Friday, 10 October 2008
Thursday, 9 October 2008
We face a slow and painful period of economic reconstruction. Debt still needs to be deflated, and if not in a sudden financial crash then slowly and with a hand on the tiller. And as Germany has demonstrated this week, both in Merkel's reassurance to German savers and in her refusal to commit German government money to an ECB-area bail-out fund, now is the time that governments look first to the people that elect them. Irish voters amongst others will rightly be asking how much their EU membership is worth when Germany's brave eurowords turn to such dust overnight.
The real pain - the chronic deep hurtful ache - is yet to come. We may get through Christmas, but 2009 and all it brings will not be so easy; painful economic change must necessarily have social consequences. The mild recessions of the 80s and 90s caused significant social change, destroying local institutions and cementing the central State. It would be naive to imagine we will not come out of this one a different nation and society. But a time of change is also a time of opportunity, a chance to establish a restructuring that will leave us better placed as a nation when we come through to the other side. And those changes will not be towards a greater centralism.
Simon Heffer comments in today's Telegraph that
The maxim of the American writer and philosopher Ayn Rand came close to fulfilment before the denouement of Old Labour on May 3 1979: that the difference between a welfare state and a totalitarian state is a matter of time.Our economy simply cannot sustain Labour's welfare state through the coming times. By the new year it will become apparent to the electorate that Brown has no solutions to offer; any attempts to increase taxation purely to bolster the welfare state, rather than for deeper economic and social restructuring, will be rejected. The pressure for an election will still be there. And like Germany, people will look inwards. Parochialism isn't necessarily a bad thing; rising crime and disorder will impact on our homes and our streets, poverty will be met daily in the local supermarket, and boarded-up shop fronts and deserted delivery depots will line our routes to work if we're amongst those that still have jobs - and a very large number of us still will. The pressure will come to see the direct local effects of our taxes. Local building societies and credit unions may blossom once again. Local watches may demand greater powers to police their own areas. Local welfare schemes may evolve to meet the worst effects. Parents may run local voluntary educational facilities. As the central State starts to fall, local institutions can grow like saplings in the sunlit space left by a fallen forest giant.
Cameron has already dumped his commitment to continue Labour's profligacy. If he to capture the coming zeitgeist he must also be prepared to dump his commitment to continue Labour's Leviathan central State.
Wednesday, 8 October 2008
Those Icelandic banks, offering interest rates of 7% or so on savings always seemed to me at least in part to be running some sort of pyramid scam - using new depositors' money to pay interest on existing balances. Perhaps I'm wrong, but I never trusted them.
Good riddance to the Icelandic financial sector.
I have a funny feeling that this world has gone for ever.
Workers in the square mile financial district of London are expecting to share £9billion in bonuses this Christmas and are planning to share their wealth through living the high-life.
London's financial industry is booming, with mergers and acquisitions activity set to hit a record $1trillion-plus this year in Europe alone.
The City's success has helped the rest of London to do well. "With some City bonuses likely to be up several hundred percent on last year, the omens are good for almost every part of city life," said Tara Ricks, managing director of City recruitment firm Joslin Rowe.
"From big ticket items such as new homes, car sales, holiday apartments, yachts, shares and race horses to luxury holidays, jewellery, fine dining and designer clothes, this money will pour back into the economy," she said.
Bankers get their wad of cash in December/January when banks start paying out 2006 bonuses that could run to tens of millions of pounds for some high fliers.
No one can easily track where the money goes, but London property is likely to claim a big share of this year's bonus "pool" estimated at nearly 9 billion pounds by economics consultancy the Centre for Economics and Business Research.
A CEBR study, done a few years ago, found that 50 percent of bankers' bonuses was spent on London property and estate agents say this could still hold true based on anecdotal evidence.
"What really sparked the price increase in Central London was the bonuses last year," said Neil Chegwidden, head of research at Cluttons, referring to big bonus payouts in 2005 year as the financial services bonanza gathered steam.
Bankers also spend heavily on fine dining, wine, trendy bars, and even flowers and exclusive concierge services. Shane Osborn, head chef at top London restaurant Pied a Terre, said at bonus time City bankers come in to celebrate.
"You see the City boys coming in in groups of 4 and 5 having a jolly evening and going for top-end champagne and wine - Dom Perignon, Krug, Cristal and Petrus."
Osborn, who's restaurant is one of only four in London with two Michelin stars, said bankers can easily spend 3,000 or 4,000 pounds just on lunch. "They like to let their hair down."
Holiday company Trailfinders said it is also seeing strong demand for luxury. The Maldives and Mauritius are popular holiday destinations, but Antarctica is becoming trendy.
"We fairly regularly get people spending more than 20,000 pounds on a holiday," a spokesman in their City branch said.
Tuesday, 7 October 2008
But how did the citizens of Dunwich make their livings? Well, it started as a system that worked completely within the feudal system. Craft workers made things and fishermen caught herring and goods and fish were sold at markets or shipped to other Charter Towns on the near coast and sold there, and enough profit was made to levy a local tax to gather enough to pay the king. The population expanded quickly, helped by a provision in the Charter that allowed any serf who had stayed unclaimed in the town for a year and a day to be immune from being seized and reclaimed by his feudal master outside the town.
As time went on, some craftsmen accumulated a surplus of coin that enabled them to buy land and build speculative dwellings for rent within the town, and service industries such as transport grew, for there was more profit in a craftsman staying put and producing goods and employing a carter to carry them than in spending a third of his time carting them himself. But none of this was yet real capitalism.
The real rewards came from high risk foreign trade. A wealthy man could spend his fortune building a cog, crewing it and sending it to Gascony, or Flanders, or the Baltic, to bring back tuns of wine, Swedish steel, furs and skins, silk and spices and double his wealth on a single successful voyage. But the risks were high; goods and ships were seized by other Charter Towns or foreign ports or pirates or destroyed by the sea or wreck, or ship and cargo both stolen and sold by the crew. Too often a man was ruined overnight, reduced to penury, having lost his all in a single throw.
It didn't take them long to learn to spread the risk. If each voyage was financed by a consortium the risk would be spread and losses borne. By the thirteenth century surviving manifests show a thriving fleet of cogs operating from Dunwich, a large base of merchant capitalists and a separate group of ship owners and operators. And as the wealthy merchants were also naturally the aldermen and burgesses of the town council, the way the town was regulated favoured the capitalists and in turn they enriched the town.
OK, this all seems like nursery school stuff to us, but back then it was cutting edge social progress. Feudalism couldn't compete. The Black Death was the watershed - after it grew early modern England, based on a free middle class and capitalism, and Feudalism all but died.
So what's the point of this post? Well, there is a certain silly gloating in the press, and commentators who should know better labelling this crisis as the end of capitalism. The Guardian seems particularly smug. But don't take predictions of 'a new world system' to replace capitalism too seriously. If the entire world financial system crashed tomorrow, wiping out every bank and making currencies worthless, by the end of the week someone would be striking silver coins in a local mint as a means of exchange; by next month some individuals would have acquired a surplus of coins and by next year capitalists would be back, evaluating risk and investing in merchant ventures.
Don't worry, be happy, as the lyrics say.
Monday, 6 October 2008
But no more. For the long arm of the EU arrest warrant will enable the Greek government to extradite any plane spotter who has successfully scored a 'home run'. Never mind that it's not illegal here. British citizens are now obliged not only to obey thousands of our own home-grown laws, we must also obey tens of thousands of laws from every one of the 27 EU nations. Is laughing at dwarves illegal in Estonia? Does cursing MEPs as corrupt venal pigs' bladders carry a five year prison term in Latvia? Who knows, except when a van-load of visor-helmeted, body armoured State police smash their way through your front door to drag you off to a holding cell.
Gerald Fredrick Töben was on his way from the US to Dubai when he was arrested in transit at Heathrow. He is being held pending extradition to Germany on a charge of denying the Holocaust. This man's views are crackpot. He's an Australian citizen. He has committed no offence known to UK law.
This extradition agreement goes too far. We need to repeal this dangerous nonsense as a matter of urgency. The bloody Huns will never realise that the best answer to Holocaust denial is to allow it full exposure in fresh air and daylight, where it will crumble to risible dust, and not to drive it into the darkness of a forbidden secret where it will grow like mould. Oh, and if 'bloody Huns' is racist or zenophobic I've just made myself liable to extradition ....
Sunday, 5 October 2008
Anyway, more than a month ago I eventually took the half hour to call them up and cancel it. They immediately offered me a vastly reduced interest rate to keep it. I said no and paid the balance off, cut the card up and cancelled my direct debt online. End of card. You'd think.
But no. Just looked at a letter than came yesterday; they claim they miscalculated the dating of the new improved interest rate offer and that they owe me 3p. Complete with a statement showing a live account still with an £18.5k limit and a credit of £0.03.
Now what's the betting that when I call them up tomorrow that the 3p credit will be the hardest thing in the world to get rid of?
Any tips, anyone?