British Society

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21
Jan 11

Thoughts On A King’s Speech

Sometimes a mainstream movie rises above the level of entertainment.  The King’s Speech is one of those films.

Plot Summary

King George V of England dies.  His son Edward VIII rules for a short time and abdicates in scandal.  The younger brother George VI, aka Bertie, who has suffered from a debilitating speech impediment all his life, is suddenly crowned King of England. With his country on the brink of World War II and in desperate need of a leader, his wife, Queen Elizabeth, arranges for her husband to see an eccentric speech therapist, Lionel Logue.

After a rough start, the two delve into an unorthodox course of treatment and eventually form an unbreakable bond. With the support of his family, his therapist, his government and Winston Churchill, the King overcomes his stammer and delivers a radio address that inspires his people and unites them for the difficult challenges ahead.

Life Lessons

This is not a movie blog.  One does not have to be a film critic, however, to see that in this movie the writing is brilliant and the actors spot perfect in their roles and performances.   What I can blog about, though, are the important life lessons in the story:

  • No One’s Life is Perfect – There is a naïve belief that other people’s lives are perfect.  Seen from afar they are richer, smarter, better looking, wittier, or more talented.  In reality, every person has a burden in life to overcome.  King George VI had a terrible stammer.  Wealth or privilege could not cure the stammer.
  • Wealth and Status Are Not Everything – An equally naïve belief is that if one has great wealth all problems will solve themselves.   The film revealed a dysfunctional royal family with distant parents, a domineering, insensitive father who derided his son’s speech problems, and an irresponsible brother who ultimately was forced to abdicate the throne.  Biblically, wealth is given for three reasons: as a test, as reward for meritorious behavior or as a punishment.  Wealth and privilege in the context of this movie appears to be at best a test and at worst a punishment.
  • It Takes Courage to Recognize a Problem – With the help of his wife, the future queen, Bertie recognized he had a speech problem and needed professional help.
  • Sometimes We Need to Look for Help in Unconventional Venues - Help in overcoming Bertie’s speech problem came from an unconventional source.   The professional who ultimately helped King George was not a doctor, had little accreditation and was a British medical establishment outsider.
  • There is No Substitute for Perseverance and Hard Work – Being a member of the royal family will not cure a stammer.  The commitment of both therapist and Bertie to grueling practice sessions and boring repetition ultimately ameliorated the problem.
  • Sometimes Pretty Good is Good Enough – King George VI/Bertie never became a brilliant orator.  With constant coaching he was able to deliver a “good enough” speech to rally his country at the inception of World War II.   In this instance, a perfect speech was not required, but rather just one with appropriate emotion, courage and resolve.

The Ultimate Life Lesson

What can we learn from this movie?  No one makes it through life without encountering problems. It may be illness, divorce, financial setbacks or a stammer.  It is not the fact that we have a challenge.  It is how we overcome the challenge.   It was not birth that made King George VI What can we learn from this movie?  No one makes it through life without encountering problems. It may be illness, divorce, financial setbacks or a stammer.  It is not the fact that we have a challenge.  It is how we overcome the challenge.   It was not birth that made King George VI noble; it was the nobility of swallowing misplaced pride, facing up to his speech problem and hard work to solve it.  To achieve nobility of spirit and outlook, perhaps it is a blueprint for all of us.

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17
Jan 11

Once in a While

Once in a while it is good to leave the country, see things from a different perspective, and talk to real people outside the United States. So Mr. and Mrs. Prophet have been in the United Kingdom for an after-holiday break.  As I write this we are at Heathrow and ready to return home to the USA.  We spent most of our time in London and Oxford, so take any generalizations for what they are worth.  Nevertheless, I wanted to share some thoughts since I last posted on January 4th.

-          London is noticeably safer than most US cities.  We took the Underground and buses late at night and in fairly deserted parts of London and we always felt safe.

-          The transportation system is superb.  Trains on major underground lines run every two to three minutes.  Train arrivals at each station are posted electronically and riders know exactly when the next train will arrive. Similarly, most bus stations electronically post the next bus arrival times.  Almost every bus stop is a weather-protected shelter with a few seats.

The tiled walls of the stations were scrubbed clean (my wife actually did the “dust on her glove” check), there was no grit or graffiti anywhere, and train platforms were free of litter.

-          Transportation is relatively cheap, and the system facilitates transfers between trains and buses.

-          In our Mayfair neighborhood, Bentleys, Rolls Royces, Aston Martins and Porsches were parked on the street.  There were no car thefts or break ins.

-          Since our last trip in 2008, shortly before the financial crash, the British economy is still suffering.  However, things seem to be turning around faster than in the United States.  Some upscale areas did have some shop closings and there appeared to be more items on sale, but restaurants were generally bustling and theaters were full.

-          Entrepreneurs I spoke with still have problems financing projects.  Some of these projects predate the financial crash.

-          Finally, public life in Britain is pleasant and orderly  Citizens queue up for theater tickets or buses.  Usual street level interactions seem devoid of obvious anger.

There is a general air of civility and helpfulness that has diminished in the US. The country may be borderline socialist, but it seems to work.

One of the major news stories in Britain was the shooting of Congresswoman Gifford.  The British press jumped on the shootings as one more sad example of the destructive and violent gun culture in the United States. I was able to compare the overseas coverage of Fox News, CNN, Sky News and the BBC.  While each media outlet had its own take on the shootings, I have formulated a couple of thoughts.

-          It is wrong to attach too much political or sociological import to the act of one lone gunman.  Liberals are attempting to score political points and that is wrong.

-          The US has a history of lone gunmen from John Wilkes Booth to John Hinckley, who tried to make a name for themselves by attempting or actually killing a public figure.

-           Misguided and unstable individuals commit anti-social acts, horrible as each act is.

-          The US political right is also wrong.  There is something wrong when an unstable individual can purchase a high-powered semi-automatic weapon and buy a 30 round magazine and empty the clip in a Safeway parking lot.

-          Further, if campaign rhetoric shows candidates in “crosshairs” and talks about “removing” opponents or calls them fascists, the violent imagery will reverberate in the mind of an unstable individual and lessen one societal prohibition against violence.

-          Finally, a society which has many well-trained veterans from Iraq and Afghanistan should think carefully about how those warriors will be reintegrated into society when education is expensive and jobs are scarce. In and of itself, whether an unemployed individual is ex-military or not, this is a dangerous breeding ground for future violent behavior.  Unemployed, angry individuals devoid of hope populate the devil’s workshop.

On a more positive note, preparations in Great Britain are well under way for the 2012 Olympics, and joyous posters already advertise ticket sales for the Games.  The upcoming royal marriage seems to have boosted British spirits.   Les Miserables is now entering its 25th season and is still rocking the house.  All is not too bad with the world.

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29
Sep 10

True Confessions: A War on Savers

We have lived through the war on drugs and the war on poverty.  We now have a British government official admitting that we now have a war on savers.  Deputy Governor of the Bank of England Charles Bean told pensioners to stop moaning about low interest rates:

Older households could afford to suffer because they had benefited from previous property price rises….They should “not expect” to live off interest, he added, admitting that low returns were part of a strategy.

Savers shouldn’t necessarily expect to be able to live just off their income in times when interest rates are low. It may make sense for them to eat into their capital a bit…. very often older households have actually benefited from the fact that they’ve seen capital gains on their houses.   See Savers Told to Stop Moaning and Start Spending

Post crisis, savers in Britain are now averaging interest on their savings of less than a quarter percent (.023) as compared to just under three percent (2.8).  The response of groups representing pensioners is swift and angry.

National Pensioners Convention spokesperson Dot Gibson said:

“For years we’ve been told to put money aside for our retirement only to find that interest rates have sunk and now we have to use our savings just to pay the bills.” See Savers Told to Stop Moaning and Start Spending

Save Our Savers spokesperson Jason Riddle added:

“The Bank was aware that there was a lack of saving before the financial crisis, but those who were prudently saving while others spent, are being heavily punished.”  See Savers Told to Stop Moaning and Start Spending

The article calculates that savers have lost 18 billion British pounds due to low interest rates.

Elites Gone Wild

The political and financial elites have spun the truth to persuade the public to accept post-crisis bank prosperity at the expense of the real economy. But the truth has a funny way of rearing its ugly head and reasserting the plight of Main Street at the mercenary hands of Wall Street greed.   Last week Charles Munger, Vice Chairman of Berkshire Hathaway and partner of Warren Buffet, spoke at the University of Michigan.  He attempted to justify the bank bailouts and corporate guarantees:

“You should thank God” for bank bailouts, Munger said in a discussion at the University of Michigan on Sept. 14, according to a video posted on the Internet. “Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies.”

“Hit the economy with enough misery and enough disruption, destroy the currency, and God knows what happens,” Munger said. “So I think when you have troubles like that you shouldn’t be bitching about a little bailout. You should have been thinking it should have been bigger.”  See Berkshire’s Munger Says Cash-Strapped Should ‘Suck it In’ and Not Get Bailout

Mr. Munger fears that bailouts would lead to another Adolph Hitler.

Mr. Munger’s contempt and disdain for the middle class and working poor came out later in the Michigan session:

To another who asked whether the government should have bailed out homeowners instead of Wall Street, Munger said: “You’ve got it exactly wrong.” “There’s danger in just shoveling out money to people who say, ‘My life is a little harder than it used to be,’” Munger said at the event, which was moderated by CNBC’s Becky Quick.  “At a certain place you’ve got to say to the people, ‘Suck it in and cope, buddy. Suck it in and cope.”  See Berkshire’s Munger Says Cash-Strapped Should ‘Suck it In’ and Not Get Bailout

I am OK, You are Not

Bean and Munger have demonstrated the arrogance of the elites.  Is it alright for Berkshire Hathaway, which is heavily invested in the financial markets through significant stakes in Wells Fargo, Goldman Sachs and GE, to be bailed out by the government?  Should we, the “little people,” 25 million of whom are unemployed or underemployed, just “suck it up?”

Mr. Bean’s recommendation for financial survival is to tap into the capital gains on one’s home.  How does a pensioner do that?  Borrowing with no income to support the loan?  Selling the home, paying tax and moving where?    Take out a financially sketchy disadvantageous reverse mortgage?   Alternatively, go out and get a job when there is massive UK unemployment?

Mr. Munger laments that the bailouts to the banks were not in even higher amounts.  Neal Barofsky, inspector general for TARP, estimated that bailouts and guarantees were in excess of $23 trillion.  See Credit Ghettos.  Mr. Munger, how much more should have been handed out to Wall Street?   Why does that type of behavior not destroy the currency and lead to Munger’s feared re-run of the Weimar Republic and Hitler?

Munger and Bean demonstrate how out of touch the financial elites in Britain and America are with the plight of the middle class.  It also demonstrates how pernicious zero interest rates are for the middle class, pensioners and savers in general.  We have discussed the immorality of zero interest rates extensively.  See War on Prudence,  Nothing from Nothing, Is the Administration Determined to Make the Elderly Poor?

Luckily, in the United States we have the ballot box to effect change.  Last time the elites in Europe said “let them eat cake” change took place on a scaffold with a guillotine.

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21
Sep 10

Clean Hands and a Weak Economy

“…America’s brightest minds have been abandoning industry and technical enterprise in favor of more prestigious but less productive fields like law, finance, consulting and nonprofit activism.” The Genteel Nation

England Forty Years Ago

In the early 1970’s I was a graduate student in London.  One of my fellow students was a 40-year-old senior government official specializing in trade.   His ministry was paying for his degree, as well as giving him a full year’s paid leave.  His father was a coal miner; he was the oldest of eight children.  His parents sacrificed to send him to public school (what we would call private school) and then Cambridge.  His siblings remained in the village and became coal miners.  He asked me what I intended to do after completing my master’s program; I told him that most likely I would return to the states and work in private industry.  He pointed out that “this was just not done” in England as government service was prestigious while business was a pursuit of the uneducated classes.  It was not work for a gentleman.

During the year, I also had lunch with the head of DCL, the predecessor company to Diageo.  Clearly a bright man from a lower middle class background, he never “went to university” or had any formal business training.  He apprenticed at DCL and worked his way up from the shop floor to management.   The prevailing attitude in England was that business was dirty and was not a worthy pursuit of the upper class.  The state of the British economy in the 1970’s was deplorable, a mix of inefficient state run enterprises, internationally uncompetitive private companies, and labor strife everywhere.

The Genteel Nation: America Today

Fast forward to the present day American economy, and consider some insightful comments by David Brooks of the New York Times.  Americans believe their country is in economic decline, faced with declining real wages and a jobless recovery.  We have missed a key cultural pivot point; that is, we have departed from the hard headed practical mentality that built the country.   Graduates from Ivy League institutions overwhelmingly select careers in finance and consulting.  Taking a manufacturing job in Akron would be “embarrassing” or “countercultural.”

Disdain for business is reinforced by the First Lady:

The shift away from commercial values has been expressed well by Michelle Obama in a series of speeches. “Don’t go into corporate America,” she told a group of women in Ohio. “You know, become teachers. Work for the community. Be social workers. Be a nurse. … Make that choice, as we did, to move out of the money-making industry into the helping industry.” See The Genteel Nation

We spawned a service economy of junior and mid level office workers.  To sustain a lifestyle comporting with a management image, we went into debt, produced too little and imported too much.  The economy adjusted “underinvesting in manufacturing and tradable goods and overinvesting in retail and housing.”  We now have a nation of too many mortgage brokers and too few mechanics, an explosion of communications majors and too few high-skill technical workers.  To the detriment of the nation we have a “gentility shift.”

We Need to Get Our Hands Dirty

In a 30-year span, I witnessed the dissolution of manufacturing in this country.  My job took me to the factories of upstate New York, Pennsylvania, West Virginia and New England.  Today many of those factories are empty or converted to condominiums, shopping centers or museums.  Left behind are job training centers, a WalMart, nursing homes and numerous drug stores to service an aging population.

During law school, I lived in a dorm with MBA students.   Unlike my English colleague with his fully paid government year-long leave, it was manufacturing companies, International Paper, GE, Ford and others, who were paying for their best and brightest managers to obtain an MBA and return to run a plant or a manufacturing division.

We have been gulled by the seemingly easy money of Wall Street.  We are woefully uneducated about the economy.  As I have pointed out, service and government jobs are a derivative of a productive economy.  See, e.g. It is All a Derivative of Productive Enterprise. We perpetuate many economic illusions.  One illusion is that we can all work for the government as suggested by our First Lady.  This advice will lead our economy to ruin.

It is time for our elite graduates to recognize the need to work in private productive enterprise.   When working for a manufacturing company holds as much allure as Volunteers for America, collectively we will all do better.

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31
Dec 09

Shredding the Social Fabric

A continuing barrage of headlines reveals even more government bailouts of private enterprise:

  • GMAC received bailout funds of an additional $3.8b on top of $13.5. (See BBC News report)
  • The Obama Administration on Christmas Eve gave Fannie Mae and Freddie Mac, two government sponsored enterprises, a “blank check.” Previously each of their bailout levels had been capped at $200b.  The New American reported that these two GSEs now have unlimited Treasury bailout funds until 2012.
  • After a fourth bailout this year, AIG received $180b from the Treasury.

Private enterprise awards of obscene amounts of money from the Treasury are indefensible.  No amount of government spin can mask this truth:  private businesses which made massive mistakes in lending and insurance practices are now being given unlimited access to taxpayer funds.  Why “unlimited” bailout funds?  And worse is the Administration’s unknowing and ambivalent response as to future bailouts: “we sure hope not.” This is Viet Nam war thinking applied to the current financial crisis: “We are so far into the bailout now, how can we stop?”

Harbingers of Social Mood

Issac Newton theorized: “to every action there is an equal and opposite reaction.”   Societies function because a broad consensus agrees upon accepted modes of behavior.  Importantly, these behaviors are mostly voluntary rather than state coerced.  The best example in the United States is the payment of taxes, as we have a largely voluntary compliance system, as the IRS cannot audit everyone. Two recent examples rips in the social fabric have appeared:

  • Shoplifting – Father Tim Jones, a parish priest in York, England, encouraged the poor among his congregation to shoplift to feed their families:

‘My advice, as a Christian priest, is to shoplift,’ he said. ‘I do not offer such advice because I think that stealing is a good thing, or because I think it is harmless, for it is neither.’

But he said it was less harmful that prostitution, burglary, or robbery; he further said that the desperate should target large stores rather than small businesses, and take nothing they do not need. He wasn’t, I think, trying to set off a crime wave in his native York. If he resembled any other thoughtful vicar I have known, he was just trying to dramatise the plight of the local, unglamorous poor for a congregation which might prefer the objects of his charity to be on another continent.  See The Guardian

  • Jingle Mail – Jingle mail is the new jargon describing a homeowner’s strategic default and abandonment of his home, in essence mailing his keys back to the bank. Much has been written about mortgage foreclosures.  For 2009 experts project 4.5 million mortgage foreclosures, with 1.5 million of these foreclosures from strategic defaulters.   When a homeowner realizes that the value of his house is significantly below the amount of the mortgage, walking away may be the best financial option.  This strategy would be even more appealing in non-recourse states like California. See Richard Benson, “Jingle Mail, Jingle Mail“

Consequences

Americans will not idly watch without reaction the bailout of private corporations at taxpayer expense.  The preferred reaction would be through electoral changes in November.  But even electoral changes can be subverted through lobbying and financial clout of big, politically connected corporations.  And neither Republicans nor Democrats are immunized against the lobbying disease. Just examine the bi-partisan lobbying of insurance, pharmaceutical companies and financial companies in the health care and financial reform debates.

Hopelessness forces individuals to undertake self-help remedies. Today it is jingle mail and shoplifting.  Tomorrow it could be refusals to pay taxes or credit card bills.  Perpetual institutional bailouts can only be a path to further rips in the social fabric and ultimately to, anarchy.

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