David Cameron apparently believed that he and his hoppo, George Osborne, could persuade the nation into giving a decisive 'get lost' message to Eurosceptics. Hence he promised the 2016 Referendum in his second election manifesto, together with the hint of a promise that some of the most egregious political aspects of the 'ever-closer union' could [at least temporarily] be toned down. When it became clear, with approach of the referendum date, that this could be a close-run event he made two catastrophic decisions. He had been met with contempt when he asked other EU leaders to concede any points of significance, so the package of 'reforms to the EU' that he claimed to have 'achieved' looked as trivial as it was: but he pronounced it a success, nevertheless; which conned nobody. The even greater mistake was to mount 'Operation Fear', presenting economic data [and even the notion of a new world war] as unambiguously guaranteeing the country all kinds of disasters if there was a vote to leave the EU: this convinced far more people that the government was trying to manipulate them, than the number who may have been frightened. Forgetting his undertaking to implement the decision of the people, whichever way it went, he stood down immediately the result was announced.
Thus Theresa May emerged as the Prime Minister. Known only as the Home Secretary who had implemented Osborne's cuts to the police and the prison system, and had failed to find policies to reduce the flow of immigrants into the UK, she had few personal adherents. Just about her first act in power was to consign George Osborne to a lucrative career on the back benches. She appointed a Cabinet of competent but mostly-unknown ministers, with three of the most conspicuous characters [Johnson, Fox and Davies] clustered together to combine with the Prime Minister in 'delivering Brexit'. Since then, she has made it unambiguously clear that she expects personally to make all the key decisions about the exit process, and to have the support of a supine parliament. That will not work out to her credit.
The Liberal Democrats' fantasy that people voted in the 1975 Referendum in favour of the European Economic Community, and that the 2016 vote could be said not to have reversed the 1975 vote because the question in 2016 was about leaving the European Union, and did not mention the EEC, is pure nonsense. The EEC metamorphosed into the EU, which fully incorporated the 'common market': with the full participation of Margaret Thatcher and John Major. The Liberals will go further into LaLaLand if they try to stick with that idea.
In making herself the arbiter of all decisions on the British side of the negotiation, apparently without an adequate team of experienced negotiators, the full responsibility for everything that will go wrong falls to her. The wrangle with the Scottish Nationalists that will form a drain on the Prime Minister's attention and her energy will help to ensure that false steps and taken and mistakes make. It is difficult to foresee a good outcome for Mrs May. Straws in the wind, such as the distraction of proposing the creation of Grammar Schools while the real-terms budget for schools is declining, indicate that the limits to her credibility will become apparent before the end of this year.
Mrs May is not as stupid or dogmatic politician as was Margaret Thatcher: she will be more hurt by the slings and arrows of political dissent than her superficially formidable predecessor could ever have been. She has chosen to pile these issues onto her own plate: she will regret it.
Tuesday, 14 March 2017
Monday, 13 March 2017
Bringing Back POT
All over the UK there are many tens of thousands of manhole covers with the POT logo on them: which means they were placed originally when Post Office Telephones had a monopoly on the telephone system in this country.
In the nineteen-eighties the privatisation advocates rabbited on about the inherent inefficiencies that could be seen in a state monopoly, notably the delay in installing phones in premises as the demand for modern IT began to emerge; so when the Thatcher government decided to sell off the system this got massive press support, fueled by costly publicity by those who thought they could profit from battening on to the most obviously lucrative parts of the system. Post Office Telephones was privatised as BT - British Telecommunications - and a vast number of small shareholders took their allocation of shares, only to sell them on to institutions as those larger bodies became able to absorb them at inflated prices.
Then came the real IT revolution. Presaged by show-offs who brought their 'housebrick' mobile phones into their local pubs and restaurants, the advent of mobile telecommunications was quickly followed by the invention of the internet and the unprecedented range of mobile media that now exist: and are advancing daily in sophistication. Large and small companies sell phones, lease phones, adapt phones and make profits by enabling the individual to feel more empowered to have universal contact with the entire human race [subject to regulatory restraint] and with the whole of accumulated knowledge. The everyday user of a smartphone is likely to assume that the whole communications system is now based on the internet and the cloud; and not to give attention to the recent discussion about the future of wire-using telecommunications links that are accessed through manholes and overhead wires marked POT or BT or by the designation of the BT subsidiary OPENREACH.
Partly using copper wires of various ages, partly using carbon fibre 'wires', a vast and essential network exists - and is expanding - which the private telecommunication providers cannot avoid using, could not possibly afford to replace [or duplicate], and thus must depend upon. This system -the core of what was sold off when POT was sold - is indispensable to all communications providers for the indefinite future.
The ramshackle system of 'regulation' that the Thatcherites created [including OFGEM for energy, and OFWAT for water] includes OFCOM for communications - including telephones. A reputedly very bright lady with a good civil service record has been made the head of OFCOM, and she has announced that the core system - the wires, branded as Openreach - must be made more accessible to BT's competitors by being managed within a more obviously separate company from BT.
Behind this decision is the government's fear that a complete separation of Openreach from BT would mean that past and present employees would exercise their right, granted in the privatisation legislation, to demand that their potential pensions would be topped-up with government money if any future corporate change in BT threatened the security of the staff's pensions entitlement. The cheeseparing government knows that it would open the floodgates to other claims if they acquiesced in that demand; so they cannot allow BT and Openreach to become wholly separate.
Openreach is the archetypal example of a natural monopoly, an organisation that is essential to the normal conduct of life, which is unaffordable to replicate by a competitor because the customers would prefer to deal with the monopolist than to pay for a second system to be installed. Politicians - acting on the advice of Economists - assert that by the intervention of a regulator they can make the monopoly behave in a 'commercial' kind of way. This is nonsense. Decades since the privatisation of Post Office Telephones we see that the essential underpinning basic technology can only be managed as a monopoly that allows fair and equal access to all legitimate users including rival telecommunications businesses. The same goes for the railways administered by Network Rail, the national grids for electric power and gas distribution, the postal system and access to ground water. While a charade of competition can be made in the management of the common infrastructure, there is no sense in that exercise. There is well-evidenced justification for allowing competition between innovative firms that offer customer-facing mechanisms for the delivery of the consumer experience that depends on the monopoly infrastructure: exemplified by Vodaphone, O2 et cetera. The clear distinction between the essentials of telecommunications that lie underground and the options that are made accessible in the consumer's hand by their preferred retailer should be replicated in the way these services are owned, taxed, funded and regulated. Pigheaded attitudes of Economists, politicians and publicists who have invested their reputations in the existing chaos will resist the commonsense revision of the system; but the Great British Public is very capable of seeing sense an eventually it is probable that a decent and affordable outcome will be achieved.
Meanwhile, the charade of 'enhancing competition' will be played out; and Openreach will be pilloried for under-investment and inefficiency.
In the nineteen-eighties the privatisation advocates rabbited on about the inherent inefficiencies that could be seen in a state monopoly, notably the delay in installing phones in premises as the demand for modern IT began to emerge; so when the Thatcher government decided to sell off the system this got massive press support, fueled by costly publicity by those who thought they could profit from battening on to the most obviously lucrative parts of the system. Post Office Telephones was privatised as BT - British Telecommunications - and a vast number of small shareholders took their allocation of shares, only to sell them on to institutions as those larger bodies became able to absorb them at inflated prices.
Then came the real IT revolution. Presaged by show-offs who brought their 'housebrick' mobile phones into their local pubs and restaurants, the advent of mobile telecommunications was quickly followed by the invention of the internet and the unprecedented range of mobile media that now exist: and are advancing daily in sophistication. Large and small companies sell phones, lease phones, adapt phones and make profits by enabling the individual to feel more empowered to have universal contact with the entire human race [subject to regulatory restraint] and with the whole of accumulated knowledge. The everyday user of a smartphone is likely to assume that the whole communications system is now based on the internet and the cloud; and not to give attention to the recent discussion about the future of wire-using telecommunications links that are accessed through manholes and overhead wires marked POT or BT or by the designation of the BT subsidiary OPENREACH.
Partly using copper wires of various ages, partly using carbon fibre 'wires', a vast and essential network exists - and is expanding - which the private telecommunication providers cannot avoid using, could not possibly afford to replace [or duplicate], and thus must depend upon. This system -the core of what was sold off when POT was sold - is indispensable to all communications providers for the indefinite future.
The ramshackle system of 'regulation' that the Thatcherites created [including OFGEM for energy, and OFWAT for water] includes OFCOM for communications - including telephones. A reputedly very bright lady with a good civil service record has been made the head of OFCOM, and she has announced that the core system - the wires, branded as Openreach - must be made more accessible to BT's competitors by being managed within a more obviously separate company from BT.
Behind this decision is the government's fear that a complete separation of Openreach from BT would mean that past and present employees would exercise their right, granted in the privatisation legislation, to demand that their potential pensions would be topped-up with government money if any future corporate change in BT threatened the security of the staff's pensions entitlement. The cheeseparing government knows that it would open the floodgates to other claims if they acquiesced in that demand; so they cannot allow BT and Openreach to become wholly separate.
Openreach is the archetypal example of a natural monopoly, an organisation that is essential to the normal conduct of life, which is unaffordable to replicate by a competitor because the customers would prefer to deal with the monopolist than to pay for a second system to be installed. Politicians - acting on the advice of Economists - assert that by the intervention of a regulator they can make the monopoly behave in a 'commercial' kind of way. This is nonsense. Decades since the privatisation of Post Office Telephones we see that the essential underpinning basic technology can only be managed as a monopoly that allows fair and equal access to all legitimate users including rival telecommunications businesses. The same goes for the railways administered by Network Rail, the national grids for electric power and gas distribution, the postal system and access to ground water. While a charade of competition can be made in the management of the common infrastructure, there is no sense in that exercise. There is well-evidenced justification for allowing competition between innovative firms that offer customer-facing mechanisms for the delivery of the consumer experience that depends on the monopoly infrastructure: exemplified by Vodaphone, O2 et cetera. The clear distinction between the essentials of telecommunications that lie underground and the options that are made accessible in the consumer's hand by their preferred retailer should be replicated in the way these services are owned, taxed, funded and regulated. Pigheaded attitudes of Economists, politicians and publicists who have invested their reputations in the existing chaos will resist the commonsense revision of the system; but the Great British Public is very capable of seeing sense an eventually it is probable that a decent and affordable outcome will be achieved.
Meanwhile, the charade of 'enhancing competition' will be played out; and Openreach will be pilloried for under-investment and inefficiency.
Sunday, 12 March 2017
Agitated Turks
In 1923 the exiled Sultan of the former Ottoman Empire [Turkey, plus extensive subject territories] decided that his country's defeat in the Great War was definitive. Most of the subject territories had been split off from Turkey by the France-British 'peacemakers' to become the current disaster states: Syria, Iraq, Lebanon [the innocent victim of others' misbehaviour] and Palestine. Thus the ex-Sultan also surrendered the title of Khalif of the 'nation of Islam'; and over the next decade Turkey became a carefully-managed, secular democratic state dominated by the most successful soldier to emerge from the war, Mustafa Kemal who took the title Ataturk [generally understood to mean 'father of the nation'].
During the nineteen-fifties and 'sixties and 'seventies and 'eighties Turkey was a crucial component of the NATO alliance, and Turks were welcomed as Guest-workers in Europe, particularly in the Federal republic of Germany. Eventually, the guest workers were enabled to become Germans; though most people in this category married other Turks: thus they remained a defined ethnic group, whose affiliation became more clear after an increasing proportion of their womenfolk took to wearing 'Islamic' hair covering. Throughout it was assumed that the great majority of Turks in Germany, and in other EU countries, accepted conformity with the norms of their hosts even though they maintained their religious identity and their Turkish roots.
Meanwhile, in Turkey politics have changed. A popular Prime Minister secured a change in the constitution that made him president: since which he has espoused populism, suppressed what many regard as a staged sham of a coup, and moved to establish himself as a dictator. To this end he is leading a campaign to change the constitution again, and he has called a referendum for this purpose. Just as French presidential candidates have held rallies to address the huge French population in London, so the Turkish president is trying to rally potential supporters in European countries. Rising right-wing populism has forced the Merkel government in Germany to restrict this process: and now the Dutch government has banned a senior Turkish minister from landing in the country and dumped another over the German boundary.
These actions have the potentiality for alarming consequences. In a few days' time, elections in the Netherlands are likely to strengthen the populist right; and riots in Rotterdam may cause newly-alarmed people to vote for the right. Meanwhile, Turkey is promising draconian retaliation: this could involve Turkish-state-supported terrorism in Europe combined with removal of Turkey's control over migration from Asia into Europe. In just a few days, crisis could become catastrophe, engulfing many of the at least five million Turks in the EU and swamping the Greek islands with sharp-elbowed young me from Iraq, Afghanistan, Iran, Pakistan and Syria.
The Netherlands, for many decades the bellwether of libertarianism in Europe, has suddenly become the leading edge of 'oppression' of a minority. The consequences will be immense.
During the nineteen-fifties and 'sixties and 'seventies and 'eighties Turkey was a crucial component of the NATO alliance, and Turks were welcomed as Guest-workers in Europe, particularly in the Federal republic of Germany. Eventually, the guest workers were enabled to become Germans; though most people in this category married other Turks: thus they remained a defined ethnic group, whose affiliation became more clear after an increasing proportion of their womenfolk took to wearing 'Islamic' hair covering. Throughout it was assumed that the great majority of Turks in Germany, and in other EU countries, accepted conformity with the norms of their hosts even though they maintained their religious identity and their Turkish roots.
Meanwhile, in Turkey politics have changed. A popular Prime Minister secured a change in the constitution that made him president: since which he has espoused populism, suppressed what many regard as a staged sham of a coup, and moved to establish himself as a dictator. To this end he is leading a campaign to change the constitution again, and he has called a referendum for this purpose. Just as French presidential candidates have held rallies to address the huge French population in London, so the Turkish president is trying to rally potential supporters in European countries. Rising right-wing populism has forced the Merkel government in Germany to restrict this process: and now the Dutch government has banned a senior Turkish minister from landing in the country and dumped another over the German boundary.
These actions have the potentiality for alarming consequences. In a few days' time, elections in the Netherlands are likely to strengthen the populist right; and riots in Rotterdam may cause newly-alarmed people to vote for the right. Meanwhile, Turkey is promising draconian retaliation: this could involve Turkish-state-supported terrorism in Europe combined with removal of Turkey's control over migration from Asia into Europe. In just a few days, crisis could become catastrophe, engulfing many of the at least five million Turks in the EU and swamping the Greek islands with sharp-elbowed young me from Iraq, Afghanistan, Iran, Pakistan and Syria.
The Netherlands, for many decades the bellwether of libertarianism in Europe, has suddenly become the leading edge of 'oppression' of a minority. The consequences will be immense.
Saturday, 11 March 2017
Early news
Even before I got out of bed on this Saturday morning, I heard on the radio two pieces of evidence of the failure of government. The Environment Agency has been so far starved of resources that incidents of river pollution are not being followed-up, to the extent that some angling societies have ceased bothering to report them. More seriously, a prison was partially destroyed overnight by action of one drunken prisoner: that prison having been condemned by inspectors as 'in crisis' two years ago.
Every day there is evidence of the deterioration of environmental, social and public services due to the continuance by the May-Hammond government of the Cameron-Osborne cuts in public spending.
The fabric of society is being unpicked; and that will be followed by deterioration in the political fabric: all because of a misinformed fetish to 'eliminate the deficit' on state spending by continual cuts.
The only way soundly to support society - and thus retain support for the political class - is to raise the productiveness of the nation. This goes way beyond improving productivity, at which successive governments have failed. There is no more important point to get over to people than this, which is why it is so frequently the theme of this blog: as it is of my book: "NO CONFIDENCE: the Brexit Vote and Economics, by David Bland, to be obtained from Amazon."
Every day there is evidence of the deterioration of environmental, social and public services due to the continuance by the May-Hammond government of the Cameron-Osborne cuts in public spending.
The fabric of society is being unpicked; and that will be followed by deterioration in the political fabric: all because of a misinformed fetish to 'eliminate the deficit' on state spending by continual cuts.
The only way soundly to support society - and thus retain support for the political class - is to raise the productiveness of the nation. This goes way beyond improving productivity, at which successive governments have failed. There is no more important point to get over to people than this, which is why it is so frequently the theme of this blog: as it is of my book: "NO CONFIDENCE: the Brexit Vote and Economics, by David Bland, to be obtained from Amazon."
Friday, 10 March 2017
Read it in the SUN
Today's Sun newspaper carries an article by Tom Newton Dunn, derived from official statistics and government statements and papers, which warns the reader to expect that there will be no material improvement of real incomes for British people in the next fifteen years. This assumes that there will be no disastrous new development, either.
Yet the downside risks for the ordinary citizen are immense. Mrs May's apparent espousal of rabid calls for a 'hard Brexit' will be incalculably damaging. She may be holding back the full exposition of her position, and she may be open to persuasion by those - including her Foreign Secretary - who usually know when to backtrack. But she seems to have headed the ship of state for the rocks.
The immediate past-Governor of the Bank of England has repeated the dangerous mantra that the EU needs Britain's ongoing trade more than we need Europe's exports to us: that may be true just now, but for how long will it remain so? The continental powers will be placing their bets on that question, as they consider the terms for a post-Brexit trade pact. Current attempts by Donald Trump's trade envoy to get European states to discuss bilateral deals with the US will get nowhere, while they may cause the twenty-seven continuing members of the EU to stick together more firmly
The picture for Britain - as Tom Newton Dunn has pointed out - is far more grim than any politicians have spelt out: even the leader and deputy leader of the Labour Party.
And every economic journalist - even the Guardian and Financial Times remoander liberals - has made absolutely clear the danger to jobs from new technologies that are in final stages of development. The range of threat, from artificial intelligence beating spivery on Wall Street through driverless lorries to fully automated sandwich shops and fish bars, will materialise throughout the economy well within the fifteen years during which a steady-as-you-go British economy would totter on with lower living standards and more austerity for all.
At every level, the media are doing their job: telling people how dire things are, how dire the politicians are, and how desperate is the potential political economy of the UK. These crucial facts will eventually get home with enough of the public for the threadbare political establishment to realise that they are at the end of their public acceptability - and there will be nowhere for them to hide. As for the rest of us; we must just hope for new sources of salvation\\; the old gang have totally blown it,
Yet the downside risks for the ordinary citizen are immense. Mrs May's apparent espousal of rabid calls for a 'hard Brexit' will be incalculably damaging. She may be holding back the full exposition of her position, and she may be open to persuasion by those - including her Foreign Secretary - who usually know when to backtrack. But she seems to have headed the ship of state for the rocks.
The immediate past-Governor of the Bank of England has repeated the dangerous mantra that the EU needs Britain's ongoing trade more than we need Europe's exports to us: that may be true just now, but for how long will it remain so? The continental powers will be placing their bets on that question, as they consider the terms for a post-Brexit trade pact. Current attempts by Donald Trump's trade envoy to get European states to discuss bilateral deals with the US will get nowhere, while they may cause the twenty-seven continuing members of the EU to stick together more firmly
The picture for Britain - as Tom Newton Dunn has pointed out - is far more grim than any politicians have spelt out: even the leader and deputy leader of the Labour Party.
And every economic journalist - even the Guardian and Financial Times remoander liberals - has made absolutely clear the danger to jobs from new technologies that are in final stages of development. The range of threat, from artificial intelligence beating spivery on Wall Street through driverless lorries to fully automated sandwich shops and fish bars, will materialise throughout the economy well within the fifteen years during which a steady-as-you-go British economy would totter on with lower living standards and more austerity for all.
At every level, the media are doing their job: telling people how dire things are, how dire the politicians are, and how desperate is the potential political economy of the UK. These crucial facts will eventually get home with enough of the public for the threadbare political establishment to realise that they are at the end of their public acceptability - and there will be nowhere for them to hide. As for the rest of us; we must just hope for new sources of salvation\\; the old gang have totally blown it,
Thursday, 9 March 2017
Budget Day: Blues and News
There was no surprise in Philip Hammond's first Budget yesterday. He followed the irrational obsession - that was planted into Tory thinking by his predecessor - that the deficit on the budget must be eradicated [by an ever-receding future date] regardless of the social cost of the devices that may be employed to effect it.
This depressing truth was foreshadowed by a brilliant cartoon by Brookes in the Times, which showed a naked Hammond playing AUSTERITY [on a Hammond Organ, obviously] on a bleak upland meadow with just a few sheep to keep him company.
The implications of that pathetic performance were pointed out in yesterday's Evening Standard by the brilliant Anthony Hilton. If the achievement of a 'high rate of growth' by the British economy is so wonderful, why are public and social services still being cut? Why are most people worse off, in real terms, than they were in 2007?
The answer is that the statistical entity that has been chosen as a criterion for the success of government policy, the 'growth' of the economy, is operationally meaningless in this day and age. 'Growth' is seen as a sign of success, while productivity is stagnant. Find Hilton's column on line.
Meanwhile, on the same day, it was announced that George Osborne - the author of the disaster - is to be paid some £600,000 a year for four days a month 'work' for a major international Fund Manager: as the old song put it "It's the rich what gets the money, and the poor that takes the blame!"
This depressing truth was foreshadowed by a brilliant cartoon by Brookes in the Times, which showed a naked Hammond playing AUSTERITY [on a Hammond Organ, obviously] on a bleak upland meadow with just a few sheep to keep him company.
The implications of that pathetic performance were pointed out in yesterday's Evening Standard by the brilliant Anthony Hilton. If the achievement of a 'high rate of growth' by the British economy is so wonderful, why are public and social services still being cut? Why are most people worse off, in real terms, than they were in 2007?
The answer is that the statistical entity that has been chosen as a criterion for the success of government policy, the 'growth' of the economy, is operationally meaningless in this day and age. 'Growth' is seen as a sign of success, while productivity is stagnant. Find Hilton's column on line.
Meanwhile, on the same day, it was announced that George Osborne - the author of the disaster - is to be paid some £600,000 a year for four days a month 'work' for a major international Fund Manager: as the old song put it "It's the rich what gets the money, and the poor that takes the blame!"
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