Thursday, December 20, 2007
Thursday, December 13, 2007
Saturday, December 08, 2007
...That was the Worst Christmas Ever!
No, we're really looking forward to coming home. It's just that London Christmas is... a little weird now that we're here all the time.
First there's the blatant manufacturing of Christmas by corporate entities.
At our local grocery store for instance they've hired choirs to serenade us. Actual singing people dressed in black and holding sheets of music. Charming I guess. But a little awkward when its real people singing right as you walk by them with your cart, and not just an overhead recording.
The worst was last weekend when Grace and I went out and about. It hasn't snowed in London for close to a decade, or so I hear. Not on Oxford street, though.
If you look carefully you can see a little guy on the roof carefully manufacturing Christmas cheer by blowing fake snow out onto the street. Is this what we can expect in the future, if global warming takes off?
Finally, take a look at this sad sight.
There's been no snow for a decade and certainly not enough for sledding down the one or two big grassy hills in central London. So, what have they done? They've built a hill out of wood and covered it in a slick tarp. Have fun kids. Just £1 or £2 pounds for a chance to go sledding during Christmas time!
The big fake sledding hill is part of Hyde Park's "Winter Wonderland." It's got a big ferris wheel, a ride based on "The Snowman" and lots of little stalls selling Christmas stuff. But something looks out of place...
It's a haunted house.
For Christmas.
And that's Santa hanging from the rafters.
That was the worst Christmas ever.
First there's the blatant manufacturing of Christmas by corporate entities.
At our local grocery store for instance they've hired choirs to serenade us. Actual singing people dressed in black and holding sheets of music. Charming I guess. But a little awkward when its real people singing right as you walk by them with your cart, and not just an overhead recording.
The worst was last weekend when Grace and I went out and about. It hasn't snowed in London for close to a decade, or so I hear. Not on Oxford street, though.
If you look carefully you can see a little guy on the roof carefully manufacturing Christmas cheer by blowing fake snow out onto the street. Is this what we can expect in the future, if global warming takes off?
Finally, take a look at this sad sight.
There's been no snow for a decade and certainly not enough for sledding down the one or two big grassy hills in central London. So, what have they done? They've built a hill out of wood and covered it in a slick tarp. Have fun kids. Just £1 or £2 pounds for a chance to go sledding during Christmas time!
The big fake sledding hill is part of Hyde Park's "Winter Wonderland." It's got a big ferris wheel, a ride based on "The Snowman" and lots of little stalls selling Christmas stuff. But something looks out of place...
It's a haunted house.
For Christmas.
And that's Santa hanging from the rafters.
That was the worst Christmas ever.
Saturday, December 01, 2007
Workin' Nine to Five, Thinkin' 'bout Zimbabwe
Normally, I figure people won't be interested in what I'm working on, because economics is maybe not a general interest topic. I don't even talk about it - well, TOO much, - with Grace. But she gave me the go-ahead to write about this one, because she thought it was funny and demonstrated the sort of thing I'm doing over here. Even so, I should warn you it's a LOT of economics below.
So, on Thursday I was asked to write an article about Zimbabwe's new growth forecasts. For those of you who don't keep up to date with the latest developments in southern Africa, Zimbabwe is, well a mess, even by the standards of Africa (none of this is supposed to be funny, by the way). It used to be one of the richest countries in the continent, but things began to go downhill in the mid nineties. Normally it's a bad sign when an economy grows by 1 or 2 percent a year. That hardly keeps up with population growth. But Zimbabwe's economy started not just to grow slower than its population, but actually shrink. To be honest, I don't know for sure what happened, but when I've got some spare time at work I'll take a look at it. Anyway, the shrinking economy was a huge deal and people started rioting. So, to placate people the President, Robert Mugabe, seized the farms and redistributed them to the poor. Because Zimbabwe used to be a British colony, former colonialists owned all the farms - they basically stole them, so most of the population didn't think it was a big deal to steal them back.
The idea was, the poor would have farm land and be able to put food on their table. Then they would stop rioting. That was the idea, but it didn't work out. The ancestors of those colonialists may have stolen the land, but they knew how to run big commercial farms. The poor didn't and so food output from the farms dropped fast. Also, when President Mugabe seized the farms investors got very afraid that they would be next, so most cut their losses and left the country. So the economy shrank even faster. Things haven't really improved since. Every year the economy shrinks (it's about 70% the size it was in 1998) but the government still needed money to fund things (especially the wages of the military - you don't want an unhappy military in a region of the world where coups are frequent). Anyway, the government started printing money to pay its bills. Then inflation went crazy, since money was flooding into the economy but there wasn't any more stuff to buy.
Inflation in most developed countries is about 3% per year, but it was around 1,000% this spring in Zimbabwe. To fight inflation, President Mugabe declared inflation illegal - that is, he vowed to arrest anyone who was caught raising prices. Seems like a good idea, but again, no.
Since shop owners weren't allowed to raise prices, they just stopped selling stuff. The whole reason they had been raising prices was because the price of stuff from the wholesalers was going up. It didn't make sense to sell at a loss, so they just closed up shop. Anyway, there was no more official inflation, but the blackmarket was now open for business and the inflation there was shooting up.
Eventually they realized they had to give up this strategy because it just pushed everyone into the black market where the government can gather no taxes. When they gave it up, inflation jumped to 8,000%. It's actually probably a lot higher because statisticians can't find things to buy at any price, so they can't really calculate the inflation.
Anyway, I learned most of that Friday morning during my research for the article I had to write by 1 o'clock (when it would get sent out to subscribers via email). The government has now released a new budget and I had to write on it. (This part might be considered funny now).
The Zimbabwe government is forecasting inflation will drop to 2,000% next year and the economy will finally start to grow (by 4%). I had to evaluate these claims.
I started to read their announcement and my brain literally started to hurt. I'm serious. It was just incoherant waffle. They were inventing their own rules of economics to play by. Their game plan is to get people back in the fields and the factories and working so the shortages stop. Then the inflation will just... go away on its own. The authorities were predicting "the mother of all harvests next year." Despite that fact that they also announced, in the same speech, that imports of food would double next year. Despite the fact that the UN says 1/3 the population (4 million people) would need food aid next year.
And why could we expect "the mother of all harvests?" Because they had been pouring money into farming! The same money that loses almost all it's value within a few months! Great!
Also, they were going to cut taxes to ease the burden on poor - because people are really suffering from, you know, the hyper-inflation. All their savings, all their wages are worthless, and on top of everything they're being taxed! Even though the hyper-inflation is caused by the government printing money to finance its spending and, with less taxes and the same amount of spending, they'll have to print more money. But hey, the inflation will take care of itself when production goes up from the farms (or not) and the factories (they didn't even bother to give a reason why we could expect that). My brain really was hurting now. How could they think any of this was a good idea?
When you have hyper-inflation (like they do) you have to stop it. It's a really cruel phenomenon because it hurts savers most of all. I read an article where a reporter said the price of one banana now costs 15 times what she paid for 4-bedroom house 7 years ago. So if you had saved enough money to buy something like that, well, tough, now it was worth a banana. Why bother working, your wage is worthless in a few months?
In hyper-inflation, money becomes worthless and you want to get rid of it as fast as you can. The economy basically reverts to a barter-system. People just try to survive, which is not a good situation for healthy growth. Everyone's just trying to get whatever stuff is left - it's not really worth it to produce anything.
In case you're curious, the way to stop a hyper-inflation is to cut government spending (so you stop printing money) and reform the bank so people trust it and so it can stand independent form the whims of the government. Usually people also make new money - it's just inefficient when a banana costs 1.5 million Zimbabwean dollars. No sign of that happening.
Anyway, that was Friday morning. I wrote an article about 400 words and made a graph, then it got emailed away. It's a really interesting job for me. Too bad it doesn't pay very well. But good experience.
So, on Thursday I was asked to write an article about Zimbabwe's new growth forecasts. For those of you who don't keep up to date with the latest developments in southern Africa, Zimbabwe is, well a mess, even by the standards of Africa (none of this is supposed to be funny, by the way). It used to be one of the richest countries in the continent, but things began to go downhill in the mid nineties. Normally it's a bad sign when an economy grows by 1 or 2 percent a year. That hardly keeps up with population growth. But Zimbabwe's economy started not just to grow slower than its population, but actually shrink. To be honest, I don't know for sure what happened, but when I've got some spare time at work I'll take a look at it. Anyway, the shrinking economy was a huge deal and people started rioting. So, to placate people the President, Robert Mugabe, seized the farms and redistributed them to the poor. Because Zimbabwe used to be a British colony, former colonialists owned all the farms - they basically stole them, so most of the population didn't think it was a big deal to steal them back.
The idea was, the poor would have farm land and be able to put food on their table. Then they would stop rioting. That was the idea, but it didn't work out. The ancestors of those colonialists may have stolen the land, but they knew how to run big commercial farms. The poor didn't and so food output from the farms dropped fast. Also, when President Mugabe seized the farms investors got very afraid that they would be next, so most cut their losses and left the country. So the economy shrank even faster. Things haven't really improved since. Every year the economy shrinks (it's about 70% the size it was in 1998) but the government still needed money to fund things (especially the wages of the military - you don't want an unhappy military in a region of the world where coups are frequent). Anyway, the government started printing money to pay its bills. Then inflation went crazy, since money was flooding into the economy but there wasn't any more stuff to buy.
Inflation in most developed countries is about 3% per year, but it was around 1,000% this spring in Zimbabwe. To fight inflation, President Mugabe declared inflation illegal - that is, he vowed to arrest anyone who was caught raising prices. Seems like a good idea, but again, no.
Since shop owners weren't allowed to raise prices, they just stopped selling stuff. The whole reason they had been raising prices was because the price of stuff from the wholesalers was going up. It didn't make sense to sell at a loss, so they just closed up shop. Anyway, there was no more official inflation, but the blackmarket was now open for business and the inflation there was shooting up.
Eventually they realized they had to give up this strategy because it just pushed everyone into the black market where the government can gather no taxes. When they gave it up, inflation jumped to 8,000%. It's actually probably a lot higher because statisticians can't find things to buy at any price, so they can't really calculate the inflation.
Anyway, I learned most of that Friday morning during my research for the article I had to write by 1 o'clock (when it would get sent out to subscribers via email). The government has now released a new budget and I had to write on it. (This part might be considered funny now).
The Zimbabwe government is forecasting inflation will drop to 2,000% next year and the economy will finally start to grow (by 4%). I had to evaluate these claims.
I started to read their announcement and my brain literally started to hurt. I'm serious. It was just incoherant waffle. They were inventing their own rules of economics to play by. Their game plan is to get people back in the fields and the factories and working so the shortages stop. Then the inflation will just... go away on its own. The authorities were predicting "the mother of all harvests next year." Despite that fact that they also announced, in the same speech, that imports of food would double next year. Despite the fact that the UN says 1/3 the population (4 million people) would need food aid next year.
And why could we expect "the mother of all harvests?" Because they had been pouring money into farming! The same money that loses almost all it's value within a few months! Great!
Also, they were going to cut taxes to ease the burden on poor - because people are really suffering from, you know, the hyper-inflation. All their savings, all their wages are worthless, and on top of everything they're being taxed! Even though the hyper-inflation is caused by the government printing money to finance its spending and, with less taxes and the same amount of spending, they'll have to print more money. But hey, the inflation will take care of itself when production goes up from the farms (or not) and the factories (they didn't even bother to give a reason why we could expect that). My brain really was hurting now. How could they think any of this was a good idea?
When you have hyper-inflation (like they do) you have to stop it. It's a really cruel phenomenon because it hurts savers most of all. I read an article where a reporter said the price of one banana now costs 15 times what she paid for 4-bedroom house 7 years ago. So if you had saved enough money to buy something like that, well, tough, now it was worth a banana. Why bother working, your wage is worthless in a few months?
In hyper-inflation, money becomes worthless and you want to get rid of it as fast as you can. The economy basically reverts to a barter-system. People just try to survive, which is not a good situation for healthy growth. Everyone's just trying to get whatever stuff is left - it's not really worth it to produce anything.
In case you're curious, the way to stop a hyper-inflation is to cut government spending (so you stop printing money) and reform the bank so people trust it and so it can stand independent form the whims of the government. Usually people also make new money - it's just inefficient when a banana costs 1.5 million Zimbabwean dollars. No sign of that happening.
Anyway, that was Friday morning. I wrote an article about 400 words and made a graph, then it got emailed away. It's a really interesting job for me. Too bad it doesn't pay very well. But good experience.
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