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.

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