Thursday, 21 June 2012

What if the Eurozone just keeps applying sticking plasters?

A thought occurred to me watching Channel 4 News last night.  We are all it seems waiting for some anarchic / cathartic moment with the Eurozone crisis.  A cataclysmic earthquake which causes the entire structure to fall apart and countries forced to start printing their own money.  We are all expecting to see massive capital flight to safe havens, terror stricken faces on central bankers, horrified Germans, delighted Tory MPs and various economists trying to tell us that they predicted this all along.
But what if this doesn’t happen?  What if the Eurozone leaders keep on applying sticking plasters just big enough to stem the bleeding but not big enough to finally cure the patient?
I suspect we have been conditioned to expect the anarchic resolution scenario in this country in part due to our ejection from the Exchange Rate Mechanism in 1992.  That day all hell broke loose with massive currency trades, emergency interest rates of 15 per cent, a Chancellor of the Exchequer caught in the headlights and screaming currency arbitrage traders bellowing at each other across London trading floors.  Oh and George Soros looking very happy because he made billions that day and Peter Jay of the BBC seemingly the only person who knew what the hell was going on!
Ultimately, however, the experience was cathartic.  The UK economy, released from the stranglehold of the ERM blossomed, which is what many predict will happen if the likes of Greece and Spain are cut adrift or leave the Eurozone of their own accord, devalue their currencies and use inflationary pressure to reduce debt.  Then again, nobody is really sure.
Personally, I am beginning to believe that the key date is not when Greece or Spain’s next government bond repayment is due but the German elections when Angela Merkel has to face the electorate next year.  Once Merkel herself is released from trying to get re-elected then we might see some progress on a growth strategy for the Eurozone. 
As I write I note that Angela is talking at the G20 about getting the “big bazooka” out to finally deal with this.  We’ll see, I’m increasingly of the belief that European leaders are not up to the task and that we are condemned to one sticking plaster after another with European, not just Eurozone, economies bumping along the bottom for a good while yet!

Monday, 18 June 2012

Forty years ago today journalism started on the road towards its finest hour!

40 years ago today the Washington Post carried a small story at the bottom of page one with the headline “Five held in plot to bug Democratic offices”.  This was the start of what is probably the greatest journalistic triumph of all time.

At the time nobody much cared, but within two years the dogged pursuit of the story by the Post, in particular journalists Carl Bernstein and Bob Woodward, had caused the story to be renamed, creating a suffix which has become synonymous with political scandal ever since.

Watergate, as it became known, is the mother of all ‘gates.  In simple terms it was, in Nixon’s words, a “third-rate burglary” of the Democratic Party office in the Watergate complex perpetrated by White House henchmen and designed to uncover embarrassing information about candidates for the Presidency. 

In reality, it is the story of how journalists on the Post, in the face of unprecedented political and peer pressure (for months no other newspaper would touch the story) uncovered a political scandal which brought down a President.

In many ways this was the high water mark for the profession.  With a series of brilliant scoops, often using unnamed sources, the Post linked campaign contributions to the Committee to re-elect the President, or CREEP as it was known (you couldn’t make it up!), to the bank account of one of the Watergate burglars and then linked the White House to the burglars in the person of Charles Colson, Special Adviser to the President who was effectively in charge of campaign dirty tricks. 

When Nixon embarked on a cover-up, the Post continued its pursuit alleging that the White House had instructed the CIA to illegally block the FBI investigation and that documents had been shredded at the Justice Department.

As Nixon wriggled on the hook the Post linked Presidential advisers of increasing importance with either the original break-in or the cover-up, eventually forcing Nixon to sack his most senior advisers, namely Chief of Staff HR ‘Bob’ Haldemann and policy adviser John Ehrlichman.   When the Senate started investigating, and the Oval Office "tapes' became public knowledge, Nixon's fate was sealed.  In all 43 people went to prison for Watergate related crimes, although of course not Nixon himself.

Forty years on the media landscape looks very different.  The web is making traditional print news look, at best sluggish and, at worst, positively outdated.  Newspapers across the country are closing, merging or going down one edition per week.  Social media is making us all into 'Citizen Journalists' armed with our iPhones to record events to post ourselves on YouTube.  Twitter and trending allow instant sharing of information. 

Most importantly, journalism itself is now in the dock.  Parallels between phone hacking and Watergate have been made before, but it is startling that the key lesson, that the cover-up is at least as bad as the original crime, appears not to have been learnt.  For the White House substitute News International with all of its alleged shredding, obstruction of justice and non-denial denials.

However, it would be wrong to paint journalism as an outdated and dying profession.  The Telegraph’s investigation of MPs expenses proved that investigative journalism can perform a public duty in the 21st Century.  The challenge for Leveson is to bring the press into line without strangling the opportunity for the sort of investigation which holds our public officials up to scrutiny and can bring down a President.

Friday, 8 June 2012

You can’t have your cookie and eat it…

Now before you ask, I’m not talking about the tasty baked treat loved by a sesame street character with a voracious appetite, but rather the less appetising internet variety. You can have your chocolate chip cookie and eat it you’ll be glad to know, but for the other type of cookie it is a different matter. 

The cookies I’m talking about are the ones that have been central to online privacy debates since the dotcom boom and more recently EU legislation governing how they are to be gathered by websites (not the Cookie Monster… nom nom nom). For those of you in the marketing world this is an important piece of internet legislation to be aware of.

In the UK, the law has recently changed to make sites more open about how they track their users, requiring sites to give consumers notification that their site uses tracking files, and a chance to opt in or out of such measures, or else face penalties.

Now, this all seems fairly straight up and not something you could really pick a bone with – who wants to be followed unknowingly? It ain’t nice in a dark alley and it ain’t nice online.

However, if websites that track users now have to allow people to opt out (presuming a good chunk will) the advertising model that is central to the online revenue stream for many sites is under threat. Naturally, the majority of the UK’s largest websites have made no signs of compliance with the new laws so there’s no immediate danger but it is still worth considering the implications.

You see, web advertising is far cheaper than alternative media and therefore trying to increase its value is vital to the strategy of many sites. User tracking helps this in two ways: firstly, it fixes the basic mechanics of tracking which adverts get clicked, and how often. The second method, though, is the key: cookies track your internet activity – your searches, the sites you’ve visited, what you’ve downloaded etc. So, when you search for flights to Spain, the next time you go online an ad might pop up on a website with the latest hotel and flight packages for the Costa del Sol! Quite smart really, even if sometimes it can be a tad hit and miss.
Ultimately, better use of data and tracking means better advertising and a better user experience. The information economy needs it to survive – Google and Facebook included.

If online consumers now decide to opt out of these tracking files in their masses then the implications are quite simple, the advertising model will collapse, leaving two alternatives: paying for the services a site offers, or letting it shut; a case of your money or your (online) life.