Financial Costa Concordia

There's a modicum of attention being paid to the apparent US economic resurgence in comparison to the UK et al. Attributed to the efficacy of assorted US economic policies. I want to get in early and disabuse you of such thoughts.

While, on paper, the UK's total debt burden is 5 times GDP as against the US's less than 3 times GDP and UK financial institutions have, on paper, 5 times as much debt as US ones - it is actually a load of bollocks. This is because the US banks are not marking to market by using access to cheap Fed money and are relying on Credit Default Swaps to deny and hide inevitable losses. Granted that US national coffers are benefitting from repatriated money and illusionary safe-haven status - as is the UK - but this won't protect either of them from a global financial collapse - France, Italy, PIGS and latterly the BRICs, Australia and Asia in general will succumb to fear.

When, not if, there is a default on a large national debt the CDS market will implode and there'll be a global Costa Concordia moment. The critical moment is when does the Captain leave the ship - Captain Greece, Captain Portugal and Captain Ireland are at the rail and Captain Italy, although a little behind them, could well accidently fall off on purpose. Captain France will go down with the ship while blaming Britain. Captain Germany, like the Captain of the Olympic, will not answer the distress calls.

I'd also like to steer the proletariat towards understanding that overpayment of CEOs and Bankers is a symptom not a cause - a few billion is neither here nor there in the present catastrophe. And that it's present high profile is just a ruse to divert attention away from the real problem - that the system itself is beyond fucked.

Incredibly, for example, General Motors, a company that never made a car worth owning, is claiming to be back in profit. In the usual manner they have achieved this by lending cheap money to purchasers to buy their products and then counting the money they've borrowed then loaned as profit. Even you and I can see the flaw in this as would a blind man on a galloping horse. Bearing in mind that there is no remaining ecosystem to support, never mind grow, manufacturing as the route out of recession. There is no supply chain outside China, nor are there enough low-wage workers; so celebrating the survival of a company based on lower wages and benefits to support more consumer debt doesn't appear to solve anything.

Your belief that one can - with generous public cash donations of course - Innovate out of the abiss is counter to all accepted business methodology. If a widget can be made in China for $8 or made in the UK for $80 then how many UK workers will benefit from the $250 profit made on the widgett? Answer: none. How many CEOs? Answer: one.

Stoking my higher than usual level of Outrage are the Hedge Funds that bought Greek debt for cents on the dollar that now want paid out at face value before agreeing to any deal. They bring to mind the last thoughts of the Mr. Black Husband spider when he asks Mrs. Black Widow "How was that for you"?

"Don't tell me - I don't want to know" school of management.

Your recent justification of the moral status quo ante begs the question as to how and why we're surrounded by illegality that is accepted as usual and that everyone involved claims to know nothing about it. What's worse is that they think we believe they knew nothing.

After the recent Gilbert & Sullivan theatre at the Palace of Westminster, leaving aside any examination of the veracity of the answers given to the questions at issue, the striking feature is that all these folk, to a man and woman, are guilty of mind-boggling, credulity-straining, if not criminal lack of knowledge of the goings on within the organisations they ran. It appears that Ignorance is so widespread that the only conclusion is that it isn't coincidental but that it is deliberate. What we witnessed was wall-to-wall denial based upon a claimed total lack of knowledge around a series of major events, occurring over a number of years, within their senior managerial remit. How does this happen? Enter the "Don't tell me - I don't want to know" school of management. While this school of management is widespread in it's influence and adherence it is of particular importance when it comes to the application of editorial standards in the media.

The fundamental tenet of the "don't tell me - I don't want to know" school of management is Deniability. This permits senior management to avoid the repercussions of actions taken by employees under their control by claiming that they didn't know what they were up to if that action were to later come back to bite them on the ass. While I haven't heard the "don't tell me - I don't want to know" refrain often I've heard it more than once. Let's take a simple example - the bribing of government officials. On occasion, in pursuit of a news story, it is necessary to get into a country that actively doesn't desire your presence. This leads to the need to by-pass the usual immigration and customs formalities by "inducing" the local government employees, officially tasked with keeping you out, to assist your entry into the country. Unfortunately once in a country in this manner the exercise must be repeated to get out of it. When filling in an expense report for this variety of assignment it is advisable to describe these payments as "Immigration Fee" or "Customs Clearance" rather than "Bribes". All News organisations have rules about bribing people and illegal behaviour but also recognise that exigent circumstances prevent strict adherence to them if the story justifies them. Management knows you can't pop-in unnoticed on a tourist visa with 20 boxes of camera equipment - but nobody asks "How'd you do it".  There'd be a lot of stories you'd never get if this wasn't the case. It is reasonably clear that "liberating" a motor vehicle, as is sometimes required in a war zone, to allow movement to and around the story won't influence the content of the story but simply enable it's coverage. After this it gets a bit more subtle. When does it become payment for the content of the story itself? 

What we see with the News Of The World/News International denial of any knowledge of wrongdoing is a good example of the "don't tell me - I don't want to know" school of management in practice where blindingly obvious illegal behaviour is ignored in pursuit of a news story. Usually this is on a case by case basis justified by "In the Public Interest" circumstances but what happens if this becomes enshrined in the ethos of the news company as a common means to get stories. It is a trickle-down phenomenon. If it is clear the boss doesn't want to, or legally can't, know what is actually going on so as to maintain deniability then you act out a charade where the boss knows that you know that he knows but can not actually be told. This rapidly becomes you telling the Boss "you don't want to know". If the Boss is happy about this then so are you and your need to know diminishes creating the tacit company wide belief that nobody important will do anything about it even if you told them - so its all OK. In such an environment illegality spreads and becomes standard operating practice - condoned by senior management's complicity in "Don't tell me  - I don't want to know".

There is of course the paper trail-blocking device of inserting an intermediary between the invoice presented to and approved by the manager and the final recipient of the payment - via a third party, usually a "stringer" - allowing the manager to deny that they paid for anything illegal. So the "I have never paid for illegally gained information" claim can be maintained by keeping payments at "arms length".

Now, while Journalism is presently on the receiving end of justifiable outrage, we need not look far afield for examples of similar illegal behaviour in a wide variety of Corporate and Financial activities where bribery and corruption are not unheard of. Again the "don't tell me - I don't want to know" school of management enables senior management to avoid guilt, job expulsion and possible criminal prosecution by claiming their total ignorance of any malfeasance while sacrificing a few implicated, but usually well compensated, staff in penance along with paying, without prejudice, a small fine. This even though it is common knowledge that bribery and corruption - in all its many guises - are the only way to achieve a satisfactory business outcome.

This culture has created an inchoate, trust free, seemingly all-pervading version of management that permits those in a position of ultimate accountability and responsibility to assume neither.