amount that we spend…in adjusted terms.  So at a time when the government is trying to increase the enemy (growth) they have colluded in getting high inflation which give them a 3% handicap before they start.  Given that we are saving more and not borrowing and spending as much there is another 1% or 2% handicap.  That we have any growth at all is a miracle.

While I am at it I hear that the government is failing because it is not increasing growth.  I agree with the second half of that statement.  We can grow in a number of ways.  One is to make stuff and persuade johnny foreigner to buy it.  This at a time when said johnny foreigner is cutting spending and trying to get us to buy more of what they produce.  Another way is to build stuff from natural resources, consume it ourselves and raise our standard of living.  Trouble is that we don’t make ‘stuff’ any more.  I’m not sure how a government can get growth.  It can improve things by becoming more efficient which mostly means doing and spending less.  Anything else it might do means inefficiently meddling and reducing growth.  Putting thousands of people on the payroll, directly or indirectly does not do it.  So the next time you hear demands for growth ask them (in your mind) ‘how you going to do that then’?

When you see a circle next time, remind yourself that it isn’t as much as you might have come to believe it.

It is obvious: good news/bad news

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