Archive for the 'Economics' Category

15
Apr
13

Thatcherism – What really happened?

Rose tinted spectacles?

Rose tinted spectacles?

Margaret Thatcher died on 8th April 2013 and this has caused quite a stir. Many people look back at her premiership with rose tinted spectacles while others roundly condemn her for ruining British industry, causing mass unemployment and generally creating hell on Earth. On TV everyone has something to say. Ken Livingston said that Britain was in trouble because we had lost our manufacturing base whereas Germany had retained theirs and were doing very well. Sounds reasonable until one considers that France and Italy held on to their manufacturing base and are in a worse state than the UK.

Most Labour MPs condemn the life and works of Mrs. T. but I wonder how things would be if she had died in 2006 with Labour doggedly following her policies toward new heights of hyper-commercialism. The gravy train still rolling. One can only guess at the sycophantic eulogising of Blair and Balls. Of course 2006 may have been too early to judge as the full effects of her policies had not been played out but one could argue that in 2013.

Broadly the argument is that rising prosperity for some was at the expense of mass unemployment for others and people love or loathe her dependent on their place in this picture. A friend complained that she could not get a job after Thatcher came to power in 1979 and I countered that during the 1979 election campaign the Tories ran a poster showing a long queue of people at an unemployment office with a strap line reading “Labour Isn’t Working“. This implied that unemployment was a problem prior to the Thatcher government. Both my friend and I had recounted our memories but anecdotal evidence is always biased. We need dispassionate analysis. We need statistics. Luckily vast quantities of data are now available via The Internet.

So I set about finding a graph showing unemployment from the 1970s onward and it seems to be true that unemployment increased dramatically under the Thatcher government. The graph is shown at the end of this article along with several others. So what else can statistical graphs sourced from The Internet tell us?

Well, the price of crude oil took off in the 70s and this had a negative impact on the British economy but it’s interesting to note that UK North Sea oil production also took off in the late 70s and overtook consumption around 1979. House prices rose substantially after 1979 though we should remember that they rose absurdly fast under Tony Blair’s government too. UK debt dropped substantially under Thatcher but later climbed back again and base rates rose substantially. The one achievement that can be attributed to the Thatcher government seems to be conquering inflation.

It’s also interesting to see that real disposable income rose steadily after WW2 dipping just before Mrs. T was elected, then rising more quickly, flattening off in 2006 and then declining after 2009.

sold out to commercialism?

Sold out to commercialism?

There was controversy when the Labour Isn’t Working poster appeared because it used actors. These days we accept that images used in advertising are not real. Musicians and film stars who were our heroes used to disdain advertising but Brian Ferry worked for Marks and Spencer, John Lydon sold butter and Christmas saw Scarlet Hohanson on our TV flogging perfume. Our heroes have sold out.

Sometime in the 1980s I recall an American friend telling me that England was “so inconvenient” as she desperately pushed coins into one of those idiot public telephones before the pips cut her off. It’s true, it was inconvenient, and inefficient and we were materially poorer. But I preferred the old slam door trains and the open backed buses. You could open doors and windows yourself rather than waiting for some bloody system to do it for you. We seem to have become richer in private material goods but more restricted and poorer in communal resources. Also poorer in space, time and trust. We live in a less gentle time.

This may be mere nostalgia and I expect that were I transported back to 1979 I would rail against the paucity of TV stations, the slowness of road transport, the limitations on pub opening times and the dreadful food.

All this crystallised in my mind the idea that the death of Margaret Thatcher is a perfect opportunity to review post war political, economic and social policy. A chance to cut through the political spin and partisan prejudice and get a long view of the period when Britain morphed from the land of respect for nobility and knowing your place to a dog eat dog free for all.

The BBC should commission a documentary or even a series. Some questions that might be asked:

  • Was the country really in a mess when Thatch took over?
  • What were the problems?
  • What were the alternatives to economic liberalism?
  • Was the economic boom unleashed by the Tories and driven to ludicrous heights by Tony Blair anything more than a debt fuelled bubble?

A selection of graphs are listed below. While reviewing these stats it became apparent that the more one learns the more questions arise. For example are we talking about long term or short term unemployment? Each may have different causes and effects. Fortunately numerous excellent resources are available on the web where one can access such data. e.g. Google Public DataPublic SpendingOffice for National StatisticsNationMaster.

Unemployment

Unemployment

Crude Oil Price

Crude Oil Price

Oil Production/Consumption

Oil Production/Consumption

UK Inflation

UK Inflation

UK Debt as % of GDP

UK Debt as % of GDP

Private Debt

Private Debt

UK house prices

UK house prices

Disposable Income

Disposable Income

Spending

Public Spending

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30
Mar
13

Forget Cyprus – Cameron is raiding British bank accounts

Rainy Days

Rainy Day Blues

The UK national debt stands at over a trillion pounds or around 88.7% of total GDP. That’s £18,506 for every man, woman and child in the UK, more than £40,771 for every person in employment. Every household will pay £1,918 this year, just to cover the interest

Party politics has become overblown rhetoric about cutting fast or slow but this is a smoke screen while the politicians get on with the real job of raiding our savings. If you don’t read all this article then at least skip to the end to read the extraordinary quote from last week’s Economist.

By rights, at the time of the credit crunch in 2008, the banks should have gone bust and three groups of people would have lost out. Those who owned shares in the banks, those who had entrusted the banks with investment money (often other banks) and those with savings in the banks of over £50,000 as this was the government backed deposit guarantee in place at the time.

This would have been bad but it would have been the most fair outcome because all three groups had chosen to entrust the bank with their money. Admittedly the savers did not think that they were taking a risk but what can you do? Shit happens. The point is that only people with a stake in the failed bank should have lost out.

Saving and investing is an intrinsic part of our economy and necessary for industry and to provide funds for people in retirement. The British government chose to bail out the banks because they judged that to allow the banks to fail would have wreaked havoc in the British economy and there seems to be consensus that this was the right thing to do. However, by doing this, everyone, including people with no investment or savings or any other relationship with the failed banks were forced to repay the debt.

On the face of it, share holders have only partially lost out as the value of their asserts declined but savers have not lost out and the bankers themselves have actually increased their remuneration with the idiotic assertion that we need them to steer a safe course out of this crises.

Meanwhile the British population are suffering a stagnating economy and cuts. This is, of course, fundamentally unfair.

Now the banks of Cyprus are in trouble and the European Union is trying a different tack. Cognisant of the fact that a lot of rich (and supposedly dodgy) Russians have money in Cypriot banks they are trying to force investors and savers to share directly in the cost of the bail out. This sounds reasonable but seems to be causing uncertainty which could lead to the turmoil that everyone agrees should be avoided. Perhaps the blank cheque bailout was the best option after all?

To protect savers and investors or not to protect them, that is the question. Should tax payers take on the debts of others or accept market turmoil by allowing the banks to fail?

Perhaps none of this matters after all?

It took Dr. David Starky on the BBCs This Week program on Thursday night to say what politicians of all stripes are keeping quiet about: the pound has been devalued 25% since 2008 by Quantitative Easing. Perhaps prompted by Dr. Starky’s forthright statement, last week the Economist put it more succinctly in an article entitled The Financial-Repression Levy:

“In the developed world total debt (including that of the financial sector, consumers and companies, as well as governments) is so high that it is implausible that it can be repaid via the fruits of economic growth. The debt must either be written off (defaulted on) or slowly inflated away. That means inflicting pain on someone: sorting out the crisis has been so difficult because no one wants to take the hit.

The Cypriot deal is a very clumsy attempt at a write-off. Your humble deposits are banks’ debts. So taking the deposits and using the proceeds to recapitalise the banks is a roundabout way of defaulting. But any form of outright default creates the potential for contagion.
Because it is more subtle, financial repression (any of the measures that governments employ to channel funds to themselves) is more successful. It was the way that many countries reduced their debt burdens after the second world war. It takes advantage of the phenomenon of money illusion: people get confused between nominal and real numbers.
The danger is that savers will eventually get wise to the erosion of their spending power….”

In short: we’re all shafted as the politicians take advantage of our economic naiveté to raid our savings and investments to repay the debts incurred by greedy bankers.

Oh Bollocks!

Saving is now a guaranteed way to lose money

Saving is now a guaranteed way to lose money

st malo beach

St Malo Beach

25
Sep
12

What ya gonna do about LIBOR?

ft.com

ft.com

A good front page in the FT today which seems to epitomise the uncertain economic spirit of the age. They ran a series of headlines referring to the London Interbank Lending Rate (LIBOR) which Barclays were found to be fiddling earlier in the year:

  • UK to overhaul benchmark interest rate
  • US regulator calls for faster Libor reform
  • Fast Libor reform ‘risks causing chaos’

Or, in layman’s terms, “Fuck, what shall we do? Don’t worry we’ll do something. For God’s sake get on with it, do it now! Oh Fuck! What are you doing? Don’t do that for Christ sake!

.

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Roses

Roses

23
Sep
12

Will Self, Cyborg Cockroaches and Democracy

Will Self

Will Self

On Friday night I went to a talk by Will Self at Brighton, Hove and Sussex Sixth Form College arranged by the excellent City Books on Western Road. I had taken the day off work as I had man flu.  I still felt feverish while listening to Mr. Self discuss his new novel Umbrella. He read a passage and it seemed quite a dense stream of consciousness type of work written, as he said, in the continuous present. He talked before and after and took questions. He was good value. Alternately, irreverent, serious and amusing.

My mind has been slightly addled the last few days and I’m not sure where some ideas came from but I think it was he who described technology as a parasite on humanity. This tied in with the ideas of a friend who suggested that we are now so reliant on technology that we are becoming cyborgs without a physical interface.

Today, I read in The Economist that Alper Bozkurt and Tahmid Latif of North Carolina University are experimenting with cyborg parasites which can be used to help in search and rescue operations. A cockroach is fitted out with a little circuit board allowing remote control guidance. The circuit board also carries a microphone and camera.

Obviously this could be very useful in search and rescue…….or spying. I’m sure that police, intelligence services, military and the corporates will all be keeping a keen eye on this type of work. If it turns out to be practical, we will, no doubt, see these things crawling all over the walls of Embassies, foreign military installations and our own homes.

The increasing speed of technological advance is amazing but I sometimes wonder about the consequences. I think it’s generally accepted that Capitalism is better than Socialism at promoting invention and innovation. The key to this is probably the concept of limited liability which has enabled much of the western world’s success.

But the downside of this success has been the growth of massive unaccountable multinational corporations. It’s interesting that Western Multinationals are unaccountable but Chinese corporates are often owned by Sovereign Wealth Funds making them accountable to the Chinese government but I don’t want to get into a discussion on the merits of State Capitalism.

So far, we seem to have decided that the innovation and the standard of living which it has achieved is worth the rise of mega corporations but I wonder if this will always be true. More and more it seems that we get more stuff at the expense of our liberty.

We now have fantastic cars, amazing hand held computers, flat screen TVs and all the other stuff but very little time to enjoy it. I remembering reading a comment somewhere that most basements of middle class Americans have unused aqualungs or sky diving gear and Britain is heading that way.

Sure there are some great technologies on the horizon but are these future wonders worth the loss of control of our governments to corporate lobby groups? Is yet more innovation worth the steady privatisation of commercialisation or public space?

What do we value more: Bigger TV screens, the platooning of our cars, cyborg cockroaches or democracy?

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10
Sep
12

Paralympic Medal table by GDP and Population

The Olympics are over, long live the Olympics! I was interested to see that the medal table for the Paralympics. Ranking by total medals, China was at the top, then Russia then Great Britain and then The United States. Well done all of them. I have to admit that the Paralympics have made me view the “disabled” in a different light. These guys are far more energetic and determined than I will ever be. Indeed, the ubiquitous overexcitement fist waving and overzealous exhalations of victory by the disabled has liberated me to dislike disabled sportsman as much as I dislike any other sports bores.

I have to admit I was surprised to see China at the top as, though I knew they’d made a big effort, I hadn’t realised that they’d made a big Paralympic effort. Russia too. Looking down the medal table got me thinking. Always dangerous……

Plucky little Cuba and New Zealand down there with 17 medals. Good for them. Not as great an achievement as China or Russia but……..hang on…..New Zealand and Cuba have miniscule populations compared with China and their economies are not nearly as great.

Obviously rich countries will do better as they have the lolly to throw at the games. The real test is not how much money you have but what you make of it. I collected some data and created a table which lists countries and their medal totals. I added a column for the country’s Gross Domestic Product which, for those uninterested in economics, is a measure of a country’s wealth. I added another column for a country’s population. I then added extra columns for “ratios” which I calculated by dividing the country’s total medals by it’s GDP or population and then multiplying by a fudge factor to get the numbers into a readable format. (ie. Not so small that they are lots of leading zeros).

More specifically the Population Ratio is the total medals divided by population and multiplied by 10,000,000. The GDP Ratio is the total medals divided by GDP and multiplied by 100,000. I then added extra columns showing ranking by Population Ratio or GDP Ratio.

I should say that I had “issues” obtaining information for all countries. China seems to score Hong King separately, Britain has it’s usual schizophrenia about whether it is The UK or Great Britain and “the former” Yugoslavia seems in a constant state of flux. However, I cobbled the data from Wikipedia together the best I could (well, as quickly as possible) and made a few assumptions.

The results are quite revealing.

Cuba and New Zealand’s efforts are actually more impressive than China, Russia, Britain or the USA. New Zealand ranks 1st by Population Ratio and 11th by GDP ratio. Cuba ranks 5th by GDP Ratio and 13th by Population Ratio. Other notable items are that Fiji is 4th by GDP ratio, Ireland is 3rd by Population Ratio and Iceland 4th by Population Ratio.

And Britain? Well we didn’t do so bad after all. Britain is 1st by GDP ratio and 5th by Population Ratio. On the other hand, India’s performance was dismal. Bottom by total medals, by GDP ratio and by Population Ratio.

Country Rank by Gold Gold Silver Bronze Total Rank by Total Medals Population Population Ratio Rank by Pop Ratio GDP (USD) GDP Ratio Rank by GDP ratio
Britain 3 34 43 43 120 2 45561989 26.34 5 137936 87 1
Ukraine 4 32 24 28 84 6 45561989 18.44 7 137936 60.9 2
Tunisia 14 9 5 5 19 19 10673800 17.8 8 44252 42.94 3
Fiji 52 1 0 0 1 62 876000 11.42 19 3052 32.77 4
Cuba 15 9 5 3 17 21 11247925 15.11 13 64220 26.47 5
Azerbaijan 27 4 5 3 12 30 9235100 12.99 15 51797 23.17 6
Kenya 40 2 2 2 6 41 38610097 1.55 54 32483 18.47 7
Belarus 25 5 2 3 10 35 9457500 10.57 23 54713 18.28 8
Namibia 47 1 1 0 2 54 2104900 9.5 27 11701 17.09 9
Serbia 39 2 3 0 5 45 7120666 7.02 34 37713 13.26 10
New Zealand 21 6 7 4 17 22 4440700 38.28 1 141406 12.02 11
Algeria 26 4 6 9 19 20 37100000 5.12 38 158650 11.98 12
Macedonia 52 1 0 0 1 63 2059794 4.85 40 9138 10.94 13
Hungary 38 2 6 6 14 26 9957731 14.06 14 128629 10.88 14
Iraq 59 0 2 1 3 49 33330000 0.9 62 28141 10.66 15
Latvia 47 1 1 0 2 55 2070371 9.66 26 24014 8.33 16
Croatia 58 0 2 3 5 46 4290612 11.65 18 60852 8.22 17
South Africa 18 8 12 9 29 14 50586757 5.73 37 363704 7.97 18
Iceland 52 1 0 0 1 64 320060 31.24 4 12574 7.95 19
Ireland 19 8 3 5 16 23 4588252 34.87 3 206600 7.74 20
Poland 9 14 13 9 36 12 38538447 9.34 28 469393 7.67 21
Jamaica 52 1 0 0 1 65 2709300 3.69 44 13428 7.45 22
Egypt 28 4 4 7 15 25 82502000 1.82 52 215272 6.97 23
Russia 2 36 38 28 102 3 143142000 7.13 33 1479823 6.89 24
Slovakia 41 2 1 3 6 42 5445324 11.02 22 87263 6.88 25
Australia 5 32 23 30 85 5 22719766 37.41 2 1271945 6.68 26
Nigeria 22 6 5 2 13 27 166629000 0.78 63 196410 6.62 27
Morocco 37 3 0 3 6 43 32660800 1.84 51 91542 6.55 28
Bulgaria 59 0 2 1 3 50 7364570 4.07 42 47702 6.29 29
Iran 11 10 7 7 24 17 1210193422 0.2 72 386670 6.21 30
Bosnia and Herzegovina 52 1 0 0 1 66 3868621 2.58 48 16837 5.94 31
Czech Republic 42 1 6 4 11 34 10507566 10.47 24 197674 5.56 32
Hong Kong 34 3 3 6 12 31 7103700 16.89 9 224459 5.35 33
Netherlands 10 10 10 19 39 11 16740554 23.3 6 779310 5 34
Cyprus 67 0 1 0 1 67 838897 11.92 17 22957 4.36 35
China 1 95 71 65 231 1 1347350000 1.71 53 5739358 4.02 36
Greece 44 1 3 8 12 32 10787690 11.12 20 301065 3.99 37
Ethiopia 67 0 1 0 1 68 84320987 0.12 73 26928 3.71 38
Israel 45 1 2 5 8 37 7900600 10.13 25 217445 3.68 39
Austria 30 4 3 6 13 28 8452835 15.38 12 379047 3.43 40
Spain 17 8 18 16 42 10 46163116 9.1 29 1407322 2.98 41
Republic of Korea 12 9 9 9 27 16 1210193422 0.22 71 1014369 2.66 42
Sweden 29 4 4 4 12 33 9514406 12.61 16 458725 2.62 43
Uzbekistan 67 0 1 0 1 69 29559100 0.34 70 39173 2.55 44
Finland 32 4 1 1 6 44 5418430 11.07 21 238731 2.51 45
Thailand 31 4 2 2 8 38 65479453 1.22 59 318850 2.51 46
Switzerland 33 3 6 4 13 29 7952600 16.35 10 527920 2.46 47
Angola 51 1 0 1 2 56 20609294 0.97 61 82470 2.43 48
Slovenia 67 0 1 0 1 70 2050189 4.88 39 46906 2.13 49
Brazil 7 21 14 8 43 9 193946886 2.22 49 2088966 2.06 50
Mexico 23 6 4 11 21 18 112336538 1.87 50 1032224 2.03 51
Sri Lanka 74 0 0 1 1 71 20277597 0.49 67 49549 2.02 52
Germany 8 18 26 22 66 7 81844000 8.06 32 3280334 2.01 53
Canada 20 7 15 9 31 13 34908900 8.88 31 1577040 1.97 54
Norway 35 3 2 3 8 39 5032600 15.9 11 413056 1.94 55
France 16 8 19 18 45 8 65350000 6.89 35 2559850 1.76 56
Denmark 50 1 0 4 5 47 5584758 8.95 30 309866 1.61 57
Belgium 36 3 1 3 7 40 10839905 6.46 36 469347 1.49 58
Italy 13 9 8 11 28 15 59464644 4.71 41 2051290 1.36 59
Turkey 43 1 5 4 10 36 74724269 1.34 55 734440 1.36 60
Argentina 62 0 1 4 5 48 40117096 1.25 58 370263 1.35 61
Portugal 63 0 1 2 3 51 10561614 2.84 47 228859 1.31 62
Romania 47 1 1 0 2 57 19042936 1.05 60 161629 1.24 63
United Arab Emirates 46 1 1 1 3 52 8264070 3.63 45 297648 1.01 64
Singapore 65 0 1 1 2 58 5183700 3.86 43 222699 0.9 65
Malaysia 65 0 1 1 2 59 29467000 0.68 65 237797 0.84 66
Colombia 61 0 2 0 2 60 46683000 0.43 68 288086 0.69 67
USA 6 31 29 38 98 4 314303000 3.12 46 14447100 0.68 68
Taiwan 63 0 1 2 3 53 22805547 1.32 56 466832 0.64 69
Venezuela 73 0 0 2 2 61 27150095 0.74 64 391307 0.51 70
Chile 52 1 0 0 1 72 17402630 0.57 66 203443 0.49 71
Japan 24 5 5 6 16 24 127570000 1.25 57 5458873 0.29 72
Saudi Arabia 67 0 1 0 1 73 27136977 0.37 69 434666 0.23 73
Indonesia 74 0 0 1 1 74 237424569 0.04 74 707448 0.14 74
India 67 0 1 0 1 75 1210193422 0.01 75 1722328 0.06 75
By beautiful Prints online

By beautiful Prints online

19
Aug
12

chimney cake and the globalisation of ideas

Budapest

Budapest

I spent this week in Budapest staying at the excellent Intercontinental Hotel with a fantastic picture window overlooking the Danube and The Castle. Hot and sunny during the day and just plane hot at night. There is nothing like travelling around Europe for a few years to make you understand just how crap British weather is. Once the light faded the castle illumination came on. Gorgeous! As was the parliament building a little further along the river.

room with a view

room with a view

For lunch one day we drove out to Budaörs and visited the  Adler a traditional Hungarian restaurant where I ate good goulash. One evening I took a boat ride along the river. The commentary explained the architecture and mentioned that a Hungarian invented the computer. Odd, as I’d been told that it was either Allan Turing or Charles Babbage, both Englishmen. This reminded me of a Dutch friend telling me that a Dutchman had developed ideas on gravity before Newton. When I was a kid I was led to believe that Britain created the whole of the modern world. At school I was told that William Caxton invented the printing press and it was comparatively late in life that I learned about a German named Johannes Gutenberg.

A little later I ate in the excellent Sörforrás restaurant. Comfortable, good service and delicious Hungarian and international food. I think that, really, the whole of European history is one. We speak of globalisation now but centuries ago there existed a Europeanisation of scientific and artistic thought. Presumably the educated people understood this but the illiterate masses were oblivious to it. Not so different from today when the world’s elite flit around the globe paying their taxes wherever convenient but when they need our support they appeal to our nationalistic feelings with terms like “in this land” and “We British”. Remember Tony Blair banging on about being “passionate” about British this and that yet when he left politics he got a job with an American bank. Patriotism, as Samuel Johnson observed, is the last refuge of a scoundrel.

Hungarian Parliament Building

Hungarian Parliament Building

In truth, I don’t believe that many great discoveries come about in isolation. Ideas about relativity were simmering away amongst the world physics community before Einstein finally hit the nail on the head. Ideas and memes swirl around in our culture like the currents in a river. They ebb and flow and occasionally some bright spark gets drawn into an eddy and brings it all together. The sum of human knowledge is ratcheted up another notch. Yes, it was Einstein who made the final move but if he’d fallen under a car, someone else would probably have got there soon enough.

It crossed my mind that, like a river, human knowledge has many tributaries and side channels. Perhaps Einstein’s marvellous discovery helped us focus our attention on the material world and we’ve made great progress in this respect. Yet I wonder how it is that a civilisation which can place men on the moon and robot cars on mars can’t figure out an economic system which does not either get bogged down in authoritarianism inefficiency like Socialism or have periodic catastrophes like Capitalism.

The odd thing is that nobody seems interested in developing another system. People who don’t like Capitalism have an irrational faith in Socialism. People who mistrust Socialism think that recessions, depressions and credit crunches are just something that society has to endure along with the concomitant suffering of the poorest. If the brightest and the best could be dragged away from their Bloomberg terminals then maybe they could figure out a sustainable economic model. Ah, but that would mean change and nobody likes that.

The banks of the Daunbe

The banks of the Daunbe

Perhaps the relevant ideas and memes are swirling around us already; climate change, the Internet, super-complex and reliable consumer products,  globalisation, a common language, the creative classadditive manufacturing. Perhaps all the pieces already exist and we just need some Einstein to put it all together?

On this visit I did not board the funicular railway up to the castle but I hung around one evening near the station at the bottom and took photos as evening fell. Vast cruise boats slid by, many from Germany. The Danube rises like an enormous cake in Germany’s Black Forest and flows through Vienna, Bratislava and Belgrade not to mention Orşova, Drobeta-Turnu Severin, Calafat, Bechet, Dăbuleni, Corabia, Turnu Măgurele, Zimnicea, Giurgiu, Olteniţa, Călăraşi, Feteşti, Cernavodă, Hârşova, Brăila, Galaţi, Isaccea and, of course, Tulcea.

As I crossed the bridge back to the hotel I looked down and saw one of these floating leviathans drifting by with a swimming pool on it’s deck. It has never occurred to me to cruise along a river before. What a great idea. You can stay in one place while visiting the great cities of Europe.

Kürtőskalács

Kürtőskalács

The hotels are near the main entertainment area in Budapest and the night was busy with tourists and locals. I bought Kürtőskalács, or Chimney Cake, from a street seller. Spirals of pastry dipped in nuts and sugar that tasted, to me, like mince pies. One starts to eat this delicious confection and gets the idea that one will eat just one more ring before stopping. But these are not rings, this is a spiral and one munches on and on and on until one has devoured the whole thing.

A driver had been organised to take me from the hotel to the office the next morning. I emerged early and he had not yet arrived and so I stood gazing out over the river and waited. The hotel concierge approached, asked my name and said I should get in one of the taxis that always wait outside the hotel. I explained that I had a car coming but he insisted. I walked to meet him at the car and explained again that this was unnecessary. This time a second concierge joined in telling me that I should get in the car and when I tried to speak a passing young man with a rucksack said to me: “He couldn’t come”. For just the twinkling of an eye I thought I was back in The Village. Either that or some Soviet era spy thriller. It seemed that the whole of Budapest knew who I was and was conspiring to kidnap me.

I got in the car and went to the office.

Banks of the Danube

Banks of the Danube

Roses

Roses

10
Jun
12

Four reasons that Germany should bail out Greece

Economy of Germany

Economy of Germany

The Euro crisis drags on and on. If the British press are to be believed then the problem is that the Euro Zone wont face up to its problems and bail out the weak economies. Specifically, Germany has the economic power to sort things out but wont put its hand in its pocket. Here are four reasons why the Germans should bail out Europe.

1 The Irish have already helped bail out German savers

The Germans make out that they have been prudent and none of the current crisis is down to them. This may be true of the German people who save a large proportion of their earnings. But the German people put their money in German banks and the banks had to invest the money somewhere. From what I hear the German banks lent a lot of money to Irish banks.

The Irish banks became insolvent and, if there was any justice, they should have gone bust. If they had then the German people would have lost their money but because Ireland thought it could not allow its banking system to fail the Irish tax payer bailed out the Irish banks. The upshot is that many German people have the Irish tax payers to thank that they did not lose their savings.

2 The Germans should get over their phobia for inflation

After the first world war the German economy went down the drain and there was massive inflation which brought about the catastrophe of Nazism and this is still etched on the German national consciousness in the form of a phobia for inflation.

One thing I read often about economics is that after a catastrophe everyone runs around making rules so that the catastrophe cannot happen again. But the same type of catastrophe is not a likely threat. Similarly with Germany, the catastrophe that looms is not massive inflation but collapse of the Euro. The Germans should wake up and see the threat of today not worry about the mistakes of the past.

3 Germany should recognise their national interest and their role as the largest European power

Germany is a big power. Not on the same scale as the United States or China but it has the 4th largest GDP in the world and by far the largest GDP in the EU. The Greek economy is tiny by comparison. The German public debt is about 81.2% of German GDP. If you added in the Greek public debt then the German public debt would be about 95% of German GDP.

Yet Germany still lives in the shadow of the Holocaust. There is still an attitude that Germany should keep its head down. That was right and understandable for a while but Germany has faced up to its crimes. The people who ran Nazi Germany are mostly all dead and they have a new generation with sound democratic credentials.

After World War 2 the European economies collapsed but thankfully, the United States stepped in with the Marshall Plan. No doubt the U.S. acted  in its own interests and realised that rebuilding Europe would benefit the U.S. but that is the point If the Germans do nothing the Euro will collapse and they will lose. If they step in and bail out the Greeks they could save the Euro and thereby help themselves.

4 Germany should get over its hypocrisy

The Germans have a very naïve and hypocritical addiction to rules. They are conservative and like the appearance of correctness but under the surface they are fudging and fiddling as much as any nation (and possibly more because of their obsession with appearances). Recall that it was the Germans (with The French) who first broke the rule that deficits should not go above 3 per cent of GDP? This hypocrisy makes it difficult for them to justify helping the Greeks who lied to get into the Euro in the first place.

The Germans are as complicit in current economic crisis as anyone else and need to wake up to current threats rather than dwelling on the past. They should step out of the shadow of the second world war and accept their power and responsibility. Also they should grow up and forgive the Greeks. Didn’t the world forgive Germany? Sometimes, in order to help yourself, you have to help people who don’t deserver it.

Germany should use its power to save Greece, the Euro and the European economy.

31
May
12

Left, Right, Left, Right, Left, Right

Irreverent Car Enthusiast or right wing fascist?

Irreverent Car Enthusiast or Right Wing Fascist?

A friend suggested to me recently that The Left have the best comedians and I agreed though we then had difficulty identifying any right wing comedians. We settleed on Stewart Lee, representing the left, and Jeremy Clarkson, representing the right. It’s debatable whether Clarkson is right wing but then it’s debatable whether Clarkson is a comedian. He is a figure of fun, which might make him a comedian, and he’s sceptical about climate change, owns lots of cars and probably votes Tory which are attributes usually associated with The Right.

Stewart Lee performs material excoriating Jeremy Clarkson for his “politically incorrect opinions which he has for money”. On the Indymedia web site Clarkson is even accused of having a “fascist agenda” though you wouldn’t think it from his dress style. I don’t recall Franco, Mussolini or Hitler sporting brown corduroy trousers.

Stewart Lee - Comedian

Comedian

So (I got here in the end), Clarkson is condemned by The Left as a fascist.

It’s interesting that the left feel it acceptable to brand all and sundry as fascist. Often the reason for branding someone as fascist is that they believe in free markets and small government but it’s worth remembering that the Nazis called themselves National Socialists, which seems almost the antithesis of an ideology based on free markets and small government.

It’s also interesting that we go along with the label fascist as derogatory while we never think to yell Commie at those on the left and, if we did, the left would probably not consider it an insult.

Why? European fascism has an appalling reputation due to it’s racist and genocidal activities in the 1930s and 40s but Soviet Communism carried out acts which, if not identical in intent, were equal in ghastliness. One can, of course, argue that the Soviet regime was a corruption of true communism but this is all very well unless you’re one of the poor bastards who suffered under its rule. One may as well argue that Nazism was a corruption of Fascism.

There is a saying in Britain: People in glass houses should not throw stones, and you’d think that the left wing would be more reticent about dragging up the crimes of the second world war yet the communist movement seems to have just shrugged this off.

Why is this? Why is the term fascist used so freely and effectively to abuse those on the right while those on the left act like they hold the moral high ground?

I have been following Real Time World War 2 on twitter and am finding that the day by day reporting has the effect of placing the events in some kind of context.

At the beginning of World War 2 in 1939 (as counted by the British and the French) the Nazis were rounding up Jews and herding them into ghettos or off to concentration camps. Around the same time the Soviets were murdering thousands of captured Polish soldiers and the Soviet regime was paying bonuses to Soviet soldiers who succeeded in murdering the most Polish prisoners.

In the 1930s and 40s in Europe a clash of ideologies took place. Communism on one side and Fascism on the other. Both were totalitarian, ruthless and evil. In reality both were probably a reaction against free market capitalism which had brought about The Wall Street Crash a few years earlier. I’m making this up as I go along but it is starting to fit together. We are even seeing a resurgence of Fascism and Socialism in Greece which is suffering more than most from the failings of free market capitalism.

The inheritance of the Communist/Fascist clash in British politics is a false left/right dichotomy. A dichotomy that never really existed in British politics because Fascism never gained a real foothold in the UK thanks partly to the Communist Party of Great Britain.

In British politics Labour are portrayed as a supporting policies such as redistribution of wealth and state ownership of industry though Labour have now abandoned the latter. The tories are portrayed as advocating capitalism and a meritocracy. But the Tories have also inherited an association with fascism which may be unfair. It’s pointless arguing that many toffs were Fascists because many working class were too. I wonder if the Tories have much in common with Fascism at all.

This is not to say that the British right is beyond criticism but by branding them fascist we incorrectly identify their failings. The failings of Tory policies is not a dislike of immigration. The Tories represent big business and big business loves immigration because it provides cheap labour. To brand the Tories as fascist is a stupid distraction.

The real criticism of the right wing should be it’s economic race to the bottom. It’s survival of the fittest mentality which leaves those less well able to look after themselves behind. It’s constant drive for profit which turns all human interaction into that of producer/consumer. Seller/Customer. An ideology which gradually erodes any gains we may have made under Labour. None of these things have much relationship with Fascism.

Screaming Fascist at a Tory misses the point. The British Tories are not about to don black uniforms and start marching around with flaming torches and they are absolutely opposed to the Fascist ideal of a strong state.

BBC Radio 4 has been retransmitting old episodes of the famous “Desert Island Discs” program where a famous and esteemed person talks to a presenter and, with the conceit of presenting their favourite music, tells something of their lives, frequently revealing some personal aspects of themselves.

Respected historian or amoral ideologue

Respected Historian or Amoral Ideologue

Recently I listened to a rerun of an edition of the program from March 1995 where historian Professor Eric Hobsbawm was interviewed by Sue Lawley.

Professor Hobsbawn is a confirmed Marxist and was so during the 30s and 40s. In his own words he stated that he was deeply and profoundly committed to the great cause (of bringing about a world wide communist utopia) and that there was not anything that was more important in life than the great cause. When asked if he thought it was worth any sacrifice he answered yes. When asked if all the innocents who had been killed by the soviets were justified he replied yes.

I too have left wing sympathies but listened to this man with mounting horror. It strikes me as an example of our deranged political culture that, while irreverent (and irrelevant) TV entertainers like Clarkson are castigated as fascists, men like Professor Hobsbawn are honoured by appearances on Radio 4.

Even after the horrors of the Soviet Union have been revealed to Professor Hobsbawn he was too arrogant to have any empathy with those who suffered under the Soviets. Men like this do not stand out like Adolf Hitler or Idi Amin or Muama Ghadafi. They sit in institutions quietly following their ideologies without thought for the people who may disagree with their over intellectual claptrap. Today these people may be in universities, in banks or in governments. They may be in the police force or in political parties. In Germany in the 1940s they were operating the gas chambers or compiling monthly statistics at Auchwitz.

There is a beautiful scene in the 1983 film Merry Christmas Mr. Lawrence directed by Nagisa Oshima where an English officer visits a Japanese soldier in prison after the allies have occupied mainland Japan. The Japanese soldier has been tried for war crimes and condemned to death.

Sergeant Hara:   “I am ready to die, but I don’t understand, my crime were no different from any other soldiers.”
Lawrence:   “You are the victim of men who think that they’re right. Just as one day, you and Captain Yonoi believed absolutely that you were right; and the truth is, of course, that nobody’s right.”

“Men who think that they’re right.” – It’s a good phrase. Yes, it’s applicable to Hitler but, more than that, it’s applicable to the Hobsbawnes of this world. It’s applicable to the English Defence League shouting abuse at immigrants and it’s applicable to the ignorant left wing zealot screaming “Fascist” at people with whom he disagrees.

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The following is a partial transcript from the March 1995 episode of Desert Island Discs with Professor Eric Hobsbawm.

Sue Lawley (SL):   So your saying that such was your commitment and your dedication that if there was a chance of bring about this communist utopia, which was your dream, it was worth any kind of sacrifice?

Eric Hobsbawm (EH):   Yes I think so.

SL:   Even the sacrifice of millions of lives?

EH:   Well that’s what we felt when we fought world war 2 didn’t we?

SL:   Isn’t there a difference between killing someone in war and killing your own?

EH:   We didn’t know that, dead is dead.

SL:    Let’s have record number 3

Artwork of Nigel Chaloner at Fine Art America

Artwork of Nigel Chaloner at Fine Art America




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