JFK’s economic legacy (homework for Chancellor Osbourne) & Gandys Flip Flops

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The UK government is considering naming and shaming companies that fail to pay small and medium-sized businesses on time through a “Trip Advisor” reviews approach. This possible small triumph for small business is too much of a baby step for me. I want to see bigger and bolder help for those firms that let’s face it, are so often heralded as the engine of growth for the economy. Think about this: It was the fiftieth anniversary of JFK’s assassination last week. Predictably, out came the analysis, retrospectives, conspiracy theories and occasional reminders of what a glamorous wife he had.

Not much was said about John F Kennedy’s economic outlook, which was pretty forward thinking and could teach Western governments in power today a thing or two. JFK was a tax cutter. He believed that by cutting taxes, companies and individuals then had the incentive to work harder, invest more and in turn create growth, jobs and wealth. Sounds like a good idea, right?

The very clever Cityam editor Allister Heath (oft quoted in this blog), of course picked this up. He lifted a summary of JFK’s economic views from an address to the Economic Club of New York from Dec 1962 – a speech that paved the way for series tax cuts and supply-side reforms over following decades. I will do the same. Here is the JFK excerpt:

“I’m not talking about a ‘quickie’ or a temporary tax cut, which would be more appropriate if a recession were imminent. Nor am I talking about giving the economy a mere shot in the arm, to ease some temporary complaint. I am talking about the accumulated evidence of the last five years that our present tax system, developed as it was, in good part, during World War II to restrain growth, exerts too heavy a drag on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incentives for personal effort, investment, and risk-taking.

“In short, to increase demand and lift the economy, the federal government’s most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private expenditures…

“Our true choice is not between tax reduction, on the one hand, and the avoidance of large federal deficits on the other… an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget — just as it will never produce enough jobs or enough profit… it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now…”

George Osbourne, take note.

A few weeks back, I chaired the World Retail Congress in Paris. I met some fantastic people including the big names like Martha Stewart, Arcadia’s Philip Green and Louis Vuitton’s Yves Carcelle, plus smaller brands, investors, consultants and analysts from the global retail realm. Someone who stood out for me as one to watch was Rob Forkan, co-founder of Gandys Flipflops, and not just because, fresh-faced at 26, he looked nothing like the rest of us wrinklier, besuited delegates at the three day conference. In fact he wore flip flops the entire time!

Aside from being a really nice chap (and drinking companion), Rob is much wiser than his years. He has an incredibly focused attitude towards building the business he created with his brother Paul. Their blog tells the story far better than I ever could, but in a nutshell, the British brothers have built a business that helps orphans around the world, in homage to their compassionate, globetrotting parents, after they lost them both in the Boxing Day tsunami. The goal now is to help people in the developing countries they had visited as a family, so nice a percentage of the profits from Gandys flip flops goes towards building orphanages in honour of their parents.

So far their enterprise has also funded a teacher and a nurse in India for a year and bought school supplies for over 100 children in Asia. So I was thrilled to hear the brothers have landed their biggest deal to date: high street brand Accessorize have agreed to sell their Gandys flip flops designs in their stores across the UK from next Spring. Monsoon and Accessorize boss Peter Simon, who incidentally was born in Sri Lanka, has a similar ethical stance and his brands too are committed to giving something back, so this deal is a good fit. Rob told me ‘It is a really exciting time at Gandys, to now be launching a new range in 17 new countries from this fashion collaboration. It’s great to be working with such a well respected & known fashion brand like Accessorize. Better yet to be able to support charitable causes and projects in Sri Lanka from this collaboration makes it really special”.

They hope to be able to sell up to 250,000 flip flops by next summer and plan to open a children’s home by the end of 2014 – ten years on from the disaster. All the very best of luck.

For more about Rob and Paul’s story, click here: <a href=”www.gandysflipflops.com/blog/” target=”_blank”>www.gandysflipflops.com/blog/</a>