Compassionate Conservatism

You may call me hopelessly old-fashioned, but I believe in loyalty. One of the ways in which we reward loyalty is a pension plan. In the case of state pensions (professors, teachers, firemen, policemen, etc), the standing argument is that many of these people took the good pension as a trade-off for lower incomes than they could get in industry.

Even the Soviets recognized that this trust was inviolate. Not so the corporate raiders, who started in about 1980 to raid the funds to pay for their purchases, totally destroying many of them in the process.

Today, the conservative US columnist George Will published a piece blaming California's financial ills on over-taxing the rich, and the 'generous' state pension system.

I find it a very odd coincidence that the very same day, conservative Republican lawmakers in Ohio announced that their public pension system is in trouble, and requires a major overhaul, to be done on the backs of the current retirees.

Hi-yo Silver, away!

Jesse alerts us to the fact that the Chinese government is not only investing in precious metals, but actively encouraging its citizens to do the same. Funny that our governments aren't doing this.

And gold briefly cracked the $1,000 ceiling today. Naturally, there'll be a reversal at some point, but I have a hunch that much money and effort have been expended trying to put off this psychologically important event. Once you've made the first crack in the eggshell, it gets a lot easier.

Every little thing's gonna be all right

Dr Mark Perry reckons it's all been on the up-and-up since 1929. Yes, production has become more efficient over time. But can it be quite as rosy as it seems, when the last quarter-century has seen an explosion of debt?

United 93

Just watched the film, "United 93" and wondered if I'd pass the test when the moment came. Remember reading how at the Guardian newsroom on September 11, 2001, the self-regarding hacks were watching the Twin Towers burn on TV and commenting how the Americans had it coming. If so, may the next one hit Farringdon Road - but only the guilty parties. That's the catch, isn't it?

A positive step: solar cooking

A brief grumblestice while I pass on a brilliant idea that my sister-in-law has just successfully tried out herself (in the northern USA): a solar cooker made from cardboard and aluminium foil.

Here's the site: http://www.freewebs.com/sunnycooker/

Will Tony Blair take Irish nationality?

Cherie Blair has said on a TV chat show that the Blair children have dual nationality, British and Irish, the latter because of Tony's mother (an Irish Protestant). It is stated that Tony and Cherie have only British passports.

That is not to say that the parents might not later choose to apply. Advantages would include the famously lenient Irish tax treatment of writers and artists (once entirely exempted, but now lightly taxed at 1% on annual income up to €100,000 and 2% for those earning above that figure). Eire is a good country for those who specialise in popular fiction.

Or perhaps the Republic would simply be a good place to lie low when the truth comes out. In 2006, General Sir Michael Rose called for the impeachment (a procedure not used for two centuries) of the Prime Minister, for taking the country to war on false pretences. In this context, it's worth noting that extradition from the Irish Republic to Britain has always been made very difficult. (When exactly were those Irish passports issued to the children?)

Not that the people of the Irish Republic are afraid to call people to account*; they take their religion and morality quite seriously there, still. I watched the Gay Byrne Show on 28 October 1994, when Gerry Adams faced political opponents and a far from sympathetic Southern Irish audience and was called a murderer to his face (he remained lethally calm and turned the point into an issue of good manners).

Perhaps Tony Blair, that son of Proteus, will one day be seized and held until verity is forced from him.

Update

*The current PM is ostentatiously backing compensation claims against Libya for supplying the IRA with explosives. Could we start a leetle closer to home? How much are the IRA, PIRA and the rest prepared to pay?

Fisk this - Jack Straw on oil and Al-Megrahi

In the Telegraph and other papers:

Mr Straw also claims today that Mr Brown had nothing to do with his change of heart over the PTA [Prisoner Transfer Agreement], adding: “I certainly didn’t talk to the PM. There is no paper trail to suggest he was involved at all.”

Even if literally true, the above statement is consistent with the possibilities that:

- Mr Straw communicated via a third party with the PM on oil-for-Lockerbie-bombers (or, the PM raised the matter with others)
- Mr Straw communicated directly with the PM, but not through speech
- There were once paper-based records to show the PM's involvement, but they have been destroyed
- There were, or still are, records held in other form (e.g. email)

A good example of a "non-denial denial"?

PM to quit?

Peter Hitchens speculates that Gordon Brown may resign soon:

What will all these people do for a hate-figure if Mr Brown quits, as I think he will probably do on ‘health grounds’ before the Election?

I reconfirmed our electoral register details by phone yesterday; but I really don't know whether I will be able to vote for any of the candidates. Have we got to the point where mass abstention sends a stronger signal than positive choice?

It occurs to me that even using the phrase "sending a signal" reveals how much the political class has lost touch with us.

UK public debt worse than USA

It's reported in the Press that UK national debt will reach c. £1 trillion by the end of the year, and when the Office of National Statistics adds-in the cost of bank bailouts to Lloyds TSB and Royal Bank of Scotland, the total should be £2.5 trillion. This will make our position worse than that of the United States, as shown in the graph below.

Lone wolves and the herd instinct

When Tony Butler worked as a football radio presenter for BRMB, I heard him comment on the news media: "They hunt in packs." (His Black Country accent, part of his charm - there's a beautiful, musical suite of accents in the Dudley/Wolverhampton area - sounded the word as "hoont".)

It's true even now. British PM Gordon Brown is down, heir-presumptive David Cameron is up. We shall see what Balloon Head makes of the economy when he gets in.

The problem with Brown is that he is, in my (educationally experienced) opinion, mildly autistic. He's the kind that academically dumber, normal kids pick on and wonder why he doesn't fight back. He hasn't helped himself by aiming obsessively at a job which requires quite different skills, which the flashy Blair has in spades; but self-knowledge comes hard for ASD types. Star Trek fans will understand that Scotty could never take Captain Kirk's seat in the Starship Enterprise; but maybe he harboured ambition, all the same. Had Kirk made Scotty his deputy, it could have lit the touchpaper.

The autistic child senses his vulnerability, and will make compromises to be part of the flock. Desperate for acceptance and respect, Brown has paltered with the truth throughout his political career, as commentators on his time as Chancellor have often noted. The brawling pit of the House of Commons has never been the place to nurture an inner-directed, analytical man's integrity.

But the pack is blind, too. Unrestrained, the instinct to group-bully the outsiders, the different ones, would send the human race well back into the Stone Age. And then look at the ones they instinctively, collectively follow. How many years was it before the Press revealed what they must have known all along, that the overjoyed crowd that greeted Blair in Downing Street after the 1997 General Election, was a handpicked mob of Party members? I shall believe in journalistic independence when a new incumbent is promptly probed and criticised.

And what is the pack now saying about Afghanistan? Are they correct? Would it solve our problems to withdraw and concentrate on more achievable aspects of domestic security (some British Army regiments stationed by our ports, airfields and the Channel Tunnel might not go amiss); or would it be a sign of weakness, the crumbling that in ancient times not only ceded the provinces formerly under the Pax Romana, but at last saw Alaric's Visigoths rampage through Rome itself?

Income mobility and income structure

A chewy piece from Professor Perry about the widely-held perception that the American middle class has essentially gotten nowhere since 1980. The research he discusses purports to show that large numbers of individuals have moved up and down between income brackets.

Elsewhere, I've read that the middle earning bracket as a whole has not advanced, and the top end has become wildly richer. But if individuals can progress up this ladder, does it matter that the gap between the rungs has stretched?

A heavy golden straw in the wind?

Many deride "gold bugs" and their increasing insistence that for safety's sake one should have the tangible stuff and not trust third parties; but the Chinese have now called in their gold from London and parked it in Hong Kong.

(htp: Max Keiser)

Evolutionary Dead End?

Please forgive the digression, but all of this discussion of financial and social breakdown, overpopulation and impending water and energy shortages, lead me to make the following observations.

As a scientist with interest in just about everything, I have come to the conclusion that the underlying cause for most, if not all, of these problems is that our psychology and cultures have not caught up with the Scientific Revolution.

I will begin with that statement that science has emerged as the most useful method of determining fact, if not truth.

However, like our cousins the Great Apes, we still waste resources when they are plentiful, with no thought of the future. We still generally pick our leaders as the most virile male, i.e. the silverbacks, rather than their ability to actually solve problems.

And we still insist on pre-Enlightenment thinking, as is demonstrated by this piece from DC's Improbable Science 'blog:

A recent report by the King's Fund in the UK on complementary medicine contains the following passage:

“This report outlines areas of potential consensus to guide research funders, researchers, commissioners and complementary practitioners in developing and applying a robust evidence base for complementary practice.”

In other words, if we spend enough money, we will find the stuff that works, and best way to use it.

However, the US National Institutes of Health has spent over $1 billion in the past decade on carefully researching these practices. Not a single one was found to be of benefit. This was so distressing to some there, that each new report resulted in a slew of resignations.

Water wars

James Quinn raises another critical resource issue, namely, water.

Taking his list "Total Renewable Freshwater Supply, by Country" (which excludes Australia, though the situation there could easily become much more challenging), I divided the figures by population size to obtain a per capita water supply, as follows:

From this we note that Canada may have something to offer the USA (Al Capone would be into mineral water now, I guess), and that India may face an even more desperate shortage than China, unless and until desalination plants take off. And parts of South America may have their attractions.

But the Congo: no. I once taught a lad whose family trekked 1,000 miles to the coast to get away from the civil war, and he very nearly didn't make it, because of a blood-thirsty armed patrol. His father nominated him for the chop rather than the favourite son, but they eventually relented.

Any views from survivalists as to where to move the family for a long-term future?

Don't save the planet, save the country

A couple of days ago, the Daily Telegraph reported on threats to our energy supply. "There will be huge reliance in the short term on gas, with up to 50 per cent of electricity coming from gas fired power stations. "

Instead of challengeable pi-jaw about global cooling/warming/okay-let's-compromise-and-call-it-change, why don't we look to reducing our energy use for the sake of liberty? No more dirty deals with Putin, Gaddafi, the Saudis et al. And less chance of another industry-crippling 1974 energy price hike.

An initiative that I think will run long and grow big is "transition towns", started by a man called Rob Hopkins in Totnes, Devon. Out from among the patchouli-scented crystal-wavers and hare-worshippers will yet come ideas to help us adapt to Peak Oil.

The Fourth Horseman

Michael Panzner's prescient book "Financial Armageddon" listed four major threats to the economy: debt, retirement and healthcare benefits for the elderly, government bailouts, and financial derivatives. So far, three have exploded into public consciousness; but the fourth is still to come.

Some say that the derivatives market is now worth over $1 quadrillion, as compared with gobal GDP of some $55 trillion. For most people, these numbers mean nothing, so here's a graphic representation:

Supposedly, this shouldn't matter, since every bet involves two parties and so the sum total is zero. This ignores counterparty risk, i.e. the chance that the other person will fail to deliver when the time comes. It's the sort of thing that busted the UK's oldest bank, Barings.

From what little I understand, the derivatives market suffers from much the same complexity and obscurity as the packaged mortgage mess - the dealers are making loads of bets with loads of other people - so the misery could get spread around rather than just take down one or two incautious players.

If just 1% of the derivatives market fails, this equates to some 18% of global GDP. We in the UK are dealing with an economic contraction of less than 6% year-on-year, and that's causing paroxysms.

An argument for holding some emergency cash, away from the banks?

Fight back against self-organisation

A lovely contrarian piece from Lifehacker: dump your to-do-list. Just do one thing at a time.

I can see the logic in this: when I've listed all I have to do, the heart sinks and then I rebel against the lot. When you've planned your life too systematically, the life-impulse within you is driven to smash the system. A degree of disorder, of randomness, of openness to change, is like opening a window in a stuffy room.

"Delight in Disorder" by Robert Herrick:

A sweet disorder in the dress
Kindles in clothes a wantonness:
A lawn about the shoulders thrown
Into a fine distraction--
An erring lace, which here and there
Enthrals the crimson stomacher--
A cuff neglectful, and thereby
Ribbands to flow confusedly--
A winning wave, deserving note,
In the tempestuous petticoat--
A careless shoe-string, in whose tie
I see a wild civility--
Do more bewitch me than when art
Is too precise in every part.

Unemployment a good thing? For economists?

A thought-provoking piece from Mark Thoma, in which he argues that many jobs that have gone deserved to go; it's the creation of new ones that should occupy our minds.

There is a pipe-smoker-in-a-leather-chair comfortableness about this (I'm not sure what the unemployment rate is for economists; should the 10 - 15,000 who failed to predict the credit crunch all be sacked?), but he may be right.

However, the allegedly self-righting mechanisms of the market may not operate quite so efficiently in a single nation's economy when there are other major causes of disequilibrium at work in the world, including quarrelsome international politics and sharp disparities in global wage rates.

An image: picture a man in his study, happily using a tiny screwdriver to adjust the mechanism in a carriage clock, while a block of frozen waste hurtles silently towards him from a passing jet liner.

PS:

Coincidentally: "... if you fail to heed the roar in your ears and fail to look up what will inevitably come, while it may surprise you, does not surprise anyone who has passed sixth grade math." - Denninger

Welcoming the disaster

Two (among others) good links from Credit Writedowns:

"On April 17, 2007, famed short-seller Jim Chanos and other hedge fund managers met under tight security at the World Bank in Washington for the G-8 meeting. Chanos and Paul Singer briefed prominent policy officials about the growing financial instability. They gave irrefutable evidence that a catastrophe was building. They told officials that banks that were about to sink the global economy. They called for decisive action.

And they were ignored.

Gordon Brown was there..."

- New Deal 2.0

My comment: there's always a nice conspiratorial frisson when you think you can show They Knew All Along. Except there will have been other voices (like the 10 - 15,000 American economists who didn't foresee the credit crunch). And self-delusion. I don't think this nails the guilty parties.

Expect a major house-cleaning, a second American Revolution. We predicted the "Great Depression 2" around 2012. Well, we doubt taxpayers will passively sit one more time, like in the 1930s, in 2000, and the past few years. Next time voters will take a page from the history books about past revolutions in the American Colonies, France and Russia. A perfect storm will erupt in a massive global credit meltdown, bringing down Wall Street and the clandestine $670 trillion shadow central banking system.

- Paul Farrell

My comment: The appeal of revolution is to juvenile minds drunk on testosterone and misled by ignorant optimism. This is why the Communists have focussed on the young. I am reminded of how Rupert Brooke welcomed the onset of WWI:

Now, God be thanked Who has matched us with His hour,
And caught our youth, and wakened us from sleeping,
With hand made sure, clear eye, and sharpened power,
To turn, as swimmers into cleanness leaping,
Glad from a world grown old and cold and weary,
Leave the sick hearts that honour could not move,
And half-men, and their dirty songs and dreary,
And all the little emptiness of love!

I don't think he would have agreed with his younger self by the end of the Great War. After a disaster comes the greater disaster: Romanticism.

What do our politicians control?

Plenty has been said about the EU and how it rules us, withour ever having had our consent to do so. But equally, our daily lives are governed by giant firms, often foreign-based.

For example, (and I offer this merely as a tiny, representative instance) I now have to pay a Frenchman to talk to a Welshman.

On September 8, 1966, the first (and very beautiful) Severn Bridge opened. It was constructed with the inventive help of the Royal Engineers (my father included), who floated prefabricated sections of the roadway on pontoons down the river, to be hoisted into position by cranes atop the towers that would hold the suspension cables.

I stood on the Welsh side with my mother and brother, listening to the Queen's speech from across the water, and watched as the Royal car came through. (Only a West Indian family near us had had the forethought to buy some flags on sticks to wave as Her Majesty passed.) The toll for cars was the then-equivalent of 35 US cents.

30 years later, a second bridge was completed, crossing further down the estuary to Cardiff and West Wales. A new holding company was formed (Severn River Cossings plc), as a partnership between John Laing plc, a French firm, GTM-Entrepose, and others.

John Laing plc is based in London and controls assets worth £698 million (December 2008 accounts); but the revenue from both bridges went to GTM-Entrepose which was subsequently taken over by Vinci Concessions SA, a subsidiary of Vinci SA, which controls assets worth almost 52 billion Euros and is based in Rueil-Malmaison, France.

The toll for cars is now £5.40 (you pay to get into Wales; any fool who wishes to leave can do so for free), and as late as last month there were protests that this highwaymanning is hampering trade and transport. But what, exactly, can the private citizen, the commercial haulier, or even the professional politican do? Doubtless any attempt by HMG to intervene would be challenged in a European court.

I think our national politicans are little better than a species of fraudster, pretending that they can do something for us but (I suspect) privately agreeing among themselves that they are powerless. In which case, all they can do is take instructions from their wealthy patrons and (perhaps partly out of impotent spite) divide and bully the insignificant people, some of whom (at permitted intervals, to be determined by their masters) vote them into office.

And now, I want to wave my little flag.