Exhausted by outrage

Read this article in Rolling Stone (hat-tip to Robert Wenzel), about how the Federal Reserve gave money to America's foreign competitors, billionaires in tax havens and even the business-inexperienced wives of Wall Street dealers.

Then if you can stand it, read Matt Taibbi's article about how nobody important on Wall Street is going to get prosecuted for the misdeeds that blew up the Global Financial Crisis.

This can't be happening.

April News

1. National Savings & Investments has not yet reintroduced Index-Linked Savings Certificates, but watch out for their return as reportedly they have a target (limit) of £2 billion in new issues. I think they will go very fast, bearing in mind continuing concerns about inflation. You can register with NS&I here to receive email updates and be among the first to get in.

2. As we are in a new tax year, you have a fresh ISA allowance. The overall limit per person is £10,680 of which up to £5,340 can be in a cash ISA; any excess must go into a stocks and shares ISA, which can be with the same or a different provider.

3. Investing for children: as you will know, the Child Trust Fund was launched in 2005 and vouchers backdated to include children born after 1 September 2002 - and now the scheme has been shelved. However, plans that have started can continue and contributions can still be made. This autumn (1st November) we expect the introduction of an alternative for under-18s, the Junior ISA. According to the Daily Mail, the allowance will be £3,000 per child and unlike adults ISAs it will be possible to switch from cash to stocks and shares and back again. It's also worth noting that this allowance also applies to children born before 1 September 2002 (who were not eligible for the Child Trust Fund). Please also see this article by Gaynor Pengelly on other options for children's investments.

4. For various reasons, my personal attitude to risk re stocks and shares is still cautious, except possibly for commodities - but even in that sector there are issues of big-boy speculation and market manipulation. If you invest now, I'd suggest you be prepared to take a long-term view. Do please contact me if you'd like a personal discussion of your own portfolio and future plans.

5. Contracting out of SERPS/S2P: from 2012, it will no longer be possible to contract-out through a personal pension, stakeholder or money purchase pension scheme. This is because the Government plans to introduce a more generous flat-rate State Pension for all, from 2015 or 2016. I warmly welcome this, because up to now we've had a terribly complicated scheme of giving with one hand and taking away with the other - Pension Credit, Pension Savings Credit etc. The bizarre result was something like an effective 40% tax rate if you had a small State pension and had a little extra income from savings - Higher Rate Tax for poor people! Here's an intriguing angle: We've yet to get full details, but a possible effect of this change of policy could be that if you are currently contracted-out (or have previously done so) and are due to reach State Pension Age after the new scheme starts, you may get the full new State Pension PLUS extra income from the contracted-out pension, whereas someone who had stayed in SERPS/S2P throughout would get nothing more. Maybe the Government will do something about it (surely their civil servants will have spotted it) - but let's keep our fingers crossed and hope they'll think it's too complicated to adjust now.

INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities. DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Alternative Vote and the Apathy Party

If AV is a controversial step, what about tackling non-participation? The last four UK General Elections have also been the lowest in terms of turnout since World War II, according to this site:

Statistically, there appears to be only a slight negative correlation between the size of turnout and the size of the winner's majority, as witness the 2010 results:

... but the British system is full of idiosyncrasies. A constituency in the Western Isles, or Northern Ireland, or one of the industrial blightlands, is not going to have the same characteristics as one in Hampshire, Slough or Greater London. And apathy can be confused with despair: in a rock-solid safe seat, those who would vote against the incumbent if they had a chance of unseating him/her, may simply not bother to vote at all.

Why not insist that everone must vote - perhaps adding the option "none of the above" to the ballot form?

Australia has a system of compulsory and enforced participation in General Elections, and so does Singapore; among European countries where it is compulsory but not strictly enforced, are Belgium and (for Senate elections) France.

South America (which I think will have a very interesting and possibly bright history over the next century) has many countries where voters must take part. Using the information here, I give below a map of them:

Let's start with AV, and if that doesn't winkle the people out of their sofas, let's go where so many other countries have led the way. Who knows, we may one day have a democracy.

Voting reform: AV = First Past The Post

The above video is no longer available on Youtube but can be watched on the BBC's website here:

http://www.bbc.co.uk/news/av/uk-politics-13048603/referendum-campaign-broadcast-by-the-no-campaign-broadcast-on-11-april-2011
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This evening I saw the political broadcast for the "No" vote and I think I've rarely seen anything so untrue and misleading.

First we got candidate Alan B'Stard promising everything to get in, then forming a coalition and welching on all the manifesto promises. Ans: No, that is what we got under the present system.

Then we saw a horse race where the third placed was declared the winner. Ans: No, under AV the victor IS ALWAYS the first one past the post, the "winning post" being 50% of all ballots cast, if necessary by taking into account second and third (etc.) preferences.

As opposed to the present system, where the last Labour government got a clear majority of 66 seats on the basis of a minority of the votes. In the 2005 General Election, out of 650 MPs, only 220 won 50% or more of the votes cast in their own constituency (see "Election results for Using and Applying statistics" here.) In over 66% of Parliamentary constituencies, all the horses failed to finish!

Working the figures the same way for the 2010 General Election, only 217 out of 650 MPs jockeyed their way past the post. That's almost exactly the same situation as in 2005; we have a coalition government only because of disillusioned and mistrustful voters switching between parties - using the current voting system.

In 2005, Labour got 35.7% (the largest proportion) of the total national vote; in 2010, the Conservatives got 36.5% (the largest proportion) of the total national vote. The mess we have is, I repeat, under the current voting system and is a result of political breakdown, not (directly) owing to a glitch in the psephological mechanism.

Some might say, why change the system, then?

I'd answer, the breakdown of the relationship between the representatives and the people is (to a significant degree) attributable to an unrepresentative system of voting, one which encourages a party political divide because MPs in "safe" seats needn't bother listening. For 20 years I had no member of any of the major political parties even ask for my vote, because however I voted, I was going to get the Labour stooge. When the constituency boundaries were altered for 2010, suddenly I had both Labour and LibDem candidates on my doorstep.

Needn't bother listening? Needn't bother working, either, in many cases: how is it possible for "hard-working" MPs to write novels, handle handfuls of directorships etc, if not for the cosy calculus of "pairing" and the lazy delegation of most of the constituency work to constituency workers? I am reminded of the eighteenth century Caribbean plantation owners who lived in London and left all the responsibility to their estate managers and overseers.

Oh, and all that guff we're hearing about how very complex AV is? Bollards. Fifty years ago, housewives were completing similar questionnaires in newspaper ads, to win washing machines - "Put these advantages in order of personal preference: price, speed, capacity..."

No-one can foresee exactly how voting will change when all votes count, or at least half of them, anyway. The LibDems needn't assume that it will benefit them most, for if it does, the other parties will adopt a raft of me-too policies. No bad thing, perhaps, to make politicians work for a consensus.

And maybe, just maybe, we'd start to examine the candidates more carefully, rather than simply glance at their rosettes. No wonder there's such resistance to change from the spoiled heirs of the present arrangement. Just who IS funding the "No" propaganda?

Ah, but without (so-called) first-past-the-post we wouldn't have had Thatcher, say the Conservatives. Well, I think a general retrospective reassessment of her achievements is in order, seeing as how we've nearly killed our industrial base and allowed the financial sector to come out in a massive, choking algal bloom. But while we're reviewing her with the crystal hindsight of history, we can look again at the miserable record of the Socialist governments, too. The vaunted advantage of a government enabled to take bold action on the back of a Parliamentary majority founded on a minority of votes, is not such a strong argument, in my view. *

And why should all be decided on red and green benches in the best clubs in London, anyway? We're long past the time when it took days to ride a horse to the capital and every provincial church told its own time; modern communications call into question the antiquated system of remote, unresponsive, not infrequently rather arrogant and sometimes downright corrupt representation.

When it really matters, the people can and will declare a clear opinion, even against the advice and guidance of their leaders, as witness Iceland's referendum on the bailout of the banks. More referendums, say I - provided the arguments to inform them aren't as lying and twisted as what I saw tonight.
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*Update (November 28, 2017): Only twice since 1918 has any party garnered more than 50% of votes cast nationally in General Elections - the Conservatives both times, in 1931 and 1935 - see page 12 of "UK Election Statistics: 1918 - 2017" (pdf) on the House of Commons website here:

http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7529#fullreport

In the paper shop

The newsagent was reaching under the shelves with a litter picker, searching for plastic ties and brown paper from the morning's news bundles.

In came the old man who has spent £30,000 on National Lottery tickets since it started.

"You'd better not bend like that in front of me, or you'll get the Golden Rivet. Are you looking for your wallet?"

"A penny."

"A friend of mine once bent down for a penny, and broke his neck. Never bend down for anything less than fifty pee."

Bill Whittle vs Michael Moore

You don't have to be a right-wing commentator like Bill Whittle to think Michael Moore is a crowd-manipulating phony. But I think Mr Whittle may have proved more - and less - than he intended.

It's clear from what he tells us that seizing the entire income and assets of "the rich" would cover the USA's expenses for only a year. Of itself, this does not exonerate those who benefitted hugely from skewing the economy. What he has shown is that the damage done to Humpty Dumpty is greater than all the king's horses and all the king's men can easily undo.

Eating the rich is revolutionary talk à la française and like Robespierre, Michael Moore might find he'd started a revolution that ate its own children. Reasserting the rule of law is another matter, and it would be part of the corrective process of justice to fine, jail or defenestrate from public office those who had the mens rea in this morass of criminal incompetence and wickedness. This is something for which Karl Denninger himself has often called. Right does not belong to the right, any more than to the left.

What a shame that Mr Whittle has forbidden all responses to his video. I suppose he would consider what I say to be merely part of his "predicted sewer backwash on the intertubes".

Behind the truth: Pastor Terry Jones and the Koran-burning

It could all be a terrible mistake. Pastor Jones may have thought he was burning his financial records:

"At first, Terry and Sylvia Jones split time between the Cologne and Gainesville churches. Then in 2008 they cut ties with the Cologne church after members accused the couple of financial improprieties connected with their side business, TS and Company, which is owned by Terry and Sylvia Jones. TS and Company sells vintage furniture on eBay and was supposed to help support the churches."