It’s the stupid economy, stupid

by Charlie_East_West on November 21, 2013

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It’s the economy, stupid” is a slight variation of the phrase “The economy, stupid” which James Carville dreamt up when he was a campaign strategist of Bill Clinton’s successful 1992 presidential campaign against incumbent president George Bush. It is now time to update this phrase in 2013 for George Osborne:- “It’s the stupid economy, stupid.”

Let me tell you a story. It is a story about the current state of our economy. It is a story about me.

In 2010, after I had worked for a consultancy group for close to five years, the company went into liquidation – which was a horrible shock. Despite making annual divisional profits for my company, I found out on a grim morning in February 2010, that I did not have a job as the company had just gone bust. It was a classic victim of the credit crunch – banks refusing to update long term working overdrafts, clients paying late or not paying consultancy fees at all, and so, a well regarded solid consultancy hit the skids almost immediately. The company failed due to a chronic lack of cashflow and liquidity.

I now found myself with extremely limited options. I had relocated from London to the South West in 2008, on the basis that my work was secure, lucrative and flexible in terms of location. After the collapse of the consultancy, I was staring down the barrel of limited employment options, a hefty mortgage and a family to provide for. I had no other career options within my rather specialised urban based profession – as I was now living in the countryside. I therefore decided to take the plunge and set up my own business as a consultant. I have now been self employed for almost four years.

I sat down on the first morning of self employment with a blank piece of paper. It was a fucking scary place to be. I scribbled down all the contacts and potential clients that I could realistically target. I then had to go through the process of setting up my own company with Companies House, register myself with the inland revenue, set up my own website, email accounts, insurance, legal disclaimers, company name protection, bookkeeping services, accountants and office space. After I had finished with all of that, I then had to market my new company, produce press releases to publicise my new company, create my own company logo, identity and stationary.

I managed to get all of this done in two weeks. I was way out of my comfort zone, and learning new skills on the hoof. All of this was done on a shoestring, as I received no redundancy payment as my previous employers were in liquidation. I could not go to the bank for a loan as they were hoarding their Quantitative Easing money rather than spreading it outwards towards the wider economy.

I had no option but to eat into my savings to get everything up and running. But, after two months, I already had a number of clients both locally and nationally and my business was looking pretty prosperous. This success story lasted 3 whole years – despite an economy that was mired deep in recession.

But, none of that prepared me for what happens when things really go wrong – both in terms of being self employed and the real economy. Over the past 12 months, I have been taking part in the fight of my life.

The effects of the financial crash in late 2008, became really noticeable in the wider business economy a few years later. Initially after the 2008 crash, it was difficult to speculate on the wider impact of the economy. But what happened within the wider economy was like a car crash in slow motion. Gradually in the subsequent years, businesses either went bust, or just stopped buying or trading with any element of risk attached. By 2013, many of these businesses are now hanging on by a thread and eating into any remaining financial surplus. As the banks are still unwilling to lend to businesses, small and medium enterprises are having to rely on their own remaining assets, savings and equity to just survive. If they topple over the cliff into debt, then there is simply no get out clause from any lender. We now have a scary situation where almost 20% of small businesses in the UK are at severe risk of going under.

In the past 12 months, I have had clients paying late, not paying and going bust. Getting new business has become increasingly fraught, as previously easy to win client contracts are simply not parting with cash.

I give you one very recent example of this. I have just spent 3 months working my arse off on developing a new public sector client proposition that had a long term monthly fee retainer attached to it. Everything was agreed in principle. We were at the point of contract exchange. Suddenly, the potential new client emails me to say that they cannot sign the contract because the government have tightened up their budgets connected to the governing body and local authority backing this proposition.

This is just a snapshot of my own situation. I do not want to come across as a hard luck story. I am acutely aware that there are many people in a much worse situation than me. But, it is a situation that isn’t going to go away. The private sector continues to face huge liquidity problems from lack of investment, sales and lending. The public sector is only just beginning its long walk towards government spending cuts. This will significantly affect the private sector, as the first thing that will be removed from a public sector balance sheet will be many third party contracts in industries like hospitality, catering, consultancy, design, advertising and events. As public sector organisations are now having to cut essential front line assets such as land space, libraries, playing fields and educational outreach programmes, there is obviously no option but for the public sector to cut the auxiliary so-called non-essential services linked to private sector contracts.

The coalition government programme of austerity has stopped any form of investment flowing between the public and private sector (apart from public sector fire sales of assets stripped away by huckster corporates within the private sector). As a result, our national debt continues to spiral out of control as there is a chronic lack of investment towards long term profits, and ultimately, growth.

So before George Osborne bangs on about what a great state we are all in, perhaps he should stop, think and realise that for the majority of us – it is not a good state. It is not good at all.

Of course, Osborne is ok. He inherited a fortune from his family business. Meanwhile, I (like many others around the country) have to explain to myself and my wife why I have wasted time and resources for a project that will grant me sweet fuck all.

Thanks Gideon. Thanks a bunch. It’s not the economy, stupid. It is the stupid economy, you stupid idiot.

{ 4 comments… read them below or add one }

Eddie Kaye November 21, 2013 at 2:44 pm

Central to the Tories’ web of bullshit is the idea being touted that those who are worse off have only themsleves to blame. Either that, or they are ‘taking one for the team’ while Cameron and Gideon stick their y-fronts outside theiur trousers, don the old capes and fly to the rescue and to sort out Labour’s mess.

Bullshit indeed. The fiscal stimulus that Brown and Darling did get through was squirelled away by a select few. Those selective squirells are now doing the same with what small growth has been generated IN SPITE OF Gideon’s misguided and misplaced austerity.

The ‘trickle down’ excuse is a total sham, the squirelling will continue for the next bout of hard times (within the next 18 months according to experts). In the meantime, those of us who work, pay our taxes etc can enjoy a two grand paycut – if we are lucky enough to keep our jobs.

Oh, but it’s OK…British Politics’ answer to Batman and Robin have fixed the economy….more like the fucking Joker!

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Charlie_East_West November 21, 2013 at 3:15 pm

It is a government for the 1%. Everyone else had better just buck up and pull themselves together…according to them.

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Eddie Kaye November 21, 2013 at 4:04 pm

It’s also designed to attract would be one percenters. Those who see being part of it as the pinnacle at the centre of the myth of opportunity. People who are actually seeing their incomes go down, but the Thatcherite dream of becoming the next Lord Sugar is perceived as the be all and end all. News for them is they have more chance of winning the lottery, or X Factor – the myth of opportunity purveyed to those at the lower end of the economic spectrum. It’s ‘it could be you’ politics, pure and simple!

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Charlie_East_West November 21, 2013 at 4:15 pm

Eddie – absolutely spot on. Self 1 v Community 0.

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