News roundup

Windrush amnesty

The Tories have been distracted from the brexit trainwreck, by a scandal involving the Windrush generation. These were immigrants, most from the Caribbean, who were invited to come to the UK in the 1950’s. Unfortunately, many got caught up in the so-called hostile environment” set up by Theresa May (as Home Secretary at the time) to help appease the bigot brigade.

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And its not just the Windrush who’ve been effected. With box ticking officials chasing targets, people from other commonwealth countries (such as Canada) also suffered under this “hostile environment”, losing access to health care, their jobs, pensions, being unable to leave the country (for fear they’d be denied re-entry permission) or even deported. And its now feared that EU citizens too could face similar problems after the UK leaves the EU.

Naturally this has left the Tories in full back pedal mode. After first denying everything, they’ve now been forced to apologise. Amber Rudd, the embattled (former) Home Secretary had suggested she’ll grant UK citizenship to all of the Windrush and anyone else from Commonwealth countries whose been previously resident in the UK. Boris Johnson went further, suggesting a general immigration amnesty open to all.

This scandal is problematic for the Tories for various reasons. Amber Rudd for example, was a dead woman walking long before she resigned. Given that her’s is an extremely marginal seat (she only got in last election by a few hundred votes), I won’t be surprised if she doesn’t stand next election. The only reason she hung around was because she was being used as a meat shield by Theresa May. Boris Johnson’s reaction is not surprising, he’s in a London seat and given London’s ethnic diversity, this scandal could easily prove fatal to his political career as well. So its possible this scandal could claim a number of further scalps, one of which could be Theresa May, as she is now one degree of separation from this scandal.

However the trouble for the Tories is, they’re now suggesting they’re going to give tens of millions the right to settle in the UK, no questions asked. Rudd’s replacement (in between striking power poses) has suggested he will even roll back existing immigration controls. And the EU is either going to insist on similar conditions for EU citizens. Or by setting a legal precedence, EU citizens will be able to win such rights in court.

So explain to me how you plan to cut net migration down to the “tens of thousands” when half the planet has the right to come to the UK and bypass any checks you bring in post-brexit?

Immigration is not a side issue for the Tories. They can’t ignore it. There’s been various attempts at historical revisionism regarding the brexit vote. Liam Fox will have you believe its because people wanted the UK to become a free trading empire again. Which is at odds with the fact that it will lose access to many trade agreements upon brexit. Corbyn claims it was a vote for his socialist worker’s paradise. Well, no the number one reason for voting leave was immigration. Of the dozen or so I know who voted leave this was the case for all but two of them (who are both now reconsidering their decision, given that they’ve begun to realise the horrible implications of future immigration controls on, amongst other things, free trade).

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And recall, the whole reason why the right have long banged the drum against immigration and the EU, is that this is how they exert control. Scaring people witless with half truths and misrepresentations. They can hardly turn around now and say, bollix to that, if we stop immigration whose going to tarmac my drive? This is exactly the whole reason why the Tories can’t agree a coherent policy on brexit. Any sensible plan would be at odds with the fantasy they’ve sold their voters over the last few decades. And similarly their immigration plans will only work, as currently proposed, if they can stop the bigot brigade from reading any immigration statistics.

Which is why I would take these promises from the Tories with a pinch of salt. My guess is, once the news cycle has moved on, they’ll renege on these promises and the “hostile environment” against migrants will not only continue but be extended to other nationalities.

Where no brexiter’s have gone before

The problem with brexit is that the Tories won’t except reality. Every time a new obstacle or problem is highlighted they either ignore it, or concoct some fantasy solution that clearly won’t actually work.

Case in point, the EU has indicated that post-brexit the UK will be excluded from certain secure aspects of its flagship Galileo programme. This is the EU’s answer to the American and Russian GPS systems. Both are technically military projects, so in theory they could turn off the signal tomorrow if either superpower chose to do so.

However, the EU says its system will be predominantly a civilian system, which they will not turn off, save certain emergencies. Its these aspects of Galileo that the UK risks losing access too. For the UK military, reliance on American GPS signals has long been a bit of a sticking point. The UK nuclear deterrent depends on American GPS signals (and US build and serviced rockets), so in theory this give the US a defacto veto over the UK’s use of its deterrent.

And the Tories response to this? Oh, we’ll just set up our own GPS system. WTF! Firstly that would take the best part of a decade to do and cost a good few billion in development costs. And that’s just the costs of getting the satellites designed and built. There’s the small matter of how do you launch them. The UK has no launch vehicles and has not attempted to build such a thing since the 1970’s. The UK is literally decades behind North Korea when it comes to rocket technology.

Furthermore, the UK mainland is a poor location from which to launch a satellite. These are best launched from equatorial locations (hence why the EU operates out of French Guiana), ideally well away from any major population centres (almost any track out of the UK by a rocket will come dangerously close to major cities). So the UK would need to partner up with someone else, likely the Australians. However they might be reluctant to involve themselves in an ostensibly military project (thus risking retaliation in the event the UK is drawn into a conflict). And besides, they can just pay the EU an annual fee and get access to Galileo for a fraction of the cost.

Can’t the UK just ask that nice Mr Musk to launch them for him? Well A) An order for 30 satellite launches is a pretty tall order, it would take some time for him to be able to do that. B) he’s a business man and will quickly tire of the brexiters antics, likely he’ll demand a large pile of cash up front. And more importantly C) the US military has essentially a veto over any launches he undertakes which might have military implications. As noted the US won’t want to lose its defacto veto over the UK’s nuclear arsenal.

Keep in mind that if any country sees a Trident missile coming towards them they have no way of telling if its a UK or American launched missile. They will likely respond by retaliating against both countries. So the US has good reason to want to maintain this veto. As the UK might well soon learn, its special relationship might not be long for this world.

The Trump/Macron bromance

And speaking of which, Marcon, “the Trump whisperer”, spent last weekend schmoozing Trump. Trump even went so far as to suggest this was the start of a new special relationship, which will have had Whitehall officials spitting in their tea cups.

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Now granted, its possible Macron and Trump will have a falling out over something (likely because Macron got creme brulee and Trump didn’t). As he laid out in his speech he represents everything Trump is not. But the mere fact that he and Trump are on speaking terms, proves one of the points I’ve long made about brexit. The UK had, from the American point of view, one job and one job only. To be America’s ally within the EU. With the UK leaving, the US must cultivate a new ally and clearly France is one of the more likely candidates.

And if the UK thinks things are bad now, this is as good as it gets. Once Trump is out of the way, regardless of who is in charge, its likely to get a lot worse. Members of both parties have made it clear that any future trade deal will require the UK to make some significant concessions (as in get rid of Scotch whiskey, Cornish pasties, bans on GM foods, Chlorine washed chicken and opening up the NHS to competition). And that’s assuming they even give the UK the time of day.

Calm Canadian justice

One question that came out of the tragic events in Toronto last week is, how is the suspect still alive? How is it he didn’t die in a hail of bullets? In the US people have gotten shot for so much as talking to the police or touching a police car. I mean I know the Canadians are very polite, but I’m assuming that cop’s are allowed to shoot someone without using the word “please” first (in fact come to thing of it, the suspect asked to be shot but didn’t use the magic word).

Well as I mentioned in a prior post, cops in the US are a lot more on edge, largely because of the unregulated nature of gun ownership in the US. This is not to say that Canadians don’t have access to firearms. As this video from Vice news discusses it is certainly possible to buy guns in Canada. Its just they make sure you know what you are doing first and that you aren’t a raving nutter (or a criminal). Go into a Canadian gunstore and ask to buy their deadliest gun and they’ll likely throw you out (while in the US they’ll sell you whatever you want, no questions asked).

As a result, Canadian police aren’t at the same level of risk as American police, and are trained to approach such situations differently. The worst thing you can do with a suicide attacker is give him what he wants. That what we call “letting the terrorists win”.

Churchill’s buzzsaw

Speaking of guns, I mentioned before how some 2nd amendment types in the US are trying to use 3D printers to circumvent gun laws. Their logic is that if the gov’mint “comes for their guns” they’ll just defy the law and make their own ones.

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Well it was pointed out to me recently that they ought to read a history book (then again reading isn’t exactly a known strong point of gun nuts). Home made guns have long been used by criminals. And in 1940, still recovering from massive equipment losses at Dunkirk, the British even took it a stage further. The Sten gun, was designed to be simple to manufacture in lots of smaller workshops around the country, using just basic machine tools, thus freeing up the bulk of arms factories for other projects. And they were produced by the hundreds of thousands. The Sten was extensively used by insurgent groups, who maintained them in back alley workshops across occupied Europe.

So given that assault weapons were banned in 1994, why aren’t these NRA types running off and building Sten guns? Well possibly because they’ve googled the terms “Sten gun” and “reliability”. As with any improvised weapon, the Sten was notoriously unreliable (prone to jam at the wrong moment while also being prone to accidentally discharge!). Indeed, the very fact they were built in such large quantities should tell you just how desperate the UK was during this period. And of course 3D printed guns have also been shown to be very unreliable. So much so, you’d be as well off throwing the 3D printer at someone!

Also, trying to circumvent the current assault weapon’s ban is illegal, as it will be illegal to circumvent any future bans on, say, semi-automatic weapons, large capacity magazines or a gun register. The ATF can arrest you simply for trying to build such a weapon, nevermind actually getting one working. And your 2nd amendment rights ain’t going to protect you from a big guy called Bubba in the prison showers.

Hand it all back

Trump and his supporters want to end immigration and stop anyone else coming into the US. What they don’t seem to understand is that this represents a profound change in how the US works as a nation, which has serious knock on implications.

The first resident’s in the US were of course the native Americans. Should you be wondering why they don’t own all the land, its because of (racism) a historic series of rulings by the US supreme court in the 1830’s which essentially said you couldn’t call “dips” on US land by virtue of being here first. The US was an immigrant country it ruled, everyone has the right to come in and claim land. So by effectively changing America from a “immigrant” country to a native country, then those 1830’s era rulings are rendered null and void, meaning the land rights go back to the native Americans.

So maybe yes Trump is going to make America great again…..for the native Americans!

Anti-science in Iran

When Hassan Rouhani was elected Iranian president, many progressives hoped that this represented a shift in Iranian policy. He encouraged quite a number of scientists, who had fled persecution by past regimes, to come back to country, including a number of environmentalists.

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However, many of them are now leaving the country again, in the wake of mass arrests of environmental activists and the death in custody of an Iranian-Canadian environmentalist, Kavous Seyed-Emami.

While the president might be sympathetic, the trouble is that many members of the revolutionary guard, and others within the Iranian regime, see environmentalists as troublemakers asking awkward questions. And with Iran in the grip of a drought as well as numerous other environmental problems, this means that no action is being taken on these issues. Trump and the Iranians are perhaps closer to one another than they might think.

Stolen valor

If there’s one thing that seems to rub Americans up the wrong way, republicans in particular, its “stolen valor”, individuals either impersonating military officers, claiming to have awards they didn’t receive or making false claims about their military service record. They’ve even had laws passed forbidding it.

So its more than a little ironic when Republican nominee for the State Department, Mike Pompeo is caught out doing this. And keep in mind, Trump specifically highlighted his “military experience” “as a gulf war veteran” as reasons for his appointment. Will he be punished for this? You’re joking right? He’ll almost certainly be confirmed without a problem. Expect Gina Haspel, aka “the torturers apprentice” to be confirmed also. I mean what’s a little war crime between friends.

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And he’s hardly the first Republican, Trump, Bush, Romney, John Wayne and Rush Limbaugh all dodged the draft. Hell, you wonder why its not a key requirement for Republican nomination (we can’t vote Mc Cain, he actually fought in a war!).

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The bursting of the London property bubble

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Property prices in the UK are now clearly on a downward trend, notably around London. Since the brexit vote, they’ve fallen by 15%. With Europeans being attacked on the London underground for daring to speak a foreign language, and even some of the windrush generation, who came to Britain over fifty years ago being told to go home by the government, its perhaps no surprise that this will have a knock effect on house prices. The expectation is that this is not a blip but we’ll see a slump in prices lasting at least five years.

At face value this would appear to be the one bit of good news you could draw from brexit. Property prices in London are massively inflated, largely because of investors (from home and abroad) who’ve been buying up London properties and using them as gambling chips in a casino. In some cases they don’t even bother renting the property out. And some of the money is almost certainly of questionable origins, the spoils of criminal enterprise, or money stolen from the state coffers in various countries around the world. Its one of the things that makes London the money laundering capital of the world.

However, prices would have to drop by rather a lot to make them affordable to first time buyers. To even have a chance of getting a mortgage in the UK you need to be able to put up a 10% deposit. So for the average UK house price of £200,000, or closer to £500,000 in London, it means you need to have between £20,000-50,000 in savings. This is well beyond what many first time buyers can afford. And furthermore, that is the MINIMUM amount that stops the mortgage broker laughing in your face (then having his goons roll you down the stairs), and actually given you a chance of getting a mortgage. To give yourself some leeway when buying and to get a good mortgage deal (plus leaving an overhead to allow for home improvements) you’d really want at least double this £40k – 100k or about $55k – $140k in cash.

And that’s assuming you can find a house where the broker is willing to wait around for you to go and get a mortgage. One of the problems with the UK property market, particularly around London, is that properties can go very quickly. I’ve seen ads for houses which state that those looking to pay with a mortgage need not apply, as the broker would rather just sell it quickly to an investor to use it as a gambling chip, rather than Mr Joe public to use as a home.

So while the crash has helped a little bit, for most first time buyers it hardly matters. And of course if you are selling your home for some reason, then this is all very bad news. For example, let suppose you bought a London flat at the peak of the boom, but now need to sell it (as you’re moving overseas for example). You put down a £75,000 deposit on say a £500,000 flat. Well that flat will now sell for closer to £425,000 meaning that once the bank’s been paid off you’ve lost all of your initial deposit, plus all the various fees on top that (and several months of mortgage payments, about £24,000 a year for a flat like this). So we’re talking fairly significant losses here, more than your original investment. And spare a thought for those with Grenfell tower style cladding, who’ve now been told homes they bought for hundreds of thousands of pounds are now worth a mere fraction of that.

While brexit is at least part of the trigger for popping the bubble, others argue that recent changes to stamp duty are also responsible. However, those changes were brought in to try and bring some sanity to the property market and get out of the scenario of them being kept empty and unused. And in that regard the plan does seem to have worked. Indeed a committee of MP’s recently even suggested the radical step of taking flats off rogue landlords.

And even if it were true, like all bubbles the UK property bubble was going to pop eventually. To draw an analogy we have a warehouse made of timber crammed with oil soaked rags and one night a mouse dislodges a bolt which causes a spark, which burns the place to the ground. This is the equivalent of blaming the mouse for causing the fire.

The immediate losers of this crisis are likely to be estate agents, the least liked and most distrusted profession in the UK (after politicians). The high turnover and high fees they are used to are now evaporating, so quite a few of them will be on the way down to the jobs centre. I suspect few tears will be shed.

The wealthy overseas property investors are unlikely to lose out immediately, as they bought some time ago, so prices would have to fall quite a bit to mean they hit their squeal point. And also the whole reason why they are investing in UK property is because if they cashed out and took the money home they’d get themselves arrested. So its not really their money that’s at risk in the first place. Either way, a property bear market is more likely than a sudden sharp correction. Meaning that we could be waiting sometime for any recovery.

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Abandoned building sites are starting to become a feature of some British cities

The exact scale of the problem is difficult to judge as we simply don’t know how much money was committed to UK property speculation and by whom. There are several high profile projects where construction has ground to a halt. Someone who works in the city told me about a pitch event she attended where they were selling London property bonds. Naturally, she fled the room pretty quickly (after helping herself to the free booze of course!) when she realised they were basically selling unhedged commodity speculation, which is generally illegal because its possible to lose more than your original investment (as the example I gave earlier illustrates). However, such funds did take in quite a bit of cash and its unclear where the blow back for this will emerge.

Keep in mind that last year China’s credit rating was downgraded when it became clear similar schemes existing in China and it was unclear how much money had been gambled and who was going to get to left without a chair when the music stopped. Of course, the real reason why China got downgraded is that they didn’t go to the right school, or know the secret handshake. So its unlikely the UK will be downgraded. But that just means that any crisis that emerges from this mess will be all the more sudden and damaging.

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The real reason for the housing crisis? The UK basically stopped building affordable homes in the Thatcher era

So it is difficult to see any positives out of this mess. If past events are anything to go by, we’ll see rents go down for a few years (until the expected rise of interest rates works its way through the system and pushes them back up again). But in the mean time home owners will struggle to sell. The main buyers will likely be corporations looking to build up a large portfolio of property to rent. With builders getting burned, there will be a halt to further construction of homes, which means that further down the line once the crash has run its course, there will be a shortage of housing. All in all the UK housing crisis will just get worse.

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What this crisis shows is that a laissez-faire approach to housing, relying on the magic of the market, isn’t going to work. The old policy of urban planning, possibly wedded to new ideas of how to design urban areas, needs to be pursued again.

Left wing Sadopopulism

I’ve had a go at Sadopopulism of the right before, but I think its also necessary to highlight the shortcomings of sadopopulism of the left as well, as it has its own brand of the same, which shares many of the same problems. Namely that such policies are basically unworkable and would do far more harm than good.

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The Horseshoe theory of politics puts the extreme’s of the left and right closer than most assume…

Firstly it has to be acknowledged that the far right and left are often closer than they would like to acknowledge. This is how you can end up with Trump enacting trade tariff’s, which some left wing anti-globalisation activists have been previously calling for. Or how Alex Jones can interview Noam Chomsky and it doesn’t descent into fisty cuffs. How neo-nazi’s can show up to an event organised by the nation of Islam. Or how some leftwingers will pour cold water on anything they hear from the mainstream media, yet much like Trump, they’ll swallow whole and verbatim anything coming out of RT or other pro-Putin propaganda mouthpieces.

However they all share something else in common, they are angry. And in that anger they’ve latched onto various new age myths and promote policies that are basically unworkable and generally non-starters from day one. And with the left wing populist of Five star and right wing populist of the Northern league a possible future government of Italy, we could well see such a horseshoe government forming sooner rather than later.

Both parties are anti-EU and would like to pull Italy out of the EU and the euro. Actually I suspect many in Berlin would see a silver lining to that. In truth they were reluctant to let Italy into the euro in the first place and events seem to have proven it was a big mistake letting them join (at least in terms of how the euro was initially set up and administered). If our horseshoe government were to follow through on this, the likely outcome would be national bankruptcy.

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The irony is that the Italian economy, while still a bit ropy, is starting to show signs of recovery

Italian banks are only open for business because they are propped up by the ECB. If that life line were to be cut off, then they’d be unable to service their debts, international lenders would cease to lend and call in loans pretty quickly, capital flight would start in earnest, forcing most of Italy’s banks into bankruptcy. Cash machines would soon thereafter stop issuing money, credit cards would be stopped and Italian companies would lose their line of credit, forcing even healthy businesses to close. Deprived of EU funds and with imploding tax revenue, the Italian state would be unable to pay its civil servants, prompting a massive downsizing of the Italian public sector overnight. They would also likely be forced to stop paying for things like social welfare. And once a new Italian currency was issued, it would lose value pretty quickly. So anyone with savings or a pension would see all of that wiped out.

There are some who argue that long term Italy would be better off going back to the Lira and their old pre-euro economic model. However, that was then, this is now. Back then Italy was basically Europe’s China, churning out lots of cheap plastic stuff, shoes and clothes, constantly devaluing their currency to make themselves competitive. That model won’t work any more because A) We have China. B) We also have Eastern Europe and C) both China and Eastern Europe realise that being nothing more than a low cost manufacturing base is economically unwise long term and are desperately trying to diversify their economies.

There are various alternative economic models Italy could adopt, after all its hardly in a unique position, there’s plenty of other Europe countries who’ve faced the very same problems recently. There’s the Irish model, the German one, the Scandinavian model and so on. However, regardless of what economic model Italy adopts, regardless of whether they stay in the EU or not, they’ll need to get their house in order and bring some level of stability to the economy. Which will mean undertaking certain unpopular decisions. And that’s pretty much what the technocrats who just got voted out of power were trying to do.

In short if you are Italian and you think things are bad now, leaving the euro would make things an order of magnitude worse. And we saw this happen before with Greece. The Greeks under Tsipras, went to the edge of the abyss, then with the abyss staring back at them, they bottled it (possibly because the Greek civil service managed to talk Tsipras down), crept back from the edge and ended up accepting terms worse than they’d rejected a few days earlier.

Now don’t get me wrong, I think the EU handled the Greek crisis very badly. It was too little too late and the EU (notably Merkel) need to take some share of the blame for this. However, the Greek’s also have to acknowledge that they also bore some responsibility. For Tsipras to then go and start dredging up the ghosts of world war II just to score a few points has to be one of the worst examples of Godwin’s law in action ever. That’s just plain bad manners. And for the leader of any nation, unprofessional.

I’ve come across conservatives using the term quite a bit of “doing a Greece”. By which they refer to their belief in the myth that Greece is in an economic mess because a socialist government mismanaged its economy, spent money they didn’t have and allowed the public sector to become massive bloated and inefficient. I’ve use the term myself, but I don’t mean what conservatives mean by “doing a Greek”.

In truth the problems for Greece (good myth buster here) were caused by a conservative neo-liberal government. Prior to 2015 Greece had never had a left wing government in its entire history. The conservative government in Greece took advantage of a boom to cut taxes, while encouraging businesses to spend and invest recklessly, often deregulating when any pesky laws got in the way. This caused the economy to overheat, which led to higher inflation. Which put pressure on the public finances. They also conspired with the likes of Goldman Sachs to help hide the scale of Greece’s debts (I mean you can always trust a banker, can’t you?). In many ways Greece made the very same mistakes that Japan made in the 80’s & 90’s and the same mistakes that the US and the UK are currently making. Its just that the scale of the Greek economy meant they could only keep it up for so long.

Either way, yes the EU screwed up but so too did the Greeks. But the populist policies of Syriza failed because they were unworkable from day one. They were wedded to the idea that Greece could give the two fingers to the rest of the world without suffering any blow back. Which of course it couldn’t.

Had the Greek’s actually jumped however, as the Italians might, Venezuela provides us with a vision of the likely results, where the economy is imploding as its government lurches towards dictatorship. Again many on the right point to the failure of the Maduro government as “proof” that socialism doesn’t work. That his reforms only worked because of the high oil prices at the time (and thus any country that doesn’t have vast oil reserves can’t afford such socialist policies).

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The bulk of Chavez’s reforms occurred in the period 1999 to 2003, when oil prices were on average lower than the current oil price

However, the bulk of Chavez’s reforms occurred immediately after he came to power, around the period of 1999 to 2003, at which point the international oil price was actually lower than its current price (it did gradually creep up, but it was much lower than the current price for most of his first term when the bulk of the reforms occurred). So those arguments don’t quite line up with the facts. And there was limited capital flight out of Venezuela until recently.

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Recent capital flight from Venezuela, slow until recently, then the rush for the exits!

In truth most of Chavez early reforms weren’t really “socialism” (then again to republicans “socialism” is everything to the left of John McCain) they were a combination of medicare/medicaid, social welfare and maybe getting the rich to pay a little bit of tax once in a while. Where things started to go wrong was in the wake of the US supported coup against Chavez. Since then the Bolivarian regime, under Chavez and later Maduro has been adopting a number of authoritarian populist policies, which is largely the reason for the current wave of capital flight. So really the failure of Venezuela is more a failure of authoritarian populism than socialism.

So the likely outcome of this attempt to crash the system that both the sadopopulists on the right and left favour, is likely to be resetting the economy back to zero and wiping out everyone’s life savings and income. Which hardly seems a policy any sane person would support. But many angry people on both sides do support this idea because they argue, well I’ll have it bad, but at least those nasty billionaires will get their comeuppance. We burn, they burn. In truth…..maybe, maybe not.

Even in the worst of times, someone turns a profit.Ferengi rules of Acquisition:163

Certainly yes, some of the wealthy, particularly those with lots of assets that are based on speculative wealth, or assets which can’t be sold off quickly, will be in trouble. Capital flight isn’t a simple matter of pushing a button and your money magically moves to Switzerland (hence why many of Chavez opponents held off for so long). Its not as if you can load a factory onto a truck and head for the border. Selling assets at a time when everyone else is selling will make for a buyers market and you won’t get top dollar. Even financial assets can be difficult to transfer. You’ll face exchange fees, currency price differences, legal fees, etc. And certain financial positions can be expensive to unwind at short notice.

So anyone engaging in capital flight is taking a financial hit by doing so, hence why they’ll only do so when they’ve no other choice. I bring this up because it debunks the argument that enacting progressive policies or putting up taxes will send the rich fleeing for the exits. As I pointed out before, if that were true, California would be a wasteland and Kansas would be the richest state in the union (and Somalia would be the richest country in the world). But that said, there’s a limit to what a government can get away with. Push the envelope too far and the elites (or anyone with a savings account!) are going to accept the financial hit as a price worth paying to keep the bulk of their money safe.

So in the event of such a lights out scenario a lot of the rich will simply move their money out of the country and try to ride out the storm. Certainly yes, some of them will get wiped out and they’ll all take some sort of temporary hit, but some could actually do rather well out of such a crisis. Once things hit rock bottom everything will be in the bargain bin and they’ll have the cash to buy. And even if a factory owner can’t operate his factory because he lacks a line of credit, he still owns the factory, which is an asset he can sell or use as collateral.

It worth noting that the bulk of the wealth of the elites in many countries is based around property. For example, during the slump in the 70’s in the UK (as a consequence largely of the oil crisis), quite a few of those with money to spare took to buying up property in places like Notting hill in London or the Moray estate in Edinburgh. Here they could buy a dilapidated townhouse, subdivide it and rent it out cheaply to migrants or as office space and make a tidy wee profit. Pretty soon many wealthy people from around the world started to get in on the act, some not even bothering to rent or maintain the property. Well now that town house in Notting hill or Edinburgh that was bought in the 70’s for a few thousand is worth tens of millions.

And more recently in the US the real winners of the financial crisis has proven to be wall street. Several wall street firms have gone around buying up foreclosed properties at a massively discounted price and created massive rental firms that own tens of millions of houses country wide. And, as one trader let slip in a brain fart on BBC, there is no better time to be a trader than in a falling market. As it provides numerous opportunities for profit. And between brexit and the US a rudderless ship for the next four years, this is something of a happy time for traders. If hedge fund managers had a motto right now it would be “we didn’t start the fire, but if the rest of you want to burn the house down, fine by us, we can make plenty of money looting the place as it burns…plus we took out fire insurance sometime ago”.

This is not too suggest that it is impossible to implement progressive policies. The NHS, equal pay act, civil rights act, the Paris climate accords, the minimum wage act, Germany’s Energiewende all show that such changes are possible. However the successful progressive polices require a long term commitment. And to get that it needs responsible politicians to drive the policy forward. It requires a commitment to compromise and negotiate with other parties and stakeholders in order to achieve buy-in to this policy, both from the public and the opposition. This reduces the chances that right wing parties will be able to simply repeal the policy when they get back into power. Obamacare for example might well be flawed (given that its a watered down version of Romneycare), but its succeeded in that even with republican control of congress, the senate, presidency and supreme court, its still on the books.

The thing that worries me about populism, be it the left wing or right wing variety, is what happens when it becomes clear that they can’t achieve what they promised? The danger is we’ll see a lurch towards authoritarianism, as we’ve seen in Russia and increasingly in the US. And left wing populists are just as like to do this.

Case in point, Corbyn is under pressure due to anti-Semitism within labour. Now I suspect the media (who are not exactly pro-Corbyn) are making a mountain out of a mole hill (to some degree). Its more than a little hypocritical, given how being a xenophobic nutjob is practically an essential requirement for membership of UKIP or the Tories. Or given all the racist stuff you’ll see on many right wing newspapers. But this is not to say that labour doesn’t have a problem here. And Corbyn’s response? Threaten those MP’s who speak out with de-selection or suspension.

With all the allegations swirling around that the EU referendum, suggesting that it was less than honest and thus might not be legal, some in labour (and labour party members overwhelmingly voted remain) most notably Owen Smith suggested the party should be prepared to have another referendum. In response Corbyn sacked him.

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Labour party members voted overwhelmingly remain, Corbyn and his allies represent just 9% of the party

And recall Corbyn lost the last election because he won’t do a deal with the lib dems, SNP and Greens. This meant some Tories got in by less than a hundred votes. So its been suggested he should do a deal with these other parties before the next election. His response? Why they should just join the labour party, after all we can’t have factionalism in the Union of Soviet socialis……sorry labour party.

This of course ignores the fact that some labour policy is simply a non-starter for some of the other left wing parties, e.g. the Greens and SNP are opposed to nuclear power while all of the other parties are in favour of another EU referendum. But such opinions are being shouted down by his red shirts in momentum. In short, labour under Corbyn is starting to resemble East Germany under the stasi. He seems more interested in winning some sort of ideological battle with others on the left than he is in beating the Tories.

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All in all, left wing sadopopulism is as flawed as the right wing variety. Both are little more than political vandalism. Lots of angry people using ballot boxes as urinals. Its entirely counter productive, with the likely outcome being chaos, political paralysis and potentially national bankruptcy. And far from bringing down the rich, it could leave them better off than they are now. Populism is not democracy in action, it is in fact substituting mob rule and authoritarianism for democracy.

Does anyone fancy a bespoke kebab?

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So the EU has released its all to predicable terms for the transitional brexit deal, which has sent the brexiters off into a tizzy. Corbyn, meanwhile has had a rare attack of common sense and realised that being leader of the opposition means opposing Theresa May, not supporting her. So he’s aligned labour’s brexit policy to include staying in the common market and thus more in line with what the labour membership want and indeed what the majority of the country wants.

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However, like Theresa May, Corbyn still wants the UK to be treated differently and thus he wants a “bespoke common market deal. We’ve seen numerous possible brexit options jettisoned. The Norway model, the Swiss model and even the Canada model fall by the way side. So we’re now down to the Turkey model for brexit. Or the kebab option as I suspect it will be called shortly. But both the major parties don’t just want any old kebab, they want a “bespoke” kebab.

To draw an analogy, let’s imagine Monsieur Barnier as the owner of a continental delicatessen and in walks May and Corbyn and both ask for a bespoke kebab (which the Tories think they shouldn’t have to pay for). Barnier has no idea what they’re talking about. Yes he did something similar once, as a favour for a Turkish customer, but that was a one off. He suggests they try something else from the menu, there’s the Norwegian stock fish sandwich, Swiss stew or the Canadian bacon special but no bespoke kebab, perhaps you should try Donald’s burger bar down the street (mind you that’s gone downhill since it got taken over by a Russian sushi chain).

May and Corbyn both plan to keep asking for a bespoke kebab over and over again until blue in the face, because shouting loudly at foreigners has worked so well for Britain in getting its way in the past. Obviously what’s actually going to happen is they’ll get thrown out, at which point May scuttle’s off into an alley, bites the head off a rat and sits on a dustbin Gollum style eating it while mumbling something about her “precious”. Corbyn meanwhile plans to stand outside the shop shouting at passers by for his bespoke kebab, until someone from the council comes along and takes him into care.

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Jokes aside, clearly both the main parties negotiating strategy isn’t going to work. Yes, labour’s shift to staying in the custom’s union is infinitely more sensible than the approach of the Tory party. It recognises that Northern Ireland is a place that exists and that a hard border there would be a very bad idea, plus that the UK does this thing called “trade” with the EU. However, as those more familiar with the “Turkey modelpoint out, there’s still checks at the border (trucks can be held up for several hours). The UK will still have to pay into the EU budget. And while yes the UK will be free to negotiate new trade deals with other countries in areas that the common market doesn’t cover, those tend to be the very areas the UK doesn’t WANT to open up its markets (e.g. healthcare, farming, etc.).

The grown up’s solution would be to negotiate a Norway model like arrangement but stipulate it as an interim to medium term solution. The EU would go along with that, they’ll always take a fudge that kicks the can down the road. Longer term the UK could then look at either a 2nd referendum in a decade’s time (after all the old racists have died off) and re-joining the EU. Or if there is a desire for a more radical hard brexit (and again, polls currently show most want a soft brexit), then the option to do that and back out of existing trade arrangements over time will be available.

However, I’m being way too sensible. The problem with such an option, or any of the other possible brexit models is that it requires one to admit that brexit is going to leave the UK worse off.

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In fact, just to keep score, way back in 2011, when brexit was just a twinkle in Beelzebub’s Farage’s eye I put up a post in which I predicted that brexit would threaten the peace of the good Friday agreement (tick) and the union with Scotland (tick). That the UK would have to pay an exit bill (tick) and continue to pay for access to the common market (tick). And that there was no way the EU would allow access to the single market without the UK paying in and retaining freedom of movement (tick). That the UK would need to accept the jurisdiction of the ECJ (tick). And besides, ending freedom of movement probably won’t work because the reasons justifying it are flawed. And “shutting the door” to immigration would just lead to labour shortages and crops rotting in fields.

I also predicted that the UK’s relationship with America would change (either the special relationship would end or we’d become the 51st state, it currently looks like the latter) and the UK’s relations with rest of the commonwealth would suffer (tick). And far from the UK getting “exciting” new trade deals, in “emerging markets“, instead the UK’s going to have to spend decades renegotiating the deals its already got via the EU. And its been made clear by other world leaders (even Trump) that the deal the UK gets won’t be nearly as generous. Indeed, the word from Washington is that regional protection for Cornish pasties, Scotch and Cumberland sausages will have to go, as the price for a UK/US trade deal (I mean who could have known the US would want a trade deal that favours them!).

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And on the economic front, the markets are clearly jittery. There have been several large bankruptcies recently. Just the other day two of the country’s leading retailers collapsed. And there’s a long list of other firms on shaky ground. While these business failures aren’t entirely the fault of brexit, clearly it isn’t helping. And there’s worse to come. Many companies are in holding pattern right now, they are waiting to see the terms of brexit before they make any decision. But its inevitable that there will be some sort of “correction and some significant level of job losses.

In short, everything the remainers warned would happen has happened (or is clearly going to happen). But this is the truth that cannot be spoken by either of the main parties. Brexit is now the official state religion of the UK and speaking ill of it is the equivalent of the Pope coming out to mass on Sunday wearing a Glasgow rangers top and singing a famine song. Brexit is essentially a suicide pact that 37% of the country voted for (without knowing what they were voting for), which will now be implemented on everyone and democracy be damned.

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Again, labour’s policy is more sensible here than the Tory’s, but its still bonkers. Its the classic dilemma of the sweet shop owner v’s the doctor. The doctor wants to cure your cancer with chemotherapy, but the sweet shop owner promises to use chocolate and sweet things which he claims, will not only cure cancer, but all other ills and make you fitter and stronger. So Corybn has to sound like the sweet shop owner, while trying to sell the idea of taking our medicine.

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Of course so long as this impasse lasts, the only winner is going to be the EU. They’ve essentially come out on top at every turn so far, largely because the UK has no real negotiating strategy other than to ask for stuff we can’t get and probably don’t actually want.

Of course the fatal flaw of many in the UK, brexiters, remainers and those in the middle is that they are confusing the EU with someone who actually gives a toss either way. As far as the EU is concerned they have bigger fish to fry right now (climate change, Trump, Russia, Berlusconi, Catalonia, etc.) than deal with the primadonna antics of British politicians.

They’ll try to get an agreement yes, there is some room for compromise. But fundamentally there’s some things they can’t do nor allow. They have been more than clear on that since the very start. And if push comes to shove they’ll just say suit yourselves, c’est la vie and jettison the UK without any agreement.

My get out of jail free card, courtesy of brexit

An interesting ruling has been made by the Irish supreme court which has some far reaching implications.

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Basically, an Irish citizen, who ran a business in the UK but is now back in Ireland, is being pursued by the British for non-payment of tax. As I mentioned in a recent post, its not uncommon for business owners to dodge payment of VAT or raid the company pension fund and get away with it. So this is a rare case of one of them being held to account (presumably because he didn’t go to the right school).

Anyway, the British applied for a European arrest warrant. However, said tax dodgers lawyers argued the defendant cannot be guaranteed a fair trial in the UK as he will lose his civil right part way through the process (due to brexit) and thus he cannot be extradited. Well the judge agreed and to be fair he does have a point, given the contradictory positions coming out of London, which includes withdrawal from the ECJ and ending the 4 freedoms of the EU on April 1st 2019 and even withdrawing from the European convention of human rights (or walking away without any agreement at all).

Of course the legal implications of this ruling is that effectively every Irish citizen living in the UK now has a get-out-of-jail free card. I could go down to London tomorrow and go around the museums, smashing national treasures with a hurley, then take a crap in one of the Queen’s fountains, kick her Corgi’s, shoot a swan, etc. So long as I could make it to a ferry port or airport and get back to Ireland before they issue an arrest warrant (or if I did get arrested, absconded while on bail) then I’m home free.

Naturally this hardly good news (particularly given that are some less than law abiding Irish people, who don’t particularly like the Queen…nor the brexiters!). It should be noted that the Irish government opposed this ruling (for what should be obvious reasons) and were supporting the extradition case. But it highlights the consequences of the legal minefield the UK is about to stray into post-brexit and the chaos that could ensue.

Because when Theresa May says “brexit means brexit”…then repeatedly fails to clarify what that means. Well what’s going to happen is that what brexit means will be decided not by the UK parliament, nor even the EU, but by judges, customs officials and lowly civil servants in the four corners of the world. Without a clear agreement in place and with the UK taking a contradictory position (get free trade, but ending the four freedoms), its left to these people to use their own judgement, which can lead to unpredictable results.

For example, take those European health and safety laws the brexiters love to hate. Well without those laws on the statute books and with no agencies to replace them and provide regulatory oversight, companies can no longer use “compliance with all European safety standards” as their defence when being sued in court. Also there are liability limits in many cases for civil law suits, even when negligence can be proven (this  is why you don’t see $2.8 million payouts over a spilt cup of coffee in Europe). So in theory, such caps on payouts could disappear and it would become a lot harder to defend against civil suits, which would see insurance premiums soar. And recall, its not just a simple matter of the UK bringing in new laws. The injured party might be in Europe (or worse America!).

And to give perhaps a more specific example, with the UK withdrawing from the European nuclear regulator on April 2019, who is going to regulate the countries nuclear power plants? There’s a risk that they might be forced to shut down and Hinkley C mothballed. And again, this is not a decision the UK parliament will get to make, it will be made by HSE inspectors, insurers or company boards. Also, what if there were to be a problem with Hinkley C, e.g. let’s supposed the French screw up somehow (as has happened with a few recent projects) or there’s an accident and the British try to sue them or prosecute EDF executives. Will the French allow that? Well maybe they will, maybe they won’t. Will a French judge allow their extradition? Who knows! Let’s just say I’m glad I live at the opposite end of the country.

Or let’s suppose a French local politician decides that henceforth British cheese is banned because it contains dangerous ingredients (English milk). Or he insists it’s labelled “du Fromage Roast beef”. What are the producers of British cheese supposed to do?

Yes, there are legal ways to settle these issues. The tax dodger’s case has now been referred to the ECJ (who may overturn the ruling). The Irish government is already talking about a new post-brexit extradition treaty. Trade disputes can be resolved via the WTO. However, this is not a case of flicking a switch. Such cases take months or even years to resolve (so our tax dodgers case may simply time out, or a company caught in limbo might go out of business). New treaties can take equally long to draft and sign. And it requires good co-operation from both sides for such negotiations to run smoothly. If the UK follows through on the brexiters plan, which is basically to undertake brexit negotiations in bad faith, then you can forget about it.

This is the real danger that the brexiters are missing. They could find themselves stuck in a legal quagmire and it won’t be easy to get out of it. Now if you’ll excuse me I need to Google “how do you roast a swan?”.

What the Dickens are they up too

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I’ve long accused the Tories of trying to take the UK back to the Victorian era. However, already the UK is starting to resemble a Dickensian novel, where the poor are downtrotten and robber baron fat cats run amok, unchecked by government.

An Englishman’s home…is his landlord’s castle

Consider a recent report, which described how one third of those renting property in the UK are living in homes that fail basic health and safety standards. And more often than not it is those on lower incomes that are the most likely to experience these problems. Why don’t they report these rogue landlords? Because given that UK laws favour the landlord, nothing generally happens, other than you getting evicted.

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Some examples of the appalling conditions UK tenants are forced to put up with…and still pay rent!

Should you ask, well why don’t they just go out and buy a home? Well because you’d need money for a deposit first. And one of the consequences of Tory policies over the last few years is that many UK workers are now chronically insecure financially, literally living pay cheque to pay cheque. A quarter have serious money troubles. Food banks use has continued to rise, indeed they’ve seen a 45 fold increase (yes 45 times higher) in use since the Tories came to power.

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Usage of food banks, has increased every year since the Tories have been in power….

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….primarily driven by low income and benefits sanctions

And its not as if there are homes out there that could be rented (or sold), indeed large numbers of UK homes are currently unoccupied, over a 100,000 have been empty for ten years or more. And tens of thousands of luxury flats in London are also being built, to lie empty.

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The fact is that there’s a housing crisis in the UK because back in the Thatcher era, the UK stopped building social houses and sold off most of its stock. While the labour government did try to do something, they didn’t really try hard enough (remember there was a boom, housing seem to be taking care of itself, they didn’t understand it was all just a bubble). Now we’re returning to the normal state of affairs. And given that the only people who can afford to buy homes are those with well paid jobs, or spiv’s and speculators, who see homes as merely gambling chips in a casino, the end result is the dickensian mess we see in the UK housing sector, something Grenfell tower merely highlights.

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UK workers have seen their income decline and are one of only three countries where people are still worse off than they were prior to 2007…and the only one worse is Greece!….

And even those with mortgages might be in trouble. To cope with the financial crisis quite a number of people switched to interest only mortgages. But now they are being warned they might not have the capital to pay off the mortgage, meaning they could face eviction.

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….and Greece is set to solve its deficit problems before the UK!

Life on the streets

And spare a thought for those who are homeless already. One undeniable fact, since the Tories came to power, the number of rough sleepers has increased. Which is again not surprising given the state of the housing market and the finances of many in the UK. But also given the horrible mean and degrading way the Tories are now running the welfare system. We have people facing sanctions, for no apparent reason, or even for simply attending a funeral, often because benefits officers have a perverse incentive to issue them.

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And the Tory response to all this? Far from trying to make things better they are literally playing their favourite game of kick the beggar. Increasingly the homeless in the UK are facing harassment, by for example councils robbing their blankets and clothes, playing loud music to get them to move on, or buying them one way tickets to no where.

And they show no sympathy for those on benefits, indeed they are practically dancing a jig over their plight, seeing it as class revenge for voting for labour (much like how Trumps tax policy is essentially class revenge on the working class for Obama).

Raiders of the lost pension fund

And unfortunately it will come as little surprise to learn that at the same time the directors at Carillon were running their company into the ground, while awarding themselves large bonuses for doing so, they were also skimping on the company pension scheme. This is a theme that is becoming increasingly common across the UK, a failing companies run by managers who see their employee’s hard earned retirement cash as their personal piggy bank, to be raided any time they feel like it. After all, that Rolls ain’t going to buy itself.

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Carillion bosses ignored a growing pension’s deficit and still paid out dividends to shareholders….and bonuses to themselves

And its not just pension funds. Its not uncommon for the government, be it the local council, inland revenue or customs and excise to be the ones to pull the plug on a failing company, usually for non payment of taxes (business rates, VAT, employee’s PAYE, etc.). Libertarians sometimes cite this as an example of how the big bad evil government crushes businesses. But its a contrarian argument that amounts to advocating legalised theft. After all employees of the firm will have seen their salaries deducted (to cover tax and pension contributions) and customers will have paid VAT and trusted the firm to pass that money on, only for the boss to put it in his pocket. I mean if you or I took money out of the company petty cash box and left an IOU in its place, how many seconds before we’d be fired and the cops called?

Yet it would appear company bosses can basically do the same thing without consequences. Indeed, one of the favourite tactics of the infamous Kray twins was to buy up failing businesses (usually pubs or nightclubs) and basically run the business into the ground, not paying any tax (VAT on alcohol being a large part of any bar’s turnover), buying booze in the front door on the company accounts, then selling it out the back door for half the price. Then when their line of credit ran dry, they just walked away (or burn the place down for the insurance money). In effect that seems to be how a number of UK companies are now run. If the Kray’s had simply done what they did on a larger scale, say bought a chain of elderly care homes and run them into the ground instead, they’d be in the house of lords by now.

And not only is it often left to the state to pick up the pieces when a company fails, but by the time they send in the bailiff’s there’s usually nothing left, so the exchequer is left out of pocket. A bill the honest tax payers are forced to pay. So when I say libertarians are advocating theft, its ordinary taxpayers who are getting their pockets picked. And the costs of these bailouts are starting to mount. Many councils now report they are on the verge of bankruptcy. A recent audit revealed that the UK’s pension protection fund (PPF), set up as a sort of insurance policy against some sort of economic crash bringing down multiple pension funds at once is now basically insolvent, owing more than its assets to the tune of £104 billion. Or about 2.5 EU exits.

Exit through the wingnut shop

And how goes the Tories snake oil cure to all ills? Well a recently leaked report shows that no matter which way you cut it, the UK will be worse off.

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Of course the brexiters said, that’s nonsense, why this report didn’t analyse the deluded crack smoking fantasybespoke” trade deal they prefer. An option, that the EU more or less ruled out, when it set the ground rules for the UK trade negotiations and the terms of any transition. Brussels was unusually blunt and to the point on this, something that you’d assume would set off the brexiters into a massive foaming at the mouth tirade (given that it essentially means the UK will lose all influence over the EU, yet still have to pay into EU coffers). But the day after this announcement the pro-brexit papers barely mentioned it (which like the brexit bill, should tell you they’re going to just roll over and accept it).

Indeed, while the EU took almost no time to agree its position on the terms of any post-brexit trade deal (it took 2 minutes to pass), Theresa May has still not set out her position and the government still hasn’t got its flagship plagiarise all those EU laws we campaigned against great repeal bill passed.

Oh, and Boris now wants a bridge over the channel, even thought that’s basically a logistical impossibility (it was one of the options considered in place of the channel tunnel, but quickly dismissed as unfeasible). And it was joked a few months back that the DUP would be looking for an extension of the Giant’s causeway to Scotland. Well no, but they do want a bridge to Scotland now. Yes, reality in the UK is starting to outrun satire.

At this point, you would think it would be a slam dunk that Corbyn’s going to be elected to power by a Tony Blair style landslide. In fact you’d wonder why he isn’t going around number ten with a measuring tape working out where he’s going to put his stuff.

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Labour do lead in the polls, but not by much

However, there’s two problems with that. One, he’s a tool, who can’t even get his own party to support him, let alone the country. And secondly, the Tories are kept in power by a large body of “swivel eyed loons”, to quote one Tory MP, who “….are mostly elderly retired men who do not have mortgages, school-aged children or caring responsibilities….”.

So unfortunately, don’t expect the Tory train wreck to stop any time soon, not until the country’s fallen completely off the tracks, which will be all Corbyn’s and the labour party’s fault (not forgetting migrants), of course.

Founding Fallacies of Privatisation – the collapse of Carillion

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The collapse of Carillion has left building sites at a standstill (including one or two hospitals), with workers laid off and sub-contractors left unpaid

The collapse of the UK construction firm Carillion has left the UK policy of PFI (public finance initiatives) in tatters, while exposing everything that has been wrong with the government’s long standing policy on financing infrastructure projects.

Since the Thatcher era, the government (both under new labour and the Tories) have used PFI to fund public infrastructure projects. The logic is that rather than the state putting up its own cash, instead they rely on the private sector to fund projects, with the state paying it off in instalments. This avoids the need for the government to issue bonds and increase the public debt.

Now as anyone who has ever taken out a loan will know this is a very silly way of financing a project. The state will nearly always be able to borrow money more cheaply than a private firm. And it is always desirable to reduce the length of time over which you pay back any loan. Case in point, I’ve recently been looking into overpaying my mortgage and doing so will save me tens of thousands over the lifetime of the mortgage (so much so I wish I’d started doing it earlier!).

Indeed financing projects via PFI’s is 40% more expensive than doing it via public finance. And furthermore, those debts are still technically the responsibility of the taxpayer to honour. The estimation is that the UK’s liabilities on PFI contracts amounts to £200 billion. To put that in prospective, that would meet the funding costs of the NHS for a 1.5 years. Its about four times more than the net cost of leaving the EU. So its not really reducing the public debt, much like tuition fee’s its just hiding it at great expense and passing on the costs to the next generation. In essence, its another example of inter-generational theft.

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Future generations will by paying off the folly of these PFI contracts for decades.

The other problem with PFI’s has been that the construction companies have been behaving quite recklessly. They’ve often drastically under priced jobs in the hope of undercutting the competition, gambling that they’d be able to outsource the job, squeeze subcontractors or using the small print of the contract to deliver the building in a substandard condition. The end result has been building projects that have consistently been delivered late, cost a lot more than planned and generally have not been up to the standards expected (having high maintenance costs for example).

And privately run public services have been more of the same. For example the firm running the Newcastle metro was actually budgeting for the cost of fines as it was cheaper to just pay the fines than run the service properly. In essence many of these companies have been playing the same game as the banks prior to the financial crisis, making reckless bets thinking the gravity train would run forever and anyway we’re too big to fail the government will have to bail us out if the balloon goes up.

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Carillion had its fingers in lots of pies

The reasons for Carillion’s collapse are multiple. There are reports of them taking massive losses on contracts in the middle east. Also the brexit effect has to be considered. The sudden jump in inflation has pushed up the cost of everything, making the cost of delivering on a project much more expensive. That said, a well run company should have priced the job with enough of a contingency to allow for that. I know some in construction who are feeling the brexit pinch alright, but they’re at least still covering their costs. There worry is more the long term implications it brings (what happens when the economy slows down and the order book runs dry and they can’t hire experienced Polish brick layers anymore to complete the contracts they’ve still got).

However it seems Carillion were throwing caution to the wind and inevitably they just pushed to hard and got caught out by circumstances. And with building sites at a halt, subcontractors not being paid, it has left an awful tangled mess for the government to sort out, as well as dealing with the public anger over fat cat bosses awarding themselves massive bonuses as their firm failed. And the government doesn’t really have a choice but to act, as there’s a risk that the collapse of this firm bringing down other firms too, the impact on the wider economy to consider and the simple reason that they can leave public services unfulfilled or expensive building projects incomplete.

Again, this highlights the short comings of the PFI process, if not the fallacy of the entire neo-liberal economic model. Even if private firms could deliver services for less than the costs of the public sector (and they can’t), what do you do when a company supplying a public service fails? Inevitably the government has to step in. So all PFI’s (or privatising public services) amounts to doing is privatising profits for the few while socialising the risk for the many.

Carrillion’s collapse is essentially a re-run of the events leading up to the banking crisis (on a smaller scale). When you ignore the lessons of history, you are doomed to repeat them.

The Great Tax Experiment

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At the core of the republicans tax plan is the notion that if they cut taxes for the wealthy, there will be a trickle down effect and we’ll all be better off. But when you ask for any hard evidence of this, they’ll usually go quiet for a bit, mumble something about Reagan (who, as I discussed in a prior post put up taxes, oversaw three recessions as well as the biggest decline in real wages in history), then change the subject.

Well actually, as Richard Reich points out, we’ve actually been conducting a tax experiment in the US going back over many years now. He compares the state of economies like California (which has relatively high state taxes) to economies like Texas and Kansas (who have very low taxes). And suffice to say, the results of this “experimentare at odds with everything that conservatives say about tax.

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We’re told that high taxes will lead to sluggish economy growth and lower wages. California has consistently had one of the highest economic growth rates, highest wages and highest standards of living, not just in the US but in the entire world. Kansas and Texas are left eating California’s dust.

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Kansas governor Brownback’s reign of error has seen the Kansas economy stagnate due to his tax cutting and austerity policy……

High taxes we are told will scare away the wealthy leading to capital flight and more unemployment. Well then explain Beverley hills! Or why are so many tech billionaires and their companies concentrated in California? Think about that for a minute. The CEO’s of Apple or Google could simply move headquarters to Kansas, staying within the same country and save themselves millions a year in personal taxes. Yet they haven’t.

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Private employment in Kansas, far from growing in response to tax cuts, it has dropped well below the US average

And here in Europe we’ve been conducting our own tax experiment. The Scandinavian countries have traditionally adopted a policy of high taxes and large levels of public spending. Yet they too enjoy some of the highest standards of living in the world, the highest wages and yet low levels of public debt. By contrast it is southern European countries, such as Italy, Greece the UK or Ireland, who’ve gone for the low tax model who tend to be the ones getting into trouble.

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Of course we are being a bit obtuse here. The economic growth rate of one country or state is not solely down to its tax policy. There are many good reasons why the tech companies are based out of California and not Kansas (the weather for one thing! And I can’t see a bunch of computer nerds surviving a night in a bar full of rednecks). The economy of California is fairly diverse, covering, mining, oil, manufacturing, tourism, agriculture, movies, etc. Texas and Kansas are by contrast heavily dependant on one or two core areas, notably agriculture and oil production. A low oil price or a hard winter and their economies can tank. So tax is merely one of a number of factors that influence the economy. But that’s kind of the point.

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California spends $0.78 for every tax federal dollar it raises, while Texas spends $0.94 (20% more) and Kansas spends $1.12 (44% more)

Republicans will have us believe that if you put up the taxes of the wealthy, an increase that will cost them a few pence on the dollar, something they can easily afford (and probably won’t even notice, as its their accountant who works out their taxes). That they’ll be so incensed by this, they’ll take their money, pile it in a corner and sit there sulking. While if you give them a tax cut, that again amounts to few pence on the dollar more into their pocket, they’ll go on a massive spending spree. Not only spending the pennies they got back from the tax man, but millions more of their own money. And they will magically find a way to spend it in a way which will only benefit the local economy. i.e. they won’t say buy an Italian sports car (which is made abroad) or invest it in a transnational corporation (which does most of its business overseas and reports its profits within some offshore tax haven) or hoard it in their bank account.

So the point here is the best we can say about tax cuts is that they might give a temporary economic boost, but the benefits won’t necessarily occur where we want them (or need them) to occur and the effect is likely to be short lived. While increasing taxes (up to a point of course) doesn’t necessarily cause a negative effect on economic growth. But a government can chose how and where it spends the money it raises from taxes.

Christmas time news round up

I’ve been away for most of the Christmas/New Year period, so I thought I’d do a round up of somethings that caught my eye over the last month….

The block

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Roy Moore losing the special senate election in Alabama to Doug Jones was certainly welcome news. However the fact still remains that 650,436 voters thought having a kiddy fiddler as a senator was okay with them. Indeed such was the narrow margin of his loss, Mr Snowflake is now appealing the result and calling for a re-vote. One assumes the state motto of Alabama should really be “Pedo’s welcome” and the state mascot should be Pennywise from IT. If Gary Glitter ever gets out of jail, we know where we can send him.

And the bulk of those who voted for him would be self described “value voters” (try not to laugh), who also voted overwhelmingly for Trump who has spent millions digging himself out of sexual harassment lawsuits. So one assumes those “values” are much the same as those in Sodom and Gomorrah.

The Republican party is at every level now a morally bankrupt institution. Its less a political party now and more of a tribe or a corrupt cargo cult. Its guiding political philosophy is no longer “conservatism but more anti-liberalism and pandering to the wealthy donors who help to keep them in power. And to be fair, we can’t blame Trump alone for this, its a downward spiral conservatives have been on since the 1980’s.

As I recall someone joking a while back, Satan himself could be a GOP candidate, he could run on a policy of ripping out the hearts of the first born of anyone who voted for him and he’d still get at least 40% of the vote in any US election. And many republicans would vote for him and them blame the democrats, because they went and put that bearded hippy on the ballot paper (some guy call Jesus) and they could hardly vote for him (…I hear he was born in the Middle East).

So this is an important point to understand when it comes to trying to debate conservatives, particularly those from the alt-right. You are wasting your time. Any facts that don’t support their position will be ignored, or twisted and deliberately miss-represented….or they’ll just plain make sh*t up. They are basically immune to logic and facts.

It is simply not possible to run a democratic society if half of that society has basically decided to abscond on their civic duties and hand their democratic rights on to a series of corrupt tribal leaders. The lessons of history tells us that this will likely end rather badly, especially for conservatives.

Russia cables

Recently the head of the UK armed forces has raised concerns about the risk posed to undersea communication cables by the Russian navy. The concern is that they might resort to cutting these cables or eavesdropping on them.

Now where would the Russians get a crazy idea like that from? Probably from the CIA and NSA. Who, with the help of US navy subs, have supposedly been tapping into undersea cables for years. So this is very much pot calling the kettle black.

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Also it is starting to get to the stage where the Russians are getting the blame for every little thing now. That said, there’s no smoke without fire, but you do wonder if issues like this are being exaggerated by those in Western intelligence and military organisations trying to protect budgets. After all, given the allegations against Trump or the brexiters of Russian collusion, how would it look for them to cut the budget of something the CIA or MI6 were selling that was intended to counter Russian this or Russia that. Pretty darn dodgy one assumes. Hence why perhaps some in the intelligence and military community are constantly talking about Russia.

Trump hates Christians

One of the justifications for Trump’s policy towards the middle east is the defence of the Christian minorities living within the middle east. Well those Christians would rather he shut the hell up, as his actions are putting their lives in danger. In the wake of Trump’s announcement to move the US embassy to Jerusalem, Christian leaders refused to meet Mike Pence during his Christmas time visit and he ended up being forced to cancel it.

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It should be noted that Christians in the middle east tend to be pro-Israel, as that’s one of they few country’s in the region which isn’t actively persecuting them. But they also understand the danger inherent in provoking the anger of Muslims and the long term obstacle to peace that an Israeli capital in Jerusalem represents. And the recent history of the region tends to be a case of one side provoking the other with the Christians caught in the middle.

And on a related topic, the UN voted to condemn Trump’s actions over the Christmas period. Trump mumbled something about cutting funding to any country that voted against him (i.e. offended his ego). Again, this is putting your foot in a quagmire.

Firstly, if he doesn’t follow through with this threat, then everyone knows it was an empty threat and he talks the talk but can’t walk the walk. A long standing doctrine of US diplomacy has been not to make threats they aren’t prepared to follow through on (hence why US diplomats are usually very careful in their choice of words). Otherwise you risk being seen as toothless. And given that Egypt and Saudi Arabia were two of those that did vote against the US (and both receive a lot of funding from the US and host a number of Trump businesses), its going to be difficult for him to follow through without upsetting a lot of apple carts.

While its true that many country’s often used aid money as a way of currying favour with others and potentially getting them to vote this way or that at the UN, the general rule is not to bluntly state as much. Because now Trump has made it clear that those who voted with him are essentially entitled to a few billion in funding. While the others should just go and sell their vote to China (who will be more than willing to pay….in exchange for an airbase in Central America!). In short, he’s just put a few dozen UN votes up on E-bay.

So Trump’s actions here could not be more ill-judged.

Trump’s tweets

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And speaking of Trump, why is he still on twitter? Given he’s now openly and repeatedly violated twitter’s own policies against promoting hate speech and/or violence, surely his account should be shut down. And its not that they can’t do it, a disgruntled employee did take Trump’s account down for a few hours last month. So it is a matter of policy that the company is ignoring its own rules and keeping his account open.

And its not just Trump. Ask anyone running a blog or a vlog that is moderately left wing and they will tell you how they face harassment (false DCMA claims, a deluge of spam, etc.), trolling and more recently the demonetising of vlog posts on a pretty regular basis, often for no apparent reason. Yet right wing vlogers like Laura Southern or Jayda Fransen (head of Britain First….but born in Germany!…..so the party name should really be Britain second) can run their potty little mouths and not face any of these same issues.

We need to get away from the myth, a myth many on the left themselves seem to buy into, that social media has a liberal bias. It doesn’t, if anything the tech billionaires running these companies have a strong bias towards conservatives. Most are socially liberal but economic conservatives. They support and agree with republicans on many issues, if they could only get them to shut up about Benghazi or Obama’s birth certificate for ten seconds.

Of course, they are deluded. The real loser in the last US election was libertarianism, not the democrats or the centre left (who, as noted, have been doing reasonably well recently). 2016 was the best chance that libertarians have had in a generation to make their mark on the political stage and they flunked it. Gary Johnston’s vote collapsed and many conservatives voted for Trump, whose about the most un-libertarian candidate you could possibly get. In short libertarianism, as a mass political movement is now dead in America. Brexit (which amounts to a return to a nativist command economy) also killed such notions off here in the UK. But even so, the fact is that there is still a bias among many tech billionaires towards the conservatives. Although that might not last very long once they are confronted by the consequences of some of Trump’s policies.

And we also need to realise that computers themselves may have a certain bias towards conservatism. Advertising revenue is increasingly being controlled by machine learning algorithms and they are going to favour the content consumers who are the easiest to sell to. And guess which side of the political fence that is?

Try the following experiment, turn off any trackers, browse anonymously and visit some random left wing sites (the guardian.com, climatecrocks, Huntington post, motherjones, etc.). The default ads that come up will probably be pretty generic ads, M&S, Sears, latest movies, etc. Now go to a right wing website (e.g. Newsmax, Alex Jones, etc.) and you’ll be bombarded with ads for gold/bitcoin or get rich/fit/bigger di*k quick scams. The fact is that its easier to sell to certain types of people. And given how dependant on advertising social media is, they will always favour one side over the other. Hence the inherent danger of ending net neutrality.

The EU on Tax havens

The EU has put together a list of the country’s it feels are acting as tax havens. While its good to see some progress on this issue, and again as I’ve said many times, its only through pressure from international organisations, such as the EU, that we’ll see action on tax havens. But equally one must be a wee bit skeptical of this list as its a bit “selective in who it labels a tax haven.

For example, Luxembourg isn’t on the list, even thought its one of the biggest tax havens in Europe. It is slightly ironic seeing faraway Islands, who actually do very little business with Europe on this list, when the EU’s most important tax havens are absent.

And of course the world’s largest tax haven isn’t on the list. That being London. And the brexiters would have us believe that the EU is anti-UK. Of course, given that its been made clear to Theresa May that she’ll be facing a choice between a Norway model (which means no immigration controls and having to pay into the EU budget, plus not being able to negotiate independent trade deals) or a Canada model, which will mean London loses some of its access to the EU, its possible the problem of the UK as a tax haven will just take care of itself.

Scottish tax rise

Speaking of tax, the SNP have recently announced they plan to increase the income tax rates for high and middle income earners while lowering the taxes of those on low incomes. They promise to spend the extra money on the NHS, schools and the police. Its going to work out costing me a few hundred a year (so a few quid a week, probably less than I spend on milk) but that seems fair enough.

Of course the tabloids are foaming at the mouth over it. What they seem to forget is that the Tories put up my taxes multiple times. The only difference is they were sneaky about it. They pushed up VAT, they put up NI rates and they put up VEI tax for small and environmentally friendly vehicles (such as a Prius or Golf), while cutting the tax on SUV’s. When I lived in England they cut funding to councils, leading to higher water rates, council tax and business rates, which ultimately fed its way through the system to see a rise in the cost of living (this is the real trickle down effect).

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And that’s before we consider the combined effect of austerity, stagnant wages and inflation which has cost everyone in the UK and average of 5.5% of their income (although its closer to -16% for younger workers and -20% for many public sector workers) and brexit will at the very least double that again.

So ya, I could have a moan about the SNP putting up taxes. But a few hundred a year, pales in comparison against the thousands the Tories have cost me. But listen to the tabloids, they’ll have you believe the Tories increased the chocolate ration from 30g to 25g’s and we should be patriotic and grateful for that.

The Scottish invasion of Ireland

I stumbled on this old BBC documentary about a long forgotten episode in Irish history, the Scottish invasion of Ireland in the 14th century. Not long after Robert the Bruce beat the English at Bannockburn, he sent his brother Edward to lead an expeditionary force into Ireland to help liberate the Irish from English rule and become the new high king of Ireland. This would have united the Celtic lands of the British Isles under one family, creating a united Celtic Kingdom.

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An alternative UK could have existed incorporating the Celtic nations of the British Isles

History is often decided by pivotal moments like this. An event that could have dramatically changed history. While the Scots were initially successful, defeating the English and their anglo-Irish allies in several battles, they received only limited support from the Irish. In part this was due to cultural differences (clan A was backing the Scots, which meant clan B who had been fighting with clan A refused to back the Scots, prompting clan C to attack clan B as they were too busy dealing with clan A and the Scots, who were then in turn attacked by Clan B, drawing in the Scots who found themselves fighting both clans B & C).

Plus the invasion happened to coincide with one of the worse famines in European history. This left the Irish in no real position to help, left the Scottish army starving and forced to forage for food off the Irish (read steal it, hardly a way to win hearts and minds). In then end ground down by hunger plus a number of tactical errors led to the Scot’s being defeated by the anglo-Irish and English reinforcements.

What’s perhaps interesting is how this incident was swept under the carpet and largely written out of the history books. For the Scots it was an embarrassment, for the English, it suggested that the united kingdom could have been a very different UK, with its capital in Carrickfergus and dominated by the Celtic nations. While for the Irish it makes them look kind of silly, the golden opportunity to get out from under English rule which they failed to take.

Then again, it would have never worked out, I mean we’d have to agree how to spell the word “whiskey” for one thing, and that’s never going to happen.

The graduate

An interesting story here from a few weeks back about an Oxford graduate who is suing his university over his grades. He claims that because he only got a 2:1, this put back his career and basically ruined his life. Now if that sounds a little far fetched, you ain’t heard the good part. He graduated over a decade ago and yet he still claims that 2:1 is haunting his career.

The reality for students is that the grade you receive in university is only really relevant to your first job. After that it plays a decreasing level of importance each time you go for a job interview, as your work experience will become more and more relevant. Having a 1st class honour might get you shortlisted a bit more often for interview, but unless you can back that up with a good interview and work experience, it won’t matter diddly squat.

I mean I got a 2:1 at uni which I was not happy about (we had a module in final year that was badly handled, if I’d gotten a higher mark in that I’d have had a 1st), but that’s life and I’ve overcome that and now I’m a lecturer. And I can all but guarantee you that if you asked my line manager what my grade in my undergrad degree was he won’t be able to tell you.

In fact, there’s a challenge, anyone here a line manager? Can you recall the degree (which uni, year & grade) of any recent hires you’ve made? I’m guessing you’d probably get only half of them right and it probably had little to do with the decision to hire them (unless they were a graduate with no work experience).

There is a point to be made certainly about inadequate teaching at UK universities, a consequence of the defacto privatisation of UK universities. And the problem is particularly bad at some of the Russell Group uni’s, where a lecturer actually teaching his classes (rather than getting his PhD students to do it) is seen by management as playing hooky. But this is more of a matter of whether or not students are getting value for money. Like I said, if you’ve learnt anything in uni its how to study independently and 10 years after graduation you should be over any issues you had with teaching.

So Mr snowflake here should be told by the judge to go suck on a lemon. A bad workman blames his tools. Anyone complaining about a lack of employment a decade after graduation, it ain’t the degree that’s the problem!

Bombardier and protectionism

Some people don’t know when to quit. After the intervention of Airbus in the row over Bombardier’s C-series that should have been the end of it. But no, the US authorities have tried again. However, they don’t seem to understand its not just a few thousand jobs in the UK that are at stake. 20,000 workers in the US contribute to C-Series production. This is the problem with nationalistic protectionism, it sees the world in us versus them terms. It doesn’t reflect the fact that you might save a few jobs in Boeing, but result in many more workers in another factory in the US losing their jobs.

Similarly, restricting immigration its argued will mean more jobs for local people. However, this simply isn’t true. All it will mean is that companies find it harder to recruit and either they’ll find loopholes to get around such laws and hire who they want. Or they’ll automate those jobs or they’ll move them overseas.

In a globalised economy its not foreigners coming over here and stealing your job you need to fear, but foreigners staying at home and your job moving.

Catalan elections

The election results in Catalonia are in and the results don’t look great for the Spanish conservatives (the PP). The pro-independence parties were returned to power, with a slightly reduced majority, while the PP was more or less wiped out (getting only 4 out of 135 seats). Then again, sending riot police into polling stations is going to kind of end up doing that.

In short, if you think the Catalan crisis over, think again. They’re just getting started. While its doubtful the pro-independence movement will declare another referendum, they might start to take measures to break with Spain. They could call on Catalans to refuse to pay their taxes to Madrid, refuse to collect VAT, hold a general strike, and otherwise cripple the Spanish economy until Madrid has no choice but to yield.

One interesting feature of the results was that the largest single party is now the Catalan Citizens party, which is largely a single issue anti-independence party. It took 25% of the vote. With the population clearly split on this issue (25-33% anti-independence, 40-54% in favour roughly), one has to say that there are really only two alternatives. Further concessions and regional autonomy to placate the nationalists (including some level of “national” recognition, a state within a state sort of thing). Or have a legally sanctioned in/out referendum. The left wing opposition in Madrid have long favoured one or other of these options. However, that was when support for independence was much lower and before Rajoy stirred up a hornet’s nest by sending in riot people to beat up peaceful protesters.

But in the absence of some sort of concession, conflict and confrontation is inevitable. In fact its probably just a matter of time before some hot head on one side or other of the debate starts setting off bombs and suddenly the PP have got themselves a civil war.

Into the blue

The brexiters had an early Christmas present, in that they will be getting their blue passports back. This was an issue that came up during the referendum, the old foggies reminisced about how they missed the old blue passports, which merely suggests their reasons for voting leave were irrational.

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The Brexiters had many sensible reasons for voting for brexit, bring back hangin, blue passports, incandescent light bulbs, lb’s & oz’s, small things really

Not least because, its been pointed out since then that at no point did the EU ever compel the UK government into changing the colour of its passports. They did propose harmonising the design of passports in the 1970’s, as part of an effort to help speed up customs controls and improve security, but it was entirely voluntary. And it was a TORY government that went along with these proposals in 1981 (under Thatcher of all people).

Indeed, the UK going back to blue isn’t even a voluntary decision, the UK is being forced into doing so, as it will no longer be an EU member and thus not UK citizens will no longer be entitled to EU passports. Oddly enough Croatia, among others, opted to keep its passports blue after joining the EU, so its just going to make it easier for the citizens of certain countries to sneak into the UK and mean longer waits for UK citizens to get into Europe….plus them having to pay for the privilege. Meanwhile, me with my Irish/EU passport can sail through passport control both sides no problem.

An incorrect story related to this circulated that it was going to cost the UK £500 million to change the colour of its passports. This isn’t entirely correct (this is what the new passport system will cost, but its a cost the UK will have to pay anyway). In truth its going to cost £50 billion to do something we could do for free by staying in the EU.

No dogs or Polish men

As we know one consequence of brexit has been to embolden the racists and the xenophobes. As an example, the sign below showed up in rural Oxfordshire, effectively banning Eastern Europeans from fishing.

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Admittedly, some of my relatives back in Ireland have had problems with Eastern European fishermen. A pond, which is one of the few places you can catch carp in Ireland, is on land my relatives own. And we’ve had Romanians show up with no rod license (and a frying pan!) looking to catch them. However, a quiet word reminding them of the law general does the trick….and if it doesn’t, a quick call to the local Garda office (who will confiscate all fishing equipment and impose a heavy on the spot fine, noting that under Irish law they can do that even if you are merely caught with a rod near the pond, never mind if you are actually caught fishing).

So its not as if there wasn’t a solution to this problem that could have resolved the matter without going the full Daily Mail. But so emboldened are the racists now that they will resort to such things without a thought for how it makes them look.

Caravans

According the BBC there’s been a significant jump in the number of caravans being purchased in the UK since brexit. Of the many negatives associated with brexit it would appear more of being stuck behind one of these things is one of those negatives. No wonder Clarkson voted remain.

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What I dislike about caravanning (my spell checker whats to change this word to canning!), other than the inconvenience and lack of consideration they show anyone else on the road (at least those in Scotland, where narrow roads can mean there’s no where to overtake them and they rarely pull over to let people past) and the waste of fuel. Its that holidaying with a caravan amounts to being penny wise and pound foolish.

With a tent you can generally camp pretty cheaply (£5-10 per night), while with a caravan you’ve got to pay for the extra fuel you’ll burn, the parking/hook up fee, consumables, etc. Add it all up, say £20-30 a night grounds fees, extra £10 per day for fuel and another £5-10 for consumables your are looking at about £40-45 a night, which is towards the lower end of the cost of a B&B room in Scotland at peak season (so once you factor in the cost of the caravan and depreciation, you are unlikely to break even).

Normally the main advantage of caravanning over B&B’s is that you don’t have to book in advance. But in peak season in Scotland, sites can fill up pretty quickly, so typically you would be advised to book in advance. While with a tent, if the camping grounds are full, you can simply trek a few hundred metres in from the road (and off any farmland…else the farmer might release his prize bull into the field!) and wild camp for free for the night.

In short caravanning seems to come with all the disadvantages of camping, but none of the advantages. While it comes with similar costs and inconvenience of B&B’s. Its really a mugs game.

The Royal price

The Queen gets a lot of criticism for the amount of tax payers money it costs to fund her, about £82 million a year. However, it was recently revealed that the production costs of the netflix series “the crown” is running at around £100 million or so. This would mean that the actual royal family is cheaper than a TV series about them.

So here’s a thought, give Meghan Markle a selfie stick and a camera, get her to film the Royal’s Meet the Kardashians style, broadcast that, and the Royal family could pay for itself, indeed we might even be able to make money off the back of them!

Hodoring the door and nuking the fridge

Speaking of TV, I’ve heard of the odd supposed “leak” of the Game of Thrones season 8 script online. It is reasonable to assume, after they royally screwed up last time, that HBO are being extra careful as regards leaks this time, so most of these “leaksare likely to be hoaxes from obsessive fans. The odd time I’ve bothered to read one, generally only when I need a bit of a giggle, its all too obvious that its not the real thing. Because these “leaked” plots make sense, don’t include a load of obvious howlers and were clearly written by someone whose read the books – which means they can’t be the real script!

When the season 7 plot leaked most people ignored it, dismissing it as a hoax, as it seemed unlikely that HBO would commit to spending tens of millions of dollars filming something this badly written. Well the leak turned out to be about 90% accurate (likely an earlier draft of the script actually filmed). Frankly if HBO wanted to save some money, they could go along to a GoT convention, grab the first bearded fanboy they see, stick him in front of a laptop, keep feeding him beer and bar snacks and in an evening he’d probably churn out something far better than what’s actually being filmed right now.

As I discussed in a prior post, GoT is now little more than expensive fan fiction, written by people who have little love for the novels and are bound by other requirements put in place on them by producers and company exec’s. Anyone hoping for a great season 8….wait for the books….although you might be waiting a long time! Its even been suggested that since G.R.R. Martin might not live long enough to finish them, we might need to create an AI to finish them for him.

But here’s the problem, much like Star Wars or Star Trek, even after a series has clearly jumped the shark (sometimes called nuking the fridge, or hodored the door as I suspect we’ll be calling it in a few years time), the series keeps going, simply because the producers (with dollar signs in their eyes) know they can get away with it and millions will still pay to watch whatever crap they churn out. As I recall one fanboy lamenting, George Lucas could film himself taking a shower, call it episode 7 and still expect to pull in a few hundred million in its first week.

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So long as money can be made, they will not learn the consequences of bad script writing and bad production and keep churning out crap. Hence why I won’t be seeing the latest star wars film, nor did I see the last two star trek films, nor will I be watching GoT series 8. Only when the movie industry sees their profits take a dent will they do anything.

And speaking of the latest star wars film, there’s actually a petition from hardcore fans for Lucas to disown it, as they disliked it that much. In essence it seems that Disney has decided to disregard the fans and focus on selling a generic sci-fi movie with lots of CGI & explosions to the masses. And for the record, I’m not giving the films a miss because I necessarily support this petition, but because I have better things to do over Christmas than go see a generic sci-fi film with lots of CGI and explosions.

Now the problem with this strategy is that making money out of the fantasy or sci-fi genre is difficult at the best of times. Its where movie studios go to die. If a producer/actor/director wants to ruin their career, or a studio wants to set $200 million on fire, make a sci-fi or fantasy movie. Any movie library will be littered with many such career ending box office bombs, e.g. the 13th warrior, In the Name of the King, Dredd, Pluto Nash, John Carter to name a few. While some of these films were dire, others on the list weren’t that bad. Its just that with such large sunk costs its very difficult to make any money with these sorts of movies.

The reason why the LOTR, star wars, star trek or GoT series stand out from the crowd is that they can rely on a legion of fans to show up (often going multiple times, or buying expensive DVD box-sets) and basically meet the overhead costs. The movie then makes its profits off the back of the general audience (i.e. those who couldn’t tell you the name of the reptilian bounty hunter seen for 5 seconds in Empire strikes back, nor tell you his entire character bio).

So the danger is that by screwing over their own fans, the studios might well find audience numbers tank and they end up making a loss.

The sadopopulist agenda behind brexit

The EU looked on last week with incredulity and disbelief, as an agreement they’d thrashed out with Theresa May, which would have settled the first round of brexit talks was torpedoed at the eleventh hour, apparently by the DUP, a small fringe party in Northern Ireland. As I’ve mentioned in a prior post, the UK’s reputation is taking a battering from these brexit talks. To many in the EU it seems like the country is unable to make any sort of decision, even when you’ve got the PM in the room (remind me, when exactly did we elect Arlene Foster as PM?). As one German newspaper put it “Brexit is the biggest political nonsense since the Roman Emperor Caligula decided to appoint his favourite horse as consul”.

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The EU showed up for talks on day one with well thumbed piles of documents, the British have one notebook between three of them….

And meanwhile back in the UK we had a conclusion to a long running saga involving the brexit secretary Dave2, who has been charged with contempt of parliament, with calls for him to be locked in the tower. This may have gone under the radar of international news, but briefly for many months now MP’s have been asking Dave2 and his department for information on their planning on the impact of brexit on specific sectors of the economy. For example, I highlighted in a prior article how leaving the EU will mean the UK leaving the EU nuclear regulatory agency and open skies agreement (which technically means that as things stand, with no agreement with the EU, nuclear reactors might have to shut down and planes stop flying for several months after April 1st 2019).

But Dave2 kept giving evasive answers along the lines of, oh we’ve got lots of boffins working on this, don’t worry your pretty little working class heads, we all went to a posh boarding schools……and we smoke pipes. Naturally, this convinced many MP’s that these impact assessments might contain some very bad news, which the government was trying to cover up. So they pressed him further, calling for a parliamentary vote on the matter (requiring that the documents be handed over), which he lost. He then tried to stall for time, portraying the MP’s as 5th columnists working for the EU, which is kind of silly when one of those MP’s happens to Jacob Rees-Mogg (on the right of both the Tories and the brexiters).

Well finally this week MP’s managed to corner Dave2 and he revealed that actually he’d been lying there are no impact assessments. When he was stalling for time, it wasn’t to give him time to censor the reports and take out anything incriminating, instead it involved him and his staff rapidly cutting and pasting stuff off the internet to placate MP’s. Yes, a year and half after the brexit vote and the UK government still has no clue what the impact of it will be, nor how they are going to prepare for it. “Fu*ked if we know!” is the official government position on the impact of brexit.

Of course this shouldn’t be a huge surprise. Plenty of independent studies have been conducted into the impact of brexit, both before and since the referendum. Prior to the referendum the government commissioned its own studies, which were generally negative about the UK’s prospects post-brexit. Given that the circumstances haven’t changed much, its reasonable to assume that any impact assessments would show the same thing and it hardly helps the brexiters case for their own department to conclude they are cutting off their own nose to spite their face.

And there was worse to come. Philip Hammond, generally seen as the grown up in the room also revealed to MP’s that there had been no comprehensive discussions by the cabinet as to what the UK’s brexit strategy or final end state was going to be. It would appear the cabinet is split into two factions, with Phil and Amber in one corner rocking back and forward muttering OMG, while in at the other end of the room the brexiters have been jerking one another off as they watch the movie Dambusters over and over again as they dream of empire 2.0.

To say this is bad is an understatement. As the military say, its the Seven Ps of Planning: Proper Planning and Preparation Prevents Pis* Poor Performance. Yet it is now clear that the UK has entered into brexit talks without any sort of plan. All this poker talk about noting wanting to reveal their hand to the EU has been bunk, the EU (and anyone with half a brain) has known all along what’s going on, the UK has no cards to play, they don’t even know what they want. The UK government’s official negotiating strategy for brexit involves screaming Leeroy! and charging into the room.

And worse still, good politics is about compromise and trade off’s. In politics nobody ever gets to have their cake and eat it. You want to restrict immigration? okay, but you do realise that’s going to curtail economic growth (by creating labour shortages), push up taxes and mean longer NHS waiting times. What to re-nationalise the railways (as Corbyn wants)? Yep, we can do that. But its going to take some time to implement, will be legally difficult (as the train companies might be reluctant to simply hand over their franchise rights and might fight the government in court). And there’s no point in going down this road unless you are willing to put the sort of cash into the railways to bring them up to European standards (which means again, likely you are looking at putting up taxes).

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The problem from the start with the brexiters has been they don’t even seem to be aware of the idea that such trade off’s are necessary. The situation with the Irish border being a case in point. Any kind of change to the customs arrangements will mean a hard border between the UK and EU. Such a hard border would open a huge can of worms and it would not be popular abroad, notably with Washington, where opposition to a hard border has bipartisan support in Congress.

Once you accept this reality it leaves only two options. The UK stays in the customs union and becomes an associate member of the EU (meaning it can’t negotiate separate trade deals, indeed it will have no say whatsoever as to the terms of the trade deals the EU negotiates….and will have to keep paying into the EU budget). Or we put the border at the Irish sea and tell the DUP, well if you don’t like it we can have a border poll, would you prefer that instead?

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Dumb and dumber, spot the difference

The brexiters don’t even seem to be aware, nor wish to even acknowledge, that such trade off’s exist, leads one to conclude that the Tory brexiters have to be the dumbest most incompetent bunch of clowns to ever be put in charge of a major government. I heard someone suggest the other day that they should do a brexit special addition of the thick of it. Actually, we are now at the stage where reality has outrun satire…..

Sadopopulism

……Or there is another explanation? The history professor Tim Snyder recently coined the term Sadopopulism to describe how the wealthy and the oligarch’s are dealing with the post-truth age.

Basically, the rich can’t rely any more on their traditional tactics of bullying centrist parties (via their control of the media) into adopting favourable policies. The deficiencies in those policies have been exposed, increasingly centrist parties are reluctant to play ball and they’ve lost a lot of support due to the blow back. The rich can’t rely on the extreme left (as they’d lock them up!), nor the extreme right. The fascists would shoot them all (then steal their stuff!) while libertarianism would likely lead to anarchy and possibly the rise of other oligarch’s who’d challenge them (then shoot them and steal their stuff!).

So instead, they rely on populism to target some easily identified scapegoats, the poor, migrants, ethnic minorities, Muslims, etc. They then undertake policies that are intentionally designed to cause harm (this were the “sado” element comes in). And to be clear this isn’t raising/lowering taxes kind of stuff, which makes everyone better off, other than a small minority (again, politics is about trade off’s). This is policies that will intentionally hurt more or less everyone (save the elites themselves of course!). They can then point out, ya you’ve got it bad, but its all the fault of poor people/migrants who are now even worse off. And after all some of those poor people did vote for Trump/brexit, so now they are being punished for that.

Its worth noting that this theory is backed up by studies into monkeys. In situations where other monkey’s were rewarded for effort that they put in, some actually opted not to reward, even those this decreased the changes of them being rewarded in turn. In other words they’d accept being worse off just to spite others.

So its possible, much like the recent tax cuts in the US, the answer here is the brexiters might be intentionally playing dumb. They know their negotiation strategy won’t work, they know they are committing an act of national self harm, that’s the whole point! Then while the country is reeling from the aftermath, they can slip through a few bills stripping workers of their rights and they’ll have the excuse to privatise the NHS (and sell it off to themselves). As the character Littlefinger on Game of Thrones put it, chaos is a ladder.