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No more buggy whips.

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romancarriage.jpgIt's usually painful for employees and owners when industries become obsolete. Exceptions include the pyramid-makers - the slaves were no doubt relieved when that particular trend came to a halt. 

As the current economic crisis deepens, it's putting more and more categories of business under threat, and many sectors are still feeling the impact of the internet on their old business models. 

A friend of mine is fond of the metaphor of the buggy whip manufacturers who got put out of work by the arrival of the car industry - as the demand for horse-drawn carriages fell, they failed to diversify. No-one cried for them, least of all the horses.

Now the wheel of fortune has turned and the car industry itself is in trouble across the globe. Demand is falling, bailouts are being demanded, and bankruptcy looms large. Their desperate measures to survive seem doomed, and their efforts to get off fossil fuels and into electric seem so tokenistic.

Newspapers are another matter, though, although the comparison isn't new. Today's ABCs, the circulation gospel, show every publication in Scotland down apart from the Times and Sunday Times. They shouldn't feel smug, though. Last time I looked it was only the Telegraph and Sunday Telegraph who held their own, and everyone's trendline is downwards. Collectively, just looking at the dailies, they lost just short of 108,000 readers in the last year, presumably mostly to the web.

In America, papers are closing left and right. Here there have been job cuts at the Guardian, the Independent, the Sunday Mail and the Record, the Sunday Herald and the Herald, and others. At the local end, there's been a net loss of 42 papers across the UK, but no major nationals have folded here. Yet.

The Scottish Government and COSLA are doing their bit to hasten the end. They're advertising online, instead of in the papers, and saving £10m doing so. As a taxpayer, I'm obviously happy to see Government save money, and searching online is easier for many than remembering to get the Friday papers. 

However, the newspapers aren't just advertising sheets. I don't want to see the Scotsman collapse just to be replaced by Craigslist. The advertising sections fund actual journalism, investigation and news-gathering (and yes, the mere reprinting of press releases too). 

Part of the problem with making the case for journalists is that they often share last place with politicians in polls about who the public trust, at least prior to the bankers' collective fall from grace. Despite their many failings, though, journalists provide a real public good, holding public figures to account and shedding light on malpractice.

Bloggers won't fill the gap, either, as David Simon (originator of The Wire) found out when he investigated a fatal shooting by the Baltimore police:

"Well, sorry, but I didn't trip over any blogger trying to find out McKissick's identity and performance history. Nor were any citizen journalists at the City Council hearing in January when police officials inflated the nature and severity of the threats against officers. And there wasn't anyone working sources in the police department to counterbalance all of the spin or omission.

"I didn't trip over a herd of hungry Sun reporters either, but that's the point. In an American city, a police officer with the authority to take human life can now do so in the shadows, while his higher-ups can claim that this is necessary not to avoid public accountability, but to mitigate against a nonexistent wave of threats. And the last remaining daily newspaper in town no longer has the manpower, the expertise or the institutional memory to challenge any of it."

If the slow-motion demise of the newspaper industry doesn't alarm you, you don't understand it. If the papers are to have a future it seems unlikely it's in print rather than online, but we'll be poorer and more vulnerable if they don't find some kind of viable business model to turn to.

Update: As Cities Go From Two Papers to One, Talk of Zero (NYT, Bugmenot to bypass registration)

"Post-Trump syndrome."

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donaldtrumpcalm.jpgA lot of people have lashed themselves to the mast of the Trump empire, from the First Minister and his predecessor to, most divisively, the upper echelons of the Aberdeenshire Liberals. His golf course and holiday chalets will apparently bring £1bn to the area, 6,000 jobs, and extend the very tourist season itself. Never mind the protected status of the site, this scheme would secure the international glamour (left) other sand dunes can only dream about.

It's lucky for all these brave cheerleaders for Mr Trump that he's such a reliable businessman. Otherwise, one might wonder whether the whole thing is what geeks call vapourware. 

You can ignore his casino business, which has filed for bankruptcy over and over again, because he quit the company last month. Presumably he jumped before he could have his catchphrase used against him. I'm sure these guys are wrong about why that might be, so let's look only at his construction projects.

The $790m Nakheel project in Dubai: suspended. The Trump International Hotel and Tower: loan default, blamed by Trump on the "act of God" known to everyone else as the recession, unfinished, with lawsuit. Trump Tower in New Orleans: on hold. Trump Parc in Stamford: falling debris. Trump Soho condos: breached planning regulations, being nimbied to death.

The list goes on and on, but a particularly scandalous example popped up today. A scheme he was running in Baja California has collapsed, leaving some very angry people who've lost millions in deposits. That article has some extraordinary elements, worth quoting at length.

  • Ivanka assured buyers in an October 2007 newsletter that all Trump projects were immune to a slowdown.
  • All that remains of Trump Baja is a highway billboard with a large photo of Donald Trump that advertises condos for sale.
  • Admiration for the celebrity developer and star of "The Apprentice" has now turned into anger and disbelief as Trump's luxury hotel-condo plan collapsed, leaving little more than a hole in the ground and investors out of their deposits, which totaled $32.2 million.
  • "I can't even stand to see Trump's face on TV."
  • Homeowners and brokers in Baja welcomed the publicity and higher prices that Trump brought. Now they wish he never came.
  • "Everybody is shellshocked. I call it post-Trump syndrome."

I wonder if John Swinney will end up feeling like Guadalupe Mendoza when his unimpeachable decision to clear the Menie plans starts to unravel. Describing her purchase, Mendoza told AP: "I did it in less than a minute. I remember my head was hurting and thinking, 'My God, what was that?' I was thinking maybe I should have asked questions. It was like a roller-coaster ride." 

Martin Ford was right: this obscene scheme should never have gone ahead. The silver lining is obvious, though. The markets and Trump's own incompetence now seem so likely to scupper it that we shouldn't even need the fallback plan.

Did I just imagine that?

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orangutan.jpegOr did ITV put an advert for a betting company in over the actual play in Italy vs Holland? Jeez, is that even legal? If so, and I didn't imagine it, I've got a special room in hell for the adman who proposed it and the legislators who agreed it: adverts will be shown on the back of their eyelids 24/7.

Update: apparently it did happen. Coincidence? I think not!

Demand destruction

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And so the unravelling of the latest financial bubble gathers pace. Here and in the States failing financial institutions have been backed with taxpayers' money.

I quite understand the decision to make sure depositors don't lose out: you should know that if you put your money into a bank account it won't disappear. However, bailing out risk-taking investors with our money? That's just wrong.

If the value of your investments effectively can't go down, you shouldn't get benefits based on that supposed risk. And the free-marketeers ought to be agreeing, because they invented the phrase "moral hazard". That hazard doesn't just apply to business people, it applies to the politicians who bale them out too.

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This page is a archive of recent entries in the Business category.

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March 2009: Monthly Archives