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Here’s a new strategy: telling the truth!

Nov 23, 2009 Business Daily, Strategy

“At last the phoney war is over. For months it has been clear that Britain’s fiscal mess is Augean. Poll after poll has shown that voters know big spending cuts are unavoidable.
…So Mr (George) Osborne had much to prove when he stood up on October 6th to give a taste of what his policy will be like if the Conservatives win the general election due by June. The temptation was to to continue to spout generalities rather than specify cuts, for fear of scaring the voters. Instead, he spelt out some of the harsh medicine needed to deal with the huge budget deficit, some £175 billion…”

The Economist (10 October 2009)

I am filled with admiration for what Mr George Osborne, the UK’s opposition shadow chancellor, did last month when he stood up before his people at a party political conference: he told the truth!

Like much of the world, Britain in the midst of a huge ‘fiscal stimulus’: a massive government-led spending plan to revive its dangerously anaemic economy. Politicians being what they are, they have been busy trying to pull the wool over people’s eyes: talking about the ‘investments’ they are making rather than where the money is coming from. Well, it’s very simple. The money is not conjured out of thin air. If government spends big today by borrowing, the money must be paid tomorrow: by taxing more and spending less. Modern politicians tend to make every possible tortuous twist of logic to avoid stating the bleeding obvious: someone’s going to pay for this, voters, and guess what? It’ll be you.

Not so Mr Osborne. He pointed out the scale of the UK government’s budget deficit (an eighth of GDP) and spelled out the harsh medicine to come, should his party be elected. Freezing of public-sector pay. Ending of middle-class tax breaks. Higher taxes for the rich. State pensions delayed by a year for everybody. And, no doubt, more to come.

This kind of talk to voters is unprecedented. Most political parties write manifestoes that are the work of fevered imaginations, not of hard facts. In Kenya, we suffer from this problem of disingenuousness more than most. We treat voters like children, and tell them what we think they want to hear. No one speaks the truth: that times are tough, that everything must be trimmed, that everyone will feel the pain.

Look at our own ‘fiscal stimulus’ plan. This has been engineered as a ‘feel-good’ budget that seems to give out all sorts of goodies all over the country. Yet the government has no money with which to fund it. So where will we find the money? From further burdening the thin sliver of population that already pays all the taxes? From pleading with development partners who simply don’t want to play ball? From borrowing in local and international markets in a credit crunch? It simply doesn’t add up, but who cares? It’s just talk.

This problem is not confined to politicians and bureaucrats alone. Private-sector CEOs also have a penchant for avoiding the truth. I remember a CEO who was engaged in a massive investment in an enterprise-wide IT system designed to modernise and automate a deeply old-fashioned and overstaffed organisation. It was obvious to one and all that staff layoffs would occur (why else do it?). But the CEO refused to say so. He was busy building political capital with his workers, and simply would not come out and say the obvious.

Well, one day he had to stand up and announce layoffs, after months of pretending otherwise. In that moment, he created a pool of ill-will across the board. Not one employee could trust him now, even those who survived the cull. Having “lost the dressing room”, as they say in football, his demise was certain.

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