Further Disintegration: Mrs May's Government Shambles

I have met Damian Green a few times, mostly in his capacity [when the Tories were in opposition] as a director of his regional water company. I would be very surprised indeed if he wasted his time, or risked his reputation, using an office computer to spend 'many hours' watching soft porn. If his computer was used in that way, by one of the staff in Portcullis House or possibly by an intern, then it is no part of the role of the police to make accusations against Mr Green on national television. The fact that the credibility of the First Secretary is being challenged suggests that there are indeed dark forces at work, with the intention of bringing about the end to the agony of failure of this government.

The precarious state of our national politics is again emphasised by the letter to the Prime Minister [which has, of course, been released to the press] from Nigel Lawson, John Redwood, Jacob Rees-Mogg and others who seem to want the nation to be quite sure of their guilt if the economy hits the disaster to which their demands would drive it.

I find it difficult to concentrate on other issues - of which there are many - when the key elements of national sustenance and security are being knocked away. The people, whether the they voted to stay in or to leave the European Union, deserve a better politics than they are offered at present. The entire political class, including McDonnell and Corbyn no less than Mrs May and the Thatcherite dinosaurs who have just sent her a 'nudge' towards ruin, have forfeited the trust of the electorate; but we are left with no better choice, no alternative that could achieve any degree of visibility to the electorate before March, 2019.

If, in the coming days, there is real news about the economy or our society - or about Economics - I will not be able to restrain myself from blogging about it; otherwise, I shall go off-line for a period and try [yet again] to set out my current understanding in a longer piece of continuous text.

Corbyn and Bitcoin: Capitalist Catastrophes

A major Wall Street bank has released a piece of research which [inter alia] warns that the advent of a Corbyn-led Labour government in the UK would potentially have a more calamitous impact on London share prices that would  'Hard Brexit'. The markets have balanced out the 'risk' arising to future profits from firms if the government totally cocks-up the Brexit negotiations with the actual fall in the pound among world currencies and the day-to-day performance of the listed companies. The level of the stock market index would fall in the event of failure; but the possibility is factored in to buyers' calculations. On the other hand, the imponderable impact on the market of Corbyn actually becoming prime minister is inestimable. How far he would cling to his lifelong Marxist dogma [and how far his party would follow him there] cannot be predicated on any known basis of probability. Thus, the bank argues, there might be no 'floor' below which British stock prices would fall. Consequently, the Wall Street Crash of 1929 might be replicated, or even exceeded, once panic sets in among dealers who have no precedent for such a change in government to be assessed against.

The very worst case is a catastrophic Brexit followed by a collapse of the present government and the anointing of Mr Corbyn to preside over the chaos, while John McDonnell would try to enact some of his socialist plans. This is no longer an impossibility, with Dr Fox, Mr Davis and Boris Johnson working so hard to achieve the disaster that they cannot understand.

Meanwhile, the vicious charade of bitcoin continues. The 'price' of this nonentity is continuing to rise, giving strength to some of the unknown number of hundreds of other cryptocurrencies that are now on offer. An ever-wider range of investors, fearful of the very high level to which the world's leading stock indeces have climbed, have 'diversified' some of their holdings into these fanciful 'assets'. Some expect that [whatever they may say now] the central banks might have to buy cryptocurrencies to prop up the market: as they have propped up derivatives and other bets that existed before the crash in 2008. If the central banks do shore up the whole rotten fantasy, the real-world economy will be hammered even harder than it has been since 2008.

The prospect for Britain, host to the London market, is especially hazardous. Warren Buffer called derivatives 'weapons of mass destruction' but they have have been protected and the market in them has continued to grow. The traders in, and owners of, those assets remain complacent: that is what gives confidence to the cryptocurrency speculators. Real people have good cause to be worried; and Corbyn's communist-inspired views give no reassurance at all.

Managing the Labour Party

Jeremy Corbyn may be the starry-eyed idealist that he often presents himself to be: in which case he is too good for practical politics, and certainly the last person to control nuclear weapons. Yet there is a good chance that the incompetence of the Tories, and the egomaniacal economic illiteracy of Boris Johnson in particular, could hand him the control of Downing Street.

It is therefore particularly important to note that he - or his manipulators - has prevented the Labour Party Conference from expressing a view [let alone, declaring a policy] on the dominant issue of the day: what does Brexit mean?

On one aspect of the matter his view is entirely sensible: this country needs a fundamental economic restructuring, with a significant implementation of mixed economy policies. This could well include the resumption of state ownership of natural monopolies - the railways, electricity, gas and water supply. It is also fundamental that a country with advanced manufacturing industries, which need to be fostered and developed into a new era of high productivity, retains the fundamental capability to produce steel. Corbyn has rightly said that the EU rules on 'state aid' to business would make it virtually impossible to take the necessary measures; but he has conceded that it is plausible to envisage a model in which the UK can be free to make industrial policy and still have a close customs agreement with the EU.

Given Corbyn's popularity with the new party faithful, and the anxiety of older loyalists to remain in favour, it is likely that he could win a vote on Brexit in the conference, and vindicate his stance: but he had declined to do that. This is pure Stalinist politics; the avoidance of any risk that he-who-must-be-obeyed is to experience challenge.

Also in the conference, John McDonnell is to make a major issue of the mass indebtedness that has beset the United Kingdom since the 2007 credit crisis compounded the economic disablement that Thatcherism brought upon the population of the ex-mining and formerly-industrial regions. His 'solution', to make it impossible for lenders to charge more than twice the amount borrowed, in fees and interest during the length of a loan, looks wonderful: but is utterly impractical. While it could apply to specific hire-purchase type agreements of individual items, most debt is not susceptible to a cap of that kind. Car loans are usually cut short when the car is changed: the debt outstanding on the loan is settled usually by manipulation of the used-car's and the new car's 'prices': it would be impossible to compute what would be twice the amount of the loan, in any simple terms. Even more complex is the question of credit cards, which are by definition a flexible rolling loan covering a complex of debts that are entered into and resolved in myriad individual agreements. It would be impossible to compute how much interest and service charge was imposed in respect of any item within the card's compass. To set a maximum APR would make the system non-viable for the banks, even though they would be constrained by circumstances to charge the set maximum all the time for everybody: and the system might still be non-viable. If the credit card system collapsed, a lot of people would be disadvantaged. But it is odds-on the McDonnell's proposal will be accepted with rapturous applause. This will demonstrate another Stalinist 'truth', that the practicality of a policy is unimportant: it is the principle and the intention that count in an authoritarian regime.

There is always somebody to blame when a policy fails; and McDonnell has spent the last quarter century blaming the bankers, for the much evil they have done and the many things they could not help. Thus the world rolls on, and the left changes as little as do the Tories. Time for the Liberals to re-invent themselves again?