Recently in Economics and the economy Category

My local authority gave me an Owl the other day. It's not a pest control measure, nor is it because I live in Hogwart's borough.
I got the Owl because my local authority, the London Borough of Southwark would like us all to save energy. Southwark was by one measure in 2005 the 19th most deprived borough in the England. It is one of the places in the UK where people spend a relatively high proportion of their income on heating.
Politicians are driven by, the possibility of being voted out. One of the tactics to avoid this is to give people money. In UK General Elections up to 1997, this manifested itself by cuts in the rate the Bank of England charged the companies that lend mortgages on houses. Local authorities don't have that kind of power, but they can tap into centrally funded projects that save people money, and give them things. Savvy residents look for freebies and batten on hard. Which is what we've done. So because I live in Southwark and Southwark wants us all to spend less on energy we get, help with loft insulation, radiator panels, highly efficient fluorescent light bulbs, heavy-duty balloons to shove up one of our unused chimneys, and the Owl .
The Owl monitors your instantaneous use of power. It clips onto the electricity supply near the fuse box and transmits the power you're using to a separate display, which updates about once every10 seconds through the day.
The Owl is both fascinating and terrifying. You turn on an old-fashioned light bulb and the number goes up a bit, you make a piece of toast and the number goes up considerably, you decide to tumble-dry some clothes. A cup of tea will not in this situation steady your nerves because using an electric kettle makes the numbers on your Owl blur.  Don't roast a chicken, bake a cake, boil potatoes and peas on different rings and look at the Owl. It is hard to believe that aluminium smelters could use as much energy.
Is the Owl affecting life at home? Yes it is, we turn lights out, we close doors, we huddle closer to our newly reflecting radiators during the coldest UK winter since 1963. One of us has even put on a woollen sweater, and filled up some draughty cracks. We are learning too, the Owl may be scary, but the Owl is our friend.   

By: Clay Boswell

The credit crisis has put a spotlight on the flow of money from the US to China - and back, through the purchase of US Treasury bonds. The relationship seems to defy logic, as if one country were paying another to buy its products.

I'm reminded of a science project I did in the sixth grade, a modified balsa wood airplane. Like other such craft, it had a propeller at the front. Typically, the propeller would be powered by a wound rubber band, to which it was directly attached. (Get your own here!) My innovation was to eliminate the rubber band and connect the propeller, by means of a crude gear, to a paddle wheel further back. No child prodigy, I imagined that air flowing past the airplane would spin the paddle wheel, which would turn the propeller, which would pull the airplane through the air, which would spin the paddle wheel, which would.... You get the idea.

Mrs. Birch, the school principal, complimented my imagination, sweet lady. "But you know, of course, that perpetual motion is impossible," she added. Yes, I nodded cautiously, wondering what "perpetual motion" meant.

I'm no longer a stranger to the laws of thermodynamics. Indeed, I often see analogous relationships in unlikely places - such as America's trade deficit and debtor status. The economy isn't a closed system, however, and new wealth is being created all the time, sometimes even more quickly than it is destroyed. Likewise, the long-term trend in living standards does not suggest entropic decay.

Still, there does seem to be something fundamentally unsustainable going on. The Chinese government has been worried for some time. Last week, a former vice-chairman of the Standing Committee and the current head of China's green energy drive, Cheng Siwei, said Beijing was not pleased that the US Federal Reserve had resorted to buying US treasury bonds, essentially printing money to buy its own debt. "If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard," he was quoted as saying in the UK's Daily Telegraph.

That's pretty much what happened to my airplane: it fell hard. But that's science, right? With the economy, on the other hand - the stakes are a bit higher. And yet, I wonder: Are we like test pilots in a jumbo jet designed by a child?

For five days each year, a few fields in a quiet corner of the UK's West Country becomes a throbbing city of 180,000 people. The Glastonbury Festival of the Performing Arts is a national institution. Started in 1971 by a farmer, Michael Eavis, who had an interest in music, it has grown to become Europe's biggest festival.

Whilst there this year, I started thinking about the organisation and economics of this event, plus its wider impact on the local area and on demand for chemicals.  

At a "meet the organiser" question and answer event, a rather stoned-looking man stood up and said he thought the festival had become a model for a new way of living. He was referring to the "Green Fields" part of the event where people seeking alternatives to conventional lifestyles.

Eavis didn't seem too keen on that idea, but said the festival had been called "the acceptable face of capitalism" because he donates around £2m each year to charities such as Greenpeace and WaterAid.

The local economy must benefit hugely from the festival. There were several hundred stalls selling everything from food to clothes to the "ShePee", which I'll leave to your imagination. Of the 180,000 people attending, 40,000 are workers: a major boost to the economy.     

The huge number of tents covering the site must also stimulate demand for the UK plastics industry: or more likely, China's plastics industry.

"Green" is certainly a key theme of the event. Woe betide anyone trying to avoid the queues at the toilets by hiding behind a bush or hedge. A team of "green police" (see video) wearing British Bobby hats coloured green patrol the site, blowing their whistles and chasing offenders.

The figures for waste produced are staggering. In 2008 the festival recycled 49% or 863.32 tonnes of its waste. This included 193.98 tonnes of composted organic waste, 400 tonnes of chipped wood, 9.12 tonnes of glass, 54 tonnes of cans and plastic bottles, 41 tonnes of cardboard, 66 tonnes of scrap metal, 11.2 tonnes of clothing, tents, sleeping bags, 0.264 tonnes of batteries, 10 tonnes of dense plastic and 0.25 tonnes plastic sheets.

This year the festival also used a fleet of New Holland tractors, all capable of running on 100% biodiesel refined from used cooking oil sourced in the UK.

This year I saw fantastic performances from Prodigy, Will Young, Tom Jones and Neil Young plus DJs like Pete Tong and Deadmau5. Don't tell any of my cool friends, but I also loved Australian legend Rolf Harris!

 

Written by Mike Nash

Two weeks ago, the general mood at the International Fertilizer Industry Association (IFA) annual conference in Shanghai was, for me, established on day one. I was having lunch with a French fertilizer distributor, who when not moodily pushing round the food on his plate with his chopsticks, was making monosyllabic utterances about the pretty dismal state of the fertilizer market in general, and his little corner of it in particular. A few Gallic shrugs later, I'd had enough. It was a long lunch.

By the end of day 1 I was pretty miserable too. And I had two more full days of meetings like this. 

I could understand the misery. Last year, everyone was making pots of cash on the back of booming fertilizer prices, driven by high crop prices, and the mood was buoyant. Now, since the collapse in the financial markets, farmer credit has dried up, crop prices are uncertain and the fertilizer market has seen a near collapse. 2008 was already being consigned to history as a never-to-be-repeated aberration.

It was perhaps the spirit of this masochistic misery that I subconsciously allowed the rather scruffy looking man sitting behind me in a hotel coffee shop to expertly steal my wallet.  Talking with friends and colleagues afterwards, it is quite true that, looking back, you realize exactly when it happened. I remember colliding with the suspect when I got up to go to the bathroom, inadvertently hitting him with my chair.

I like to think of myself as fairly savvy. I've traveled to some pretty dodgy places for work and pleasure and this kind of thing had never happened to me before. The lobby of the Shangri La hotel was not a war zone and there were two colleagues sitting at my table. Surely they would notice anything amiss while I walked to the bathroom, leaving my jacket on my chair?

Alas no. About 10 minutes later as I got up to leave and pay the bill, I realized what had happened. It is a sickening feeling. First there's the frantic call home to the wife, waking her up in the process to ask her to cancel all the credit cards. Then there's anger - what good to him is my gym membership card or my pass at the driving range, all of which needed replacing.

Then a curious calm descends upon you. I became quite sleuth-like, asking for CCTV footage - unfortunately the cameras did not cover the exact scene of the crime. Then I retraced my steps through the lobby, looking under tables and chairs, and getting a few odd looks.

This kind of news ripples through a conference pretty quickly. And the hotel bent over backwards to help. This included commandeering the bell boy, Irwin, who accompanied me to the Shanghai police station in the hotel limo.

While much of urban China has "modernized", let's just say its police stations are stuck firmly in the 1950s. It was like a scene out of a film. The police were clearly having fun with the bell boy. Poor Irwin was patiently trying to explain what had happened, but the policeman on the reception desk kept getting up, only to be replaced by someone else. It was clear a decadent westerner losing his wallet was of little concern to them. I decided to remain patient. Any sign of antagonism would only protract the whole process several hours.

After 20 minutes I was finally allowed into an interview room. Bare white walls, bare desks, no natural light. No air con just a fan which kept blowing my passport onto the floor. There was one attempt to lighten the place up. A potted plant stood forlornly in a corner, unwatered for several days.

There followed a painstaking review of what the wallet contained and what make it was. Time and time again my passport was checked. Fortunately, my visa said businessman rather than journalist. Otherwise I'd still be there today.

Then I described the suspect, my version of events as best I could recall them. This took an hour. At no time did any policeman make eye contact, or acknowledge my presence. It was disconcerting.

Eventually, I got what I had come for. A certificate with a crime number on it so I could claim for my losses back home through insurance.

I remained stoically British to the end, I thought, and went to shake the policeman's hand, who looked totally non-plussed, but eventually offered his hand.

Then the police disappeared to input all the data onto their computers. I was left alone with Irwin, who chirpily started talking about Premier League soccer. He was a Liverpool fan, which made it bearable. God bless Irwin (later in the hotel I filled in a card saying how he had "gone the extra mile" to help a guest). He's probably head bell boy now.  

I resisted the temptation to steal a police cap from the rows upon rows of them I was passing as I left. It would have made for a nice souvenir and would have pleased my son no end.

It all certainly made the conference a little more memorable.

Written by Feliza Mirasol

On my latest family trip, we took to the road for a 10+ hour drive to Toronto, Ontario. I am one of those people who really enjoys long drives, when the weather is clear and you've got a full tank of gas. It feels good to know you can go for miles and miles.

Hitting the road for Canada was once a family tradition. As kids, my parents would drive me and my siblings to our relatives in Toronto and let us stay there for whole summers. So taking this trip up to celebrate our cousin's birthday was in keeping with family tradition.

But as a kid, it didn't occur to me how long road trips like this need planning and money: food, gas, tolls, maps, etc. Where I live, it's fairly easy to find gas stations with competitive prices, and these days, every cent off counts. But on the road, I find you're pretty much at the mercy of whichever gas station you pull into, and despite prices having come down from ridiculously high highs, it can still take a hefty bite out of your wallet.

On this latest road trip, I eschewed the usual "punch buggy" game used to pass the time in lieu of pointing out hybrid cars on the highway. Once or twice we even passed, or were passed, by the cute little Smart Car, which always reminds me of a clown car at the circus for some reason. I was curious of how much of a difference it made to run on electricity and whether those travelers in the hybrids really needed to stop less often as we did.

I've read up somewhat on varying debates on whether hybrid technology is worth the investment when there still exist cars with better fuel efficiency at cheaper prices. However, with the presence of more and more hybrids on the road, at least according to my re-vamped road game, it seems that there is at least a faction of consumers out there willing to do it the new way.

But in the meantime, while the development of even more fuel economic vehicles marches on, and as hybrid technology gets its kinks ironed out, I'll kick it the good ol' road warrior way. Without the GPS and just the roadmap, a wad of gas cash, a loaf of homemade sandwiches in the cooler, and, of course, the Slim Jim's original beef jerky. Canada, here we come, eh!

You've no doubt heard, but the chemical sector is in the midst of a downturn. Prices are fluctuating wildly, plants are closing - some permanently, and established market players with strong pedigrees are being wiped from existence.

For us journalists, there is no better indicator of the tough times we're facing than the dearth of invitations to exotic-sounding press junkets that we receive in our email inbox.

Not so many years ago, my colleagues and I would scrabble for the visit to that exclusive restaurant or the trip abroad to meet the executives of an up-and-coming player.

A nice perk didn't detract from our objectivity or guarantee the publication of an article, you understand, but it often helped to create a more relaxed environment for all concerned. No doubt, those being interrogated by the press felt a little more at ease too.

As well as the meals, there were the trips to China or the US - business or first class, naturally (all offers were welcome) - and days out at a rugby, soccer or cricket match. And what about the gifts left on your table at a conference: a pendrive containing a press release, a shiny new pen or a clock, perhaps?

I've heard many a tale of fantastic sounding trips in the past but thanks to cost cutting and belt tightening, those halcyon days of the 1980s and 1990s are now long gone.

It's all very well being emailed information - very helpful, in fact - but you can't beat a gaggle of journalists getting together to query the latest financial figures face to face with company execs, or asking when a plant is finally going to restart, if ever.

Clearly, the chemical sector is going through a period of change but it's a real shame, not only because the press like a good day out - but because this remains a people industry.

Nurturing relationships is essential in our profession; it's all about meeting people and establishing contacts with key figures who we can call upon for an opinion or quotable soundbite now and again. It also helps companies understand what journalists look for in a story and how best to disseminate that information.

Let's hope that cutbacks, and the increased use of webinars and conference calls, don't signal the death knell for the last remaining press events and stop these all important relationships from forming.