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Sunday, 30 November 2014

Gideon's Grim Delusion

The usually-arrogant Chancellor, Gideon Osborne, is occasionally rattled when he comes under challenge: then he quacks like a cartoon duck. His place in history will be that of a pathetic puddle-duck, swimming aimlessly on a polluted pond while he is under the impression that he is a Master of the Universe.

His boasts about the strength and the growth of the British economy now face the fact that the economy is really so weak that taxation revenues are falling - spectacularly. As this blog has reported for some years now, the growth has been of spending by consumers: largely on imported goods, or on goods that are produced by foreign-owned firms so that any profit is allocated abroad and not to the development of the UK economy. Much of that spending is supported by benefits: including in-work benefits because mass wages are not sufficient to maintain families decently. So even with 20% VAT payable on some items, the exemptions of food and children's clothes mean that even VAT revenues are less than the statisticians would have expected from the GNP that they report to exist.

Now he admits that - in the unlikely event that he will be the Chancellor in the next government - he would have to make cuts in state spending that would be so severe as to make national defence, policing, education and the functioning of both urban and rural local authorities non-viable. But, of course, he does not interpret what he says in those terms; because he has a huge disadvantage. He studied Economics and he still believes in it. So he is taking the country to hell in a handcart; unrestrained by his fellow PPE graduate the Prime Minister.

Meanwhile the financial services industry is also doing its bit to encompass the ruin of the economy. An 'expert' at the normally-excellent advisory firm, Investec [by the name of Rami Myerson: note that well!], suggests that one of the best of British firms should be subjected to asset-stripping. He proposes that Rolls-Royce should either sell off its heavy engine business [that which supplies marine, railway and large tractor engines] to release cash to short-termist money-grubbing shareholders. He may be right to note that many institutional shareholders employ such stupid 'analysts' themselves that they do not recognise the advantages of diversification [by the right management] and just want to own aero-engine shares even if that market is suffering from the European recession and the slower rate of growth in China. Many of them will be equally purblind with him, and fail to see that large companies are better served by having diverse aspects of business. And if he has studied Economics he will probably have succumbed to the idea that investment just 'happens; that it does not need soundly to be planned. He is the sort of twerp who has done much to assist in the deindustrialisation of Britain; and he would doubtless regard it as a feather in cap if he could stimulate a seismic shift for the worse in the national economy and in the micro-economy of Derby where devastating unemployment would follow.

Friday, 28 November 2014

Failure and Flannel

David Cameron has given his long-awaited, much leaked speech on EU immigration to the UK.
He admitted that he was impotent to change the situation within the present EU rules; and the tacit side admission was that he has little chance of achieving any significant change. He has refused to say whether he will advocate a 'No' vote in the event of a referendum on EU membership that offers no substantial change. He has evaded saying what would be the basis for any negotiation of Britain's possible future status within the Union. The pusillanimity of his approach, and the flannelly words in which he tries to clothe his obfuscation, make him look even more painfully inadequate.

Occasional displays of a flaring temper - whether genuine or simulated - do not mark Cameron out as a statesman. Indeed, keeping cool and clinical is the mark of a successful politician who is maturing into a statesman: such as Disraeli, Baldwin and Macmillan.

More importantly, Cameron claims success for the Tories' management of the economy since 2010. He and Gideon are constantly asserting that the British economy is growing more quickly than any other mature post-industrial economy. One set of data, cash turnover of the economy as guessed by the official statisticians, is logged as the GNP - Gross National Product - and the latest three-month results have recently been published. The recorded consumption per head of the population is increasing; on average, with most descendants of the former working class receiving less than average pay. An increasing amount of individuals' spending is on imports [up 1.4% over the quarter] while exports declined over the three-month period by 0.4%. Investment is weak [around half of one per cent]. The claims of economic success are flannel: as are pretences that the government has come even one metaphorical inch to meeting its promise eradicate the budgetary deficit by May next year.

There is a good chance that the universal failure of the coalition to meet either the participants' 2010 election promises or the terms of the Coalition Agreement will help to ensure mass abstention in the general election, mitigated by a rising cohort of UKIP voters. Chaos beckons!

Tuesday, 25 November 2014

The Benefit Restriction Bandwaggon

Cowardly Clegg was seen yesterday running down to road in the wake of the latest shabby bandwagon bleating that he, too, supported the capping of benefits for EU immigrants.

He is deep into his own dilemma: a former full-time eurorat, he has always declared himself strongly in favour of the UK remaining in the EU. He must be aware that the dominant power in the Union, Germany, will never agree to dilute the principle of free movement of labour. So he knows that he is supporting a plea for the  impossible in his latest desperate search for a popular cause.

 IF Cameron wins the coming election - which looks unlikely - the continentals' refusal to accept any serious dilution of the principle of free migration within the EU will be a strong element in the disagreement that will underlie the promised referendum on Britain's continuing membership.

The deeper question remains unasked. Recent EU immigrants are well over 80% economically active, contributing vigorously to the UK economy. It is reported that fewer than 40% of the adult population [under age 65] of Bengali origin are economically active: does Clegg intend that the 60% who have made no overt contribution to the economy should also be denied benefits? If not, why not?

Saturday, 22 November 2014

Pathetic Politicians

Cowardy Custard Clegg was reported in today's Times to have gone to ground, unable to make any response to the humiliation of the LibDem candidate in the Rochester and Strood by-election. The LibDems have been in cahoots with Cameron's Tories for the best part of five years: and nobody is grateful for those policy modifications that the LibDems claim to have influenced.

One of Clegg's legacies for the next parliament is the gross over-representation of Scotland in the House of Commons. The Tories were prepared to tackle this, but after Clegg's idiotic proposals for the House of Lords were necessarily abandoned he played dog-in-the-manger on reform of the Commons. Hence the odds are becoming heavily stacked in favour of the ScotNats becoming a bigger faction in the Commons than any LibDems who may secure an election success in May next. This will be a significant contribution to the ungovernability of the Kingdom, going forward.

Meanwhile Gideon Osborne has abandoned his 'campaign' to insert some sense into the EU policy on bankers' pay. He played by the EU rules - a worrying indication of how little Cameron will be able to achieve in any 'renegotiation' of Britain's submission to the Union - and was rapped on the knuckles for his impertinence. It is agonisingly apparent that the continentals fail to comprehend the international financial business, and that they have made the rules on the squidgy foundation of complete ignorance. They say "you can pay bankers as much salary as you may choose; but can only give them a maximum bonus of 100% of salary". The fact that 'bankers' have in many cases been paid a commission for turnover under the nomenclature of a 'bonus' has passed the stiff-necked boneheads by. The adventurous areas of the business will wander off from London [where most of them were created] to New York, Singapore, Hong Kong and [soon] Shanghai and Bombay; and the traders and algorithm-creators will go too. Britain's balance of payments, and the income-tax take, and the VAT on luxury purchases will all be lost to the UK. This process will inexorably be in train even before Cameron MIGHT have a chance of starting a re-negotiation IF he is able to form a government.

Disaster looms: and Cameron's repeated declarations that only a government led by him can give the UK a new relationship with 'Europe' ring more hollowly at every repetition.

Beware!

Saturday, 15 November 2014

Territorial Integrity

In 1938 there was a huge row in Europe centred on the 'territorial integrity' of the cobbled-together entity called Czechoslovakia. Edward Benes, the 'jackal of Versailles' had conned the gullible Woodrow Wilson into handing to a clique of Czech nationalists more than 4 million German Bohemians, 2.5 million Slovaks, about 500,000 Hungarians, 500,000 Ruthenians and 500,000 Zigani [Gypsies, or Roma].

The great majority of the Germans wanted to be ruled by a German-speaking government, and when Hitler made a ploy for their transfer to Germany - and local leaders mostly accepted that - Neville Chamberlain and his French opposite number did not see that they had much ground to oppose this, as a pretty clear language frontier existed within the old Kingdom of Bohemia. As Brussels is now, Prague was a linguistic 'island' in a predominantly Czech-speaking area, but the rest of the German population was effectively contiguous with Germany and Austria [which Hitler was in the process of annexing, with overwhelming popular support]. Unfortunately, Hitler went beyond the bound of what was reasonable, when he made similar demands of Poland: and World War II began. The tragic outcome does not make the revision of frontiers that was agreed in Munich in 1938 wrong: with almost anyone but Hitler, it was a just and sensible outcome. Retrospective opponents of the Munich Agreement say that it destroyed the 'territorial integrity' of Benes's empire.

Now we have a similar issue in the Ukraine. The internal borders between the Soviet Republics were sketched arbitrarily under Stalin [first as Commissar for Nationalities, and then as 'the Boss'], and subsequently Khrushchev casually handed Crimea to his native 'country' of Ukraine. Despite his early title, Stalin did not give a damn for the sensitivities of nationalities, and in East Ukraine and the Crimea were significant Russophone majorities. When there was a coup in Kiev, unseating a formally elected government, some members of the Assembly made ridiculous and offensive statements about forcing Russian speakers to learn Ukrainian and change their orientation: if necessary, by coercion. That was never proclaimed as policy by the Ukrainian state, but it was popular in the west of the country. So with Russian help the most threatened regions declared their independence from the Ukrainian government: while both ministers and Assembly members in Kiev spoke with different emphasis to and about the Russophone population.

Now naïve western leaders, misinformed by the Munich revisionists in their foreign offices, are burbling on about maintaining "the territorial integrity of Ukraine": and threaten to disrupt the growth of all European economies by imposing sanctions against Russia [which does not directly control the 'rebels' in Donetsk and other areas]. This is daft and destructive.

The Sudeten-German question was 'solved' by Benes - restored to power by the victorious wartime allies - by the expulsion from their homes and livelihoods of more than three million German speakers. Having got rid of them, his regime was then shoved aside by the Moscow-dominated communists and for forty-five years Benes' territory was a Soviet puppet: then the Slovaks broke away. The question of the Hungarian minority in Slovakia remains raw.

The Russophone-Ukrainian issue will not be solved by sanctions, or by war: only by honest and well-informed negotiation.

Thursday, 13 November 2014

He Still Doesn't Get It!

One must have some sympathy for Ed Milliband, but this rarely extends to being willing to entrust leadership of the country to him. There is very little sympathy vote in general elections.

Yesterday young Ed had his tenth attempt at a relaunch of his leadership; and this time what he said was seriously scary. He suggested that all employers should be made to pay a raised minimum wage, and should eradicate 'zero-hours' contracts: this would throw millions into unemployment. In addition he suggested that 'the richest' members of society should be even more heavily taxed than they now are, and partially excused this by asserting that an unspecified proportion of these 'rich' currently pay no taxes. The sublime silliness of this proposition vindicates all but the most personal and vitriolic attacks that are made on the sinking man. The great majority of British residents who are rich pay their taxes. Some people, within the rules, receive income from UK sources in other domiciles [or have alien-domiciled wives or husbands who receive the bulk of their incomes] which is within the existing rules. There is a strong possibility that many of that minority of the rich will decamp themselves to foreign domiciles and stop paying rates and the taxes on all their personal purchases in the UK if the basic rules of residency are changed: so tax revenues would go down, not up.

He plans a scenario where entrepreneurs will feel even more unwelcome and join the rush to alien domiciles; while the millions of extra unemployed become a charge on the state [adding to the cost of the benefits and allowances they already receive while notionally in zero-hours employment]. After a short time it will be impossible for the government to borrow the increased mass of money they will need to keep paying benefits. The meltdown of society would only be a step away.

To appeal, as the appalling Blair used to do, to the innate good qualities of the British people is nonsense in a country that has been made a patchwork of 'communities', some of whom are already 65+% 'economically inactive'. There will be no fall-back  for the government: even if we remain in the EU our standoff from the eurozone severely limits the help the members would be able or willing to provide to assist the UK. The USA is in no mood to re-run Marshall Aid for a feckless island near Europe that has no contemporary strategic significance.

Ed is asking the British electorate to behave like lemmings.

Friday, 7 November 2014

This could be alarming news...

There is some hope that the LibDems will be wiped out in the forthcoming General  Election; but it cannot be replied upon as the possible outomes cover a wide range.

Thus two related items of today's news come together scarily. One is the suggestion that the surviving  LibDem MPs will demand as part of their terms for entering into any coalition that they have complete control of a list of Departments of State. One of those departments is Energy and Climate Change - which has a LibDem incumbent now. Yesterday the Secretary of State, Ed Davey, said that the average subsidy that households will have to pay for 'green' energy programmes [plus a small amount to subsidise social tariffs] will rise from £27 per household now to £58 in 2020. One can expect that the actual sum will be more; and that this will not be matched by any real increase in average household incomes. So standards of living will be driven down to pursue those policies, if the Libdems have a say in this.

When Labour was last in power, Ed Milliband [now the leader] was the Secretary of State for Energy and Climate Change and he set many of the policies which the coalition have pursued by default. So we can not hope for much change out of him. Tories hint that they will somehow mitigate the impact, if they have any share of power; but the credibility of all Tory policies on matters economic is stretched to breaking point.

The absence of coherent economic and social policies right across the narrow spectrum of Britain politics is frightening.

Wednesday, 5 November 2014

Everybody Knows; But Doesn't Wish to Know

Cameron of the Bullingdon Club has been peddling his spiffing idea for a few weeks now. If you focus the national concern about immigration on the number of EU migrants, you may divert the attention of the nation from the reality that they all know; but do not wish to accept that they know. By placing the argument on completely false ground the Prime Minister has sown a wind that will soon return as a whirlwind.

The facts are that at least 80% of recent European immigrants are in work; while 67% of the adults of Pakistani 'heritage' and 69.5% of those from Bengali 'heritage' are economically INACTIVE; i.e. they are not in employment. The amount of taxes that those people pay, as a ratio of the benefits and state services they receive, is negligible.

Will the politicians please explain how this has happened? Do they think anything should be done about it? Can anything be done?

Sunday, 2 November 2014

The Season of Mellow Fruitfulness

Welcome to November!

The UK had its warmest-ever recorded temperature on October 31 - All Hallows Eve [Hallowe'en] - and on cue the UN 'experts' on Climate Change are about to deliver their newest and most extreme warning about climate change on the earth. They are set to say that unless the population of the planet is taxed with higher energy prices, and higher taxes to subsidise energy costs [and thus try to con people that they are not paying as much for energy as they will be compelled to do] climate change generated by humans will become irreversible.

All that the scientific experts need to do is write the declaration. They leave it to despised ragbag politicians - acting on the advice of discredited economists - to enforce their prescription on the people. Welcome to the future! Welcome to the reversal of economic growth in China, India and Africa!

Spend an hour looking at the fascinating data on climate change on earth, and on other planets, that are plentifully available on the Web. And then see how how much convinced you are personally that these scientists have got the correct analysis. One does not need to consider the personal integrity of commitment of the scientists: they are in the position of anyone who has been elevated to the role of Advisor to a ruler among men and women. Proximity to power always goes to the heads of intellectuals; but it does not confer authority on them. It may foster the formation and extension of delusions.

These are big and important matters: think for yourself!