The Listening Banks

A couple of days back I was writing about the likely fall in smoker spending in the aftermath of smoking bans, using figures from Lecroix in Spain and Klaus in Denmark. In the continuing discussion on that thread, Klaus wrote:

Everybody in Denmark (and UK, I suppose) think that consumption fell off when “the crisis” kicked in by fall 2008 – but this graph shows that consumption started to fall off immediately after the smoking ban in the summer 2007. The recession was kick-started by the smoking ban, and a negative economic spiral was evident.

It was not just because of the smokers changing their ways – it was also because of the changing ways of their friends & family members. I think it quickly became a trend in more or less the whole population – the home culture.

It is not difficult to imagine the mechanism behind it: When politicians suddenly restrict an area very hard, people will go other places to avoid the restrictions. When these other places are private homes, consumption will obviously fall. But why was the falling consumption not made up for by nonsmokers, i.e. people still visiting restaurants & public places as usual or even more after the ban? Because their consumption was already as high as it could be. That’s how capitalism works – you use the money you earn minus what you save.

Bottom line: The smoking bans in UK and DK could have kickstarted “the crisis” in both countries because of the consequences to the private sector of sudden falling consumption.

The way Klaus sees it is that smoking bans introduced in the UK and Denmark in 2007 had economic consequences a year or a year and a half later, in 2008. But in the UK, where the smoking ban came into force in July 2007, the Northern Rock bank was already having liquidity problems by September 2007, and was taken into public ownership in February 2008 – long before the effects of the smoking ban were likely to have worked through the economy, and to the Office of National Statistics and the Bank of England – which started referring to a negative ‘demand shock’ in its Quarterly Report at the beginning of 2009.

Frank buys a bedside lamp

Frank buys a bedside lamp

But there’s another possible explanation of what might have happened in the UK, which is based upon the privileged position of banks. I keep most of my money in bonds, savings accounts and shares, and when I liquidate any of these assets, I usually get a cheque sent to me which I then pay into the current account in my bank. And when I want to buy something, like a bedside lamp, I either buy it with cash or with a cash card which draws on my current account. And I think that this is how many people run their financial affairs. And what that means is that my bank is able to monitor my spending and saving, and maybe build up a profile of my normal spending pattern.  And I imagine that banks do monitor their customers’ spending and saving patterns, for a variety of reasons.

If so, then sometime in late July 2007, a worried cashier would have collared one of the bank’s senior managers and blurted out: “Frank’s stopped spending! He used to buy a pint of Stella every day, as regular as clockwork, and now he’s hardly buying any. And he’s buying less petrol for his car too!” Probably the senior manager would have retorted that I might have fallen off my bicycle again, and I’d be back on the booze in a week or two, and there was nothing to worry about. “But it’s not just Frank, sir!” the cashier would have continued. “It’s also Dave and Harry and Ed. About a quarter of our customers have pretty much stopped spending!” And the senior manager would have turned white, and sat down heavily in the nearest chair.

Frank stops buying bedside lamps, and saves the money instead.

Frank stops buying bedside lamps, and saves the money instead.

And later that night, as they pored over the figures, they would have found that a quarter of their customers had not only slashed their spending, but had actually started saving at rates never seen before. And what happens when money starts flowing out of the economy and into savings? It means that trade slackens, fewer goods get sold, prices fall, and businesses lay off workers and start going bankrupt. This ominous sudden fall in spending signalled a rapidly approaching recession. And the banks became unwilling to lend money to start up new enterprises in such a darkening climate. In fact, they became unwilling to lend money to almost everyone, including other banks.

Only the banks, the listening banks, could have seen the recession coming, because only the banks had this ‘insider knowledge’ of what was happening through the accounts of their customers. And so it would have been in the banking sector of the UK economy that the “crisis” would have started, long before the effects of the fall in spending had fed through into the UK economy, with pub closures and staff lay-offs.

It may well have been perfectly obvious to the banks that it was the smoking ban that was doing the damage – or it may not have. My bank didn’t actually know that I religiously bought a pint of Stella Artois every day until 1 July 2007, because I always paid for it with cash. But it would have known that my spending had slowed considerably, even if it didn’t know why.

In fact, the refusal of the banks to lend money was ascribed to the ‘sub-prime mortgage crisis’ which had its origins in the USA, and had in August 2007 led the French bank BNP Paribas to freeze funds in sub-prime. And perhaps there was some truth in it. If so it was highly politically convenient to blame the crisis on something that was happening thousands of miles away, rather than something that was happening right here on our own front doorstep. Or, more accurately, the front doorsteps of Britain’s pubs.

And Danish bodega doorsteps. And also French bistro doorsteps. Because, oddly enough, France also had brought in a public smoking ban in February 2007.

And there would have been considerable resistance within the Labour government, which had just brought in the UK smoking ban (and were proud of it), to any notion that the smoking ban had been the cause of the crisis. Although one person agreed that the smoking ban was having an effect:

Chancellor Alistair Darling has admitted the smoking ban is forcing pubs out of business…

Mr Darling told journalists at Westminster “there is no doubt the smoking ban made a difference” in killing off boozers after the British Beer and Pub Association told MPs the number of failing pubs is now “accelerating rapidly.”

In saying this the Chancellor was being politically incorrect, because everyone knew that the smoking ban had been ‘a great success’ from Day One, particularly among smokers, who are always delighted to be banned from smoking. Any suggestion otherwise was almost treason.

But my suggestion today is that the UK smoking ban kicked off not just the mass bankrupty of UK pubs, but also triggered the subsequent ‘credit crunch’ as banks watched millions of their customers stop spending and start saving, and responded appropriately.

And if it did so in the UK, and not in the USA or anywhere else, it was because US bans were being brought in piecemeal, a town here, a town there, a state here and a state there, and the effect was largely invisible in the US banking sector. But in the UK a gold-plated, well-enforced, no-exceptions smoking ban was imposed on over 60 million people in one of Europe’s larger economies on one single day: 1 July 2007. The resulting shockwave running through the entire UK economy was registered as an earthquake by UK banks, and a warning of much worse to come, and they responded with appropriate (and fully justified) alarm. If the same didn’t happen in France, which is also one of Europe’s larger economies, it was because the French ban allowed exceptions, and was not enforced, and was widely ignored.

And if banks still don’t want to lend money, 5 years later, it’s probably because they’ve yet to see their customers start spending again. Which of course they won’t do until they get their pubs back. Or at least, Frank won’t.

About Frank Davis

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25 Responses to The Listening Banks

  1. harleyrider1978 says:

    OT from the last page but well worth posting:
    From your link 75% of LC is in over 65 age group from the chart the 80 year old group accounts for the most LC cases at approx. 4000 a year!

    From the average life expectancy chart for the UK;

    It appears LC doesn’t have an effect on life spans in the UK at all for what one would expect to live to save a year or two MAYBE!

    The most common age at death in England and Wales in 2010 was 85 for men and 89 for women.
    Over the last 50 years (1960-2010) the average life span has increased by around 10 years for a man and 8 years for a woman.

    Mortality in England and Wales, Average Life Span
    Released: 17 December 2012

    http://www.ons.gov.uk/ons/rel/mortality-ageing/mortality-in-england-and-wales/average-life-span/index.html

    By age

    Lung cancer is strongly related to age. In the UK between 2007 and 2009, an average of three-quarters of cases were diagnosed in persons aged 65 and over (Figure 1.1).1-4 Age-specific incidence rates rise steeply from age 40, peaking in the 80-84 year olds. Incidence rates are similar for men and women in their 40s, but, thereafter, male rates are higher than female rates, and this gap widens with increasing age. At age 50-54, the male : female ratio of the age-specific incidence rates (to account for the different proportions of males to females in each age group) is around 12:10. By age 85+, it is around 23:10 (Figure 1.1).1-4

    http://www.cancerresearchuk.org/cancer-info/cancerstats/types/lung/incidence/uk-lung-cancer-incidence-statistics

  2. smokervoter says:

    There is a God. Heavily favored San Francisco was rudely defeated in the Superbowl 34-31.

    Not a good year for the City by the Grey. Lost the Prop 29 vote and now this. Maybe they should all drown their sorrows in the San Francisco Bay by committing mass suicide from the Golden Gate Bridge. Commenter Tom and the 30,000 San Franciscans who voted No on Prop 29 could then restore the town to its former Barbary Coast glory, free of the congenitally grouchy Nouveau Puritans who run the place. After all, topless waitressing was initiated there. They used to hold Smoke-In’s at one time as well*.

    As for Stanton Glantz and the exciting student body and faculty at the University of San Francisco (USF), it’s doubtful the game meant much – too risky and macho and unsafe. There is no football team there at all. Its former team the San Francisco Dons had one good season 61 years ago.

    “USF’s finest football team ever was to be its last in Division I. Though football made a brief comeback as a Division II sport during the 1960s and 1970s, USF has not fielded a varsity team since.”

    *I typed “smoke-in + san-francisco” into StartPage and lo and behold, look what popped up!

    http://www.yelp.com/topic/san-francisco-smoke-friendly-bars-in-sf

    • Tom says:

      USF is not the same as UCSF.

      Glantz is at UCSF, University of California San Francisco and is a part of the same UC statewide system that includes UCB (Berkeley, extreme leftist territory with smoking strongly discouraged/illegal), UCD (Davis, where one of the first outdoor bans city wide was initiated nearly a decade ago), UCSC (Santa Cruz, where tobacco “possession” is a crime and communists run openly for election, and win), other UC campuses across the state.

      USF is University of San Francisco and is a separate campus, and unlike UCSF, does not own property all over the city, nor have a private armed police force in private police cars patrolling city-wide as UCSF does. USF is also a Jesuit owned and operated campus which has a very old Catholic church as one of the main buildings on campus.

      UCSF main campus is located up on Parnassus Heights, the auxiliary campuses all over the city. USF is located in upper Hayes Valley, between the Haight and Richmond Districts on a hill called Lone Mountain.

      The article you quote may be referring to USF instead of UCSF though – but I don’t think UCSF has any major sports affiliations going on either, unless maybe track and field, aerobics, intramural teams – maybe. UCSF does have Kezar Stadium just below campus at one of the entrances to Golden Gate Park and most UCSF people use Kezar to do their running around and jogging, since it’s smoke-free and safe. USF also has a big atheletic field, only USF’s is located on campus.

      SF won’t be in the Super Bowl, tough luck. For a city that bans smoking with $500 fines outdoors, has made plastic bags illegal and paper bags a “crime” one has to ask for and then pony up a paper bag “tax” for the “crime” of needing one to carry home groceries, then it probably doesn’t deserve to be in the Super Bowl anyway. They’ve been spreading their prohibitionist causes far beyond SF now too and they’re beginning to implement outdoor bans in other cities and towns, including Sacramento and places to the east of Sacramento, in their march toward Nevada.

      It’s so bad and ridiculous I find it hard to talk about anymore, but it’s not gotten better, it’s gotten worse it seems, as it’s spreading, statewide, at least in NorCal it is.

      • smokervoter says:

        oKAY, correction time here. No, UCSF doesn’t have a football team either. Here’s from the Fitness & Recreation page at UCSF:

        Welcome!
        There’s something for everyone at UCSF Recreational Sports. Recreational Sports offers a wide range of sports and activities, including squash, dodgeball, racquetball, volleyball, basketball, futsal (indoor soccer), tennis, golf, rowing, ultimate frisbee, table tennis, badminton, and flag football. These sports are played as leagues, drop-in sports, clubs, or as clinics.

        Can you possibly get more any more sappy New Age California than this? They’re just soooo ahead of the curve with the newfangled Health and Safety Culture that’s sweeping the globe! Leave your cigarettes (and your testicles) at home.

        Flag football is exactly where we’re headed with professional American football. I said it to a friend in conversation about a month ago. Watch out across the pond: Football (soccer) is next. And say goodbye to rugby.

        Did anyone else notice the constant references to a ‘safer’ football game during the Superbowl? And they had that Poster Child out there at half-time who was learning to eat more ‘healthy, nutritional food’.

        One last time here: this is the most annoying era I’ve ever lived through.

    • Tom says:

      The smoke-friendly bars comments are a lot from back in 2007. Since then a new ordinance has been passed that bans outdoor smoking in any outdoor bar, restaurant or patio area. So since that time, they have since closed another “loophole”, as the anti-smokers like to call it. The new ordinance only permits outdoor smoking up against the curb, alongside where traffic flows by. Anywhere else on a sidewalk or outdoor area is essentially, illegal – this includes parks, squares, plazas, sidewalks other than alongside the curb, parklets (parking spaces converted to small seating areas so as to restrict parking space availability so as to restrict traffic so as to restrict places where people can smoke, etc. and so on, part of SF’s commitment to Agenda 21) – so a lot of those comments from 2007 are no longer applicable nowadays, not with the extended outdoor smoking ban laws in effect. The fine is $500 in some areas, is posted and is highly visible that it is $500 too.

  3. smokervoter says:

    Note to Gary the entertainment venue turnaround specialist and industry analyst who has concluded that it’s impossible to turn a profit by catering to smokers with a pub.

    This is from the above link:

    drew b. says:

    I smell bidness opportunity for Em X! Start the bar you want to frequent.

    Emily X says:

    i would, but I can’t stand dealing with drunk people. i used to wait tables graveyard shift down the street from ruby skye and that was enough for me. thats why I became a hairdresser.

    Tell ya’ what buddy, if you can make money selling drinks to smokers in San Fran, you can certainly make money doing so in the UK.

  4. nisakiman says:

    I think that as well as the Franks of this world not buying table lamps, a large part of the tipping into recession must have been brought on by the number of pubs that started closing and the resultant loss of jobs. That meant mortgages weren’t getting paid and houses were being repossessed. That in turn puts a lot of pressure on the banks, who find themselves holding a huge portfolio of property which is dead money to them. You can see how repossessions escalated after 2007 in the graph in the article here. From the end of 2007 to the end of 2009 the number of repossessions almost doubled.

    • harleyrider1978 says:

      The banks and the Federal Government are holding back millions of homes off the market to try to stabilize prices in the housing market. This destabilizes true market forces to find the real value of real estate. Meanwhile,the FED in America pumps out 85 billion a month into the Dow Futures and dow jones to pump up stock values. Its been ongoing for 6 years now. Market and stock values are based upon fraud and deciet via pumping. Sooner or later the whole scam will implode in another 1933 moment when they finally go ”Oh Shit” weve pumped to much…………Where a loaf of bread is now 5 bucks and gasoline 7-10 bucks. The money becomes worthless.

    • garyk30 says:

      People got some very good bargains.

      A little over a year ago, my youngest son paid $(US)80,000 for a house that was worth $160,000.

      After putting in a lot of work painting and such, he and his girl-friend now have a house that is worth a lot more than they could could have comfortably afforded in normal times.

      • garyk30 says:

        Bah, I meant to say = worth at least $160,000

      • nisakiman says:

        Which means the bank probably lent 90% of $160,000 (perhaps less, but a substantial percentage, anyway), on the house originally, had to repossess on default and got a return of $80,000. Less agency commission. Times a few thousand houses. Not a sustainable business model methinks.

  5. harleyrider1978 says:

    Bank Run in Progress? Massive $114B Withdrawn From 25 Largest US Banks First Week of January!

    SD contributor AGXIIK warned readers months ago about the FDIC’s expanded deposit insurance which was set to expire Dec 31st, predicting that the expiring expanded deposit insurance enacted in the wake of the 2008 financial panic could trigger a bank run.
    Many scoffed at the report and its implications, due to the fact that the story received zero attention by the likes of Bloomberg, CNBC, or even ZH.

    It appears that the expiring expanded FDIC insurance has in fact triggered a massive deposit withdrawal at the nation’s largest banks, as the Fed is reporting that $114 billion were withdrawn from the largest 25 US banks over the first week of January, the largest fund outflow since the 9/11 attacks, even exceeding the pace of the outflow during the 2008 financial panic!
    US banks shaken by biggest deposit withdrawals since 9/11
    US Federal Reserve is reporting a major deposit withdrawal from the nation’s bank accounts. The financial system hasn’t seen such a massive fund outflow since 9/11 attacks.

    ­The first week of January 2013 has seen $114 billion withdrawn from 25 of the US’ biggest banks, pushing deposits down to $5.37 trillion, according to the US Fed. Financial analysts suggest it could be down due to the Transaction Account Guarantee insurance program coming to an end on December 31 last year and clients moving their money that is no longer insured by the government.

    The program was introduced in the wake of the 2008 crisis in order to support the banking system. It provided insurance for around $1.5 trillion in non-interest-bearing accounts with a limit of $250,000. It was aimed at medium and small banks as the creators of the program believed bigger banks would cope with the crisis themselves.

    So the current “fast pace” of withdrawal comes as a surprise to financial analysts because the deposits are slipping away from those banks which supposedly were safe. Experts expected savers in small and medium banks would turn to bigger players come December 31.

    http://www.silverdoctors.com/bank-run-in-progress-massive-114b-withdrawn-from-25-largest-us-banks-first-week-of-january/

  6. garyk30 says:

    Antis/health nannies claim there are about, in America, 131,000 smokers’ deaths caused by smoking.
    They leave no possibility of other causes.
    The claims are impossible!!!!

    There is almost no possibility that claim is ‘True’.

    Let’s assume that if a smoker dies from lung cancer there is a 99% probability that cancer was caused by smoking.
    99% is a probability of 0.99 for each and every such death.

    The probability of two such deaths both being caused by smoking is 0.99 x 0.99 = 0.98.
    There is a 98% chance that saying both deaths were ’caused’ by smoking is true.

    But, saying that 70 such deaths were ’caused’ by smoking has ONLY a 49.5% chance of being ‘True’.
    0.99 x 0.99(70 times) = 0.495

    After 100 such deaths, saying that they all were caused by smoking has only a 36.6% chance of being ‘True’.

    Saying that 200 such deaths were all caused by smoking has ONLY a 13.3% chance of being ‘True’.

    It is totally impossible for the statement that there are 131,000 smokers’ deaths per year that are all caused by their smoking to be ‘True’!!!!

    To make such a statement is a deliberate lie.

    • smokervoter says:

      I hope this lines up correctly with GaryK30’s cancer stat post.

      When I saw that 131,000 figure, my internal cranial spreadsheet (I am a carpenter afterall and quick math is my business) multiplied that figure times three for 393,000, the annual smoking mortality figure I run on.

      I don’t know what to run on anymore. Did you notice that recent article which claimed only 35 million Americans smoke? I recently saw where allegedly 17% of Californians still smoke, despite all the chest-beating pronouncements by TobaccoFreeCA that we’re now down to 12%. I personally think that 17% is an undercount.

      All I know for sure is that not one single friend in my 45-year circle has died of smoking. I spent 25 years in very, very smoky bars and not once did the ambulance show up to cart anyone away from a heart attack. No one ever keeled over at the barstool from second or firsthand smoke either. Barfights, yes.

      One of my aunts did die of smoking in the mid 1970s but it turns out that she died right around the average lifespan for her age – at that time.

      • nisakiman says:

        I’ve said this before, but in summer I see a lot of Brit tourists when I’m in my local bars and restaurants, and I would estimate that about 60% of them are smokers. Maybe non-smokers just don’t go to bars and restaurants when they’re on holiday…

  7. garyk30 says:

    “Antis/health nannies claim there are about, in America, 131,000 smokers’ deaths caused by smoking.”

    That should be 131,000 lung cancer deaths.

    • smokervoter says:

      That’s the problem with search engine brilliance, isn’t it. I looked it up on the net and now I’m an instant expert. Truth be told, I don’t think I could even honestly speak for what it’s really like to live in the town I’m in, despite being born and raised here.

      I know this much though. One of the candidates for my city council in this last election ran on a platform of levying a soda tax and came in dead last. I smoke in public all the time here – no problema. I doubt that our police force has ever issued a single smoking violation. The police chief stated that he didn’t intend to waste precious resources enforcing any smoking laws. But then again I’m not completely sure, maybe I should look it up on the net.

      There is an old school, more relaxed corridor in Southern California consisting of the Inland Empire, Orange and San Diego counties that I operate in where life’s pretty nice still. No major complaints here.

      The last time I was actually in San Fran was likely at Candlestick Park on October 17, 1981 for the Stones concert and I smoked both varieties without any objections from anyone. When I left Santa Cruz in 1983, the last thing I did on my way south out of town was to flip the middlefinger salute into the rearview mirror as I officially crossed into Monterey County.

      • smokervoter says:

        This was meant to line up after Tom’s UCSF comments. The comment box can get pretty squirrelly at times.

      • Tom says:

        Local MSM in SF ran a big “news” story about a month ago, on the “crackdown” on smokers going on – arrests, fines, etc. – just to keep everyone on their toes and scared of being caught smoking outdoors in public. The local MSM “news” announcers on TV always put on their sternest anti-smoking faces when making such announcements. They always try making it look like the worst thing ever that is being announced. I guess SF’s economy depends on continued inflow of money from UN, RWJF, Big Pharma, anti-smoking fake-charities, green fake-charities, etc. and so on – so they make sure the MSM in SF conforms. Only “government approved” “news”papers are allowed to be put into the government owned racks all over town BTW. They did that in order to “go green” as it reduces excess waste paper blowing about town, was their excuse. It’s like the excuse that they must ban outdoor smoking because it results in butts, but then making outdoor ashtrays illegal, thus leading to the disposal of butts situation – they cause these problems themselves, on purpose, in order to implement their “solutions”, which always result in more government control, over every aspect of life there is. So NorCal is not like SoCal in the respect of left-wing communist terrorist groups having taken total control at this point and driving the whole rest of the state into bankruptcy, now that they have infiltrated and taken over state government in Sacramento, only 99 miles from SF, practically a sister city at this point – and I would expect soon, things done to SF will be done statewide – because the ones who did it to SF are the same ones who were voted into all the offices and control Sacramento – and they are iron-fisted bastards, dictators, have no love for the people what-so-ever, other than their lip-service propaganda designed to hide their sins and corruption from the naive and unsuspecting who, in SF, still believe in this crap known as anti-smoking, going green, homage to the UN, etc. and so on.

        • harleyrider1978 says:

          And to think My Aunt and 2st cousin died in a truck going over a cliff in Nevada 2 years ago going back to San Francisco to file for property rights in a california court over an impending divorce she was in. They had left kentucky the day before driving str8 thru. My other cousin who had just handed the driving over to my younger cousin went to sleep in the passenger side and the younger female cousin fell asleep at the wheel and Kaboom! off dat cliff they went on the interstate. The one cousin not sriving survived with a broken back,leg,arm and collar bone. The back mended but left her constantly in pain and is now on disability from it. Sad state of affairs but when a divorce is filed and in action kentucky law allows the property settlement portion to be awarded to the children of the spouses. It doesnt die with them…………imagine that shit,blew me away when I found that out.

  8. garyk30 says:

    The same maths can be used to show the idiocy of the hospital admissions due to heart attack miracles claimed to be due to smoking bans.

    Let’s say that there are 5 fewer admissions claimed to be due to a smoking ban and that each such non-admission has a 70% chance of being due to the ban.

    70% = 0.70

    The probability of two such events being ’caused’ by a ban :
    0.70 x 0.70 = 0.49, and that is ONLY a 49% chance that BOTH were due to the ban.

    For 5 such non-admissions, there is ONLY a 17% chance they all were ’caused’ by the ban.

    That makes a miracle claim rather unlikely.

  9. harleyrider1978 says:

    Rollo the stats you pick are a cherry picked for sure as its the one that backs your desired result. The problem is those rates are nearly entirely in the 80 year old bracket. Meaning likely they were quitters from 2 decades before.
    Which would firmly put them in the non-smoker category via the ten year claims of smokefree to return to normal lung condition of a non-smoker.
    Granted according to UK cancer stats on number of smoker decline there are 2.5 million less smokers in the UK in 2008 as in 1984 of legal cigarettes,but this does not encompass blackmarket cigarette consumption that has skyrocketed in the last ten years nor does it include roll your own smokers.

    The point here is LC is a condition of age not smoking status as the data actually points to that as the causative agent in either smoker or non-smoker. If we have to state that it takes clearly 5-6 decades of regular heavy smoking for LC to show up,then in the non-smoker status we have to state that it takes the same 5-6 decades for it to show up in never smokers. That’s the actual conclusion from the data!

    http://www.scotsman.com/edinburgh-evening-news/latest-news/pub-closure-blamed-on-rising-prices-and-smoking-ban-1-2772938

  10. Woodsy42 says:

    A couple of thoughts:
    No they won’t start spending, even if they get their pubs back. Once the habit and culture is destroyed it won’t just start up again like turning a tap back on.
    I wonder if there is a common personality link to smoking and to going out to pubs? Non smokers being maybe more careful, less spontaneous, would be less inclined to go to pubs whereas smokers may be more the convivial, less controlling, live for the day type personalities who tend to thrive in pub (and alcoholic lubricated) company?

  11. timbone says:

    I rememebered something today. The legislation passed on 14th February 2006, my 55th birthday, was a Smoking Ban Experiment, yes, an experiment, with a 3 year review written in.

  12. Klaus K. says:

    Good article again, Frank – it is a very interesting issue. I just don’t understand some of the article comments.

    A note to the issue: It is possible that many businesses were weak already before the ban. It is fx. well known that the hospitality industry lives on a tight margin < 5%. To the providers for this industry the home culture must have been a devastating experience – not to mention taxis, which were hurt immedialtely, and clothing, luxury goods and other non-daily goods.

    Even if the smoking ban was not the only culprit in the kickstart of the crash, it is today impossible for the private (consuming) economy to rise again as long as the ban is in place, because of the home culture. It is depressing the economy – by somehow changing the western societies to resemble other societies with home culture, fx. DDR (Eastern Germany) – it is no wonder the economy is weak, similar to the economy of a coutry like DDR.

    On a broader level another strong cause of weak economy is also visible: The mood. What effect is likely to emerge when the state suddenly puts a big, well functioning minority "out of business" with an ultimatum like this: "We will now remove your rights, accuse you of killing your neighbor and beeing a loss to other citizens, bully you in the media, raise your taxes, bombard you with tighter regulations – and you will have no speaking time in the media … Now do as you are told or be damned!"

    Is it likely that the economy will thrive after that? Is it likely that production, consuming or innovation will thrive? Of course not. And the mood affects the whole society, i.e. the nonsmoking population too. Social mood is important to the human being and to the capitalist economy. It rests on the base that every citizen are able to work for the hope that tomorrow will be better than today. This is the ultimate driver of human economic growth. The smoking ban, however – and anti-smoking politics – is working in the exact opposite direction: Raising the fear of a much worse tomorrow. This factor plays a huge part in the weak economy too …

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