Stood on the Precipice

Posted on May 17, 2012 by Carps

When we will fall off? Maybe tomorrow. Events are moving so fast now that my previous blog post – drafted on Monday night but not published ’til just now – is already outdated. People have started pulling their cash out of Greek banks, which is the moment that heralds that the first stage of affairs is coming to an end and the seemingly endless game of kick-can is over.

How will things play out from here? Honestly it’s insane to guess, and I stand willing to eat humble pie in a year’s time, but…

  1. Money will start to flee the other Eurozone periphery countries as Greece unravels. Interest on Spanish and Portugese bonds will reach 7% and it will quickly become unaffordable for them to borrow money in the open markets, forcing them to turn to the ECB
  2. With German elections due, Merkel will face massive political pressure to reduce German exposure to the Euro periphery – in effect weakening the ECB at the very moment that it is (theoretically) most critical
  3. As Greece crumbles, the far left will gain power, and a mainstream European country will be back under extremist control for the first time in nearly 40 years.
  4. Greece will exit the Euro and default on its debts, sparking a firestorm of contagion as over-leveraged banks in France, Germany and the UK lose billions of what are laughably called “assets” on their balance sheets. They too will turn to the national central banks and the ECB looking for a QE handout.
  5. Despite this, for a while, Britain will be seen as a relative safe haven and in the short term we’ll be able to sell our own bonds at record lows and probably engage in another bout of QE. This will be temporary, and will represent the last stand of the old system.
  6. Merkel will be voted out of office in a popular revolt against what the German people see as the foolish commitments she made to the periphery.
  7. A new, more hardline approach at the ECB will come into being on the back of German elections as the Bundesbank hardens its stance against being the backstop for Europe and the German parliament is politically unable to command support for anything other.
  8. With nowhere to turn to for day-to-day funding, calls within Spain, Portugal and perhaps Ireland will arise for them to take the Greek path and the end of the Euro finally hoves into view – and possibly the EU itself.
  9. France finds itself with nowhere to turn for the “stimulus” cash it wants from the ECB and popular sentiment against the EU hardens further still.
  10. The backdrop to these political movements will be slumping economic performance, falling investment and the steady ratcheting up of inflation, accompanied by social unrest.
  11. The US won’t be able to bale us out this time as they have their own debt troubles and may yet be tempted into further misadventures in the Middle East.
  12. David Cameron will be a useless cunt throughout the whole jig until he is replaced by a massive papier maché nodding dog by a despairing public.

Should events unfold in anything like this order, then within a year we are likely to be facing tumult across Europe the like of which we haven’t seen since the 1930s. The hard facts are that we have seen decades of false growth on the back of lax monetarism, crony capitalism and insane government programs and this will have to be rewound. How that will be achieved beyond huge numbers of defaults is anyone’s guess. Probably at least one country will fall prey to a nationalist demagogue and the best we can hope for is that that doesn’t mean war.

In day to day terms, this means banks going bust, and massive hikes in real interest charges (not the artifically low ones from the central banks, but the rates you pay on your mortgage and credit cards) as the surviving banks scrabble to claw back what they can. Taxes will rise under the guise of emergency measures as the safe-haven status of government bonds is eroded and they too look to the citizenry.

Many assumptions about the role of the state, how it is financed and what it can achieve will be torn down. How this will leak to the surface is anyone’s guess, but benefits will be frozen at least and any number of government services will be shut: a genuine bonfire of the quangos is about the smallest thing that could happen – and the reality is likely to be much more radical.

The broader picture will be about getting less for more in every part of life – from services, to benefits to everyday goods. How long will it last? If handled expertly, a short sharp shock may last a year or two as we establish new, saner systems of government and finance. As we are actually run by clowns of the first water, maybe a decade.

On the other side of this bleak-sounding chasm will be smaller, more localised, more accountable and rational system of finance and governance. Councils with real power and held properly accountable. Responsive local companies. Staid but predictable banks. A return to mutualisation and sound principles of capital investment. If we’re doubly lucky, Chinese wage slaves will still be churning out doo-dads for us to coo over and we’ll be able to play Angry Birds while we wait for people to sort shit out.

To prepare in the meantime, buy tangible, lasting items while you can and avoid whimsically falling into long-term contracts for non-necessary services. Do not buy shares in Facebook or even Apple. Fatten up. Lose your expensive tastes and look for frugal alternatives to luxuries you’ve gotten used to. Keep hard knowledge in book format. Make sure you have some marketable skills. Keep friends, family and working networks close. Remember that zombies can be killed by a blow to the head. Hope that I’m wrong.

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Acropolis Now

Posted on May 16, 2012 by Carps

Back in November, I mused on the prospect of a nationalist strongman arising in Greece in response to the EU’s apparent willingness to override national sentiment and the democratic process in Greece. While no Nostradamus, I point you to the entrance into the Greek parliament of the crypto-Nazi “Golden Dawn” party as well as the communists as evidence that my foresight was about right. My suspicion is that while this is being treated as a kind of dramatic sideshow, it actually will form a template for events across Europe.

In France, the voting share of the National Front shocked the commentariat who even now have no idea how deep the roots of nationalist resentment at the European project have spread. That Hollande has been routinely called a socialist by the press overlooks the fact that his main appeal is actually to this latent French nationalism.

Suddenly, Angela Merkel is facing the end of her much-vaunted ‘fiskalunion’ and this in turn reveals the essentially undemocratic nature of the European project. Greece and France alike, she avers, must keep to the agreements they signed. But what when the national governments that signed those agreements are booted out? Either the electorate is allowed its say, and a government can renege on an agreement to which they weren’t signatories, or the EU can simply insist that its will overrides that of the people. No surprise which course ex-Communist Merkel seems to favour. I must have missed the bit where Merkel was enthusiastically endorsed by plebiscites in Greece and France.

Pulling back to the wider picture, slowly but surely (and, to give them their due, the powers-that-be have kept the plates spinning for far longer than I imagined possible) the multiple crises developing across not just Europe but the whole world are reaching a head.

Hollande’s program of decouplement from the fiskalunion is likely to be timed with a true Greek default. If no government prepared to agree to the terms of the fiskalunion can be formed in Athens by June, the country effectively runs out of money and Greece will be forced out the Euro. In turn, this will give the Greeks the opportunity to revert to the Drachma and default on their Euro liabilities. Lest we forget, the primary victim of a Greek default will be France (see here)

If this runs its course, France herself hits a perfect storm sometime in July of market flight (already, spreads on French bonds are rising as the markets take fright at Hollande’s rhetoric) and Greek default – leaving the French banking sector in shreds more or less overnight. How does that play out? Probably not very well.

Meanwhile, overt currency wars have broken out. The dollar has been the reserve currency of the world since pretty much the end of WWII – and thus has been the centrepiece of US foreign power (oil trading, for example, is exclusively in dollars). But since the Fed turned on the taps and started printing dollars by the trillion, that picture is changing. Quietly, various countries have started looking at alternatives. Since 2009, India pays for Iranian oil with gold, for example and China is reported to have started using the Yuan for transactions with Iran.

What does this mean? Well it tells us that the era of US dominance is more or less ended. By debasing their currency so thoroughly, the Fed has guaranteed that US dollars carry less weight than they once did. By corollary, Iran’s geopolitical importance thus grows ever greater as trade in Iranian oil becomes the poster child for those who want to see an end to the dollar’s cherished status and therefore an end to American power.

Obama may still be feted by the nearsighted, but he has if anything accelerated the stupidities begun under Bush II. Across the Western world, governments remain addicted to the crack pipe of deficit spending which, for all the talk of ‘austerity’, is actually the true picture.

As an aside, ponder this: Greece spends a greater percentage of its GDP on the military than either the UK, France and even Russia (remember: this is an economy in freefall, and entirely supported by ECB loans). So on the edge of Europe – bordered by the troubled Balkan states which have seen much warfare over the last 2 decades, we have an excessively militarised country which is increasingly turning to the political extremes

 

 

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Less, not more: Government Part 2.

Posted on April 24, 2012 by Carps

In Part 1 of what I grandly calling a “series”, I looked at how Government as it is currently run starts from a principle that necessarily reduces personal liberty. I used the silly example of bread to demonstrate how Governments – of all parties – start from a shared position that the State should try to ensure the best for everyone.

But these are trivial instances of what the State is capable of – and uniquely designed for. We will travel to the other extreme today: nationalism, war and genocide.

It needn’t be pointed out that private enterprise is incapable of fomenting war. No private organisation has the mandate to arm itself or to carry out violence on other actors on the economic stage. History has thrown up the odd curve-ball counterparts to that – such as the East India Company – but these were effectively run as armies masquerading under the flag of commerce.

Nations, of course, have shown themselves incapable of staying out of wars. In just the last 15 years for example, British forces have seen action in Iraq, Libya, Kosova, Sierra Leone, Bosnia and Afghanistan. In some instances, these actions took place under a ‘lawful’ umbrella afforded by international mandate and arguments can be made that these wars could be considered to be ‘just’ wars (more of which later).

Nonetheless, when it comes to the dealing out of death, nothing has yet matched the capability of the State. A lone berserker such as as Anders Breivik or the 9/11 highjackers might have the capacity to inflict deaths numbering into the low thousands, whereas the State can easily despatch millions.

To enact the killing fields of Pol Pot, the gulags of Stalin or the death camps of Nazism required the ability to marshall huge resources and override historical legal norms. The only entity capable of achieving these things is the State. Therefore we can see that the concentration of powers in the State is, while not intrinsically evil, a precondition for the ultimate evil.

Both genocide and war are often yoked to the power of nationalism. While nationalism again is not intrinsically evil, it is easy to generate sympathy for violence in the name of patriotism. Governments around the world and throughout history have been keen to seize the flag and to wave it to harness popular sentiment for state-sanctioned murder. Again setting aside the matter of the ‘just’ war, millions of men have been marched to their death in the service of nationalism over the centuries. Arguably the worst war of all – WWI – came about due to nationalist politics and the inevitable friction that arises from such games.

Wrapped in the flags of nations, men were marched out in front of the machine guns and tanks and slaughtered by opposition forces. Even today, a relatively minor intervention in a tin-pot country such as Libya is accompanied by flags and trumpets and tales of British derring-do.

So the State lays claim to not just impinge on minor matters of liberty, but in the ultimate analysis to lay claim to your very life. Therefore it follows that the power of the state should not be bolstered nor glorified, but carefully limited. Only in the case of existential threat to

————————————

The concept of the ‘just’ war is an interesting one. Many would argue that our recent interventions in places such as Kosovo or Kuwait were ‘just’ in terms of what they prevented. I don’t dissent entirely from such a view, but it is clear that in many cases it is almost impossible to choose the right ‘side’ to support. I draw the analogy of the English Civil War. Millions of us died across a decades-long conflict, with countless atrocities committed by each side. Families were displaced, people starved, children killed, women raped and villages burned. By any reckoning, in today’s parlance this would have been considered a clear-cut case for UN intervention.

But who would the UN (had it existed) have chosen as the ‘right’ side, and what would the moral imperative be? Would they have recognised the followers of Cromwell or the Royalists as the ‘true’ rulers of the country? Would they have attempted a partition along sectarian lines?

Ultimately, the English found peace among and between themselves and many of today’s constitutional arrangements date back to the final settlement of that conflict.

Our long and unfortunate interventions in the Middle East highlight the problems of the ‘just war’. We have propped up regimes that later we have helped to overthrow, been complicit in torture, sold arms to dictators and caused tens of thousands of deaths through direct military action. Is the region more stable and a better place for our involvement? It is very hard to see that it is.

Do I argue always for blanket isolationism? No: there have been, are and will be cases where military action is morally justified. But the easy complicity of the state and its willingness to throw away our lives in the name of their causes needs more critical attention than it routinely gets.

 

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Some Thoughts on the NHS

Posted on April 24, 2012 by Carps

Having spent a bit of time up close and personal with the NHS recently, it’s given me some time to reflect on its nature.

Firstly, most people’s perceptions of it are I suspect coloured by their personal experience. Anecdote looms large whenever talk turns to doctors and hospitals – how could it not? I was seen, diagnosed and operated on within the space of a month. I was diagnosed by a top neurologist in a huge, clean, modern hospital and operated on by a team using groundbreaking ‘gamma knife’ technology in the same ward where Richard Hammond was treated following his near-fatal crash, despite having neither great wealth or fame. I’ve paid my dues through the tax system and been handsomely treated by a service blind to status or personal background.

But yet.

But yet. My story is just that: a story. In the bed next to me was David B of Pontefract. For 7 years he struggled to find treatment for leg pains that left him unable to walk – and therefore unable to work. So knowledgeable was he about his own condition after long years of pain that he had to correct the nurses’ medication charts for himself. Despite his erudition and knowledge and despite his articulacy it had taken 7 years to negotiate the system and get onto a neurology ward. His own brand of gallows humour certainly had a different colour to my own and when I left he remained undiagnosed, marking time on a cocktail of pain killers.

You pays your money, you choose your anecdote. On this basis the NHS could be either miracle or nightmare.

There’s definitely a problem associated with size. I think regardless of the source of funding – whether you’re a fully signed-up Tractor Production Operative straight outta 1940s Ukraine or a foaming Friedmanite free market fundamentalist – any organisation with 1.6 million employees and over 60 million ‘customers’ can’t be efficient.

Returning to anecdotes, I have sat through probably 12 – 15 different mini interviews with various medical personnel over the last few months. Every single one, without exception, asked me about allergies or existing medical conditions. Without exception every single one diligently noted my allergies (Penicillin, peanuts, cats) and medical conditions (asthma, recurrent oesaphageal bolus). I’ve been telling NHS personnel this for decades – shit, they diagnosed these things – and yet on every visit their collective memory is blank. Maybe Tommy Lee Jones and Will Smith turn up after I leave with a little memory-wiping light pen.

Where does this paper go? How come, in 2011, with all the wonders of technology and the sheer ubiquity of database systems does this information not follow me around with my NHS number?

It’s a small thing in my case, but returning to Dave B of Pontefract for a second the details of his daily medication were wrong. 3 different nurses did the rounds to deliver his pills. 3 times he patiently explained to each of them that their notes were wrong and that the 50mg dosage on their charts was insufficient. The information couldn’t even survive the end of a shift, much less the passage of years.

Another, less trivial anecdote. As I lay in my bed, near the nurse station, the ward sister/matron/overlord was engaged in a frantic paperchase with another ward. A 73 year old stroke patient had been sent from the Neurology ward to a different department for a scan. He never returned. Instead, this department had discharged him. Literally sent him out of the building: 73 years old, undiagnosed, suffering the after-effects of a stroke, onto the streets. Responsibility, communication and responsive action seemed notable by their absence – despite the best efforts of the person on the end of the phone.

So, you can read the runes of the anecdotes any way you like. But pull out to the wider picture, and the NHS fails by many measurable metrics. On the huge scale of things, the matter becomes one of aggregated statistics. And there the truth comes out. Survival rates for cancer are pitiably low – down there with the likes the Poland, despite the almost incalculable extra billions spent. For heart disease, witness our 20% greater death rate than nearby Germany. We have fewer hospital beds per head of population than poor, bankrupt Greece – despite spending 25% more per head of population.

The NHS is also deeply politicised – and this is because of the way it is funded. Some elements of the medical profession are militant. One of my nurses was on her last couple of days and was very vocal about leaving the NHS because of the changes coming up. The stupid, sci-fi dystopia TV screens attached by mechanical arms to the beds had Andrew Lansley’s stupid mug playing on rotation. All the nurses seemed to see him as some kind of Voldemort figure. Maybe he is. I don’t know. But politics have no place at the bedside.

Likewise, a friend of mine – a nurse – sprays her Facebook wall daily with polemic about ‘cuts’ and union activism. She is a believer in the NHS. It is often said that the NHS is the closest thing to a religion left in the country and this is both true and unpalatable. The goal of any health system is to save lives – not waste them in the name of “equality of access”.

Instead of looking rationally at what systems deliver the best health outcomes, we’ve spent 60 years exploring a cul-de-sac with apparently scarcely a glance at a map book.

Of course if any politician dares to speak of ‘reform’ the land trembles to the sound of marching feet and the refrain of “we don’t want to end up like America!” as if there were only a binary choice between our system and theirs.

Now I’m no expert in the provision of healthcare, but it seems pretty obvious that Specsavers do a better job of eye care than the NHS did or could manage on its own. I get regular, cheap eye tests and have dabbled with various styles of glasses and contact lenses down the years – always at friendly price points and with a convenience it’s hard to imagine anyone a GP ever delivering.

It also seems pretty clear that with even relatively small subscription fees that schemes like the Leeds Hospital Fund (now sadly subsumed into some conglomerate in the modish fashion of the age) have managed to offer superior levels of service than the NHS can by itself.

The answer would appear therefore to lie in the model adopted by most of the world: compulsory health insurance, with a minimum guaranteed contribution by the state and top-ups according to each individuals needs, wants and financial circumstances. That such a suggestion is beyond the pale in polite conversation tells you what you need to know about the mythic status of the NHS. In its current form, it has been a heroic failure.

 

 

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Less, not more: Government Part 1.

Posted on March 19, 2012 by Carps

A tale is told – probably apocryphal – of the Russian ambassador’s first trip to London. On visiting a shop, he was stunned by the variety of produce on display. Turning to his British host he asked plaintively: “but who is in charge of the supply of bread in London?”

The answer is, of course, no-one. It is the chance interactions of literally millions of farmers, shoppers, buyers, millers, van drivers, retailers, packagers, designers and a thousand other bit players that deliver huge varieties of breads at various price points, wherever and whenever it is needed or wanted.

This is Adam Smith’s “invisible hand” at work. It quietly powers the delivery of television, film, music, chewing gum, phone calls, socks, steak, onions, car headlights, matches, windows, door frames, silly putty, tea towels, egg timers, mobile phones, laptops, iPads, tyres, pornography and, of course, bread.

Taking that example, to suggest that bread production should be nationalised would be considered the very peak of madness. How would one agency satisfy the needs of those millions of people, or do so in an efficient, equitable way? Let us examine the reductio ad absurdum of this position:

We know now that some forms of bread are healthier than others. Kingsmill white is for feckless poor people with poor diets. It is cheap, but has high fat content, high gluten content, and is overloaded with salts and sugars. Granary loaves are more expense and are for nice, well-educated healthy people. If we agree that the state’s role is to ensure the best for everyone, then the “obvious” options are:

  • The state should place higher tax on cheaper breads to make the better stuff less relatively expensive and thus encourage people to buy better bread
  • The state should place higher tax on more expensive breads to subsidise improvements in the quality of cheaper breads
  • The state should tax richer people more heavily in general and distribute the funds to poorer people so they can afford to buy better bread
  • The state should decide what constitutes good bread and enact a law outlawing bread that doesn’t meet these criteria
  • The state should embark on a national Bread Awareness Strategy and spend money educating people about what makes good bread
  • The government should appoint a ‘Bread Tsar’ to oversee a efficacious mix of all the available policies to meet a target for the consumption of granary bread.

Put in the case of bread, doesn’t that sound rather silly? it should be evident that the outcome of all of those policies would be more expense, less choice and more legal restrictions on both production and consumption.

Do you personally clamour for more expense, less choice and more legal restraint in your life? Perhaps you do.

Should you claim the right to inflict more expense, less choice and more legal restraint on others? Perhaps you shouldn’t.

And actually, you probably skipped over the begging part of this question, right before the bullet points: “…if we agree that the state’s role is to ensure the best for everyone…” This is the central fallacy behind the ‘choice’ as offered to us by the current political system. All major parties advance from this position – that the state knows (or should know) best. Almost all mainstream political argument, from newspaper columnists to ‘man in the pub’ is unspokenly informed by it. It is the daily frustration of the libertarian that this critical assumption is both assumed and uncriticised.

So these are the arguments advanced, in other guises, in the cases of healthcare, education, industry, transport, infrastructure, energy use and a slew of others beside.

The state is invoked as a morally neutral benefactor working to ameliorate a dirty fray in which there are, unfairly, winners and losers. Of course, the truth is that in order to intervene in these matters the state must necessarily override personal preferences and freedom of choice.

A trivial and in many ways silly example, but it is the general principle which will underpin the next entries in this series.

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We trading something for nothing.

Posted on March 16, 2012 by Carps

Recently, my Kindle bit the dust. I’d been getting quite into the Kindle thing – reading it in the bath… downloading books on an ad-hoc basis… using it to browse the web. There is a remorseless logic to the digitisation idea: if the spread of knowledge is correlated to the cheapness of reproduction, then the Kindle and its ilk are at the apogee of what should be a new enlightenment.

And then the screen got cracked. It can’t so far as I can tell, be replaced.

£120 of technology was lost in an instant thanks to a stray stiletto heel/bra clasp in a suitcase (not one of mine, I hasten to add: I only wear flats and prefer to go braless on holiday). And not only that, my access to the many books I had bought went with in a flash. Sure, I can read them on my iPhone’s Kindle App, but scrolling through a dense, 300 page novel on a 2 inch screen with your thumb is not an optimal reading experience.

I picked up my battered, nigh-on 15 year old copy of The Rise and Fall of the Third Reich by William H. Shirer (which I can’t recommend enough). I paid £8 for this book before boarding a flight to Seattle back in the days when knowing HTML was enough to make one a web expert. It is battered, well-thumbed and has a couple of loose pages which correlate to my favourite passages of the book – those few months in which Europe finally tipped into war.

This isn’t a tedious books-are-better-than tech rant, however. But it is about the colossal change in our vision of what ‘ownership’ has come to mean. My £8 bought me ownership of an actual thing that depends on nothing more than shelf space and will be mine until I destroy it or pass it on in some way. By contrast, the works on my Kindle were digital bits to which I had merely bought the “rights” to. I had the right to read a work on my Kindle – nothing more. It may seem unlikely, but one day Amazon will be no more and then what of this ‘right’? It cannot to be transferred to a bookshop or other provider.

What we have steadily been engaged on for many years is the substitution of nothing for something.

The same is true of music. Once you paid for the physical artefact – a vinyl disk or a CD. Now you you often merely pay for the rights, tied a specific device. The license I have to play Bobby Gentry’s Ode To Billy Joe does not extend beyond Apple devices and so, when the inevitable day comes that I move onto something else I will have to buy the “right” to listen to it on another device. It’s about the smartest move the digital industry ever made.

For Apple and Amazon, one can see the logic. Producing a trillion digital copies of an MP3 or digitised book is probably cheaper than producing mere hundreds of physical copies. They take almost no storage space, and can be distributed instantly around the world with no need for physical intermediaries such as shops and personnel.

But there is a more corrosive effect beyond trifles such as music.

Just as music has become a digital commodity, so has the ‘news’ become an endless procession of noisy nonsense. Facts once had to be winkled out, fought over and verified. Today, one can simply make a ‘fact’ from spurious digital data and win the fight for the world’s attention in the space of a few minutes. Extrapolate outwards from a survey of less than a hundred people are merrily claim that “86% of people would choose super miracle formula Fombulin A”.

The “hockeystick” in the field of climate science is a cherishable example of the genre. Shown many years ago now to be based on flawed, partial data and riddled through with unfounded assumptions and mistakes alike it still squats in the public imagination as the default visualisation of what’s happening to the Earth’s temperature.

Enraptured by the power of this shit, corporations and governments alike choose partial slices of ‘data’ every day and release it through media outlets that are world leaders in gullibility and anti-think. This is bad for you. That is good for you. “Science shows x”. “Economists believe y”. Buy this. Sell that. An endless wall of 24 hour bollocks that stretches as far as the mind can picture.

I don’t know about you, but this shit bothers me.

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