LA Interlude 

So here I am in LA, busy lecturing on Blockchain and how it really IS different from everything else, and I am re-learning what I knew about America and how it works all over again.

As an observer from afar it is easy to miss the nuances that make America great economically (and in other ways too, though many would differ). I have always said that the American economy is immensely flexible and uniquely able to withstand shocks in either direction. The private sector focusses on the  business of wealth creation, and NOT on income distribution and destruction. To take one example, hiring and firing are not blighted by the dead hand of bureaucracy that the UK and EU face. I can tell you stories of companies, particularly in Germany, struggling with their head count. What do they do? They literally cannot make the people leave. I know of one person who sat at their desk for a year doing precisely nothing as management did everything possible to get them to leave voluntarily. They have to be quite careful of course, as even reading the newspaper can be construed as not working, but just sitting there, can’t. When three more people in the same department started their silent vigil, the decision was taken that “something had to be done” and the staff were offered early retirement on 90% salary. You might not regard that as great, but the point here is the retirement fund, not the company, bears the cost. Value destruction by any other name.

In America, a deal would have been done and everyone would move on, at far less cost and far less disruption. The economy as a whole relies on people working two jobs.  Most people in hospitality, for instance, start at 6 and finish at 2. They then go to a part-time job in the late afternoon or evening, so that losing a job overall is less of a problem. The destruction of Capitalism which lives within its very soul means there are not the zombie companies that abound everywhere else (China in particular springs to mind).If you know anything of economics you know that perhaps its most important function is to set a market-clearing price. As long as there is no movement on price, there can be no market clearance. But the Americans recognise that getting the market clearing and growing again is the single most important thing that Economics can do.

Unions work in a different way too. In America they are held properly accountable for their actions (on both sides), and as a result negotiation is conducted with a view to reaching a reasonable outcome. Both sides need each other. It’s not adversarial in the way it is in the UK. The result is that the number of days lost through strikes, in a country 6 times as populous as the UK, is smaller. Get your head round that one.

If any government in the UK was serious about reform (HA!) they would make striking financially and politically unviable so that it becomes a last resort in the way it used to be. People are fed up with public services simply not working because of the intransigence of one side or the other.

The US is also serious about allowing in people who can benefit its economy. From the days at the end of WW2, (remember Werner von Braun?) when the entire workforce of the German rocket program was purloined, to today when Universities, Companies and Charities (yes, Charities) are able to get the brightest sparks world-wide to come and work for them. Yes there are a lot of Mexicans and others who come and do the two-job-tango, but every one of them really really believes they can make it. The free courses available through individual State institutions are truly astonishing and create the workforce needed to flourish.

I’m staying in a lovely hotel in the downtown area with “small” rooms so large they would qualify as family rooms in the UK – or even as small houses. From it I can see the amazing buildings housing the likes of PWC, Wells Fargo and TCW to mention but three. But I can also see the future in the shape of the Lakers’ stadium, now named Crypto.com stadium. Coming to a bank near you soon.

But the most interesting thing is the WiFi name that pops up amongst those of individuals and the hotel. It is DigitalGovernmentTaskforce. It’s locked of course, but I did try, and I’m sure someone better than me at hacking could get in. But what are we to make of that? It has apparently an office in nearly every State with links direct into the Government. It’s clearly a group of people working on behalf of the US Government to delivery more digital stuff.  They are miles ahead of us and will remain so as long as the Republicans have their way. From my time here, I can’t see that changing any time soon.

Just two more things that slapped me around the head as I wandered about. California of course goes with Solar as opposed to wind renewables, but there are over 70,000 turbines across the whole country as opposed to 11,000 or so in the UK. There used to be a sort of subsidy here in the form of tax breaks and other incentives, but the present administration, in its drive to save Government Dollars, did away with them. And what happened? All of a sudden those whirling blades had to actually compete (horrors) as opposed to suck their customers and the government dry. Literally within a few days the companies involved with turbines on the stock market had all been repriced to a non-subsidised price level and started earning real money. The actual delivered price of electricity fell. Customers started paying true prices. And it all happened almost overnight. As a counterpoint, in the first half of 2025, 37% of Scottish wind turbines were paid NOT to produce electricity. Just think what the wholesale price might have been if it had been a properly economic, competitive market as opposed to an insane, ideological stupidity. Our electricity market as you probably know is virtually the highest priced in the world, destroying both businesses and citizens budgets.

And finally, orange juice. The orange juice in California is the most delicious thing you have ever tasted. And why is that, you may ask. It’s very simple. The oranges here are picked sun ripened (ie properly ripe) and squeezed and fresh juice is shipped every day. Practically everything we drink in the UK which exists are from what are called bench ripened oranges. That means they are picked before they are ready to keep them “fresh” (that’s a euphemism by the way) in transit. Of course much of the UK juice is from concentrate which is juice dehydrated then water added in the UK. I hate to say it but that is one of the things I don’t think Economics will ever be able to fix. Buy orange juice futures a la Trading Places (not financial advice)

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