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Friday, 30 October 2009

Everybody will funk out at Copenhagen

The party games that have been played out in the EU Heads Of Government meeting this past two days have been more obviously silly that usual, because the poor mutts have allowed themselves to indulge in a mood of euphoria that at last the Lisbon Fudge is to be ratified. They went on to create a new mess of sugary fudge by agreeing that Europe should pay heavily to encouraging other parts of the world to tackle climate change; while funking which country shall pay how much.
Nobody can be held responsible for any policy failure after the final ratification, because nobody will 'own' any policy: EU Directives will set the context - and nobody is ever responsible for a Directive - and policies within states will be constrained or overruled by Directives. So the bully-politicos who are becoming the 'natural party of government' in each country will push through whatever seems to them to serve their blairite best advantage, without constraint or potent public inquiry. Nobody can remember when EU accounts were last signed-off by the auditors; and now the girls and boys on the inside track in each member state can tell the people below them that any abuse of pwer was sanctioned by Brussels: knowing that the people above them don't dare to rock the boat.
The extent of humanity's responsibility for climate change will increasingly be disputed as the economic constraints tighten: both by those who don't want to pay for mitigation and by the increasing minority of literates who are becoming influenced by the deniers of anthropogenic causation. The fact of climate change looks set to continue; and two more countries this week have issued dire warnings to their seaside populations that they may have to evacuate their homes within this generation. Prevention of an ultimate crisis must focus on what humanity can do to mitigate climate change on a global scale. This will probably entail huge climate-influencing public works that will try to change the behaviour of the oceans, and devices to control the penetration  of solar radiation to the atmosphere and to the suface of out planet.The concentration of green campaigners - and tax-collectors - on 'greenhouse gas emissions' is bizarrely unhelpful: that whole argument assumes that - this time - the single cause of the phenomenon [which has occurred many times in world history] is the human economy.
Solutions that could 'work' to save human life on the planet would overcome CO2 impacts and yet correct for global warming that might emanate from astronomical and geotechnical forces that our science has not yet analysed adequately. In the arrogantly depressing tradition of the Puritans and the Marxists, the Greens would impose high taxes and low living standards on most people in  what have been the advanced economies; while tolerating the possible starvation of 'overexpanded' populations within the emergent countries where population growth has become rampant,
No wonder the politicos are backing off from any draconian proposal to spend hugely [from resources they do not have] that would [at best] deal naively with a problem which none of them could explain.
Back to Al Gore!

Tuesday, 27 October 2009

Methane, Meat and Water

Lord Stern - the intelligent apostle of the climate change lobby - has been quoted this morning as advocating vegetarianism as a step towards mitigating climate change. He notes that methane is 23 times more dangerous a greenhouse gas than is carbon dioxide: a proposition interestingly similar to one used on the other side by an early denier of anthopogenic climate change, who argued that the methane excreted by millions of buffalo and elk in North America until their extermination by European settlers would have been a greater risk to climate than all the vehicular pollution created by the modern USA.
British farmers reacted to the latest comment by saying that they were now challenged [and modestly paid] to maintain the countryside as it is, which is largely based on sheep and cattle farming. That land is mostly unsuitable for intensive food crops; so there is no practical alternative to the present use of the land.
Whether the future is to be vegetarian or carniverous for the human who survive the next sixty or seventy years, one thing is clear: a crisis at least as great as the potential consequances of global warming is assured. The predicted growth in population will outstrip available water resources, even if rainfall in the most heavily-populated areas is not drastically reduced by climate change. The ability of humanity to address climate change is heavily questioned: but there is no question about the water problem. If population grows at the rate that has been predicted, thirst and filth will inescapably create incalculable human misery; and food supplies will fail as crops wither and animals die. This is no distant prospect: it is happening today in Africa.

Monday, 26 October 2009

Osborne Bashes Bonuses

The Brown government is likely to loose the next General Election; but it is increasingly unlikely that the Tories will win - other than by default. There is a distinct lack of enthusiasm for the Etonians and their associates among the majority of uncommitted and undecided voters.
George Osborne the shadow chancellor made a populist pitch today, with his proposal that people in 'retail' banks should not be paid significant bonuses; but the profits should instead be used for investment in businesses.
Businesses certainly need access to funding. For this purpose, they need banks. Most banks have been foolishly, even recklessly, run in past years; but the current crop of senior managers have been retained or engaged on salary-with-bonus packages that are designed to ensure that the retail banks become once more fit for purpose. The bosses will have earned those packages, in full, if the objectives are achieved and 'real world' businesses and viable individuals can borrow responsibly in future.
By contrast Osborne appears to have backed off from wanting to ban - or draconically to limit - the bonuses that traders and product designers are due to be paid in the 'casino' wholesale financial services business. Yet that is the sector against which public disgust has most strongly been directed, the market that almost destroyed the world economy. Doubtless he has been told by his shadow treasury team that a future government would have a devil of a job balancing the national books if these 'investment bankers' and traders stopped being paid massive taxable sums in the UK. It will be bad enough for government cash-flow if part of the bonus is received in shares, or is otherwise deferred, because the immediately accessible tax take is reduced.
Thus in this area - as in so many others - there is no clear difference between government and opposition [and the Lib Dems offer no innovation, notwithstanding the forensic skill of Vince Cable].
Policymakers can only thrash around for the least-painful way out of the mess into which 'brilliant' Chancellor Brown allowed the system to propel us all. Political parties have no relevance in this crisis management, but - suprisingly - in this context, Darling seems marginally to be the better man for job; pity about his leader!

Friday, 23 October 2009

The Banks 'On Welfare'

Anyone interested in the rational view of American social issues should follow Star Parker in her syndicated columns and via her CURE organisation.
It provides regular blogspots and access to a very significant corpus of work.
Her key perception that the US banking system has - in effect - been put on welfare [alongside the growing cohort of those who have been made unemployed by the banks' past actions] gives a useful perspective to the rapidly advancing statism that has captured both the USA and the UK.
This cannot be seen as a party political issue, as what the Bush administration began the Obama administration has carried forward [though the latter has pursued quasi-nationalisation with much more enthusiasm].
The bovine acceptance of dependency by both individuals and institutions is the antithesis of enterprise; and marks a major phase in the decline of the west.

Wednesday, 21 October 2009

Mervyn is Right!

If a few men go out to sea in a small boat to catch fish - say haddock - and one of them catches a cod, that must now be reported to the national government, which must report it to the EU, which will deduct that codfish from the national quota that professional fishermen are allowed to catch.
The EU pretends that it is allowing more latitude to national and regional governments: but, as this new regulation about cod fishing shows, it is merely building up intrusive bureaucracy.
A parallel point was made by Mervyn King in his Edinburgh speech on October 20, 2009. Detailed regulation is mere regulation: bureaucracy is just costly bureaucracy: and clever Dicks who know how to manipulate the fringes of legality to their own gross advantage will always outsmart the deskbound rulemakers. The bankers have been given greater power to ruin the economy than they had on New Year's Day 2007; and they can safely assume that there will always be a Gordon Brown to lead the next bail-out. This will be true until the idiocies of the historical Economics establishment have finally been abandoned.

Monday, 19 October 2009

Freakanomics: a Nice Escape

Levitt and Dubner have deservedly struck gold with their second book in a series that could run further. Since SUPERFREAKONOMICS includes the sex trade among its subject matter, it has had huge exposure in the press.
Among the great attractions of their approach is that it does not hark back to the core dogmatics of textbook Economics: it is fun, it includes a lot of common sense and sensible observation. This is so unlike the aridity of mainstream economic theory, that has built complexity sky-high on the basis of assertions that are 150 years old and did not describe the 'real world' even as it was when they were formulated.
There is no similar fun in NUCLEAN ECONOMY, but there is realism and good sense: try it out, accessible from this site.

Thursday, 15 October 2009

Contempt of the People

Bankers' bonuses are beating all records - and all but the most senior managers of the banks will be able to take most of their bonuses in cash pretty well immediately. Just a year after the credit crisis reached its peak, it is generally agreed that the bankers' behaviour is obscene. it is certainly contemptuous of the mass of people whose lives will be adversely affected by the bankers' and securities traders' past antics  for many years to come.
Meanwhile Britain's parliamentarians have got themselves in a pickle by having accepted an adjudicator on their expenses who has made up his own aberrant rules: they must now accept what he has said, or defy him and look corrupt and selfish. Either way, it means that politicians as a class do not have the moral authority to censure the bankers as they should.
Bizarrely, the one person who comes really well out of the past period is Alistair Darling, who predicted the depth of the crisis while on his summer holiday [to receive much ridiclue] and kept his cool throughout! While the Prime Minister postured, Darling beavered away; and when he made public statements they were measured, clear and comprehensible. It will be worse than unfortunate if he falls foul of the expenses kerfuffel in any serious way.

Wednesday, 14 October 2009

Bank Profits and Bonuses

The international bankers have again achieved what should be imposible.
They have made very significant profits, from which they are paying large bonuses; making fools of the politicians who bailed them out at such huge cost just a year ago. Ministers demanded that bonuses be limited: they have not been; though there are some cosmetic changes in the timing of when the rewards will go into the blokes' pockets.
How do they manage this, when things are getting tighter for ordinary people and for 'real' businesses?
The answer is, that they trade with others of their ilk in imaginative contracts, not in reality,
This is explained in Nuclean Economy, acessible via this blog.

Monday, 12 October 2009

More Assets to be Stripped

The government is trying to sell its holding in the Channel Tunnel, the Dartford Bridge, the Tote and other assets, to reduce the deficit on government spending.
The deficit arose because the stability of society was seriously threatened in 2008 by the near-collapse of the banking system. That failure was due to the disastrously incompetent manner in which the 'financial services' were regulated; and regulation in turn was burdened  by its dependence on nonsenical propositions that were asserted in Economics.
The revenue that may be received from these sales will be a mere drop in the ocean as a supplement for normal government revenue; but a much more important question is whether it is right or sensible to sell yet more 'public goods'  to be administered for private profit.
The Tote was established by Winston Chrchill in 1928, when he was Chancellor of the Exchequer, and it has supplied stable funding for the sport of horseracing ever since then. There is a broadly valid old adage: 'if it ain't broke, don't fix it'. We may add, if it's useful as it is, why change things?
Such tinkering will not make a ha'peth of difference to the economy, or to the financial position of the government. It is action for the sake of action: gesture politics. The real issues are demanding, and should properly be addressed.
To see a realistic assessment of the issues, refer to Nuclean Economy, via this site.

Friday, 9 October 2009

A true measure of Britain's problem

The World Economic Forum [best known for running the annual Davos shindig] has announced that Britain is the world's 'leading financial centre'; but this apparent accolade is balanced by the fact that the same survey lists Britain in 37th place for 'financial stability', after Nigeria and Bangladesh in a table of 55 countries.
The UK was 44th for currency stability, 45th for the stability of the banking system, 39th for managing the public sector debt and 40th for managing private deabt.
This is because there is precious little evidence that the government and the Bank of England really have control of the system
By keeping the economy open to global financial trade the government gets taxes from the City trading firms and on the salaries and bonuses of the traders. The cost of doing this is to expose the 'real economy' and the economic existence of citizens to unpredictable and potentially violent fluctuations.
Gordon Brown thinks that he has 'saved the world': he may have benefitted other countries by his vastly expensive intervention in the meltdown of the financial system in 2008, but he has pushed Britain further out on the limb that hangs over an abyss.

The Tory Twister

David Cameron has taken a bold line in his 2009 Party Conference, and it has received a good response. The ideas that emanate from work led by Iain Duncan Smith and by a recent import from New Labour show that the Conservatives have recognised the extent of the problems Britain faces.
But their proposed 'solution' will make matters vastly worse.
Nobody except their mothers and dependents likes or respects NHS managers: they are legendary for inefficiency, waste, and the avoidance of responsibility; so if they are - rightly - weeded out, who would ever employ them? Ditto for many of the MILLIONS of Civil Servants who should be thrown out if the Tories really want to shrink 'big government'.
It's great to claim to be able to 'get Britain back to work': but DOING WHAT? Serving in Tesco or Asda for a short week, selling imported commodities and receiving tax credit? That's no good for the tax burden or for the balance of payments.
The problems go seriously deeper than the 'solutions' that Cameron has proposed: see Chapter Five of Nuclean Ecnomy