Thursday 29 November 2012

A Letter to Tony Woodley...

Today I encountered three things that annoyed me to do with public transport.

First, someone kicked me out my seat on the train because they had reserved it. I sat in the empty seat immediately across the aisle.

Secondly, someone decided that the best time to find their Oyster card was as they stood in front of the barrier. It was at the bottom of their handbag.

Finally, and this broke the camel's back. I had to walk home from the tube because there was a bus strike. Below is a genuine email I just sent to Tony Woodley, Executive Office of Unite. Let's see if he replies...

Dear Tony,
I write to you in a state of coldness, I hope you excuse any spelling mistakes that result from my shivers. Sadly, today I had to walk for almost 15 minutes as a result of a lack of buses. More importantly, I was forced to utilise London's underground. As a man of relatively short stature and a severe case of gralmitophobia this was clearly a cause of great distress.

I must say I am not fully up to date on the reasons for today's industrial action but can only assume that it boils down to something along the lines of "We. Want. More. Money" (similar to the great Canadian strike of April 2008 regarding the allocation of America's "Internet Money" - source: http://en.wikipedia.org/wiki/Canada_on_Strike).

Notwithstanding my lack of research into the subject, I can conclude that the action is contrary to the best interests of this great nation. You see, the best case scenario from your perspective is that a pay increase is granted to your members. This has two results:


Firstly, this creates an artificial imbalance in the labour market - with labour demand artificially suppressed below equilibrium levels by a shift in the labour supply curve. The end result? Further pressure on overall employment levels or increased unemployment amongst those who are not part of your "club".

Secondly, and more importantly, any pay increase will have zero bearing on real incomes as any wage increase feeds almost immediately into inflationary pressure and prices increase offset any rise in nominal incomes. Sadly, this is not demand pull inflation consistent with the oh so needed real economic stimulus (i.e. driven by resource scarcity resulting from increased demand) but cost push inflation, which is completely divorced from any true economic recovery.

This inflationary spiral will quickly land upon the desk of Merv, who will be rapidly required to send a telegram to big Dave to inform him of the sorry state of affairs - inflation above target with no concurrent real growth. This would only lead to a rapid hoik of the base rate being hungrily translated into mortgage rates by the banks you so often (and often rightly) demonise.

Then what do you have? A fragile economy, people clinging on to liquidity through cheap mortgages and outstanding credit which suddenly rocket as a result of inflation. Mortgage and credit card defaults soar and you are left with a huge portion of society left bankrupt and unable to afford even public transport. As demand for bus journeys fall, Arriva is forced to cut back on staffing numbers, and your members are left being paid significantly less. Zero in fact.

I said there were two points. Actually there are three. My neighbour Steve deals in fixed rate derivatives. He is more leveraged than a private equity backed MBO. He has a small Chateau in Bordeaux, A Peruvian monastery, 2 Ferraris and a chalet in Val D'Isere. His current cashflow would be unable to afford a 5% base rate so he would likely have to let out the flat next door. People who rent are typically noisy and unpleasant and I would rather avoid this if at all possible.

Thank you for you understanding and I look forward to a reconsidered view of industrial action in future. You will be pleased to know that this furious typing has warmed my hands up significantly.

Kind regards,
Lethargic Invective (Obviously I actually signed by real name)