In these days of economic turmoil, it’s important that we don’t just bury our heads in the sand and hope it will all just pass, on the basis that previous downturns have passed. Even competent governments can only make policies – it’s up to all of us to make them work. For example, supposing the way out of the problems is for us all to go out and spend – the government can cut taxes and give us incentives to spend, but they can’t make us go out and spend. Likewise if the solution is to stop spending, they can raise taxes and ask the Bank of England nicely to raise interest rates, but they can’t easily stop us from spending recklessly all together.
At the same time, it’s important not to get too carried away and blame everything on the credit crunch.
The media have a tendency to run in waves. They report a story from a particular angle until everyone couldn’t care less, then they find a surprising different angle to take.
At the moment, it’s all doom and gloom, with the credit crunch at it’s core.
A couple of weeks ago on 6 Music I heard a news bulletin that proclaimed Abbey, Alliance and Leicester and Bradford & Bingley were all cutting back large numbers of staff.
To the average man in the street, this sounds like 3 well known banks are all in trouble.
However, what they didn’t mention is that all 3 banks are owned by the Spanish based Santander banking group who bought Abbey a couple of years ago, Alliance and Leicester this year (iirc) and Bradford and Bingley retail quite recently.
The main reason of course why companies buy out their competitors like this is to make the merged business more efficient by cutting out duplication and selling off excess assets.
So even if we were in the middle of a “boom”, they would have more than likely been making these jobs cuts – yet they were clearly trying to lead the listener to believe that this was yet more evidence of the credit crunch.
When it comes down to it, none of the high street retailers that have gone bust recently have been a major surprise. Woolworths “budget bits and bobs” format has been adopted by people like Wilkinson who do it cheaper and better. Photo labs such as Max Spielmann / Klik photopoint have been living on borrowed time from the moment that non-tech savvy grandparents started to buy digital cameras. MFI, well they lasted much longer than most of their furniture!
Zavvi? Until file sharing can be stopped (if indeed it can) then it’s only a matter of time before all the remaining music and DVD retailer go under.
These closures were perhaps speeded up by the Credit Crunch (TM) - but it’s only brought forward the effect of changing markets.
John Lewis or Tesco going bust, now that would be scary news!
