I'm putting these links onto Bearwatch because they're too hot to include on the Broad Oak Blog, where I try to maintain a cooler view of the economy and investment. But pace my attempts at sanity and balance, it may be that the urbane attitude is fatally mistaken, and that matters are approaching a crisis of apocalyptic proportions.
Let's start with an absolutely magnificent rant by Joe Bageant, whose fireball sermon takes as its text the principle that "at ground zero of human species economics [...] the only currency is the calorie" - here he is.
I came upon that link from a comment on this blog, which foresees a new feudalism that begins by victimising the poor and goes on to terrorise the middle class. Again, as we slide into accepting permanent structural unemployment, I begin to doubt the continuance of democracy as I grew up knowing it. On the way, this post tells me things about mainstream Eng Lit icon poet and preacher John Donne that I almost wish it hadn't. And bloggers should take note of the fate of protesters against the Outland-style Virginia Company: "For making “base and detracting” statements against the governor, the Company managers ordered one servant to have his arms broken, his tongue pierced with an awl, and finally to be beaten by a gauntlet of 40 men before being banished from the settlement. For complaining that the Company’s system of justice was unfair, a man named Thomas Hatch was whipped, placed in the pillory, had an ear cut off, and sentenced to an additional seven years of servitude." Read the whole post here.
And in its turn, that came from the sidebar of Jesse, an investment / economics commentator who has been turning (or progressively revealing himself to be) more radical over the last year. His archly-named section "Matières à Réflexion" contains much that is indeed worthy of reflection.
More than once I have quietly challenged James Higham on his "Them" conspiracy theory, but that was to see if he really could prove the links. Perhaps such proof is impossible, just as (thanks to the careful exclusion of fussily minuting civil servants) it is impossible to know exactly what was said by whom at Tony Blair's sofa-style inner Cabinet meetings. Coming from the financial angle, all I can say is that there seems to be growing unease at what many feel to be a crooked manipulation of the entire economic system for the benefit of a rich and powerful elite - to the point where the system may break down altogether. Which, to quote the now tarnished Johne Donne, "makes me end, where I begun": do read Bageant - I think the drink and drugs have merely fuelled his oratory, rather than turned his brain.
Saturday, July 24, 2010
Monday, July 19, 2010
Protest! Index-Linked Savings Certificates withdrawn!
I have just looked at NS&I's website and found that Index-Linked Savings Certificates (and some other products) are no longer on sale. I've spoken to a rep and she confirms that they've been withdrawn as of today (19 July 2010). NS&I cite the extreme popularity of the products, evidenced in unexpectedly high sales volumes that have led to the Treasury's sales targets being fulfilled.
This product was introduced at the beginning of the high inflation in the 1970s. The point of it is to preserve the value of your hard-earned savings against the surreptitious theft of devaluation.
As I pointed out last month, anyone invested in it for the 12 months ending in May would have an effective 6.5% tax-free gain, 100% securely. Find that on the High Street.
This is a government that was going to sort out the system for the benefit of the citizens. It's started with a big fat failure. If my hunch about future inflation is correct, you are about to be stuffed by the financial system.
Protest! You can call 0500 007 007 and ask to make a complaint. They'll take brief details, give you a complaints reference number and have a member of their complaints team contact you.
Please pass this on. Know anyone in the news industry?
UPDATE (3 p.m.): BBC News has caught up with this story:
"Building societies are likely to welcome the move as it removes a strand of competition from the market... NS&I, which is backed by the government, works under rules that state that it must not dominate the savings and investments market." So when artificially low interest rates rob the saver, the government must follow suit.
"It has withdrawn both products from the market for new customers and has not set a date for when they might be offered again." I can't remember when this last happened - if it ever did.
FURTHER UPDATE (Weds 8 a.m.): Indeed this hasn't happened before, as The Guardian reports. Hit quote: "Rival banks and building societies have lobbied intensively to make sure the rates offered by NS&I and other government-owned banks are not so competitive that they restrict the flow of funds into other banks."
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.
Protest! Index-Linked Savings Certificates withdrawn!
I have just looked at NS&I's website and found that Index-Linked Savings Certificates (and some other products) are no longer on sale. I've spoken to a rep and she confirms that they've been withdrawn as of today (19 July 2010). NS&I cite the extreme popularity of the products, evidenced in unexpectedly high sales volumes that have led to the Treasury's sales targets being fulfilled.
UPDATE (3 p.m.): BBC News has caught up with this story:
"Building societies are likely to welcome the move as it removes a strand of competition from the market... NS&I, which is backed by the government, works under rules that state that it must not dominate the savings and investments market." So when artificially low interest rates rob the saver, the government must follow suit.
"It has withdrawn both products from the market for new customers and has not set a date for when they might be offered again." I can't remember when this last happened - if it ever did.
This product was introduced at the beginning of the high inflation in the 1970s. The point of it is to preserve the value of your hard-earned savings against the surreptitious theft of devaluation.
As I pointed out last month, anyone invested in it for the 12 months ending in May would have an effective 6.5% tax-free gain, 100% securely. Find that on the High Street.
This is a government that was going to sort out the system for the benefit of the citizens. It's started with a big fat failure. If my hunch about future inflation is correct, you are about to be stuffed by the financial system.
Protest! You can call 0500 007 007 and ask to make a complaint. They'll take brief details, give you a complaints reference number and have a member of their complaints team contact you.
Please pass this on. Know anyone in the news industry?
UPDATE (3 p.m.): BBC News has caught up with this story:
"Building societies are likely to welcome the move as it removes a strand of competition from the market... NS&I, which is backed by the government, works under rules that state that it must not dominate the savings and investments market." So when artificially low interest rates rob the saver, the government must follow suit.
"It has withdrawn both products from the market for new customers and has not set a date for when they might be offered again." I can't remember when this last happened - if it ever did.
Sunday, July 18, 2010
Massive inequality
See this series of slides for some eye-openers about the distribution of income and wealth, e.g.:
It's getting very "us and Them" these days, rather worrying if you're not able to sit it out like Cicero on his country estate at Arpinum, 70 miles from Rome. But even he could not hide forever, and Antony's thug Herennius found him at Formiae.
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.
- In the US, the top 10% have 81.5% of all the wealth, and 90.4% of financial wealth such as stocks, bonds and mutual funds.
- Of OECD countries, the UK has the 3rd most unequal income distribution, after the US and (can we perhaps ignore it?) Luxembourg.
It's getting very "us and Them" these days, rather worrying if you're not able to sit it out like Cicero on his country estate at Arpinum, 70 miles from Rome. But even he could not hide forever, and Antony's thug Herennius found him at Formiae.
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.
Alas, we don't know
The system has become so distorted - some might say crooked, which includes the connotation of cheating - that economists are turning from their financial models to speculate about the future actions of governments.
Even Steve Keen, having come up with a model that shows the economic machine can shake itself to bits, admits that the State can throw a spanner into it first: "There’s a lot more work to do before the model is complete–notably including the impact of a goverment sector that can add its own spending power to a depressed economy."
Now John Mauldin, on his way to the annual Agora conference in Vancouver, notes that even among the pessimists, opinion is divided as to the severity of the economic consequences, and especially as to turning-points.
And as the sovereign debt crisis rolls on, differences between countries get to look more interesting. Mauldin considers the relationship between cyclical debt (owing to periodic upturns and downturns in the economy) and structural debt - the type that demands long-term cutbacks in spending. Hearteningly for any Italian readers, their nation doesn't look too bad, especially when (as he points out) it will be so easy to save money, for example on official Maseratis.
But after looking at the US, just look at the state of the UK. I fear that our new and amicable coalition government is asking us to clap hands to save Tinkerbell.
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.
Even Steve Keen, having come up with a model that shows the economic machine can shake itself to bits, admits that the State can throw a spanner into it first: "There’s a lot more work to do before the model is complete–notably including the impact of a goverment sector that can add its own spending power to a depressed economy."
Now John Mauldin, on his way to the annual Agora conference in Vancouver, notes that even among the pessimists, opinion is divided as to the severity of the economic consequences, and especially as to turning-points.
And as the sovereign debt crisis rolls on, differences between countries get to look more interesting. Mauldin considers the relationship between cyclical debt (owing to periodic upturns and downturns in the economy) and structural debt - the type that demands long-term cutbacks in spending. Hearteningly for any Italian readers, their nation doesn't look too bad, especially when (as he points out) it will be so easy to save money, for example on official Maseratis.
But after looking at the US, just look at the state of the UK. I fear that our new and amicable coalition government is asking us to clap hands to save Tinkerbell.
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.
Blow you, Jack, I'm all right
One of the 20,000 professional economists who didn't expect the Global Financial Crisis gives thanks for other people's unemployment. To quote Mel Brooks: "I cut my finger. That's tragedy. A man walks into an open sewer and dies. That's comedy."
This leather-armchair contemplation of other people's difficulties in abstract, aggregated terms tempts me into unfair comparisons with Ebenezer Scrooge, Dives and Lazarus, or the savage philosopher-tyrants of the East in the twentieth century. But it would be more charitable of me to ascribe his views to limited imagination, rather than hard-heartedness. Let him be, in his Flint ivory tower (or would that be the pleasanter purlieus of Washington?), while the State of Michigan slides into insolvency . Economics is only a dismal science for others.
This leather-armchair contemplation of other people's difficulties in abstract, aggregated terms tempts me into unfair comparisons with Ebenezer Scrooge, Dives and Lazarus, or the savage philosopher-tyrants of the East in the twentieth century. But it would be more charitable of me to ascribe his views to limited imagination, rather than hard-heartedness. Let him be, in his Flint ivory tower (or would that be the pleasanter purlieus of Washington?), while the State of Michigan slides into insolvency . Economics is only a dismal science for others.
Saturday, July 17, 2010
More on drugs
I break the silence again, because yet again the high-ups are trying to get more drugs legalised; in this case it's the Chairman of the Bar Council. I've taken on the redoubtable (and courteous) Charon QC and expect to be hit over the head repeatedly by third-party Bolly-swiggers, but fear not the struggle naught availeth. I give below my objections, perhaps Devil's Kitchen will reappear and deny yet again that he's hooked.
M’learned friend has opened a can of worms. Those who would welcome liberalisation should first read, in a fair-minded way, the experiences and views of the former Birmingham prison doctor Anthony Daniels, aka the Spectator’s “Theodore Dalrymple.” (See his 1997 City Journal article here: http://www.city-journal.org/html/7_2_a1.html)
Readers may also wish to consider the different reasons for taking drugs. Some in the more successful and privileged levels of society may take them as a pleasure trip to stave off boredom, or to alleviate stress and mental overstimulation as they continue to pursue wealth and fame. A proportion will be caught in the toils of addiction, but their network of friends and their financial resources often (though not always) help cut them free.
Lower down, drugs licit and otherwise are a form of medication against unrelenting misery, even if that misery is carpeted and centrally heated. And they are a trap, just as much as the benefits system. They destroy initiative and ambition. This gestalt of hopeless idleness and fuddled fecklessness is then passed on to another generation, with the addition of negligent and abusive parenting. My teaching assistant also works in the evenings at a chemist, and told me yesterday how she was struck that practically everyone in Quinton (west Birmingham) was on a drug she didn’t recognise, so she Googled it up and discovered it was an antidepressant.
When I was at school, the futurologist’s choice was Huxley’s Brave New World or Orwell’s 1984. We now have a miserable coalition of both. Speaking of coalitions, there is a most unfortunate agreement between a government wanting to save money and so eyeing the allegedly unwinnable war on drugs, and a social elite (including members of the government) who grew up with drugs-for-fun and don’t see why anybody should be allowed to prevent one doing as one wishes. This glosses over the obligation to set an example to the less fortunate and to succour them. Much of the libertarian philosophy I read today seems to be a clever gloss on callous selfishness.
[Charon then directs me to a podcast interview with an American judge who also thinks the war is lost.]
OK, have now skimmed the transcript (for which, thanks). Now let’s have a look at some of these worms wriggling out of the can:
Racism: yes, a lot of non-whites in jail. Connect that to justice being like the Ritz. Also (maybe) more usage at the desperate end, and less ability to stay out of sight of the cops – no haciendas to fall apart on. And please consider what I have heard black colleagues in the looked after child system say more than once: the whites permit the plague of drugs, because it keeps the blacks down.
Judge Kane compares the “unwinnable” war on drugs to Prohibition. I understand that by and large, Prohibition worked. It was repealed after the Great Crash because the government needed a way to raise more revenue.
Legalisation means pure drugs, clean needles – point taken, so to speak. But I expect customers also got clean straw during the Gin Epidemic. “If it is available like an aspirin, then there is no market for it.” May I ‘umbly draw His Honor’s attention to the aforesaid epidemic.
Prisons are overcrowded: build more. This freeing of offenders for reasons of accommodation is part of the feedback system that tells the offender that the law has no teeth and will only gum you gently after the 150th offence. A firm – and class-blind – approach would send the message very quickly. I read not so long ago about a magistrate in a Scottish court (in the 60s?) who warned publicly that carrying a knife would be punished as severely as possible; the next offender got 10 years; knife crime ceased abruptly, immediately and for the remainder of the magistrate’s time on the Bench.
Prisons are expensive: not so much as crime. Cost of a year at Her Majesty’s pleasure £30k, savings in costs of crime £300k I have read recently. Perhaps a proportion of insurance premiums should be hypothecated to the prison system so the connexion might be made more explicit.
Legalisation means “no need to rob”. So how come liquor store robberies?
The war on drugs is unwinnable in the same sense that the war on murder, robbery etc are unwinnable. What you don’t see in advance is what will happen when the restraints are off; but we have historical precedent to teach us. The judge speaks of a steady 1.7% addiction rate to heroin and opium, but forgets (a) that there are now many other drugs available and (b) that in a far wealthier and more leisured society legalisation and ready supply could spread use and multiply addicts much, much faster.
Doubtless I’ll be told how pernicious tobacco and alcohol are; I agree, and I am also in favour of increasing restriction on both. The former shortened both my parent’s lives by some 20 years, I believe; and I recall when the latter was available from pub, offies and vintners, but not from supermarkets, garages, post offices etc and often at all hours. I recall one of my looked after children went home to celebrate his father’s release from prison; the poor sap of an adult drank everything in the house and then went out and got caught stealing a bottle of vodka from his local shop. Back in the jug agane.
I think the real driver in all this handwringing declamation of failure is the reluctance of the authorities to prosecute famous people as they will in cases of tax evasion.
Now, Charon will you read Daniels for me?
The case continues.
M’learned friend has opened a can of worms. Those who would welcome liberalisation should first read, in a fair-minded way, the experiences and views of the former Birmingham prison doctor Anthony Daniels, aka the Spectator’s “Theodore Dalrymple.” (See his 1997 City Journal article here: http://www.city-journal.org/html/7_2_a1.html)
Readers may also wish to consider the different reasons for taking drugs. Some in the more successful and privileged levels of society may take them as a pleasure trip to stave off boredom, or to alleviate stress and mental overstimulation as they continue to pursue wealth and fame. A proportion will be caught in the toils of addiction, but their network of friends and their financial resources often (though not always) help cut them free.
Lower down, drugs licit and otherwise are a form of medication against unrelenting misery, even if that misery is carpeted and centrally heated. And they are a trap, just as much as the benefits system. They destroy initiative and ambition. This gestalt of hopeless idleness and fuddled fecklessness is then passed on to another generation, with the addition of negligent and abusive parenting. My teaching assistant also works in the evenings at a chemist, and told me yesterday how she was struck that practically everyone in Quinton (west Birmingham) was on a drug she didn’t recognise, so she Googled it up and discovered it was an antidepressant.
When I was at school, the futurologist’s choice was Huxley’s Brave New World or Orwell’s 1984. We now have a miserable coalition of both. Speaking of coalitions, there is a most unfortunate agreement between a government wanting to save money and so eyeing the allegedly unwinnable war on drugs, and a social elite (including members of the government) who grew up with drugs-for-fun and don’t see why anybody should be allowed to prevent one doing as one wishes. This glosses over the obligation to set an example to the less fortunate and to succour them. Much of the libertarian philosophy I read today seems to be a clever gloss on callous selfishness.
[Charon then directs me to a podcast interview with an American judge who also thinks the war is lost.]
OK, have now skimmed the transcript (for which, thanks). Now let’s have a look at some of these worms wriggling out of the can:
Racism: yes, a lot of non-whites in jail. Connect that to justice being like the Ritz. Also (maybe) more usage at the desperate end, and less ability to stay out of sight of the cops – no haciendas to fall apart on. And please consider what I have heard black colleagues in the looked after child system say more than once: the whites permit the plague of drugs, because it keeps the blacks down.
Judge Kane compares the “unwinnable” war on drugs to Prohibition. I understand that by and large, Prohibition worked. It was repealed after the Great Crash because the government needed a way to raise more revenue.
Legalisation means pure drugs, clean needles – point taken, so to speak. But I expect customers also got clean straw during the Gin Epidemic. “If it is available like an aspirin, then there is no market for it.” May I ‘umbly draw His Honor’s attention to the aforesaid epidemic.
Prisons are overcrowded: build more. This freeing of offenders for reasons of accommodation is part of the feedback system that tells the offender that the law has no teeth and will only gum you gently after the 150th offence. A firm – and class-blind – approach would send the message very quickly. I read not so long ago about a magistrate in a Scottish court (in the 60s?) who warned publicly that carrying a knife would be punished as severely as possible; the next offender got 10 years; knife crime ceased abruptly, immediately and for the remainder of the magistrate’s time on the Bench.
Prisons are expensive: not so much as crime. Cost of a year at Her Majesty’s pleasure £30k, savings in costs of crime £300k I have read recently. Perhaps a proportion of insurance premiums should be hypothecated to the prison system so the connexion might be made more explicit.
Legalisation means “no need to rob”. So how come liquor store robberies?
The war on drugs is unwinnable in the same sense that the war on murder, robbery etc are unwinnable. What you don’t see in advance is what will happen when the restraints are off; but we have historical precedent to teach us. The judge speaks of a steady 1.7% addiction rate to heroin and opium, but forgets (a) that there are now many other drugs available and (b) that in a far wealthier and more leisured society legalisation and ready supply could spread use and multiply addicts much, much faster.
Doubtless I’ll be told how pernicious tobacco and alcohol are; I agree, and I am also in favour of increasing restriction on both. The former shortened both my parent’s lives by some 20 years, I believe; and I recall when the latter was available from pub, offies and vintners, but not from supermarkets, garages, post offices etc and often at all hours. I recall one of my looked after children went home to celebrate his father’s release from prison; the poor sap of an adult drank everything in the house and then went out and got caught stealing a bottle of vodka from his local shop. Back in the jug agane.
I think the real driver in all this handwringing declamation of failure is the reluctance of the authorities to prosecute famous people as they will in cases of tax evasion.
Now, Charon will you read Daniels for me?
The case continues.
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