As the world takes note of the 10th anniversary of the collapse of Lehman Brothers and the ensuing financial crisis, now is the perfect time for those in power to take a step back and make sure mistakes are not replicated.
As the United Kingdom careens closer to Brexit travesty and chaos or a new golden age of self-determination (take your pick), economists, politicians, academics, religious leaders and others have come together to plead for the creation of a fairer economy.
Now may be the most auspicious moment to launch a clarion call, for today—10 September—marks the 10th anniversary of when Lehman Brothers announced a loss of $3.9 billion, that is, its death rattle. Five days later, the company, founded in 1850, filed for Chapter 11 bankruptcy protection, the largest in U.S. history.
Then events turned out pretty ugly, didn’t they?
The U.K. think tank, the Institute for Public Policy Research’s Commission on Economic Justice issued a 50-page report titled “Unfair and in need of reform: Public attitudes to the U.K. economy” stating that little has been done to re-right the economic situation following 2008 and in the years of the last decade up to today.
The commission members include people from all walks of life and several businessmen and women, although it probably does lean to the left—the Labour Tony Blair government adopted some of its findings back in the late-1990s. Some might argue that such a report would always lean left, unless the “a rising tide lifts all boats” argument is still deemed the right, most sensible and economically beneficial argument.
One claim, concluded from answers in an IPPR questionnaire, is the U.K. population believe employees have too much power and employees not enough and less and less of it. But business people might argue only leadership and experience can ensure success and growth. And a percentage of the population would always support an increase in the money in their pockets while having no real idea of how global economics works in 2018.
The report exists to underline its members’ concern at what they see as unfairness.
I will here just outline some of the report’s conclusions, and on a day when I am at the Houses of Parliament in London to hear the findings of the “UKHospitality Workforce Commission 2030,” a “sector-wide commission involving employers, all-party parliamentary groups, industry bodies and authorities, to deliver an employment foundation for the sector.”
Parts of the IPPR report that might weigh on the hotel industry include the plea—yet again—to raise the minimum wage and for multinational companies to pay proper amounts of tax.
It also issues a renewed cry to boost exports and to do away with capital gains and dividend taxes, even if the method of doing that would require raising taxes on them to equal those paid on income from work.
That tax revenues would come in any way, because these multinational companies employ people who earn wages, is a weak point, the IPPR seems to suggest. The report also seems to be saying that companies need to do what is right, not what is legal, rather than putting the onus of taxation on individuals who do not have access to lawyers and/or the ability to be supple in their business models.
Personal debt is growing in the U.K., and that will affect the hotel industry in that there will be less discernible income for hotel stays.
Yes, hotel rooms equal a finite number, and occupancies show demand. Demand also is generally outpacing supply, so all good then. But economics—certainly crashes—tend to come along in a seesaw manner. That is, weight increases on one seat of the seesaw slowly, but when the tipping point comes, that seats hits the floor extremely quickly.
Sorting out Brexit so we do not head into a “No deal” pit might be a good start. But at the same time, leaders should take a pause to ensure 2008 either does not occur again or does not contain the same degree of pain and inequality.
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