Even More Worrying

One rather hopes that politicians always know they are lying, then we know what game they are playing.

But I have an eerie feeling that Gideon our Chancellor of the Exchequer really believes that the basic economic data are favourable for the United Kingdom. He bases this optimism especially on the facts that the Gross National Product is increasing at around 2.5% this year, and that millions of people are doing very low-paid jobs.

Neither of these items is actually good for the economy, or for the people who depend on it.

The gross national product is merely the guesstimated total of transactions in the country: so it is immaterial whether the products that are sold are British made or imported. Provided more is traded at rising prices, or yet more at constant or falling prices, the GNP goes up. So the more people are employed to unpack and to sell imported goods [or to fit imported nail designs] the more GDP and employment go up. But when imports exceed imports by more than 6% of the total national income, as now, that means that a sum equal to 6% of the total reported turnover is owed to foreign producers.
This deficit must be clocked up as additional external debt - on which we have to pay interest - or used by foreign investors to buy yet more control of British companies [whose customers thereafter have to pay tribute to the foreign owners of those businesses]; or dwellings in London that are mostly unoccupied. Either way, in addition to buying more than we import, we have to pay more every year for what was borrowed or sold out in the past. So every increment in the GNP at present increases the country's indebtedness to aliens.

In addition, much of the purchase money for imported goods is borrowed within the UK: so private debt is increasing. Private debt is further increased as people borrow to fund house purchases at rising prices. Increasing proportions of exiguous wages are dedicated to debt servicing, and every added restriction on lending to the poor further reduces their aspirations to enjoy anything like the lifestyle they see others enjoying on the telly.

Furthermore, as had been emphasised by all opposition politicians [including today the LibDems], the national debt to fund government spending within the UK has increased under Gideon's supposedly brilliant custodianship.

So personal debt is up, domestic national debt is up, and debt to aliens is up: and the net result of five years of deleterious reductions of many public services is a disaster. Of course, some areas of government were ineffective and inefficient: so austerity in those areas served the taxpayer well; but the overall net result of cutbacks in the public sector has done nothing to mitigate the economic scene while it has notably devastated the social system.

If it were not so ruinous to the economy in the medium term, one could merely lament Gideon's adherence to the nonsense Economics that he was taught as a student. But as it is so utterly devastating, his delusion will not save him from a reckoning.

The Sale of 'Justice'

The barristers are in a tizz because they recognise that the pattern of available work is being changed by the reckless policy of cuts being imposed by the government. In particular, they argue this week that the severe reduction in the availability of legal aid for civil cases [cases brought by one person or business against another] has almost completely been removed from smaller-value cases. This means that neither side can afford to employ a barrister to take the case to court: and the barrister profession as such calls this a denial of 'justice' to the litigants.

I can have no sympathy with them, as long as they harbour in their midst the sort of despicable character that attempts, in court, to blacken the characters of abused children as a form of mitigation for the appalling abuse that the defendants have undeniably committed. A recent case in Oxford Crown Court was darkened still further by the fact that one of the barristers who used this defence was a woman. This disgrace to the human race was defending in a criminal case, so her remuneration was provided by the taxpayer. While this is considered by the Bar Council to be acceptable conduct, the population should display utter contempt for the entire profession. Of course the tenants of the most expensive chambers in the Temple would never take such cases, and thus would not be tempted to use scurrilous tactics; but they do not act to elevate their lesser brethren from the mire in which they choose to wallow.

The sooner Britain's outrageous confrontational courts system is abolished, the better!

Gideon Sells More of the Family Silver

The Chancellor is greatly pleased with himself: he has been to some degree instrumental in selling the government's block of Eurostar shares. Of course, a major tranche of those shares are allocated to a Canadian pension fund. The rest goes to equity investors who will either sell to aliens or sell to Brits who will, in due course, sell to aliens.

He purports to believe that such actions are good for the country. They bring in cash, which he can waste on bread and circuses for the masses. Then the foreigners own the assets, and we don't.

This is just a tiny example of the gadarene rush to despoil the country of its remaining assets. Each such sale pumps a bit of cash into the country, until in the course of circulation it is used to buy imports: then the consumption of those imports is the final destruction of the wealth that was alienated when the capital assets [including, in many cases, intellectual property] passes out of British hands.

It beggars belief!

Compounding Failure

The debate that has limped through recent days, largely in the letters columns of the minority press, shows the utter failure of the political class to recognise the constant imperative to maintain the national defences at whatever that may cost. The U K is effectively defenceless against jihadism, and the government (even more, the official opposition) is not willing to contemplate either the cost or the content of building adequate defences. Yet the chattering classes would have their political chums are talking pretty recklessly helping the spivs who run Ukraine finally to suppress - if not expel - the indigenous Russian speaking minority; who number several million. Whatever the weaknesses of the official Uranian army, the tough nut volunteers (notably the Azov brigade) are determined racists who want to wreak upon Russian speakers their vengeance for the horrors perpetrated on the country by the Georgian tyrant who called himself Stalin.

Retired generals, admirals and Air Marshals have battened onto the slogan that the UK should spend 2 % of GDP on Defence. That is nonsense: the country should spend what is necessary, thus generating employment and spin-off technology.

In the nineteen-naughties Germany started to build 'super-Dreadnoughts' . This alarmed the establishment of then-patriotic and intelligent people. HMS Dreadnought had been designed to put the Royal Navy ahead of all comers, but the Germans could copy it and their construction programme could enable them to pull ahead of Britain. So the cry went out "We want eight, and we won' t wait" and we built eight of these things every year until we outnumbered Germany' fleet. Nobody counted cost before national security: the money had to be found!

The country has effectively been stripped of defensive capability ; and, even more worryingly, of any willingness openly to face the fact.

Arrogance versus folly

Ed Milliband has produced the first seriously silly proposal of the election campaign from a major party, ignoring the bloody experience if the Libdems in government. He is trying to buy the student vote by cutting fees in universities in England from £9K a year to £6K. Thus the debt on fees from a three year degree falls from £27,000 to £18,000. As students interviewed on TV olast evening said, add to this the debt from maintenance over the same three years and you face a total of some £50,000 at the present fee rate and £41,000 in Ed's Wonderworld. Big Deal! Ed tried to mitigate this by pointing out that the poorest students can get maintenance grants and universally bursaries, that somewhat reduce the maintenance burden. But someone aged 21with an indifferent degree in an oversupplied subject from a less-fashionable university - with no underpinning from the Bank of Mum and Dad - will face a difficult world with a debt of around £30K and the prospect of earning around £21K annually if they can get jobs at all. A notional reduction in the debt that lower-paid graduates may never have called-in is a very bad joke to the person who is expected to vote Labour to secure this huge benefit.

Meanwhile the ineffable rubber-faced Gideon at the Treasury gloats at Britain's "world beating" rate of economic growth. Any country can record a growth in turnover if more people are employed on minimum wages to sell more imported goods on credit. But it all hastens the day when the material despoliation of the economy becomes so severe that sources of credit are sealed off and the ruin that has been wrought on the people becomes fully evident. That arrogance is much more dangerous than Ed's sheer silliness.

Greece cannot lose.

Very few informed Europeans can be ignorant of the fact that the Greek Finance Minister is a game theorist who has pushed the art to its limit in classes and in academic journals worldwide. He knows what game he is playing.

Most of the uninformed subjects of the eurorats of Brussels have accepted the proposition that the issue with Greece is one of financial probity: it is said that Greece has been even more profligate than Ireland or Italy since it joined the Euro, and needs to stick to its undertakings to bring its finances into line with the demands of the EU, the ECB and the IMF.

Not many people outside the UK and Russia want to admit that the European Union is in every element of its being a political structure. It has massive economic ramifications, but they are, and always have been, subject to the political imperative of ever-closer union. While the originators of the project were clear that their underlying motive was to remove the possibility of internecine war from the European continent; it is no longer anything like so clear-cut as to what Union - let alone 'ever-closer union' - is meant to achieve.

The common currency, the euro, was purely a political venture. Again, it had economic implications that have far exceeded the prognostications with which it was ushered into existence; but the fact that it was an adjunct to the political process was never challenged seriously. Thus in declaring that the participating states had sufficiently 'converged' in their economic plans and data that they were fit to share a common currency the political judgement transcended the economic in all cases. It was common gossip that Italy and the Iberian countries, Ireland, Greece and Cyprus had window-dressed [i.e. had optimistically massaged] their data, with the EU further airbrushing the picture: these were seen as trivia in the achievement of the greater objective.

With that as the basis on which the whole structure rests, political fudge is available to maintain the appearance of the structure; at least for the purblind pursuers of the tarnished 'ideal'. Greece will make further promises, almost on schedule by the middle of this week. Funds will be released. Conditions will be promulgated that nobody can expect genuinely to be fulfilled. Austerity in Greece will be eased: but not by enough to maintain the fickle electorate's faith in the new government. So the European Union will stagger on into another decade where the central accounts of the Commission will not properly be audited and ever-more-egregious fantasy declarations of the Commission will be respected to some extent in various of the member states.

The Bishops and the Gas Bill

The bishops of the Church of England have gently pointed out that there is a great gulf between the 'political class' and their supposed constituents, and that this may be greater than ever.

When most politicians were from the landed classes they necessarily mixed every day with dozens of servants, from whom they would receive many home truths. In the glory days of the Labour Party almost all of those who became MPs had been hands-on workers and often long-serving trade union officials: the minority of intellectuals in the party were constantly reminded that their constituents were honest sons and daughters of toil, and even when they became ministers this lesson was constantly reinforced. Almost all of this has gone: few Tories ride every day, few Labour MPs live permanently in terraced houses exposed to neighbourly contact [though a few have - rarely occupied - such properties as part of their propaganda facade]. The politicians who have waxed comfortably over the past couple of decades are more remote from 'hard-working families' than any who have gone before them.

The Scots have found their own solution to the problem; and how that works out in the next parliament will be fascinating. I think the English and Welsh can consider that exception remote from their own options; though it will influence what is possible very considerably. My acquaintance are almost uniformly of the view that UKIP will take votes but not seats, but that may be enough to upset the statistical predictors. The next government will be Conservative or Labour and its members will be no less isolated from the mass of those whom they purport to serve,

My little book, Rottenomics: Replacing Economics, is available on Amazon [and will shortly be on Kindle]. Its opening paragraphs make exactly the same point as the Bishops make, with an important difference. I go on to say that a major factor in the alienation of politicians from people is the politicians' adherence to absurd economic propositions. This has superbly been illustrated this week.

The Competition and Markets Commission has been considering household energy bills, and has found that millions of people have 'lost' hundreds of pounds by not shopping around and switching their supplier, The clever Economics graduates who now work for sectoral regulators as 'regulatory economists' have a mission to compel the participants in markets to behave as their textbooks say participants in the economy should behave, thus to create an 'efficient market'. Most consumers take the view that they pay for regulators to control the market and ensure that suppliers treat customers fairly: so why should people spend many hours trying to understand deliberately obfuscatory billing and pricing systems, then venture into an alien world of websites in search of a supposedly better deal. They have to take the site and the information that it gives to them as being entirely objective and personally relevant. Millions lack the confidence to go down that route, and hundreds of thousands do not have the competence to do so. And why should they bother, if there is a regulator? Is it the task of the regulator to ensure that fair [lowest possible] prices are charged, or - as now seems to be the case - is it their role to force hard-working householders and deserving pensioners to jump through hoops so that their behaviour conforms to a nineteenth-century fantasy about 'competition'? I know what most people would prefer. That is their choice: so why not facilitate it rather than frustrate it?