The Gervais Principle, Or The Office According to “The Office”

Although positivistic in its framing of people and I disagree that sociopaths are creative, even so it makes interesting reading around the life cycle of a business. Courtesy of Venkat @ RibbonFarm:

My neighbor introduced me to The Office back in 2005. Since then, I’ve watched every episode of both the British and American versions. I’ve watched the show obsessively because I’ve been unable to figure out what makes it so devastatingly effective, and elevates it so far above the likes of Dilbert and Office Space.

Until now, that is. Now, after four years, I’ve finally figured the show out. The Office is not a random series of cynical gags aimed at momentarily alleviating the existential despair of low-level grunts. It is a fully realized theory of management that falsifies 83.8% of the business section of the bookstore. The theory begins with Hugh MacLeod’s well-known cartoon, Company Hierarchy (below), and its cornerstone is something I will call The Gervais Principle, which supersedes both the Peter Principle and its successor, The Dilbert Principle. Outside of the comic aisle, the only major and significant works consistent with the Gervais Principle are The Organization Man and Images of Organization.

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I’ll need to lay just a little bit of groundwork (lest you think this whole post is a riff based on cartoons) before I can get to the principle and my interpretation of The Office. I’ll be basing this entire article on the American version of the show, which is more fully developed than the original British version, though the original is perhaps more satisfyingly bleak. Keep in mind that this is an interpretation of The Office as management science; the truth in the art. Literary/artistic critics don’t really seem to get it. I’ll have some passing comments to offer on the comedy and art of it all, but this is primarily about the truths revealed by the show, pursued with Dwight-like earnestness.

From The Whyte School to The Gervais Principle Continue reading

HBOS accused of misleading the public over £4bn rescue

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Courtesy of Tom Harper @ The Independent:

A highly questionable deal between a major British bank, the previous Labour government and UK financial regulators resulted in the publication of misleading information that led the public to invest hundreds of millions of pounds in the failing bank.

An investigation by The Independent on Sunday has found the Treasury and the Bank of England were funnelling billions of pounds worth of loans to HBOS (Bank of Scotland) when it raised £4bn – without informing potential investors that it was surviving on life support from the state.

In a desperate attempt to keep its head above water at the height of the financial crash, the bank issued a £4bn rights issue, where new shares were issued to investors, in April 2008. This outlined its financial position in a prospectus signed off by UK financial regulators.

However, HBOS failed to mention anywhere in the 194-page document – which is supposed to detail all possible risks to potential funders – that its balance sheet was so dire it was being propped by billions of pounds in state loans.

Legal experts and MPs expressed astonishment yesterday at the omission, which may have seriously misled the markets and appears to have been approved by Gordon Brown’s government, raising disturbing questions about possible collusion between UK financial regulators and a major British bank. Months after the rights issue, HBOS went bust, forcing taxpayers to cover a £25bn black hole in its finances.

Gordon Brown and Alistair Darling An investigation by The IoS can also reveal that the current Bank of England review of regulators’ historic supervision of HBOS – mysteriously delayed for years – is refusing to investigate the implications of the HBOS rights issue, despite it being central to its terms of reference. Continue reading

Why do the People of the UK Accept Financial Repression?

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It is amusing yet disturbing to see that the UKs media fails to mention the public debt of the UK but refers only to GDP and inflation figures, the ‘everything is awesome’ meme. Both of these numbers are manipulated but asking how the GDP deflator number is derived, what the actual number is and why does it increase GDP and lower inflation? This would be the start of a discussion.

When governments find themselves in a situation where they cannot pay off their accrued debt, they have a number of plays open to them. They will not relinquish power without a good scrap.

1.The first play is hyperinflation and this destroys the currency but also the debt, not ideal if you wish to remain in control.

2. The second is default, also known as the Argentinian option but this eventually leads to the destruction of the currency.

3. The third option is austerity, which is parroted by the political parties as necessary but if we have had austerity for 5 years why has public debt gone up by 80% since the coalition came to power? Currently standing at £1.4 Trillion with £1 billion per week being used to fund interest payments on the debt, £52 billion per year and rising. Austerity is a lie, it’s never worked but we’re all in this together, well most of us as you will see. As public debt has increased so much, interest rates are not going to rise, it’s counterintuitive and illogical for government to do so, they have another option.

4. The fourth and my personal favourite is financial repression, sounds like fun which it is. Repression hits both savers and wage earners, if inflation is higher than interest rates then savers lose out. If inflation is higher than wage increases, the wage earner loses out. If both of these scenarios play out, savers and wage earners lose out and those that hold the debt benefit. Continue reading

It’s Time to come Clean about our National Debt

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Courtesy of Liam Halligan @ The Telegraph:

Most pundits assume the general election will be fought against a strong economic backdrop. The Conservatives certainly hope that buoyant consumer sentiment, including continued rock-bottom interest rates and stable financial markets, will help them secure victory, and even an overall majority, in May 2015.
After David Cameron’s conference speech in Birmingham earlier this month, complete with a promised £7bn income tax cut, some 39pc of voters said it was the Tories “they most trust to manage the economy”, compared with just 19pc backing Labour.

It was in the afterglow of that speech that the Tories chalked up an overall poll lead for the first time in more than two years. A strong economy, then, will clearly be front-and-centre in any successful Conservative general election campaign.

It’s politically significant, then, that public sector borrowing figures released on Tuesday were truly shocking – so bad, that further pre-election promises of tax cuts are now much less likely. Such promises, as we just saw, are vital when it comes to keeping the Government’s electoral opponents at bay. If such terrible figures continue into the coming months, the Tories could even lose their reputation for superior economic management.

The economy is growing at 0.7pc per quarter, we learnt on Friday, far faster than last year. Yet public sector net borrowing over the first half of 2014-15 was 10pc higher than the same period in 2013-14. Borrowing in September alone was £12bn, a staggering 15pc up on the same month the year before. While tax receipts were up 3.1pc, revenue growth was outstripped by even higher spending. For all the talk of “austerity”, central government expenditure in September was 5.4pc above that during the same month a year ago, as welfare payments spiralled.

The Government, having already borrowed £58bn between April and September, is almost certain to miss its £96bn annual target by a mile. It’s now all but certain the UK will post a sixth successive year of triple-digit, billion-pound deficits, five of them under the Tories. Osborne has borrowed more in his half-decade as Chancellor than his predecessor Gordon Brown did during a decade at the Treasury. The Conservatives’ 2010 “emergency Budget” said the books would be balanced by next year. Official projections now suggest that won’t happen until 2018-19.

Continue reading

And The Gold Bank Appears: following Fekete, China is embracing New Austrian Economics as the foundation for the new International Monetary System

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Courtesy of Conscience Sociale blog:

You might already know that China aims for Official Gold Reserves at 8500 tonnes.

But you surely not know about the golden treasure embedded in the original opinion editorial by Song Xin, General Manager of the China National Gold Group Corporation, Party Secretary and President of the China Gold Association, 07/30/2014.

He spoke about the strategic role of gold, and new institutions needed for gold circulation, precisely in the logic based on New Austrian Economics that I’m using in my articles on Conscience Sociale and elsewhere since 2011. [articles in english ; en français].

His sentences about the GOLD BANK is truly one of strong evidence of what I called the ‘Grande Renaissance’ which will transform the whole world in the following decades (another one is the growing interest in Agile Democracy).

Chosen excerpts of Xin’s editorial [Translation by BullionStar], with emphasis mine :

“For China, the strategic mission of gold lies in the support of RMB internationalization, and so let China become a world economic power and make sure that the “China Dream” is realized.

Gold is the only thing carrying the dual mantels of a commodity as well as a monetary substance. It’s both a very ‘honest’ asset and forms the very material basis for modern fiat currencies. Historically, gold has played an irreplaceable role in responses to financial crises and wars as it comes to protecting a country’s economic security. Because of this, gold carries with it an honored and divine-given strategic mission in the ascend of the Chinese people and the pursuit of the “China Dream”.

The Important Function Of Gold.

Gold is the world’s only monetary asset that has no counter party risk, and is the only cross-nation, cross-language, cross-ethnicity, cross-religion and cross-culture globally recognized monetary asset. Gold is the last protection for a country’s economic security; it safeguards a nations sovereignty in times of crises. […] Continue reading

The Top Five Special Interest Groups Lobbying to keep Marijuana Illegal

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Courtesy of Ian Fang @ Republic Report:

Last year, over 850,000 people in America were arrested for marijuana-related crimes. Despite public opinion, the medical community, and human rights experts all moving in favor of relaxing marijuana prohibition laws, little has changed in terms of policy.

There have been many great books and articles detailing the history of the drug war. Part of America’s fixation with keeping the leafy green plant illegal is rooted in cultural and political clashes from the past.

However, we at Republic Report think it’s worth showing that there are entrenched interest groups that are spending large sums of money to keep our broken drug laws on the books:

1.) Police Unions: Police departments across the country have become dependent on federal drug war grants to finance their budget. In March, we published a story revealing that a police union lobbyist in California coordinated the effort to defeat Prop 19, a ballot measure in 2010 to legalize marijuana, while helping his police department clients collect tens of millions in federal marijuana-eradication grants. And it’s not just in California. Federal lobbying disclosures show that other police union lobbyists have pushed for stiffer penalties for marijuana-related crimes nationwide. Continue reading

Very quietly, the coalition tries to dismantle judicial review

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Courtesy of Ian Dunt @ Politics.co.uk:

When the local council gave permission to put up a 66 metre wind turbine next to the home of Chris and Julia Holder, it initially seemed they were powerless to stop it. Despite 1,125 letters of objections, the plans went through. It was judicial review which gave the couple the ability to fight the case in the Court of Appeal.

When the Department for Education stripped headteachers of their discretion to approve absences during term-time, a group of parents suddenly found they couldn’t afford to take their kids on trips overseas. They used judicial review to challenge the decision.

When Sefton Borough Council refused to fund care for elderly Ms Blanchard until she’d diminished her savings to £1,500, it was judicial review which ended up finding the policy unlawful. The decision forced 120 other authorities to review their budget decisions and saved vulnerable people from having their savings slashed to pay for care.

Judicial review sounds boring. You shouldn’t put it in a headline, as I have, because people won’t click on it. You can’t mention it across a dinner table because everyone will stare at their plate and wait for you to shut up. But it is one of the most powerful tools citizens have over their government. In almost every case of injustice by the Home Office I’ve come across – especially in relation to immigration and asylum – it is judicial review which allowed the most vulnerable people in the country to challenge the most powerful.

When Chris Grayling was found to have turned legal aid into “an instrument of discrimination”, it was because of judicial review. When two immigration officers detained, shouted at, bullied, harassed, imprisoned and conspired against an innocent Indian mother, how did her family fight the case? Judicial review.

So of course it should come as no surprise that the government is trying to dismantle it in the Lords this afternoon. They will do so not by banning it or anything as obvious as that. Instead they will do what the coalition always does: price it out. They will make it too expensive and risky for anyone but the most reckless and wealthy to contemplate. Continue reading

Buy-to-let boom: one in five homes now owned by landlords

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Courtesy of Richard Dyson @ The Telegraph:

Private landlords now own almost one out of five homes in Britain and they will buy a further million in the next five years, according to new research highlighting the phenomenal growth of buy-to-let.
The figure, along with other startling statistics about this increasingly popular form of investment, provides the latest snapshot of Britain’s changing housing market as fewer people own and more rent.

An army of two million private landlords now own and rent out five million properties, according to the report by mortgage lender Paragon. This means 18pc of households now rent from private landlords. And the proportion is growing, as investors continue to see property as a source of future income and profit.
The Government’s own figures suggest that by 2032, more than one in three properties will be owned by private landlords.

The report “18 Years of Buy-to-Let” drew on information from a range of sources and was published to mark the eighteenth year since the “invention” of buy-to-let. That was 1996, the first year in which mortgages specially aimed at private landlords were made available.

The number of properties owned via buy-to-let grew has almost doubled in the period, it said, and is now worth a total £1 trillion. Continue reading