The Change Curve

To help a friend, I was searching for a better image of the 'change curve' than the one I first used here in 2009.  Back then they were surprisingly tough to find online. Now there are tons of them, adapted to countless different scenarios. This would seem to suggest that a vast number of people have got beyond the 'depression' phase since then ;-)

At any rate, here's a useful overview of various models that help make sense of change, based on Elisabeth Kubler-Ross's five stages of grief, care of Warwick University.

I've posted a few of the better images from the pile that turned up.

Shock As Faith Dies: Change Curve Activated

The patient failed to respond.

Faith in our institutions finally died this week after a long illness. Doctors amputated a banker, began a saline drip for 28,000 small businesses, corrected errors in several prescriptions and tried another infusion of cheap money. Parliament even held a debate. But the patient failed to respond.

Reactions were mixed. Some were 'sorry, disappointed and angry', others cried. Some remain in denial.

In other words, nothing has actually changed. But it's a start.

Hopefully, we'll soon have a lot of little things going wrong.

Image from VirtuallyShocking.

Short Churches?

Ever since protesters were forced by police to retreat from the London Stock Exchange to occupy St Paul's Churchyard, I've been fascinated by the effect of the global financial crisis on our Christian institutions.

While the Vatican has seized the opportunity to issue its statement on 'reform to the international financial and monetary systems', the Church of England, of course, was terribly embarrassed to be caught up in it all. Incapable of grasping a real opportunity to shape people's thinking, instead St Paul's initially offered to convene a nice cosy debate. Then the Cathedral's 'canon chancellor' resigned ahead of the Bishop of London's threat of eviction, which was followed shortly after by the resignation of the dean of St Paul's. Finally stirred into action, the Archbishop of Canterbury called for "robust public discussion" about the possibility of a so-called 'Robin Hood tax' on financial transactions.

The Vatican's statement is typically grand, and I've not had the time to consider it all, but here's an extract of some concrete proposals:

"a) taxation measures on financial transactions through fair but modulated rates with charges proportionate to the complexity of the operations, especially those made on the “secondary” market. Such taxation would be very useful in promoting global development and sustainability according to the principles of social justice and solidarity. It could also contribute to the creation of a world reserve fund to support the economies of the countries hit by crisis as well as the recovery of their monetary and financial system;

b) forms of recapitalization of banks with public funds making the support conditional on “virtuous” behaviours aimed at developing the “real economy”;

c) the definition of the domains of ordinary credit and of Investment Banking. This distinction would allow a more effective management of the “shadow markets” which have no controls and limits."

However, I wonder whether our religious institutions could be a bit more active in the reform of the financial system, rather than pontificating from the sidelines? Their wealth and tax-free status has not gone unnoticed, and there's plenty they can do on the investment front. The Church of England's ethical investment policy is here, for example. And it has lent stocks to short sellers. But that's not what I'd call active. 

Having previously suggested that short selling would be a useful regulatory tool, and that we could do with a secular version of the old Devil's Advocate, perhaps these are areas where the churches can help, along with voting at AGMs on executive compensation, for example. In fact, sometimes billed as the "shock troops of the Vatican" or "God's Marines", maybe there's a calling for highly-trained Jesuit priests on the trading desk of an ethical hedge fund, short selling the stocks of companies that the faithful believe are operating unethically. 

I wonder how they would rate Mr Blankfein's efforts?

Image from NJ.com.

Does Occupation Work?

Much is being written about Occupy Wall Street and similar expressions of mass dissatisfaction about our financial system. In particular, many are giving advice on more practical alternatives to occupation, which misses the point:

"Occupy Wall Street is [a] leaderless resistance movement with people of many colors, genders and political persuasions. The one thing we all have in common is that We Are The 99% that will no longer tolerate the greed and corruption of the 1%. We are using the revolutionary Arab Spring tactic to achieve our ends and encourage the use of nonviolence to maximize the safety of all participants."

In other words, this is what people do when their faith in all the immediately practical alternatives is exhausted. 

But why? Does mass occupation 'work'? I mean, is Egypt now a better place? Wouldn't it be better to withdraw completely and assume the foetal position under your duvet? 

 

While I don't believe these protests have any causal connection with the changes that are democratising the financial markets, they are critical insofar as they represent a peak in our society's dissatisfaction with its financial institutions. I mean, this is not intended to shock or wake people up, like a strike or a noisy protest march, or an attempt to get the attention of law-makers outside Parliament. Quite the reverse: pitching your tent in the beating heart of a giant city is a sign of utter confidence that every rushing passerby, every person who reads the paper or watches the evening news will understand exactly why you're there.

For this reason, such occupations are a sign that the majority of us have rounded the change curve. It means we've moved beyond 'shock' at how broken things are, through 'denial' and beyond 'anger and blame' - even though that appears to be what all the signs are about. Those people wouldn't be there if they instinctively sense that we all understand the world has changed for the worse. That something has to be done. In fact, the reason they're gathering is to figure out what is to be done.

Ironically enough, these occupations mean we're moving on.

There's No Good Time For Banks To Change

Retail bankers always fiercely resist change. I guess that's because they've always had to follow the manual. Unless the manual changes they are powerless to help. Add to this a general lack of accountability for the manual, and you have the perfect recipe for inertia. This explains retail bankers' resistance to faster payments, fairer overdraft charges, abandoning the sale of payment protection insurance ... the list goes on and on and on. It's cultural, regardless of their woeful economic plight.

So, of course, we find febrile resistance to the notion of 'ring-fencing' or other structural proposals to shuffle the deckchairs somehow prevent the need for massive taxpayer subsidies to keep retail banks afloat. Timing is always the last line of defence, and now we're hearing from the British Bankers Association that they couldn't possible restructure until never they've financed the recovery and repaid bail-out funds to the taxpayer.

I completely understand the concerns about restructuring banks amidst the current economic hurricane. But isn't the purpose of restructuring them to protect us against one of them being swamped? If so, surely now is the time to batten down hatches and secure the cargo as best we can.

Or should we simply be manning the lifeboats?

Image from gCaptain.

U-turn On Horse-drawn Carriage Ban A Victory For Common Sense

The decision of the Transport Secretary not to phase out horse-drawn vehicles in the UK over the next 7 years has been hailed as a "victory for common sense" by consumer groups.

A spokesperson for Charioteer.org said, "Seven out of ten people born before the horseless carriage was invented still enjoy the ceremony of parading through the streets in their horse-drawn vehicle. Transport in the modern era is easy-come-easy-go; the ceremony of carriage-riding gives importance to a journey, and reminds people of an era when the ability to travel was a great deal more scarce, and a great deal more valued."

"In this time of great austerity it is important that we continue to support expensive, outdated travel methods abandoned virtually everywhere else," she added. "Otherwise, we'd have no jobs for stable boys and nothing to put on the roses."

A spokesperson for FaceBoogle said, "What's a carriage?"

Cut Greece Loose

Cutting the Gordian knot

Talk about Zeitgeist - last Saturday morning I was in Porto, reading about the Greek crisis in The Economist. It was my first trip to Portugal, which I guess was good timing for them, economically speaking. Next month, Spain receives some of the Pragmatic Pound. And I'd like to think I'm doing my bit for Ireland, albeit on the meter, by assisting a financial start-up there (sorry, still in stealth).

But I won't be bailing out Greece.

Tax-dodging, low productivity and overly generous pensions aside, The Economist reckons the key to that country's dismal plight is political patronage. "Greece needs transparent and impartial rules, but politicians are not keen to limit the scope for dishing out favours." Everything from railways to medical budgets leaks cash to powerful lobby groups.

And, reading on, it seemed to me that in this sense the Greek rioters have more in common with the proponents of the "Arab Spring" than their EU colleagues. As the ebbing economic tide exposes the littered wrecks of corrupt schemes and relationships, the have-nots are descending in droves on the survivors and what's left of their loot. In Syria, the crowds are putting the "squeeze on Assad" by demanding a "civil democracy" that comprises free elections, freedom of speech and assembly, protection of minorities and an end to repression. The longer the government resists, the more citizens withhold labour, and capital flees. In return, the regime dishes out more favours, stokes inflation and the country edges further toward meltdown. Egypt is clearly further along. Libya perhaps further still.

This chaos is vital for renewal - though bloodshed is not essential. Back in June '09 I suggested that the UK's constitutional reform must be a messy process, and it's proving just that, but riot-free (you can ignore the photo calls). A dynamic, open, democratic process that encourages broad engagement by all stakeholders cannot realistically be neat and linear.

Though in May 2010 I also suggested going short EU banks and long riot shields. And if things do turn nasty it's perhaps worth bearing in mind Mathias Koenig-Archibugi's reminder to The Economist of the lines from "The Third Man":

“In Italy for 30 years under the Borgias they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland they had brotherly love, they had 500 years of democracy and peace, and what did that produce? The cuckoo clock.”

The point is, we do the Greeks no favours by bailing out their system of political patronage. The bureaucratic emperors must be shown to have no clothes.

So cut Greece loose, I say. Only then will the Greeks have their Renaissance.

Strike All You Like: The World Has Changed

Change Curve

I've never really understood strikes. And, given the timing of the current round in the UK, I suspect those who go on strike may not either. But I think this lot are a good sign.

It means the strikers and those who empathise (many private sector pensioners, for example) have moved on from the initial shock of discovering there is no money to fund generous pensions.

And they have moved through denial that this means their own pensions.

And they have reached the phase of fear and anger about the fact that the world isn't as the same as they thought it was when they decided to do whatever job it is they've decided not to do on Thursday.

Next stop: depression.

And then maybe acceptance and a measure of understanding. After all, it's a feature of our existence that we become complacent, vulnerable to change, and blame everyone else for any misfortune when change arrives. Our defences against disaster weaken over time.

And, finally, planning how to move forward into a very different future.

It's that fundamental.

Because we aren't talking about mistreatment of a colleague, or any other point of principle. The current round of strikes is all about venting collective anger, though not in the Greek style. Yet.

And anger on this scale means the whole world has changed, not just your own lot.

So, all power to the strikers, I say. In fact, let's all get out there on Thursday and have a bloody good shout. And, Hell, why not spend Friday drowning our sorrows?

On the weekend we can all indulge in a little critical thought.

And on Monday, we can plan how to move on.

Of Banks And Leaky Buckets

Bank

I saw that Philip Stephens of the FT reckons the Independent Commission on Banking has let the banks off the hook.

I'm not so sure.

Once you accept the principle that retail banks must be 'ring-fenced' from their casino counterparts, it's a slippery slope. Firstly, it's questionable whether ring-fencing will work without formal legal separation. Secondly, ring-fencing won't mean much without a prohibition on the retail bank either directly or indirectly financing any of the casino operations - including providing security for casino activities. Surely the two businesses will have to behave truly independently. Mere firewalls will not prevent a repeat of the banking crisis.

But forget all this talk of fences and firewalls. Today's banking model is just a very leaky bucket.

Banks rely on you not having the first clue where your savings end up, or even caring how much interest is earned or who by (proof of that, if you needed it, is in any Barclays' TV ad with a Stephen Merchant voice-over). Your savings and the interest can leak into anything from a credit card balance to a synthetic CDO tracking shonky mortgages in Florida. Similarly, you sign up for loans and insurance, and your money runs out some more holes in the form of fees, charges and commissions or a giant fine to the FSA. For every hole that gets plugged - whether it be restricting early repayment charges or forcing better disclosure in consumer credit, stopping the Great PPI Robbery or requiring customers to be treated fairly - other holes appear in the form of additional current account charges and so on. Now they whinge about having to sell branches to create competition, and the costs of restructuring to prevent more holes being made by toxic investments.

At what point do we throw away the bucket?

Do the NHS and the BBC Really Need My Help?

I was recently invited by 38 Degrees ("people. power. change.") to email my MP to save the NHS. Previously, I was told the BBC needed me to ride to its rescue.

Now, I've been a great supporter of harnessing people power via the Internet to facilitate social, political, commercial and retail improvements. Hence my subscription to updates from 38 Degrees (amongst others). I was attracted by the mission statement:

"38 Degrees brings you together with other people to take action on the issues that matter to you and bring about real change."

But I don't think you improve the effectiveness of our institutions - particularly the NHS and the BBC - by campaigning against the forces for their reform. Both institutions devote adequate resources to that already. I don't mind emailing my MP to support one of a number of rival reform proposals. But I won't trouble anyone in support of the status quo.

Image from kuduTalk.

Twitter: McKinsey's Window On Global Change?

McKinsey Quarterly, the online journal of McKinsey, says "five crucibles for change will restructure the world economy", requiring all businesses to "pay attention to more stakeholders, more regulations, and more risks - and to watch to see what their customers are tweeting about them".

The online journal will focus on each of these drivers in the coming year. In summary:

1. Emerging market countries will contribute more toward world economic growth than developed countries, adding new consumers and driving innovation in products, infrastructure and supply chains;
2. Developed economies must innovate to substantially increase productivity;
3. Complexity in the international flows of capital, goods, data and people will create new business models and boost innovation, but bring additional risk and volatility;
4. Competition for resources will require greater productivity, investment in clean technology and attract greater regulation;
5. National governments and other nationally-oriented entities will be under greater pressure to cope with all of the above.

It would seem you're best advised to follow the coverage on Twitter...

Image from LMNeff.

Lessons In Waste: Where Do Your Taxes Go?

Too late, we've learned that senior civil servants turned state's evidence on their New Labour masters, marking an audit trail with "letters of direction" for the House of Commons Public Accounts Committee. According to Bloomberg:

"On 13 occasions between the start of 2009 and April 2010, civil servants asked ministers for a “letter of direction,” according to figures originally released by the Treasury in April. In the previous four years, only four such letters were requested, according to the Treasury."

The Public Accounts Committee's reports make grim reading for anyone interested in low cost government, tracing waste and ineptitude from early in the New Labour regime. For example, on 8 April it had this to say about an HM Customs & Excise private finance contract:

In 2001 the Inland Revenue and HM Customs & Excise, now HM Revenue & Customs (the Department), signed a 20-year contract with Mapeley STEPS Contractor Limited, one of several companies in the Mapeley Group, transferring ownership and management of 60% of its estate. At contract signature the Department expected to pay £3.3 billion (2009 prices) over the 20 years of the contract. To date it has paid 20% (£312 million) more than expected, and now expects to pay £3.87 billion over the 20 years. Moreover, signing a contract which involved tax avoidance through an offshore company has been highly damaging to the Department's reputation.

The sale of the public stake in British Energy was also revealed as ham-fisted, as has been the handling of the £1.85bn in overpaid benefits.

The sickening list goes on and on and on. And of course even more waste is featured regularly in Private Eye.

It's a crying shame to be pouring extra taxes into such a leaky bucket as the UK public sector. So, all the more reason to engage with Where Does My Money Go?

Image from the Open Knowledge Foundation

Wall Game Yields Coalition Agreement

At last we have a new government and a Coalition Agreement, and a new cabinet. Are they listening? So far, so good. Here's a summary from the BBC:

• There will be a "significant acceleration" of efforts to reduce the budget deficit - including £6bn of spending reductions this year. An emergency Budget will take place within 50 days
• Plans for five-year, fixed-term parliaments, meaning the next election would not take place until May 2015.
• Proposals for a "wholly or mainly elected" House of Lords on the basis of proportional representation will be brought forward
• The Lib Dems have agreed to drop plans for a "mansion tax" on properties costing more than £2m, while the Conservatives have agreed to shelve their plans to raise the inheritance tax threshold
• Instead there will be a "substantial increase" in the personal tax allowance from April 2011, with further steps to raise it to £10,000 as a "longer term objective".
• The Lib Dem policy of taxing planes, rather than passengers, has been adopted and there is a commitment to a new tax or levy on banks as well as a pledge of "robus action to tackle unacceptable bonuses in the financial services sector".
• The new administration will scrap part of Labour's planned rise in National Insurance
• A pledge to have a referendum on any further transfer of powers to the EU and a commitment from the Lib Dems not to adopt the euro for the lifetime of the next Parliament
• The Lib Dems have agreed to Tory proposals for a cap on non-EU migration
• The Conservatives will recognise marriage in the tax system, but Lib Dems will abstain in Commons vote
• The Lib Dems will drop opposition to a replacement for Britain's Trident nuclear missiles but the programme will be scrutinised for value for money
• There will be a referendum on moving to the Alternative Vote system and
• Enhanced "pupil premium" for deprived children as Lib Dems demanded"

And from the fine print:

1. Child Trust Funds and tax credits will be reduced for higher earners.

2. Committment to spending 0.7% of gross national income on foreign aid.

3. Demonstrating a committment to low cost government, there will be a review of long term affordability of public sector pensions (protecting accrued rights - which will make public sector pensions even less affordable in the long term...).

4. Non-business capital gains to be taxed "at rates similar or close to those applied to income."

5. Banking levy and action on unacceptable bonuses.

6. Plans to "foster diversity, promote mutuals and create a more competitive banking industry," including a year long review of separating retail and investment banking.

7. A possible loan guarantee scheme for SMEs.

8. Bank of England to control prudential regulation (is this really the end of the FSA?)

9. Allowing 10% of an MP's constituents to force a by-election where that MP is found to have engaged in "serious wrongdoing".

10. A statutory register of lobbyists and the removal of 'big money' from politics

11. "Radical" devolution of power and greater financial autonomy to local government and 'community groups'.

12. A retirement age (yeah, right - we'll never retire) of 66 from 2016 for men and 2020 for women.

13. An end to the requirement to purchase a pension annuity at 75.

14. The end of multiple 'welfare to work' programmes in favour of one.

15. New providers can enter the state school system in response to parental demand.

16. A 'referendum lock' on transfer of further powers to the EC.

17. The end of: national ID cards, national ID register, biometric passports and the Contact Point Database.

18. Extending the scope of Freedom of Information Act to increase transparency.

19. A review of libel laws 'to protect freedom of speech'.

20. Safeguards against the misuse of anti-terrorist legislation.

21. Further regulation of CCTV - does this mean curbs on the use of images?

22. An end to the storage of internet and email records 'without good reason'.

23. A smart grid and smart meters.

24. Feed-in tariffs for electricity.

25. A 'huge increase in energy from waste through anaerobic digestion' - which sounds very painful indeed.

26. A green (greed?) investment bank.

27. Any new coal-fired power stations will need carbon capture and storage (CCS) to meet emissions performance standard.

28. A high speed rail network.

29. No third runway at Heathrow, and no extra runways for Gatwick or Stansted.

30. A recharging network for electric/hybrid vehicles.

31. A commission will consider the West Lothian question (the paradox that Scotland, Wales and Northern Ireland have their own assemblies, while England does not).

Moral Panic #101: Deficit Leaves No Time For Electoral Reform

Having limped in first over the electoral finishing line, and needing support to govern, the Tories have been understandably meek in setting an agenda for this Parliament. And after decades of dodging the issue, they are truly appalled at the thought of electoral reform as the price for Liberal Democrat support.

But commit to it they must: it's a travesty that 23% of the national vote could produce only 9% of the MPs. And it is small consolation to the people who comprise that 23% (not to mention the 29% who voted Labour and the 11.9% dismissed as voting 'other') - that 'their' 57 MPs hold the 'balance of power'.

The general election would have been more engaging and vastly more inclusive if the 63.9% of voters who did not receive their first choice could have nominated the candidate they'd have preferred to win instead. That's what Proportional Representation is all about.

Despite moral panic designed to dodge the issue yet again, electoral reform will not 'distract' anyone from cutting the £163bn public deficit. All are agreed that economic reform will be business as usual for this government. In fact, as a result, it should be 'less busy than usual'. So there'll be plenty of time to work out the move to one style or other of Proportional Representation.

Commitment to electoral reform might even lead the unlucky 63.9% to work much more willingly with the lucky 36.1% to cut the budget deficit.

Image from VoterPower

We Have MPs Where We Want Them

In many ways the UK general election has not gone the way anyone wanted.

Sure, we have a hung Parliament, 149 MPs from the last scandal-ridden pit did not stand, Jacqui Smith lost her seat, and the BNP didn't get any at all.

Yet the politicians and their party machines have not been able to control the result. And, while voter turn-out increased slightly, voters were angry at being turned away as polls closed and already a campaign has begun to "take back Parliament" by reforming an electoral system that nullifies vast numbers of votes.

So one thing seems assured: this Parliament is in for a bumpy ride.

And this is a great outcome. We have MPs exactly where we want them. They are not in control. They have little alternative but to listen and respond to our issues bottom-up.

Independent forums like Power 2010, 38 Degrees, and TheyWorkForYou, are genuine attempts to gather and share everyone's views without regard for 'party lines'. The politicians would do well to engage with them instead of relying on their own party 'research' to validate policies they want to impose from the top down.

But we too need to participate by sharing our concerns: we'll only get the government we deserve.

Image from The Original Hog Roast Company

Inverting The Insitutional Narrative Part 2: Telling It Bottom-Up

In Part 1, I suggested that to properly understand our motives at the ballot box the election narrative needs to be told from the bottom-up, not top-down.

How is that going?

False outrage in the headlines of certain newspapers is merely a top-down attempt by those institutions to influence how people vote (I won't dignify that rubbish with any links). And while pieces from Dispatches and Charlie Brooker genuinely expose the party leaders as institutional machines, they do nothing to reveal what individual people actually care about.

Ironically, Gordon Brown and the TV media came close to revealing what individuals think when he was caught expressing his annoyance off camera when a Rochdale resident expressed her own views instead of letting him list his government's achievements.

So what do people actually care about? And how does that resonate with candidates?

The team at TheyWorkForYou have bothered to find that out. By doing a quick survey yourself you'll find out the most common issues in your constituency and where your candidates stand - at least those candidates who've bothered to respond (1156, when I did it). Tellingly, the Guardian's report on this initiative focused on the Tories' refusal to complete the survey rather than people's issues, which were dismissively and condescendingly referred to as "everything from CCTV cameras to gay parenting."

Sadly, VoterPower have also done the analysis to explain just how little most people's votes actually count in the UK electoral system:

"The average UK voter only has the power of 0.253 votes. This is because most of us live in safe seats, where the outcome is pretty much certain regardless of how we vote... [for example] 57.60% of those who voted in Hammersmith in 2005 did not vote for the winning candidate. These votes count for nothing in the First Past the Post system."

There's clearly much work to be done before we'll see Politics 2.0!

Photo: 'expectant crowd' via BBC.

Innovation Doesn't 'Kill' Anything

As someone who's been involved at one bleeding edge or other of retail innovation for over a decade, I flinch when anyone mentions the words 'critical mass'.

Innovation is hard, because it always means change for someone. And change is a difficult process - more so for most of the population than the comparative minority of innovators and early adopters who preach it. So, while it's vital that there are evangelists for change who are passionate and completely biased in their view of the benefits of the new and the disadvantages of the old, it's also important to temper their message when addressing the wider world. After all, new products don't need to 'kill' old ones, they need to co-exist.

Tempering the discussion of innovation is more easily said than done. Once upon a time, change was only whispered at the top of organisations or society, and you or me would get fired or killed for daring to speak its name. The joyous challenge presented by the social media is that discussions about change are open to everyone.

For instance, I've been directly involved in e-payments for over a decade, and various people have called for 'the death' of cash or cheques at one point or another. Some still do. But, while this resonates with the faithful innovators and early adopters, it is neither helpful to most people's acceptance of innovative financial services nor to the process of getting those services released. Ironically, it's a tactic of the sceptic or the laggard to seize upon the 'death' of something held dear as the reason not to embrace change, often relying on 'hard data' from the current process against merely honest estimates of the benefit to implementing the new one. And that can be enough to eliminate many an innovative project from crowded boardroom agendas.

But it doesn't have to be that way. I can readily see why cash (or cheques) are still a vital payment option. All payment methods should co-exist, and if people naturally refrain from taking up new ones, or gradually abandon one form or another until it becomes untenable, so be it. Releasing another useful option - with the sole benefit of increasing choice - can be enough to see another method abandoned, which can then be gracefully retired. Like the humble cheque, perhaps, in the face of the myriad alternatives. But as can be seen from the reports on that announcement, merely discussing the 'abolition' awakens deep resistance, and provides the sceptics and the laggards with a platform from which they can make change harder than it needs to be.

Photo from WNYmedia.net

When Top-Down Meets Bottom-Up

Gordon Brown's exchanges with a woman from Rochdale today are emblematic of both the decline in faith in our institutions and the root cause.

While speaking with Ms Duffy, the Prime Minister focused entirely on making his own political points rather than listening to her issues, rationally expressed, including a parting compliment on local education. And his annoyed, off-camera reaction to her persistent attempts to get a word in edgewise was to mistakenly dismiss both her and her genuine concerns as "bigoted".

Ms Duffy's personal reaction to the Prime Minister's comment was "disgusted" and "upset". "They have no idea how we're living in this country," she said.

Already, the vicious cycle of public reaction has begun, taking the government, politics and politicians with it.

Photo from Plugin.com

Feel The Fear And Do It Anyway

As a lawyer, maybe I ought not to see risk as a positive force, but I do. If I did not, I would never have ridden a bicycle, horse or motorcycle, played rugby, scuba-dived, rowed, sailed, skied, driven vehicles, flown, or become involved with start-ups. Of course, I might never have fallen off, over, into, under or onto anything either. But the risk of falling - of failure - is actually what has made all these things FUN.

I'm actually not being facetious. Sir David Latham expressed his concern about overreaction to risk in the context of the furore over the 'early' release of prisoners, in light of the Venables case:

"I'm concerned that the society we're presently living in, is becoming too risk averse. That means that society is perhaps unrealistic about the level of risk it should be prepared to accept."

Boris Johnson made a similar point in his recent article on the plague of ski helmets:

"...there is something strange here, a mutation in the Zeitgeist. I reckon the helmet mania is more than just a question of fashion or a re-assessment of the medical risks of skiing. It’s a sign of the psychological state of the Western bourgeoisie in the grip of an economic crisis. They have seen what happened to the risk-taking bankers; they have seen how the sky fell in on the insouciant system of free-market capitalism; and so they literally cover their heads as an expression of the safety-first mentality that has seized us all."

Global concern about risk in the financial markets goes back along way. The Basel Committee on Banking Supervision was created in 1974. Yet even after all those years of careful work, and several Basel Accords, the Committee has been unable to prevent numerous banking meltdowns and ultimately the Credit Crunch. This is why placing further constraints on the financial markets is unlikely to work, and why I advocate simplifying them and opening them up to everyone instead. People may look upon that as a might leap of faith, but I've witnessed firsthand the way Zopa, the person-to-person lending marketplace launched in 2005, has grown nice and steadily throughout a period when the 'traditional institutions' were the ones exploding with bad debt.

Even today, we're being hectored by mainstream media interests to avoid choosing a coalition government in the UK. To hell with them all, I say. Feel the fear and do it anyway. It'll be FUN.

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Tactical Voting: Hung Parliament?

People are asking about how they might vote 'for' a hung Parliament. Well Tactical Voting suggests the constituencies between which voters could swap their votes to help produce that result, and where you might go to discuss and arrange it. The 'Voting Buddies' group on Facebook is one example. Alternatively, you could go to Hang 'em to see if you're able to vote for a candidate they suggest.

Or you could vote for a minority party that has a shot of winning your seat, or whichever of the major parties the polls suggest will take second place.

Toby Young points to scepticism about the impact of tactical voting. But it will be interesting to see whether the Facebook, Twitter and the other social media help voters unleash its potential this time around.