Archive for the ‘business’ Category

No Easy Answers
April 12, 2016

This column was first published in the April 2016, Friday AM All Month in Salmon Arm.

You’ve heard the joke about the Trivial Pursuit game for economists, right? 500 answers for every single question. I often think about this joke when a budget is presented. 

Of the 2016 federal budget, many will say (in fact, have already said) that the wrong buttons were pushed and the wrong levers were pulled and if the new government really knew what it was doing, we wouldn’t face a deficit.  But that’s a bit like assuming any of us really know what combination of tactics will spark the economy. Previous budgets certainly haven’t cracked that code. Still, I would be wary of those who know better without proposing workable solutions. 
 
What we know for sure is that we’ve been in a historically low growth economy since 2008. We also know that oil prices are low and when we rely on those royalties to pay for government services, we’ll see a decrease in revenue. When facing a decrease in revenue in government, there are really only four options. Spend less (cuts to services), charge more (increase taxes), borrow (deficits) or find efficiencies (we don’t talk about this one as much as we should; there is always room to increase productivity, share resources and reduce waste). 
 
While we also watch the up ticks and down ticks of the stock market, we need to realize that relatively speaking, very few companies are on the stock market. They are there because they needed capital the banks couldn’t (or wouldn’t) lend and they stay because of the equity their company keeps and the money they can make for shareholders.
 
I never want to be the one to decide who works hardest and who contributes most to an economy. Do we reward risk, results or efforts? I do, however, suggest that we really need to have that talk. We like to think our tax system is based on risk. We reward those who take it because they benefit those of us who don’t. Ironically, in a low growth economy, we are rewarding low risk with profit and high risk with loss. 
 
Perhaps it’s the nature of risk we need to revisit as well as the nature of capital. There are different kinds of risk and different kinds of capital. Each works in its own way and works best when they are considered in relation to one another. It’s a complex question. There are no easy answers. Only easy criticisms. 
 
As a self employed person, I like to think I have taken a risk. One that rewards me personally and rewards my community and its economy. Does that risk discount my relative contribution to the shared assets we all need to live and work? Public infrastructure, education and health, among many other common societal needs, cost money that is raised through taxation. What is a fair share? 
 
But like risk and capital, not all businesses are alike. Micro business (fewer than 5 employees) constitutes 80% of business and we can’t be treated like big business. There are not the same expectations of big business concerned with share value. It’s an important distinction to make and one we ignore at our peril. Small business is not solely focussed on profit and shareholder value. It’s about self-employment, multiplier effects and community capacity. How do we measure that accurately? 
Questions such as these will make for interesting discussions at the upcoming Respect Lives Here: The Economics of Happiness workshop being held on Wednesday April 13 at the Log Building at Pierre’s Point. Local business owners and community leaders will explore the nature of an economy of well being, where more than one kind of capital is considered in the equation. The full day workshop is $20 and includes lunch. More information can be found at www.plan-be.ca
 
Of the 2016 budget, I will say that while no one ever said with glee “Hooray, let’s borrow MORE money”, if the middle class is to have more disposable income as a result of the child tax benefit, then, micro businesses who sell goods to consumers or to other small businesses, it’s likely that relative increase in income will help the economy. If we are to invest in the maintenance and repair of infrastructure, it’s likely the construction industry will benefit as will the economy. If we are to reduce the amount of debt our young people face by pursuing post secondary study, it’s likely to increase their disposable income upon graduation which, in turn, will boost the economy. 
 
But what do I know? If studying economics teaches you anything, it’s that all you ever learn is how little you know. But learn we will. Criticize without alternatives, maybe not. At least not yet. There’s too much work to do. 
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Down the Rabbit Hole
May 3, 2014

This column first appeared in the May All Month Edition of the Salmon Arm Friday AM

I always carry a copy of Alice in Wonderland with me. Odd, but true. It’s my go to source of wisdom, inspiration and perspective. You see, Alice had no idea what she was getting into that fateful day. And to some extent, neither do I. Every day is an adventure, especially when you’re a small business owner like me.

You never know who you’ll meet, where you’ll go and what will happen. It’s all very exciting and on occasion, absolutely terrifying. There are cheshire cats, mad hatters and queens of hearts in the business world. There are days where you feel very big and there are days where you feel very small. There are days where you rush around like a mad hatter. And there are days where you might best express yourself with a few swings of a croquet club.

What you might not know is that Alice in Wonderland was not only about words, it was also about numbers. Just like business, as it happens. Both are very powerful storytellers, words and numbers, that is. Lewis Carol was the pen name of a Reverend at an Oxford College. It’s said that Alice’s adventures were a satirical exploration of the mathematical theory of the time. The book was first published in 1865.

It’s my view that modern business is also a satirical exploration of mathematical theory. Despite centuries of commerce, we have yet to find a way to measure what really matters. How much, for example, is a pound of happiness worth? How about an ounce of laughter? Can we benchmark the love we feel for our families and friends? Is there any better key performance indicators than a beautiful sunset followed by a glorious sunrise?

There are, on the other hand, things we are exceptionally good at measuring. Baseball statistics for one (they are more complex than most university level economics courses), debt equity ratios, gross domestic product, trade balances, net worth, interest rates and stock exchange indices. But to what end? I bet Alice would wonder that too. Her adventure was all about finding the answers to riddles as complex and confusing as these. Which is what we all do. And until I figure them out, she’ll be with me enjoying the tea party.

“Who are you?” said the Caterpillar. “I hardly know, sir, just at present – at least I know who I was when I got up this morning, but I think I must have changed several times since then.”

And speaking of stories, I hope you’ll take in the new exhibition now open  and running through to the end of June at the Salmon Arm Arts Centre. It’s called Saga: The Art of Storytelling in the 21st Century. It’s a collaborative and interactive exploration of our stories, how we tell them and how they unite us as the giant tea party that is our wonderful and adventurous community.

PS – You needn’t worry about the Queen of Hearts, she wasn’t invited.