Month: September 2009

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Cash For Scrap Continues

Among Mandy’s many amusing statements at the Labour Party conference was that the cash for scrappage scheme would continue with money being provided for another 100,000 cars and vans. Cue applause. Excuse me? Did any of those attending have any grasp of the economic consequences of this policy? I doubt it… all it does is bring forward purchases from the future. People who buy now using government money will not be buying in the future using their own. Subsidised sales now mean there won’t be any then. This effectively bankrupts the future to bankroll the present – how is economic growth supposed to arise from this? Keeping the car industry alive now by robbing it of any future serves one purpose, not economic but political. When the future rolls inexorably around and lack of cash means stimulus has to stop, Labour is well aware that chances are it’ll be after the election and they won’t be in power by then anyway. It’ll be someone else’s problem. This is an appalling and cynical management of our finances which if better understood would make their losing at the next election a certainty. Instead they can rely on there being a general lack of understanding as it’s they who determine what level of economic education we receive. No wonder Balls fears homeschooling so much, any independently and properly educated kid is going to see straight through political chicanery like this.

BB

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Immature Debate

This is Chancellor Darling quoted, I imagine from their own PR, at the Labour Party conference (speaking on economic stabilisation and improvement), “I welcome the chance of a mature debate on how we achieve this goal – even if it is hard to see the Shadow Chancellor taking much part,” he said. “There has, after all, been little that is grown up about his performance so far.”

This is what those who wish to run the country have to offer us by way of mature debate? In any genuinely mature debate I can’t see much chance of either Chancellor taking part on that showing. The silly idiot opens his mouth only to disqualify himself from further comment. I say this again and again; while I accept if we remain a nation we need someone to run this country but it can’t be the bankers and it can’t be the politicians either. Should we wish for a military coup now? That doesn’t seem feasible with our overstretched resources almost permanently abroad. Perhaps that’s why, in the face of mounting evidence that their mission there is futile, they’re there in the first place. As Britain descends ever faster into chaos perhaps this is a rare tangible example of genuine prudence from the PM, keeping the army so spread out they couldn’t manage a local coup even if they wanted to.

BB

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Mandelson for Prime Minister?

Peter Mandelson is now being quoted at 4 to 1 to be the next Labour leader, meaning if they win the next election he might be the new Prime Minister! You never know, he might make a good fist of it!

BB

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Brownout – Judgement Fail

Why is Brown being greeted with smiles, applause etc. at the Labour Party conference? This is the man who was UK Chancellor during the run-up to the greatest near-breakdown that world finance has ever had, and was Prime Minister when everything he was in charge of almost collapsed! The UK economy, his brief, was at one point just a few hours away from going to the great till in the sky yet the bloke in charge while this was all happening is warmly greeted and congratulated. Why aren’t they putting a teacloth over his head and hiding him in a corner somewhere?

More to the point, how can we ever trust this lot?

BB

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Give Over, Darling

Chancellor Alastair Darling is this morning reported as stoutly declaring his intention to limit bankers’ bonuses. Does he stoutly declare how he’s going to do that, I wonder? If the bankers want to pay themselves more money, they will. They won’t call it a bonus, it’ll simply be called a renumeration instrument, or some-such. Business as usual, then, for the banks, something else Darling is said to be declaring he’ll end. What nonsense! When the banks wanted to get round financial insurance legislation they took the insurance concept, added a bell and whistle or two and called it swaps. Same deal, just no regulation. Darling isn’t going to regulate these people; they’re cleverer than him!

More indication he’s superfluous, then. Anything really important and politicians can’t affect it or effect it. Who runs the place, then, elected politicians or unelected bankers? When it’s all going well you might kid yourself it’s the elected politicians and that  you actually have any say in how things are run thorugh your vote. When push comes to shove, it gets pretty obvious you simply don’t, doesn’t it? And along with these stout declarations are other declarations, equally stout, about regulating the banking system so that the financial meltdown (supposedly averted but in reality merely postponed) can never happen again. These might have more weight were they not issuing from the smug motley crew of politicians and bankers who allowed this situation to ferment in the first place. Given they were the people who led us into this, it’s doubtful they’ll either wish or be able to lead us out. To whom can we turn now for leadership?

BB

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Scam civilisation

This from Tacitus, Roman historian, on the Britons after being conquered,”All this in their ignorance, they called civilization, when it was but a part of their servitude.”

The early Britons thought they had their own civilisation but really it was just a scam run by the Romans. The Romans had the monopoly on the money supply. If you wanted to trade, you had to use money, which you could only get from the Romans. Every time Britons traded, the Romans got their cut. The Britons were greatly encouraged to consider improving their circumstances by trading (mostly up) as the hallmark of a civilised nation. Get a whole people, a nation, running around trading and giving you a cut each time, self-motivated as they think they’re being civilised… what you’ve got is a machine that works day and night to make money for you.

We today similarly think we have our own civilisation, but really it’s just a scam run by the banks. The banks have the monopoly on the money supply. Every time we trade, bigger car, bigger house, more exotic holiday, or even just basics like food, heat, light… the banks take their cut as we have to “borrow” from the banks to get the money into circulation to use for all this. At interest. All our efforts really serve to do is enrich the banks.

The Roman scam grew bloated and was destroyed by the irresponsibility of the people at the top. The complete withdrawal of the money supply, on which the Britons and everyone else conquered by the Romans had come to depend, precipitated what we refer to as the Dark Ages. What we live in now grows bloated and is being destroyed by the irresponsibility of the people at the top. The money supply diminishes as the banks refuse to “lend”. History repeats itself around us.

I suspect a long night may be drawing in…

BB

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Load of Balls

Education Secretary Ed Balls suggests he’ll be making significant savings by combining schools into some kind of federation meaning he’ll be able to sack any number of heads and deputy heads. How is this saving money? All those heads and deputy heads won’t be working and contributing to the economy any more. Instead in all likelihood they’ll be claiming benefits and costing the country money instead. They won’t be spending money in their areas so they won’t be putting more money into the butcher’s pocket so he’ll have less to put in the baker’s pocket and the candlestick maker will no doubt feel the brunt as well. They’ll all be paying less taxes, needing less support staff and facilities, less advertisements and so forth. In short, cutting jobs is a surefire way of shrinking the economy.  I thought we were trying to expand it?

How is any of this making savings? The answer is that overall it isn’t, not when you think about it in context. If Minister Balls hopes to impress then he appears to be relying on the electorate not giving the matter any proper consideration. It’s entirely unsound economics, it only appears to  have any significance if it’s viewed out of context. Put it in its true context and it causes more problems than it might solve.

Anyway, like all the other much-touted plans being made by the various political parties, more taxes here, less public services there, it’s real purpose is to maintain the illusion that the growing debt mountain can be solved by prudent budget slashing. Belts would have to be tightened so much that nether regions would disappear into other dimensions. Public borrowing is growing at such an increasing rate there’s little doubt by the next election it’ll be obvious even to the illiterate and innumerate that the sums involved are far too large to ever be addressed within the economic system we have. It always had a mathematical sell-by date built-in to it, it was never a practical long-term proposition, and now it’s broken. We need a new one. On that disconcerting subject, all commentators are mute. What do we replace the banks with?

BB

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The ‘real’ elephant in the room is…

I was just watching the Jeff Randall show on Sky, on the subject of new post-crisis bank regulations one of the guest suits opined that the real elephant in the room, the aspect no-one was discussing, was the Glass-Steagall Act.

This was passed after the last depression – way back – and essentially determined the investment arm of a bank received no inside info (which might have given them unfair marketplace advantage) from their commercial arm.

The act was repealed in recent years and that in all probability has a great deal to do with the economy being in the perceived mess (dead as a doornail, in my view) that it is.

Point is, the elephant referred to is there’s no suggestion offered that this act be re-instigated, nor anything similar.

Meaning, in essence, obscured behind all the huffing and puffing lies the hard-to-deny suggestion that nothing being offered will work to regulate the banks.

Further, anything that might genuinely regulate the banks isn’t even on the table.

Hmmm.

Lots of hot air from the politicos, then, and nothing of substance behind it.

The banks go on their merry way to the casino. When they win, they award themselves huge bonuses, and when they lose again they award themselves huge bonuses and we’re asked to bail them out.

Some might feel justified in asking at this point, “Who really runs this country, the government, or the banks?”

But I digress… Glass-Steagall was the elephant in the room according to Jeff Randall’s guest suit, but I suggest that the real elephant might be, “If the banks are so broke they are having to be bailed out by the government (that’s the taxpayer, don’t forget), and to get the money to bail out the banks the government (on behalf of the taxpayer) is having to borrow money from the banks… at interest… where do the banks get the money to lend to the government to give to the banks?”

And that’s not all, because another unasked question, another elephant, might be along the lines of, “If the banks know they’ll be bailed out by the taxpayer anytime they gamble and lose, what’s to stop them gambling over and over?” and yet another might be, “If the government prints bonds and banks lend the government money on the strength of those bonds, money that the banks have created out of thin air, literally, because in law they’re allowed to do this, why doesn’t the government simply print money itself at no interest and cut out the banks who are in many ways entirely superfluous and purely parasitic?”

That’s a lot of elephants.

BB

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Ships in the night – recession ships lie idle

If  the recession’s over or anywhere near it, why are all these container ships lying idle, with more being built that will only lie idle too when they’re completed (if they ever actually are)? One can make allowances for prior overproduction, but not this much, not by any means. Read more at http://www.dailymail.co.uk/home/moslive/article-1212013/Revealed-The-ghost-fleet-recession.html

http://tinyurl.com/qnr3dr

Unusually this piece appears in the UK’s Daily Mail. I would assume it’s a shot across the bows of the Labour Party with the coming election in mind. We can probably expect more along these lines.

BB