Cameron, the Euroskeptics and the dangers of appeasement

PM David Cameron made his long awaited speech on Europe earlier this week. Of course, its contents had been so heavily leaked beforehand I think most people know exactly what he was going to say months ago. In it, he firstly accepted that the UK was better off in the EU than out of it, but then laid out his plans that in the next election he’d be seeking to renegotiate Britain’s relationship with the EU and put that to the people in the form of a referendum.

Of course, the whole point of this speech was to get the Eurosceptic wing of both his own party and UKIP (or as I prefer to call them, the UK Bankruptcy Party….U-Bang ;D) off his back, by giving them their long cherished referendum on the EU.

For many decades the right wing media have long adopted a policy of basically blaming foreigners for all of the UK’s problems. Of course, in the 50’s it became socially unacceptable to blame Jews for everything anymore. Then in the 70’s, after they could no longer use the “N” word, and even blaming Muslims and Asians for everything is considered a tad racist these days. Blaming leftists, has since the 90’s, been a bit silly (as the labour party is now moved so far to the right, as one Tory put it to me, Tony Blair government was “the best conservative government the country ever had” :no:). So the tabloids instead took to making the EU and those nasty evil foreigners in France and Germany their piñata.

While this did succeed in sell lots of papers and ensuring that Tory politicians could avoid certain blame for certain things (e.g. I would argue the European Courts interfering in UK justice only happens because the UK lacks a proper constitution or bill of rights) it has had a corrosive effect on UK politics.

Unworkable
Unfortunately for the euroskeptics and Cameron, there is one glaring flaw in his strategy – it can’t possibly work! As politicians in Europe have pointed out the EU is not some sort of Al-Carte menu, the UK can’t pick and choose which parts it what’s, its all or nothing.

And for good reason too! Nobody is claiming that the EU is a perfect institution. Ask the politicians, or indeed the people in any EU country, and they will point out what they think should be done differently. The French would like to have a financial transaction tax (which the British oppose). The Germans what closer integration (ditto!), notably of tax rates (I came across a German think tank report once that labelled Ireland as a “tax haven” due to our low rates of corporation tax). Ireland and many smaller countries want more even distribution of power in the EU at the expense of larger countries (such as the UK), much like how each State in the US gets two senators regardless of size, we’d like every country to have one commissioner regardless of size. The Poles would like to label Vodka from anywhere else “distilled paint stripper”, much like how the French get arsy about people calling sparkling wine Champagne. The Poles also want a more even distribution of the EU budget to favour them and Eastern European nations (with their large populations and lower standards of living) at the expense of wealthier Western EU nations (that would of course mean the UK loosing its rebate).

Now if the EU were to allow the UK to renegotiate and pick and choose what it wants out of the Union, inevitably everyone else would be allowed to do the same. The art of politics is good compromise. And that would imply that in exchange for say, opting out of the court in Strasbourg. Of course as I’ve pointed out before, without a constitution this would merely relocate the problem to the UK, anyone think UK courts will be any better? (Remember all that super injunction business?) But! As part of the quid pro quo, the UK would have to take on some polices from the rest of Europe, e.g., agree to the German proposals regarding tax, accept the Financial transaction tax, give up the British rebate, etc. Obviously you put that to the vote in the country and I think you don’t need a crystal ball to predict the outcome (a massive vote against it and maintenance of the status quo).

Cameron’s proposal is in short so silly, so naive I can scarcely believe a UK prime minster would be that dumb and ill informed to actually say this. The proposal is so obviously unworkable, that the Lib dems, while pointing out the obvious, aren’t ruling out the possibility of working with the Tories in a new government that endorses such a policy, even though any “in or out” referendum is red line issue for them. Obviously they are correctly predicting that Cameron will likely come back from Brussels with his tail between his legs (its happened to us Irish several times!) and be forced to ditch the policy or put before the people something so meaningless and stupid that the whole country will inevitably vote against it.

Appeasement and extremists
The real danger to the Tories is that it indicates that Cameron is embarking on a policy of appeasement of the extremists within his party. Instead, he should be confronting them. He should also be telling the editors of the tabloids to stop blaming Europe for everything…after all that’s what we have Nick Clegg for! (Operation Liberal Shield and all that!)

Like I said, the art of good politics is being willing to compromise. To sit down with you’re enemies and meet them half way. That way while nobody gets everything they want, everyone walks away from negotiations with something. However, compromise simply isn’t in the vocabulary of political extremists such as UKIP.

The extremist’s methodology of negotiation is not that far removed from that of a spoiled child in a supermarket – that if they throw a tantrum and roll around on the ground screaming, everyone will rush to give them what they want….of course what actually happens is the other shoppers promptly ignore the screaming brat (much like the other EU partners will ignore the screaming UK brat) while giving the unfortunate parent a look that seems to communicate that they should have considered the benefits of contraception :)).

This is how we end up with such laughable absurdities of the Tea Party types calling for Obama to do something about the deficit, ignoring the fact that the deficit has mostly been run up subsidising Republican voting states, the military (who generally vote for the GOP), subsidizing corporations and paying for their medicare. Or the Tea party would like Obama to cut taxes to solve the deficit ( I don’t think they teach people basic addition and subtraction in Texas schools!), but they won’t raise the debt ceiling in the mean time. Or how some republicans are “pro life” but for the death penalty?

Or how here in the UK, I pointed out in a prior post, the absurdity of so-called “slipper farmers”, many of them the landed gentry of the UK (i.e. tories) who are using a loop hole in the EU’s CAP system to get subsidies from land on which they do little or no farming. But while the EU is aware of this loophole and would like to close it (the French are very much in favour of closing it) its the UK, and notably the Euroskeptic MEP’s who are blocking such action!

I happened to be up earlier enough the other day to catch BBC Radio 4’s early morning “Farming today” programme. And while some did criticize the CAP system (and the proposed reforms to it), it was acknowledged that a UK withdrawal from the EU would be catastrophic. And we’re talking, an end to grain or dairy farming in the UK sort of thing!

Extremists are very bad at forward planning. I’ve pointed out before the case against a UK withdrawal from the EU. By and large Cameron accepts the UK is better off in than out, not least because this would antagonise the UK’s 2nd largest trading partner and principle ally – the US. Indeed America expressed disquiet at the suggestion of a UK withdrawal in any shape or form from the EU.

Underpants Gnomes school of politics
But the euroskeptics have no answer to these sorts of criticisms. They have simply never thought that far ahead as to what the UK would do after it left the EU….other than go bankrupt, watch as the UK itself break up (Scottish and Welsh independence and all that), the “special relationship” wither on the vine.

I have previously criticised the SNP because, while I’m minded to support Scottish independence, I query the timing and I question whether they have critically thought through the process of making the country independent of the UK. The recent spat between them and the EU president underlines this. In short the SNP policy seems to be:

Step #1 – Vote for independence
Step #2 – ???
step #3 – Scotland the Brave!

However, the euroskeptics are even worse. The underpants gnomes in UKIP’s plan seems to be:

Step 1 – EU referendum
Step 2 – ???
Step 3 – ??? ???

The dangers of Appeasement
Of course as Neville Chamberlain found out, appeasing aggressive extremists is always bad idea. But like I said, this is exactly what Cameron is attempting to do. The history of politics suggests he’s onto a loosing strategy.

Take again, the example of the Republican party. For decades leading republicans had always been aware of this fringe within America of libertarian survivalist types and religious conservatives, who were their political allies, but rarely voted. And even then often for small fringe parties instead of the GOP! Karl Rove, “Bush’s brain” and chief political strategist, had the bright idea of reaching out to them with the view of forming a political alliance with these groups.

Blink and 12 years of Fox News propaganda later and the GOP faces not so much a lunatic fringe within the party but a lunatic mainstream. The leadership of the party now find themselves barricaded in the asylum manager’s office trying desperately to hold closed the doors and stop the Tea Party storming in and taking over. As far as Romney’s recent defeat, while he has to take some of the blame, but it was in part a consequence of the fact that he was forced to adopt a number of ridiculous tea party-esque polices to appease them. Such as getting rid of FEMA (the guys who pluck people off roof tops after a hurricane!) and ignoring climate change….hardly a sensible set of polices to be endorsing when a hurricane floods millions out of their homes a few days before an election!

As I’ve stated before, I see two futures for the Republican party, one where they expel or crack down hard on the Tea party extremists and reclaim the political middle ground (and thus stand some change of winning the next election). Or where the lunatics take over the asylum, put forward a general wackjob like Rand Paul or Sarah Palin for president, who will be roundly defeated as the moderates from both left and right unite to stop a deranged lunatic become president.

Confront
And my position on Tory party would be the same. David Cameron and the mainstream Tory’s best course of action right now would be to confront the Tea party style extremists in his own party (such as the types who want to ban abortion and outlaw gay marriage or indeed withdrawal from the EU) and basically tell them to feck off take it somewhere else. If I were him, I would go the other way. I’d endorse a symbolic pro-EU policy that would get right up the nose of the euroskeptics (e.g. concede to the EU about prisoners right to vote…or how about starting flying the EU flag next to the union jack over Westminster! :))) just to sent them into a complete tizzy and flush them out into the open.

While this might risk splitting the Tory party, in the long run it won’t matter so much. Extremists political parties, such as UKIP tend to have a very short shelf life. Its happened in several countries before. Such parties tend to do well for one or two elections, particularly if they are able to pick up an large chuck of the “anti-government” vote. However, their unwillingness to compromise makes it impossible for them to get anywhere. They can’t form governing coalitions and even when they do such regimes quickly became a lame duck administration and collapses. It quickly becomes obvious to voters that a vote for them is a vote for stalemate and the same tired slogans and support starts to slip.

Also extremists tend to be as unwilling to compromise with each other as with outsiders. Many such parties have a habit of splitting up after any electorate success. Recall that UKIP nearly split over Kilroy’s attempt at becoming leader. The BNP is essentially in the process of splitting with the EDL taking over a lot of its support. While I’m somewhat left leaning, I’ve never voted for socialist parties largely because they spend most of the time arguing with each other rather than those on the right. I recall once how the socialists in my constituency put forward 3 separate candidates, all of whom lost….but if you totted up their votes, if they’d united around one candidate they’ve have just got in….instead a Tory got elected instead (i.e. you’d have been as well off voting Tory in that election than socialist!).

So while yes, it would mean the Tory’s almost certainly loosing any hope of a majority next election, but by compromising on Europe they would find it easier to build a coalition with other parties. And like I said, while UKIP might get a bit of support, inevitably they’ll simply self destruct sooner or later and much of those votes will migrate back to the Tory party. The alternative is, that Cameron risks the tea party style extremists in the Tory party gradually taking the party over, eventually rendering them unelectable.

Only in the Kingdom

Some of ye may of heard about proposals from Kerry to allow old fella’s (sorry, I’m using the Irish term for “senior citizens”) to drive home after a couple of jars while a few sheets to the wind. The argument being that sure they never drive that fast anyway and they know where they’re goin!

Of course it seems to be getting more media attention in the UK than back in Ireland. I suspect this may have something to do with the fact that the principal figure behind it is Danny Healy-Rae, son of the infamous Jackie Healy-Rae.

For the uninitiated the Healy-Rae’s are a family of “cute hoors” (that being the Irish equivalent of a spiv or an Arthur Daley type) from Kilgarvan in rural Kerry (and I mean so rural, they think Kilarney is a big city!). There main hangout is “the Healy Rae” a pub that, last time I passed by, they we’re turning into a private members club to get around the smoking bar. You’ll find the place easy enough, its on the only street in the village and there will be one or two battered merc’s parked outside! To say the place is quant is to put it mildly. It’s the sort of place you associate with duelling banjo music!

Of course it is notable that the proposers are all publicans (including Healy Rae). Now in any other part of the world this would be considered a massive conflict of interest and the politicians in question asked to step down, but not in “the Kingdom” of Kerry!

Of course back in the real world, its unlikely to cut mustard. Naturally one can highlight a few obvious flaws in this plan. Notably, by a Garda (that’s the Irish version of the old Bill) issuing a permit for someone to drive home after a few pints and the driver subsequently has an accident. Then there is nothing to stop him, or anyone else injured in that accident from suing the police forces (or indeed the pub who sold him alcohol) for libel.

And by what criteria would the Garda judge an individual is sober enough to drive, other than a breath test? And what’s to stop someone having 2 or 3 pints getting a permit off the cop, driving to another pub and having another 3 and driving home (legally!) legless drunk.

Also the whole point of drink drive limits is to establish a legal limit for an acceptable level of alcohol. Now avoiding the debate about whether the limits are too low or too high, the point is that allowing someone whom you know is dangerously impaired in his driving ability to get behind the wheel cuts right across the principle of having a drink drive limit. It would make more sense to simply argue the limit is too high and raise it, or accept the science backing the present limit is correct and leave it as it is (or lower it further).

While the Rae’s do raise a point about people in isolated communities not being able to socialise, I would note that this is not a problem unique to Kerry. Go to northern Scotland and parts of Canada and people face the same problem. And indeed a common solution is “designated drivers” often where the individual in question gets free complementary (non-alcohol) drinks from the bar (fat chance of that in Kilgarvan!) or where some bars pay for a subsidised “pub bus” to pick people up and drop them off after chucking out time.

Its snow joke – SAPS at work

Of course as most of us are aware, its snowing outside, although the media would have you believe that civilisation as we know it has in fact ended. Inevitably as the snow fell the SAPS (Save Ass Policy Schemes, where “elf N’ safety” is invoked not due to a genuine safety risk but as part of a work avoidance strategy or for reasons of liability avoidance) swung into action.

Many schools closed because of snow, effectively forcing working parents to stay home from work. Yes, like the rest of us, school principals had weeks of advanced notice of impending snow, but apparently they have since discovered that snow is slippery (Jasus! who could have known!). Yes, and its also slippery when it rains! And the school run becomes treacherous when its foggy, yet we don’t see fit to close school’s then. One assumes this is because school heads would be laughed at if they did.

Indeed I would argue that one of the reasons the country grinds to a halt every time a few snowflakes fall, is largely because we can make excuses that in other parts of the world would be dismissed. If they closed down the rail network in Sweden or North America because of a little snow, they’d be laughed at and called “girlie men“. But in the UK faced with the choice of going out in the freezing cold and fixing a signal fault or blaming “elf n’safety” and staying inside in the warmth, its all too easy for railway staff to do the latter.

In the university on Friday, things started off well. We got an e-mail from the boss, the gist of which was, its just a bit of frozen water, don’t be a wet blanket, business as usual! However, inevitably after the students began making excuses (a rumour got going that all the buses were cancelled, not true they were running, just taking detours around certain ungritted roads) and trying to get out of going to class (of course I pointed out that if they ended up having to walk home/get a taxi they’d be in exactly the same boat after class than if they skipped it, so they may as well stay). But inevitably the SAPS kicked in and closed the uni down….and told us to leave the building (where there was no snow inside) and go home…via that same “hazard” they’d just shut the uni over!

While I admit I did cancel some appointments with students for Friday the night before, this was more because I didn’t have a lot to say to them (busy with marking) and didn’t want them fighting their way in only for me to say “what’s the craic!”

Why don’t we grid pavements?
Of course the powers that be seemed to have long realised the benefits of gritting roads and clearing away the snow, but why not pavements? I mean more people walk on pavements than drive (and drivers have to get out of the cars at some point). I fear this again may boil down to SAPS.

Back in Ireland we are no better, if not worse than the UK. But I recall a radio phone-in programme, where a householder was advised to stop gritting the pavement outside his house on the grounds that if some slipped on the grit he could be sued….but if they slipped on the snow it was considered just an accident!

Now if this is true, then that’s just plain stupid. In Germany the opposite rule applies, if you DON’T clear the snow and someone slips you can be sued (that said, Germans suing Germans is a fairly rare event) but if you make some effort, you can’t be sued.

While I won’t go as far the Germans, certainly a bit of common sense would sort this all out. I would propose a law that declares snow to be slippy (like Dah!)…but! in incremental weather everyone needs to accept the risks they take when they step outside. If you slip, regardless if a pavement has been gritted or otherwise, its just an accident. As a courtesy, householders, businesses or the council are free to take measures to make things a little less treacherous, but its assumed people will apply a bit of intelligence (wear sensible footwear, travel with care, bring a walking stick, etc.). Similarly, schools stay open regardless. If parents feel they’d rather not risk the wee’ins in snow, they are welcome to keep them at home. But otherwise, its business as usual.

Supermarkets? They’re all a load of knackers!

Of course those big price discounts for CD’s Tesco’s produce are not necessarily a good thing. As I described in a previous post (here) the bargaining power of the supermarkets often leads them to make unreasonable demands of suppliers. Supermarket suppliers can often find themselves squeezed to the point where its next to impossible to make money out of the contract, but they need to keep selling to the supermarket as nobody else can support that volume of business.

Naturally this leads to some companies cutting corners and that seems to have resulted in some horse meat, nearly a third in the case of some Own-brand Tesco burgers, winding up in some meat products…..I assume they’ll be rebranded “Knacker burgers” pretty soon! 😀

My response to this is, we’ll what do you expect for a burger that costs a couple of pence? As the Beeb point out (based on FSA data, a “value” beef burger can contain barely 50% beef, the rest “filler” which is basically all kinds of other crap they have lying around the factory.

Now while I’d admit to using supermarkets from time to time. I can be mega busy sometime and inevitably I wind up treating eating as just a quick task to get out of the way (and thus will just grab something quickly, even a pot-noodle! :oops:). But I purposely avoid buying certain produce in supermarkets (unless I’m stuck) notably dairy, meat and fresh fruit & veg. While this is often part of a conscious effort to support local shops, its also about me recognising that I want to know what’s being put into my food and I know what goes on with those who supply supermarkets.

Sometimes, a bargain isn’t quite the bargain it looks like!

Who put down music’s Top Dog?

This week say the inevitable with several more high street firms winding up zipped into the growing pile of body bags of the Great Recession (a review of High Street casualties and their status on the Beeb). One notable casualty was HMV, the last remaining high street music store chain.

While one can certainly blame the recession and poor trading conditions for bringing down many firms (let’s face it, those Tory cuts are hardly helping matters), and it certainly would have hit HMV where it hurt. But there are many other factors in play for HMV.

Ultimately the demise of HMV, Virgin Megastore’s (I would blame this failure on changing the name to something nobody can pronounce nor spell!), Game (which seems to have emerged from its earlier woes, tho for how long we’ll have to see), Blockbuster and many other firms can, ironically be traced back to their greatest success – The sale of CD’s and later DVD’s.

Both of these products proved to be enormously profitable. In part because of their mass market appeal, but also because of the fact that in the early days of CD/DVD sales they were sold at something of a price premium (i.e. a bit more for a CD version of something than a cassette or vinyl copy). This made sense at the time, as it represented more of a “premium” product and the production costs of the disks back then where much higher than those for tapes and Vinyl’s. However rapid improvements in manufacturing technology along with something of a price war between the firms manufacturing CD’s led to glut and the cost of the disks plummeting in the late 1990’s…but the media industry was very slow to reduce the sales price of disks to match this drop in production costs.

This, led to stellar profits margins for the music industry, as Philip Beeching (an advertising exec at the time who worked with HMV) notes in his blog. Consequently the media firms, notably the retail arm, were raking it in.

And like any cartel in the position of commanding a defacto monopoly, the media industry became increasingly greedy, bloated and corrupt. Executives awarded themselves massive bonuses, the stars of the industry (hardly poorly paid even before!) saw their income skyrocket, the industry forked out massive amounts on advertising/celebrity endorsements, comp trips for hanger’s on with 5-star hotels, champagne on ice and all the coke you can snort included! And of course the media industry also established a chain of massive and hugely expensive high street stores.

They also built up something of a monopoly in terms of shutting out foreign competition. One of the reasons the UK tends to do badly in the Eurovision, isn’t so much “anti-British” feeling in Europe, but more anti-Brit record industry. Many struggling artists in Europe, and their fans (who make up a large portion of the Eurovision audience), are peeved at their inability too make an international breakthrough, something they blame on the UK records industry.

All this spending however, built up the media industries fixed operating costs (i.e. the costs of staying in business and operating) and of course it comes on top of the existing “below the line” costs of running a media company. That being the cost of hiring the army of (generally low paid) workers to perform a host of important roles within the media (secretaries, editors, song writers, key grips, roadies, store staff, the guy who makes the tea, etc.). What the media industry, notably HMV, failed to realise is that they were basically making the rope that would be used to hang them.

“Downloads are just a fad”
Many in the media industry have been quick to point the finger (as they do when any media company gets into trouble) and blame file-sharing for the demise of HMV. While certainly, it hardly helped their financial situation, I would argue it was more a symptom of the fatal illness, rather than the root cause, as I will explain in a minute.

Again, Philip Beeching recalls, as part of his advise to HMV, pointing out the retailer’s vulnerability to both discount sellers such as Tesco’s (who were going for a “stack’em high & sell cheap” approach) and of course file sharing. The response from management was to angrily dismiss his (entirely accurate) analysis and state that “downloadable music is just a fad”. This has got to go down in history as one of those “famous last words” quotes.

Initially the reaction of the media industry to mp3’s and Peer-to-Peer was to firstly ignore it and deny that it was a threat, then completely misinterpret the problem and then over-react to it. As the many in the RIAA will frequently lament “how can we compete with free?”….obviously they’ve not visited I-Tunes recently! However the question they should have been asking is “how can ridiculously overpriced compete with anything?”.

The attitude of the industry was to assume that anyone using the internet or mp3’s was some sort of thief with the words SWAG written across his hard drive…ignoring the fact that the mp3 format had been developed, not by socialist hackers, but by a bunch of German academics of the Fraunhofer institute. Who, in the early 1990’s, where looking for a way of compacting down large media files. Allegedly, the first ever mp3 file was “Tom’s diner” by Susanne Vega…perhaps a telling peek into the music tastes of Germans!

While I accept that P2P has had some impact on music sales, I would dispute that its been as bad as they claim. Take my example, I was never a huge purchaser of media or disks (and most of my CD’s are classical music!) to begin with. But of the stuff I’ve downloaded P2P it has mostly fallen into one of the following categories:

1) Stuff I never had any intention of buying to begin with (heard half of a track on the radio, wanted to hear the other half (nothing better to do!), probably decided it was crap and deleted soon there after, you-tube has of course rendered such downloads largely obsolete)
2) Replacement for content I’d already purchased (after the supposedly “indestructible” CD died after just a few plays!)
3) Rare stuff that I couldn’t get in any store (out of print books, 1950’s films or 80’s TV series, specialist online retailers or pay-per-view sites now cover this area pretty well…indeed speaking of which Santa forgot to bring me some Judge Dredd so I’d best order some tomorrow!)
4) TV shows I’d missed (catch up TV sites such as BBC iplayer have again largely made such downloads obsolete)
5) “Pre-viewing” stuff I planned to buy anyway, for example a few years ago I bought the entire 4th and 3rd series of Star Trek Enterprise, largely because I’d downloaded a few episodes and decided that it didn’t look as bad as many fan sites had claimed, ditto for many of my classical CD’s….I have yet to receive a letter from Mozart’s lawyers! :)) ).

So adding all of the above up, about the only revenue my use of P2P, seems to have denied HMV is the fact that without P2P I MAY have bought something in one of their stores which turned out to be sh*te and never listened to it again….of course that ignores the fact that I know I’d have gotten the stuff much cheaper online anyway and there is this thing called “e-bay” where one can sell stuff you don’t want any more. And indeed if you’re a technophobe, there’s this place called “Cash Converters”.

The RIAA backlash
Either way, the reaction of the media industry was, rather than go with the flow and try and find a way to make money out of the internet, was instead to start suing anything that moved. They went after the manufacturers of mp3 players (that’s sort of like suing BMW because at least one or two of their drivers are complete pri&k’s!). They began suing those who ran sites or who downloaded they’re content, often relying on a trail of evidence that would be considered illegal in any other context (i.e. hacking into someone network to trace/disrupt a download is still “unauthorised access”, a violation of civil liberties and about a dozen other laws) and highly dubious (my favourite, they tried suing a dead person and then a granny for distributing Gangsta rap!)

In another example, lawyers for the media industry would sent people letters saying that their IP address had been used to download copyrighted content…ignoring the fact that IP addresses can be easily faked and wireless internet networks can be hacked into (even if you enable password encryption! This is why I would recommend switching you’re router off when not in use!).

This is the equivalent of you being arrested by the cops for a robbery, even though the only evidence they have of the crime is that they broke into you’re house (without a warrant!) and found you had a pair of shoes (and they knew that the guy who committed the robbery was also wearing a pair of shoes).

Inevitably while the industry has succeeded in frightening some into paying massive fines, unfortunately, more often than not, once such dubious evidence has reached a court of law, its been thrown out. The downfall of ACS:Law or MediaDefender are good examples of these sort of sordid practice.

The media industry also got their minions within government’s to pass increasingly draconian and unconstitutional laws to claim down on peer to peer. Indeed theses days you could get a harsher sentence for a few clicks with the mouse, than beating up an old lady for her pension money.

Naturally this draconian approach provoked a backlash from fans. I know some serious music fans who on point of principle had avoided the temptation of P2P, but who now began using it purely to punish the media industry for supporting such brutal and undemocratic policies. This link gives a taste for such unrest within the ranks.

If there is a quicker way to destroy an industry than suing you’re own customers I am unfamiliar with it. This is exactly the same approach taken by the hobbyist war-gaming firm TSR in the 1990’s and the consequence of it was, they alienated their fan base, who stopped buying their products and the company went bust.

How the internet killed the video store star
Of course, these serious music fans didn’t have long to wait for a “legit” alternative to P2P to emerge. Apple very wisely did what the retail arm of the music industry (that would be HMV’s department!) failed to do years earlier – find a way to exploit this new market and make money out of it. Many contemporaries soon followed. Indeed, even Napster, once the bane of the RIAA, has since been reincarnated as a legal and profit making site.

And as far as physical content goes, i.e. you want the actual disk (possibly to give to someone as a present) there are, as noted above, a host of online retailers now available who will sell it too you, often boasting a much better selection than any high street store and offering substantially lower prices.

Now while it seems that HMV did eventually (in 2006!) work out that this much fangled “internet” thinky was sort of a big deal and began to look at putting up their own retail site. But, as Philip Beeching article points out this was a dismal failure.

I would in fact describe it as not so much a case of shutting the stable door after the horse had bolted (they should have been in there before I-tunes came along!), more a case of them denying the horse had bolted (even when presented with an empty barn), burning down the barn to prove that the horse was still inside and when the horse came back, shooting it to stop it running away again! :no:

Ultimately HMV, Zav…whatever the hell! and other recently bankrupt firms were unable to do the one thing they needed to do. That would be lower their prices! Largely because, as noted earlier, they had built up massive fixed costs during the CD/DVD sales explosion in the 1990’s and 2000’s. While companies like Amazon and Tesco‘s drove a hard bargain when negotiating with suppliers, the likes of HMV, were too close to the industry, and seemed to have just rolled over at every turn. The final death throes of these stores has indeed largely thus been inevitable.

Lessons learned?
The collapse of HMV has sent rather more than a few shudders through the media industry. And not least because increasingly artists are using the internet to by-pass the media mogul monopolies altogether and go direct to their fans. The UK band Arctic Monkeys were one of the early pioneers of this. Many others have followed the same route. More recently that tacky South Korean song that was doing the rounds before Christmas.

So what lesson can one take away from all this? Well certainly, ignoring you’re customer’s changing tastes, then suing them (when they show reluctance too being overcharged) is hardly up there with how to win friends and influence people. And in a free market, its always the customer who should be setting the price, not the supplier fixing an artificially high price. Such suppliers need to realise they are merely digging their own grave in the long term by doing this. Sooner or later someone will come along and offer a way (legal or otherwise) by which people can by-pass you’re monopoly.

Also, trying to defend a monopoly using lawsuits is a losing strategy, as inevitably, like the dinosaurs in “Jurassic Park” life will find a way around such barriers (every time the industry made one means of downloading illegal, another method would emerge, indeed there’s nothing to stop people burning stuff onto a CD and giving it too their friends). Also failing to appreciate technological advances and the effects they will have on you’re business is up there with King Canute.

But what worries me about the media industry, as they prepare for the glitz of the Oscars, is that they don’t seem to be getting the message. Consequently I suspect the business failures of the retail wing of the media industry will now carry over to the media companies themselves. Obviously the smaller firms (many of whom are likely to loose a lot of business through the collapse of HMV anyway) will be the first to go, but inevitably, unless the industry urgently changes tactics, this process will work its way up stream until the media giants themselves begin to tumble.

No Death Star for America

The White House has refused to fund a proposal by 34,000 Americans to build a Death Star. While they acknowledged the potential for jobs and economic growth offered by such a project, the White house let it be known that the Obama Adm., “does not support blowing up of planets” (damn liberals!). They also questioned whether the country could afford the estimated $850 Quadrillion in construction costs.

Oh well, it was worth a try!

What’s up with Scottish money?

One thing I’ve noticed since I last came down from Bonnie Jockland is the increasing hostility of British shopkeepers towards accepting Scottish notes.
Now, as anyone from the north knows using Scottish money in England is seldom a fun experience (as in this clip from Live at the Apollo). Its like you’ve handed the shop keeper a dead baby. But recently I’ve had several flatly refuse to accept Scottish notes, even after I pointed out I had no English notes available (last time I got out cash was up north) and they have no credit card facilities. Meaning of course I walked off without purchasing anything and haven’t back to that shop since…indeed one such shop nearby has since closed down (a salutary lesson in market capitalism there, if you don’t accept you’re customers cash, you’ll go out of business pretty quickly!).

Least any Daily Mail reader start blaming Asian or Polish shop keepers who don’t have a clue about the UK. While I have gotten some quizzical looks off of Asian or Eastern European shopkeepers, when I’ve handed them Scottish notes (they start holding it up to the light and generally act like I handed them a piece of an alien spacecraft). Once they’ve established that it is a legitimate banknote, they tend to take a pragmatic “money is money” attitude and accept it. No, it is usually white English shopkeepers who refuse to take such notes and go all EDL on me.

I often find such hostility amusing given that Scottish notes have pictures of famous British people on them, the word “Sterling” and “legal tender”, while the English notes don’t have any reference to sterling nor legal tender and have a picture of an elderly German pensioner instead (so they’d rather take coin off of bloody foreigners!)

Again, as I don’t read the Daily Mail or Sun, I don’t know what BS they are spreading to provoke this. But too be clear, even IF the SNP get a yes vote in two years time (and balance of probability is it will be a narrow rejection of independence), it will still take a number of years to negotiate and then implement the terms of that independence. Hence unless you plan on hoarding Scottish notes under you’re mattress for a decade or so it will still be legal tender for sometime.

Indeed Irish punt notes, while technically no longer legal tender, can be exchanged for Euro’s at the original set exchange rate at the Central Bank in Dublin (although you may face some questions if you show up with a large pile of them). No doubt in the unlikely event of Scottish independence AND the Scot’s joining the Euro (as I pointed out in a prior post, this won’t happen any time soon either), there will be a transition period for exchange of notes both sides of the border.

The Trillion Dollar Coin

Interesting article by Paul Krugman of the NY times has been doing the rounds. As he points out there is this absurd situation in the US political system, where Congress can vote for a budget where the numbers simply don’t add up, i.e. award generous pork barrel spending to their respective special interest groups, give their rich friends a massive tax break. The president’s powers to overrule this budget are very limited (he can either refuse to sign and veto the whole thing, or accept that shutting down America is too costly swallow his pride and sign it anyway).

Then a few weeks later the very same politicians who passed a budget that is guaranteed to run a deficit can pull out their Tea Party Patriot costumes, refuse to raise the debt ceiling and blame “the black guy” for reckless spending and dump the inevitable mess that will follow if the US were ever to default on its debts on the President. Now in any other country this sort of behaviour would be quickly labelled stupid and stopped, but not the US.

However, Krugman points out a loophole the White House could use to get around this. The Treasury department can mint a coin of any denomination of their choosing. So in theory, there’s nothing to stop them minting a Platinum coin, assigning a value of say $1 trillion to it, and handing it over to the Federal Reserve to use as collateral. Thus effectively pumping an extra trillion into the economy and bypassing congress. Krugman even suggests they put Republican house leader John Boehner face on the coin, though I vote for George Bush (who is largely responsible for the current economic mess) and the slogan “in debt we trust”.

Of course the Tea Party Republicans and libertarians have been sent into a tizzy over this one. Of course I find this odd, libertarians are forever trying to promote the idea of a reintroduction of the gold standard and getting people to buy into their various scams involving gold or sliver coins. All Krugman proposes is that Uncle Sam should do the same on a much larger scale. Again, I suspect conservative demonstrate yet again, that they don’t understand the concept of irony.

The founding fallacies of privatisation

In reference to my last post, it is perhaps important to counter what I call, the founding myths of privatisation. I would highlight three in particular.

Private v’s public
The first fallacy is that its cheaper to run things via a private sector firm than in the public sector.

Now, as someone who works in the public sector I am all too aware of a certain number of my co-workers, many of them in senior positions (drawing on a considerable salary) who quite frankly, are more obstacles to the efficient running of the university. If Osborne happened to drop by and ask for a way the uni could save money, I suspect many of us staff would point to the key offenders and say “sack him/her” and not only would it save the taxpayer money, but productivity in the university would actually increase! But equally, during my term in private industry, I’ve seen many clueless and inept bosses whose job function seemed to be to stop the rest of us doing our jobs.

Indeed data does seem to suggest that the publicly run NHS provides much better value for money than the privatised US health care system. Now I’m not suggesting that the NHS is a model of efficiency, I’m merely pointing out that there nothing to say that just because a company is run by the private sector (with a profit motive) does not automatically make it cheaper and more efficient. And in a similar vein, as I discuss here, despite heavy government subsidy, the UK’s train services are actually more expensive that similar services provided by public sector companies in other countries.

Of course part of the problem for a private firm is that they are after all running a business, not a public service. The company and its shareholders are in it for the money, and surprise, surprise, they are going to place lining their pockets with sliver and awarding themselves large bonuses ahead of, say fixing all those leaky water pipes or providing more spacious trains for commuters.

Competition is key
The second fallacy is that governments often forget that one of the key variables in private industry, is that of competition. Bosses need to feel their competitors breathing down their neck before they step up to the plate. Otherwise, any time the unions threaten a strike over Christmas, they’ll just roll over and give in (this is how we end up with train drivers earning more than airline pilots!). Or if a supplier or maintenance contractor starts charging a king’s ransom, the boss just shakes his head and signs the cheque (rather than go to the trouble of replacing his hardware and finding a new supplier/contractor). The financial incentive to spend the cash replace antiquated systems that cost alot to maintain (such as signalling on the train lines), just isn’t there.

One of the big problems with the “privatised” railways or water companies is that most of their “customers”….that would be us poor saps, don’t really have any choice but to use their services. I mean if you live far from work and can’t get their by car (possibly because you can’t afford one), then you really have no choice but to either use the train or quit you’re job. And incidentally the latest rise in rail fares is prompting some people to do just this, as the cost of rail travel is for them exceeding the benefits of working.

Similarly, I can’t exactly ring my water company, tell them to shove off, and start relying on bottled stuff!

Now government’s often tries to claim that they compensate for this lack of outright competition by making companies bid for contracts. But I would point to the fiasco of the West Coast contract as an example of how divorced from reality this claim is.

I am no fan of Virgin trains (if there’s one thing I associate with their trains its the smell of piss from those overly large toilets of theirs), but clearly First Group we’re simply pulling numbers out of a hat to get the contract. Once they had it and inevitably failed to deliver, there would be sweet FA the government could do about. And again, while I’d agree Virgin have been doing a pretty crap job on the railways (maybe not any worse than any other UK train company), but I fail to see how changing the logo on the side of the train is going to change anything.

Further a large chuck of the problems within the Railway companies can be traced back to the privatisation process. As the companies had to bid against each other to get the contracts, many started operation with huge debts (most borrowed the money to pay the government for the contract against their rail companies assets). This made it very difficult for them to raise the capital to spend serious amounts of cash on new trains or infrastructure without some form of government support.

And again, in reference to the probation service privatisation I just posted about, its worth noting that companies like G4S, who have previously screwed up royally and cost the taxpayer millions, are in the bidding for these contracts.

If you tendered several builders for an extension to you’re house and the one who got the job made a mess, went way over budget and then buggered off leaving you with a hole in the roof, I’m guessing you won’t hire him again to fix up the garage (I suspect if you contacted him again, it would be to set up a sting and get him on one of those “rogue traders” TV shows!). But that’s exactly what the government does with these companies time and time again. Every time a contact goes out for, say, a new class of Submarine, the same guys who went over budget and buggered up the previous time, still end up getting the contract!

Too big to fail
Finally there is the problem that many of these privatised public services essentially fall into the category of being “too big to fail”. As I’ve mentioned before, if any government ever did bite the bullet and try to create a “real” privatised train service with open competition between companies on lines and companies like Ryanair free to buy slots and run their own trains, bring in lower paid staff from abroad and an open bidding system for railway service contracts.

Inevitably under such a system there would be winners and losers. And the losers would involve train companies going to the wall leaving passengers stranded and some stations (in marginal constituencies) without any active trains. With many people unable to get to work, the economic consequences for the country would be devastating. And of course the political consequences would be even worse come the next election. This is why we see the absurdity of the government paying 5 times more to subsidize a privatised railway system as under the last days of British Rail.

Similarly the government cannot afford to let its virtually privatized network of universities go to the wall, due to the awful political and economic consequences that would unfold. The water and power generating companies also know that they can behave as badly as they like and never go broke. As cometh the hour, they will be rescued by the state. As there’s no better way to loose an election than to cut off people’s water (which almost happened due to the drought) or electricity.

Don’t get me wrong, there are many things that private companies do and do well, and do very efficiently. But there are sound economic reasons why capitalism works and in many cases privatisation amounts to one ignoring these rules.

And there are some public services which we don’t want to end up in the private sector. The cost to society in the disruption of these services, being simply too great for any nation to risk.

Privatizing Probation, are they serious?

For quite some time, rumours have swirled that the Tory’s were planning on privatizing elements of the UK justice department. These appear to have been confirmed with an announcement of a plan too privatise the probation services. This should lead to some nice juicy contracts being given to a few wealthy Tory donors.

But what could possibly go wrong? Well the fact that one of the companies in the bidding is G4S, hardly builds confidence. This is the same company who took on the privatised job of protecting the Olympics, then bugger everything up, forcing the army to be deployed at considerable expense to the taxpayer.

Furthermore, the history of privatzing public sector posts like this is seldom positive. Consider the fiasco when prison transport was privatised and they started loosing prisoners (again G4S, then known as Group 4 became notorious for this). Indeed the other day there was a piece on radio 5 live about rogue bailiffs.

Then there was the scandal of A4E, where the government (specifically the Blair government) privatised parts of the social service aimed at getting people back into work. It has since turned out that many of these “charities” involved have simply milked the government to the tune of millions (£180 million in the case of A4E, the fraud office is investigating last I heard), putting people in jobs they weren’t suitable for (and ultimately were unable to keep) or simply faking their records to show that people had gotten jobs. All the while the directors creamed off millions (Emma Harrison of A4E paying herself a cool £8.6 million!).

Indeed, the Tory’s weren’t pointing the finger much about this, as they compounded the Blair government’s mistake through their policy of “welfare chain gangs” which turns out to provide “compelled labour” to corporations (including another security firm who forced benefits claimants to sleep under a bridge in London), thus discouraging them from hiring more full time staff (why hire someone at minimum wage when you can get a welfare recipient from the government for a fraction of the cost?).

In America a similar plan to privatise the handling of youth offenders in Pennsylvania, resulted in a major scandal (the so called “cash for kids Scandal”), where it turned out that the private company in question were colluding with a judge to obtain favourable rulings (i.e. rulings which then translated into an expensive contract being issued to the company to imprison, monitor or care for youths, with the judge getting a kick back).

So perhaps the question I should be asking is what can possibly go right?