It's not often that adverts manage to be both entertaining and clever - the sort of advert that you don't skip on Sky Plus.
British Airways' latest offering is just that. And their new slogan "upgrade to BA" should be applauded as marketing genius.
Have a look for yourself...
PS Other airlines are available.
Saturday, September 29
Saturday, September 22
How Cameron can beat the clunking fist
The Financial Times' Dear Economist column is well worth a read. It's written by Tim Harford, author of The Undercover Economist (a book I've read, and not unlike Freakonomics).
A few weeks ago, the column featured the story of "J" who wants to run for student union President and is willing to put up some cash to help him in his quest.
I just wonder if David Cameron ought to take heed from the wise words of the Economist. Given the talk of an early poll, it might be his only way to win an election...
A few weeks ago, the column featured the story of "J" who wants to run for student union President and is willing to put up some cash to help him in his quest.
I just wonder if David Cameron ought to take heed from the wise words of the Economist. Given the talk of an early poll, it might be his only way to win an election...
Source: FT.comDear Economist,
I am an economics student, and intend to run for president of the student union this year. The elections are won on the basis of whose name is seen the most around campus. Given that it is improbable I will win, I am willing to offer a pot of hundreds of pounds to people to help campaign – dependent on my winning. What is the most efficient use of this pot? Hire one person to go flat out? Or spread the money around?
Cheers
J, EnglandDear J,
If you are able to fool your potential recruits into taking you seriously, you will find willing volunteers – and you may indeed win. But you seem like an obvious loser to me. If your fellow students are as dismissive of your chances as you yourself are, they will find your offer unattractive.
They will refuse to help, and you will lose. Either way, your situation – like that of many politicians – is dependent on a self-fulfilling prophecy.
You need to find some way to take advantage of your position as a hopeless outsider. I would recommend putting a decent bet on yourself to win – you should be able to find long odds. The prospective winnings would make your offer more generous, which could make all the difference.
As for how to divide the money, I recommend that you run a prize draw, winning volunteer takes all. That would make the cash payment more attractive when your campaign is sparsely supported and the incentive is most needed.
In any case, the economist John List has shown that prize draws are a great way to raise money for charity. Your campaign certainly sounds like a charity case to me.
Economist.
Sunday, September 16
Northern Crock
David Cameron is engaging in a bit of political opportunism this morning, by laying the blame for the Northern Rock credit crisis at the door of the government (well, it beats having any actual policies, doesn't it?).
Without wishing to mention that the liberalisation of the consumer credit market took place under a Conservative government, one has to question the validity of his argument.
There are two points worth making: the first is on the point of access to credit; and the second relates to the relationship between debt and Britain's economy over the last 10 years.
It's important that people have access to credit in order to be able to engage in consumption smoothing. A credit constrained world benefits only those with enough liquid resources at the outset (i.e. the very rich); at one level, access to credit (almost paradoxically) helps those on lower incomes more than those in higher income brackets, as it allows them to maintain spending in periods where their income falls short of their outgoings, and pay off debt when their income exceeds outgoings (at least, theoretically). Credit is therefore a redistributive device in the sense that it allows individuals to smooth consumption over their lifetime.
Of course, there need to be reasonable safeguards on lending - but it is, and should rightly be the responsibility of lenders and borrowers to lend/borrow on an affordable basis. The Government should introduce regulation only to the extent that it provides adequate safeguards to the wider economy and to individuals. It shouldn't involve itself in more wholesale policing of credit agreements between individuals and their lenders, as this would drive up the costs of borrowing and would in turn restrict access to credit.
David Cameron suggests that "under Labour our economic growth has been built on a mountain of debt. And as any family with debts knows, higher debt makes us more vulnerable to the unexpected. In short, the increases in debt in the UK have added a new risk to economic stability." Whilst this as a factual observation has some truth in it (debt has risen over the last 10 years, and borrowing exposes individuals to the risks of unexpected events), it misses the point.
A stable economy - where people feel assured that inflation and interest rates will remain stable and low (in historic terms) - actually increases the likelihood that people will borrow against the expectation of stable income streams over the long term. Increased debt is a symptom of a stable economy, not necessarily a cause of an unstable one.
The year after the Black Wednesday debacle, total gross lending in the UK increased five-fold. Why? Because people felt more confident that lending would not expose them to the risks that they had endured during the 1980s and early 1990s. It is no surprise that gross lending has increased in every year since 1993 - a period that has seen low and stable inflation rates, and decreasing interest rates (a trend that was accelerated under Labour).
Whilst low interest rates might encourage borrowing, higher interest rates discourages it. The recent rises in interest rates will encourage more and more marginal borrowers to pay off debt more quickly and revert to saving instead. The consumer credit market, in this way, is self-regulating.
In David Cameron's rush to acquire a few floating voters, he has failed to grasp the facts of the matter. His comments today about consumer credit are simply a load of Northern Crock.
Without wishing to mention that the liberalisation of the consumer credit market took place under a Conservative government, one has to question the validity of his argument.
There are two points worth making: the first is on the point of access to credit; and the second relates to the relationship between debt and Britain's economy over the last 10 years.
It's important that people have access to credit in order to be able to engage in consumption smoothing. A credit constrained world benefits only those with enough liquid resources at the outset (i.e. the very rich); at one level, access to credit (almost paradoxically) helps those on lower incomes more than those in higher income brackets, as it allows them to maintain spending in periods where their income falls short of their outgoings, and pay off debt when their income exceeds outgoings (at least, theoretically). Credit is therefore a redistributive device in the sense that it allows individuals to smooth consumption over their lifetime.
Of course, there need to be reasonable safeguards on lending - but it is, and should rightly be the responsibility of lenders and borrowers to lend/borrow on an affordable basis. The Government should introduce regulation only to the extent that it provides adequate safeguards to the wider economy and to individuals. It shouldn't involve itself in more wholesale policing of credit agreements between individuals and their lenders, as this would drive up the costs of borrowing and would in turn restrict access to credit.
David Cameron suggests that "under Labour our economic growth has been built on a mountain of debt. And as any family with debts knows, higher debt makes us more vulnerable to the unexpected. In short, the increases in debt in the UK have added a new risk to economic stability." Whilst this as a factual observation has some truth in it (debt has risen over the last 10 years, and borrowing exposes individuals to the risks of unexpected events), it misses the point.
A stable economy - where people feel assured that inflation and interest rates will remain stable and low (in historic terms) - actually increases the likelihood that people will borrow against the expectation of stable income streams over the long term. Increased debt is a symptom of a stable economy, not necessarily a cause of an unstable one.
The year after the Black Wednesday debacle, total gross lending in the UK increased five-fold. Why? Because people felt more confident that lending would not expose them to the risks that they had endured during the 1980s and early 1990s. It is no surprise that gross lending has increased in every year since 1993 - a period that has seen low and stable inflation rates, and decreasing interest rates (a trend that was accelerated under Labour).
Whilst low interest rates might encourage borrowing, higher interest rates discourages it. The recent rises in interest rates will encourage more and more marginal borrowers to pay off debt more quickly and revert to saving instead. The consumer credit market, in this way, is self-regulating.
In David Cameron's rush to acquire a few floating voters, he has failed to grasp the facts of the matter. His comments today about consumer credit are simply a load of Northern Crock.
