08 January 2009

Hazardous spill

Regular readers of this blog will know of my recent obsession with Moral Hazard, brought on by the spate of bank nationalisations across the western world. It is rather like toxic waste: once it is out, it is very difficult to contain without a lot of damage being done. And the cost of cleaning it up is not only high, it is ultimately borne by the taxpayer.

After the ignominy of the various bank rescues, the shame associated with government bail-outs seems to have disappeared. First the American car industry's Micawberish pleas ultimately resulted in something indeed turning up - $17.4bn diverted away from the destitute bankers. In these topsy-turvey times this was portrayed as a victory for the working man, though presumably not the men who work for companies that have to compete with GM and Chrysler, such as Ford. Not to be outdone, the UK car industry has been making similar noises so it too can compete on an uneven playing field.

Next up the US Steel industry is pressing for protective clauses in any fiscal stimulus package put forward by the soon-to-be President Obama. Meanwhile over in mainland Europe, the Italian government has pledged to prop up the Parmesan cheese industry, buying up 100,000 wheels of parmigiana and 100,000 of Gran Padano in a bailout worth 50m euros. And ahead of Christmas, as a sop to the Low Countries candle industries, duty was imposed upon imports of candles from China. After all, how do you say no to businesses that have been honestly failing, if you have already rescued those who failed through dishonesty?

Personally, though, I couldn't be happier about the situation. After all, as the definition of critical industries that are "too important to fail" expands, I am pretty sure that this will some come to include advertising. Advertising in the UK was worth more than £19bn in 2005, more than 1.5% of GDP, and the UK is a major centre for creative advertising, and multinational companies often use UK-created advertising for marketing their products globally. London is acknowledged alongside New York as one of the two world centres of creative advertising and two thirds of international agencies have their European HQ in London.

So although I am working for a company that is looking to make redundancies, I feel sure the government will step in and save my job. After all, next to banking, advertising seems a positively moral business to be in.

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