As the days get longer and the chill of early spring starts to melt into much needed warmth around the world, so our mood becomes more positive as we seek encouraging developments in the international markets. From blossoming roses to turning down the thermostat, we all hope that with the seasonal change everything will improve – even the economy!
But at the risk of being accused of being a depressive naysayer, this year I fear we may be fooling ourselves. I always try to think positively, as negative attitudes are rarely creative, but there are times when you look around and wonder just how deluded we are becoming.
Whether it is the background noise of wartime missiles and drones, to economic figures which seem to defy logic, we are not paying real attention to the risks that seem to be building up around us. Around the world so many governments have been asleep, now, unfortunately, we have to wake up.
There are at least two actual wars as well as various filthy civil conflicts in Sudan and other blighted areas, and so the world has not become a safer place. Conflict resolutions still seem to be aspirations rather reality. Such aggression can cause only pain and destruction and serve only to weaken nations both financially and socially.
Then we have the excitement of technological developments, which are usually so positive as we look towards the future of spaceflight and returning to the moon. However, the headlines have tended to focus on the risks of AI on the employment prospects of the next generation around the world. AI is still only part formed and therefore such views are often just considered conjecture or unhelpful guesswork. The effect, though, is the same and that is that it damages our confidence as we are always fearful of the unknown.
Turning to the economic situation, we really do not seem to be seeing signs of confident growth. With debt levels for many nations at seemingly unsustainable levels, this does not mean inevitable pain and disaster, but it does mean that we have far fewer alternatives to try to maintain not just our economic growth, but to sustain our financial obligations to populations, lenders and governments.
So, are we doomed? No, but we are in dangerous waters with limited strengths. At some stage nations like ours in the UK and the rest of Europe have to realize that we cannot keep living beyond our means and the bills have to be paid.
The answers from many politicians are often usual and unimaginative, but we have grown used to them. “The rich must pay more,” squeal the Greens, “spongers must be exposed,” shout others, but few seem to look at the key rules for running and economy sensibly and sustainably.
Firstly, there is the stupidity of calls to raise taxes. These people do not realize that tax doesn’t create wealth, but greater wealth generates more tax. So, we should focus on where wealth can be created and where a mature economy like the UK can benefit.
In the UK, look at the areas of greatest employment and expenditure and that is our smaller companies. I am always encouraged to see that, despite the naysayers, small companies are still dynamic and brave. It is not easy sleeping when you start a new business, as I know from experience, and your family’s house and assets may be on the line. So, we should create a tax environment for the brave to make this happen. We have done it before, and we can do so again.
Secondly, look at our strengths and especially those technology hubs around the UK. There are about 40 spread across the kingdom. These have already proven their strengths and value, as measured by the demand and the value they fetch when enthusiastic Californians come hunting to buy new developments.
So, governments should create a capital investment chain across the nation to provide new capital. There is no shortage of investment funds (look at the pension funds) but someone has taken away the plumbing needed to feed such investments to smaller businesses around the country.
As for governments? Stop spending money you don’t have and making promises you cannot keep. What you can do is to get the fundamentals of the nation working properly, by which I mean the infrastructure of cost-effective power, communication, transport and education.
Am I mad to be thinking like this? No, but we are mad if we do nothing about it.
Spring isn’t just about the sun cream. We need to start building a credible economic structure.