He’s done it again

So, having won the local elections, (though with less that 50% of the votes cast), Turkish PM Erdogan says he will “crush” the opposition. He just doesn’t get it. In a democracy, the elected have to represent all the people, not just the supporters, as Morsi has found in Egypt. The cheapest lesson learnt are though at other peoples expense, but it seems that for some, this is just an intellectual stretch too far.

It is particularly disappointing that this is happening in Turkey. One of the greatest men on the 20th century was Kamal Ataturk, who set that country on a course of modernisation and abandoned the arabic script for writing in favour of the latin form. His legacy remains in place whereas that of Hitler and Stalin have both been condemned to the dustbin of history. Erdogan, with his banning of Twitter and Youtube is a small fish in comparison, albeit a small fish determined to poison the water.

 

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My Biggest Deal

In 1999 I was working as a freelance salesman for a Taiwanese company with a factory in China. The factory had been a new start up for finished goods created by a company with a long history of producing textiles.

In my search for business I read all the relevant trade magazines (mostly sports related) and in one of these came upon a new start up, Kooga Rugby, based in the capital of UK Sports, Manchester.

Though lived in the south, I had no problem in driving north and meeting one of the directors. We got on well and soon I had them as a customer. With them I developed the then brand new helmet for Rugby and it was the sight of this on the field really launched the brand into the comparative, big time.

The business and the friendship continued and as part of their development they were able to raise finance from the venture capital company 3i’s. Part of the deal was the they would have the power to appoint a chairman, which they did. I met him a few times and talked to the founders and from this concluded that the chairman was going to take the business over, cutting the founders out.

I can’t be certain how I arrived at this conclusion. Though I have had a lot of experience of people I don’t think I possess any special powers but actually the founding directors agreed with me. What to do?

Of course the business was short of money and needed further capital but clearly this would not come from 3i’s who had just announced that their minimum investment would be £5,000,000 and not the £3,000,000 that had from 3i’s.

With this knowledge I approached a contact I had in corporate restructuring and formulated a plan to put the company into receivership and buy it from the receiver. I calculated that the deal could be made for £500,000 and set out to raise the money.

The richest person I knew was the boss of the Taiwanese company I was working for so I set out to meet him and propose a deal. The initial mistake I made was to brief him by email. He wan’t interested but didn’t say so. I flew to China but was told he had just left for Taipei. I flew to Taipei only to be told he was in Tainan. So I took a plane again, caught up with him and told him that we should buy Kooga, that I would put in £200,000 and that he should put in £300,000. After a few questions, he agreed and with the finance in place I moved the plan forward.

Reporting back to my soon to be partners in Kooga, it became their job to put the company into receivership, using my contacts as the people to do it. Not unnaturally, the Chairman was all in favour, figuring that he could get his corporate restructuring people in place and that then he could manoeuvre to get control. However, they resisted his efforts at persuasion, stuck with me and the rest as they say “is history”

I will tell the rest of this story, which is still unfolding, at a later date. Questions for clarification are welcome.Image

MAD MAD MAD

In an earlier post I mentioned MAD, the policy of Mutually Assured Destruction which controlled the nuclear powers in the ’70’s and ’80’s  and which now controls relations with Russia and Europe.  I’m just an amateur pundit so it was rather nice to hear a commentator on the BBC this morning, saying exactly that. Russia needs to sell gas and Europe needs to buy it. We are locked in a death grip.

All this of course refers to the situation in the Crimea, which today will be incorporated into Russia. The parallels with Hitler and the 1938 annexation of the part of Czech Republic occupied by German speakers is a clear one in that both were based on military power. The fact that the Ukraine exists outside of Russia at all is rather strange. The Ukraine, as an independent nation only came into existence in 1991. At that time the entire population were citizens of one country, the USSR. When that was chopped up, it became some thing of musical chairs for the population. They gained the citizenship of which ever country they happened to be living in at that time. Thus very many Russians became Ukrainian citizens whether they liked it or not. The rest, as they say, is history.

As I have mentioned before, the Russian weapon is Gas, in which they have an abundance. Other plans are being made to reduce the European  dependence on this vital energy source but in the short term, it is going to be very difficult if not impossible.

So here I am , following a very mild winter, thinking about next winter and wether we can manage with 30% less gas. I predict a big demand for electric heaters!

Which of course raises the next problem. Germany seems determined to stop using nuclear power in favour of using a mixture of polluting coal (hastening global warming), solar voltaic cells (pray for a sunny winter; (but wait, if it is sunny in the winter it will be colder! Damn.) and wind power. Without  gas from Russia, next winter looks pretty bleak in Germany.

Profit maximisation, a paradigm shift

I read recently that modern multi national corporations exhibit psychopathic tendencies. Now a psychopath is some body with a chronic mental disorder, more fully described as 

“The study of the psychopath reveals an individual who is incapable of feeling guilt, remorse or empathy for their actions. They are generally cunning, manipulative and know the difference between right and wrong but dismiss it as applying to them.

They are incapable of normal emotions such as love, generally react without considering the consequences of their actions and show extreme egocentric and narcissistic behaviour.”

Now I ask you, honestly, is it possible to apply this to a none person, a corporation? I read recently that it was, and more, that these companies are really psychopathic.

A corporation is a legal entity. It exists. It can own property, hire and fire workers and move its headquarters anywhere in the world. It is predicated (that word again), on one simple aim, profit maximisation. So strong is this motive that it is possible for the owners of a company (the share holders) to take legal action against the officers of the company if the are not motivated by that one simple imperative. Profit Rules! 

Now I have to say that if a person acted solely on that principle, they could well be considered to be a psychopath since being a normal human requires much more than the pursuit of money at all costs. A human lives in a society and is normally part of a family. It is generally considered that this provides great benefits such as security and services. People who choose to live outside society are definitely considered to be somewhat odd in the least, in some cases, dangerous. 

The problem is that this corporate pursuit of money has begun to infect society and this I think is a game changer (or as it is now know, a paradigm shift). Where once we had soldiers, we now have private contractors. Where one we had state/county prisons, we have private correctional facilities. Where once we had police, we have private security guards. And all of these people are working for one reason only, profit maximisation.

I’m a great fence sitter. As my mother used to say, if you can’t say something nice, don’t say anything. so I try to look for the best in people. However, when it comes to this new trend in society, effectively its destruction, I have to say I struggle not to shout from the roof tops “This is a disaster”. Effectively it legitimises psychopathic behaviour and gradually erodes the glue that holds our nations together. Let me quote one example. There are two ways of punishing offenders, custodial (prison) or none custodial, (such as probation, or community service). Now nobody would ever go into the probation service for the high salaries. Normally it is a profession reserved for those that care, and want to do the best they can. Like the police or government administration, it is called a service not a business and the rewards are not just money but security, some element of prestige and status. But now the plan is to make it into a business, so it becomes the probation business. Do I really have to spell it out? (OK, I will) “ This is a disaster”.

For those of you who are sceptical, I would draw your attention to a recent case in which judges took money in exchange for sending juvenile offenders to for-profit youth jails. In 2011, former Luzerne County Judge Mark Ciavarella was convicted of accepting bribes for putting juveniles into detention centres operated by the companies PA Child Care and a sister company, Western Pennsylvania Child Care. Ciavarella and another judge, Michael Conahan, are said to have received $2.6 million for their efforts. Clearly honour, prestige and security was not enough for them. Maximisation of profit in action!

Now you might say that the fact they were sent to prison (for an incredible 28 years) destroys my case. On the contrary. The fact that they did it proves to me that the disease is spreading and with further privatisation in the pipe line, only set to get worse.

Too many memories.

A well documented problem of old age seems to be memory loss. I suppose that we all live in fear of that affliction. Not knowing who you are, or who your family and friends are must be really disturbing, though probably more for the friends and family than the sufferer.

But now it occurs to me that a similar problem may well be not memory deficiency but memory excess. Too many memories, rather than not enough. A recent example occurred when I created a picture comment (posted here”- picturecomments.wordpress.com).

I took what I thought would be a universally recognised still shot from the really famous movie by the Russian director Eisenstein “Ivan the Terrible” If you are not a film buff and were born after 1950 you probably haven’t seen it. In place of the face of the medieval tzar, I superimposed that of the current Russian Tsar (sorry, I mean President) Putin. In place of the poor Prince I put the face of Mikhail Khodorkovsky and added the caption, merciful Tzar spares poor prince.

I thought this was pretty clever and sent it to a few friends but found that only one recognised the picture at all. For the rest it was completely unknown. In fact much of what my own character is built upon is unknown to the vast majority of the population.  My personality creating books, tv shows and movies have been superseded by more modern offerings (though not necessarily better, have you seen the re-make of The Wicker Man? Ugh). In a nutshell, I have become an anachronism.  The younger generation dances to a different beat and my memories are irrelevant.

Does it matter? Well actually I think it does, especially when we consider that well know aphorism penned by the famous (but only if you know him) philosopher George Santayana. “Those who cannot remember the past are condemned to repeat it”. It increasingly seems to me that modern politics thrives on memory loss. You might, if you are old enough, remember a time when there was a family “bread winner” usually the man, who could earn enough to support his wife and children. What do we have now? A western world where both man and woman must work to support the household. That’s real progress.

Clearly very many women like to work, and may even be more competent than the “man”. I don’t wish to criticise that at all, just point out that, where once a family could manage with one “bread winner”, now it really does need two.

aphorism

a pithy observation which contains a general truth

Political power from the end of a pipe.

Chairman Mao, (remember him?) is reported to have once said “Political power grows out of the barrel of a gun” which rather contradicts the widely quoted and comforting adage about the pen being mightier than the sword. However, things might just be beginning to change. Thinking back to 1956, it was guns which the Russians used to suppress the Hungarian uprising against the Russian imposed government and it was guns again which they used to put an end to the Prague Spring of 1968. However, in 2014, in the Ukraine, few shots were fired, and those that were seem to have failed to stop the popular uprising against, again, a puppet Russian kleptocracy. But of course in this case it is not the pen which has defeated the guns, rather it is the threat of something far more powerful, economic pressure.

Regrettably, it may yet end in tears. It is fortunate that we, in Central Europe are moving into spring. It will be about 8 months before winter bites again and when it does, it could well be the gas from the end of the pipe which has the real political power. In this, Russia and the Ukraine are locked in a deadly embrace. Russia needs to sell its gas to the West. They need the money. Ukraine needs the gas to keep, not just warm, but from freezing to death. Russia can use the gas as a weapon against the Ukraine, but the pipe to the west runs though that country, so they can’t actually turn it off. It’s all rather reminiscent of the cold war and the M.A.D (mutually assured destruction) doctrine. It worked then. We are, after all, still here. Will it work for these two countries? Probably, at least until the Ukraine develops some new energy sours (fracking perhaps) or until Russia increases the throughput of gas via the new Baltic route. It’s a race against time,  but which one will win?

For interests sake I include this link to the Olympic water polo match of 1956 between Hungary and  and Russia. This is really worth a view if you are not aware of it.  http://www.youtube.com/watch?v=MLoA5yLZ4l4

Economics as humour

Jokes are very common  among native English speakers but can be a bit difficult for those not brought up in the culture. Telling a joke and then trying to explain it rather spoils the point of it; never-the-less, and following on from my piece “money as comedy” I will try.

It goes like this. “If all the economists in the world were laid end to end they wouldn’t reach a conclusion”. If you understand, that’s great and I hope you find it amusing. If not, you need more lessons! Basically it is predicated upon the belief that no two economists agree about economics, something of a generalisation, but based upon the great number of economic theories that exist, none of which seem to work in the long term.

Being a simple sole myself I rather support the ideas of the economist John Maynard Keynes and his proposition, proposed following the  great depression of the 1930’s, that the world adopt a new reserve currency which he called the Bancor. Effectively this meant that there would be a currency made up of a basket of national currencies and commodities, (such as gold). Instead of this and following the economic victory they won in the second world war, the US dollar took the role, a role which seemed to have worked fine until the US inflation rate accelerated due to the Vietnam War. When European government complained they were famously told by John Connally, the  US Secretary of State for the Treasury, “It may be our currency, but it’s your problem”, which strikes me as somewhat arrogant, but who am I to judge.

This “Bancor” idea keeps on popping up, latterly in Russia, prior to that in China but it seems to me that as long as people (mostly Americans) still think that their national currency actually has some real value, its chances of actually happening are remote.

“Predicated upon” may be new to you. For clarification I give a dictionary definition here:-

(Predicate something on/upon) found or base something on: the theory of structure on which later chemistry was predicated.