Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Strong hand and a weak nerve

Strong hand and a weak nerve Editorial comment THE article in this issue examining the onslaught on the money supply are cleft suck situation facing the British vital if we are t o stop seeing those de­ Steel Corporation is a disturbing pressing headlines. "£ hits new low". Strong example of how politicians throw in But if the condition for more over­ their hand when the going gets really seas credit is a hike i n domestic interest rough. rates — thereby making it more costly Chancellor Denis Healey defended for industry to invest at the very time hand his public spending cuts — which look when it needs to b e cheaper — then one must seriously question whether the like being directly responsible for exacerbating the troubles of BSC — by terms are too punitive. saying that was what the private sector It's likely to be argued that we have no option. That a refusal of credit had been crying ou t for. That could be and a interpreted as an "I told you so" would be the final crunch of no remark from someone who possibly confidence, and that Britain would slither into chaos. foresaw the likely consequences of his action, rather than a reasoned wea k If that is indeed the case, then no one argument supporting it. should be more aware of it than For the fact is that the Govern- Johannes Witteveen and his IMF ment's recent moves to bail the country colleagues. nerve out of its economic troubles are more Witteveen has been dubbed "Bri­ likely to keep us in the debtor's prison. tain's bank manager" by some of the British Steel is a classic example of newspapers. So let's look at his role in development cut-backs resulting in this context for a moment. fewer customers, resulting in higher He can, if he has a mind to. refuse to prices for a deteriorating service, extend our overdraft because the risk is British Rail is another obvious case in too great But if the overdraft isn't this vicious circle. forthcoming then there's even less chance of the outstanding loan being But far from heeding the damage paid back. this i s inflicting on two prime sectors of Coupled with this contribution by If Witteveen's "bank" was in the the economy — raw materials and the trades unions to putting the local High Street, it could choose to transport — the Government sees fit to country back on its feet has been the bring in more measures which will hit cut its losses, put in a bankruptcy Government's grant-aid programme to petition and then seize assets t o pay for private and public sector industry industry, designed to correct the im­ the secured loans. alike. balance between the productive and non-productive sectors. But the IMF is n o High Street bank. We know, of course, the circum­ And Britain — for all its troubles — is stances behind this. They form chapter Meanwhile, unemployment — no small, private company whose and verse 10 Everyman's Guide t o the always seen as a harsh but neverthe­ demise would cause little more than a British Disease .. . too many teachers less effective yardstick by which to tipple in the trading pond. Neither is it and not enough capstan operators, X judge austerity measures — remains a s the sort of customer from whom you pounds worth of production out­ horrifying as ever. can seize assets, it's a bit bizarre, for stripped by Y pounds worth of Unemployment apart, the results so example, t o think of the United States consumption (with the money presses far to bring back the country from the as a major creditor coming in and working overtime to mask the deficit), position of a Banana Republic have auctioning off the likes of British Ley- wages galloping a head of prices, and so been modest but encouraging. If it land to the highest bidder. on. takes nearly 30 years to dig yourself All this was meant to change with into a hole, it's unlikely that you're go- In short, the IMF is putting on the the much-heralded industrial re­ ing to clamber out in a few months. pressure — as indeed all efficient banks generation programme, and some of it Yet this is what our overseas are obliged t o do. But, at the time when has. Days lost through strikes have creditors seem to expect, for it's hard Britain is making a credible effort to been fewer than at any time since the put its balance back in the black, it's to believe that Healey would have early fifties, and that other pain so decided on the latest cost curbs with­ time that Healey used some more of his often quoted as being the principal out considerable pressure exerted by reputed nerve and played a better game cause of Britain's debilitation, wage- of poker. the IMF. push inflation, has been anaesthetised It's all too easy to argue that further The stakes are high, but he's still got by incomes restraint a pretty formidable hand. cuts in public spending and a fresh INDUSTRIAL MANAGEMENT http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Industrial Management Emerald Publishing

Strong hand and a weak nerve

Industrial Management , Volume 76 (11): 1 – Nov 1, 1976

Loading next page...
 
/lp/emerald-publishing/strong-hand-and-a-weak-nerve-LicK0RScfi
Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0007-6929
DOI
10.1108/eb056682
Publisher site
See Article on Publisher Site

Abstract

Editorial comment THE article in this issue examining the onslaught on the money supply are cleft suck situation facing the British vital if we are t o stop seeing those de­ Steel Corporation is a disturbing pressing headlines. "£ hits new low". Strong example of how politicians throw in But if the condition for more over­ their hand when the going gets really seas credit is a hike i n domestic interest rough. rates — thereby making it more costly Chancellor Denis Healey defended for industry to invest at the very time hand his public spending cuts — which look when it needs to b e cheaper — then one must seriously question whether the like being directly responsible for exacerbating the troubles of BSC — by terms are too punitive. saying that was what the private sector It's likely to be argued that we have no option. That a refusal of credit had been crying ou t for. That could be and a interpreted as an "I told you so" would be the final crunch of no remark from someone who possibly confidence, and that Britain would slither into chaos. foresaw the likely consequences of his action, rather than a reasoned wea k If that is indeed the case, then no one argument supporting it. should be more aware of it than For the fact is that the Govern- Johannes Witteveen and his IMF ment's recent moves to bail the country colleagues. nerve out of its economic troubles are more Witteveen has been dubbed "Bri­ likely to keep us in the debtor's prison. tain's bank manager" by some of the British Steel is a classic example of newspapers. So let's look at his role in development cut-backs resulting in this context for a moment. fewer customers, resulting in higher He can, if he has a mind to. refuse to prices for a deteriorating service, extend our overdraft because the risk is British Rail is another obvious case in too great But if the overdraft isn't this vicious circle. forthcoming then there's even less chance of the outstanding loan being But far from heeding the damage paid back. this i s inflicting on two prime sectors of Coupled with this contribution by If Witteveen's "bank" was in the the economy — raw materials and the trades unions to putting the local High Street, it could choose to transport — the Government sees fit to country back on its feet has been the bring in more measures which will hit cut its losses, put in a bankruptcy Government's grant-aid programme to petition and then seize assets t o pay for private and public sector industry industry, designed to correct the im­ the secured loans. alike. balance between the productive and non-productive sectors. But the IMF is n o High Street bank. We know, of course, the circum­ And Britain — for all its troubles — is stances behind this. They form chapter Meanwhile, unemployment — no small, private company whose and verse 10 Everyman's Guide t o the always seen as a harsh but neverthe­ demise would cause little more than a British Disease .. . too many teachers less effective yardstick by which to tipple in the trading pond. Neither is it and not enough capstan operators, X judge austerity measures — remains a s the sort of customer from whom you pounds worth of production out­ horrifying as ever. can seize assets, it's a bit bizarre, for stripped by Y pounds worth of Unemployment apart, the results so example, t o think of the United States consumption (with the money presses far to bring back the country from the as a major creditor coming in and working overtime to mask the deficit), position of a Banana Republic have auctioning off the likes of British Ley- wages galloping a head of prices, and so been modest but encouraging. If it land to the highest bidder. on. takes nearly 30 years to dig yourself All this was meant to change with into a hole, it's unlikely that you're go- In short, the IMF is putting on the the much-heralded industrial re­ ing to clamber out in a few months. pressure — as indeed all efficient banks generation programme, and some of it Yet this is what our overseas are obliged t o do. But, at the time when has. Days lost through strikes have creditors seem to expect, for it's hard Britain is making a credible effort to been fewer than at any time since the put its balance back in the black, it's to believe that Healey would have early fifties, and that other pain so decided on the latest cost curbs with­ time that Healey used some more of his often quoted as being the principal out considerable pressure exerted by reputed nerve and played a better game cause of Britain's debilitation, wage- of poker. the IMF. push inflation, has been anaesthetised It's all too easy to argue that further The stakes are high, but he's still got by incomes restraint a pretty formidable hand. cuts in public spending and a fresh INDUSTRIAL MANAGEMENT

Journal

Industrial ManagementEmerald Publishing

Published: Nov 1, 1976

There are no references for this article.