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Showing posts from September, 2011

J'accuse... pt 1

The crisis of the Euro is not a Greek crisis... it is a German one.


We are told, incessantly, that the crisis is a question of German tolerance for the lazy, un-German economies like Ireland, Spain and Greece. But actually, the issue is the fact that German (and French) banks funded borrowing in those countries in a way that they would not have done at home.


So as Estonia, in common with the rest of the Euro-zone, signs off on a deal that doubles the national debt of the country, we should recognize that this is not a deal to rescue Greece: it is a deal to rescue the German banks.


Estonia, with a GDP per capita less than one third of Germany is handing over 10% of its GDP to rescue the imprudent lending of German financial institutions.


That is wrong.


If the Germans don't want to be rescued by their poorer neighbours, now, would be the perfect time to say so.


In my view the membership of the the Eurozone is already too expensive for the country I came to in order to escape the crushing …

Miliband: a symptom, not the cause of Labour's problems

The Labour conference in Liverpool has rather descended into a comedy of errors. The Leader's speech was badly delivered and only patchily coherent. The policies- such as they are- that have emerged from the conference have mostly inspired indifference, but in one or two cases actual hostility. Even the comedy turn of the teenage speaker which seems to infect party conferences from time to time ended up being rather less than it appeared. All in all this conference seems set to cement Ed Miliband's image as a bit of a loser, and to inspire no one with the image of Labour as the party of the future.


Doubtless -as is the way of the media narrative- we will soon have growing stories of plots against the leadership and a lot of "Labour in crisis" headlines. After all electoral defeats after a long period in government tend to underline problems in the party: just ask the Tories what it was like ten years ago. Yet even if Ed Miliband is replaced, it is hard to see which of…

Parkinson's Law strikes again

C. Northcote Parkinson died in 1993, but almost every day we see examples of his famous Law in action. Put simply he said "Work expands to fill the time available for its completion". From this fundamental insight, in various semi-humorous books, he laid out different aspects of how human nature conspires to undermine the efficiency of organisations.


You may want to read his original and brilliant essay here.


Nowhere is Parkinson's Law more clearly obeyed that in government bureaucracy.


I recently saw a good example.  A well known international financial agency has approached the governments of the Baltic countries to create a fund of funds that invest in the region. Leaving aside whether or not this project is a good idea in principal, and whether or not it might "crowd out"  the private sector or not, the slightest glance at how bureaucracy and government works should tell you what a wrong headed project it is.


Since the agency is asking for government money, it …

So how much does Tony Blair think he is worth?

OK, so Tony Blair was a steaming pile of hypocrisy in office. So he was also pretty incompetent, leaving us with a constitutional settlement that could destroy the country and economic policies that brought us to the brink of national insolvency. 


OK, so he left us with the inept and unworthy Gordon Brown as his hand picked successor.


So he created a coterie of dishonest unelected "special advisors" - the so-called "sofa cabinet" and undermined the civil service, personalizing his regime in a way that was also essentially against our constitution.


So he was a war monger.


So he was a brazen liar.


So how come JP Morgan appear to have paid him a lot more than the declared £2 million?


Surely the experience he picked up in office belongs to the country, not to him, and he should, as his predecessors did, have used that experience to benefit this country, particularly since he did so much damage to it while in office.


But, if the rumours speak true, perhaps he was just lost in …

Lib Dem disappointment

Now I have had time to consider the Liberal Democrat conference as a whole I must confess to feeling rather... underwhelmed.


The fact is that the party is falling into the same old habits as the other two. The characteristically over the top treatment of the Leader- fireworks, marching bands and all that is expected at the time of his speech, seems now to become an all purpose creep-fest for the entire conference all the time. Far from a genuinely interesting program of debates- with all the disagreements of the old Liberal Assemblies, we now have a uniform blandness and a display of unrelenting toadyism.


It is not particularly Liberal and it is not particularly convincing.


The manufactured unity of the conference does reflect a lot of like mindedness among the party membership, but frankly it also reflects the fact that the party seems to have forgotten its purpose as the focus for new thinking about politics. Our country IS in a crisis and yet there is not only unanimity among ourselve…

Putin, Autocracy and Assassination

Vladimir Vladimirovitch Putin has not been a notably successful leader of Russia. He made a significant strategic mistake in making the production of oil and gas the priority for his country. The result was a higher Rouble, which squeezed Russian industry and finance, and undermined the rest of the real economy: the economy where most Russians have jobs.


Faced with a large number isolated of one company towns, instead of promoting entrepreneurship and trying to diversify their industrial base, he has simply subsidized the zombie company- it saved jobs in the short term, at the expense of undermining Russian competitiveness. Instead of trying to relieve isolation by investing in infrastructure, the Russian infrastructure has largely been left to rot. Dangerous nuclear stations, such as Sosnovij Bor on the Gulf of Finland, continue in operation, despite the very real threat it poses to the very existence of the City of St. Petersburg.  Roads and rail receive inadequate attention; aviatio…

Can we take Murdo Fraser at his word?

The political scene is Scotland seems as close to a dead end as can be found. The corpse of Socialist cronyism still retains some vestigial loyalty in the West of Scotland, but the populist behemoth of Separatism now strides across the political landscape in the shape of our pudgy "Father of the Nation" Alex Salmond.


Meanwhile the crisis that faces Scotland is not just an economic or even a political one: it is a moral one. The creation of a class of dependents has elevated political patronage to the primary source of economic activity north of the border. Far from dispersing this centralized state, the SNP seeks to extend it. Instead of the different parts of Scotland deciding things locally, Salmond prefers to create bigger bureaucracies in Edinburgh.


Yet the wealth creating part of Scotland's economy continues to diminish. Oil support suffers from a chronic lack of investment in infrastructure- it is still not possible to fly from Aberdeen to Houston, and now barely to …

Outside the conference hall...

The media narrative of the Liberal Democrats at conference setting themselves up against the "evil" Tories is not one that I find particularly inspiring, even if it makes for tub thumping speeches and generates a bit more coverage for the party. 

In fact it is a distraction.
Vince Cable is wasted as the anti Tory shibboleth, when it is his economics prowess that is now most needed in order to analyse the growth implosion outside the conference hall. Yesterday's downgrade of Italy looks to me like the beginning of the end of the financial system as we have known it for some twenty or thirty years. The political paralysis across the European Union is now not only threatening the existence of the Euro, but of the European Union itself.
The breakdown of the EU would be an economic and political catastrophe for the UK.
While infantile Conservatives rub their hands with glee, they fail to see the unfolding disaster in Britain. Our markets, our trade, our very livelihood depends on…

Conference and Conference Calls

Alas I am not able to get to Birmingham for the Liberal Democrat conference this year. I suspect that the party will rally round, but I notice the venom of the Mail and the Telegraph is already rising- the slightest thing that they consider likely to make the Lib Dems unpopular, from set decoration to tattoos is highlighted, while the body of good policy making and good speakers will- of course- be ignored. The vituperation coming from the right wing press is almost an affirmation: it underlines the new power that the party now has. Nevertheless, there are many things that, if they are not addressed at this conference, will need to be addressed soon. Tavish Scott's comments on Nick Clegg, while reflective of a certain personal bitterness are not completely wide of the mark. The leadership can, and will, get away without much criticism at this conference, but it does not mean that such criticism is unmerited. 


While Tim Farron made a good speech, there are many points that he made t…

What is to be done?

My latest trip to the UK made me very sad and somewhat angry.


Even on the Katia washed streets of Edinburgh there were young men begging for change. In Estonia the beggars are old and genuinely in need, in Edinburgh they were young and genuinely unemployable. The beggars are a symbol of something worse- the palpable sense that most people no longer feel in control of their destiny. So many have withdrawn into a squalid fantasy world of drugs, alcohol or video games. The misery is obvious and the determination to escape equally so- drunkenness is everywhere. The pallid obesity which is the general lot on the streets is a great shock, after you have  become used to the good health and good looks of the Estonians.


It is therefore not enough to say that there is a political crisis, or even an economic crisis: what I see is a moral crisis. Too many Scots were abdicating their own personal responsibility: "this is the fault of the English, independence will fix this". Too many elsew…

Its worse than you think...

Travelling to Edinburgh in a nearly gale- NOT assuredly a hurricane- reveals Britain at almost its worst. I travel in a diesel train, but we are forced to adhere to a 50 MPH restriction imposed on electric trains, even though the train is already 15 minutes late, so there are no electric trains immediately ahead of us- it is just "the restriction- for your safety". No, it is a restriction for insurance or for operational reasons or for signalling reasons. It is not for the passengers, it is for the company. Yet, despite the large number of passengers missing connections, we are supposed to believe the health and safety spiel- no matter that it is not the truth.

This is where I find myself losing my temper.

Across almost all aspects of British life, we are not given the true information, but merely bluffed with customer service bullshit. It is as though the people here could not handle the truth, that everything must be sugar coated. I can see a gale outside, but it is not th…

The Financial become Economic Crisis now turns into a Leadership crisis

The fact is that the financial crisis was rooted in a failure of politics in the first place.  The changes to mortgage regulation under President Clinton forced US banks to enter the "sub-Prime" Market in the first place. The Banks, attempting to improve- as they hoped- the riskiness of these loans, bundled them with safer loans in order to try to insure themselves.


Meanwhile, the monetary management by the global central banks was very loose: interest rates were historically low for a prolonged period. The implication was that there had, under the influence of new technology, been a significant improvement in capacity. In fact as we now know, both low rates and nominally higher growth were being maintained by a dramatic expansion of bank balance sheets. The innovation was simply in finding ways to expand global liquidity. Finally the banking system imploded. The next- disastrous- decision was political: to take the banks into public ownership. This transferred a private sect…

Scottish, British (?), and European

The majority of people in Scotland would subscribe to an idea of multiple identity. Being Scottish and British and European is something that a large number- probably the majority- of the people of Scotland accept as their identity.

However the rise of the SNP has brought the central pillar of this identity- Britishness- sharply into focus. A significant number of people reject their British identity. Campaigning  at the last general election in the North East of Scotland, I found plenty of doors that said "I never vote for London based parties". Even when I pointed out that the Scottish Liberal Democrats were based in Edinburgh, it was plain enough what the message was: "independence-nothing less".

Now, the SNP is rising in the polls for Westminster seats, while the Scottish Conservatives are actively deciding if they even have a future in their current form. Meanwhile, Alistair Darling's memoirs explains just how dysfunctional the Scottish Labour Party had be…

Planning with no Plan

The British economy faces some serious questions about how it can grow in a sustainable way, but one thing has become clear: the planning laws are now so restrictive that they are not sustainable. The problem is that NIMBY-ism has mutated into BANANA-ism (Build absolutely nothing anywhere near anywhere). The consequences are villages that no longer have populations that can support a pub, let alone a school, shops or anything that makes a community- as a result the countryside is losing population fast. It is in a word “unsustainable”.Meanwhile the less than 7% of the land area that is actually built up has to take ever more of the population- and the costs of housing now put it out of reach of the majority of the young generation. Our “property-owning democracy” isn’t one.The self appointed “defenders of the countryside” (funny how so many “Greens” turn out to be large landowners) continue to avoid tax by putting their land into trusts, so that for a large part of the land area of th…