Skip to main content


Showing posts from October, 2011

Blaming the Germans

In all financial transactions there are credits and debits. For the last few years there have been a lot of debits in Greece and the other, so-called, PIIG states. The converse has been that there have been a large number of credits in Germany. Germany is not a paragon of fiscal rectitude- indeed it was Germany that first softened- by breaking altogether- the financial criteria by which the members of the Euro-zone are judged, but which they now insist must be applied strictly to other countries. Germany has amassed its credits by benefiting from a fixed exchange rate with the weaker economies of the south of Europe. The German economy has been out competing the rest of the Eurozone, which has been unable to balance their economies by either allowing their own currencies to depreciate, thus making their goods cheaper, or by allowing a German currency to appreciate, thus making German goods more expensive. This German free ride has caused considerable economic damage to those countri

Time to overthrow the (tax) system

Yet another tax catastrophe is unveiled by the incompetents who control Her Majesty' Revenue and Customs service: over seven million people are paying the wrong level of tax . Though the story is reported as though it is a good thing that 4 million will get a repayment, the fact is the cost of fixing the problem will be in the millions. The British taxation system is totally broken. As I have noted before, it is now 11,250 pages of mostly contradictory regulations. This is five times longer than the German tax code. I is incredibly expensive to administer, and the costs of compliance- even a simple individual tax return often requires an accountant- are now running into tens of billions of Pounds, on top of an administration cost that is already around £ 20 billion every year. This can not go on. It is quite clear that simply tinkering with the system bequeathed by the OCD tinkerer, Gordon Brown will not get us anywhere. There most be a wholesale reform. Huge areas o

Asset shrinkage and the double dip

The latest stage of the Millennium depression is seeing political and financial leaders making one of the most dramatic policy mistakes yet. The Banking system is being forced to boost its capital ratios by a combination of international ( Basel III ) and individual government legislation. Nothing wrong with that, you may think: the crisis has already proven that bank capital was too small to fund the holes that resulted from the collapse of the property bubble. The problem is that global liquidity is already exceptionally tight: governments are seeking to tap the markets in order- among other things- to fund the banks that they have nationalized or to fund the European bail out fund, the EFSF . Of course those in the capital market that have liquidity are now exceptionally loath to invest it, unless in some haven deemed extra safe. Banks cannot be considered particularly safe in the light of the crisis. As a result, even the strongest banks are not getting the amounts that they

Adding Value

The economic problem about jobs is a bit like a game of football. A football game needs a certain number of referees and linesmen to keep the game going. However the point of the game lies in the skills of the players, not of the officials. Small children do not generally have pictures of the officials on their walls, even when a poor decision by an official may have substantial impact on the result of a match.  The same issue arises with state sector jobs. The fact is that poor regulation can kill an economy just as it would kill a football match. To my disgust, my own party was proud to announce the hiring of 2000 new tax inspectors at the Lib Dem party conference. The fact that Britain now has more tax inspectors than soldiers is a matter of shame. The fact that we have the largest and most unworkable tax code in the developed world is a national scandal. Imagine if FIFA, or some other criminal organisation, decided that there should now be 25 definitions of the offside ru

Hunting the Fox

In the current blitz of publicity I am not sure I should say that I have met Adam Werritty a few times, and the Defence Secretary a few less, usually on pleasantly social terms. The stories that the press are running today bear no resemblance to anything that I could recognize. They are certainly not gay- so far as I can tell- and I think the innuendo is childish and rather unpleasant.     Neither are they crooks. Adam Werritty is not some Svengali making millions out of his connections: far from it. It seems to me that out of principle, he refused to go on the government payroll as a special adviser, even though, for several years (as the world now knows) Adam was Liam Fox's SpAd. So, Defence contractors spoke to Adam Werrity? He is the Defence minister's closest adviser. Is that what people hate?  That Mr. Werritty would not sign up for the SpAd junketing?  I can see that they should have signed up for more government oversight, but this press witch hunt is just pl

The Real Tax Scandal

The news that 98% of FTSE companies use tax avoidance is being reported in the usual "shock-horror" terms of corporate greed. However those protesting are aiming at very much the wrong target. When even the HMRC itself - never mind the corporate sector- uses tax avoidance structures, it is clear that something fundamental needs to change. The UK tax code is the largest in the world . It currently stands at an astonishing 11.250 pages. This is five times longer than the German code. Many of the provisions of this code  are contradictory. It is impossible for a single person to understand, still less comply, with all of the provisions. The creation of the Brown system of tax credits has also made it incredibly expensive to administer: an estimated 3% of revenue or an astonishing £18 billion. That, of course, does not include the costs to the tax payer in complying with the code, and even for an individual that can be several hundred pounds and for a company many thousands. W

The Quantum Revolution leading to Politics 2.0

"The fault, dear Brutus, is not in our stars, But in ourselves, that we are underlings " Shakespeare, Julius Caesar There come times when a strange conjunction appears in human affairs. Times when, in the words of WB Yeats: "Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned; The best lack all conviction, while the worst Are full of passionate intensity." The Millennium Depression, which has been with us now for nearly four years, is testing the apparatus of government to the utmost. The party conferences in Britain demonstrated a lack of vision that might have been predictable but was no less shocking for all that. It is quite clear that politicians across the world do not understand the scale of the convulsions that are gripping the global economy. In short the putative leaders of the world look powerless. This happened before. Although Yea

So, what is the BBC actually for?

The BBC in the late sixties created a second TV channel, BBC2 and it gave the responsibility for that channel to David Attenborough . Under his leadership the BBC created programmes like Civilisation , The Ascent of Man and Monty Python's Flying Circus . The channel did not broadcast all day, and when it did not, it showed the test card (see above). There were two TV channels and eventually four radio channels. Attenborough was not only a talented broadcaster himself, he was an inspiring leader in television innovation.  Now, decades later, the BBC has a huge number of TV channels and even more radio channels, plus a vast website and a plethora of broadcast formats, from HD to DAB. Why is that? Doubtless some BBC mogul would say that the Corporation was "responding to the needs of its customer base", "Reflecting the diversity of Modern Britain" or some other horseshit. Actually the Corporation has become a massive boondoggle at the expense of the Brit

Putin jokes

(Source: Getty Images) It has already almost gone beyond parody: Vladimir Putin's spokesman actually said, when Putin was compared to Brezhnev, that is was GOOD!  Brezhnev, far from being a brutal and doddery old autocrat, was actually a very  positive leader in Russian History . Well compared to Putin, he certainly is: Brezhnev is now dead and can do no further harm. No wonder that there are now quite a few Putin joke s doing the rounds, my favourite is: The Federal Guard Service protecting President Prime Minister Vladimir Putin and Prime Minister President Dimitri Medvedev arrests an activist who is handing out leaflets on Red Square. The man is taken by the KGB FSB to the Lubyanka for a search when they notice that the leaflets are blank. "Why are they blank then?" The man is asked "Why bother to print? Everything is clear anyway"

A Twit tweeting a Twitter

OK. I said I was not going to join Twitter, because hey, who needs a thought that can only be developed in a few characters. However after a few requests and the fact that of course those few characters can be a link to a blog post, I have decided to finally join the ranks of the twitterati, albeit with bad grace. Thus you can now follow this blog @CiceroBlog, and you are quite free to tweet up up a storm should you so wish. The buttons are now installed.

Putin's Soviet nostalgia

Vladimir Putin has made a speech proposing a new  Soviet , Eurasian Union for the countries of the former USSR. He suggests that working together will enhance the prosperity of all the countries of the region. Perhaps it will but, as usual, Vlad the Bad gets important details really wrong. The European Union was constructed by states that were previously bitter enemies. As a result it insists on strict adherence to democratic values and forms. The so-called Copenhagen criteria  include a deep commitment to the rule of law and human rights. The Eurasian Union would be constructed by countries with little or no adherence to the rule of law and little or no respect for human rights. With the sole exceptions of Ukraine, Moldova and Georgia all of the putative members of the Union are rated Not Free by Freedom House , and are some of the most brutal tyrannies on the planet, The fact is that having undermined human rights and democracy in Russia, Mr. Putin seems to be seeking to impos

Scottish Tories show their Colours

The election for the next leader of the Scottish Conservatives has become increasingly rancorous. Murdo Fraser, the current deputy leader has put forward an interesting and brave idea that the "Conservative" brand in Scotland is so toxic that it needs to be changed. The remaining four candidates reject his analysis and suggest that the way forward is simply to be more vehement about where they stand now. The fact is though, that the Conservatives stand nowhere. They long ago lost the support of the urban proletariat, then the Kirk, then latterly even industry, and now farmers. Without renewal, they are condemned to die out- and the greatest part of this renewal is to stop reminding the Scottish people how much they opposed the new constitutional arrangements.  A huge number of erstwhile Conservative voters have defected to the SNP, and yet the message does not seem to have come home to the party as to what this means. The backbiting, both in public and in private agains