Fantasy Government and Fantasy Finance

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We have elected an incompetent government that has presided over an ever growing culture of lies and greed. They have allowed lobbyists and special interests to influence policies for the price of an agreeable lunch and a few favourable headlines. Spin and deceit have replaced honesty and open government. And without giving it any serious thought, people are saying capitalism has failed. This has nothing to do with capitalism. It has no more to do with capitalism than the USSR had anything to do with socialism. The same people also say these financial institutions are the wealth creating sector of the economy. No they aren’t. The real wealth creators are the factories and the people who make things, and those who distribute and supply them.

By what twisted logic does it make economic sense to close profitable factories which give gainful employment to thousands, send those jobs overseas, knock down the factories and build houses in their place to sell at inflated prices to the now unemployed workers? If ever there was a formula for creating a sub-prime mortgage crisis, that has to be it. And that, in essence, and on a colossal scale, is what has been going on for years with the complicity of the government and all its regulators. Now, the institutions responsible for this merry-go-round of economic madness are clamouring for taxpayer aid from the government and blaming everyone but themselves for the mess. We have for too long rewarded failure, now we will pay the price.

More than two decades ago ICL, Britain’s last major computer manufacturer, had trucks ferrying unsold computers from one depot to another in a desperate attempt to give the impression of activity and mask how close they were to collapse. It didn’t work, but it’s uncannily similar to how some financial institutions have behaved in recent years. Smoke and mirrors; sleight of hand; cryptically-named financial products. Banks everywhere competed with each other to build the biggest market share in worthless investments, often having no idea what they were buying. Why did they do it? Because they paid themselves huge bonuses for doing so. Lehman Brothers, for example, paid out a staggering $9.5 billion in “bonuses” only nine months ago.

It’s hard to accept the term “bonus” as a fair description of the money they have looted, especially as in the case of Lehman Brothers it must have been crystal clear to those at the top the payments were entirely unwarranted and potentially fatal to the business. But such was their greed, they went ahead anyway. This is nothing to do with capitalism, or free market economics, it is the inevitable consequence of a corrupted financial system, plain and simple. President Nixon once famously declared, “I am not a crook.” I would like to see the leaders of the remaining great financial institutions say the same thing. And I want them to prove it because frankly I have no confidence in the regulators to investigate and prosecute wrong doing.

Who set the framework in which the institutions and the regulators operate? Step forward Gordon Brown, he was at the helm at the Treasury for a decade, making all the rules. Of course, he didn’t do it alone, thanks to “revolving doors” he had City people come and work at the Treasury where they shaped government policy before returning to the City to exploit the newly relaxed standards they helped bring about. Now as Prime Minister it is evident for all to see how completely incapable Brown is of leadership. Yet to listen to the government, their track record would seem to be above reproach. But the fact is, this government lives by deceit. It spins, it lies, and it has no shame because it lives in a fantasy world where it makes its own reality.

We need to go back before the second Gulf War for a measure of how venal this government is. Britain and America went to the court of world opinion and lied on oath. There were no weapons of mass destruction, there was no connection between Saddam and al Q’aeda. The phials of biological weapons, the drawings of mobile chemical labs, the intelligence documents reporting shipments of Yellow Cake from north Africa, they were all fake and Bush and Blair knew it. So instead of confronting the real terrorists, we have spent billions of dollars and pounds and laid down thousands of lives fighting the wrong war in the wrong place. However, it has been to the personal enrichment of many of those best connected with both governments.

Simply put, democracy has failed. This is not the failure of capitalism or of free market economics. It is our collective failure as voters to hold to account governments that lie and deceive, that allow lobbyists and special interests to overrule our interests. What goes on in Washington and Downing Street is a travesty for government. What goes on in Wall Street or the City of London is a travesty for an economy. Both should be working for the common good, not self-preservation and self-enrichment. We need change. We cannot be apathetic the next time we have an opportunity to vote, we must seize that opportunity and put an end to the politics of spin and the economics of greed. We must have honesty and open government.

Sir Alan, You’re Fired

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I would truly like to know how the latest series of “The Apprentice” managed to get such adulatory coverage right across the media. The winner seems to be getting more attention than Prince Harry did for going to Afghanistan, the only thing missing was The Drudge leaking the result before it was officially announced. And this for a tired programme that over the years has turned itself into a send-up of “Wacky Races” with Sir Alan Sugar himself becoming a cartoon character of a businessman. If that’s how he treats people who work for him I certainly wouldn’t set foot inside his boardroom for a paltry £100,000.

When I started watching the first series it was in the hope of seeing bright young people showing ingenuity and business acumen, a showcase for British entrepreneurial talent. Instead, we see Dick Dastardly, Muttley the Dog, Penelope Pitstop and a whole cast of others compete in a series of wacky challenges with ever more emphasis given to celebrating failure. I appreciate that the exercises are little more than scenarios to let a group of people work together to see how they perform. They are just like team-building exercises where you have to cross an imaginary river with a piece of rope, a plank that’s too short and a lot of shouting at each other. Success, therefore, is not whether you get across or not, but how well you work together and how well one of you leads the team.

What we end up with is a “boardroom” meeting where skill at passing the buck is what gets you through to the next round. It doesn’t matter how useless you were during that week’s challenge as long as there was someone else you could make look more useless than you. The formula could have been used to accentuate the positive and in the early series that’s the way I tried to view it, open minded and optimistic. But the producers, as is so common today, have felt the need to go down-market for audience share, to compete with “Big Brother” on it’s own territory, to show us contestants disintegrating before our very eyes. It has not been a happy spectacle.

So Sir Alan, I’m sorry but, “You’re fired.”

A lesson in accountability from America

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What a contrast we see in the way the military is run in this country compared with the USA. Here, General Dannatt is being praised for his bravery in first speaking out about the abysmal housing our servicemen are expected to live in, and now for the near-poverty levels of pay for those in the lower ranks. He is holding his political masters to account. Over in America, however, the hobnailed boot is on the other foot. Secretary of Defense, Robert M Gates, has just sacked the four-star Air Force Chief of Staff and the civilian Air Force Secretary for “a pattern of poor performance” over control of nuclear weapons and parts. Last year he sacked a two-star general and the civilian Army Secretary over the shocking standards of accommodation at a top US military hospital.

Here’s what the head of the Senate Armed Services Committee had to say: “Secretary Gates’ focus on accountability is essential and has been absent from the office of the secretary of defense for too long.” Contrast that with our own part-time Secretary of State for Defence who is also the Minister of State for Scotland. Accountability is not a word he is familiar with. He has presided over a regime where increased demands on the armed forces have not been matched with increases in resources. The thin desert-pink line has been stretched to breaking point and it is no surprise that under the circumstances more and more servicemen are abandoning the armed forces.

Gates has made it clear that the American air force had suffered for years from a loss of expertise in handling nuclear materials. Is that what is in store for us? Are we going to have our own “nuclear incidents” caused by lack of experience or lack of resources? Two incidents hit the headlines in America. One happened last year when a B-52 flew across America with six armed nuclear cruise missiles, which was completely against regulations, but what’s more, the crew didn’t even know they had them on board. The more recent incident, which resulted in the sackings, was when four nose-cone fuses for Minuteman nuclear warheads were sent to Taiwan, instead of some helicopter batteries that should have been sent.

The problems in America are certainly not due to resources, they are more symptomatic of complacency. Over here we have a dedicated, motivated, and professional armed services, but which is underpaid, poorly resourced and seriously overstretched. As a consequence ours are also haemorrhaging skilled men and women. Never mind the injustices that are being done to those who serve, and let’s not even get started on how shamefully the wounded are treated, where is the political will to see defence as nothing more than a part-time job? When will we get a secretary of state for defence who will focus on his job? When will we get some accountability?

Corporate Manslaughter in the NHS

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We haven’t properly sorted this one out, have we? Whenever members of the public lose their lives and it emerges that managers have been cutting costs at the expense of safety, we demand action. And that action never seems to be equal to the “crime” as we see it. It’s usually just a fine on the company concerned so modest it doesn’t even affect management bonuses, however egregious the failing, however obvious the dangers and however dire the warnings that were ignored. I’m not aware of anyone ever being jailed.

Such is the case for Linda O’Boyle. She has now died as the inevitable and predicted consequence of the NHS withdrawing free treatment. It was withdrawn because she voluntarily paid for some additional medication that was not available free of charge on the NHS. As such, she became classified as a “private patient” and therefore not entitled to further free treatment. She could not afford to continue at her own expense the treatment they had been providing, so the NHS left her to die.

Incredibly there is even a rationale for all this. According to Health Secretary Alan Johnson, allowing patients to supplement treatment at their own expense will create a two-tier NHS, with preferential treatment going to those patients who can afford the extra medication. He would rather see people dead than allow a two-tier NHS. Class hatred doesn’t come any more ugly than this.

According to the NHS, “It is explained to the patient that they can either have their treatment under the NHS or privately, but not both in parallel.” So if I need to be admitted to hospital, will I be refused treatment because I have been paying for my own Hay Fever tablets? No, of course not, that’s a silly question. But why is it a silly question? No, seriously? Where is this ultra-fine line? Why is there even a line in the first place? Private patients, like parents who send their children to private schools, are already paying double. First for the “free” services they are not taking advantage of, and secondly for the private services they are paying for instead.

Mrs O’Boyle was being denied treatment she was entitled to and to which she had been contributing all her working life, ironically in the NHS itself. How perverse is that? It is more than perverse. It is corporate manslaughter. The NHS is as guilty as any other business that takes cost-saving measures that results in someone’s death. That was the rationale behind Dr Shipman, who would terminate any old ladies whom he judged were a nuisance and costing the NHS more money than they were worth. He would be so proud of the lessons New Labour have learned from him.

Original Telegraph report here.

Landing on Mars

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These two photographs are separated by thirty nine years, and more than thirty five million miles. The inset is of Neil Armstrong stepping off the Lunar Lander of Apollo 11 back in July 1969. The fuzzy, low-resolution television pictures were beamed all around the world to a spell-bound audience witnessing for the first time man landing on a heavenly body that was not the Earth. It is slightly ironic that in this age of high definition tv, the new history-making image is as fuzzy as the one from decades ago. It shows the Martian probe, Phoenix, descending to the surface with the parachute visible above it. You can just about make out the trace of the parachute chords between the two. For all that it is a low-resolution image, it is nonetheless breathtaking and I find it far more interesting than the surface views taken from the lander itself, almost mesmerising in fact. Remarkably, the image was taken by NASA’s Mars Reconnaissance Orbiter which is on an unrelated mission to Mars. It was launched in 2005 and arrived in March 2006, while the Phoenix Mars Lander we see in the image was launched in August 2007 and arrived yesterday. What will we see in another thirty nine years? Man landing on Mars? The chances are that to beam the first pictures back to us as soon as possible and at extreme range, they will once again be black and white and fuzzy.

It’s not Gordon’s fault

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All the attention lately seems to be on Gordon Brown, when will he step down or when he will be ousted if he doesn’t go voluntarily. Everyone is blaming him for Labour’s current difficulties. If “difficulties” is the right word, it seems to be a weasel-word used by those who lack the moral fibre to say it like it is. “He is a difficult child,” someone might say of a seriously dysfunctional, out of control brat. Or, “It was a difficult crossing,” someone else might say about the maiden voyage of the Titanic. And that’s about it, really, they’re sunk, so get rid of Gordon. But it’s not his fault.

While Gordon is indeed the Prime Minister, he isn’t the only one in the cabinet. The “iceberg in the corner of the room,” if I may mix my metaphors, is the incompetence of the entire cabinet. Everyone surely knows it, but nobody will talk about it. If a camera was allowed into a cabinet meeting and it panned around the table showing each minister in turn, you could categorise them, one after the other, “Useless, useless, useless.” Every man jack of them. The only exception would be those who are “dangerously incompetent” instead, like Alistair Darling or Jacqui Smith. Labour is in it’s current difficulties not because of one man, but because of a couple of dozen men and women. They should all go.

That still wouldn’t solve Labour’s problem, though. The Labour back-benches are full of has-beens that never should have been in the first place. There are very few exceptions because the Blair legacy is one of filling the Parliamentary Labour Party with apparatchiks and researchers, clueless about the real world, but well skilled in manoeuvring within the party and therefore contemptuous of the democratic process. That is how we can have a Labour government that increases taxation on the lower paid while falling over itself to appease the super-rich. That passes Draconian laws to suppress peaceful protests while swindling the police over their pay. That promises to listen to us while denying us a vote on the European Constitution. The list is just too long to detail, the ruination of the NHS, the underfunding of the armed forces, the chaos of immigration, those few gripes only scratch at the surface of the problems. Difficult times indeed.

There is nothing we can do about it. The Labour Party was elected with a five year mandate, and Gordon Brown still has two years of it to play with. The House of Lords has been emasculated, it can no longer provide a check or counterbalance to the House of Commons. There is no mechanism, as there is in the United States, for a “Recall” vote to cause an election to be re-run if the winner fails to live up to his or her election promises. There is no prospect of the Queen dismissing Brown and causing a general election. Constitutionally we are in unchartered waters. A party in power with a huge majority in parliament, and a country with no confidence in it whatsoever. Did we celebrate the downfall of the Soviet Union too soon?

An economy run by Arts graduates?

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Sam Leith writes an excellent piece in the Telegraph today essentially saying that Arts Graduates know nothing about how the economy works because it is unknowable. That’s a good point. On that basis, the present sorry government must be Arts Graduates of the highest calibre because the Prime Minister and his Chancellor demonstrate how much they don’t know about the economy on a daily basis. Leith gives credit to those who work in the City and assumes they must be great experts in the economy. There I must disagree. The mistake, which I think a lot of people make, is to confuse what drives the City with what drives the economy. There couldn’t be a greater gulf between the two even though the City has a great impact on the economy as a whole.

Those who succeed in the City, and many do in spectacular style, do so not because they know how the economy works, but because they know how the City works. That should not be a subtle distinction. The reputation of the City has taken a pounding recently, and probably deservedly so, because everything to do with the economy is causing great concern to ordinary people whose daily lives are blighted by miscalculations, misjudgment, or just plain mischief.

That concern was enough to give the Labour government its worst electoral defeat in living memory. The Crewe bye-election will be another opportunity to give them another black-eye. Over in America, things are hardly any better. They have a presidential election taking place right now which provides an insight into some of their concerns. One such is the NAFTA trade agreement which came under fire recently as the cause of American jobs being ‘exported’ to Mexico. We have a similar problem here, but does anyone seriously believe that jobs are going to India or China because wage rates in the third world are so much lower than they are here? Only an Arts Graduate could believe that. The reason jobs are being exported is because City bosses earn huge bonuses from exporting them. If they didn’t earn such bonuses, those jobs would not be exported. Of course I use the word ‘earn’ in the loosest possible sense, in the sense of an athlete who ‘earns’ a gold medal by taking steroids or a mugger who ‘earns’ money by waving a knife in someone’s face. They are merely working the system.

And that’s the root of the problem. It is a system. A system of rules and regulations, of treaties and trade agreements that provide endless opportunities for smart operators to work it to their personal advantage. In what possible way, for example, can it be good for the American economy that an investor can buy into Yahoo! after it had turned down a takeover bid from Microsoft, and then sue the board for rejecting it? He had no involvement in the business beforehand, no concern for the nature of the business, or the interests of its customers or suppliers, but now he can hope to have the bid reopened and see his share-holding soar in value as a consequence. All perfectly legal and proper so far as Wall Street is concerned, of course, but absurd that a market can be manipulated in this way. Plainly Wall Street, and the City, do not facilitate the economy, they distort it. Likewise NAFTA and all the myriad of similar treaties do not create free trade, they interfere with it.

Someone who did know about the economy, and knew it very well, was Adam Smith. When he extolled the virtues of a ‘free market’ he wasn’t writing about a market that was closely regulated to somehow make it ‘free’, he wasn’t writing about states that had treaties to ensure ‘free’ trade between them. ‘Free’ to him meant free from all such interferences in the first place. It would be the invisible hand of self-interest that would drive free trade and ensure it stayed free. He would be astounded by an economy that barred imports that competed with local produce, intervened to buy up surplus stocks to maintain an artificially high price, dumped that surplus stock on third world countries, and in consequence ruined those markets for their local farmers and producers. Such is the EU vision of an economy. He would be equally astounded by an economy that enabled exotic fruit and vegetables to be flown half way around the world, at significant cost to the environment, to be sold at rock-bottom prices, while at the same time fuel prices are soaring and motorists are penalised to reduce their so-called carbon foot-print. This is not an economy that is capable of being understood.

We need reform. In Arts Graduate terms, economics has become like the Turner Prize, devoid of all social worth and intellectual merit. It is ripe for those with no understanding of the real world to exploit and manipulate to their own ends, the people who should matter are shut out. So we need reform across the board, from the City to farming as well as manufacturing, but most of all, we need reform of our government. Capitalism, for that is what is at stake, is as unworkable now as communism was, and look what became of that.

Walter Al-Mitty

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Who remembers Neil and Christine Hamilton? The Tory MP and his wife, ruined over the cash-for-questions affair? Booted out of Parliament by a white-clad Martin Bell, then bankrupted and forced onto the z-list celebrity circuit to scrape a living. Where are they these days?

I only ask because I watch the antics of their main protagonist with mounting incredulity. Mohammed Al-Fayed, long known as the Phoney Pharaoh to Private Eye readers, has been in the courts and our papers spouting his extraordinary theories about Prince Philip and MI6 and their plot to murder Princess Di. If you put edited highlights of their lives side by side, Fayed and Hamilton, which one carries himself with dignity, and which one is the court jester? Which one is the real human being, and which one is the caricature?

I don’t know Hamilton or Fayed personally, all I know about them is what I see in that distorting lens which is the media, yet the difference between them is stark. If we go back to the cash-for-questions affair therefore and ask ourselves which one of these two we believe, I can’t think anyone would now side with Fayed. Do you find him credible? I was never convinced the charge was that serious in the first place, even if true it is mind-numbingly trivial by the standards of what passes for our corrupted government today.

But I don’t think it is enough simply to say that even if it was true, it wasn’t serious. The consequences to the Hamiltons were devastating. And the root cause of that devastation is the man who stands up in court and tells the world that Prince Philip is a Nazi, that he ordered MI6 to murder Princess Di, that she was pregnant with Dodi’s child, and that Prince Charles also plotted to murder her, and so on, and so on, and so on.

You had to wonder, when you read these extraordinary allegations before, if they were what he really believed or whether the reports were exaggerated. But he has now said all of this and more on oath, in court. And so there it all is, word for word, the evidence that he is living in a fantasy world. You also had to wonder when the cash-for-questions affair was raging in the media which side was telling the truth. Well on the evidence of Fayed’s testimony in Court yesterday, this particular jury of one has returned with an unequivocal verdict: Hamilton is entirely innocent.

How much is Free Speech worth?

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There’s an old saying along the lines that something free is only worth what you paid for it, or put another way, if it’s free it isn’t worth having. So what of free speech? What good does it actually do us? I can see how in times past it was a serious matter that you should be able to criticise the king without fear of losing your head, or challenge religious orthodoxy, or develop new scientific thinking. Free speech has enabled civilisation to advance, it was crucial to the spread of new ideas, new thinking, new understanding. But as crucial as it was, free speech did not represent new ideas, new thinking or new understanding, it was merely the tool to bring them about. Today we have a lobby that worships free speech as if it were an end in itself. There is a scene in “Life of Brian” where the fleeing anti-hero loses a sandal and some of the chasing mob pick it up and worship it. Free speech should be something we use to get from A to B, like a sandal, and that’s all it is. That’s not to say it’s bad, that’s not to say we shouldn’t have it, that’s not an attack on free speech as a concept.

Where we do have a problem with free speech is with the zealots who worship it and who strive to extend it’s boundaries beyond reason, the sandal worshipers in that Python film in other words. To them, it is perfectly okay to insult Christians, it is perfectly okay to insult Jews and it is perfectly okay to insult Moslems. To them, free speech is paramount, it matters above all else. If they see that any Moslems, for example, are offended by cartoons mocking the Prophet then it becomes a matter of principle to them to torment those Moslems beyond endurance. Free speech is paramount. Free speech must prevail. The Christians and Jews have already been beaten into submission by the free speech lobby, but is that right? To complain or criticise on the basis of reasoned rational thought is one thing, but should it be acceptable to insult anyone for no reason other than to extend the limits of free speech? It is almost a religious obsession with some of the free speech fanatics, just criticise them and see the reaction. The irony would be lost on them.

The problem is that free speech is not being used to advance new ideas, new thinking or new understanding. It has been hijacked by those who are intolerant. To them the feelings of other people are an irrelevance before the altar of free speech. No one who is hurt to see their sincerely-held faith mocked, or is offended by foul or abusive language, actually matters. Indeed, it sometimes seems they are deliberately targeted for offence. Free speech did not come to us for free, it was hard won and a high price was paid for it. Right now we have lost it, and it is not doing us any good. On the one side we have whistle-blowers trying to tell us about corruption in Europe and who are being suppressed. Where are the free speech zealots when you need them, banging their drums and demanding attention? On the other side we have idiot Danish cartoonists who become a cause celebre instead. We need to win back free speech, it is too important to allow the zealots to run riot with. I am never going to stand up and defend the right of someone to be gratuitously offensive.

Incitatus honoured

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Another day, another new metaphor to describe the shamelessness of this government. Today the metaphor is Caligula who wanted to make his favourite horse a Consul just to annoy the Senate. He didn’t actually do it, apparently, but Gordon Brown is not as shy as that well-loved Roman and he will miss no opportunity to annoy us. Step forward three donkeys of public service, Tom Kelly, Debby Reynolds and Richard Summerskill.

Those with long memories will recall that we are in this mess in Iraq because we were lied to by the government over Saddam’s weapons of mass destruction. One man tried to speak out, and well qualified he was to do so too. But his credibility and reputation were publicly shredded, leading him to commit suicide. For his services to the country Tom Kelly, the government spokesman at the time, is given the Order of the Bath. The same honour goes to the Government’s former chief vet Debby Reynolds, who was in charge when foot and mouth and avian flu struck these shores. Thank heavens her efforts fell short of meriting a peerage. But spare a thought for Richard Summerkill who must feel short-changed after his department lost the personal and banking details of every family in the country and yet he only walks away with a CBE. Bad luck, Dick, try harder next time.

There you go, Caligula, for a master lesson in how to abuse the people you govern, look and learn from Emperor Gordon.