Interestingly, human irrationality is a hot topic in economics at the moment. Behavioural economics it’s called, on the cusp of economics and psychology.
Some people harbour an awkward clash of feelings – homosexual attraction on the one hand and shame or embarrassment about that attraction on the other. It is well known that the mind struggles to sustain conflicting views.
Personally, I don’t see old economics and behavioural economics as opposed. It is useful to assume people are rational as a good approximation to their long term behaviour, but it would be unwise not to think how in practice their behaviour may deviate from that simplifying assumption.
Once we are fed, heated, housed and healthy, our extra consumption inevitably has an element of luxury about it. And once luxury enters the scene, the practicalities are in trouble, as women who wear expensive stiletto heels can testify.
My instinct is to assume that we consumers are an inconsistent bunch. We like competition if it delivers low prices, but grumble if it delivers the bad news that prices need to go up.
It is no wonder that bank capital is regulated. When borrowing and lending is profitable, it is tempting for banks to scale up their operations and to borrow and lend too much in relation to their capital, in effect reducing the effectiveness of the potential capital cushion.
At the BBC we’ve had plenty of women in good management jobs. It comes and goes but there’s been plenty. On air, I think there’s quite a bit more we can do.
Black Friday is not another bad hair day in Wall Street. It’s the term used by American retailers to describe the day after the Thanksgiving Holiday, seen as the semi-official start of Christmas shopping season.
Art can help a town by attracting a certain Bohemian population that adds life to the bars, character to the streets and a buzz to the name. Employers may then follow. But art can’t do much if every town does it. There aren’t enough Bohemians.
But beginners to the World Economics Forum have to understand there is no single Davos experience, and there is no single Davos community either. There are numerous tribes who interact only at a minimal level.
Crossrail is a prime example of infrastructure. It is a rather deadly word, but I think it is exciting stuff, the civil engineering which makes Britain tick – the bridges, tunnels, power and water networks, which bind us together.
Historically, the British have always been rather wary of grand engineering projects – perhaps understandably, given that many of them have been delivered late and over budget.
I rarely come away from presenting the ‘Today’ programme without some sense of regret. There is always some question that I should have asked, or some point that I should have made. This is annoying but not surprising. Perfection is hard to achieve in a three-hour live programme.
Now undoubtedly, we face some very British challenges when it comes to infrastructure. We rightly cherish our back yards and green spaces, and we’ll defend them passionately when projects are announced. We live in a democracy, and we like to debate these things, often for many years.
One of the key problems is that the Germans know what they do because everywhere they go there’s a ‘made in Germany’ label on it – they can feel proud of Volkswagens and Audis and Mercedes.
The fact that radio is so hopeless at delivering data makes it an uncluttered medium, offering the basic story without the detailed trappings. But it does mean that if data is important, radio is probably not your place.
The Germans are clear about what they do – cars and machine tools; the Japanese are clear about what they do – electronics; the Chinese are clear about what they do – they’re the workshop of the world.
What comes with a job as a staff member of the BBC is a certain self-censoring that you get utterly used to. You don’t say everything you think. You hold back on some things.
When a population saves a lot, the funds are invested outside the country as well as inside. If the Japanese invest in the United States, it pushes their exchange rate down and makes their manufacturing more competitive.
Although being economics editor sounds impressive, it does not mean I actually edit anything. It mainly reflects two decades of title-inflation at the BBC, which has given ever more status to senior reporters, presumably because it is cheaper to do that than to offer higher pay.