When on the edge of the Fiscal abyss…..

Now while the Mayan long count calendar ran out without causing an apocalypse, there is another ticking clock that will run out shortly and could create an economic apocalypse for America.

For sometime I have discussed the financial situation facing the US government. In essence, contrary to what Americans would like to believe they have as big and bloated a public sector as much of the EU. And indeed it is the very people in the US who wail the loudest about “big government on our backs” who receive the biggest subsidy cheques (many of America’s top companies count uncle Sam as either their best customer or indeed their only one, many of the “tea party states” receive more money in federal subsidies than their citizens contribute in tax).

Of course the problem facing the US is that their citizens pay but a fraction of the tax rates we pay in Europe. Naturally the inevitable gap that results in the countries finances has to come from somewhere and for the moment they are getting around this problem by borrowing money from the Chinese. But that’s not a sustainable strategy….just ask the Greeks!

Indeed currently, with a deficit of 8.7% the US has a higher deficit than any of the troubled Eurozone countries. With its higher rate of inflation (due to QE) and low interest rates, anyone buying dollars is literally loosing money with every dollar they buy. It is only the “irrational” attraction of investors to the dollar that is shoring up the US economy (much as the allure of euro’s worked for Greece and Ireland) but sooner or later this infatuation will end, and the results for the US are unlikely to be pretty.

But, neither the republicans nor the democrats are willing to see the sort of spending cuts implemented, necessary to close the deficit gap. As they quite rightly recognize that this would all but guarantee them loosing the next election!

Raising taxes, notably for the wealthy seems an obvious solution. After all they have some $21 trillion stashed away in offshore accounts. But again the republicans are dead set against this, as they after all represent the wealthy and many of their members fear tea party reprisals if they vote for tax increases (of course if spending cuts of the type the tea party often ask for were implemented it would be far more devastating!).

In essence the Americans want European levels of public spending with tax haven like rates of taxation. Something has to give.

When back in 2011 the Republicans held the US government hostage to a deficit increase, as part of the negotiations Obama wrote in a sort of “nuclear” option. This would see automatic increases in taxes and cuts in spending …where it hurts! The idea behind this was that it would be so painful politically to members of congress of both the main parties that they would be spurred into action and agree a deal rather than face these cuts/tax hikes coming into force.

Unfortunately, the US government’s financial long count calendar runs out on January the 1st. The economic devastation witnessed in the EU as a result of the German/IMF “austerity measures” are in all probability likely to be repeated in the US as a result, probably pushing the US back into recession, which will all but guarantee the UK’s triple dip recession becomes a reality.

But it would seem that the men of congress are staring into the abyss…the abyss stares back…and they say…its all the black guy’s fault, where’s his birth certificate!

As I’ve commented before that anyone can try to make party politics out of a crisis as serious as this merely demonstrates the poor and sorry state of democracy in the US. That politicians can literally be playing the blame game while racing towards a cliff as they place scoring points off each other as more important than averting a major crisis. A crisis that will cost many working Americans their livelihood.

As Steff Flanders at the Beeb discusses this is actually a more worrying crisis than the one facing the Eurozone. As with the last such crisis its likely America’s credit rating will suffer and the markets will punish the US government for its dithering incompetence. Indeed personally I wonder who would be stupid enough to buy dollars the way the Americans run their economy.

No doubt the republicans are foolishly assuming that they’re friends in the markets won’t betray them….my fear is that realising the world has lost all confidence in the US economy, the US hedge funds will take great delight in profiting from America’s demise, as a Goldman Sachs trader let slip last year.

Banking regulation, crime and punishment

A major distraction of the last week for politicians has been the issue of banking regulation. Firstly, I would query how can it be that, five years after Lehman brothers collapse, the government is only now considering that banks need to be regulated more tightly. And since then we’ve seen numerous other scandals, but notably recently, LIBOR, PPI (and personally I reckon the banks are also secretly behind those guys constantly ringing about PPI claims as part of an effort to discourage us from claiming) and that drug money laundering scandal.

Let me give an an analogy. Let us suppose that a bunch of bank robbers ran into a high street branch, held the place up at gun point, ran out of the bank and bumped into the keystone cops (who were out chasing after I guy on a bicycle whom they thought had called them a “Pleb”). Now let us suppose the judge, rather than giving them ten years inside, instead merely told them off, fined them a fraction of the money that had stolen, allowed them to keep the rest and walk out of the court free as birds. My suspicion is that the thieves would be not in the least bit deterred and as soon as they’d lodged the loot (not in a bank mind!) they’d be out robbing again.

Now if we reverse this story with it the banks doing the robbing, which is pretty much what’s been happening with these banking scandals. They caused tens of billions in damage (most recently with LIBOR) costing some people their homes and businesses and yet they escape (if they are caught of course) with a fine a fraction of the economic damage they caused and not a single night in jail! While the US courts seem keen on prosecuting one or two traders. But it seems the majority (some 45 within UBS alone) involved in this scandal will be getting away scot free!

Why is anyone surprised that the banks are continually involved in these sorts of scandals when they aren’t being punished for these crimes? Its a case of tails they win, heads we loose. Every few years we see, the banks get involved in some horrible scandal, the politicians wring their hands and cry to heaven “why are these bankers so corrupt and greedy” (hint, because many those running the banks are psychopaths! As I discuss here). The banks get a slap on the wrist fine and no sooner has the ink dried on that cheque, they’re at it again….cycle repeats!

If we want to see these continuous scandals within “the city” stopped then that requires punishing the ring leaders within the banks for they’re crimes. Now if a couple of the ring leaders (rather than some hapless fall guy) such as Bob Diamond (Geezer) were to be perp walked into the High court (in hand cuffs), given ten years and a massive fine (enough to see him sleeping on the streets once he was out, like this guy) I suspect you’d find the rest of the financial industry quickly scared straight.

Apocalypse naught

I’d hoped to do this post before today, but ran out of time with my Christmas prep’s. Of course unsurprisingly the Mayan long count calendar ran down to its last second….and nothing happened! But how could anyone expect anything to happen?

I was out at the time of the “roll over”. Although it did offer me the opportunity to say to the guy in the coffee shop “don’t take to the end of the world now” and “here’s a fiver, you’ve got ten minutes to spend it” :))

The Mayans were an advanced civilisation for their day, but there is no way (outside a lot of wishy washy new age BS) that this would provide them with the means to predict the future. Indeed modern Mayans (there are a good 7 million of them) claim that far from the end of the world, today was merely the changing of one era to another (equivalent to the Mayan millennium).

However, I’d propose a more obvious explanation – the ancient Mayans high priests screwed up! They were attempting to devise a calendar that aligned their believe system with the realities of time, the seasons and the internal politics of empire (e.g. the King says he wants a festival around a certain date close to his birth day, they need to fix the calendar to allow that and link it in with some religious context to justify that). What would happen thousands of years from then, long after they were all dead and buried probably never even occurred to them. No more than it is possible that Mark (who wrote the first gospels of Jesus) probably didn’t believe he was writing history (rather than just some allegorical tale).

If there’s one thing to learn from this incident, it is the danger of relying on dubious claims from ancient runes. As the saying goes, talking to god is called “faith”….but when god answers back, its called “paranoid schizophrenia!” :>>

Similarly if there is god and he was to leave the secret of salvation with someone, would he choose to leave it with some dodgy geezer who ties you up to an e-meter and charges a couple a grand for the privilege? Even people of faith need to adopt a healthy level of skepticism.

Much ado about Pleb’s

Plebgate is starting to take on elements of the Shakespeare play “Much ado about Nothing”. During this play Borachio (or is it Conrade? been a while since I’ve read or seen it) at one point calls Dogberry “a Knave” (or was it an ass?). Throughout the play, Dogberry continually refers back to this incident “and in addition sir, I believe he may have called me a Knave”.

Similarly, as I commented at the time, Andrew Mitchell used many expletives and four letter words (that would get most of the rest of us arrested) at the police and generally acted like a pompous upper class twit, but it is this Dogberryesque slight that has had the cops going “….and we think sir….. he may have called me a pleb”.

Tory Cuts in action, as seen on TV – Part II

Interesting wee program on BBC the other night “Britain’s Hidden Housing Crisis”. It shows how the economic crisis is pushing many people out of their homes and into the poverty trap. This crisis isn’t just affecting the working classes any more but increasingly member of the middle class and even a few toff’s. One of those interviewed was a former investment banker forced into sleeping rough. While I suspect many may not have a lot of sympathy for him (a few comments on this blog string to that effect), it shows you how deep this crisis is running.

One of the key themes of this program was the fact it is now so easy to wind up homeless. For example one of those interviewed ended up loosing her home due to cancer stopping her from working. This is the sort of thing that could effect any of us, hence why we all need that social security safety net…a net the tories are increasingly cutting away!

There is a myth put out by the tories that those on benefits don’t work and have it easy. Not true, increasingly people in low paid jobs with large debts (or a poor credit history) are being forced to rely on the benefits system just to make ends meet and keep a roof over their heads. If there was one theme of this programme it was that living on benefits is no picnic.

The tories unfortunately still cling to this warped view of people on benefits. I recall a tory on the radio last week bemoaning the fact that so many people in council estates have satellite dishes (let them eat cake sort of thing) My response to that would be:
1) those satellite dishes are largely the product of you’re pal Rupert Murdoch’s near monopoly on UK TV, notably sports.
2) not everyone who lives on a council estate (or is on benefits) is unemployed, quite a number of them do work (quite legally and legitimately).
3) many more used to work but have since lost their jobs due to the Tory austerity policies.
4) There’s a (rusty) dish on the side of my house from a previous occupant, all a dish on the side of the house tells you is that someone at a point in the past had a subscription. I’d query how many of those dishes are still active.

It is also true that some people in modern society aren’t very good at budgeting and have their priorities all wrong. Casing point, one of those interviewed in Panorama was shown driving away from his newly repossessed house in a large 4×4 (personally, I’d ditch the car first or trade down to a cheaper model before loosing the home).

However, if we’re going to start condemning people to poverty for these sorts of things, won’t it be an idea of regulating away the leaches who prey on them. I’m talking of course about pay day lenders (semi legalised loan sharks) and slum landlords. Indeed, as I pointed out sometime ago the tories policy on squatters rights has loaded a housing system that already favours the lenders and “casino landlords” all the more in their favour.

Yes there are people who exploit the benefits system, but there as many if not many more genuine hardship cases. Cutting their benefits to punish the scroungers amounts to “collective punishment” and if we’re going to start inflicting that on people, I think most of us would rather start with a few other groups (bankers? Lawyers? Tax dodging corporations?).

If there’s one thing we all need to learn is we are truly all in this together. Any of us are only a few pay cheques away from the bread line (unless you’re one of our millionaire cabinet that is), and this “I’m all right Jack” attitude in British society needs to go.

Kim Jung Style

This week crazy North Korean dwarf, Kim Jung un, world’s sexiest man (according to both the Onion and The Chinese People’s Daily), Rap music star (according to this parody I found called “kim jung style”), Time man of the year and ruler of the world’s largest ant hill, decided to celebrate Christmas in style by letting loose one of his big fireworks. Which apparently managed to work (again, I have to question the credibility of a country whose most fearsome weapon is called a “No Dong”) this time.

This “successful” missile test sent many in the right wing press into a complete tizzy. Will he be nuking LA next? (actually if you’ve ever been many would argue that would be an improvement!). Does this justify the US (or even the UK) spending many hundreds of Billions more on a large arsenal of nuclear weapons, not to mention missile defence systems?….Not quite!

But I would make a few key points:
1) The NK Taepodong-2 missile is a crude and primitive liquid fuelled ICBM, not unlike the first generation USSR and American ICBM’s of the 1950’s. Such missiles are very expensive to operate, need large launch platforms to prepare for launch (which are virtually impossible to hide due to their size) and take a period of many hours if not several days to fuel and prepare for launch.

Of course it will be all to obvious to the west what is going on (as it was for this launch) and the flight time for an incoming airstrike of a fighter squadron from a South Korean airfield (or carrier) would be measured in minutes. Indeed a B-2 (which the DPRK lack the ability to track) could be armed and flown from its base in the continental United States to North Korea and destroy the missile on the pad long before it was ready to launch.

2) The NK’s have in all probability a fairly crude first generation nuclear weapon, not unlike the Fat Man device. Unfortunately this is way too heavy to be mounted on a missile such as the Taepodong (which has a maximum payload of around 300 kg’s while such a bomb weights in at 4,000 kg’s!). Even they’re shorter range and more advanced missiles (that can hit targets in South Korea or Japan) are unlikely to have the payload capacity to carry a nuclear warhead (maximum 1,000 kg’s is generally agreed by experts).

Miniaturizing nuclear warheads sufficient for mounting on a missile took the major powers a considerable period of time and involved a lot of research (which didn’t come cheap!). Indeed it has taken the Chinese a good 30 years to prefect this technology with substantially better resources than those available to North Korea. I am personally doubtful the North Koreans have this capability nor that they will ever achieve it any time soon. So short of some lucky break with espionage (of course the problem with DPRK is that any agent will likely just defect in exchange for a big mac as soon as he’s over the fence!) its unlikely this will ever occur.

3) In addition to a miniaturized warhead, the North Koreans would also need a “re-entry vehicle”. That is a heat shield sufficient to allow the warhead to renter the atmosphere and not get burnt up or have its electronics damaged and then guide the warhead onto its intended target. LA or San Francisco might look like a big target, but on the globe scale they are tiny. If the missile misses its target by as little as 1% that amounts to missing the city by 70 to 100 miles (likely then detonating over sparsely populated farmland or over the ocean). Again it took considerable research efforts by the USSR and US to perfect such devices.

4) Even if the NK’s could somehow dupe the west and launch a missile carrying a WMD (without that being stopped) and develop all the other things needed, the range of these missiles is such that it is highly unlikely it could reach the US (save Alaska….so the US might loose some slightly nutty politicians and some good moose hunting country!) They certainly cannot hit the UK or Europe.

5) The North Korean leadership no doubt realise that actually using a WMD would be an act of politic (if not actual!) suicide. The US would respond in some way, and a strongly worded letter from Hilary Clinton ain’t going to cut it. While the US might forgo the option of a nuclear response (if the weapon failed to go off or as noted, exploded harmlessly over the ocean). They and their allies in the region have more than enough firepower in their conventional arsenals to devastate the North Korean military in very short order. It is almost certain that what is left of North Korea would then by invaded and occupied afterwards. As I’ve previously discussed, even the South Korean military, without any assistance from the West has more than sufficient manpower and firepower to overwhelm the North Korean military by itself.

The reality is that Kim Jung un is likely merely signaling his intention to maintain the North Korean Policy of C.F.C, or Crazy, Fearsome, Crippled. As I’ve previously mentioned the CIA’s nickname for the Pyongyang Adm. is apparently “the crazy gang” or “the Hermit Kingdom“. As North Korea’s long term survival strategy is to always keep the world guessing and appear sufficiently on the edge and dangerous that on the one hand the world won’t simply ignore them and let the regime wither and die. But on the other hand they know they don’t want to push the poker hand too far such that they give the west a valid reason to retaliate militarily.

Indeed it was telling that the missile went nowhere near the continental US (or even Japan, it overflew a few sparsely populated islands, that’s all) but right along the Chinese coast. China has just been through a once in a generation leadership change and my suspicion is this was in effect a shot across the bow of the big red Dragon to the West, not the Yankie devils to the East.

China is often described by western reporters as “North Korea’s only ally”. That’s not a sentiment shared in Beijing, as the wiki-leaks fiasco revealed. No, to them North Korea is like some crazy decrepit old relative who has a nasty habit of making casually racist comments and getting them into trouble with the local council by running over teenagers toes with her scouter. The Chinese would in truth by rather rid of the DPRK, but have to tolerate them for reasons of the internal workings of the ruling Chinese “communist” party (of course, in truth the Chinese communist party is no more socialist than the Tory’s nor the North Korean monarchy style regime with its hereditary leadership).

So in essence this event was more about North Korea letting China and the west know that CFC is still in effect.

An ode to Patrick Moore

Sunday saw the death of Patrick Moore, infamous to many in the UK as the presenter of the long running show “the Sky at night”.

the strength of Patrick Moore was his ability to connect the fascinating (but complex) world of astrophysics and cosmology (the sort of stuff that has Stephen Hawking scratching his head over) down to the level where the man in the street can understand it. He helped many to understand that there is a vast universe out there and probably was responsible for convincing many a young lad to go off and study physics and astronomy.

Of course this could be a double tragedy of sorts. One of those questions, Patrick Moore was always asking was “are we alone in this universe?”. Rumours are swirling that NASA might be on the verge of giving us an answer to this question, possibly as a result of data from their latest Mars rover, within a few days (they have I should note, neither confirmed nor denied these rumours). What a pity he couldn’t have hung on for a little while longer.

Starbucks…and nothing to do with Battlestar Galactica

Another sacrifice onto Osbourne’s plinth seems to be a number of “tax avoiding” companies, notably “Starbucks” . Personally, even though my company inexplicably just allowed an outlet to open downstairs, I’ve been avoiding them. I mean nevermind the morality of it all (they have the nerve to charge VAT!), do you really want to be buying you’re coffee off a company that is so badly managed that they can rake in £398 million a year and return a loss, for 14 years out of 15! Imagine going on Dragon’s Den and asking for money and presenting that sort of balance sheet? They’d spit the coffee back out at you!

Starbucks have since promised to start paying taxes….ah sure god love you’s! (cos I don’t and neither, it seems, does Osborne!). Naturally UK Uncut ain’t buying any of this. But let us pick this one apart for a minute. Let us suppose that I began performing creative accounting on my income, e.g. driving to work (I usually don’t, as its quicker to cycle as its not that far) and deducting the running cost of the car as “expenses”, along with the cost of maintaining my house, etc. I then presenting the HRC with a balance sheet stating that I had lost money (and in fact despite working full time I should be entitled to benefits) and claimed no income tax.

Now what if I agreed to meet with the HRC and “negotiate” paying some tax, what would happen? I think any of us would be done for tax evasion pretty quickly! What should it be any different for a corporation?

What’s that I hear the Tories say? Starbucks will leave the UK if we punish them too harshly? Ya, and how exactly are they going to move their stores to another country? Or indeed their customers for that matter? And where are they going to go? I don’t think they’ll make £398 million selling Latte’s in the Cayman Islands…not unless they can persuade the local population to start drinking about a hundred cups of coffee a day…each!

Bottom line, the fact that it takes public pressure to force a company to make what amounts to a charity donation to the UK HMRC should tell you there is something seriously wrong with the countries tax code. Any loopholes in these rules need to be closed, penalty taxes applied to all trade with known tax havens and all the lawyers and accountancy firms who help corporations or the super-rich dodge tax, should be bared from government contracts.

Osborne throws in the towel on deficit

This week, our Toff Bullingdon boy chancellor seems to have finally thrown in the towel and admitted that his deficit targets will be missed. I seem to recall pointing this out well over a year ago. Having steering the country into back into recession, it seems the Tories are aiming for a nice big lamp post to wrap the economy around. Some market watchers are already talking of the possibility of a triple dip recession. Speculation is also now mounting that with the UK’s debt levels rising, the country will loose its cherished triple A credit rating. Of course the irony is, that one of the main justifications for the austerity measures was the need for the UK to maintain its triple A credit rating!

And its not exactly rocket science why the government is in this mess. Keynesian economics tell us that the worse thing a government can do in a recession is cut public funding. This causes everyone else in the economy to slam on the brakes and stop spending. Small businesses worried about lots of unemployed civil servants no longer frequenting their premises doesn’t try to expand, even if he sees a market for such expansion. Even if he does, the Bank worried about more mortgage foreclosures stops lending to small businesses. Employers stop hiring, even to replace retiring staff. All in all the whole economy slows down, tax receipts fall and the government suddenly has to borrow more, not less. It is this very debt spiral that has brought eurozone countries such as Greece and Ireland too their knees and it is largely the fault of right-wing zealot’s such as Osborne on Merkel who are at fault for this crisis.

Steffen Flanders on the Beeb had an interesting TV series out a few weeks back called “Masters of Money”. The Open University has a page here that talks about it, and the different economic theories involved. At its heart is a debate between, J. M. Keynes (who advocated a more controlled economy), Heyek (who said politicians should just get out of the way) and Karl Marx (who said bolix to this, capitalism is unstable and institutionally corrupt and should be got rid of altogether).

All in all, I would argue that all three of these great economic theorists were correct but in different ways, but also wrong to some extent. If anyone has been more correct about the performance of capitalism (in particular the events of the last 5 years, it is Karl Marx. Look no further than the greed and corruption of Wall Street (or as I mentioned in my last post, Fleet Street) for an example. However the flaw in Marxist theory has been coming up with an alternative to Capitalism. For those unfamiliar with 20th century history, that sort of didn’t work out so well!

Heyek, similarly is probably correct, in that the best thing the state should do is leave people alone to run their businesses. But! This assumes we live in an ideal world, and the bad news for Heyek’s many right wing supporters is that we don’t. For the Austrian school of economics to work it requires our corporations to be run by people who will be cut throat Gordon Gecko’s one minute, then turn into buddish monks the next (and put the the nation’s economic interests ahead of their own). As the numerous scandals have shown, not just recent years, but the the many others stretching back to the very early days of the capitalist era (the panic of 1873 being just one example), greed and corruption are all too prevalent in capitalism. Inevitably in the absence of regulation the very greedy and corrupt, those who are willing to take the biggest risks and tell the most outrageous lies (notably the office psycho’s who control many of the world’s largest companies) will win….but when they get it wrong or succeed in creating an unsustainable bubble, the consequences for the wider economy will always be catastrophic…usually forcing the taxpayer to ride in and restore order.

It was for these reasons that Keynesian economics became dominant in the post 1930’s depression. And the period from the 1940’s to the 1970’s represents one of the longest and steadiest periods of economic growth in history. It was only the economic crises of the 1970’s that caused some to doubt Keynesian theory. Personally I would pin the blame on this on the oil crisis of the era which resulted in inflation soaring at a time of recession. Richard Heinberg of the Post Carbon institute discusses this matter, and the similar problems we are having right now, in this short film. But either way, the events of the 1970’s led to the rise of free-market evangelicals such as “The” Thatcher or Ronald “Mc”Reagan.

Of course, we’ve now gone full circle, the dismantling of the Bretton Woods system has led to a collapse of the world economy on a parallel with the 1930’s depression (indeed it is worth remembering that what made that depression great wasn’t “the wall street crash” but the fact that the global economy remained in a state of decline for well on a decade…which is pretty much what’s happening now!). Clearly Keynes was correct, the government needs to keep a firm hand on the tiller and carefully regulate the economy. Nations do need to be prudent with their cash, yes. But equally they need to keep those savings for a rainy day, and the news to Osborne is its currently pouring outside.

But the zealots of the free market cargo cult, such as those in the Tory party, do not give up their mantra easily. In many respects the rise of “libertarianism” within the US tea party movement can be seen as a sign of this. Its equivalent to the priests of the Mayan apocalypse calling for yet one more sacrifice to appease the gods. They’ve tried their best by kicking old grannies out of nursing homes, putting public sector workers on the dole queue, people with disabilities below the poverty line, cutting police officers, you name it, but it doesn’t seem to be working.

Obviously the message to the rest of us is, that we urgently need to stop Osborne or as he’ll go to the stage of sacrificing babies (or at the very least, closing down schools and hospitals) before admitting the inevitable truth.

The Leveson enquiry – try to ignore the elephants!

The whole Leevson inquiry verdictmedia event” went over my head last week, as I sort of guessed it would be another rerun of the Hutton Report.

The dogs on the street know that the Murdoch’s were either knee deep in these phone hacking shenanigans or criminally incompetent and inept in their inability to do anything to detect it or stop it, as I’ve discussed previously in this blog. Yet they will it seems get away scot free. A few of their minions, notably “Sideshow” Brooks and “Grimey” Coulson, will get taken to the cleaners. But the Murdoch’s look like emerging unscathed as too rather incredibly does Jeremy Hunt….sorry! typo I meant Cun… 😀

In short, one could draw an analogy. Let us suppose that a load of chickens were killed by a break in to the chicken house. The Farmer conducts a long detailed report into the matter, one that clearly implicates the Foxes in the break in….then responds by putting the foxes in charge of implementing a plan, intended to keep them out…how likely is it to succeed?

There is indeed a genuine debate in the wake of this enquiry as to how free should the press be? On the one hand Leevson details a system of corrupt influence and selective reporting, that would put many tin-pot dictatorships to shame. We have stories of police chief’s and senior politicians bending over and perverting the course of justice and democracy, just to satisfy the whims of the Murdoch’s. We have stories such as those of the Dowlers, or Christopher Jefferies (whom the media vilified just because he told a few tabloids hacks to get lost). The mother of another murder victim has talked to the Beeb this week (Patricia Bernal video of that here) of being hounded by a pack of wolves, with the press pack threatening to just “make stories up” about here, or even pushing money through the letterbox to get their exclusive.

The quest for truth or the common good seems to be a thought that doesn’t even occur to many tabloid news outlets, notably those controlled by the Murdoch’s or the Barclay brothers (remember their little sting on Vince Cable to help out their chum Murdoch).

However, a system of tight regulation could create serious issues for the press, as it would leave nervous editors under pressure to bury an embarrassing or controversial story. And not just the usual drunken celeb with her tits out tittle-tattle, but stories that are a lot more serious. If there is a law that restricts press freedom, you can be guaranteed that the lawyers of the rich and powerful, anxious to muzzle the press when embarrassing secrets get out (possibility of involving criminal wrong doing) will drive a bus thought such laws. Just look at the whole “super injunction” business.

Elephant number one
Ultimately the problem at News International wasn’t a lack of regulation, no it was because the Murdoch’s assumed that they could get away with anything (and to date it would seem they were correct in that assertion!). The issue isn’t a press that’s too free. Its that some elements of the press are owned by monopolistic tycoons determined to use the media as an instrument of propaganda and gaining politician influence (just look at the mess otherwise known as American democracy as a prime example). It is this control over the media the Murdoch’s exert, where Blair, Cameron, Romney and even Obama have had to come before Murdoch and “knell before Zod” that is the problem.

I didn’t notice the Guardian or Private Eye (the latter not afraid to push too close or beyond the libel line) getting involved in phone hacking…possibly because the owners of both papers know that the consequences of being caught doing what the Murdoch’s got away with (on an industrial scale!) would be the destruction of their company, personal bankruptcy and a spell in prison.

Therefore there is a simple solution to these problems, tighten the existing rules as to who constitutes a fit and proper person to run a media outlet (hint, the Murdoch’s should be the benchmark for “should not be given a paper round”) and also restrict the ability of one individual or company to control multiple media outlets. In short break up the media empires of the Murdoch’s and Barclay’s.

Elephant number two – the internet
Of course there is another elephant we can’t ignore – the internet. Increasingly many get their news and information not from the media, but from the internet, be it blogs like this or wikipedia. Muzzling the internet is a tricky business, notably as you need to go to court in the country where the site is based (I’m not sure if for blog.co.uk operates out of the UK, I believe its actually based out of servers in Germany…at least that’s what the IP address suggests!). And even if you can get that court to agree, two clicks and the same content is up on another site somewhere else. And as the Cheating-footballer-otherwise-known-as-a-GIT found out last year, you can’t easily muzzle 75,000 twit’s on Twitter. Even single party states such as China have struggled in this regard.

Of course this is healthy as the Internet is one of the few remaining bastions of what we could remotely call “free speech” on this planet. But sometimes, things can be taken a little too far. The danger is, that once a rumour is out in the internet, it can take on a life of its own, and the press regardless of any regulations can start reporting on the “controversy” over that which cannot speak off (a quick internet search filling in the gaps), regardless of whether it is true or not, as the whole Lord McAlpine saga a few weeks ago proved.

So any talk of press “regulation” is little short of political street theatre without taking into account these two elephants. And the “less than competent” government currently in power have got to be the last people we wish to entrust with this authority!