China rules through our Cargo Cult addiction

Melbourne Herald Sun, 3rd January 2010

On New Year 2008 I described the state of world business as “Cargo Cult Economics”. Remember those natives of war-time New Guinea who believed that wealth was delivered by the gods? The planes would always land, bringing them food, clothing, machines - it was magic, they came out of thin air.

But once the war was over, the goods stopped coming. So the natives made gifts to appease the gods. They built aeroplanes out of straw and copra, radios out of coconuts, control towers out of bamboo poles. They believed that the cargo would always come.

So in our cities and Wall Street we believed that income would continue to grow, share prices would never fall, houses were solid investments.

By New Year 2009 the economic tsunami had demonstrated the flimsiness of our beliefs. Superannuation was supposed to be rock solid but it dissolved like sand. Banks crashed. Share prices crumbled, much of the world went into recession. At last we could see through all these financial facades and concentrate on building something real.

But wait a minute - here’s New Year 2010 and what do we see? All those coconut and banana structures are being rebuilt. Everybody is triumphant at having successfully saved our sacred cargo cult. The control towers are still built of bamboo and straw, the radar is a spinning gourd shell.

But the natives are living well. We have ample supplies of any goods we fancy. Beautifully made and very cheap, kindly provided by the hard working gods from Beijing.

These generous souls also allow us to continue our extravagant lifestyle, by giving us money whenever we need it. Currently America owes China about a trillion dollars for government securities alone. Whenever Uncle Sam needs a buck, Uncle Hu Jintao delivers.

Then last month we saw vividly where it was leading. China decided it did not want to be restricted by a Copenhagen treaty. So it told Obama, Brown, Sarkozy, Merkel, Rudd and the rest of our leaders to shut up and sign what it dictated. The world was going to play by China’s rules or not at all. After some vain protests, our leaders meekly signed the filleted accord.

China learned the lessons of world diplomacy from the best teachers. The British Empire fought the Opium Wars between 1839 and 1860 so they could feed the Chinese people constant supplies of opium. We knew an addicted people was in our power.

Well now the West are the addicts. Dependent on China for their tellies, iPods, clothing and - soon - cars. We’re also addicted to money. Where do you think all these billions spent on financial bail-out schemes will come from, ultimately? More loans from Uncle Hu?

Those of us in marketing are just the front-end of the process. We sell the products, wherever they were made. We build the straw and bamboo store fronts, and stand there handing out the toys and gadgets made afar. We don’t create the goods, our tools are smoke and mirrors.

The world has very little time to get real. We’ll never cure the addiction so at least let’s make more of the dope ourselves. Like adding value to the minerals we’re feeding into the furnaces of Asia’s industry.

Trouble is, our politicians have seen what happens to those who try to expose the cargo cult or preach reality. They are ripped apart by a raging mob. (Here we call this an election.)

Whatever persuasion you are, it’s time to stop berating our politicians and start encouraging them to be brave. It’s going to take some tough decisions if we’re to break the addiction of cargo cult economics. Happy New Year.

Ray@ebeatty.com

Rudd, Obama and the political beauty contest

Melbourne Herald Sun, 30th January, 2010

If you think business is a competitive slog - keeping your product on the shelf, fighting price-cutting rivals, being subject to the whims of public popularity - then spare a little sympathy for politicians.

Theirs is the hardest task of all, with opinions fluctuating almost weekly and always some new election just around the corner. They use all the same phrases as marketers - defining the brand, segmenting the market, profiling the consumer (voter), and selling the message.

And if any politician tells you they are not interested in opinion polls, watch their eyes carefully through the TV screen because they are lying.

It's some years since I worked on a political campaign but I've got to tell you it's exciting. Your clients are all these famous faces off the telly, everything you do seems to end up on the evening news.

Issues can blow up into disasters in the space of a day, and the advertisers and policy makers will huddle together to hammer out a response. Sometimes you'd run out of a meeting straight to a studio to make a TV commercial overnight.

If that sounds stressful, you'd better believe it. But then after a while the adrenaline becomes addictive.

Right now we are seeing the political chooks aflap in three continents.

America's love affair with Barack Obama has turned to plate-throwing before they've even wiped the "Just Married" paint off the car. Two govenorships and Ted Kennedy's holy seat wiped out in a voter backlash that has both President and party stunned.

Always too smart to be proud, Obama has called back the team that did it for him in the first place. David Plouffe was his campaign manager in the election and he has been put in charge of all the Democrats' coming elections in November.

Taking another nibble of humble pie, he has turned to Bill Clinton. Not surprisingly - Clinton's biography for his first term reads like a day plan for what has happened to Obama to date. However, Clinton rescued himself and won a second term. Suddenly he is being looked on with new respect.

Of course down here it all sounds familiar, looking at our own Prime Minister. The Rudd of Kevin 07 has lost his gloss and even at a time when the economy and employment are bright there are still plenty of worried frowns.

The opinion polls are running strongly for the Government so far this year, according to Gary Morgan. The ALP sits on a comfortable 58.5 against a Liberal-National Party 41.5, and the PM at 61 per cent approval.

But every politician knows how quickly the tide can turn, especially with a new opposition leader in an election year.

So as in America, the ALP is re-igniting its advertising team. Nearly 30 years ago, Bob Hawke amazed the country by appointing arch-rightist John Singleton to do the ALP advertising, using his agency, now called STW. But Singo has gone, as have the key creatives who devised the campaigns.


So recently the party swapped to McCann-Erickson. This was the agency that created 1972's It's Time campaign, so the party has come full circle. Presumably their brief is, "It's not yet time".

It's an election year in Britain too, with Prime Minister Gordon Brown looking like he's preparing the charge of the Light Brigade. Within five months he will be galloping against the massed guns of a revitalised Conservative Party under their glamorous young leader David Cameron.

UK Labour's ad team is feverishly studying the Obama history book in the hope of inspiration. Sorry fellas, the author needs a bit of it himself right now.

Ray@ebeatty.com