Some years ago I went to London?s Royal Court Theatre to see Six Degrees of Separation, John Guare?s masterly play which suggested that each of us are only separated from everyone else on the planet by just six degrees. It spawned a favourite London dinner party game. Pick a celebrity and see how many degrees of connection separate you. As I had a successful Hollywood character actor for a stepfather I beat everyone hands down. You name it, Monroe, Reagan, Minelli, Crosby, he had known them all. Very popular making at the time. Not!
As we try and make sense of where we are in the economic cycle, we must sometimes remind ourselves just how few degrees do separate us from the rest of the human race. Difficult sometimes , for we naturally prefer to see ourselves slightly apart from the pack. So news last week, that insurance giant Axa is to cut 2000 jobs, closing centres from Kendall to Exeter may not have excited much interest here, we have our own problems not least in the Borders, but play the game and somehow you find we are connected to that story. More depressing, given Scotland?s umbilical attachment to Marks & Sparks would have been news of 290 jobs losses among senior store managers. So we would have emoted for ten seconds before learning that the multi-million pound fortunes of those lucky partners in Goldman Sachs saw shares immediately leap to a 40% premium. In the musical chairs of economic news all connects. Thinking about it, I found I knew someone who knew a Goldman Sachs vice president, someone else whose mother knew a Marks & Sparks manager ?moving on? and yes an Axa Manager via a colleague. Less glamorous than connections with Monroe perhaps, but in terms of economic confidence, more important.
In Scotland we cannot but be affected by such news both good and bad, for our economic base remains narrow. The golden Goldman Sachs employees could buy a New Town house or invest in Scottish companies, their wealth cascading a drop or two north of the border, but all those Axa and M & S families who might have headed for the Highlands will stay home. Some may live in Scotland and effects of their redundancy will ripple out. Incoming tourism will be further affected this year as results of other redundancies which did not make the news, in the retail, technology, legal and financial sectors. ? Down in England? economic news also affects us more personally. In the smallest hamlet in Wester Ross or the busiest Glasgow pub you will find people with children and siblings working in the service economy in Essex, Bristol or Potters Bar. For whatever our race and history, on a small island there are no degrees of separation. As Katie Grant wrote in the Herald last week, all that pre-election talk of divorce was twaddle. The English and Scots are not married, we are much closer than that.
Yet watching the evening news about Kosovo in recent weeks has given me a curious feeling of unconnectedness, for it has apparently had no effect on the markets. News stories from Kosovo and Wall Street have resembled those mathematical problems so often parodied in school magazines. ?If Johnny has three apples, and Jenny has two, what ?s the weather like in Newcastle.? Belgrade is bombed to bits but how long did it take the Dow to reach 11,000? It seems like a couple of days since new traders were cheering clearing 10,000. The FTSE too has been happily bubbling along, and with the IMF announcing on cue that the world crisis was over, Clinton has been able to continue the caring ole? boy act, and blah-blah-Blair could carry on saving humanity.
Then the Chinese embassy bomb changed the world. Suddenly Blair looks like a plonker and Clinton is not having his calls returned. The markets momentarily lost their nerve, but with all those baby boomers shovelling money into stocks, nerves were steadied. Buffett warned disciples that the markets were too high, but all those white collar whizz kids dealing on-line answered, what do you you know, creep? Yet isn?t it time we plebs start making connections, for we?re the ones who usually have to pay? Politics and economics cannot play indefinitely that other fantasy game of having no connection with the firm next door.
So what next? The Americans, who now strike many as being as arrogant as they are ignorant, carry on spending on the back of their market investments regardless, apparently as far up above the fray as their bombers, but perhaps they cannot distinguish the realities of the landscape either. Yet as Andrew Smithers observed in the Evening Standard last week, Wall Street is more overvalued now than it was even at its 1929 peak. "There is a mass of evidence that we are in the midst of the fifth Wall Street mania this century. On each previous occasion the result has been crash followed by major recession. It is possible that the world has changed, ... but it must make sense to have contingency plans in case it turns out all wrong."
Now of course we heard it all that before last summer didn?t we? And as we watch the news, we may still decide there are sixty degrees of separation not six between our lives and Wall Street , let alone Kosovo. We?re O.K. Except the first Kosovans are arriving in Scotland and soon I bet we will know someone who knows someone whose child has a Kosovan in their class and a Wall Street downswing would connect with us horribly fast . It would even put the Goldman Sachs boys off their golf.
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