Other News of the Week

The Dictator’s Daughter in trouble
Last week I made mention of Gulnara Karimova, the daughter of Karimov, the Uzbek dictator, aka “the dictator’s daughter” or according to wikileaks diplomatic cables “the most hated person in the country”. Anyway, the BBC revealed a letter from her, allegedly smuggled out of prison, that suggests a spectacular fall from grace.

Gulnara, never shy of publicity, has been noticeably absent the last few weeks. Her twitter feed went dead a few weeks ago. She also made the unprecedented move of openly criticising her father a few weeks back. Anyone else who’s remotely thought of doing that has been killed or arrested. All this suggests a feud going on, possibly even a power struggle between dictator and his charismatic daughter.

Now while one cannot help but be sympathetic to her plight, they are probably more than a few who will conclude that what goes around comes around. Gulnara cannot feign ignorance as to the crimes of her father, not least because she’s been intimately involved in more than a few of them! Evidence suggests that she has been directly involved ibn racketeering, bribery and general acting like a spoiled despotic bimbo.

Indeed, what may well have triggered this whole sequence of events was her implication in a massive bribery scandal in Sweden and in Switzerland, one which involved hundreds of millions of pounds (possibly the biggest ever in Sweden). Its possible that the excesses of his daughter simply became too much for the despot.

Or equally its possible that she tried to move against him (rumours suggest he’s not well and might be dying). Indeed the BBC have a series on right now about the Plantagenet kings. One unfortunate trend for the Plantagenet’s was how king after king, no sooner had he the crown on his head, but his own relatives, often his own sons and wife, were plotting his overthrow, often helped out by the king of France. Such is the way of any despotic government, which is why we need to do everything possible to topple such regimes.

Farage v’s Clegg on Europe
Speaking of authoritarian, right wing nut jobs, I missed the whole Farage v’s Clegg debate. But that wasn’t so bad, for as I predicted would happen a few weeks back, the debate was ruined by Farage repeating the old nazi trick of telling big lies often enough such that people start to believe they are true :no:.

According to Farage, 29 million Romanians and Bulgarians (or was it 500 million!) are about to descend on us (btw that’s more than the entire population of both countries!), 120% of the UK population are now immigrants, 98.7% of whom are only here to claim benefits, steal our jobs, commit crimes, butcher horsemeat, spread diseases and commit terrorism in what little free time this busy schedule allows :)).

It is no use “debating” something with someone who is going to rattle off a load of bullshit. We see the same thing when scientists try to debate creationists or climate change deniers. The only situation where a debate with Farage would be acceptable would be if we had a moderator able to act as fact checker and call out Farage’s porkies and half backed myths as he goes along. Otherwise its like wrestling a pig, you both get dirty and the pig seems to enjoy it ;D.

TB in moggie’s
Of course the tabloids soon had another thing to obsess over other that the EU debate, the fact that TB might have spread to cats, possibly from Badgers and then to humans. I would note the risk of infection is pretty low, but then again when have you known the tabloids to let a few “facts” get in the way of a good story!

I would argue that this shows the faults in the government’s policy on Badgers. That a policy of vaccination of badgers and cattle is better than culling. As you can never be sure to get all the badgers and inevitably disrupting an eco-system by killing badgers in the area can have all sorts of consequences…such as badgers from neighbouring areas moving in and spreading new diseases too that area. Now while this is unlikely to have been the trigger for this outbreak, a future TB outbreak could easily be triggered by such a sequence of events.

In short humans meddling with nature rarely has the consequences we intended. And if you don’t believe me about that, go ask the Australians about toads and rabbits.

NHS budget’s under pressure
One of the big Tory lies promises was that NHS spending would be safe under them. Well we’ve seen yet more evidence that this simply isn’t so. A report suggests that many NHS trusts are now in deficit. I suspect this may have something to do with the Tories ridiculous policy of allowing doctors (hardly the best people to put in charge of a budget, that’s why we have accountants for!) greater control over budgets, apparently so that we the health care users get more “choice”.

Ya, that’s the one thing I wanted in an NHS hospital, more “choice”. That way if injured I could choose not to be taken to the nearest A&E but maybe remain in agony a few minutes longer to go to a different one down the road. Or how about a choice between a lime green X-ray machine and a blue one? ;D

As if to compound matters, there are also reports of councils, who have come under severe budgetary pressure from the government, dipping into NHS funds to pay for certain services. Again, given the enormous pressure council budgets are under, this is hardly a huge surprise. In fact it’s a bit like waving a chuck of raw meat in the face of a lion and acting surprised when he bites.

Of course the danger is that the Tories will merely use the failure of any NHS trust as an excuse to try and privatise it.

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Power blackmail

There is talk of a competition committee investigation into the near monopoly powers of the big six energy firms. This sent the two main parties into a tailspin. Labour quickly claimed that Ed Miliband’s proposed policy of a price freeze was responsible, while the Tories denied this.

I would note that I have been critical of the policies of both the major parties on this issue. I think labour’s price freeze idea is unworkable, although the Tories ain’t much better with their plans to pay the French and Chinese to nationalise the UK nuclear industry, cutting funding to energy efficiency and a new dash for gas (hardly seems sensible given events in Crimea!).

However the response from the industry was to raise the thinly veiled threat of national blackouts by the boss of British gas and Centrica, if the big six’s cosy little cartel was threatened.

Now while I agree that there is an urgent need to come up with a workable energy policy in the UK. And a failure to do so has led to a lack of investment in the energy sector. However threatening already angry customers with a blackout is hardly up there with a strategy for winning friends and influencing people. And it also suggests that there is truth to these allegations (you know you’re over the target when you start taking flak and all that).

However what Centrica are implying is that for purely ideological reasons they will renege on their responsibilities to provide power and invest in infrastructure and thus they are in violation for their franchise agreement (which gives them the right to operate). Hence I would argue that they either the bosses of these company’s should resign at once and the company distance themselves from his comments. Or both British Gas and Centrica should have their franchises revoked and be re-nationalised.

Flight MH370

The disappearance of flight MH370, is something that has inevitably attracted a lot of media attention over the last few weeks. How, some ask can an aircraft just disappear? I mean don’t we have GPS and satellite tracking, etc? This has led to a whole host of lurid conspiracy theories circulating.

Actually the truth is that it’s very easy for an aircraft to go missing. Take a look out the window of a plane sometime and see how much empty space there is, particularly over an ocean. Tracking something in that sort of environment isn’t easy, particularly when it’s at 30,000ft and travelling at hundreds of miles an hour. Also consider that it is not routine to track objects over the ocean, not least because most radar sites are shore based and have a limited range.

While within the EU and the US there is an attempt to track all aircraft by radar, and certainly turning your transponder off is the sort of thing that’s going to result in air traffic control at the very least asking a few questions (and since 9/11 more than likely alerting the Air force too). However this is borne out of the fact that the air traffic in these areas is so dense that monitoring is essential in order to prevent mid-air collisions. And even then there have been several such occurrences over the sky’s of Europe and America. In other parts of the world, it is not routine to track all aircraft, except in militarily sensitive areas or on approach to controlled airspace such as airports and major cities.

And satellite tracking, isn’t fool proof. Up until now, there has been very little need to track aircraft by satellite, save in certain military or intelligence cases, and one assumes (baring miss-adventure) there was no need for anyone to consider doing that in the case of MH370. And to be honest, a satellite in a polar orbit (standard for spy satellites) is not the best way to track a plane. It was little short of blind luck that any information was received from the plane via satellite. Airborne radar assets such as AWAC’s or ground based phase array radar sites are far better at this job. But of course, they need to be within range.

As I mentioned in a prior post, the loss of this flight has been a bit distressing for the Chinese relatives. We in the west are used to the bungling incompetence of our politicians and government. But the Chinese government usually keeps such things hidden from its people, so they are not used to be confronted by confused and inept politicians and don’t realise that this is perfectly normal in a crisis (recall G. W. Bush deer-caught-in-headlights response to news of 9/11). Indeed this might be what is fuelling the aforementioned conspiracy theories.

China’s “flesh search engines”, where millions of them form an angry mob online, have teamed up with their counterparts on sites like Reddit to try and find the plane using google earth…unaware that the images on this are often many months or years old, and it’s not that odd to see a plane in a satellite image over an ocean.

Who dunnit?
So putting aside such conspiracy theories, what can we say is a possibility? For starters, just because its a mystery doesn’t prove anything. There were similar lurid conspiracy theories regarding Air France flight 447. The usual rivalry between Boeing and Airbus surfaced with some American commentators trying to argue that it was because of something intrnisically unsafe about the Airbus…forgetting to point out that the one component on the plane that suffered any kind of a fault was made in the USA and fitted to many Boeing aircraft also! In then end it turned out to be a combination of gross pilot error and spatial disorientation.

I seem terrorism as pretty unlikely. Terrorist’s don’t commit their acts in secret…after all if the public don’t know the group did something, they how are we supposed to feel terrorised by their actions?

I see three possible explanations; one is a fire or mechanical emergency on board. Although it would be an odd set of coincidences that would lead to this scenario.

A second theory is decompression of the airplane during flight. There have been incidents where a plane has depressurised in the flight, the pilots and passengers rendered unconscious by the lack of oxygen and the plane has continued flying for many hours, sometimes drifting off course, until running out of fuel and crashing. However, this also does not quite match with all the relvant technologies.

Another (and more worrying) explanation is someone, possibly the pilots or someone who gained access to the flight deck without alerting security concerns (e.g. an air hostess or a friend), setting out to deliberately make sure the plane disappeared, possibly as part of some insurance scam. This has unfortunately likely happened before, notably in the case of Silk Air 185 in 1997 and a transatlantic Egypt Air flight in 1999. Several other attempts to hijack or commit suicide with a plane have been thwarted by the actions of the crew.

That said, this “suicide” theory also has a few holes in it, as for example it won’t explain the aircraft’s climb to 45,000 ft or why certain systems (which cannot be accessed from the cockpit) were turned off, as a pilot discusses here. It also seems unlikely nobody on the plane would notice why the aircraft was flying in the oppose direction it should be, as well as one assumes silence from the cockpit for several hours, without doing something about it.

Perhaps the problem therefore is all those security measures taken post-9/11, as they assume we can always trust the flight crew, whereas in these rat-race times maybe we can’t. And as Air France 447 show’s pilots can seriously screw up from time to time. There are solutions, notably a system that automatically alerts not just air traffic control, but the nearest military base if anyone turns off a transponder system. Better systems for tracking aircraft would be a good idea.

And as the Air France disaster in the mid-Atlantic a few years ago showed, a 30 day transponder limit for the black box (at a very limited range), or only two hours of cockpit voice recordings is clearly inadequate.

Ultimately however the fact is that we may never know what happened to this ill-fated aircraft… but that still doesn’t “prove” anything!

The New Czar

And in relation to my last post, we are seeing Putin starting to tick all of the boxes to be labelled as a tyrant.

Certainly his decision to host the winter Olympics in a Southern Black sea town has to strike one as bizarre. One wonders why none of his advisers spoke up to question this…clearly because they were too scared of him to do so. And squandering $50 billion on it seems a tad excessive. Consider what would have likely happened had and government in the UK spend anything like that on the London 2012 games?

And we see clear indications of megalomania. One thing I’ve noticed for example, whenever Putin gives interviews these days he’s usually seated on a raised platform or seat of some kind…A tactic long used by royalty I might add. He’s also taken to building many extravagant palaces for himself, the latest being part of the Sochi games construction projects.

And there’s have been numerous “suspicious” deaths of his opponents, including those of Litvinenko and Berezovsky within the UK. As for the media, as I mentioned in a prior post, the Russian media these days is about as fair and balanced as that under the soviets. Reporters without Borders rates Russia under Putin as one of the most dangerous places to be a journalist.

And in Crimea we saw one of the other hallmarks of a dictatorship, that of a rigged ballot to give them the veneer of democratic legitimacy. It is for good reason that many are deeply sceptical of the supposed margin of victory in the Crimean “referendum” of 96%, with a turnout of 89%…considering that about 40% of the population (ethnic Tartars and Ukrainians) were boycotting the poll. And of course this poll gave only two options, neither of which offered the option of staying part of Ukraine!

Ultimately we need to realise that power has gone to Putin’s head and Europe has a megalomaniac dictator on its borders, likely surrounded by a horde of his cronies who are either too afraid to criticise him, or too busy making money off the back of his regime to care. Russia is not so much a rogue state, but as one author has described it as “a mafia state” where Putin is the Cap di tutti Capi.

Now it’s bad enough having such tyrants in charge of some African country or oil rich emirate, but having a dictator like this in charge of a sizable army, gas & oil reserves and nuclear weapons is not good for world security. Already NATO are supposedly weighting up their options.

And what will be worrying NATO is the knowledge that you can count on one hand the number of tyrants who have gone from power willingly. Most have either been hounded from office by a popular uprising, as occurred in Serbia. Or the dictator has been forced from power by civil war, as is currently ongoing in Syria. And indeed recall the whole reason there is a Syrian civil war is thanks to Putin (otherwise its likely he’d have been ousted sometime ago, much like Gaddafi) and one of the primary concerns was the fate of Syria’s chemical weapons stockpiles in the event of a power vacuum.

In short this can all only end badly for Russia. While Putin might be able to maintain his cult of personality through the good economic times, he’ll struggle to do so when inevitably these sanctions start to bite and the Russian economy starts to suffer. And at this point its difficult to predict the end game for his regime.

Again, one does not need to dress up in khaki and invade Poland to earn the label “dictator“. All one needs to do is show a completely disregard for all the checks and balances on political power intended to stop one person becoming too powerful. Which even the ancient Greeks, in the world’s first democracy(ish!) realised, was exceptionally dangerous.

Viva la Vida

I’ve been reading a book by journalist David Wallechinsky in which he profiles tyrants and dictators both past and present. One can see many common strands of behaviour among tyrants. Suppression of human rights, use of death squads to silence opponents and torture are all too common.

Bizarre behaviour
But another trend he identifies is the tendency to pass bizarre laws. For example, Ne Win, the former dictator of Burma, once ordered all vehicles to start driving on the right one morning (meaning bus passengers must get on and off buses in the middle of the street!). The late dictator of Turkmenistan, Niyazov passed all sorts of strange and bizarre laws, ranging from the banning of lip synching, smoking (only after he had to quit for health reasons), dogs, long hair and ballet.

Gaddafi, never to be outdone in weirdness, once ordered all Libyans to start breeding chickens, even those living in apartments (and presumably making jokes about not counting chickens before they’ve hatched were banned too!).

In another example Chechen dictator Ramzan Kadyrov has this strange thing about keeping lions and tigers as pets and has also passed laws that include banning of energy drinks, although murdering and torture of his opponents is still apparently legal.

Meglomania
Meglomania is another all too common trait. Lukashenko of Belorussia insists that he be called “Batka” (dad) by Belorussians. In another example, Niyazov had the month of January renamed after him (and April after his mother, plus September after a book he wrote…which is required reading for anyone joining the civil service!).

In Africa, Obiang Nguema (the dictator of Equatorial Guinea) has claimed to be “in permanent contact with the almighty”. While in Cameron (the country not “call me dave” ;D) under Paul Biya, it is reported that one cannot get a job with the state, even that of a lowly police officer, without “you have to show that you support the president actively, that you love him and his party”.

Corruption
And of course we have the squandering of public funds. Niyazov (again!) for example had a 12 metre high gold statue of himself erected on a platform that rotated so that it always faced the Sun.

The Kim’s of North Korea have spent billions of their impoverished countries money on a grand capital with numerous gaudy landmarks, vast (largely empty) skyscrapers and vast boulevards (in a country where practically nobody is allowed to drive).

Saudi Arabia under the house of Saud, is considered so institutionally corrupt (regularly topping the poll for Transparency International) most companies doing business in the kingdom have to set aside hundreds of millions in their budget to pay for kickbacks and bribes.

Similarly Karimov, the dictator of Uzbekistan, was lambasted in the wikileaks diplomatic cables for squandering most of his country’s wealth on himself and his family, notably his daughter, described as “the most hated person in the country” by the diplomatic cables.

Suppression of the Media
Dictators also have a habit of suppressing the media and tend not to be terribly happy with those who criticise the regime. For example in Laos, under the communist dictator Sayasone, it is illegal to “propagate information or opinions that weaken the state or slander the state”. Lukashenko once threatened to “wiring the necks” or protestors. A law in Robert Mugabe’s Zimbabwe is so broad that merely making a statement such as “don’t be a thinkhead like Mugabe” to a friend on a bus can get you imprisoned.

A good example of the effects of this media manipulation can be seen via the ongoing saga over the missing Malaysian Airliner. There have been some slightly bizarre reactions from the Chinese relatives, with some convinced the airliner is okay or not able to understand why they’ve been searching in the wrong place. Some have threatened to go on hunger strike, as if that is somehow going to magically make the airliner (or more than likely now its wreckage) appear.

Of course the problem here is that the Chinese are used to being lied to by their government or have facts hidden from them, as much for their own protection as to hide the bungling incompetence of the Communist party. While we in the West are well used to seeing politicians running around with they’re hair on fire or standing around in the middle of a crisis looking stupid (G. W. Bush was particularly skilled at this one!), Chinese citizens are not.

Elections – Tyrant style
It is quite common for dictators to try and justify their actions with a veneer of democratic legitimacy by holding highly suspect “elections” or referendums. Such “elections” tend to be passed with results of +90%, e.g. Obiang’s “election” in 2002 saw him get 97.1% of the vote, Niyazov 99.5%, Karimov 90% and Saddam out did them all with 100%.

Such results are usually borne out by the fact that the ego of most dictator’s cannot stand the notion that someone might actually disagree with them. I mean, one suspects that David Cameron is all too aware that a sizeable proportion of the British population regard him as an upper class twit and would sooner eat a ballot paper than vote for him (hence why his tactic is to ignore them and try to bribe the rest of the country with tax cuts while blaming everything bad on Nick Clegg, the EU and immigrants). But dictators cannot tolerate the idea of any form of opposition, failing to realise the total hypocrisy that this reveals of themselves and their regime.

Psychology of the Dictator
But what goes through the mind of a dictator? Why do they do it? In some cases it’s because they are basically evil cruel bastards (Francisco Nguema and Duvalier are good examples of this), with little thought for anyone. Many are clearly vain and insecure egomaniac’s. In other cases they are simply deluded fools surrounded by a bunch of cronies and yes men who won’t dare not tell them the truth.

Nicolae Ceaușescu the late dictator of Romania is a classic case study here. He was apparently oblivious to how much he was universally hated by his people until the 21st of December 1989, when in the midst of a mass propaganda rally, with the Warsaw pact imploding around him, he was booed off the balcony by the crowd (see here). His regime, once one of the most iron fisted of the Soviet bloc effectively ceased to be right there and then. He was captured an executed by partisans a few days later, still largely at a loss as to why he was loathed so much. Similarly the downfall of Erich Honecker’s East Germany is another classic example of a deluded dictator unaware of how is universally loathed, suddenly learning the truth the hard way.

Overthrowing dictators
Unfortunately the overthrow of dictatorships isn’t easy. More than a few have been replaced by a regime not much different from the one before. Perhaps a more relevant question is to ask how to stop dictators achieving power.

In this regard, Wallechinsky considers G. W. Bush (then in power at the time of publication) as a sort of “special case” as Bush demonstrated many of the same tactics of a dictator. Be it a contempt for human rights laws (such as prohibitions on torture), rendition of suspects, secret trials (or imprisonment without trails), starting wars illegally, disputed elections (Florida and all that), manipulation of the media (Foxnews and the swiftboating of John Kerry) and corruption (Cheney’s secret energy committee the minutes of which are still unpublished and the matter of many billions of money for Iraqi reconstruction that just disappeared).

While Bush didn’t become a dictator as such, he shows the dangerous slippery slope which occurs when you allow any leader to ignore or violate those all-important checks and balances. Clearly maintaining these are the best way of protecting people from tyranny.

As for those dictators already in power, well most won’t be there were it not for the support by the West and other major powers. An economic boycott (either an official one or a public unwillingness to shunt said nations products) could also serve to put pressure where it is needed. And also there is the international criminal courts. Seeing the likes of the rogues I’ve mentioned brought to account would certainly act as a firm deterrent to the rest.

Walkers and Risk

While it may not have made the news an interesting and important legal precedence was set last week. About 8 years ago a walker, then aged about 12 took a fairly nasty fall down the West Highland Way, which resulted (as a consequence of breathing difficulties he had after the fall) in him suffering brain injuries and disability.

Now while one is sympathetic to his plight, his family then went and tried to claim compensation from the National Trust (the section of path crosses through the Trossach’s National Park), claiming that they should have “anticipated the risk” and installed a handrail, evenly cut steps, put signs up warning of a slippery surface, etc…again we’re talking about a remote mountain trail here, not a London high street.

Anyway the judge in the case has now ruled against the plaintiff’s arguing that it is unproven whether it wasn’t just the walker’s own fault he fell. And perhaps more crucially, he ruled that there is an element of risk associated with an activity such as hillwalking and one must accept such risks whenever you go out in the countryside.

This is something of a landmark ruling. While again sympathetic to this individual’s plight, the mountaineering organisations have generally heaved a sigh of relief at the news. The consequences had the ruling gone the other way would have been to open a huge can of worms, where much of the UK’s hillsides, national parks, and crag’s fenced off and rendered essentially no go areas.

And it would have had implications for other sporting activates too. A day at the beach, going surfing or kayaking, visiting many national monuments, or even a kick about in the park on a Sunday would have all been wrapped up in so much red tape and “elf n safety” madness so to make them effectively illegal. Had this case gone the plaintiff’s way, no doubt next time someone goes cheese rolling in Gloucester they’re be police marksmen on stand by! And what would happen next time it snows? (i.e. the ground covered in slippery stuff, when was the last time you saw a hand rail down the middle of a UK pavement?) presumably the whole country would be legally required to stay indoors until it all melted!

Indeed a similar case has just kicked off where a woman is seeking compensation from her employer because she was attacked by seagulls outside the office :no:. Again her argument is that the employer should have “anticpated the risk”…and no doubt had a word with the seagulls ;D.

Returning to the matter in hand however, I would also add that in this specific case the issue of age (again he was 12 at the time) must be considered. It is sort of a parent’s responsibility to look after their kids safety. As a parent you can’t absolve yourself of that responsibility and hope some magical force will swoop in and rescue your wee’in from danger like David Prowse in those Green cross code videos. I’m not saying parents should go around with the kids on a leash….in fact I’d argue part of the problem with kids these days is there’s too much helicopter parenting and the kids don’t know how to look out for themselves. But clearly a parent should not be letting a kid wander off by himself in the middle of a wilderness and then try and blame someone else (who wasn’t even there!) if an accident happens.

And while the Judge ruled the right way this time, what if he’d hadn’t? As I mentioned a whole host of activity we all engage in and enjoy would have been effectively thrown into chaos, just because of one judge’s opinion. Indeed its worth remembering that much of the elf n safety madness in this country (e.g. banning conkers or cake sales) is based on not on what the law actually says but what a judge might decide it means. This is the problem with UK law, were judges get to basically make up the law as they go along. This is largely why the UK is getting itself tied up in knots with the EU’s human rights act, while other EU states don’t have such problems. The UK needs a proper constitution, just like virtually every other civilised state in the world.

The New Normal

I caught the film “Company Men” on TV over the last week. It was yet another tale of the impact of the Great Recession, as its now called, on society, this time focusing on the mid-level manager types who while well paid and technically wealthy, were living pay check to pay check during the boom and then wiped out financially when their cosy $200,000 a year job went up with the balloon.

Of course this prompts the constant question of when will the recession end? When will things go back to normal. Well I’d argue, we’re in what you could say is the new normal. It was the economic growth prior to the recession that was unusual and the recession has more been a case of the global economy resetting itself to a more stable equilibrium.

The truth is that starting from the Thatcher and Reagan era up till 2007 the world went through an unprecedented level of economic growth that was not normal. It was in fact an unsustainable boom. It was sustained by many factors that just could not be maintained, not least because many of them were entirely self-destructive.

e.g. in both the beginning and end of the boom corporations would downside or shut down factories in order to boost their share price. To draw an analogy, if the owner of the local fruit shop were to respond to a temporary drop in profits by firing staff and closing off half his store, or a farmer responded to a bad harvest by having his prize winning breeding heifers sent off to slaughter, most would argue they’d clearly gone a bit mad and if the bank heard about it they’d be calling in any loans pretty quickly. Yet this is basically what many corporations were doing in the 80’s. Towards the end several of the Wall Street firms were betting against themselves, equivalent to taking out fire insurance on your own firm and then asking the insurance agent if he knows where you can buy some petrol and could he lend you a match.

And this bubble was ultimately the result of the deregulation heavy lassie-faire policies of Thatcher and Reagan. Of course we can’t solely blame Thatcher/Reagan for this crisis. Clinton’s decision to repeal the Glass-steagall Act certainly didn’t help matters, nor New Labour’s failure to properly reign in the city of London. And one can scarcely think of a worse person to have in charge of the US economy at the crucial hour than G. W. Bush.

Also, as I discussed in a prior post, we have to consider the issue of global oil supplies. Oil shocks of the 1970’s were replaced in the 80’s and 90’s with a massive oil glut. Prices fell so low that in the 90’s oil once hit a low of around $10 a barrel. Of course this trend wasn’t sustainable and its very likely that the growth of China simply soaked up so much of the world’s oil and gas to raise the price so high as to finally burst the bubble.

As the saying goes, those who fail to learn the lessons of history are doomed to repeat them. Those who favoured deregulation failed to pause and ask why those regulations were brought in to begin with. As the history of capitalism is littered with examples of short sharp boom and bust cycles with market panics and many of these rules had been developed in the wake of one train wreck or another.

And indeed all the evidence is that the spiv’s in the markets are at it again. In the last month we have news of attempts to rig the London foreign exchange rates. This of course coming on the back of the LIBOR rigging scandal. Notably nobody was actually arrested or jailed for that so is it no surprise that they’re at it again. Also this week comes news of traders conspiring to rig the HIBOR rate in Hong Kong…over 100 times in recent years! The Economist also has an article out about the extent of “crony capitalism” worldwide, demonstrating that in some countries as much as 40% of the economy is essentially corrupt….and unsurprisingly Hong Kong finishes top with Russia second. Again if you let people get away with such high crimes is it any surprise that the fail to chance and keep doing it over and over again.

And we would do well to remember this or else its very possible we’ll be staring into the same abyss again in a few years time, but this time there will be no bailout as the public will not stand for it and no government will be able to afford it.

More Random Thoughts

At last some sense
Gordon Brown (where’d he disappear too?) has waded into the Scottish debate. He’s suggested that the solution is that rather independence would be further powers given to Scotland, notably the transfer of more power both to Holyrood and local councils, including greater control of issues such as taxation, health and welfare.

…or in short what Brown was arguing for was what is otherwise known as “Devo Max”. I’ve been making this very point since the start of this whole independence debate. Ask Scots what the actually want, its neither independence nor the current status quo but more devolved powers and less interference in Scottish affairs by Westminster. In opinion polls the Devo Max option always rates well above the other two alternatives on the ballot paper.

Of course, Alex Salmond did offer the option of Devo Max, however the Tories, arrogant in their assumption that they could bully the Scot’s into accepting the present status quo, foolishly failed to take up this option (basically blundering into a giant bear trap that Salmond had laid for them). This was a massive miscalculation and I think the time has come for them to acknowledge as such and hopefully put forward some sort of bill before the referendum. Otherwise, they risk loosing Scotland. And even if the referendum goes the Tories way, they won’t solve the problem, and no doubt in a few years time we’ll be in the same situation again.

Crimean Outbursts
One of the major issues with regard to the takeover of Crimea by Putin, is the unrelenting pro-Putin propaganda within Russian media. The cult of personality of Putin will not tolerate any criticism of him or state policy. Indeed much of Russian media is starting to resemble Pravda, the infamous Russian newspaper of the Soviet era, who despite its name meaning “truth” was notorious for being entirely absent of any.

And RT, Russia’s premier is expected to toe the kremlin line, even though many of its broadcasters are based overseas or are not Russian. However there have been a number of unscripted anti-Putin outbursts on RT over the last few weeks. One saw the host ominously “sent to Crimea” (well I suppose they can’t send people to Siberia anymore!). While another resigned live on air after condemning the Russian invasion.

Unfortunately, by and large RT has toed the Kremlin line, which is hardly surprising for a channel ultimately funded by the Russian state. While I have to credit RT for reporting the stories western media are often reluctant too (something Al-Jazeera should also be credited for), this pro-Kremlin bias, which they have equally showed regarding Syria (often reporting the most outrageous of pro-Asad propaganda as fact) has greatly undermined their credibility. Indeed personally I regard them as no more credible as a new organisation than Fox News or the Daily Mail.

Schools takeovers
There was yet another story this week that calls into question the Tories policy on education. We have a story regarding an alleged attempt by Islamic Fundamentalists to “take over” several UK schools and effectively turn them into little more than state sponsored madrassa’s (no mixed lessons, no sex education, Islamic prayer, etc.). While this plan appears to have been thwarted (assuming its not just some right-wing hoax), as you can imagine, it had the Daily Mail brigade practically doing cartwheels, as it seemed to confirm all their worse fears.

To me this story highlights precisely why any school in receipt of state funding should be neutral as regards religion. While I’m not proposing going to the extremes of the US, where even mentioning the G word inside a public school is considered sacrilege. But clearly putting clear water between the business of educating children (about stuff like science, maths, history, etc.) and teaching them about faith (which I would propose they are welcome to do within the school, but outside of official school hours, subject to the parent’s consent).

And indeed my fear is that a couple more such stories as this one and its very likely the alternative is going to be a US style no exceptions ban on any form of religious activity within UK schools.

Bursaries Failure
Now when the Tory/Lib dem’s raised tuition fees, one of the complains against this policy was that it would create a class divide. Whereby, those with rich sugar daddy parents to bankroll university costs would get to go to university (even if they were barely smart enough to fill out the application form). While smart kids with a less privileged upbringing wouldn’t be unable to afford it. But the government claimed, we’ll provide bursaries and extensive student loans to compensate.

Anyway, yet another report has emerged suggesting that bursaries, which the universities are obliged to offer to those from poorer backgrounds, has had no obvious effect in increasing completion of degrees.

And this is hardly surprising, given statistics suggesting the average student loan debt could rise from £26,000 to £53,000 in a few years time. And it is also suggested that the government has vastly overestimated the amount of this debt that will ultimately be paid back.

While I do agree that students should pay something towards higher education, clearly this Tory/Lib dem experiment has I would argue failed and needs an urgent rethink.

Yet more Bitcoin woes
And again yet more negative stories around Bitcoin. More of the virtual currency’s exchanges has gone bankrupt. Firstly there was Flexcoin, which described itself as “the bitcoin bank” which has collapsed after a major theft of its bitcoins. Then Poloniex went to silicon hell in a handbasket too, after allegedly “loosing” 10% of its customers money.

Meanwhile Newsweek claimed to have tracked down who they claim is the inventor of Bitcoin to a quiet suburb in California. However, perhaps unsurprisingly given the negative publicity the currency has gathered recently the man in question has denying everything.

It is looking like much of what I discussed in prior posts (here and here) is proving to be true. Ultimately Dr Adam Posen (of the Peterson Institute for International Economics) less than flattering views on bitcoin would appear to have been proved true:

“many of the same right-wing nut jobs who distrust the government viscerally are more likely to believe in bitcoin…it’s those who are angry about being defrauded who are likely to be the ones defrauded again”

“…gold is the investment for silly people. bitcoin is gold for people who don’t save…”

While I am no fan of the present global financial system (i.e. it stinks and needs fixing), I think libertarians like Ron or Rand Paul need to learn a bit more about how it works before suggesting solutions that clearly are worse than present status quo.

Shadow Banks
And we have a good BBC article this week about one of the factors driving the bitcoin bubble, China’s so called “shadow banks”. These are business trusts, sometimes run by local businessmen or politicans (but sometimes also gangsters!) who are effectively running what amounts to a bank but without any official banking license or regulation.

The problem is that many Chinese businesses, unable to get credit through the official channels have in the past turned to these shadow banks. And some of these shadow banks have engaged in somewhat risky business practices, the sort which would make Lehman brothers look sensible! But as the Chinese economy slows, there is a fear that this whole unregulated credit system could unravel. And part of the danger with that is its not entirely clear how much money has been lent out via the shadow banks. Some figures suggest up to 20% of all credit within China comes from them. That would imply that a sub-prime like meltdown of here could make the financial crisis of 2007 look relatively tame (again remember the problem wasn’t so much Lehman’s going down, it was the fear factor as nobody knew who would be next and otherwise safe institutions were suddenly put at risk).

Naturally the Chinese government is trying to do something about it, they’re trying to force regulation on such business arrangements, finding ways for people to obtain credit through the official banking sector. But the risk is it could be too little too late. Either way it does demonstrate that not everything is rosy in the Chinese garden.

World War I Debates

With the 100th anniversary of the start of the 1st World War looming (ominous given events in Ukraine!) this has led to the inevitable debates as to who started it? and was it worth it?

On the BBC last week there were two programmes, one by military historian Max Hastings and one by economist Neil Ferguson debating this issue. In particularly debating whether all the deaths and sacrifice of the Great War was justified.

Neil Ferguson, while not exactly my favourite person, did make an interesting case. He attacked many of the myths surrounding the justification for war i.e. German militarism (which was largely an invention of British tabloids), that there was little need for immediate British intervention (Britain was standing up for plucky Belgium neutrality…while Belgian troops were plucky defending British rubber and ivory interests in the Congo), that the German Military was vastly more effective at its pursuit of the war than the allies (its just they were outnumbered 2 to one that stopped them winning), or the notion put forward by the Nazi’s that Germany was “stabbed in the back” (actually the mass surrenders of German forces were often orchestrated by the German army’s own officers, once they realised the situation was hopeless).

While he did make some good points, his logic was a little dubious and he was inevitably roasted by all the experts afterwards, which was quite entertaining! Certainly his idea that had Germany won the result would have been something like the European union is stretching things a little. But that’s not to say he didn’t have a point.

My criticism was his failure to state the blindingly obvious – The real perpetrators of World War I was the European Aristocracy. The propaganda lie of the British trying to stop the UK being dominated by a German Kaiser falls flat when you realise that the UK already had a German King (of the Hanoverian dynasty), who was a blood relation of not just the German Kaiser but also the Austrian, Russian and Belgian Royal families.

Ultimately World War I was just the next round in the massive chess game otherwise known as “the great game” that they’d been playing with each other for centuries (one assumes so they could tot up the scores in the gentlemen’s club later and work out who got the last glass of sherry). WW1 was merely another of a long series of war related to this Aristocratic rivalry.

The problem with WW1 was that the aristocrats tipped their poker hand a little too far. Previous wars had tended to be short because it became obvious pretty quickly who was going to win and who was going to lose. The likely loser sued for peace, a treaty they quickly reneged on as soon as their rival’s back was turned. But in the case of WW1 they failed to appreciate that advances in technology had handed a massive technical advantage to the defender. Or that the system of alliances would lead to bloody stalemate.

Also the European powers became trapped by their own propaganda. After whipping the public into a bloody frenzy, then sending off millions to die, they could hardly do what they had in previous such situations and settle the matter in some smoke filled room. The result would have been revolution. And indeed in both Russia and Germany there was a revolution once it was obvious they were losing the war.

While I would question how Max Hastings can even try to argue the slaughter of WW1 could ever be justified, one has to admit it did have some positive, although unintended consequences. Many nations, such as Ireland, Czechoslovakia, Poland, Hungary, etc. gained independence. Countries like Britain or France, which were basically aristocracies pretending to be democracies suddenly began to behave a little more like a democracy. The US suddenly realised that they needed to stop acting like a British colony and more like an independent nation.

Of course these were countered by a lot of negative things. The Russian revolution led to the Communists coming to power, which eventually put Russia under the control of Stalin. While things started off rather positive in Germany and Italy, both soon fell under the sway of fascism…which led to World War 2.

But going back to Neil Ferguson’s key point, it was Britain’s decision to involve itself in what was a European war that made it a world war and led to a prolonged conflict. Is this so? Well superficially, yes. It’s likely (though not guaranteed) that the Germans would have won without British intervention. Although it should be remembered that it was largely a French force that turned the German’s back at the crucial battle of the Marne. However I doubt, even if he’s correct, that this would have prevented a future conflict. In the end WW1 was a train wreck waiting to happen. A perfect storm created by the incompetence of the governments of the time. Had Germany beaten France quickly, as Ferguson suggests, then I suspect a few years later another war would have kicked off and sooner or later this would have drawn in external powers such as Britain the US or Japan.

This would be particularly true if you consider the Kaiser’s desire for colonies and the implications of such projects as the Berlin Baghdad railway (otherwise known as “the orient express”). This would have almost certainly kicked off another war, if not in Europe, then somewhere else.

If there’s anything World War 1 proved it’s the dangers of aggressive nationalism and the short comings of any political system that relies on an autocratic style of control…is anyone in Russia reading this?

Putin Crimea Gambit

I’m not usually one to agree with William Hague, but when he describes what’s going on in Crimea as “Europe’s biggest crisis for a century” he ain’t half wrong. Of course, part of the problem here is that Putin is surrounded by a circle of yes men who won’t dare criticize him (lest they get whipped by Cossacks, or invited out for sushi).

Military Matters
For example, one of the unintended consequences of his actions might well be that Putin has drastically altered the strategic balance within Europe…to the detriment of Russia! Indeed short of getting out a shot gun and blowing his and every general in the army’s toe’s off, one can scarcely thing of a more effective way of crimpling his own military, long term.

As I mentioned in a prior post, his actions raise the risk that Ukraine will now join NATO, along with other Western Allies in the region, such as Kazakhstan, Azerbaijan and Georgia. This would drastically alter the balance of forces within Europe. NATO air power would now be within range of most of central Russia, even Moscow itself. One scenario I doubt the Russians have ever war gamed is having to maintain air superiority over their own capital.

While Russia has a large airforce, the bulk of this is made up of obsolete cold war era jets (MIG 25’s & 31’s, SU-27’s, etc.).These are no match for the latest in Western 4.5th generation and 5th generation fighters. Any time such aircraft have encountered modern Western Jets, they’ve generally been hacked from the sky. While Russia has a small force of its own 4.5 gen aircraft, they have less than a hundred of them…versus a combined NATO armada of around a thousand 4.5th or 5th gen aircraft and many thousands more 4th gen fighters in support!

Thus you don’t have to be a military genius to figure out that in the event of a shooting war, NATO would quickly gain air superiority over most of central Russia. Russia’s remaining air, naval and ground forces would then be forced to flee out of range of NATO air strikes (which would mean leaving most of Russia’s major cities undefended), or else face destruction and ultimately defeat.

Now the Russians will probably point to their nuclear forces to save them from this. This is also what worries me, as Putin’s actions in Crimea threaten to undermine the effectiveness of the Russia’s nuclear deterrent, and that in of itself raises the risks of a future nuclear war as a result.

Russia has, since the 1980’s, largely adopted a second strike policy (as have the Indians, Pakistani’s and until recently the Chinese). This was largely due to the fact that Russian missiles lack the accuracy of Western missiles and NATO’s sophisticated early warning system means it’s highly unlikely the Russians could launch a credible first strike without suffering annihilation in the insuring counterstrike.

However a crucial requirement for a second strike policy is the assurance that your missiles will still be there to be fired after the enemy has attacked. A Russia ringed by NATO, particularly when you consider there are gaps in the Russians own early warning systems, is at risk of NATO trying to knock out their arsenal, possibly using conventional forces (e.g. stealth aircraft or drones), before they can push the button in Moscow. Now while I doubt the Obama’s of this world would give such an order, I’m not so sure about the Sarah Palin’s or the Nigel Farage’s. And that’s exactly the sort of scenario which could start WW3!

This is why the Cuban missile crisis was such an issue, as the Americans argued the Russians putting missiles that close to their shore undermined their second strike capability (of course the Russians pointed out they were ones to talk what with American missiles in Turkey!). Similarly G. W. Bush’s ABM plan was so contentious because it was feared it would undermine the Russian’s ability to launch a 2nd a strike. This crisis was only defused when it became obvious that the ABM system in question didn’t actually work properly!

However, the US and Israel have been busy developing their ABM systems. And if they could mount them sufficient close to their Russian launch sites, its possible they could counter much of Russia’s nuclear deterrent. Indeed Russia’s own 2010 assessment of “threats” to its own deterrent lists just the sort of scenario’s I paint above.

Of course there are solutions for the Russians. Developing and building more advanced fighter aircraft. Developing more accurate long range missiles which can counter ABM systems. However that’s going to cost money, lots of it. Just look at the amounts the West spent on mega-projects such as the F-22 (total cost to date: $62 billion!) or the Eurofighter. Consider that the UK is planning to spend £20 billion just upgrading the existing Trident system (which I still say is a waste of money).

Now while there were many reasons for the collapse of the Soviet Union, ranging from mismanagement of its agricultural policy, failed economic policies and awful politics (as it’s been said, the Soviet union collapsed like a house of cards because it was a house of cards), as well as the effect of a sudden drop in oil prices in the late 80’s. But trying to compete with the West on military spending was another contributory factor, one I doubt Putin’s in a mood to repeat.

Its about the Economy: Stupid
And the cautionary tale of the Soviet’s collapse was probably why the Russian stock market has tanked recently. By sending tanks into Ukraine Putin has sent a signal to the markets that Russia is not a safe place to do business. And as a result, the markets have panicked and begun to pull out.

While Putin thinks he’s safe from Western sanctions due to the fact he supplies Europe with natural gas, he perhaps forgets that the money to pay for that gas flows through New York, Frankfurt and London. And while the EU might not impose sanctions it might not have too if the markets vote with their feet and start pulling money out of the country.

And as far as that Gas is concerned, Putin turning off the gas isn’t a decision he can take lightly. Obviously if he doesn’t supply the gas, Europe ain’t going to pay for it, and he’s still going to have to pay the workers. All the pipeline’s run West to Europe, so its not as if he can just start selling it to the Chinese. And of course we’d be assuming the Chinese are as dumb as us Europeans, as to allow themselves to become dependent on Russia for their energy (why do you think China’s talking about building hundreds of GW’s worth of wind and solar power? Too save the whales? Or because they don’t want to be dependent on foreign energy imports?).

If that doesn’t get the message across, lets look at another example. Russia’s space industry. The Russians, along with the Ukrainians are supplying rocket parts and engines to a number of Western companies, such as Sea-launch, Boeing (Atlas V first stage) and OSS. They also now launch Soyuz rockets from French Guiana. I’m doubtful how long these relationships will last, given the situation in Ukraine. No doubt the directors of these firms I mentioned are having crisis meetings as we speak looking for alternative hardware suppliers who aren’t Russian or Ukrainian.

So while many Russian industrial workers or oil and gas workers might be moved by nationalistic fervour to support Putin, that novelty factor might start to wear off rather rapidly once their pay checks start bouncing. And once his general realise the mess he’s gotten them into he won’t be able to rely on their support anymore. And there is history here. Several of Putin’s allies ranging from Yanukovych and Milošević were ultimately brought down, not by NATO air strikes, but because their policies wrecked the economy and the people drove them from power.