The Human Development Index is Personal

The British media moan that the UK is sliding inexorably down the Human Development Index. It's ranked 21st.

This parochial view of course ignores the plight of nations nowhere near the top 20, whom measures like the HDI are really intended to help. The top 20 are pretty irrelevant, actually, as may be the HDI itself, according to its critics. To them, you could add Hans Rosling, whose TED presentation brilliantly illuminates how misleading and unhelpful it is to refer to the development of 'countries' rather than areas and demographics within them:



This may sound terrifically defensive to those in higher-ranked countries, but ultimately, what is an acceptable standard of living is also highly personal. People's social, political and cultural satisfaction are tough to measure and compare. I regard myself as living in London, rather than the UK, for example. And I reckon it's the right choice for now, even having lived in Sydney and New York City.

Mind you, a huge, lingering structural deficit, higher taxes and the continuing failure to fix a broken parliament might change my view.

Here's that HDI top 20 if you're still interested:

1. Norway

2. Australia

3. Iceland

4. Canada

5. Ireland

6. Netherlands

7. Sweden

8. France

9. Switzerland

10. Japan

11. Luxembourg

12. Finland

13. United States

14. Austria

15. Spain

16. Denmark

17. Belgium

18. Italy

19. Liechtenstein

20. New Zealand

Those Squealing MPs Are Back!

Isn't it reassuring to see the piggies back from yet more holiday, fighting every effort to have their snouts hauled out of the trough?

My personal favourite is the one squealing about 'subjective judgements' in the legal review of her own expense claims, but not the subjective judgements made in how she actually filed them. As a chief architect of the Nanny State she should've known better. Experience how subjectively angry this makes you feel, by staring at the defiant face below for 30 seconds. Then exercise your own subjective judgement at Power 2010.

John Thain's 10 Lessons of the Credit Crunch

I would summarise the recent remarks of former Merrill Lynch CEO, John Thain, at Wharton Business School in the 10 points below (my adds in italics). But two general observations. First, John says he doesn't believe there could be another bubble as damaging as this particular one, whereas we can't possible know that. It seems a lot safer to assume there will be a more damaging bubble, so we can at least consider what it might be and have some chance of acting to minimise or avoid the consequences. And, second, John is pessimistic that we'll heed these lessons of the credit crunch. So, logically, he would have to concede we're in for a repeat.

1. Loan/mortgage brokers should be incentivised based on loan performance, not just volume;


2. Loan owners who securitise must retain a significant proportion of the equity;


3. Government sponsored entities should be not-for-profit (i.e. they can run at a profit, but can't distribute profits, with an exception here in favour of the Treasury, surely);


4. The issuers of securities need to explain not just the risk in the security, but also what residual risk remains with the issuer and how it plans to cover those risks (this would demonstrate more clearly the inter-relationship between markets for credit and insurance, the use of shadow banks, and related assumptions);


5. Banks must reserve more capital as a proportion of total assets in a rising market, so they can afford to reserve less in a falling market;


6. Private equity firms should not be free of leverage controls (which suggests they need to make the same risk explanation in 4 above to their investors as issuers of other securities, regardless of whether those investors are 'sophisticated' or market counterparties);


7. Financial regulatory structures need to be more logical, less duplicative, less expensive, with no gaps;


8. Compensation should be variable, reflect how earnings are generated, tied to longer-term performance, aligned with shareholders' interests and ultimate financial results;


9. Credit risk management needs to be improved - but the crisis has demonstrated that once toxic assets are on the balance sheet it's tough to get rid of them, so there has to be some recognition that a government guarantee is ultimately necessary to remove them;


10. Financial institutions must pay for their implicit government guarantee, over and above existing FDIC or other financial compensation schemes.

Never Retire

The pensions crisis has dragged on for years now. The hole is £200bn deep, and recent stock market rises have not helped to fill it, because bond yields fell at the same time. In fact some households are now missing 5 years worth of living expenses.

Listening to the experts, there is no plan for getting individuals out of this mess. Meanwhile corporations are busy minimising their exposure as best they can, and the UK courts have (grudgingly) upheld the law allowing employers to require us to 'retire' at 65.

Tempted as I am to campaign to raise the 'retirement age', I think we should forget it. It's only there for our employers' benefit, and they may not last long enough for it to matter anyway. For us, there is no retirement, only age. We have no pension 'entitlements'. The welfare state is dead. Investing for the future is like trying to beat the casino.

Like it or not we're in charge of our own welfare, and we need to take control. Some are calling this process "rewirement", which is nice. 'Work' is not a chore that can ever be dispensed with, simple as that. And we can't rely on a single employer. We need multiple revenue streams in case any one of them dries up. We have to remain alert to opportunities, and be flexible enough to take each one. And so on. Until we drop.

Rower's Revenge 2009

Well, that's a wrap for 2009.

An average of 4.84 training sessions a week for the past 50 weeks and a time of 1:39:59 in the Rower's Revenge - 58th overall, 11th in M40-49 group - just pipping Oikonomics, who smoked me on the bike. I was 49th and 9th respectively last year, so I'm going to have to do something radical next season...

In the meantime, I've raised 60% of my target for Prostate UK - you can help beat that by donating at: http://www.justgiving.com/simondeanejohns/.

Join us next year!

Thanks to SussexSportPhotography.com for the pic.