The class system

Why, after all the supposed socialist and proto-socialist governments since WWII, do we have such a high and rising gap between rich and poor?

Even our postal service has become class conscious - in 1968 and under a Labour government. You'll note it's not "Express" or "Priority" as with the US system, but "First Class" versus - what is it now - "Steerage"?

Something is completely ripe and succulent in the state of Denmark

UK is more corrupt than Qatar, Barbados or Luxembourg, says Transparency International.

Mind you, at 20th we're way above Italy, which ranks below Rwanda.

Having a go, because they won't

Ex-MP Matthew Parris pleads the case for our Parliamentary representatives. Understandable, since he has simply moved from one profession that imagines it knows better, to another.

As usual, he does coy, paradoxical and faux modest so well; but not well enough to disguise the fact that the Fourth Estate has become as conceited - and part of the in-crowd - as the rest of our masters. I will allow them the first, if they will relinquish the second.

A recurring fantasy pesters me, about the episode (sadly the clip omits the marching, menacing entrance of AC; audio fly on the wall here) in which the now pointedly poppy-less Jon Snow deals with a gatecrashing Alastair Campbell rather differently:

JS (before AC even reaches the desk): Please leave the studio, you have not been invited onto this programme.

AC: I phoned to say I was coming.

JS: And you had your reply. Please leave immediately.

AC: No I won't, there's something that needs to be said right now!

JS: Please leave now, or Security will escort you off the premises.

AC: I'd like to see them try! Now be sensible, Jon -

JS: - We'll take a break. Security!

Instead, we got "And now we are joined by Alastair Campbell - a rare moment - thank you for coming in" etc - and the chummy handshake at the end. Channel 4 News patted itself on the back for a journalistic coup, but out here in the bleachers it just looked as though Campbell felt entitled to treat a news studio like an airport executive lounge.

Reporters Without Borders' "Press Freedom Index" says we've gone backwards since 2003 - and even two points down on 2009. Our national ranking is now 19th, below most of the Nordic and Baltic countries. Is there a link between cold weather and integrity?

It's an ill wind...

(Please click on pictures to enlarge.)

Jesse's sidebar links to a website that shows national indebtedness, e.g.:


But this needs interpreting in the light of money owed both ways (the net international investment position, or NIIP), e.g.:


Recent ONS statistics show that as our pound and stocks devalued, our NIIP improved (if that's an improvement):


... so what counts as good news, and how badly-off are we?

Caravan news

We're heading back into the 60s/70s. Turn on, tune in, drop out. But I'd suggest a twist.

I've often said to others - especially my wife - never mind New Age travellers, let's become old age travellers. That is, no tats, no drugs, no atomkraft nie danke stickers. Just go where you like by caravan, pretending you're on holiday from your drab dwelling in e.g. Birmingham. That way the police will just see you as silly old crumblies and leave you alone. Bless you, love, we're on our way to Bournemouth for a fortnight, that sort of thing. My Mum used to say people always think you're dafter than they are, just play up to it.

In other words, don't challenge the system, just sidestep it unobtrusively. We're all too interconnected to bring down the system without horrible things happening to us, the ones we love and the ones we depend on. Find your niche. As the Chinese saying goes, better to light a small candle than complain about the dark.

It's not consistent, I think, to complain about Communist strategies for mass social subversion on the one hand and then on the other to advocate something very similar oneself, e.g. withdrawing all your cash from the bank on a given date, a move Ian PJ appears to support, though I well understand the temptation.

The point is not to smash the system - we've seen the joy that brought to Russia, China, Cambodia etc - but to encourage it to mutate to our preferences. CAMRA turned the tide on proper beer, people like Hugh Fearnley-Whittingstall got Tesco et al to get more serious about humane and organic food - all without torching the pubs and supermarkets.

The first to operate on the new model will doubtless get a free or cheap ride - see the caravanners who've invaded upmarket Venice Beach, a place where they could never afford to buy houses even before they had theirs repossessed - and then the system will adjust.

There's no need for a hey-guys-let's-all approach: do what you've decided, don't put up with what you don't have to, be prepared to pay the price for your decision. If enough others do the same, society will change appropriately; if not, you've suited yourself. I quit teaching in 1989 because I wasn't prepared to put up with the crap and bullying, and it cost me financially - but who knows what carrying on would have cost me? My life has been incredibly richer experientially as a result of realising that it wasn't all decided for me. We forget how free we are already.

No self-destructive emotional spasms, please, we're British.

He who pays the piper

Why do we talk about British freedom and independence when our political and business leaders have sold the country from under us?

Germany's Deutsche Bahn has owned the Royal Train since 2007 and has now just sacked the manager despite his 30 years' service. Follow the money, and you'll see that you have to pay a Frenchman to get from England to Wales across the Severn. The Frogs also own British Energy. Cadbury's is now American, HP Sauce Dutch, Coca-Cola has just closed down Malvern Water, even the UK's tax offices are owned by a property company based in Bermuda... Banking, car manufacture (or rather, assembly), we could go on. It would be far easier to list the few major enterprises that are still (as ultimate beneficiary) British-owned.

A new book by Matt Taibbi reveals that the same is now going on in America.

Will it eventually become a war of the people against their rulers?

UK banking system overconcentrated

According to the advert on the left of this article, the USA has 7,830 banks of which 437 are judged to be in immediate danger of failing. Assuming that happens, that leaves 7,393 banks servicing a population of 310,592,000 - equivalent to a little over 42,000 people per bank.

The UK has "about 400" banks and building societies (FSA list here) to service a population of 62,008,049 - equivalent to over 155,000 per bank.

In other words, the US has about 3.69 times the number of banks per million head of population - a much smaller average customer base, but a correspondingly larger reserve of lesser-sized organisations to take up the slack if one or more of the big ones goes down.

This suggests that it is even more important for the UK to consider breaking up the biggest outfits, because the fall of one of our greatest trees would create a much bigger clearing in our forest than it would in the States.

Pulling the wool, or something

Is there any evidence that the EU seriously expected to get a 6% increase in its budget? Wasn't this merely a headline figure for the punters, so that Europhile leaders could go back to their nations claiming a bargaining victory?

A straw in the wind

Here it comes, the new colonialism.

Politician requiring tuition

Alan Johnson has said he'll need to buy a book on economics now he's been made Shadow Chancellor. He's not alone, as it seems most of political class know nothing about the subject, even though many must have read PPE at Porterhouse.

What one book would you recommend politicians should read before we let them play with the toy train set of our economy?

I think a new Ladybird book would be a wonderful help - they used to be so clear and concise. So much better than turgid, shut-you-out academic and wrong.

Pin the tail on the economic cycle

Where are we in the cycle, would you say? (Click on pic to enlarge.)

Is there such a thing as law? How about the EU?

James Higham draws our attention to a presentation by "Captain Ranty" in which the latter asserts that any law passed by our rulers has no validity without our specific individual consent.

This position has its attractions for those of us who deny that we ever consented to rule by the EU, but philosophically it has its dangers and I think we'd do better to declare that certain decisions by Parliament are ultra vires, especially the concession of any part of national sovereignty, since this is a form of dilution or abolition of the franchise that legitimises the House of Commons itself.

I attempt a doubtless flawed riposte to the freedom-loving Captain, as follows:

If you're going to take what is I think essentially an existentialist position, then remember that Sartre said (in effect) not only are you free but you cannot choose otherwise than to be free. Canonising Jean Genet means that as far as the laws and taxes are concerned, you merely note the consequences of possible actions and then decide to do whatever you're going to do. Externally you are still ruled, but presumably there is an internal change in that while you accept that some have power over you, you no longer concede them the right. There must be some sense of relief, some conservation of psychic energy in that.

But that position is not a collectivist one, for pace Sartre's aberration during the 1968 riots, otherwise he maintained there is no collective freedom. You say "Soon it will be. Soon there will be a million of us. But long before we get those kind of numbers we will have won." We? Win what? There is no "we" and far from a future victory, freedom is an inescapable initial condition. Existence precedes essence.

I believe Sartre said that you could choose to give up your freedom, but I don't think the logic of his position dictates that we should be bound by a previous decision of a past self, any more than by the diktat of another. "I've changed my mind", you'll smile.

Tiptoeing away from this road to chaos, may I suggest that Americans (which group now includes my brother) might do well to reaffirm the Constitution in all its words and guiding spirit. What wisdom your Founding Fathers had, to set down such a massive and beautifully-carved stone as the basis for the nation; we in Britain are much more vulnerable to top-down plutocratic / neo-aristocratic / bureaucratic corruption and revolution, for here the system merely smiles and tells you it's changed its mind.

The future of the British political elite

One law for them...

"Insider-trading laws don't apply to Congress" - reports Denninger. Is that also true for Parliament?

Just for a laugh

Candidate's exam response, reported in a Monmouthshire village magazine:

Q. What is artificial insemination?

A. When the farmer does it to the bull instead of the cow.

Gold is merely the thermometer of inflation?

The vitally important inflation / deflation debate continues. In my last post, I relayed one view, which is that the very rich and powerful will not permit runaway inflation, because it erodes the value of money and the rich have most of the money.

As a corrective, I give below the latest video from the National Inflation Association (NIA), a US group that has warned about credit growth and inflation for a long time. Their motivation appears to be patriotic - a return to sound money as part of what makes individual prosperity and freedom possible.

The NIA argues that the rise in the price of gold is not because of mass speculation, for although a lot of gold has been bought recently, a lot has also been sold. What may be happening now is a transfer of privately-held gold from relatively poor people who need to raise money, to investors who are looking ahead to a time when cash will rapidly depreciate. Think of all those gold-buying outlets (or inlets) you now see on your High Street. As someone said a while ago, the mania will be when those shops start selling you gold instead of buying it from you.

As many have now said, trading nations around the world are devaluing their currencies to keep pace with one another, for fear that their exports will be hit if they don't. So the soaring value of precious metals can be seen as a better indication of inflation than currency exchange rates.

You may think that if currencies are depreciating, then surely prices of goods and services in general must also increase rapidly, and we don't see this yet. But we are in a recession and the threat of unemployment is keeping down wage demands; the self-employed are willing to lower their rates, perhaps especially if paid in cash; and traders in items such as cars and computers are offering discounts to clear stock and keep paying their overheads.

However, the NIA and others say there will come a time when the system begins to crack. Governments are buying their own debt, or lending money to banks to do it for them, to maintain the appearance of normality and control; this can't go on forever. The prediction is that we will get either default or hyperinflation. So the gold bugs say buy gold, silver, maybe oil and agricultural commodities etc - anything tangible that can't be multiplied at will.

I don't think (feel) that the turning point is imminent, because of recession and the attempts by some governments (such as the UK) to retrench. But I fear that these last-ditch attempts are untimately doomed to partial or complete failure. In that case, the gold bugs will probably be vindicated.

The other thing I'd say, as I've said before, is that if the system really does come under severe strain, the price of gold may not be the most important of your concerns. If you accept the inflationists' thesis, you will be quietly making preparations to cope with emergencies of different kinds.



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.

Down with the Bolligarchs!

"Governing is quite simple, really," remarked Kameronski. "It's merely a matter of knouting the krestyan and taxing the burzhuaznyĭ. Some," and he looked about him meaningfully as a dread silence enveloped the room, "fail to understand the necessity of firmness."

The figure on the right in the last image is that of the hapless Osbornski, purged with other moderates and revisionists in the ensuing Party reorganisation. His wilier successor Clarkov, known as "old Stone-Liver", survived until the latter half of the decade.

The Thin Geek Line

I have just finished reading "The Ultimate Utility of Nonutility", by Lisa Colletta (Academe magazine, September-October 2010).

In it, she writes the following:

"A liberal mind is one which is independent and disinterested, aware of the history of thought, action, and reaction, and understanding of ambiguity. The liberal arts are not valuable because they are useful politically or vocationally. They are valuable because they are what constitutes real knowledge.

...I would claim that real knowledge of the real world is emphatically not the domain of the professional fields. The professions teach students skills, skills that may indeed be useful, but are too often uniformed by knowledge or thoughtfulness."

She is not alone in her dismissive attitude towards the sciences and engineering. I have seen similar opinions expressed by David Brooks of The Washington Post, Simon Jenkins of the UK's The Guardian, several other political commentators, and all too many university professors.

They remind me of the ancient Greek philosophers, debating the virtues of democracy, while surrounded by slaves and servants who do the actual work.

Apparently, her 'real' knowledge and grasp of the ephemeral nature of human constructs have failed to make her aware of the frailty of our whole civilization.

Were it not for the excess food and other resources provided by the Agricultural, Scientific and Industrial Revolutions, our comfortable lives would not be possible, the lofty ideals of the Enlightenment would be so much empty rhetoric, and democracy as we know it would not exist. In fact, without the relatively small number of technical experts, the best estimates are that 95% of humanity would starve to death within a few months.

Let her ponder that the next time she pontificates to her students.

Excellent article by Charles Hugh Smith

Charles Hugh Smith explains the current mess in terms of class warfare and entrenched self-interest. In a nutshell:

• The wealthiest top 1% have influenced the tax system so that their investment income is barely touched, especially when there are loopholes and shelters they can use. They and their wealth can stay in the US.
• The bottom 60% depend partly or wholly on what they receive in benefits from the system. They have to stay in the US.
• This puts the burden on the middle-to-upper income-earners. But if the burden gets too heavy, the top half of those earners may choose to flee the country. If so, the system breaks down.

The fear may be overstated.

US citizens have to pay US tax on their earnings anywhere in the world, but if they renounce citzizenship and have over $2 million in net assets (including income-producing assets such as pensions), there is still a one-off ransom tax to pay before they leave.

If they have less than $2 million, they may not have enough to live the idler's dream abroad.

The result is that fewer than 750 Americans chose the escape route in the last year.

But Smith's article is very useful for seeing how the parts of the machine work, and why it resists reconstruction.

What inflation? "Them" won't let it happen

Inflation in food and soon, it is reported, in clothing, is owing to factors such as bad harvests, rising energy costs and government export restrictions.

But if you agree with the monetarists that inflation is caused by the expansion of money and credit, then until people and governments have paid-down (or defaulted) enough debt to feel confident about spending again, we are in a deflationary environment and whoever holds money is going to do well.

That said, there is a subset of monetarists who think that somehow, governments will force-feed money into the system to create inflation, or hyperinflation.

While this is technically possible, people like Mike Shedlock counter that the ruling elite will not allow this to happen, since it would destroy their wealth.

It's a rigged game, not Russian roulette. So barring some catastrophic default, we've got to sweat it out through a new Depression era.

Save money.

"Commercial real estate lags residential and residential real estate has not yet bottomed, and indeed may not bottom for years." - Mike Shedlock

"The most important indicator is “credit growth” or lack thereof. Everything else follows... There is no credit growth, and therefore, according to my long-standing theory, there can be no sustainable economic growth unless and until miraculously credit starts growing. However, given current policies in Washington, that seems unlikely at this time." - Bert Dohmen (htp: Karl Denninger)

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.