Worry not. I did see the New Year in at a party, and wrote this a couple of days ago so the show goes on.
There is one question I feel we need to ask again which is crucial to western success in the New Year. It is why does the west’s public sector find it so difficult to spend wisely, and to keep within sensible spending bounds? Why is the public sector so good at lobbying for more money, and so bad at delivering more with less?
In the great recession of 2007-8 many industrial companies experienced large falls in their income. Some saw their turnovers halve, as their customers decided to destock. With falling demand from their customers, it meant a period when they ordered nothing, as they worked their way through what they had already bought. Many companies adjusted rapidly to the new reality. They did not take it out on their customers, as they needed to win them back.
If the public sector in the west cut its spending by a little over 10% the current problems would be largely solved. Public borrowing would subside to affordable levels. It should be possible to do this without damaging the main services states feel they should provide. If that was all that private sector companies had had to do in 2007-8 most would have taken it in their stride,and would not have cut anything that mattered.
Instead of getting on with doing this, the public sector often enters a barrage of complaints, special pleading, and funny numbers. Rarely does anyone running a public service speak in terms of pounds or dollars spent. Budget numbers are put into so called real terms, and cuts are expressed as reductions in previously agreed growth plans, not as cuts in actual amounts of money being spent. Bonuses, pay awards, salary increments and pension improvements are often taken as unavoidable commitments, not something to manage in hard times. Public sector managers appear on the media to say they cannot do a good job because they are short of money. Private sector managers appear on the media to say they are doing a good job despite the shortage of cash.
I hope 2012 brings more commonsense to the public sectors of Europe and the USA. If more action is not taken voluntarily, the markets will press on and force worse medicine on the unwilling patient.