The trouble with Tony

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Tony Blair made a speech last week regarding the EU referendum, in which he made a number of very good points. He pointed out that the EU referendum process was flawed, it was set up by Cameron to settle an internal matter within the Tory party, he never considered the consequences of losing. People did not know what they were voting for and to push forward with a hard brexit on such a narrow margin (and less than 37% of those who voted) is not democracy, its a perversion of democracy.

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Brexit was only supported by 37% of the UK electorate and under 27% of the UK population

However there’s a problem with this message – Tony Blair. One can scarcely think of a worse person to lead any sort of resistance to brexit that Tony. He’s still dogged by the legacy of the Iraq war. Now to be fair many of the same Tories who are attacking him over this EU speech are the very same people who also voted for the Iraq war. Only two conservative MP’s voted against it, against 84 members of his own party. Given how the Tories are throwing themselves at Trump one has little doubt that a Tory PM would have also backed an Iraq war. The only difference would have been they’d have likely committed to unilateral action without the UN, as the White House had been calling for.

But even so the Iraq war casts a long shadow over Tony Blair and his legacy. Case in point, the Daily Mail accused Tony Blair of giving £1 million to a Gitmo detainee who recently blew himself up in Iraq. Naturally he pointed out the hypocrisy of the fact that the Daily Mail had publicly backed a campaign to get this man freed. And that it had been during the coalition government (i.e. with the Tories in charge) that he’d been paid compensation.

In another example Jeremy Corbyn tried to blame the loss of a byelection on Tony Blair. Normally winning by elections for a opposition candidate is like shooting fish in a barrel. But Corbyn simply can’t defend seats, nevermind take them off the Tories. So its a bit rich him blaming “disunity” within the party when he, not Tony, is the main source of this discord. However, it again shows the problems with relying on Tony Blair to be the standard barer for anything.

So if there’s to be opposition to brexit, while Tony Blair’s welcome to express his views, we need someone else to lead it.

The Trump who came to tea

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It is becoming increasingly obvious that Theresa May’s decision to invite Trump over to the UK was premature and ill advised, to put it as diplomatically as one can (a cluster-fuck screw-up from a stand-in PM would be a less diplomatic way of describing it).

Trump’s disastrous performance at press conferences, his erratic behaviour, conflicts of interest and of course the resignation of his national security adviser in record time, have all contributed to a view that his will be a chaotic and probably shortlived presidency. Already his job approval numbers have plunged in just a few days, to a point it took Nixon 8 years and a Watergate scandal to reach. In my view it is only a matter of time before there is some move to unseat him.

Keep in mind that only a minority of Republicans need to join forces with the democrats to unseat him. The prevailing wisdom was that this was unlikely to happen any time soon, as the GOP need him more than he needs them. That if there was a move against him, it would likely happen either just before, or after the mid term elections (depending on whether the GOP feel they would be better served by removing him from office prior to or after the mid terms). Aside from the impeachment option, Trump’s erratic behaviour does raise the possibility of removal via the 25th amendment. While this would require the support of the cabinet, recall that most of his cabinet it are the sort of odious cronies who can be easily bought. Trump I suspect may have forgotten that someone might make them a better offer.

So the danger for the brexiters is, they invite Trump over, put the country through the political mess of mass protests, embarrassing the queen and parliament, etc., only for him to then be removed from office shortly afterwords. Aside from the political damage this would do, it could have serious consequences if for example there’s a Scottish independence referendum campaign ongoing. Voting for independence just to piss off Trump, might just swing the referendum the way of the SNP.

And needless to say it could put the UK in an awkward position in terms of negotiating with Trump’s successor, doubly so if the democrats win in 2020. Recall that it would be illegal for the UK to even start negotiations with the US until they are out of the EU in 2019, so baring a ridiculously fast turn around on a trade deal its likely to fall to the winner of the 2020 election to complete these negotiations. And the chances of that being Trump aren’t particularly high.

So Theresa May may well have just made it harder for her to get a favourable trade deal, than better. So why did she do it? this could be a potential resigning issue. Well the answer tells us a lot about the post-brexit UK. Notably that the country is desperately short of friends and as a result we’re going to have to let Trump and his grubby (small) rapist hands near the Queen. Obviously given the weakness of the UK’s position, its unlikely we’ll be getting a favourable trade deal with anybody, not the EU, not China, nor the US.

Getting a trade deal is certainly possible, in much the same way that if you go down to a used car lot, and you are suitably desperate you’ll come away with a car (you’ll pay a lot more than you’d like to and it might break down on the way home, but you’ll get a car). The problem is that the devil is in the detail and its likely the UK will have to concede a lot.

So in essence the situation with this Trump visit more or less confirms that the UK will be a lot worse off after brexit than it was before.

Why post-brexit immigration policy is doomed to failure

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We’ve had two reports come out over the last week regarding the post-brexit impact on immigration. One warns that already skill shortages are creeping in and that these will inevitably impact on the economy. Another report predicts that the brexit bigots are in for a nasty surprise, as its likely that brexit won’t produce any meaningful cuts in UK immigration. It will make little difference overall and simply mean trading EU migrants who come in for shorter periods (which we want, as it means they pay taxes and leave before they become a burden on the state in later life). While in return we’ll be getting more older UK citizens moving back home, or longer term migrants from beyond the EU (both of whom are generally looking to settle permanently).

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Surely both of these reports can’t be correct? Well yes they can be. Its just that both of them are feeling different parts of the brexit elephant at different times in the future. Inevitably the drop in the pound (which makes British wages less attractive), brexit uncertainty and the sharp rise in xenophobia all means that the number of Europeans coming in will take a knock. And, as noted, we are already seeing some of these effects. This will lead to labour shortages in many key areas. And a drop in people in work will eventually mean a drop in tax revenue.

Why can’t unemployed brits take up these posts? Well because in many cases they lack the skills and training required, or they live in the parts of the country where there aren’t labour shortages. At the same time, the low value of the pound makes wages in the rest of Europe suddenly seem rather attractive. So some of those with the skills we need, both British and EU citizens, might be tempted to move to Europe to take advantage of their now higher salaries.

On the other hand, as I’ve pointed out in a prior post, the representation of EU citizens in migration figures is often misunderstood by the brexiters. While yes, group together all of the EU countries their numbers look high, but we’re ignoring the fact that on a country by country basis far more come in from India or China than any EU country. And UK citizens and their families make up a very large chunk of net migration figures.

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Also net migration figures represent just what they say – net migration, i.e. the turn over, those coming in minus those leaving. This is an important distinction because it means the numbers of people we are dealing with is a lot higher than many realise. You’ve got many UK citizens who travel back and forth for work related reasons, as well as seasonal workers who come into the UK to meet key skills shortages. The idea that all of these people are going to have to go through some sort of intensive screening and form filling is going to create a logistical nightmare.

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We’ve had a taster of sorts of the chaos this will cause already. Some EU citizens have been thinking ahead and applying for UK residency. Note we’re talking about people married to British citizens, who’ve been here for 24 years. They get asked to fill out some Byzantine 85 page form, pay a few hundred quid in costs, surrender their passport for several months and then have their application rejected for no obvious reasons and get a letter back advising them to prepare to leave the UK.

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The UK is lagging well behind taking in its far share of refugee’s.

Unfortunately, this is exactly the sort of crap that migrants from beyond the EU have had to deal with for years. It highlights something we’ve long had to cope with in the HEI sector – that the UKBA is one of the most incompetent and badly run government departments on the planet. They are a law onto themselves who are able to hide their ineptitude and stupidity behind a cloak of scary Daily Mail headlines. Regularly they’d impose all sorts of Monty python-esque like rules or dictates on us (or employers), rules they’ll often then re-interpret in a completely different way to what the law actually says….then ignore any information we send them. e.g. the one time we did have to report one of my students to the UKBA (she dropped out of the course), I was more than a little surprised to bump into her on the bus a few months later (and she got off at the same stop as the halls of residence, so I’m guessing she was still living in her term time address). Yes they had her name and address and several months later, they still hadn’t done anything!

If any other government department behaved like the UKBA they’d be spending half their budget just defending themselves from lawsuits and paying out compensation to those whose civil rights they’d violated, or the time of employers and universities they’ve wasted.

Now imagine what’s going to happen when a few million EU citizens in the UK all have to apply at once for residency. Throw in another 6 million for those of us of Irish descent (if for some reason our reciprocal rights are lost) and we’ve got a massive backlog (I believe they currently handle only about 100,000 a year!). The end result is something akin to the Clark County gaming commission. There will be a ten year backlog and as a result anyone who you would genuinely want to kick out (e.g. a Muslim jihadi, Romanian Gypsy criminal horse meat butcher….I’m trying to imagine the worse case scenario for a Daily Mail reader), it will take several years for his application to get to the front of the pile and thus for anyone to realise he shouldn’t be in the country. And when his number is about to come up, all he has to do is change his circumstances (e.g. change his name by deed poll, marry, divorce, have a kid, etc.) and his application gets moved to the bottom of the pile.

At this point UK immigration law becomes pointless, as one could live and die without it ever applying to you. This is why Australia, UKIP’s poster child, doesn’t apply the same rules for New Zealand citizens as it applies to those from Europe. Similarly Canada and America apply a much more relaxed immigration policy to each other than they do to those from further afield. Its simply not logistically possible to have everyone coming in from your nearest neighbours fill out an 85 page form and then pay some civil servant to read it. In short, the proposed immigration controls are just unworkable.

Clearly what these stories show is that there’s an urgent need to reign in and reform the UKBA. Keep in mind that this incompetence and mistreatment of EU citizens has already been noted by the EU and they will inevitably reciprocate post-brexit. So failing to reign the UKBA in will mean it takes 6 hours for UK citizens to clear customs post-brexit. Frankly whichever moron came up with this ridiculous 85 page form (so complicated that even the UKBA can’t seem to figure it out!), should be sacked on the spot. Ultimately for the sake of speed and efficiency, the UK’s immigration rules will require simplification. And even in the best case scenario, more border guards will still have to be hired to prevent any backlogs developing in the system. And that’s going to cost a few billion. Yet another of those many “hidden extra” costs (along with a few billion for the farmers, eight billion for university research, another eight for the car industry, etc.) that the brexiters forgot to mention on the side of those buses.

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The UK border post brexit?

So the Tory policy on immigration is clearly unworkable, it would be difficult to come up with anything worse. But what is Corbyn’s response? Well he’s come up with some half baked plan to divert immigrants away from certain parts of the country that already have large numbers of migrants. To call this a massive misreading of the situation is an understatement. Migrants generally congregate in the parts of the country where there are labour shortages and thus jobs available. These areas tend to see very little support for either UKIP or brexit. By contrast areas with high unemployment and low rates of migration tend to be where the support for brexit was at its strongest.

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There is an inverse correlation between leave voters and the number of migrants in their local area

It is in these areas with relatively low immigration rates where you’ll find UKIP bigots sitting on their arse whinging about migrants taking their jobs, when in truth there are jobs available, if they’d just get up off their arse and move somewhere where there is work (or perhaps retrain and gain the skills to get a job). And unlike the UKIP’ers, migrants have no interest on sitting around living on benefitsAnd how is Corbyn going to make them move where he wants them too? Is he going to have is own version of the stasi follow immigrants around?

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EU citizens are a tiny portion of benefits claimants…..

Corbyn’s is basically proposing to pour fuel on the UKIP fire. It represents such a colossal misreading of the problem, that it clearly shows that he is even more out of touch on this issue than the Tories. And that takes some doing.

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…..and far more Pakistani’s claim benefits anyway….so how is leaving the EU supposed to help?

Either way, all of this means that any hope of the brexiters for a points system and serious cuts to immigration is unlikely. But unfortunately, that’s not going to stop them trying. Hence why we’ll probably see them try to impose some Daily Mail friendly border controls. Of course once the UKBA ends up buried under a sea of paper work, many millions of the types they want to keep out, sneak in through the cracks, while a lack of skilled labour leads to factories closing, chronic NHS staffing shortages, crops rotting in the fields, etc. Finally at this point, there will be panic and they’ll have to roll back these restrictions.

In short, the UK will have voted for the worst of both worlds, loss of all of the benefits of being in the EU with none of the border controls that were supposedly the justification for brexit in the first place.

Trouble is brewing…

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I worry that we’re going to see a lot more strikes over the next year or so as the full impact of brexit works its way through the economy. Already, there’s been a number of strikes, southern rail for example, multiple ones at Heathrow, the London underground, etc. But I worry that is just the start.

I’m not usually the one to get too involved in Union politics, but I happened to go along to a recent meeting and I think it highlights many of the problems. No doubt the Tories will try to spin any strikes as some sort of leftist plot to get Corbyn elected. Well his name, nor did the labour party come up once in the meeting. The only time I’ve heard any union member mention his name it was as the butt of a joke afterwards.

What the union did discuss was the hypocrisy of lay-offs of some research staff while on the teaching side we’re massively overloaded, largely because brexit has made it so much harder to recruit. At the same time the unions worry that the drop in the value of sterling and rising inflation means we’ll effectively be swallowing a 20% pay cut over the next few years. And deducting inflation from any pay rises since the start of the financial crisis means we’ve already had to take a 9% pay cut since then, which is better than the defacto 10.4% average pay cut across the UK. And this cut in wages in real terms at the same time as inflation rises is also a factor in why a third of UK families are living in a defacto state of poverty.

So naturally, the unions are less than pleased and the likelihood of industrial action is increasingly strong. And across the public sector, the NHS for example, this picture of workers stretched and overworked while being forced to swallow a defacto pay cut is replicated. And in the private sector too, it is inevitable once people start to notice how their pay packet seems to get that bit lighter every month that they too will start to demand a higher salary.

One feature of strikes that I think people don’t get is that they often don’t start for the reasons they are really about. Take the Southern rail strike, officially its over who gets to close the doors on a train, the driver or the conductor. This sounds silly yes, but then again many marriages collapse usually for some very silly reason, such as the colour of a IKEA futon (IKEA is Swedish for “arguments” I assume, I’m sometimes surprised they don’t have marriage counsellors and divorce lawyers in their stores). Its all about trust and a break down in the relationship between workers and their bosses.

For example, another issue that came up in our union was some changes to the employee evaluation process. To cut a long story short, management told the union one version of why they wanted certain changes, which I have to say I thought seemed pretty reasonable. However, when one or two union members, who are also line managers of staff, went on a training course they were told a completely different version of why the management wanted these changes (to promote a more commercial style rank and yank system). Naturally they fed this back to the union who has now rejected these proposed changes.

And I’ve seen this happen in more than a few other occasions, both in the public sector and private. Management come across as two faced, they say one thing to the unions, then another thing to senior staff or the media, failing to understand that word will get back to the unions one way or another (such as by them reading a newspaper!). So you can see how, after being promised that they won’t be put out of a job, the conductors on southern rail assumed the worst when they learnt Southern was buying a load of driver only trains. And so they pushed the panic button.

If you go behind someone’s back and lie to them, they will generally assume the worst. Honesty is the best policy. If management really do want to bring about certain changes, then you need to get buy in from staff first. Trying to steam roller any opposition will just lead to the sort of chaos we’ve been seeing in Southern rail. In fact its worth noting that strikes in Scandinavia and Germany are less common, in part because there’s a much closer working relationship between unions and management, with union rep’s often sitting on company boards.

So a lot of the strikes we’ll be seeing may well start for seemingly silly or trivial reasons, but in many cases they’ll represent the straw that finally broke the camel’s back. And like I said, the bulk of that pile of straw represents the usual “we’re overworked and underpaid”. Pay staff more, hire more staff to take the load off and they’ll put up with a lot more hassle. That’s a big problem for the government (and the private sector) because it would mean them having to push up public sector pay (or hiring more staff). Whatever it costs to fund a hospital or university today, it could be 20% more expensive in five years time. And with falling tax revenue post-brexit those are bills the government can’t pay, nor can those in the private sector, so some union militancy is very likely.

Now the Tory reaction to all of this will no doubt be to look at ways of preventing strikes. For example, they might well ban public sector or workers in industries like power and transport from going on strike. Well let me head off that one, it won’t work. Other countries have similar laws and all that happens is you end up with more wild cat strikes. Keep in mind that all workers need to do is pull a bunch of sickie’s all at once. If management insist on sending in doctors, well its very easy to make yourself unfit for work, just don’t sleep or eat enough. In some safety critical jobs its actually illegal for a worker to attempt to work without getting a certain number of hours sleep first. If you work in the food and beverage industry you are supposed to avoid your place of work if you’ve been exposed to a food borne disease (so just visit a relative with a wee nipper with a tummy bug and you’re off work for 48 hrs!).

Also there’s the option of work to rules. We’ve got one of those running right now in our place and I think long term its probably going to be what forces a compromise from management far more effectively than any strike can. Work to rules can, over a long enough time period be crippling, as often there’s all sorts of things workers are expected to do on a daily basis, which their contract doesn’t even mention. For example a couple of years ago the Irish public transport workers noticed that there was nothing in their contracts that obliged them to collect fares, so rather than going on strike they simply refused to collect fares for a day, meaning the company had to pay for the whole system to run without any revenue coming in!

But perhaps the biggest danger for management is what if staff start leaving, either taking early retirement or immigrating to Europe. If I’m honest, the pay rates in Ireland look awfully tempting right now (thanks to the falls in the value of sterling). If I hadn’t bought a house recently, I’d probably be applying for jobs back home right now. And I’m guessing there’s plenty of junior doctors (who may not have mortgages) thinking the same thing, particularly given how horribly they are being treated by the government recently. The UK risks a brain drain post-brexit as workers move overseas. A situation that would not be helped if immigration is restricted. And this doesn’t just apply to highly skilled labour like doctors or lecturers. Keep in mind that even when it comes to say, train or bus drivers, its not as if a boss can wander down to the job’s centre and recruit a few dozen fully trained and qualified drivers right then and there. It takes time to teach such people and for them to build up enough experience to do their job effectively.

So I think the message is buckle up and get used to the fact we will see more in the way of strikes, work to rules and public serviced stretched. There is a way out (aside from the obvious, halt brexit), but it means management being willing to pay up, hire more staff to relief staffing shortages and increasing pay to match inflation. But that in itself will have a knock effect by making a lot of things much more expensive.

Delayed reaction

One of the problems with Brexit and Trump, is that while both are expected to cause serious economic damage, often to the very people who voted for such policies, but it might be sometime before the full impact of this is realised, as the primary risk is the long term damage.

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Indeed we are already seeing the effects. For example, recent rationing of vegetables in the UK. The supermarkets blame unseasonal weather in Spain. However, relatives I have in Spain, Ireland and Germany and they report that while yes supplies are down and the price of certain vegetables is up, there’s no rationing. The obvious explanation is that the drop in supplies in Spain has pushed up the prices. But with the UK pound having dropped in value by 20% the UK supermarkets are being outbid by their competitors from the rest of Europe who can pay the Spainsh growers in euros.

Similarly brexit has been disruptive to businesses, 58% of firms say so. There’s been many job losses since brexit, the banks are already quietly moving out of London. But employers, aware of how politically sensitive any such claim would be, are going out of their way to avoid saying so, often blaming other factors instead. e.g. we’ve seen a few redundancies in the uni. The official reason is that the research units they worked for didn’t bring in enough money….what they don’t mention is that the main source of research money was from the EU! The UK government has promised to pick up the tab for research, but we’ve certainly not seen any of that money, so now people are losing their jobs.

In another example, we have the recent revelation regarding NHS overcrowding. Well in part this is due to the fact that the NHS has been chronically underfunded since the Tories took office. But brexit has made it increasingly hard for it to recruit. They, like universities (we’ve been unable to fill a number of vacancies since brexit), will find it difficult to recruit staff from abroad to plug staffing shortages, as foreign staff will be fearful of the impact of brexit. The reduced value of the pound makes UK salaries look less attractive (and the rise in racist incidents and xenophobia doesn’t help either!). So the end result, waiting times go up and granny’s reward for voting leave is she’ll be waiting longer for that heart operation.

Politicians are experts at taking credit for something that happens through no action that they have taken (often despite their policy rather than because of it). At the same time, they are also very quick to try and avoid blame for something that is very much their fault. But the problem is that a lot of the time the effects of their term in office don’t show up until after they’ve left office.

Case in point, the Great Recession. The Republicans have tried to blame everyone other than themselves for this, Bill Clinton, Obama, Hilary, working class people, the tooth fairy, etc. The reality is that the two people who have to take the bulk of the blame for the financial crisis are Ronald Reagan and Margaret Thatcher. Their policy of deregulation, neo-liberal turbo capitalism and the rat race “greed is good” attitude it brought with it, set up a massive bubble in the world financial system. A bubble that finally popped in 2007.

And the warning signs were there right from the start. There were numerous scandals, with companies going bust, billions lost and the government forced to step in, cheque book in hand to rescue reckless gamblers. LTCM (Long Term Capital Management), the Junk bonds scandal of the 80’s, Stratton Oakmont (of Wolf of Wall street fame), the Guinness trading fraud, the failure of Barings bank or BCCI, the American savings and loan crisis, ENRON etc.

Indeed, its worth noting that a number of these scandals and failures listed above occurred within the term limit of both Thatcher and Reagan, or their immediate successors. So nobody can plead ignorance and say they didn’t realise the dangers. And it was in this era that the concept of “too big to fail” was established. The lesson many on Wall street took away from these early scandals was that no matter how badly they screwed up, the government would bail them out. Profits had been privatised and risk had been socialised.

This is not to say all other presidents in between escape blame. G. W. Bush was clearly asleep at the wheel in the lead up to the crisis. There was a massive property bubble building and a huge rise in credit. A number of experts were warning that this wasn’t sustainable. He and his advisers should have realised the danger and taken away the punch bowl before the party started to get rowdy.

Bill Clinton often gets blamed for the crisis because he repealed the depression era Glass-Steagall act. However, we have to put this decision in the context that the banks were simply by-passing the act (via overseas subsidaires), in part thanks to legislation passed under Reagan and trading in derivatives had been left unregulated by the Reagan Adm. (which was ultimately the trigger for the financial crisis) Clinton’s options were to do nothing, or get rid of the act and then try to replace it with something that actually worked. So in and effort to get a GOP controlled congress to play ball with him and regulate derivatives, he signed a repeal as a concession (one that had been put on his desk by Republicans, i.e. they initiated the repeal, then pressured Clinton into signing it, not the other way around as its often presented). Of course Republicans being the backstabbing two faced gits that they are, they simply took the repeal and didn’t put in place any new regulations.

To draw an analogy if was Thatcher and Reagan who designed and commissioned the warehouse made of matchwood with no fire exits and crammed full of oil soaked rags built right next to an orphanage. Newly appointed fire safety officer Bill Clinton should have done something about it. But as it was already built and afraid of catching flak from the powerful builders lobby and their Mafia allies, he caved into pressure and just signed off on it without inspecting the building. It was however ultimately nightwatchman Bush, who was asleep on duty in the warehouse when it went up in smoke. And it was likely his habit of smoking indoors and his failure to extinguish his cigarette that caused the fire to start in the first place.

In short, yes it would be unfair to blame Reagan and Thatcher alone for the financial crisis, G. W. Bush, Gordon Brown, Blair, Clinton and anyone who with a credit card who spend money they didn’t have prior to the crash, we all need to take some of the blame. But clearly it was these two who set the world on the road to ruin. But the problem is that the bomb didn’t go off within their terms, hence they didn’t get the blame. Indeed there are (as noted) some Trump voters who blame Obama for the crisis, even thought he wasn’t in office until well after the crisis had started.

So one has to worry that history is about to repeat itself. Trump and Brexit will both have lasting long term impacts on the global economy. Potentially, we might well look back in a few decades time and point the finger at this moment as the point where Western capitalism and democracy failed. But it will take a while for such damage to appear. Indeed, given that Trump’s plan seems to be to cut taxes and increase public spending, we could well see a temporary jump in the economy, even thought he’ll just be starting another unsustainable bubble.

The US has a major problem with its national debt. As I discussed in a prior post, if something isn’t done about it, sooner or later the US government will go bankrupt. And Trump is talking about borrowing anything from $10 trillion to $20 trillion. This could potentially double the debt and push it to levels equivalent to nations like Greece or Italy. At the same time, his racist, xenophobic and anti-science policies will stifle investment. The next generation of investors and entrepreneur’s will bypass America and go elsewhere. Already in fields such as renewables or biotechnology America is falling behind its rivals. Tariffs and protectionism, will just make things worse in the long term.

In short, Trump policy will make it very difficult for the US government to raise tax revenue to pay off its debts. And with the baby boomers retiring the US needs to start raising income just to pay the pensions of those retiring. At some point, it could be a few years time or twenty, the US government won’t be able to raise the cash to pay its obligations, never mind service its debts and it will default. Of course the likelihood is the markets will see this coming and stop to lending any money to the US government, leading to a sovereign default.

Now Trump supporters will say, so what that’s only bad news for China and those pricks on wall street, isn’t it? Well two thirds of America’s debt is internal, that is to say held within the US. And American pension funds are the main holder of US treasury bonds. If the US were to default as Trump has implied, he’d be bankrupting every pensioner and saver in America. Print more money? That will destroy the value of the dollar, which is bad news for billionaires like him or anyone on a fixed income (such as pensioners). In short, there is no way that Trump or any of his successors (whether Democrat or Republican) can dig their way out of this hole without screwing over pensioners and baby boomers, or in other words the very people who put him in office. Trump’s economic policy is essentially the same as Argentina’s prior to the crash in 2001.

In Britain Theresa May has committed the UK to an economic policy that is also unsustainable. Brexit is going to be expensive, perhaps a cost of up to £66 billion just to leave and maybe as much as £25 billion per year to fund all those subsidies she’s promised to those who will lose out (car makers, universities, farmers, etc) as well as the loss of trade. Put quite simply that’s unsustainable. There was something of a stopped clock to Osborne and Cameron’s obsession with deficit reduction. In that they were doing it because they couldn’t bring themselves to spend public money on the poor and the needy (who’d just blow it all on stuff like pasties and rent). But that’s not to say that the UK hasn’t got a big problem here, one that will get worse with time as more and more baby boomers retire.

Digging the UK out of this hole becomes difficult post-brexit. Making it harder for young Polish workers to come in and take over paying the taxes that pay for the pensions of retiring British workers isn’t helping matters. Quite apart from making it harder for companies to recruit (i.e. longer waiting times in hospitals, you won’t be able to get a plumber, train and bus strikes and delays become more common, etc.). Letting the value of the pound slide leads to high inflation, which means pensioners take a hammering and workers start demanding higher wages (anyone paid in sterling reading this has essentially taken a 20% pay cut this year thanks to the falls in the value of sterling).

Cutting public spending? Well the two biggest line items in the budget are the NHS and the welfare bill. And pensions and working tax credits are the main source of welfare spending, not unemployment benefit (tiny by comparison). In short, there is no way the UK can dig itself out of this hole that doesn’t screw over the very pensioners who vote Tory and voted overwhelmingly for brexit. My advice to any pensioner is don’t retire....ever!

In fact here’s a prediction, my guess is that what will finally push the US over the edge will be its greatest ally the UK. You can just see the scenario. The UK, at some difficult to predict future date, goes broke as a result of brexit and defaults on its debts. American banks post huge losses. Worried the US might be next and needing cash in hand to prevent a run on their reserves, they all dump their holdings of US treasury bonds. The US government finds it impossible to obtain credit and defaults as well.

What about the IMF? Well do you think China or the EU is going to be terribly helpful after Trump and Brexit? They’ll rescue themselves and their own banks but that’s it. Keep in mind that some bankers may actually be able to profit handsomely from the crisis, the same way they profited during black Wednesday.

So the real danger with Trump and brexit is the long term lasting impact they will have, not the short term. Its important to realise this and when things do hit the fan, remember how we got here. And also as we go along, remember that while many may be reluctant to admit it (particularly those who voted for these clowns in the first place!), but both are already having an impact on the real economy and on people’s lives.

Charging for the NHS puts everyone’s health at risk

The Tories are going for increasingly tabloid friendly policies that will sound like a good idea to Daily Mail readers, but ultimately achieve nothing, other than pour more fuel on the fire of xenophobia. Take their recent announcement that foreigners will have to pay for NHS services up front.

Certainly no doubt the NHS is chronically underfunded and over stretched. Nine out of ten UK hospitals is overcrowded at the moment and the country now has the shortest GP appointment times in the world.

So how much could this save the NHS? Well foreigners using the NHS fall into two categories. The first group are what we’d refer to as “health tourism”, where someone enters the UK for the expressed purpose of taking advantage of NHS services. This costs the UK between £110 – £280 million. The second represent more “normal” use of the NHS, where say a Spanish tourist breaks his leg and has to go to A&E. These costs amount to £1.8 billion per year. However it should be noted that probably only about £500 million is actually recoverable or chargeable.

The bulk of those being treated in this 2nd category are from European countries (or Australia) where the UK had reciprocal health care agreements with those nations (e.g. if a British pensioner or tourist needs treatment in Spain they get treated). Individuals nominally resident in the UK (e.g. students or those in employment) are generally exempt from NHS charges. Of course these conditions may not hold post brexit.

Note that the patient in this second group may not have much choice that they get treated in an NHS hospital. An American tourist who collapses in the street, a passenger who is taken ill on a transatlantic flight. So recovering costs from these people “up front” would likely be impossible.

Adding it all together, the NHS can recover (or avoid spending) between £610 – £780 million per year. That sounds like a lot, until you realise that the current NHS budget is about £120 billion, out of the £145 billion the UK spends on healthcare. So at most 0.65% of the NHS budget, or probably more realistically 0.3% of the UK’s total health spending. Even the infamous NHS funding gap of £30 billion, cannot be plugged by such charges, meeting barely 3-4% of this deficit.

The simple fact is that charging foreigners for NHS services will not solve anything. Yes it is unethical for someone to get on a plane and go to the UK intentionally to use NHS services, but its hardly a crippling burden and this represent a tiny fraction of those using the NHS. Trying to recover healthcare costs from them would be a drop in the ocean compared to the money spent treating UK residents.

And one has to consider the consequences to such up front costs. The government is talking about putting sick people in need of treatment out on the curb, or perhaps detaining those who are given emergency treatment and putting them in the equivalent of a debtors prison. We are talking about going against every principle the NHS was founded on, sinking the UK to Dickensian levels. Yes the Tories are going to turn the clock back post-brexit to the 19th century.

 And what’s the bet that the Tories will float off the unit responsible for this treatment and sell it in the private sector? Remember, many in the Tory party want to privatise the NHS (and they’ve been quietly privatising bits of the NHS), so one does have to worry if this is merely the first step on a slippery slope.

And worse, what happens, as I considered in a prior post, if a foreigner comes down with some sort of new virus or infection. Stopping any pandemic requires swift action, you need to get that person to a hospital as early as possible. Outbreaks have been avoided where healthcare could be given swiftly to the patient zero and a cordon put up around those inadvertently exposed to the virus. However, in other cases, where such action wasn’t taken (generally because the patient zero didn’t get treated swiftly enough), the virus has spread around the world with frightening speed. Consider that the bulk of the deaths related to the SARS outbreak of 2002, can be attributed to a single sneeze in a lift lobby.

So this policy will not help plug the NHS funding gap, it will be a drop in the ocean. Refusing treatment is not only morally bankrupt but puts the health of everyone in the country at risk. And it is being done purely to the benefit of the Daily Mail reading UKIP types.

In memory of the Bowling Green victims

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We’re rapidly approaching the anniversary of the infamous Bowling green massacre. On the 7th of February 2011 nobody was killed by ISIS terrorists, although two of them were arrested. Our sympathies go out to the non existent victims of this fake tragedy.

Seriously thought, this is taking “alternative facts” aka lying and deceit to a whole new level. Its ironic how so many of those who support populists claim that they do so because regular politicians lie, when the Trump team exists in a truth and fact free zone. Newsbiscuit have a take on this story here.

Of course, there was an ulterior motive to this, it was no simple slip up. An inconvenient fact for Trump is that the only Americans killed by terrorists during Obama’s watch, were home grown terrorists, not refugees. And the two deadliest of those three attacks took advantage of America’s lax gun laws. Quite apart from the regular massacres and spree shootings carried out by white male Americans on a daily basis.Something Obama did try and do something about, but Republicans blocked it.

And speaking of spree shootings we have have evidence that the attack carried out in Quebec city was a right wing gun nut and Trump supporter. And the response from the white house?….silence, they’ve scarcely acknowledged that it even took place.

Meanwhile in other news, the post-brexit UK government has just announced that the vegetable ration has been increased. Good growing conditions in Spain and the heightened value of the pound means supermarkets have been able to increase supplies to 3 items per person. All hail the dear leader!

How the Tory’s Trident deception undermined UK security

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It was revealed last week that a Trident missile test failed just a few days prior to a vote in Parliament about Trident renewal. However, news of this failure was suppressed by Theresa May and her government. They’ve tried to spin it since then that they kept it secret, not for fairly obvious political reasons, but on grounds of “national security”. Well this is a complete lie and worrying too as it hints about how the current government works and no doubt how it will handle Brexit negotiations.

Firstly, keeping the results of this test secret from the other nuclear armed states would be virtually impossible. They have early warning satellites, spy satellites, subs (often sent out to shadow nuclear missile carrying subs and report on their activities) and long range radar systems, all of which allows them to track missile launches like this. On some occasions the other powers will have been told in advance about such test, as a launch might endanger any space based assets they have passing overhead….or a test might be mistaken for a sneak attempt at a first strike (potentially prompting a retaliatory strike).

So the other nuclear powers would have been watching and observed the results of this test. And this is largely the point of testing missiles like this. Testing a trident missile is the equivalent of the UK walking in front of the other nuclear powers and performing a Haka. It reminds them that the UK has a fully functional nuclear deterrent. There is in short, not much point in testing such a missile (and wasting tens of millions of tax payers money) if the other states aren’t watching.

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Trident missiles have failed before

So the other powers saw the missile test and saw it fail. This not that an unusual occurrence. Even the best rockets are only about 92% reliable (meaning 1 in 12 of them will fail). This is the whole reason why a Trident sub carries more than one of them. So by itself this was a little embarrassing, but its happened before.

But the other powers know that the UK isn’t North Korea (granted the Tories seem to want to turn it into NK with brexit, but we’re not there yet). They would have waited for the press release from the MoD and tried to read what they could out of it to try and figure out what went wrong…..only they were greeted by silence. Why, they will have thought, are the British being silent? They know we saw the missile fail, why keep it a secret?…..Unless of course there’s something they are trying to hide? i.e. that the trident isn’t quite as reliable as claimed!

Keep in mind that while the other powers will be in a position to observe live missile tests, they won’t know what’s going on in the labs and engineering firms that build the missiles. Its possible that individual parts of the missile have repeatedly failed tests, but by luck the live firings of the assembled missile have always worked. Only now these problems have escalated to the point where the entire missile is failing in flight.

Case in point, Orbital (a new space start up) and their Antares rocket. For years there were rumours that they were seeing failures and burn outs of the rocket’s Russian built engines during ground tests and inspections. But any time they launched, everything seemed to work- Until in 2014 when a rocket blew up on the pad (or more precisely it blew up the pad!). As a result Orbital have essentially gone back to the drawing board and switched to a new engine. SpaceX too has had problems with the use of LOx in combination with composites, but any issues in testing never carried over to endanger a launch – Until a few months ago when a rocket exploded on the pad.

Now I’m not suggesting there is anything wrong with the Trident missile. But my point is, that by trying to suppress news of this rocket failure it may have created the impression that there is. In short Theresa May wasn’t protecting UK security, she was undermining it for selfish political reasons. It raises the risk that the other major powers would have seen the test failure, put two and two together and decided it equalled five. And if a shooting war broke out in the mean time, they might actually take action they otherwise won’t consider.

And it gets worse. The supposed reason for this failure was to do with the GPS guidance system of the rocket. GPS signals can be interfered with. This is why most ICBM’s have a backup guidance system that relies on alternative principles (inertial, celestial, etc.) that should step in if the primary guidance failed. We must consider the possibility that the missile went of course because one of the other powers was at the time jamming GPS signals and the backup guidance failed. By failing to report anything for several weeks this would have sent the message to that other state that the British were still scratching their heads clueless as to what had happened. And that in the event of a shooting war, Trident was little more that 20 billion worth of useless hardware.

So let us be clear, Theresa May was quite happy to undermine British security just because she was scared of a confrontation with Jeremy Corbyn on an issue where she was already guaranteed a majority. Frankly if she can handle Corbyn, waving a ban the bomb petition (while wearing one of his dodgy tracksuits), how does she propose to handle Putin, the Chinese or the Europeans during Brexit? And her reaction to Trump banning UK citizens from the US? Silence because she’s afraid of the big bad bully with the mad hair. I mean how spineless is she! If Brexit mean brexit, it means the UK becoming the 51st state of Trump land.

This episode also implies that the government will suppress important information and keep it from Parliament during Brexit negotiations. We’ll only find out when its too late to change anything. If there weren’t enough reasons for MP’s to vote against this article 50 bill, this is clearly another.

And of course, ironically enough, the suppression of this test failure also creates a compelling case against trident renewal, probably more so than it would, if the incident had been reported earlier.

The sound of silence

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Trump’s (racist, illegal, unconstitutional and utterly pointless) ban on Muslims entering the US is facing much international criticism. However the criticism from Muslim countries has been somewhat muted. Certainly some Muslim countries are responding, notably Iran and Iraq are considering reciprocal bans (and Iran and Iraq teaming up on anything should be setting off red warning lights in the US state department that this was a very bad idea). But you’d expect the Muslim world to be uniting and threatening sanctions against the US.

Keep in mind that OPEC still controls 60% of the world’s oil supply. Contrary to popular myth, fracking has not led to the US becoming independent of OPEC. Its still tied into the global oil supply system, so if OPEC embargoed the US, pump prices in America would skyrocket and the Dow would fall off a cliff. And Middle Eastern oil

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The case against article 50 and the hard brexit that will follow

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So MP’s are finally voting on article 50. Tory eurosceptic labour leader Jeremy Corbyn is calling on his MP’s to back the bill. After all we had a referendum and a majority backed leave. However I would argue, no, both labour and Tory rebels should not back article 50 and here’s why.

Well no firstly they didn’t get a majority. As I’ve pointed out before multiply the turnout of the referendum (70%) by the 52% and you come up with 37%. Now excuse my elementary maths, but isn’t 37% less than 50%? By definition a majority requires +50%. In most European countries a decision on something as important as this this requires a majority decision, not a simple plurality. And this ignores the millions who were excluded from the ballot (EU citizens, UK citizens leaving abroad).

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Brexit was only supported by 37% of the UK electorate and under 27% of the UK population

The idea that the UK can make such a momentous decision (which statisticians say was something of a fluke) on the basis of a decision made by just 37%, the vast majority of whom are old foggies who’ll be dead in a few years time (meaning technically the 52% “majority” will have slipped away not long after brexit is implemented), is a complete distortion of who democracy is supposed to work. Especially when we remember how the brexit camp only won thanks to criminally irresponsible” campaigning.

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Its possible that the relative age difference between leave and remain voters means already they’ve lost the majority…if they ever had it in the first place!

And furthermore democracy is not majority rule. Its majority rule with minority rights. Given the tightness of the result, it would seem sensible to go for a Norway model arrangement. However, the Tories being the ideological zealots that they are pushing for a hard brexit. One that will see the UK becoming the 51st state of Trumpland.

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Indeed, perhaps more worryingly, we now have the PM throwing herself at the feet of Trump, offering him a state visit just days after he took office (normal protocol is to wait until a president is well into his term) and refusing to join criticism of his openly racist ban on Muslims (including many British with dual nationality). This does not bode well for future negotiations with the US on trade. Keep in mind there’s all sorts of concession the US will be looking for. The ability to buy parts of the NHS, the relaxing of UK safety or environmental standards and changes to UK food standards.

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You may wonder, if you’ve ever been to the US, why so many Americans have bizarre diets, they’ll avoid dairy or grains, but happily tuck into a pork chop. They’re vegan, but also like to go hunting. They eat all sorts of crap but insist on only soya milk in their coffee. Well the reason for this is the dire state of US food safety compared to those in Europe. This is a country where cattle can be pumped full of growth hormones (which end up in the meat or milk), chicken chlorinated and GM foods are often sold unlabelled. This is what’s going to be on your plate post-brexit.

Oh, what’s that you say, why I’ll just buy British. Ya, and already the UK farming lobby is looking to switch to these US production methods. Which aside from the food safety issues are terrible for the environment and for rural employment, given how the US food corporations and large farmers have squeezed out many small farmers. So UK farmers, especially small farms will struggle post-brexit. Oh and btw, the US food lobby are one of the main employers of foreign labour in the US. So not what you want brought over to rural England. In short, if you thought dealing with the EU was bad, dealing with Trump is a lot worse. And that is what MP’s will be voting for.

And worse, from a labour MP’s perspective, the Tories have hinted at how they want to get rid of the welfare state, gut employee protections and try and turn the country into some sort of tax haven for the super rich. Now firstly its unlikely they’d succeed, Ireland has a much lower rate of corporation tax (and personal income taxes), the Benelux and East Europeans offer even lower rates for certain kinds of business (and all throw in free EU membership as a freebie). The baby boomer pension time bomb and the very generous retirement the UK has given to its pensioners (free NHS treatment, bus pass, winter heating, TV license, weekly state pension, etc.) means the numbers simply don’t add up without reneging on pensions. But its probable they’ll at least try. One has to seriously question the sanity of any supposed left winger who votes to endorse this in a few days time.

Furthermore, as I’ve pointed out before any labour MP needs to think strategically. Basically if you are a labour MP, the people in your district who voted leave were overwhelmingly Tory or UKIP supporters. Polls have shown that the vast majority of labour members and supporters voted remain. Now backing brexit is not going to convince any of these conservatives types to back you next election…..but it might cause many of those who voted remain to vote against labour. I for one will not be voting labour next election if they back article 50, even if they oust Corbyn before the next election. And it will probably be a long time before I think of doing so again. As far as I see it if labour back brexit, they will be guilty of betraying every principle their party has stood by. And given that backing brexit has turn Corbyn into a Tory groupie, I’d be better off voting lib dem, the SNP or the Greens as they are providing much more effective opposition to the Tories than labour.

And I am far from alone, polls show many now vote one way or another depending on how they voted in the referendum. If labour backs brexit they are committing political suicide. The results of recent by-elections should have hammered that point home.

And from a UK point of view, a hard brexit means tension in Northern Ireland and Scotland. While its still far from clear Sturgeon can get a majority any time soon (although I won’t rule it out, her chances are better than last time), I’d argue such a historic betrayal by England all but guarantees that over a long enough time line (once the older generation who voted leave and no to independence last time have died off), that Scotland and NI will leave the UK at some point in the next few decades. Voting for article 50, MP’s need to consider you may be voting to break up the UK. Future historians might judge you very unkindly, noting that our current ones ain’t exactly thrilled either.

All in all we have to conclude the entire brexit process is flawed and it was flawed from the begining. Cameron, confident of victory and more worried about the short term internal politics of his own party, did not ensure the correct political checks and balances were put in place before calling the referendum. He should have insisted on a majority decision and held the referendum in the autumn when turnout from students would have been higher. He did not set out, nor did the leave camp, what kind of brexit we’d be getting. And I find it very difficult to believe that many of those who voted leave what the UK to “take control”….and then surrender sovereignty and control over our food supply and Health care to Trump and his cronies. The entire process is flawed, its going to be a mess, so I’d say go back to the begining and start again. Why should the country suffer just because Cameron was a moron?