Tag: United States

BUSINESS IS READY FOR TRUMP ROLLERCOASTER

JUST JIM 233.

BUSINESS READY FOR TRUMP ROLLERCOASTER.

When the Trump presidency starts next Friday, the business community won’t be alone in wondering what happens next.

During the transition from President Obama to President Trump, economic indicators have generally been up on both sides of the Atlantic. Here the FTSE 100 has had its longest run of successive all-time peaks since it was set up in 1984. One of the reasons is Donald Trump’s commitment to increase infrastructure spending across the United States. Any business traveller will know The Donald is on to something here. Most of America’s airports are tired compared to their gleaming counterparts in Asia and the Middle East. It is the same with US roads and rail. It is the penalty Americans are paying for being first to embrace the car revolution in the post war years.

SME confidence is also strong in the UK. It rose from 2.9 to 8.5 in the last quarter according to the Federation of Small Business. Is this a spill over effect from Trump’s plans when he comes into office? Some economists believe that for every percentage point the US economy grows, advanced economies like the UK grow by 0.8%. The incoming President is planning tax cuts and increased defence spending as well as major infrastructure schemes that we have already discussed.

But business needs to be cautious. Trump is a loose cannon. We have already seen shares in pharmaceuticals crash as a result of the incoming President’s determination to repatriate manufacturing to the US. Bringing jobs home was a key election platform and has already led to Ford deciding to locate a car plant in Michigan instead of Mexico. Defence shares have also been hit by tweets sent out from Trump Tower.

Business will also be aware that the new President will be taking office with controversy swirling around his coiffured blonde hair. Has he done enough to distance himself from his global private interests? Is the team he has selected to run the great offices of state up to the job? Will he get the support of the Republican controlled Senate and House that the raw numbers suggest? Many don’t regard him as a real Republican. Then there is the personal stuff. Is he in thrall to the Russians over his peccadillos, and will he realise that he cannot run the United States by angry tweet.

Business on both sides of the pond have craved more business experience at the top of politics. Well the USA has got one and it will be fascinating to see if Trump can manage a political machine as well as he ran his boardroom. They are very different beasts.

 

Follow me at www.jimhancock.co.uk

 

MAY: TOO SOFT ON THE BOARDROOM

 

MAY: THE BOARDROOM PUSSY CAT.

One of the reasons for the huge gap that is opening up between the people and the elite across the western world, is bad behaviour by some big businesses.

I always thought we should dismiss the Prime Minister’s initial mission statement about being a government for all as “what they all say” and so it has proved in relation to the Green Paper on Corporate Governance. This was meant to be a signal that ministers were going to grapple with the Philip Green’s of this world and the huge gap between workers on frozen pay and bosses paid 140 times more in some cases.

Instead of workers on boards, they are to have a “voice”. There is little on giving pension scheme members more say, the issue at the heart of the British Home Stores scandal.

Under consideration are pay ratios to show the gap in earnings between Chief Executives and workers, more power for shareholders to vote against bosses pay rises, private firms to be held to the same standards as public companies and a code of practice.

Will any of this be effective in bringing about more corporate business responsibility. The government seem to be in nudging not compelling mood.

THE CHALLENGE OF NUTTALL.

Blue Labour is an organisation that worries about the growing gap between its traditional northern working class base and the liberal (small L) elite who have enthusiastically embraced the social and economic changes of recent years.

They met in Manchester at the weekend to ask questions like “might there be a hermeneutic of continuity reuniting the working class with those that fear its voice?” Now I’m happy to share a Gauloises Disque Bleu (remember them in soft white packets) with any number of intellectuals and discuss the future of socialism. However I think there is a lack of urgency on the centre left and a self indulgent sectarianism between Greens, Liberal Democrats and Corbyn opponents.

While they agonise the new UKIP leader Paul Nuttall says he is going to appeal to Labour voters in the North on the issues of immigration, crime, foreign aid and putting British people at the top of the queue for jobs.

What is the centre left response to that agenda which some will feel has a whiff of racism? Well for one thing what are UKIP going to do about housing, adult social care and the productivity gap? But the centre left do need to make an effective response on the “awkward” issues like immigration. Otherwise those many UKIP second places in wards and constituencies will fall from Labour’s grasp.

ON BALANCE I MOURN CASTRO’S PASSING.

Fidel Castro’s coup in Cuba happened as I began to take an interest in politics. He has been around all my adult life so some thoughts at the time of his passing seem appropriate.

His coup removed a regime that was turning Cuba into a brothel and casino dominated by the United States. Castro wanted American help but instead faced the Bay of Pigs invasion designed to topple him. He therefore embraced the Soviet Union and foolishly allowed them to base missiles on the island which nearly brought about a nuclear war. He was ruthless with opponents and persecuted gays. But, but, but he gave the Cuban people health and education standards rarely matched in the Americas. He also sent troops to confront apartheid South Africa and contributed to its end.

We will all be weighed in the balance and for only a virtuous few will the scale be wildly in their favour.

Follow me at www.jimhancock.co.uk

ANGER EVERWHERE.

 

DON’T GET FOOLED AGAIN.

Everybody thinks the E.U. referendum is going to be a close run thing. Why do they think that? Because the polls tell them so. These are the same polling organisations who got the General Election result wrong and arguably distorted the outcome as a consequence.

Apparently on line and phone polling is giving wildly different outcomes and it could be even more difficult to get accurate polling results on this E.U. Referendum than when you are asking people for their political party preference.

So on June 24th if the British people vote to withdraw by a decisive margin or (as I hope) decide to remain with a convincing majority, prepare for another round of hand ringing by pollsters as we find out that the British people had a clear view on their future destiny after all.

By the way, although I am convinced pro European I do think it is provocative for the government to send out anti Exit leaflets ahead of the official referendum campaign. It will just help supporters of Leave who are already preparing to cry foul if we vote to Remain.

A STEELY EYE ON THE CHINESE.

I understand the importance of our trade relations with a nation that could overtake the United States and become the biggest economic power in the world. But it has never been without risks. The main ethical one is dealing with a country with a poor civil rights record but there are others including the issues that are arising over the future of the British steel industry.

With China now involved in financing major infrastructure projects in this country, it is not easy to aggressively oppose their steel dumping. A measure of the growing arrogance of the Chinese government was their decision to impose a 46% tariff on grain orientated electrical steel made in Wales at the very moment when the government was facing the hugely embarrassing possibility of seeing the Port Talbot plant close.

You can tell the members of the Central Committee of the Communist Party are not answerable to voters.

We need to save domestic steel making, and put a bit of distance from the Chinese. I also hope we will hear more at next week’s Downtown lunch in Liverpool about the progress of Chinese investment in Liverpool and Wirral following the latest MIPIM extravaganza. It is a long time since the city was at the Shanghai Expo and I don’t see many shovels in the ground.

UNREST IF TRUMP NOT CHOSEN?

Donald Trump continues his divisive campaign to win the Republican nomination for President of the United States. His Wisconsin set back this week means it is unlikely he will arrive at the Convention with a majority. But if the Republican establishment deny him the nomination by back room deals, there could be real trouble. I watched a Channel Four documentary recently which illustrated the ugly mood amongst his blue collar white working class supporters.

There has already been violence at Trump rallies. It could get worse.

BERNIE, JEREMY AND THE PANAMA PAPERS.

I have been pro Hillary Clinton for the Democratic nomination but I was mightily impressed with her rival Bernie Sanders speech after winning in Wisconsin. His attack on the greed and corruption exposed by the Panama Papers leak shows the degree of anger by us P.A.Y.E. People at people who are salting away their wealth in tax havens.

Sanders has a lot in common with another insurgent politician, Jeremy Corbyn. Labour should watch the American socialist carefully.

NOT SO GRAND NATIONAL!

Channel Four does not get the same audience for the big race that the BBC got. So to try and increase viewers they are putting it on at 5-15 on Saturday. It just doesn’t feel right to me. Most people are off on a Saturday, not getting home from work. You should be able to have a bit of lunch and enjoy the race in the middle of the afternoon.

 

TO FRACK OR NOT TO FRACK?

THE ENERGY GAP

 

Is the extraction of shale gas part of the answer to our looming energy gap, or a potential environmental disaster in our crowded island?

 

Opposition to fracking is rising as demonstrations from Blackpool in Lancashire to Balcombe in Sussex have shown. The government meanwhile seems determined to press ahead with exploratory licensing despite the fact that we are in the run up to a General Election.

 

The fracking controversy is coming to a head because Britain is facing an energy gap. Coal is a declining source of energy. Old nuclear power stations are being decommissioned and negotiations with energy companies about the strike price for new plants are lengthy. Fears about nuclear power after the Three Mile Island and Chernobyl incidents left politicians reluctant to invest in new plants around the turn of the century. UK natural gas production has been declining at 8% a year since 2000. Despite government support for renewables, the fact remains that water, wind and bio-energy account for a small percentage of our energy supply.

 

Then there is Russia. Recent events have increased a desire for the EU and the UK to be less dependent on Vladimir Putin’s gas and coal.

 

FRACKING

 

The process of fracking extracts gas from shale rock by pumping a mixture of water, sand and chemicals into fissures one or two miles down. The gas and waste water then flow up to the surface.

The chemicals used are commercially confidential and that has proved controversial with environmentalists.

 

Estimates vary as to how much shale gas there is under the UK. A recent report commissioned by the Department for Energy and Climate Change suggested that fracking could deliver 25% of the UK’s gas needs by the middle of the next decade. Other experts feel it will take much longer for shale gas to be produced in volume and that cheaper Russian gas will continue to be attractive. Indeed a key question will be the impact of shale gas on household bills.

 

The American experience looms large. There has been a 75% increase in United States natural gas reserves due to fracking. Gas prices have reduced from $12 to $3 per million British thermal units By 2020 the US will be exporting gas. However whilst states like Pennsylvania have embraced fracking, New York maintains a moratorium. Also when comparing the US with the UK, the major issue of population density must be taken into consideration. Another important difference is that American landowners own the mineral rights beneath their land whereas here they are the property of the Crown.

 

Currently there is a promise that £100,000 plus 1% of total revenues will be paid to local communities where fracking takes place. The question is will this be enough to buy off residents who fear groundwater contamination, methane leakage and incessant tanker movements on country lanes? The government insists that a tough regulatory regime will be in place and cite the cautious approach Ministers have taken so far. That includes a moratorium on test drilling when it was suggested that natural seismic movements under Blackpool might have been caused by exploratory work.

 

The conference will be held eight months before the General Election. Some of the most promising shale gas fields are under marginal constituencies in the North and the fracking debate could well become an election issue. Claims for the level of public support for fracking vary widely. An industry commissioned opinion poll claimed recently that opposition was down to 24%. A poll for the Guardian and Nottingham University suggested the nation is split fifty fifty.

 

However enthusiastic national government is to press on with fracking, it is local councillors who have to give planning permission. Some are questioning their expertise to make such crucial decisions.

 

On this crowded island fracking pitches local communities and environmentalists against those with responsibility for keeping the lights on.