Other people’s money is opium

English: Bust portrait of Muhammad Ali, World ...

English: Bust portrait of Muhammad Ali, World Journal Tribune photo by Ira Rosenberg (Photo credit: Wikipedia)

I’ve met some very interesting people during my time in advertising. In just one year, I met Chris Brasher, the founder of the London Marathon and a gold medallist from the 1956 Olympics. Ivana Trump turned up for a shoot with Richard Young, the famous paparazzo, with me beside her. Who else? Hmm. Denis Compton, Ryan Giggs, Shaquille O’Neal, Muhammad Ali, HM Secretary of State for Sport, Noel Edmonds, Shami Ahmed and someone who tried to bribe me but didn’t offer enough. There were others.

After I shook Muhammad Ali’s hand, I didn’t wash my right hand for nine years.

Eventually, my wife, Sally, said that either my hand went or she would.

It was a close call, but we’re still together.

Of course, the celebrities weren’t exactly queuing to meet me. I simply had some rich clients. Where have they all gone? When I was running Vauxhall’s advertising for General Motors in the UK, the advertising budget was £40m, or $62m, or €50m.

It’s now £10m, or a quarter of my past budget.

Like a hurricane, the digital revolution arrived.

Budgets became centrally focused, policed by Procurement, leading to Euro TV commercials with no dialogue, plot, wit nor memorability. All the sound tracks appeared to come from an Italian porn quiz show.

So what happened?

I think it’s partly to do with Clients’ realising that there is a difference between OPM and YOM.

Just stop for a moment and say, “OPM.”

Yes, it sounds like opium, and it is. It means Other People’s Money.

The opposite is YOM, or Your Own Money. OPM vs YOM.

Digital allowed clients to get their marketing budgets back under control. Google analytics have become a global reporting service. Agencies have dramatically changed as a result.

Meanwhile, parallel things were going on in the European Commission’s economic zone.

Countries with money were subsidising countries without any money. The receiving moneyless countries included Greece, Portugal and Ireland. The OPM subsidies were as addictive and destructive as opium itself. These countries knew they should behave like grown-ups, but couldn’t stop themselves. And then Italy and Spain succumbed to the drug too, and went bonkers with OPM. Meanwhile, the UK privately blessed the day that Margaret Thatcher insisted on us not adopting the euro.

Germany, which was a driving force for the Euro, led by Helmut Kohl, is now in a difficult position. Many of these economically damaged EU countries are very important customers of Germany.

So the Germans are pouring buckets of their YOM, or Your Own Money, in case you’ve forgotten, which the Germans have not.

The issues now divide into three:

  1. Is the German economy sufficiently robust to bail out Greece, Italy, Spain and Ireland? Yesterday’s Irish referendum suggests that Ireland might now be agreeable to taking full responsibility for its economic plight, with a bit of help from the UK. We await the outcome of this month’s General Election in Greece. If they vote against pro-Euro candidates, the country will be forced to quit the Eurozone by the financial markets, probably in little under a month. The disaster at Bankia in Spain might now unravel Spain’s membership, too, the bank having yesterday asked for a €19bn bailout, in addition to last month’s €4.5bn.
  2. Is Germany really the country which should leave the EU? Its economy is so different to the rest of the other EU economies that it would definitely do better outside the EU, like Turkey.
  3. Rather than printing money, should we just accept reality and let bankrupt countries go bust?

I supported the old European Economic Community for political reasons, thinking that, if we traded principally with each other, we were less likely to go to war again. This turned out to be fairly sound. Then the disaster of Maastricht happened. We got an economic union. Jacques Delores was partly the author of this disaster.

The Rumble in the Jungle

George Foreman

The economic union was doomed from the start because the terms of trade between, say, Germany and Ireland were prohibitive for Ireland, as they were also for Portugal, Spain, Italy and Greece.

But, it was principally doomed because there was no fiscal union.

The USA has a tax regime which is pan-continental. The EU does not.

The USA and the EU are like bacon and eggs.

The USA is the pig or hog who supplied the bacon: it is committed, but the EU is the hen who supplied the eggs: she is merely involved.

When Muhammad Ali knocked out George Foreman, he was committed.

Foreman did, at the age of 45 become the World Boxing Heavyweight Champion again, but I don’t think the EU is going to be given a second chance to sort out the EU unless the politicians agree a fiscal union.

Which they won’t.

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