McDonnell’s Claim – Government Investment Works. Oh Really, Does It John?

John McDonnell’s claim is that government investment in this and that is a very good idea, very profitable. That’s why the central government should borrow to go buy all the utilities, the broadband, the transport companies and all that.

Before we consider any other issue here – like whether we actually want state control etc – the whole idea does depend upon the idea that government will be investing in sensible things. This being something we can test by going and looking at what government does invest in when it has the chance to borrow to do so:

The Treasury has clamped down on local authority borrowing, amid fears that reckless investments in struggling retail properties could bankrupt councils.

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The Problem With Hammerson, Land Securities – Property Valuations Are Too High

We all like to think – we who think markets work that is – that markets work. Bit tautologous but there we are. Prices in a market reflect the “true” value of whatever it is. As it happens, this isn’t true. What is true is that market prices reflect the aggregate and average price of what everyone involved in the market thinks the price should be. We can be tautologous again and say that the market price is that real price as the price of something is what you can sell it for.…

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A Piece of Cake – Mike Ashley Chases Patisserie Valerie

We’ve into a compare and contrast story here in these Sceptre’d Isles. But first an incy-wincy bit of background. As you will recall, Tim’s being regaling us here with yummy accounts of the travails at Patisserie Valerie. You know, that chain of sweet delight that wasn’t what it seemed. But isn’t that just so true of those cakes you buy that on the outside appear just sumptuous, but when you bite into them they’re a great disappointment?…

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India’s Weird Decision To Ban Vertical Integration In E-Commerce

There’s near no useful economic explanation for what India is doing in the field of e-commerce – online selling of goods and products. There’s good political reason of course, which is why it’s happening. But then this is just a confirmation of that thought that bad politics overrides good economics. For what’s happening is an absolute ban on vertical integration in that retail e-commerce. Therefore companies like Amazon and Flipkart cannot own equity stakes in any of the people who sell on the platforms.…

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Amazon Kills Retail Jobs – Yes, And Ain’t It Great?

We have a strange complaint about Jeff Bezos and Amazon here – that the company kills retail jobs by being more efficient. Well, yes, it does, that’s the very thing which makes us all richer over time, killing jobs. This is actually the great and grand economic task, to kill jobs, to reduce the amount of human labour that is required to meet any particular one of our wants or desires. The why it makes us richer is that this frees up labor to then go off and sate some other of our desires or wants.…

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Mandy Rice Davies Moment – Of Course Debenhams Denies Cash Crunch

One of the little things that makes modern business dangerous is quite how efficient we’ve become at it. This means that it is possible to run a little closer to the wire, the edge. That is, a business can be run more efficiently. Can run on mere fumes of capital, can optimise cash flow. That’s great, it all contributes to the overall efficiency of the economy as well as the company. The downside of this is that if there’s no capital buffer, if cashflow is always being optimised, then if there’s some jolt or error then it can all come unravelled very quickly indeed.…

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Yes, The EU Is Run By Idiots – Why Do You Ask?

When the European Union started to go on a jihad against credit card fees there were those  issuing small parp squeaks of common sense. The credit and debit card networks cost money to operate. Thus, someone, somewhere, must be paying the costs of running those credit and debit card networks. The logical place for those costs to be allocated, the someones, is the people who use the network. The logical somewhere is at the point of use.…

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CVAs, House Of Fraser And The Death Of The High Street

Landlords are beginning – well, vocally at least – to complain about the use of CVAs in reducing rents on commercial properties. Company voluntary arrangements are akin to a bankruptcy, in which all the various contracts entered into by the company originally are up for grabs. OK, not in detail they’re not but in practice that’s pretty much what happens. Companies like House of Fraser are making use of them to get out from under the cost burden which is collapsing the business.…

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Unibail Rodamco And Westfield – Markets Don’t Really Work Quite Like That

It’s entirely true that there’s money to be made even in a declining market. Being better at making a return on capital than the competition will see to that. And it’s also equally obvious that retail isn’t dead. It’s suffering some pressures from online, but bricks and mortar stores are going to be with us for some time yet. Still, there’s a certain unease here:

Christophe Cuvillier has the confidence of a man who knows he is on the home straight.

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10% Of High Street Shops Are Empty – 10% Of Sales Are On The Internet

This is one of those things we’re supposed to be celebrating – but then there’s no one a conservative as a lefty in the face of change, is there? High Street shops and chains are closing across the country. This, apparently, will put retail jobs at risk.

Good, we don’t need people doing those jobs any more. They can go off and attempt to sate some other human desire or want:

Shoppers are deserting the high street in greater numbers than during the depths of the recession in 2009, creating a brutal climate that is putting thousands more retail jobs at risk.

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