Thursday, 30 July 2015

Capitalism's Last Gasp?

If the latest plethora of books on the subject is anything to go by - probably not. An article in The Spectator critiques the latest offering by a C4 presenter and Left wing ideologue. Yet again, a left winger is predicting that Capitalism is doomed, and that it will be replaced by 'greater sharing of resources' - which seems to be Left wing speak for 'Sodomy non sapiens'. Essentially, this prediction has been trotted out since Marx and probably before him and they still haven't managed to come up with a workable alternative.

Capitalism is as old as humanity. I would suggest that it began when Ugg first discovered that he could trade a leg of mammoth for a months supply of fish, which could be traded for a wife, new sandals, a years supply of leather loincloths and a bag full of freshly napped arrow heads and axes. That he could trade those for the rest of the year and keep everyone else working to supply him with more trade opportunities and food probably arrived at the same moment. And, I would venture, that ever since some 'thinker' in the group has whinged that Ugg's enterprise approach to trade is 'unfair' and fails to 'distribute the proceeds evenly.

I suspect that Capitalism, love it or hate it, will always be around in some form. The reason is that, unlike the Left's ideal society and system, it is flexible. It responds to change. It adapts, and it rewards effort, enterprise and innovation - all of which are anathema to the sort of 'managed' redistributive economic systems favoured by most people on the Left of the political spectrum. Ironically efforts to 'control' economic activity, or to redistribute the rewards usually result in a widening of the gaps between 'rich' and 'poor' and ultimately in the 'means of production' actually being moved entirely abroad.

Recently I have indulged myself, reading some of Owen Jones' work and making an attempt to read several other tomes on 'non-capitalist' economic systems. I've given up. None of them seems able to see that any system such as they propose doesn't actually 'fix' anything. In fact they simply exchange to entrepreneur with some Party Hack and associated Apparatchiks who reward themselves and patronise everyone else in the name of 'fairness'. Nor do they seem able to recognise that every attempt to create the sort of systems they favour fail for the same reason every time. People do not like being told what they may and may not have. They do not like having some faceless bureaucrat serving a 'leader' enjoying the fruits of everyone else's labours, telling them they aren't entitled to some reward for their efforts because it is 'unfair' to the bone idle twerp they work alongside.

As The Spectator article says -
Oddly enough, the recent batch of left-wing doom and conspiracy books, from those of Russell Brand and Owen Jones to the more serious and informed Mason, point to a unified worldview. This sees human beings in democracies not as people with free will and unimaginable potential, but as inanimate beings to whom things are done. 
I do agree that raw unadulterated Capitalism produces some big inequalities, but teaching me to be envious of the guy who ventures his capital (earned or unearned) in some new business venture and strikes it rich, isn't addressing the problem. Most folk need only three things - a regular income, security and a 'home'. Yes there are those who live in sixty room mansions, own a yacht and four cars, but most of us never could even if we lived in some Left wing Utopia.

If there is one thing I have learned reading history and travelling in my work capacity, it is that there is a distinction between ideological theory and reality. I would love to see a more equal society in which no one goes hungry, no one is homeless or without medical care, but I also recognise that, no matter how attractive the ideological theory, it is unlikely to be achieved in any human society. Simply because humans are not all the same. We come with all manner of personal abilities, skills and ambitions. Ideology seldom takes account of that. In addition every Left wing regime I have ever encountered ran on the same principle - the belief that the 'State' owned the money in everyone's pockets and could spend it. So they floated loans, printed more money, raised taxes until it hurt, spent the money and then wondered why their economies flatlined. As Mr Micawber famously said; "Income Twenty Pounds per annum, Expenditure Nineteen Pounds, nineteen shillings and sixpence - happiness. Expenditure Twenty Pounds and sixpence - disaster." A lesson there the Left simply refuse to learn. Their solution to everything - raise taxes! Tax the rich until the pips squeak as one Left wing Chancellor of the Exchequer put it. The result of his idiocy was a massive departure of 'capital' and a fall in revenue income.

Recently I was surprised to learn that in present day Russia income tax is a flat rate irrespective of income. Health care, social welfare and so on are all set at 'basic' levels. If you want better, you are free to buy it, but the 'State' doesn't provide it. That applies across a range of former communist countries, and, contrary to what writers like Owen Jones believe was the case, often this replaces a system where everyone paid for the best for the ruling elites, and got just the basic care themselves. Many other nations have similar systems. Hong Kong was one and still is, and China, Taiwan, India and several other major growing economies have the same idea - one rate of tax for everyone. In Hong Kong the super rich were encouraged to be 'philanthropic' - and they were often very generous.

I have to agree with the writer of The Spectator article. There is clearly something in the left wing mindset that refuses to acknowledge that no system is entirely 'fair'. Or that there will always be inequalities. That, after all, is the human condition.

Wednesday, 29 July 2015

Hunting for 'Sport' ...

I think there is something seriously wrong with someone who chooses to spend a large amount of money to go to some distant country (and sometimes stay within his own) just so he (or she) can kill some large animal as a 'trophy'. It is one thing entirely to kill an animal for food, it is another to kill something just to show how 'powerful/rich/manly' you are. What I find utterly despicable about the case of the dentist who shot Cecil the iconic lion, is that he didn't need to kill the beautiful beast, and then he made a mess of it. His accomplices lured the animal out of a Game Reserve, and given that Cecil was so well known, and used to people, he was a sitting target, and they knew it. Then, just to add insult, this would be 'hunter' uses a bow and arrow - and wounds him.

Then the buffoons lose track of the injured animal and it suffered for forty hours before they finally killed it with a rifle. Some hunters, some 'big' man this dentist. Now it emerges he makes a bit of a habit of killing big animals for 'sport'. Not because they are a pest, or threatening anyone - just because he gets a thrill out of it.

I am very aware of the arguments that revolve around the ecology/conservation issue, specifically that 'culling/killing' older animals 'improves' the 'bloodline' and the money pays for more 'conservation'. Further arguments make the point that it is not the hunting that is the problem, but the 'loss of habitat'. Both arguments advanced by owners of parks or companies that organise hunting. There is no doubt that there is a problem with habitat, and there is equally no doubt that there is some very big money to be made from killing animals under all manner of guises. This is, perhaps, where the biggest problems lie, particularly in Africa. The money goes largely to the personal bank accounts of the arrangers, and the 'license fees' usually vanish in backhanders to various officials to 'look the other way'. How many more Cecils must we lose before someone calls time on this slaughter of our vanishing wildlife? Particularly on the dwindling 'trophy' animals?

Poaching is a major problem and some 'target' animals are being pushed to the edges of extinction. How, therefore, can a wealthy 'tourist' obtain a permit to shoot and kill a Northern Black Rhinoceros when there are, according official sources only FOUR left in the wild! The lion population in Africa is crashing, down now to 25,000 according to conservation groups from 150,000 thirty years ago. Tanzania's President has just sold 1.8 million km2 of the Masai Mara to the Emir of Dubai as 'private hunting park'. Not unnaturally the Masai are not happy about being cleared from their traditional land, and conservation groups are not happy about having a chunk of one of the most diverse habitats for Africa's dwindling animal population turned over to 'hunting' -- private or otherwise.

Of course the usual argument that the hunting will be 'good for the diversity' is being trotted out. Frankly, it just doesn't hold water! Not in the Masai Mara!

The argument that 'loss of habitat' makes it necessary to 'cull' these beautiful animals is as much a commentary on the human race as it is on the hunters who advance it in defence of their 'sport'. The human animal is the only one that does not regulate its birthrates and population. All the African wildlife, and I should think everywhere else's, expands or contracts its numbers in a sort of harmony with food supply. That is, as long as 'humankind' don't interfere. It is well known that the 'big cats' restrict their breeding when food is in short supply, and so do most of the herd animals - humans don't. So our populations keep expanding, and restricting the space for the animal population.

Add in big money being offered by human population groups who have already decimated their own natural fauna in search of 'ingredients' for their 'traditional medicine' and then add in the inadequates with vast fortunes and the urge to prove how big they are by shooting everything that has horns or fangs and claws, and we are headed for the extinction of all the 'trophy' animals they want to kill. What then? Perhaps we should start issuing hunting permist to bag a 'Big Game Hunter'. That might address more than one problem.

Monday, 27 July 2015

Just who is Turkey fighting?

I suspect the belated entry of Turkey into the conflict against the ISIS has guaranteed its failure. Washington, displaying its usual complete ignorance (or perhaps wilful blindness) of the many factions and tensions, has welcomed the attacks on the Kurdish PKK positions, labelling them 'terrorists' and, conveniently, overlooking the fact these were the only fighters on the ground having any success against the ISIS thugs. So, we let our 'ally' bomb them - as long as they also put a few bombs on the ISIS. I begin to think the US is incapable of learning from past mistakes and incapable of recognising that the 'enemy of our enemy is NOT our friend.'

It has been pretty obvious to everyone - except Washington apparently - that Turkey has been quietly supporting the ISIS against Syria's Assad. The Kurds defeating the ISIS attempt to seize Kobane, and their success at driving them out of the surrounding countryside there, plus successes against them on other fronts have obviously worried the Turkish government. The fear of a successful Kurdish military in Syria and Iraq is, in my view, the most obvious reason the Turks have finally decided to strike at the ISIS. It provides the perfect cover for their attacking the Kurds, and for attempting to weaken and destroy the Kurdish forces at the same time.

Were I a betting man I would put money on the next move being military strikes and occupation of the Turkish Kurdish provinces and an attempt to occupy the Kurdistan region of Iraq. In the interests of 'suppressing terrorist bases' of course. And Washington is going to go along with this, tacitly allowing the Turks to pull off a suppression of Kurdish nationalism. Just so we can maintain the status quo of the Kurds being split up between three or four 'states' created at the end of WW1 with no regard whatever to the original populations.

Turkey has called an emergency meeting of NATO for tomorrow, the reason is, I think, obvious. They want to declare a state of emergency in the Kurdish provinces and extract a promise from the NATO nations of 'non-intervention' in their 'internal affairs'. And the NATO powers will, proverbially, throw the only effective resistance to the ISIS on the ground, to the lions.

Expedience and politics is the major cause of much of the terror problem we face. It is not new, we've been doing it for centuries, and it has never brought 'stability', only laid the ground for the next conflict and the next 'enemy' to grow and develop. Already the Turkish action against the Kurds is producing a backlash. It will get worse, and the Turks know it, and perhaps are even deliberately provoking it. Their 'fear' of the PKK strengthening its position may well have led them into a dead end which may well now produce the very thing they are afraid of - an internal conflict that can escalate into a civil war while they try to contain the external threat of the ISIS. In fact, Turkey's action in attacking a group that should be an ally, is very likely now going to drive the PKK into joining forces with the ISIS.

THAT is something I think nobody will enjoy.

Friday, 24 July 2015

Turkey and the ISIS

In what could be a case of 'biting the hand that fed them', ISIS sent in a suicide bomber to blow up a lot of Turlish citizens. That may have been a serious miscalculation on their part. Turkey, obsessed with keeping the Kurdish population firmly under their rule and the Kurdish province in Turkey, has been tacitly letting the ISIS thugs do as they please along their border with Syria and Iraq. As long as it was 'only Kurds' in the firing line, no intervention, no restriction on the 'recruit road' across the border.

Now it seems to have come back to bite.

Politics makes strange bedfellows out of temporary expediency. West governments have fallen into the same trap, arming and supporting 'opposition to Assad', only to find we have armed and supported a monster as more and more of the 'anti-Assad' groups joined the ISIS. Turkey has made the same blunder, tacitly aiding and abetting the ISIS in its early stages presumably in the hope that this would force their restless Kurdish population into toeing the line. The reverse has happened, and this blunder may now cost Turkey dearly - and not just in further ISIS incursions and bombings. Turkey has a very chequered history when it comes to its 'minority' populations. Possibly the only thing that has prevented the Kurds suffering the same fate as the Armenians is that there are more of them, they occupy a large chunk of Eastern Turkey, and there are even more resident across the borders inIraq and Syria. Plus, of course, genocide is now a definite no-no in the eyes of the international community.

So Erdogan's refusal to allow Kurdish Peshmerger fighters passage to the relief of Kobani now seems like it will rebound. Perhaps is already rebounding. Western politicians would do well to remember this as well. Our recent history is littered with failures to grasp the concept that the 'enemy of my enemy is NOT necessarily my friend' and may well turn and bite when it suits them. Again and again, we have armed groups of 'freedom fighters' only to find their ultimate aim is as far from our 'vision' as it could be. Dare one mention the Russian inspired overthrow of the Afghan Kingdom by 'Marxists' which ruined a country and destroyed a complete society when the tribesmen rebelled? What did we do? Oh, we gave the Mujaheddin weapons, and they, in turn, morphed into the Taliban.

Similar situations have and still do, tear African populations apart. Where do the weapons in Eritrea, Somalia, Sudan, Chad, and so on come from? Where did they come from originally? Ah, now that is the question ...

I learned recently from a police friend, that it is now generally agreed among security services that it has never been easier for dissidents to get hold of weapons, and it seems there are always people willing to bankroll them - once again falling for the 'the enemy of my enemy is ..." line. Well, I suspect Turkey is about to learn the hard way, that when it comes to 'terror' groups - they can never be regarded as 'friends.'

Wednesday, 22 July 2015

My latest book will be out in days ...

My latest book, Limehouse Boys, set in the East End of London in the 1830s, will be available from Amazon and other book sellers very shortly. Limehouse Boys is set against the background of hardship, abuse, criminal activity and the comradeship forged between friends and family in hardship.

When Ned Farrier is orphaned and committed to the orphanage attached to the Workhouse, he meets and befriends several other boys in the same position. The corrupt Beadle however, has plans for their future. Their escape links them up with watermen working out of Limehouse and brings into focus the abuses and corruption in the running of the Workhouse for the Reverend Short, Rector of St Anne's, Limehouse.

One Beta Reader wrote - 

I really felt part of the book and ran with those boys. You have many characters here, but managed to give each one his own personality and these traits came through. While reading I didn't just see a clump of boys or seamen. Each one was different in a lovable way.

I hope that other readers will feel the same way. Watch this space, the book will be available in Kindle, Kobo, Nook and iBook formats as well as print version. Published by IndieGo Publishing LLC and edited by Janet Angelo of IndieGo.

Tuesday, 14 July 2015

Some Interesting Reading

My reading list lately has included a hefty tome by Prof Jane Humphries of Oxford University entitled Childhood and Child Labour in the British Industrial Revolution, and another book entitled The Establishment - And how they get away with it by Owen Jones. Both are not easy reading, but they are certainly eye opening. The first exposes how Britain's wealthy and Middle Classes benefited from the mass exploitation of children in the 18th and 19th Centuries. It describes how children from the age of six or less were employed in mines and mills at absolute minimum wages, often putting in 16 hour shifts in the mines where they hauled the waggons, or gathered the coal from spaces too small for an adult. In the cotton mills, children were used to gather waste beneath the machines while they were operating. Deaths and injuries were too numerous to count, and the resistance in Parliament to any restrictions, or the imposition of any safety measures was unbelievable.

Which leads me to the second book. Written by an angry young man I found I have observed many of the things he speaks of at first hand. "The Establishment" is a very well organised 'clique' of the wealthy and the powerful, and, if this book is to be believed, they exercise some very far reaching control over the civil service, the political landscape and the access to wealth. As I said, I can attest to having witnessed certain aspects he mentions, but not being a part of the "Establishment" myself, cannot say whether everything he mentions is as he says. I have long suspected much of this, and I would agree the circumstantial evidence points to it, but I cannot see anyone actually provided proof 'beyond reasonable doubt'.

The first book I found difficult because of the emotions it stirred. After all, the vast majority of us, born two hundred to a hundred years ago, would have followed at least some of the 'career path' described in it. As Prof Humphries points out, in many of the 'trades' a boy would be lucky to reach 25, and as for reaching a 'retirment age' - well very few did. For the girls it was as bad if not worse in some aspects. I felt a deep sense of thankfulness for the efforts of my great grandparents, grandparents and their antecedents for their efforts to break out of that mould and give my brother and I a chance of something better. Her book prompted me to look into the whole 'Workhouse' and Poor Law administration and the manner in which orphans were handled. Some of it made so angry I had to stop, and to me the worst aspect is that the modern 'Benefits' system is administered by the same mindset and the same 'social class' that set up the Workhouses. Worse, they seem to have the same motivation as their forebears - don't 'improve' anything, as the recipients might then break the cycle of patronage ...

What is fascinating about the revelations in both books is just how far those who do hold the keys to wealth and power will go to defend their control, and the lengths they will employ to ensure that they and their families, friends and close associates remain in control. Students of history will know how the Roman aristocracy used Circuses, 'free bread' and other populist handouts and entertainments to keep the populace 'happy' and unwilling to challenge the status quo. We can see a similar pattern in our own society, with 'football' extravaganzas and other 'sporting' entertainments. The 'arts' are funded to the hilt because they keep a population from asking awkward questions, and there is also that wonderful stand-by, fear of the 'enemy'. Here we can take our pick of a wide range, from 'being overwhelmed by immigrants', through 'runaway climate change' and 'loss of sovereignty' right down to all the 'something'-phobias we are constantly told we engage in.

Anything and everything to make sure we don't ask questions like, 'how does a man enter the political 'career' as a penniless graduate struggling to pay his loans become, in a few years, a millionaire property owner?' Or how a company with no expertise in some technical area get awarded huge contracts to perform work in that field? Or, Why does the Treasury have a list of 'preferred bidders' who can bypass the tendering process, but who all seem to be major companies with links to MPs, senior civil servants or other 'power' figures?

It is said that history is written by the victors, but I suspect this is not always true. What is true is that those in power have always been very good at manipulating our thinking, and in redirecting our attention away from their activities. Hence "Climate Change" (take a look at who the main promoters really are), or the Anti-Eu or any other convenient 'enemy'. As Owen Jones points out "Sovereignty" is, today a total illusion. The agenda is set by unelected officials in the UN, the EU and numerous other 'international' bodies. Once signed up to, parliaments have little scope for adjustment.

In the UK much is made of the 'unelected' nature of the Commission and the Council of Ministers, yet the politicians will argue that both are 'indirectly' elected bodies - the Council by National electors voting for the Party or Minister on the Council and the Commission by virtue of the fact its appointees are 'elected' by the Council and approved by the European Parliament.Mr Jones argues, and I believe he has a point, that this is a sham, since the Ministers are representatives of the political elites of the various member countries, the Commissioners are drawn from their ranks and the Parliament is also stuffed with members of the same political class.

The problem is, of course, that they can and do argue that we, the gullible voters, voted for them.

What is very clear is that in any age, and in every age, the wealthy and powerful will look after each other first and last. If there is any benefit lower down it is usually because some have managed to break out of the mould and claw their way upward by their own efforts, not because anyone in power made it easier or even helped them. This is where the Trades Unions have, in my view, gone badly wrong. The leaders of the Unions have joined the Establishment and become a part of the problem. No, I am not calling for a more radical Union movement, I am calling for a better understanding of what the working people - everyone who has to earn a salary or a wage to pay the bills - really want and need. Stuff the ideology where the sun doesn't shine. Let's recognise that for our society to prosper as a whole we need less division, less isolation and a damned sight more recognition of the partnership between 'worker' and 'manager/investor/owner'.

Yes, reading this made me angry at the abuse and the duplicity, but it also made me very proud of the boys, girls, men and women who managed to claw their way out of the pits of the slums, the poverty, the exploitation - and give their children a better chance. For the record, my paternal grandfather - the youngest of four children and the only surviving male - was apprenticed as a coffin-maker at 13. His future wife, the daughter of a small holder, apprenticed as a seamstress at 12. My maternal great grandfathers were respectively Colour Sergeant in the Royal Irish Rifles and a farmer. Great grandmother Heron's father was a Gardener on the Mount Stewart Estate. Their children managed to rise to become a Postmistress and to run his own business. My paternal grandfather finished his schooling on his own, taught himself accountancy and worked as a bookkeeper well past retirement age. I salute them all.

I commend both these books to my readers here, some of this is what inspired my latest book, due out soon. Limehouse Boys follows the paths of a trio of orphans in the 1830s East End of London. Watch this space for more details of its release.

Monday, 13 July 2015

Captains and Kings

The Greek drama continues. Mr Tsipras may have hoped he'd get an easy ride when he came back to Brussels and presented the original proposals as 'his'. He hasn't had it. The Belgian PM went for him in no uncertain terms, and several of the other national leaders have made it clear he's really going to have to deliver this time round. It would be funny if it wasn't so serious and hurting so many people. As the Belgian PM pointed out, Greece has had a better deal than many others, in fact it has enjoyed benefits and bailouts no one else has got and it has failed to deliver anything so far.

He isn't getting an easy ride at home either. His own Party is split between those who want to bite the bullet, and the hardliners who still think they can get away with robbing the bank and not paying the penalty. And the populace are angry, with most demanding he find a solution that lets them stay in the EU and the €uro - there seems to be little liking now for the concept of returning to the Drachma and the freefalling economy not reforming anything promises. I think Mr Tsipras is learning at first hand Abraham Lincoln's dictum - you can fool some of the people some of the time, but you cannot fool all of the people all of the time.

I suspect that a deal will be struck, but Mr Tsipras is going to have to accept some things he won't like, and Brussels/the ECB will make some small concessions to sweeten the pill, but there will be some big penalties if the reforms aren't delivered. And in the meantime the 'little people' - the voters - continue to suffer the consequences of successive regimes that thought they could give handouts endlessly in pursuit of popularity in the polls. For a government to balance its books, it needs to have a realistic income, and that can come only from tax. If you don't collect them, you can't expect to get everyone else to fund you.

As the Belgian PM pointed out rather forcefully, the Greek populace enjoy a generous set of benefits the Belgians and everyone else is paying for. Their 'Minimum Wage' is almost twice that of five other EU states, and they enjoy a pension age at least 17 years younger than anyone else. Time to reform, and more important, time to actually do what they have talked about for the last five years,

Saturday, 11 July 2015

Tragedy? Comedy? or Farce?

I can't quite make up my mind on the latest move by the Greek government. It seems they have said 'NO' to the Troika's proposals on the grounds that they were 'bad' for Greece and 'democracy' and have now come back to the negotiating table with a set of proposals for the reform of their economy, benefits, pensions and so on that look amazingly like those they said 'no' to just a week ago. How anyone is able to keep a straight face on it is beyond me.

So it looks as if the Greeks will be staying in the €uro. I suspect there will be no end of disappointment in the UK Media and certain US based news media, all of whom have spent the last week telling us how 'evil' the proposals were, and how a 'Grexit' was the only way forward. I imagine they weren't too impressed by the tens of thousands that besieged the Greek Parliament on Wednesday and Thursday demanding that Greece STAY in the €uro and secondly, that their government sort things out. I suspect that may have given Mr Tsipras a bit of a message.

Reading the Telegraph, the FT, The Spectator and the Washington Post articles on the crisis, one could be excused for thinking they were actually trying to orchestrate an exit and would like to see the €uro swept away. That made me wonder why? What is it about the EU and the €uro these commentators are so afraid of? Or is there some other agenda?

Reading Christopher Clark's monumental works Iron Kingdom and The Sleepwalkers, I begin to suspect there is a deep seated fear in sections of the British populace and perhaps mindset, that cannot accept the thought of a powerful and successful European unit, whether we call it a 'Union' or a 'Federation'. It is interesting that Prussia was one of our principle allies until 1871 and the unification of the German States. From the moment of unification onward, the British Press briefed against Germany, and slowly incited a mindset that equated the German people with enmity. It led to an arms race, diplomatic attempts to isolate Germany and finally war. It is amusing to note that one aspect of this misfired spectacularly. Parliament demanded that all German goods had to be labelled 'Made in Germany' and got it. The idea being that this would encourage people to boycott such goods. The opposite happened. The Label Made in Germany immediately became the stamp of quality.

What has this to do with the current Greek farce? Simply this - reading the UK and US Media reports on it, the EU has become synonymous with 'Germany' - and of course, that means it must be bad. The fact the EU was the brainchild of the French, Dutch, Belgians and one or two others seems to have escaped them. They have forgotten that it began with the 'Benelux' countries forming a Customs Union, which then expanded. The German were then divided between West and East Germany, and only the West German Federation was initially a part of the enlarged EU. Funny then, that so many today in the UK media seem to be convinced that the entire EU project is the brainchild of an expansionist Germany trying to take over the world by stealth.

It would be funny, if it wasn't so small minded and frankly stupid.

For the moment, however, it looks as if the Greeks will now accept the proposals they originally rejected, but are now proposing as their own. They'll sort out their economy (they say) and behave from now on. So, to the disappointment of many anti-EU commentators we will not see the €uro 'unravelling' or the EU tearing apart.

Never mind, there's bound to be some new thing they can whip up a storm about in a week or so ...

Thursday, 9 July 2015

Left? Right? Centre?

In the interests of clarity, I'd just like to check. The 'Troika' is under fire from both the 'left' and the 'right' and both claim to be doing it in defence of Greek democracy. The Left claiming that the demands to reform the Greek economy before any 'relief' package can be handed over, is 'damaging the economy and denying vital services', while the right claim it is undemocratic to demand any controls at all. Both, presumably, would like the Greeks to be allowed to continue on their merry way, funding their corruption with everyone else's money.

Once you add in the UK Media which seems to simply put a negative spin on anything to do with the €uro or the EU and one rapidly comes to the conclusion that the 'Troika' (which I understand to be the German Federal government, the European Central Bank and the EU Commission) may actually be right. That they aren't popular with the Left or the Right is a given. The Right love to hate them as being about 'stealing sovereignty' and trying to create a 'Fourth Reich' to use the populist UKIP label, and the Left love to hate them because they won't allow freewheeling spending. The Greeks currently hate them because they want to keep on with their freewheeling spending - using the rest of Europe's money as the former Latvian PM said on our television recently. Funny how the media love to show us all the hard Right and hard Left banging on about the 'evil' EU restricting Democracy on the one hand, and the 'evil' Troika on the other for imposing controls on free spending handouts.

The irony is that both sides earnestly believe they are defending the 'democratic' rights of everyone to determine their own affairs. Both seem to forget that the currency is currently the world's second largest 'Reserve' currency and has actually proved reasonably stable in the sixteen years since it was created. The Greek government actually cooked their books to get in in 2000, joining at a Rate of 340.75 Drachma to the €uro. What we now know is that they did so because the Drachma was on the point of collapse, and perhaps Brussels and the Commission should have looked at the glossy figures a little more thoroughly when they were presented by a rather large UK based international accountancy firm that handles major corporate tax affairs for several companies who pay little or no tax to the countries they operate in.

The argument advanced by Mr Farage in an interview aired last night is that the Greeks have 'lost their sovereignty' because they are unable to 'adjust their economy' be devaluing their currency. I got the impression he felt that, to help Greece, everyone else in the Eurozone should allow the Greek government to run the printing presses, flood the market with devalued €uros and allow runaway inflation everywhere else. Ironically, this is what Die Linke and their fellow 'socialist' supporters in the Greens and other 'left' parties want.

Just so the Greeks can carry on doing the spending they are doing. Not unnaturally that suggestion has the more prudent Finance Ministers - and Hr Schauble is just one (though he happens to control the largest €uro based economy, and does it rather well) - rather cross. Especially the Baltic States, Poland, Czech Republic, Slovakia, Finland and Sweden.

Having lived in a country where printing money was used to address economic downturns, and devaluation employed to improve export trade, my own feeling is that those who feel this is the right way are either mad, or they are deliberately and dangerously trying to ruin the whole European economy. I'm starting to believe the latter in fact. Which makes me think that none of them have any concept of the misery it will inflict. As I said, I have lived through it. I have lived with an 'official' inflation rate of 12.5% year on year and the consequences were that though my salary was automatically 'adjusted for inflation' and I usually got at least 5% annual increments - my actual spending power decreased annually by a minimum of 7 - 10%.

Why? Because the 'official' inflation rate was roughly half the actual. That is what allowing Greece to 'devalue' the €uro would produce in the longer term. Thank you all the Left wing commentators in the UK and US media trying to talk the €uro out of existence, or talk it into devaluation. I can't use the expression here that I would say to their faces, but I will use the Shakespearean curse - A pox on all your houses.

Perhaps it is time for a reality check for the ideologues of the 'left' and the 'right' - and maybe the 'centre' as well. Economies are built on trade, productivity, goods, services, savings and prudent management of the resources of any nation or group. The EU isn't perfect, but it is doing a remarkable job of holding together a very disparate group of people and cultures. As Josephus has reminded me from time to time, one of the biggest problems is the divide between the frugal and industrious 'northern' nations and the more laid back and less industrialised southern ones. That is perhaps most evident when one looks at the divide between Southern Italy and Northern Italy, or those South Eastern States once part of the Austrian Empire and those that were run by the Ottomans.  A similar divide almost tore the US apart in the 1860s, less than a hundred years after its Founding.

The Germans are very, very touchy about inflation and falling productivity. They remember all to clearly how runaway inflation in the 1920s and early 30s brought a certain Party to power that plunged them into almost total destruction, and they won't allow anyone to take them there again. In the last weeks the Greek government has repeatedly come to the table with the same proposal - no cuts, no immediate reform, just give us the money and we'll see what we can do. Understandably, Hr Schauble is angry, after all Germans are going without some of the benefits they are paying for the Greeks to enjoy. It might pay the UK Media to be a little less 'anti-German' and get their heads out of the 1940s mindset. The German economy is remarkably stable, partly because they don't have the same lurching from 'socialist' to 'neo-socialist' and 'capitalist' economic dispensations and flights of fancy as we do. They aren't the threat, and neither is Brussels - the real threat is the idiocy that says fragmenting Europe into a myriad small states with parochial politics is the right way to go in the world as it is developing today.

As for the current crisis, Mr Tsipras is going to have to come up with a bit more than rhetoric and lots of glad-handing people like Mr Farage to get any change from the Troika and no amount of Farage Fulmination and Leftist whinging is going to change it.

Monday, 6 July 2015

Who really owns the money?

From many comments on the current financial crisis in Greece - and from the utterances of the Greek PM and his so-called Finance Minister - I get the impression that a majority of people have no idea of how Banks operate, and even less idea of where they get the money. It doesn't seem to register that the 'money in the bank' is actually 'owned' by the people who deposit it there, not the Bank. Nor do they seem to appreciate that the friendly 'High Street' banker is in a totally different league to the so-called 'Merchant Banking' operations in the City. For one thing your High Street manager doesn't get to play with Fund Investment - probably the worst he can do is lend a client a bit too much or allow to big an overdraft.

The guys in the city are another world. These are the guys who can move billions at the touch of a button, the men who lend huge sums to companies and to governments. But there are also limits to how much and whose money - and again, it isn't theirs or the banks. Once again, it is money entrusted to them by investors and depositors. The trick is that the Banks work for their investors and their shareholders - famously a court in the US decreed in the 1930s that the sole function of a corporation is to make a profit for its shareholders. That is what banks do when they lend anyone money, which is also why most of us don't borrow any more than we need to. After all, why pay more than you absolutely have to for the privilege.

There is much fulminating about the Banks having lent too much, or the Banks making profits at the expense of the people - but who forced anyone to borrow the money in the first place? Until the 1990s, Bank Regulation meant they had to 'hold' in their vaulty a considerable portion of the money deposited with them. Then, presumably in the belief this would bring 'growth', governments decided to allow a bank to lend almost everything it held on deposit. Thus, if a depositor put in §100, the bank could lend a borrower §90, and when he paid that into his bank account, they could lend up to §81 of that, and so on ... That fueled the 'credit boom'.

The next problem is that of governments themselves. They have, in reality, only the money they can gather in taxes to spend. If you push tax to high, the big money leaves and tax revenue falls, so goivernments are forced to balance spending and income by taking loans usually organised by the IMF. The alternative is to simply 'print more' a trick that saw the value of the British Pound collapse under the free spending Labour governments of the 1970s. Those who scream about how the €uro has 'denied nations their democratic right' to resort to the printing presses forget that the value of the money is only as good as the gold, trade or whatever that underwrites it. Bank of England notes still contain the legend 'I promise to pay the bearer on demand ...' and technically you could take your Bank Notes to the Bank that issued them and demand the hard cash in coin, preferably gold.

For years now the Greek crisis has been brewing and all the other countries caught up in it have managed to find solutions. Some, like Ireland, took the pain, fixed their overspending problem, and are now recovering, others lag, but are dealing with it. Greece alone has refused any reform. Their PM and Finance Minister have caused enormous frustration by repeatedly coming to the table with the same empty hands. As one Minister put it, they smile, they shrug, and say, you make a proposal, we'll consider it. Now they claim they want the debt written down - in other words, they want to stick their hands into the pockets of every taxpayer, depositor and investor yet again, and take even more out of everyone else's pockets while still refusing to reform their freespending.

More worrying is the fact that many of those asked, on leaving the Polling Stations, say they voted No to 'punish the banks' or to 'punish Brussels'. Fine, but tomorrow, when the banks have nothing to offer, or when Tsipras and his henchmen print Drachmas and try to pass them off on a 1 for 1 basis, it will probably take less than 24 hours for the value to crash.

Well, the people have spoken. Whether they stay in the €uro or not is a moot point. Some believe Europe will bend over backwards to keep them in. I'm not so sure they will, Mr Tsipras and his Finance Minister have annoyed everyone. So they refuse to pay their debts? Greece will find it incredibly hard to get fuel, medical supplies and a whole range of other things they can't make themselves. Countries having to work on 'cash up front' generally run into massive problems very quickly.

Will it 'kill the €uro' as so many British commentators and media 'experts' seem to hope? I doubt it. That would cause a much, much bigger problem economically for the International community than many realise and it will hurt everyone. It might be a good idea for all those journalists, campaigners and the rest, calling for Europe to 'write off the debt' or 'give emergency aid' to back off a little and consider. The Greek Referendum has been used to 'send a message' and to cover up the fact the Greek government refuses to carry out meaningful reform of an economy based on other people's money.

The Greeks have been living on and spending everyone else's money since they cheated their way into the €uro. They were eager enough in the early days to get into the €uro for the very simple reason the Drachma was shot to ribbons and only just still viable. They wanted the €uro then, because it gave them, they thought, a limitless source of funds to cover their profilgacy. They've made no effort to collect their own taxes, they allowed capital to vanish, and even the EU subsidies to disappear into projects that were just to boost the wealth of a few. They've been refusing to reform for the last five years, and now its caught up with them. Mr Tsipras wants 30% of government debt written off - which means the rest of the EU, the depositors and taxpayers must pick up his bill, presumably so he can carry on spending.

I know what my answer would be if I were a bank manager and a debtor approached me with that sort of demand. This argument is not about 'democracy' or even control of their own economy, it is about paying your own way, and paying your debts. They don't 'own' the money supply, neither does Brussels or anyone else - it belongs to us, the taxpayers, depositors, and investors.

Wednesday, 1 July 2015

An Interesting Question

I read that Mr Putin is to 'review' the legality of the independence of the Baltic States, Estonia, Latvia and Lithuania. One can only wonder at what the NATO/US/EU response will be. Another Munich Accord a´la Chamberlain's 1938 agreement with a certain gentleman with similar ambitions for his country and people? Perhaps everyone should demand a 'review' of Russia's occupation of East Prussia, the so-called Kaliningrad enclave.

Mr Putin plans, apparently, to review the legality of his county's recognition of the three small states who, as historians will know, have been overrun and occupied by just about everyone in  the neighbourhood in the past. Their brief breath of freedom between 1919 and 1939 saw them first occupied by Nazi forces, then by the Soviets. Neither occupying power earned much love or respect. Stalin's deportation of 'natives' was followed by the implanation of native Russians, so now all three countries have fairly large ethnically 'Russian' populations - just as was the case in East Ukraine, parts of Georgia and several other parts of the former Soviet empire Mr Putin has 'reclaimed' in the interests of 'protecting the ethnic Russian population' ...

In 1939 Britain, France and the Empire went to war with Germany over the invasion of Poland. Now the question hangs in the air over whether or not we will stand up for the three small Baltic States. Is their membership of NATO and the EU worth the paper it is presumably written on? Maybe, maybe not.

One problem that I can see is that Russia is far better armed now than NATO, and far less restrained by concerns of 'sovereignty', morality or international sentiment. Should Mr Putin decide the 'recognition' is illegal, what then? Another Ukraine? Very likely, although, with his army already massed on the doorstep, I suspect it will all be over in a matter of hours -- long before any of our western leaders can even get their heads round the question of a response.

Which leaves them with the same option Chamberlain faced in 1938. Oooh, we'll impose 'sanctions' and then more 'sanctions' as we watch Mr Putin roll over Finland, Poland and perhaps even the Eastern States of Germany. Do anything to stop him? Oooh, can't do that, it would be unpopular in the ballot box, and we no longer have the means anyway.

So much for 'Peace' and the 'Peace Dividend'. So much for 'Peace in our time' at any price and at all costs. We seem to have forgotten the important mxim - Si vis pacem; para bellum.