Saturday, December 27, 2008

What Does it Say ...

- about the Level of Debate on Domestic Violence in This Country...

... that I have just watched the most sensitive and informed treatment of abusive relationships I have ever seen on British television, and it was in Wallace and Grommit?

Fluffles was the archetypal battered partner, and Paella the archetypal abuser. It was harrowing ...

Laban's immediate and ungallant thought was that her Significant Other needs to keep an eye on the sherry bottle. Has anyone else any ideas about What It Says ? After all, if she's right, the Organisation Formerly Known as Dr Barnardo's Homes has just frittered away a lot of the punters dosh on expensive representations of Real Domestic Violence as envisaged by Bartle Bogle Hegarty's finest - when it should have been giving us Mr Park's gentle allegories.

(I must admit to preferring Curse of the Were-Rabbit, which I'd not seen before. Paella was too obviously a villain from the off. But will the lovely Fluffles become a fixture in the W/G menage ? It occurs to me that Gromit is a hero in the Gary Cooper mould ..)

Thursday, December 25, 2008

Belated Christmas Joy To You All

A couple of years back I mentioned this lovely Marian hymn. My daughter put this together with the freebie XP movie maker and Google, Vivien Ellis sings beautifully - Gloria in excelsis !

(post backdated to the appropriate day - at the time I was just too busy !)

Monday, December 22, 2008

Tariffic !

The trade barriers are starting to go up. While the company formerly known as British Steel, now Indian-owned, faces 30% production cuts, India is raising steel tariffs to protect its domestic production capacity. At the recent G20 meeting, participants swore to uphold free trade - then went home and raised duties on steel (India) and cars (Russia - a decision which provoked protests).

The Economist is distressed.

Tariff increases may be the protectionist’s barrier of choice, despite limits agreed by members of the World Trade Organisation (WTO). This is because in the past decade many countries have unilaterally cut tariffs to well below those limits. They have plenty of room to raise them without breaking any rules.

If all countries were to raise tariffs to the maximum allowed, the average global rate of duty would be doubled, according to Antoine Bouet and David Laborde of the International Food Policy Research Institute in Washington, DC. The effect could shrink global trade by 7.7%.

China has announced tax rebates for its favoured exporters, as well as pegging its currency at what America sees as an unrealistically low level. In many countries there's pressure for more import duties.

“Post-imposition of the duty, the prices for imported zinc would go up, thereby inclining buyers to opt for domestic variants,” an official of a zinc company said.
He seems to have grasped the concept pretty well. The Economist is reminded of the 1930s and the Smoot-Hawley tariffs. In fact, the increases weren't that hefty compared with the already-existing tariffs. But :

Smoot-Hawley did most harm by souring trade relations with other countries.
And that's the point. America was then the great world exporter. By provoking retaliatory tariffs, she cut off her nose to spite her face, as Ambrose Evans-Pritchard, again in Cassandra mode, explains :

There has been much talk lately of America's Smoot-Hawley Tariff Act, which set off the protectionist dominoes in 1930. It is usually invoked by free traders to make the wrong point. The relevant message of Smoot-Hawley is that America was then the big exporter, playing the China role. By resorting to tariffs, it set off retaliation, and was the biggest victim of its own folly.

Britain and the Dominions retreated into Imperial Preference. Other countries joined. This became the "growth bloc" of the 1930s, free from the deflation constraints of the Gold Standard. High tariffs stopped the stimulus leaking out.

It was a successful strategy - given the awful alternatives - and was the key reason why Britain's economy contracted by just 5pc during the Depression, against 15pc for France, and 30pc for the US.

Could we see such a closed "growth bloc" emerging now, this time led by the US, entailing a massive rupture of world's trading system? Perhaps.

Interesting to see that the 1930s depression in the UK was apparently nowhere nearly as bad as in the US, thanks to Imperial Preference - the policy of making the British Empire as nearly as possible a free-trade zone. Some remnants of Imperial Preference - like the favourable UK import regime for Caribbean bananas - only vanished relatively recently. Not that depression was a picnic for those affected - my grandfather was unemployed for pretty much the whole of the 1930s, with occasional labouring work on Government relief schemes, and his daughter went to school with cardboard in her shoes.

We have no Empire any more, so that avenue is closed to us - and America is not the world's exporter any more, so the lessons of Smoot-Hawley don't necessarily apply to them either.

Protection can work pretty well for a nation with a devastated economy and infrastructure wishing to rebuild. Japan and Korea did pretty well out of it - can you think of any candidates closer to home ? The South African and Rhodesian economies under the impact of sanctions did not collapse, but substituted imports and became self-sufficient.

I must admit I had M. Sarkozy down as a Brit-style price-of-everything sell-the-grandmother merchant. Maybe not so, although he's probably just playing to the gallery :

"We cannot be the only continent in the world that does not support its builders and manufacturers. We have to help our industrial infrastructure," Sarkozy told the assembly.

"Otherwise we are going to see an industrial wasteland."

What do you mean "are going to see" ? M. Sarkozy obviously hasn't taken a train between Birmingham and Wolverhampton or Sheffield and Leeds.

Pity The Poor Banker

Robert Peston reports Bank of England deputy chairman John Gieve as follows :

"If we'd used interest rates to try and address this asset-price credit growth, we would have been holding down the level of activity elsewhere in the economy, in manufacturing, in other services, holding down the level of employment at a time when consumer price inflation and earnings were stable and reasonably low. And people would have said, you know, 'this is a wilful reduction in the prosperity of the country'."
In other words, they feared the political reaction to what they knew was the right thing to do, so they didn't do it.

So much for the political independence of the BoE, for which Chancellor Brown was given so much credit, and which seems to have left him with the power while passing the responsibility to the BoE.

And the kindest expression for the BoE personnel involved would be that they "fell below the level of events".

It's not "that the Bank of England does not possess the proper tools for dealing with incipient booms in assets and lending". It's that it doesn't possess the proper bankers. John Gieve sounds like one of those chaps who would have trundled through less interesting times without trace. Instead he seems to have a CV covered in red ink and blots.

BoE website :

Sir John Gieve was appointed Deputy Governor in January 2006. In addition to his membership of the Monetary Policy Committee, he has specific responsibility for the Bank's Financial Stability work ..
That's unfortunate. Financial stability seems in short supply ...

He oversaw one Home Office shambles :

Sir John Bourn, the Comptroller and Auditor General wrote

To inform Parliament that the Home Office has not met the statutory reporting timetable in respect of its 2004-05 resource accounts;


I cannot form an opinion on the truth and fairness of the Home Office financial statements for 2004-05


That is as strong a condemnation of incompetent financial management as any auditor is likely to utter.

It is as astonishing as it is unacceptable, that a major Central Government Department like the Home Office cannot be trusted to account for the money it spends on our behalf.

If a private sector organisation had mismanged its financial affairs as badly as this, then the people in charge would be out of a job forthwith.

Will the Home Secretary Charles Clarke, whom in theory bears resposibility for this David Blunkett legacy, have the honour to resign ?

What about the "Sir Humphrey" , the Permanent Secretary and therfore the Accounting Officer of the Home Department at the time. i.e. Sir John Gieve.

Sir John is now the Deputy Governor of the Bank of England, with a vote on the level of the Bank of England's official Interest Rates, which affect the entire UK economy !

And another :

Last week the 56-year-old career civil servant returned to Westminster for a grilling by the Home Affairs Select Committee about why more than 1,000 prisoners were not even considered for deportation after serving their jail sentences. "There were failings in the handling of foreign prisoners which I regret," Gieve told the committee. "I am not trying to excuse the inexcusable."

Gieve has also been criticised over the running of the Immigration and Nationality Directorate and his failure to give a full account of how the nanny of Kimberly Quinn, David Blunkett's former lover, was given a visa.

In recent weeks, the Home Office has come under fire from several corners. Charles Clarke, the former home secretary, called the department "dysfunctional", while Clarke's successor, John Reid, recently judged it "not fit for purpose".

You have to be impressed with a chap who can preside over so much disaster and is still prepared to share his wisdom with us on prime time TV (tonight's Panorama). What's Hebrew for 'chutzpah' again ?

To be fair to Gieve and his colleagues, house prices were roaring ahead long before 2006. It was around 2005 that I started to get unsolicited invites to buy-to-let seminars at snazzy hotels, one of the signs that the market is heading for a peak. And doing the right thing would probably have cost the members of the Monetary Policy Committee their jobs. Instead it'll cost ours.

Gods of the Market Place

In my Amazon post I got comments from people who seemed to think I was a disciple of free markets. Up to a point, I am. As a general principle, free markets seem a pretty good way of 'making us better off' - although that phrase covers a multitude of sins and ideas - what exactly is 'better off' ?

But only up to a point. People are not always rational. What JFC Fuller called the myth of the Heroic Man is to a greater or lesser extent always in conflict with the myth of the Economic Man. Neither myth is terribly healthy, as we're not all one thing nor all the other.

Unfortunately both major UK parties are full subscribers to the myth of Britons as Economic Men.

Labour see that 'you are what you have' - and it doesn't matter how you got it. Hence the idea that being poor is somehow in itself a stigma and disgrace - to be removed by state transfers of cash. Pretty much the direct opposite of their founding beliefs, that an honest working man, no matter how poor, could - and should - be able to look anyone in the eye. But it's a long time since Labour was the party of the honest working man.

Tories see that 'you are what you make' - and it doesn't matter how you make it. Wasn't David Cameron's previous existence spent doing PR for upmarket vertical drinking establishments ?

I'm more of Martin Kelly's mind (he's quoting here) :

"(Economics) has moved into the void left by the decline of religion and the moral consensus; and it is increasingly seen as the main preoccupation of public policy, a panacea for social ills, the source even of private contentment. From being a technical subject, explaining human society in the way that medicine explains the human body, it threatens to become an end in itself, laying down goals, motives, incentives."
Which, as he says, is how we end up with Billy Aitchison and Sonny Devlin.

It's not one or the other, it's more or less. Don't forget Heroic Man, don't forget Original Sin and don't forget Original Damn Foolishness - the unwise decisions of clever men are likely to impact us much more then the unwisdom of the stupid, because clever men will be in positions to make decisions which affect us all. Vortigern thought he was maximising his utility when he hired Hengist and Horsa, but it turned out they had their own ideas about utility.

The worshippers of the Gods of the Market Place should ponder the end that attended Gabriel Oak's dog George, shot in "another instance of the untoward fate which so often attends dogs and other philosophers who follow out a train of reasoning to its logical conclusion, and attempt perfectly consistent conduct in a world made up so largely of compromise".

Trouble is, we may by then have suffered the fate of his sheep !