The popular pastime for financial commentators this season is sticking pins in George Osborne. To those on the left who hate everything about him, to those on the right who think he should have used the fiscal crisis as an opportunity to slash state spending far more than he did, to those in the middle who prefer their politicians to be vacillating blunderers blown by fate, and thereby easier targets, this Chancellor is pretty bloody irritating.
The UK is expected to be the G7’s fastest-growing economy this year, and Osborne’s doubters at the IMF have had to admit, in a mealy-mouthed way, that they were wrong to try to point him away from the path of austerity — which other critics now say wasn’t much austerity at all, which is why it did less damage than expected. Earnings growth has risen to match inflation for the first time since 2010, turning Ed Miliband’s ‘cost of living crisis’ into last year’s soundbite even though real earnings will remain below their pre-crisis level for years to come. Business investment is growing, deflecting fears that an uptick based on consumer spending would be fragile and short-lived. Osborne’s cheeky declaration in favour of ‘full employment’ was followed by yet another sharp fall in jobless numbers. Despite a continuing battle to shrink public borrowing, there’s talk of tax cuts ahead of next year’s election.
Well, this column has been more consistent than most in saying that Osborne was on the right track all along. ‘Barely a flicker of growth, but Osborne must follow his instincts and stick to his guns’ was my headline back in July 2011. Of course there are many elements of recovery for which he can take no credit, including the pessimism–defying rates of private-sector job creation and new business start-ups ahead of the return to growth, and the impact of the Bank of England’s quantitative easing, which is reckoned (by MPC member Martin Weale) to have contributed 3 per cent to GDP since 2009. And of course we should worry that on the basis of electoral calculation, Osborne is doing nothing to avert a house-price bubble. But on the whole the Chancellor is entitled, for the time being, to wear his characteristic look of impish smugness; perhaps for the next 12 months he’d be wise to wear a paper bag over his head as well.
Dangerous brands
Wally Olins changed our understanding of commerce by defining ‘brand identity’ in terms of positive emotional connections between consumer and product. A genial guru in his trademark bow-tie and specs, he has been warmly obituarised — but the pseudo-science he sold as a consultant to the likes of BT and Volkswagen was more ambiguous, in a moral sense, than he or his adherents ever cared to admit. In a recent interview he warned of the danger of ‘fake authenticity’, yet in On Brand (2004) he wrote admiringly of Volkswagen for the ‘contrived’ image of its Audi marque: here was a brand that aimed to be seen as an inheritor of the Bauhaus tradition in which form followed function, but in which the car itself was little more than an eye–catching body shape on a VW chassis: ‘In today’s Audi, form doesn’t actually follow function at all — it just looks like it does.’
Olins believed consumers who choose brands for emotional satisfaction know they are buying image over substance: he admitted to a personal preference for imported mineral water even though he could not tell it from tap. That may be harmless if shoppers are as sophisticated and self-aware as he was. And of course some brand images — Rolls-Royce, Apple, The Spectator — reflect real product qualities. But in too many other cases, brand imagery is a vehicle for deception, for seeking to sell something that exists only in the imagination of the buyer. And when branding meets politics, most famously in the New Labour project, it leads only to disillusionment. Wally Olins championed the value of brands in business and beyond, but not conclusively: they are dangerous devices in the wrong hands.
The shoe-shine scandal
Down in St Pompon, the Dordogne village where I keep a holiday hideaway, my neighbours emphatically endorsed the status quo in last month’s municipal elections. On a very high turnout, our enterprising young mayor was returned for a second term with 80 per cent of the vote.
That reflects his efforts to attract trade and investment into the commune, and is more than four times the current approval rating of President François Hollande, whose hope of restored dignity — after tabloid exposure of his new girlfriend and the electoral battering of his Socialist party — has been dashed by the departure of his political adviser Aquilino Morelle, accused of ‘conflicts of interest’ in a previous role as an official of France’s social affairs inspectorate, when he also happened to be a paid adviser to a drug company. Even more damaging, the ‘petit marquis’ Morelle is revealed to have had a room set aside in the presidential quarters for the professional care of his own 30 pairs of handmade shoes.
All this comes at a time when Hollande has been trying to shift the political agenda towards job creation, but with scant prospect of positive change. Unemployment remains stubbornly above 10 per cent (compared to 7 per cent and falling in Osborne-land) and a leading French think-tank predicts it will be no lower by the end of 2015. Highlighting the mockery of égalité that socialists like Morelle so richly symbolise, the same report points out that joblessness among the unskilled has recently been almost six times higher than among the functionary class, for whom it is negligible.
Indeed, the only person to gain stature from this week’s Paris headlines is shoe–shiner David Ysebaert, a hardworking micro-entrepreneur who charges €10 a polish and offers home visits for five pairs or more. Morelle has told him his services are no longer required — but Hollande would do well to harness Ysebaert and St Pompon’s mayor as his new political advisers.
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