Friday, November 10, 2006

The next generation of bloggers

Are you writing a blog yet?

I say yet because blogs are a growing trend and inevitably you will get tempted.

What will your blog be about? Music? Books? Sex??

Whatever it will be about, apart from a few close friends, very few people are ever likely to read it.

That isn't such a shame, since mankind won't be so worse off for not having ever read it.

What is a great shame, is the potential of blogs that is going untapped every day.


As I have written before (including below), blogs can be a powerful weapon of democracy.

They give people a voice they never had before. A voice that can be heard anywhere, everywhere, anytime.

But nobody is reading. Why?


There has always been too much material on the web for people to know what to read and what not.

As I said, this is a shame and it is also a problem.

But like all problems, it can be solved.


The chances are that today you will visit at least one of the following websites:

The New York Times;
or Youtube

What is common to each of these websites is that they are all an expression of someone's voice.

And we go to listen.

Unfortunately, there are too many voices to hear.

Fortunately, there are more voices than ever that want to be heard.

All we need to do is listen. But how can we listen to them all?


This week over 40% of the US population had their voices heard.

As we saw in the newspaper (or in other words, at one of the websites listed above), the election was a "referendum on the war in Iraq".

Was it?

What have people done to change anything about the situation in Iraq? More importantly, what are they going to do about it?

Surely, the election wasn't the only time the people of America had their say about Iraq?

Of course, it wasn't.

People have been standing outside Congress and other government buildings across the country and around the world each day, expressing their disagreement over the war in Iraq.

But nobody was listening.

Google has changed the way we use the web. How?

It has managed to break down a virtually unlimited amount of information into something that people can use.

Previously, much of what Google can find went unseen and unused.

But times are changing.

People demand more information and they now have a way to get it.

But what are they going to do with all this newfound information?

Hopefully, they will use it to form an opinion.

The next step will be to find some way of expressing this opinion in a way that people can hear.

At the moment, this happens when a polician goes on television or is interviewed by a newspaper. We can all hear what they have to say.

Now it's our turn.


While electronic voting is still in its infancy, it offers the way forward.

Eventually, everyone will vote electronically. Eventually, everything will be done electronically.

Once we have all entered the electronic age of voting, the opportunity for people to express their opinion about something will be huge.

Consider a substantial issue (e.g. going to war, raising taxes, changes to education policy) about which you have an opinion. You will either agree, disagree or be undecided.

If enough people can express their view about something then the chances of the outcome being alligned with the interests of the country are significantly increased.

It shouldn't have to be much more complicated than this:

Step 1: Read as many blogs that discuss a particular subject
Step 2: Engage in a dialogue with other people to try and find common ground
Step 3: Go to a (government) website and vote.
Step 4: If enough people (i.e. a majority) support the idea, you could vote for an alternative proposition.

Step 1 has been partly solved by Google Blog Search. Step 2 is already popular among bloggers and non-bloggers alike. Step 3 and 4 are still unavailable.

It's 2006. What are we waiting for?

Wednesday, October 25, 2006

Down for maintenence

I was going to call this posting Lazy voters get what they vote for, but blogger was unavailable for one hour during routine maintenence, so I couldn't publish until now.

This inspired me to change the title.

There is lots of attention on what will happen in next month's US midterm elections.

Will you be voting?

The chances are you won't.

Luckily (or not) for you, it would't make a difference even if you did.

The fact is, one vote every two years won't lead to something worth voting for.

What we need is for the voting system to go down for maintenence while changes take place that will make a difference.


Think about something you don't like, for example, fatty foods.

If one day you decide you don't like fatty foods and would prefer a low-fat diet, you will stop eating fatty foods and start eating more fruit and vegetables. What happens to producers of fatty foods?

Either they change or go out of business.

But what if we only decided to change our diet every year or two, or even four?

A lot of companies making fatty foods stay in business and we get fatter and unhappier.

Does this sound familiar? Well not in the real world.

In that world, people vote with their minds and their feet every day and this is the driving force behind much of the social changes we see take shape around us.

The fact that more and more people are eating healthier foods shows what sending messages to food companies can do. What a difference people can make.


While midterm elections are an opportunity for people to express their frustrations with their elected leaders it is not enough to affect what those elected leaders actually do on a daily basis.

At best, they are a chance for someone else to take their place and cause an equal or perhaps larger number of frustrations among the electorate.

The electorate are just like consumers and if they are not heard every day then what they say or do every two years or more will make absolutely no difference whatsoever.

And making no difference is becoming more risky as the stakes get higher.

Make a difference today and be heard.

Vote for blog!!

Thursday, September 07, 2006

India: the land where time stood still but everything changed

Time travel or intergalactic flight has always been the stuff of science fiction.

But in many ways, a machine that transports people across space and time has already been invented. It's called an aeroplane.

When I stepped off a flight to Bangalore, India it felt as though I had landed in both a different world and a different time.

If you ask someone on a street in India what year it is they would respond 2006, but they wouldn't think it was 2006. And neither would you.

When people talk about India, they usually mention its population of over a billion and that many of them now form an integral part of the way companies work around the world.

What people don't describe, or perhaps appreciate, is what it is actually like to live in the country.


If you consider India from the perspective of an average Indian, your perception of it would change considerably.

The values and way of life of the people don't seem to have changed for over half a century.

While Indian people are still courteous in public, the streets are utterly chaotic. As one local described to me, it must seem like a scene Charles Dickens would have witnessed in late nineteenth century England.

And while much of the British legacy remains it has failed to develop in the way Britain did.

Part of this is because of the late stage India joined in the race for economic development. Because of this, it feels the need to move at the currently hectic pace just to keep up with the rest of the world.

Another hurdle is the lack of effective and organised management of public systems. As mentioned, the streets are in complete dissaray, the air during rush hour in Bangalore is heavy with smog and most of the roads are filled with potholes or in many cases incomplete.

This is not the country or the city you imagine when you are told of an "IT hub" or the "next global superpower".


While India has much to be proud of it has equally much to be concerned about.

All of the achievements of the past 50, and especially 15, years are what India has to lose if it continues to fail to provide the necessary infrastructure necessary for a country to develop sustainably.

Put bluntly, before another shopping mall or office block goes up, roads and water mains should be put down. Without this, India will forever remain stuck in the past.

Thursday, August 17, 2006

Painting by numbers

Many 18-year old students in the UK will today be contemplating their future.

They have found out if they can go to university to study the subject of their choosing.

They may think that this is the most important day of their life.

In fact, the most important day of their life has already passed.

It was the day they made a choice. The consequences of that choice are already being realised.

Whether they can go to university or not is out of their control. Whether they can afford to go and study is also out of their control.

Economists understand this distinction between an action and the consequences of that action.

So, why not choose to study economics?


Economists have a great job. Let me explain why.

When you ask someone for advice, you usually do this because there is something you want to do but aren't exactly sure what that might be. So you seek the opinion of an expert.

In the case of medicine, the person you will ask has studied biology or chemistry and a number of years of medicine to be in a position to offer a suitable suggestion.

With legal matters you will ask someone who understands the legal system and how it affects your individual rights.

In both of these cases you seek an objective solution to a problem. There is a right and wrong response. The right response will lead to a healthy or just outcome. The wrong answer will lead to ill health or worse.

When you ask an economist for advice, you are not going to get a right or wrong answer. You will get a logical argument that helps you to understand more about the question you are asking in the first place.

An economist can't tell you how to make money. That's what investors do. However, an economist can give advice to an investor.

If an investor wants to know if the economy will deteriorate next year, an economist can explain why this might happen or why it might not. It is up to the investor to choose which of these arguments are the most convincing to them. After all, everyone sees a painting in a different way.

An economist paints the picture and others observe it.

Painting by numbers. How many other professions let you do that all day long?

Friday, July 14, 2006

Do current account deficits still matter?

Recently I attended a debate in London hosted by Reuters with the above title as the point of contention.

Not that there was much contention.

No direct answer to the question was offered by either participant.

This reflected both an unwillingness to address, and distint lack of understanding of, the issues underlining this misguided question.

It is not the deficits themselves that 'matter'. It's the debts they have spawned, in this case within the US household sector, that will eventually force through an outcome.


One attempt at a solution was offered: a 40% real reduction in the dollar.

Apparently, in the past few years we have already seen half of this decline and "all we need is for the US current account data to reflect this."


So, all we need is for the dollar to weaken and this will make US households spend less and reduce the current account deficit?

If only.

It's not the dollar that has gotten us into this situation and it isn't the dollar that's going to get us out of it.

The answer lies in Asia.


On the flip side of US profligacy is Asian thrift.

This counterparty to US excessive consumer spending is what has kept the whole party going for the past decade or more.

The party is over.

No longer are Asian central banks providing a free lunch to the US in the form of low interest debt. The bill has arrived. And it's called inflation.

Inflation is what has led interest rates in the US to rise to the level they are now. And it's these interest rates that will push US consumers into a level of indebtedness they haven't seen in years.

Once US consumers stop spending it will slow US growth to such an extent that the US current account deficit falls.

It's not the deficit that matters, but how it corrects.

In fact it won't take long before the US current account could be in surplus. An explanation of how that happens will be for another day.

Tuesday, January 03, 2006

The final act

Comedy often turns into tragedy, right around the final act of the play.

2006 will bring the last few scenes of the US Federal Reserve's Comedy of Hikes.

Will a new hero step in to save the day or will he arrive too late?

Time's up.


The bond market is literally bending over backwards to get the Fed's attention.

The yield curve is inverted.

This means that investing in a government bond for 2 years earns you a higher rate of interest than investing for 10 years.

Strange, huh?


Not funny

Before the yield curve inverted, the Fed relentlessly increased interest rates at a painfully slow rate. A quarter point here, a quarter point there.

No end was in sight.

But as is becoming commonplace in today's damn the future society, the light at the end of the tunnel was a truck heading straight for us.

It won't be easy to turn around in time and avoid the crash.

As the chart shows, when the yield curve has inverted, the stock market gets edgy.

What's worse, the economy either contracts or slows considerably.


Either a recession or a slowdown of the US economy now look inevitable. The latter much more than the former.

Of course, if that truck were to be carrying a load of explosives we might be in for even more trouble!

(English translation: the US economy is now more vulnerable to a recession following a terrorist attack than at any time since 2001).

Breaking news

It could have been so beautiful.

24-hour news: there whenever you needed it.

News on Demand.

The concept seems so old now. And tired.

News is broken.

It's time to fix it.


Humans have an insatiable appetite for news (especially bad news).

We read a newspaper everyday. Why?

To learn more about the world around us.

We want to learn about the world us.

We expect news every day.

Bad news: there isn't news every day!

Hold the presses, please!


Can you imagine a day when there isn't any news?

How would you know?

You wouldn't.

News can be whatever news companies want it to be.

Whatever sells is news. And we buy it, every single day.

This is wrong. This will stop.


When we stop buying news.

If you are paying for the news you receive it's like adding fuel to the fire.

The more money you pay to receive the news the more money news organisations receive to produce more news!

Thanks to all the 24-hour news that's been shoved down our throats over the years we've learnt the difference between information we need to know and news.

In a true "Information Age", we choose what news we want to read. And we don't pay anyone for it. (e.g. Google News).


When we look back on changes they make sense.

It's even more interesting to look at those changes while they're taking place (hint: this can be a great way to make a lot of money).

The past few years has seen news broken and bridges gapped.

The bridge is between ignorance and knowledge.

Thanks to 24-hour news, we know so much more about the world around us.

This education has been the raison dĂȘtre of 24-hours news. For that we are thankful.

But it's come at a price.

Now that it's served it's purpose, 24-hour news can stop and we, the masses, can move on to the next stage of enlightenment...