Concentrating Power

As systems enable fewer people to deliver the same or better. As businesses look to save costs, mainly by reducing head count. Business (and government) become dependant on fewer and fewer people to run their operation.

In the 70's when typing pools disappeared as a result of computers and the ability for people to type their own letters and email previously paper memos. This didn't consolidate the power but dispersed it away from the typing pool. Deskilling it to some extent, as experienced typists applied knowledge of layout, punctuation and grammar. Early "word processing" had spell checking of sorts and now most do on the fly spell checking and grammar as well as offering suggestions on layout. 

So new, more efficient, systems don't always concentrate power, but others do. The ones that do are those that help deliver the product or service to the customer. Warehouse systems that used to employ a small army of people but now use an automatic robotic system. These requires little human intervention on day to day basis. These have concentrated the power from unskilled workers into skilled workers that build, operate and maintain them. 

Even in account departments where invoices arrive, are checked and paid automatically with humans simply auditing the system and dealing with exceptions, this concentration of power happens.

So if this smaller more powerful work force decides it wants more, what would be the employer's response? Until these systems become universal there are enough other skilled people out there to undermine any pressure that may have been exerted.

Undermining employees individual or collective efforts to get more (whether fair or unfair) has recently been the modus operandi of many employers especially skill levels are low.

However, reducing head count concentrates power into fewer people, but also desikills and reduces the labour pool able to do that job. At first the pool is large and those left in employment are thankful for a job and fearful of their security in any future cull so are compliant and undemanding, but will that be the case going forward? Should business build a contingency? Even if a contingency is developed it needs to be robust as the ability for a smaller group organise and become a collective is easier, so even a contingency may be undermined.

As business's goal is to improve margin and grow regardless of their employees needs there will always be a desire to reduce costs. The quickest and easiest way is to shed employees. Taken to its ultimate where the CEO presses a button on Monday morning and the factory churns out the product or service, without anyone else's involvement. The business is in charge of its destiny, without any employee dependency.

A company like this is just dependant on its suppliers and customers. There is no ability to cut cost other than reinvesting in the technology that allows the automation. Likely an expensive and risky decision.

What has happened is that power has been concentrated from employees into suppliers. There maybe some ability to undermine suppliers with other suppliers where the technology is relatively similar. But that would imply that the competition to the businesses products or services was similar too. And if there is some significant proprietary technology (patented). Then the business would be held to ransom to get a competitive advantage.

If every business runs the same, employing no one, then how do the customers/consumers get the money to buy these products?

Putting two and two together

Last week "they" (the government) announced that they are putting up the state pension age. The justification is "we are living longer and this retains the ratio of 1/3rd of our adult life in retirement."

The first thought I had was, when I started work in the 70's most people that retired were dead within two years. I don't remember anyone arguing to bring the retirement age down then. In fact pension funds were so cash rich that companies used to raid them for cash to put back into the business. That is until Robert Maxwell emptied the pension fund of the Mirror group and the law was changed.

Second thought came today, while listening to the news of the G8 summit on the need to solve the increasing numbers of people with dementia. Dementia is something that gets worse with age and as people are living longer the chances of getting dementia increase. If you need to keep people employed, paying taxes and acting like good little consumers you need them to be mentally able to keep going. So I'm not clear on the motivation here.

The odds are about 1 in 3 in getting some form of dementia before you die and are the same odds for getting cancer. While some unlucky sods with get both, that means that there will be very few pensioners well enough to enjoy their retirement and dent the pension pot.

Increasingly see that for most people life is unfair, not because they get ill (that is random chance), but that they have little choice in path of their life (dictated by politicians).

Dark matter Or anti-light

To every force, there is an equal and opposite force, A truth. We've are all told at school. A Star/Sun emits light so powerful it can push a planet into a different orbit. As a sun is round then these forces balance out and the Sun remains in.the same place, That doesn't explained the "opposite" force. Is this what Dark Matter is? The attraction that holds galaxies and solar systems together that gravity doesn't explain n 

High Voltage 2011

Was it better than last year?  In some ways yes in others no

Lest start on the positives - the real ale tent. So popular they struggled to keep up with demand. Excellent range of ales. Some I wont try again but others I go an extra mile or two for. They even had men wandering around selling Hobgoblin from barrels on their back. It didn't make sense that these hovered around the real ale tent in stead of wandering down to the main stage! Anyway it was far better than last year and I managed to sup 19 pints over two days compared to about 8 last year.

Food - The variety was good. The staple sausages, burgers etc and some Caribbean, Mexican selections and not forgetting the Ginsters pasty stall.

Having revealed I sunk 19 pints there is no surprise that the availability of XXL T shirts also struck a positive note compared to last year. There was more seating outside the bar tents too. In fact ignoring the music this was like a good natured fate.

Attendance was obviously down on last year and that was probably due to a less compelling line up of bands

Before I go on to the music I think it is worth noting that this time next year will be right at the start of the Olympics. If there is a High Voltage in 2012 it will be at a different time of a different location or maybe both...My suggestion is West London - Epsom downs - well away from the Olympics so no impact on transport, might attract a new audience, Only problem will be finding the port-a-loo's, I understand there will be shortage at this time.

So on to the music...

I my have missed some stunning performances but here is what I though of what I did see.

First up was Michael Monroe. Not a band I had heard before but OK,

OK in the sense that I would listen to them agin but not good enough to make me want to rush out and get a copy of there output. And just to show it was really rock and roll he pulled the anarchistic climb the stage stunt.

 Next up SKIN. A much more passionate performance that started to get those rock juices flowing.

For our 4th pint we decided it was too far to walk back to the real ale tent so opted to buy a pint of larger. My friend (his round) can't help chatting to the ladies and so it was while queueing for a beer.

Then came Rival Sons. Each band was better than the last.. or was that the beer working! No definitely very good. If you haven't heard them then you need too ASAP 

Waited for the start of Queensryche but wasn't expecting to be impressed and wasn't disappointed. So headed off to the Metal Stage via the Ace Cafe tent - This has got to be the hidden gem I have not been disappointed with the talent that they have managed to put on last year and this. Not always my cup of tea, but the talent is undeniable. No programme so I don'y know who I saw.

Via the real ale tent we arrived at the Metal Stage and caught the end of Ravens Creed

Ravens Creed stereotypical metal band. Lost of gruff shouting and every being played too make as much noise as possible with the base/drum/lead interjection. Not much more to add.

Then Trigger Finger.. Metal Stage? How many Metal band have you seen in a three piece suite?

  

To tell the truth there were hints of metal in their set but this was very much a good rock band. A well polished set. The singer worked the audience and everyone was taking part. Someone had recommended them to me. I must remember to thank them. I have already got their latest album.  If they hadn't have been that good I'd have made it for Thin Lizzy. As it was I was happy to catch the end on the Main Stage.

Thin Lizzy a well practiced performance that because of its classic set was simply good fun.

We headed for the real ale beer tent, but yet again as we passed the Ace Cafe tent and were drawn in to the strange world of Arthur Brown

I do like a bit of prog rock and this hit all the buttons form me the was one of the highlights of High Voltage 2011. 

We headed back to the main stage to catch Judas Priest which we probably would have stayed at apart from two things  1 - it wasn't that good,  2 - I'd heard that Electric Wizard had been caught up in the Norwegian bomb and shootings and that Rival Sons where going to do another set.

Not a completely new set but I only noticed two from the set they did early and they were so much better on the smaller stage. They looked more comfortable and they worked like a well oiled machine.  

Some 11 pints down we tottered off home ahead of the main crowd. 

SUNDAY 

Love Fungus ... I saw James May and thought this could be a laugh, but he wasn't in the band. They started playing then the singer opened his mouth and the noise had the same impact as standing next to someone with terminal halitosis. We reeled backward (almost spilt my pint) and headed for Metal Stage.  

Saw the first two numbers from the Furyon.

Tutti Frutti Ice Cream

I've wanted some ice cream like I used to buy as a kid.

In Battersea High Street there was an Italian ice cream shop which I remember. I new it as Notarianni's but it was Notarianni & Son
 

The window on the left had changed, but used to be a sash window that would slide up and from where they would serve the ice cream. They even had their own van that would tour the local streets during the summer. Mr Softee, Mr Whippy and Tonibell took over mobile market and sadly now the shop has now closed and this fantastic shop front has gone.

Back in the late 50's the ice cream was white and would often have a few crystals of ice in it. The vanilla was intense and my favorite. There were few flavours on offer, Chocolate, Strawberry,  but others I liked where Raspberry ripple, with it sharp fruit flavour, Tutti Frutti with its candied fruit and angelica and Rum & Raisin with its hint of warming rum and sweet juicy raisins.

Sadly Supermarkets no longer stock Tutti Frutti or Raspberry Ripple and rarely Rum & Raisin. Vanilla ice cream has become frozen vanilla custard. The move to soft scoop ice cream that now does not contain any dairy products (UK), let alone cream (in the US min 10% milk fat) has left me no alternative than to make my own. So I bought an ice cream maker.

The first ice cream I made I used the recipe that came with the machine. The result was some very nice ice cream, but the vanilla had to overcome the unmistakable custard taste and colour.

In this day I expected to be able to get a recipe of the internet and knock up a "proper" ice cream in no time. A look for Italian ice cream recipes simply gave me a load of same. basic stuff mainly from US people with Italian sounding names. However, I discovered that Italians call ice cream Gelato and it is different! but what is the difference. God this is so hard... The difference is one or more of the following: -

1. There is less cream and more or all full fat milk used (less fat the more intense the flavours).
2. There are less or no egg yokes (that gets rid of the colour and the custard taste)
• or there are more eggs (which doesn't quite make sense)
3. It is mixed/churned slower so there is less air in it and it is denser
4. Its not kept as cold as modern ice cream. 

Interesting (for me anyway) is that ice cream probably came about when the Arabs introduced sorbet to Sicily and they adapted to use milk instead of water. 

So now all that is sorted, just go ahead and make your ice cream..

OK for vanilla but what about Tutti Frutti?

Search and you'll mainly get US sites with all sorts of fresh fruit bananas, peaches mandarin, cherries and pineapple. None of that back in the UK in the late 50's they'd only just stopped rationing and fresh fruit was limited and expensive. It was also seasonal and no good for a consistent product.

The Tutti Frutti I remember was small pieces of sugary fruit and some green stuff called Angelica. Which I vaguely remember not liking, but can't remember the taste. The other thing that they have stopped in supermarkets is candied Angelica. (starting to become paranoid). I had to order Angelica online and not that widely available.

Now this may not be the best recipe, but it is the closest I got to the Tutti Frutti I remember (or think I remember) from Notarianni's. If I find something better I'll update the blog.

Ingredients:-

• 400ml whole milk
• 300ml single cream
• 85g - 100g caster sugar depending on how sweet you like it.
• vanilla extract or past if you want
• 25g angelica
• 50g glace cherries
• 50g candied peel (orange and lemon)
• 50g sultanas (or raisins)
• 75ml orange juice

Instructions: -

• Put the fruit (cherries, peel, sultanas) in a bowl and cover with orange juice and leave to soak for at least an hour. Chil after bad before adding to ice cream
• Place milk and cream in a a bowl
• add the sugar
• add vanilla if you want
• scrape out the beans and place them and the pod in the milk
• refrigerate until well chilled (about 30 minuets)
• prepare the ice cream machine and poor the mix in steadily while the paddle is turning.
• once the mixture has almost frozen, add the fruit and juice for the final minute or two
• put the ice cream (geleto) in a suitable container and place in the freezer for at least an hour
• if in the freezer for several hours take out and place in the fridge for about an hour before serving

Let me know how you get on.

 
  

Where has all the money gone?

This is so simple that I thank god the people that run the economy don't try to become brain surgeons or rocket scientists.

Some basics (apparently little understood)

Today over 97% of all the money used in the UK economy is created by banks, in the form of electronic bank deposits, with just 3% being created by the state in the form of notes and coins.

Banks are able to create money through the accounting process they use when they make loans.

When banks extend loans to their customers, they create money by crediting their customers’ accounts.

Conversely, when a loan is repaid to a bank, the bank deposits that were used to repay the loan disappear from the economy, as a result of the accounting process used.

The fact that the vast majority (97%) of the UK’s money supply is created by private commercial banks, when they make loans, means that there are certain simple rules that determine the amount of money in the economy:

1. If banks are making new loans faster than old loans are paid off, the money supply will increase.

2. If the public pay down old loans faster than they take out new loans, the money supply will shrink.

In short, as debt increases, money supply increases, and as debt is reduced, the money supply shrinks.

For most of the last 40 years case 1, above, has applied, and the money supply (and level of debt) increased consistently from 1970 until late 2008.

Following the onset of the financial crisis, banks panicked and severely restricted the amount of new loans they made. However, existing loans had to continue to be repaid.

Banks were not creating money by making new loans to compensate for the money that was disappearing from the economy as it was used to pay down old loans. This lead to a shrinking of the money supply, a fall in spending in the economy, and a more severe recession.

From September 2008 (the start of the financial crisis) and November 2012, £89 billion of money was withdrawn from the economy as businesses paid off debts and were unable to refinance existing loans. In addition, £35 billion of money was destroyed as consumers paid down existing personal loans (mortgages not included).

Quantitative Easing was a means of injecting new money into the economy to replace the money that was disappearing as old loans were repaid.

The flaws in this approach to QE

There was a critical flaw in the implementation of QE. The money created via QE was intended to replace the money that was disappearing from the real economy, as individuals and businesses paid down their existing debts.

Instead the Bank of England injected the money into the financial part of the economy, by buying bonds from pension funds and insurance companies. The Bank of England increase the quantity of money (bank deposits) in the hands of these financial sector firms and investment companies, and therefore increase the amount of money circulating in the financial markets.

In order for the money creation to lead to an increase in spending (growth) in the real economy, the deposits created through QE would need to move from the financial markets to the real economy. But Pension funds could not simply pay all this newly created money to their beneficiaries (pensioners), as to do so would have run down the value of the fund and left insufficient assets for future beneficiaries.

QE has pumped new money into the financial markets, where it has stayed circulating and inflating prices of financial assets (stocks, bonds etc.).

It was not realistic to think that this newly created money would ever reach the real economy or have an effect on employment, economic growth or inflation. The lack of any significant improvement in economic growth, despite the creation of such huge sums of money, shows that the money created has not reached the real economy.

But the value of stocks and bonds has increased to new heights?

Injecting QE into the real economy

If the money that was created via QE (a total of £375 billion) had been spent directly into the real economy, then GDP would have been boosted by up to 6% a year.

Would this injection of newly created money into the real economy have been inflationary? Initially, no, because it would have first created new demand that would have ‘soaked up’ the spare capacity in the economy (the 2.5 million unemployed workers, under-worked staff, part-time workers who want to be full-time, half-empty restaurants, factories working four days per week instead of five, etc.). The impact of this extra spending would have been, quite simply, a recovery from the economic recession.

Eventually the creation of money in this way would have become inflationary. However, the very point of QE is to create inflation. A rise of inflation in the real economy would have shown that QE was successful, but also that it was time to halt further QE.

How could QE have been injected into the real economy?

Four of many potential options are laid out below:

1. Through funding new government spending: for example, large planned infrastructure projects could have been brought forwards, schools could have been rebuilt, flood defences could have been built. All of these would lead to additional employment, further spending in the real economy and economic growth, as construction workers spend their salaries into the real economy and this money circulates.

2. By using money from QE to cover existing government spending and reducing taxes. For example, VAT raises approximately £100bn a year. By suspending VAT for 3 years, at a cost of £300bn, an extra £300bn would have been left in the hands of consumers and businesses. Assuming this was split evenly between consumers and businesses (a 10% fall in prices, and an additional 10% margin to the business), this would have increased disposable income, made businesses less dependent on bank financing to expand, and potentially led to job creation.

3. By distributing the money directly to citizens, as a form of ‘citizens’ dividend’. This money would have been used for spending (growth) and also for debt-repayments (helping bank solvency, reduced household debt so higher disposable income due to lower debt repayments).

4. By employing the unemployed. The £375bn created by the Bank of England was sufficient to employ 2.5 million people full time on the national average salary for approximately 5 years. Logistical issues aside, it should be clear that there were more effective ways of stimulating the economy through the creation of money than injecting new money into the financial markets and hoping this money would reach the real economy.