Brexit deal or no deal

Theresa May, aka the yellow submarine, is famous as a politician who doesn’t actually advocate any particular policies. Largely because she knows that any idea she comes up with is generally going to be a bad idea (e.g. the treatment of the Windrush or the dementia tax).

So its probably not a huge surprise to hear that her brexit trade policy has been criticised from both sides of the house, with both leavers and remainers arguing against it. Even Donald Trump turned his nose up at it. And its almost certain to be rejected by the EU. Its effectively been declared dead before the ink’s had a chance to dry.

And the Tories are now taking a pounding in the polls, slipping behind labour again, with a sharp rise in UKIP support (recall that in some marginal seats every vote for UKIP is effectively a vote for Corbyn, given that labour is often the 2nd party in those constituencies).

The downside is that the brexiters will see this as furthering their goal of a “no deal” brexit. However there is a dangerous flaw in their logic (inevitable really, most of them are posh kids used to getting their way by holding their breath until they turned blue and the nanny panics). Arguing no deal is better than a bad deal, is the sort of thing you’d hear a dead beat husband say to justify not show up to his divorce hearings (which just means his ex gets the car, the house, the kids, the dog and half of all the money!).

They seem to think we’re playing a version of the TV gameshow Deal or No Deal, with the EU cast in the role of the unseen banker. However, the truth is a little different. And if we were playing a version of Deal or no deal, then the box is already opened and we know what’s in it (a bill for tens of billions of euro’s and a drop of several points of GDP) and the banker/EU can decide what else to put in the box or how much its worth and make the UK accept the deal regardless of how awful or unfair it is.

In the event of a “no deal” or a break down in talks, then the EU will activate its contingency plans and its lawyers will decide what the implications of a no deal brexit are. In effect, they’ll go through what the UK has already agreed to and signed and pick the bits out of that which they like (and ignore the bits they don’t like). In other words the only one who gets to “have their cake” in a no deal brexit is the EU.

And keep in mind what the UK has a agreed to already includes a hefty exit bill, continued freedom of movement and the UK (or at the very least NI) remaining part of the customs union, forever! Which hardly sounds like the sort of outcome the brexiters would want.

Now granted, the UK can try to defy the EU….if we ignore the little fact that over half the UK’s food is imported from the EU and how dependant the UK is on electricity from the continent (southern England depends of several GW’s worth to get through the winter) or gas from Norway (40% of all imports, Norway being part of the EEA and thus trade will be affected by a no deal brexit). I think the definition of the term “fucked” is when experts start to seriously debate how you should go about stockpiling tinned food.

And, as discussed previously, sooner or later a court case will go against the UK government and they’ll be forced into an about face. e.g. a car maker sues them due to delays at the ports and either wins a massive compensation bill or an injunction prohibiting customs officials from interfering with their trucks.

As the Irish labour leader recently pointed out, what the brexiters are proposing to do is renege on international treaties (you know the sort of stuff Hitler and his cronies got in a spot of bother over), which is almost certainly illegal under international law. Contrary to what Trump says (he suggested suing the EU, then again he has a habit of using slapp lawsuits, which he usually loses!) the UK is likely to be the loser in any such legal cases.

Hence why its possible that at some point in the event of a no deal, the International court of justice in the Hague (not to be confused with the ICC, or the ECJ in Luxembourg) will get involved, or more specifically the PCA (the Permanent Court of Arbitration). They are basically the UN equivalent of VAR and they could well be called in to rule on the legality of a no deal brexit.

While I’m not calling myself an expert on this (plus we are into uncharted legal territory anyways), but my guess is that they’ll rule that no, you can’t just break an international treaty because you feel like it (or because Russian trolls managed to con large number of voters into doing something really dumb). The UK can only break treaties its signed by the mutual agreement of both the UK and EU.

Equally however, the PCA might also rule that some aspects of article 50 aren’t legal either. Notably the imposition of this artificial deadline (which is clearly intended to give the EU the upper hand in the closing stages of negotiations). The court could well rule that no, talks have to keep going on for as long as they have to. And if that’s inconvenient for either party, well tough!

So its possible that the outcome of a no deal (e.g. a cabal of hard brexiters ousts Theresa May and ends negotiations), would be several months of chaos, which is then interrupted by court rulings that annul everything, forcing the UK and EU back to the negotiating table. If the UK wants out quickly, then they can just sign whatever exit terms the EU’s lawyers have prepared. Yes it will be an awful deal, but just close your eyes, think of England (because Scotland, NI or Wales won’t be hanging around for much longer in such a scenario!) and sign. Equally if the EU wants the UK out of the room in five minutes flat, then compromise on some of those red lines.

So the consequences of a “no deal” could actually be the UK stays locked in negotiations with the EU more or less indefinitely. Of course it probably won’t get to that. Because it will quickly become obvious to brexiters and remainers alike that the Tory party simply can’t deliver on brexit, at least a brexit that doesn’t involve economic chaos and the breakup of the UK. They will therefore pivot behind Corbyn who will win a snap election.

Corbyn is arguably a more committed brexiter than anyone in the Tory party (in Westminster’s circles he’s known as “May’s chief whip”). Largely because he has bigger fish to fry (overturning every piece of legislation both the Tories and new labour have passed since 1970!) and he’ll want to get the talks over with as soon as possible. And he’s willing to compromise on areas such as freedom of movement or the custom’s union to do it. But of course, this will mean the UK remaining tidally locked in the EU’s orbit forever more (or until the penny drops and people ask what’s the point of being in the EU’s orbit but having no influence over it? leading to a 2nd vote and the UK rejoining).

So before the brexiters reject Theresa May’s policy….or more to the point, the edited version that Brussels will approve of in a few weeks time! Consider that this is probably the best brexit deal they will get. The alternatives are likely to be either one negotiated by Corbyn, or a 2nd referendum overturning the previous result. With the splitting up and/or collapse of the Tory party shortly thereafter.

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The brexit red flags you might have missed

Therssa May’s little Brexit away day in Chequers seem to go well, at the time of writing, nobody’s thrown their toys out of the pram yet (save the odd grumble of discontent). As before, with the brexit bill we were told “the party won’t wear it” that there would be mass resignations, a leadership challenge, rebellion, destruction of the death star, fire & brimstone, etc.

However, instead, nothing. When push comes to shove, the brexiters have about as much backbone between them as an English adder. Although that said, what May is proposing, just doesn’t go far enough for the EU. They’ll likely turn her down and force her and the brexiters to concede more ground, which probably will result in some push back eventually.

As I mentioned before the brexiters have to oppose a soft brexit of any kind because they know demographics are against them. Sometime over the next decade a significant number of those who voted leave will have died….likely in a pool of their own piss an a dirty hospital floor because the UK can’t hire nurses anymore (thanks to brexit) to treat them. Already recent polls have shown a majority in favour of remaining in (or rejoining) the EU. Hence why the brexiters have to go for a brexit that’s as difficult as possible to unpick or reverse. Its basically what they did with rail privatisation.

So like I said, I suspect some sort of push back will come at some point. However, outside of Chequers there’s been a number of worrying developments over this past week which would give anyone, leave or remain good reason to be concerned and be looking to either halt the brexit process or go for the softest brexit possible.

Trading places

Firstly there’s the issue of future trade deals. One of the assumptions the brexiters are making is that they can get “exciting” trade deals in “emerging” markets. However in order to qualify as “British” as part of any future trade deals, said goods, such as cars for example, then the majority of the parts and materials have to have been made in the UK (and yes I know that sounds obvious, but the brexiters don’t seem to get it). Currently many UK made products, most notably cars, are mostly built out of parts coming in from overseas (notably Europe).

Hence if for example Trump gives the UK this much vaunted trade deal (and that’s a big if, you honestly think he’s going to screw America just to do the brits a favour?), that won’t matter, UK made cars will still count as “European” when they arrive in the US. In fact UK based car companies will be in the worst of both worlds in the event of a hard brexit. They’ll have to pay a tariff on parts imported from the EU into the UK and then pay a further tariff on the car when its exported (and 75% of the UK’s vehicle production is for export, as in they roll off the production line in right hand drive!).

I would note that this scenario is not unusual. Many car makers, particularly in places like China or Mexico, face the same problem. However, they have the advantage of much lower labour costs. If you’re paying half what it costs to make a car in the UK, do you really care if someone slaps a 20% tariff on you. Yes you’ll try to get a trade deal to eliminate that, but ultimately, its not going to break the bank. However for the UK this could immediately render UK car production uneconomic. Further, in order to avoid similar problems, European car makers might stop buying UK made parts as well.

But what about Nissan, didn’t they invest in brexit Britain? Well yes, but only because the government effectively bribed them. Further it was pointed out to me this week that basically Nissan far from being naive, actually played May and the brexiters like a fiddle. Car makers chance their car models about every five years or so. But it takes the best part of several years to actually do that. Hence Nissan’s board had probably already decided to continue production in the UK prior to brexit, under the assumption of a remain vote. Aware that it would be several years before any of the aforementioned tariffs actually hit them (when production of the planned models will be winding down) and that shutting the plant now would mean throwing away a lot of money, it is not surprising they decided that this was a hit they could absorb, particularly if they could scare a kick back from May in the order of a few billion.

Now the problem is that sometime around about 2020 Nissan and other car makers are going to have to make the more important decisions about future car production. As things stand many will have to look at introducing hybrid or all-electric version of their vehicles and the UK doesn’t make a lot of that hardware and, for reasons noted earlier, they might not sell such parts (or vehicles in the UK post-brexit). So in the absence of any comprehensive trade deal with the EU, its all but certain that at this point Nissan et al will take their multi billion pound cheque from the government, tuck it in their back pocket, fire a few thousand British workers and ride off into the sunset.

A is for atom, C is for chaos

Secondly, we have news about Euroatom and the UK’s supposed replacement for it. As I pointed out in a prior post, the brexiters assumption that they could leave Euroatom, but yet still somehow be part of it (or just gate crash future meetings) was bollix. Well it seems that message got through eventually (kudos to Barnier for somehow getting that into Dave2’s thick skull!). So they scuttled away and prepared to set up their own version of Euroatom. Whose job it will be, much as I warned, to basically google and then plagiarise all of those pesky EU regulations the brexiters hate and implement them in the UK.

The UK nuclear industry’s readiness for brexit….all red lights!

Well a recent audit judged the UK’s preparedness for brexit (with around 8 months to go) as regards nuclear regulation and rated the UK at red in all five categories. And just to be clear to the brexiters, no this isn’t something you can fudge or make do and mend at the last minute. WE ARE TALKING ABOUT RADIOACTIVE MATERIAL! You know the stuff that glows in the dark! If the UK isn’t up to speed on this by March 2019 the consequences could be pretty serious. Nuclear plants might have to shut down, hospitals could run short of isotopes, factories could be forced to shut. Hell, even your average smoke alarm has a small quantity of radioactive material in it. So leaving the nuclear industry unregulated isn’t an option.

I know people who work in the nuclear industry and while they will be quick to point out that, they’re name isn’t Homer Simpson and they do take safety very seriously. Unfortunately, they are also the first to admit there’s a good few jackasses in the industry (typically upper class twit’s who went to the right school and have been overly promoted as a consequence) who are only one mistake away from a Darwin award. The many foul ups over the years at UK nuclear facilities are testament to the fact that the UK nuclear industry needs regulating.

And this isn’t a matter the UK government can simply fudge. Private companies might not play ball, if they fear losing their insurance cover or line of credit (quite apart from the consequences if several of their workers ending up glowing in the dark!). And the IAEA has to sign off on everything. And if come March 2019, the UK nuclear regulator consists of a port-a- cabin at Sellafield with a few clueless trainees inside frantically googling what is a Geiger counter?, odds are they’ll shut the whole thing down.

Border polls

Thirdly, a poll has come out regarding Irish reunification that would have Ian Paisley rising out of his grave….and likely going off to beat the DUP leadership to death with a crucifix. Prior to brexit you’d struggle to even get a majority of Catholics to support re-unification, polls (both catholic and protestant combined) typically ran at 65% no, 30% yes (the rest don’t know’s). Well that lead of +30% has now been slashed to just 3% with 45% no and 43% yes (the balance again undecided). Need I point out but 3% is within the margin of error for an opinion poll, but also easily within the margin of what can be overturned in an actual referendum campaign.

And again, the really bad news economically as a result of brexit hasn’t struck yet. In short, the odds of NI (and recall the DUP campaigned for brexit) becoming part of the south are probably in the order of 50/50.

Reacting to this poll, the Irish PM did point out his best guess that the North probably won’t vote for reunification. However, his comments have to be put in the context that his main rivals politically are Sinn Fein and that the NI economy is much weaker than in the Republic, with a GDP about 20% lower. Hence there would be a price to pay for reunification and I’m not sure if people in the south appreciate that (or are willing to pay that price).

Personally, I’d argue that in a soft-brexit scenario (particularly where it was pretty obvious that a 2nd referendum and the UK rejoining was a likely possibility in the medium term) Varadkar is probably right. However, in hard brexit scenario I’d argue its very likely he’s wrong and NI would in fact join the south. But either way, if this isn’t setting off alarm bells and having unionists wake up in a cold sweat, I don’t know what will. The DUP backing brexit was a historic mistake for the party.

Vote leave’s illegal campaign

Finally, we have the not so small matter of the legality and legitimacy of the brexit vote being called into question (again!). As I’ve pointed out before on this blog a couple of times, questions have been asked about the tactics and funding of the vote leave campaign, not to mention undisclosed links to hedge funds, the misuse of personal data and links to both US far right groups and the Kremlin.

Well a leaked report suggests the electoral commission is going to find that vote leave broke UK electoral law during the referendum. And this “leak” came from none other than the vote leave camp themselves, suggesting that they wanted to get the news out in advance because the actual report is going to be so much worse. Indeed, they submitted a 500 page rebuttal (the lady doth protest too much me thinks!).

Now leave voters will likely shrug their shoulders at this and say “fake news” (buddy, its an official independent investigation, the very opposite of fake news!). However, you might want to consult the small print of the Vienna commission, which both the UK and US (among others) have signed. Under this, the referendum result should now be annulled and the vote re-held. And there are a number of precedence’s set across Europe where similar votes were annulled and then re-run (most recently in Austria).

But of course the UK isn’t Europe or the US. With no proper constitution, under British law, the UK government can just ignore this inconvenient little fact….until a court ruling goes against them! At some point they are going to face further legal challenges to brexit. And this ruling from the electoral commission means they can’t hide behind “the will of the people” any more (i.e the 37% who voted for brexit, closer to 25% if we consider those who were denied a vote or leave voters who’ve already died since the vote).

And its not the Gina Miller types I’d be worrying about. Its corporations and businesses who will be able to show how brexit has caused them real and serious economic harm. And they can hire high priced lawyers to fight their case. And recall some of these cases will be fought in court rooms in Europe or in the US, meaning it doesn’t matter diddly squat what laws the UK government passes to try and wriggle out from under it.

Such legal cases could get pretty nasty. We are kind of into uncharted legal territory here. The lawyers will start subpoenaing government documents left right and centre, and who knows what will come out from that (nothing good I suspect!). Ministers will be hit with summons to testify in court under oath. Think about, if Boris Johnson ends up in the dock there are three possible outcomes, A) he lies under oath, is found to have committed perjury and gets hauled off to jail. B) He tries to make a joke out of it with a latin quote and gets done for contempt. C) He cracks under cross examination and fesses up to everything, then gets arrested for obstruction of justice and electoral fraud. Or D) knowing Boris, he manages to do all three!

The smart legal advice to the government (well unless they want to hold the next cabinet away day in Wandsworth scrubs!) would be to just settle these cases out of court. Take the lawyers aside, offer them whatever amount of money it costs to make them go away (which is basically what they did with Nissan after all) and hush the whole thing up. Of course once word gets out and you have corporate lawyers queuing round the block, at the same time the public are seeing their taxes going up to pay for brexit, it will probably get to the stage where they’ll have to have another referendum at some point….

…..Or maybe, they won’t. In theory if a pro-EU government were to come to power at some point in future, they could argue, not unreasonably, that brexit was an illegal act undertaken by corrupt ideologically driven bigots, power hungry fifth columnist and traitors in the pay of a foreign power. Rather than have a 2nd referendum, they’d could simply vote to annul the result and proceed with EU membership without even bothering to hold another referendum. So the seeds in brexit’s downfall might have already been sown.

But either way, there’s enough red flags starting to go up that only a fool would ignore them. But unfortunately the brexiters, like captain Ahab, are committed. Brexit is the hill on which they’ve chosen to die on. They can’t back down now, if they do they are finished. It would be the end of Tory party, the DUP and Corbyn.

The Southsea bubble: brexit edition

I joked before about how when the brexiters talk the talk about “exciting” trade deals “in emerging markets” they don’t say where are these mysterious new markets. Timbuktu? Peru? El Salvador?….Well actually yes. The brexiters think that they can substitute trade with the largest single economy in the world, for trade with Latin America. Things I’ll say in jest, they’ll say with a straight face. Humour and satire are again being outrun by facts.

So, what’s wrong with this idea? Well firstly the South American economy is worth only about a quarter of that of the EU economy. And while the UK literally has a pipeline to the EU, via the channel tunnel, Latin America is the other side of the world…and on the other side of the inter-tropical convergence zone (if you’re a nervous flyer, you don’t want to fly to south America, it gets pretty choppy).

And while you’ll come out of the channel tunnel onto either a high speed railway line or an eight lane motorway, the transport infrastructure down south isn’t that developed. The roads away from major cities aren’t great and there are large gaps in the network, the unfortunate consequence of living on a continent with vast jungles, massive rivers, high mountains and uncontacted tribes (who’d sooner eat Boris Johnson than buy a Dyson vacuum cleaner off him!).

In short its a bonkers suggestion. Even more bonkers when you realise the UK already HAS a number of trade deals with Latin American countries, with other deals being negotiated via the EU. Deals the UK will lose upon leaving.

I mean what are we going to sell them? Given that the Tories have been principally trying to re-assure farmers, one assumes they mean beef. Well, you do realise that Argentina is beef country? Order a steak in Argentina, you get a massive steak that’s half the side of a cow (for a fraction of the price you’d pay in the UK), and no sides (and they don’t exactly do vegetarian food out there btw!). So I don’t see how British farmers could compete. And as they’d be looking to export meat to the UK, this would flood the UK market and bankrupt UK farmers. Plus, given the presence of foot and mouth disease, the UK would risk losing its disease free status, meaning it would lose access to the European and north American markets.

Should I be accused of saying south American’s don’t eat their greens, they do, but its more fruit and salads. Brazil also has large sugar cane and grain growing plantations. I don’t see how the UK could compete and it would inevitably be the losers in any such deal. Plus a number of south American countries are somewhat paranoid about their agricultural production and might be reluctant to allow UK imports, as they would worry about diseases being brought in, threatening a vital industry. Its illegal to bring fruit (or in some cases grains of any kind) into a number of south American countries (they search bags at customs and they will fine you if they find some much as an apple core). And speaking of fruit, Argentina and Chile both have a large wine industry. Do the brexiters seriously think English wine (what the French call “du vin roast beef”) is going to compete against that?

But what about cars or planes? Well given that a number of car and plane manufacturers are now threatening to leave the UK, that might be a moot point soon. But since we’re talking about, Brazil, Mexico and Argentina have their own car industries (Mexico and Brazil’s each manufacture more cars than the UK).

As a European traveller down south you’ll notice how a lot of their cars (Clio’s, Golf’s Megane’s, etc.) all seem to be a generation or two behind the ones back in Europe. I assume the car manufacturers are moving equipment from Europe down there, allowing them to get a bit more revenue out of model before its retired. And as they’ll have worked out any issues with the car back in Europe, they can build them cheaply in Latin America (quite apart from the lower labour costs). Again, there ain’t no way UK based manufacturers could compete (and as they will no longer comply with EU emission standards and safety requirements, we can’t sell them or even drive them on European roads).

The luxury end of the car industry is dominated by US or Asian brands (Lexus, Cadillac, etc.) so that’s going to be a difficult one to break into and it likely won’t go down well in Washington, where it will be seen as trying to eat America’s lunch.

As for aircraft, Brazil is home to Embraer, the world’s third largest aircraft manufacturer. More famous for small regional jets, they’ve recently begun to branch into medium sized jets. While I can see a few UK airlines buy the odd plane off them….well not that we’ll have many airlines left, most are already registered in the EU (even BA!). But either way, the UK is unlikely to see any real gains.

One feature of south America you do notice is how the contrasts between rich and poor are fairly stark. The poor are very poor and the rich are very rich. Hence why if you hang around the posher parts of Buenos Aires or Rio, you’ll be paying London prices, and that’s the cheap places! There’s also a certain level of social apartheid in south America. This is a part of the world where boys from the favelas can literally get picked up by the cops (or shot!) for just walking down the street in a posh part of town. South America had the misfortune to be where a number of right wing thinkers, in collaboration with various military dictatorships, were allowed to run various social and economic experiments. And needless to say, the results haven’t been pretty.

That said, the vast bulk of people in this part of the world, while not poor (nor are they rude rich snobs), they ain’t exactly rolling in money. The sort of high value expensive stuff the UK would be looking to sell they won’t want to buy and they can get something similar locally (or made in China) for a fraction of the UK price. So in short, there’s pretty much no way any of the trade the UK will lose post-brexit with the EU can be made up in Latin America. Indeed, given the loss of Latin American trade deals post-brexit (once existing trade deals are lost upon brexit), its questionable whether any of the trade the UK already has with the region can be recovered quickly.

Another consideration is that while many South American countries have free trade agreements with each other and freedom of movement, its not as all encompassing as it is in the EU. In fact it wouldn’t be far removed from the “bespoke” trade deals May often talks about. And the end result is that if you try to go across any border in South America, there’s generally going to be a queue (and a delay of a few hours), as there will be customs and passport checks of some form or another. Its inevitable that the same will happen at Dover and in Northern Ireland, particularly if the UK starts signing trade deals with third parties (such as the US) which aren’t compatible with EU rules.

However, there is one sector of the south American economy where the UK could potentially see a market for its wares – financial services, which they can sell to the many nouveau riche in the region (social apartheid? Our kind of people! you know we used to do great business with the ones committing actual apartheid?). I mean seriously, the Tories have never in their history cared about factory workers , farmers or fishermen. Do you honestly think they’ve gone through some sort of road to Damascus conversion?

No, instead when they boast about how “we” can get “exciting” new trade deals, they are talking into a mirror. The “we” refers to them and their boarding school chums in the city. The plebs in the factories and fields are snookered. But that’s hardly the Tories problem. After all, why do you think the likes of Farage and Aaron Banks wanted brexit in the first place? (so they could bet against the pound and make a killing from its collapse in value after the brexit vote).

However if this is the plan, its a crap plan. Latin America is not exactly the most politically, nor economically, stable part of the world. Those right wing social and economic experiments I mentioned? Let’s just say that there was a certain level of what the CIA would refer to as “blowback”. As we speak Argentina might be about to go bankrupt (again!). In Brazil there’s strikes and unrest, with talk of martial law and military dictatorship. And Venezuela? Don’t ask! Tying the UK’s economic fate to that of south and central America doesn’t exactly sound like a brilliant plan.

Oh, and there’s the small matter of those Islands in the South Atlantic that the UK is occupying, which tends to get up the noses of the locals a bit. I suspect any sort of a trade deal might involve them being jettisoned.

Its also important to remember that the Tories will place their ideology above the well-being of the country. As I pointed out in a prior post, the privatisation of the UK’s railways wasn’t undertaken in a way that would be most likely to succeed and produce an efficient service. It was undertaken in a way that would be as difficult for a future labour government to unpick as possible. That this would destroy British railways long term or cost the government more than it saved was of little concern (they don’t use the train, that’s what the Jag is for!). So to is it with brexit.

The brexiters are all to aware that demographics are against them. That once the older generation who voted leave have all died off, the odds are the younger generation who voted remain (or were denied the chance to vote at all) will simply vote to rejoin the EU (indeed recent polling suggests public opinion is already turning against them). So a critical goal of the brexiters is thus to achieve “a clean break”, which is code word for a brexit that as difficult as possible to reverse, even if its detrimental to the UK.

In short, what the brexiters propose is a re-run of the south sea bubble. That bubble grew out a false claim that a UK company had been granted a monopoly on trade in South America (in truth they had permission to send exactly one ship a year!….to trade in slaves!). This was then blown out of all proportion by speculators, not unlike the very spiv types behind brexit, who then buggered off and left an awful mess for a future government to clean up, which bankrupted many in the UK. When you forget the lessons of history….

News roundup

Do panic

A few months back the brexiters complained that they wanted the Royal Mail to celebrate brexit by issuing stamps to mark the occasion. Well RM seem to have met them half way by issuing a set of “Dad’s Army” stamps. Clearly someone at RM is trolling the brexiters.

Inevitably perhaps, others have been creating their own versions of potential brexit stamps.

 

Our Brexit, hallowed be thy name

Meanwhile, back in the mad house, Saint Theresa of Maidenhead May suggested that an extra £20 billion would be available after brexit for the NHS thanks to the “brexit dividend”.

This was met with incredulity by many. At the time of the referendum when they made similar claims, it was pointed out that the UK only really spends about £8 billion on its EU membership, once farm subsidies, rebates, research funding, structural funds and other things Brussels pays for are taken into account. Of course the implication would be that, much as I warned might happen prior to the referendum, this could indicate that the Tories do not plan to pick up the tab for these bills. Farm subsidies will end in March 2019, the fishermen and deprived communities in Wales, Scotland and Cornwall will see their lifeline cut off and universities will see research budgets slashed, with a knock effect to the many high tech start ups who depend on that research funding to get them off the ground.

And there’s the not so small matter that the UK will be stuck, not with a brexit dividend, but a brexit deficit. There’s the exit bill the UK will need to pay, £40-50 billion net (depending on rebates and currency exchange differences, since its calculated in euro’s). And then there’s the economic cost of undertaking brexit (about 3-7% of GDP, best guess £72 billion).

Plus, what do you think the EU does with all of that cash? They spend it on hiring civil servants to administer all the EU regulations, that May is trying to squeeze into UK law. It was improper regulation on the British end that led to the Grenfell tower fire. In China, there’s a controversy over baby formula, leading to shelves being emptied in Australia because some mum’s don’t trust the Chinese stuff anymore. So regulations are something you neglect at your peril. And the three immediate areas that will need tackling are nuclear materials, medicines and food safety…..so no pressure then! And in any event the conditions of any trade deal, be it with the EU or other parties, will need to include a budget to account for paying for the regulation of that deal.

In short, never has a UK Prime Minster said something so inaccurate since Lord North told parliament that the Americans loved being part of the UK so much, they’d happily pay a bit more for tea. But as I’ve said before, brexit is now the state religion of the UK.

While May, perhaps sensing what she was implying, did backtrack and mubble something about a tax rise to pay for the extra money until the (non-existent) dividend kicks in. But even this is worrying. Basically what she said was that the Tory party is abandoning its manifesto and sacrificing it on the altar of brexit. And while more money for the NHS isn’t a bad thing, its almost certain that this new tax burden will fall on the middle and low income earners (this is the Tories after all, which is more likely, they give up smoked salmon once a week to pay for hospitals, or they get the plebs to pick up the tab?).

Brexit is now to the UK what Juche is to North Korea. The excuse upon which anything can be sold. A tax rise? Its for brexit (but don’t worry we’ll pay you back later). An end to farm subsidies? Privatise the NHS? Strip workers of their right to strike? Its all to make sure brexit works!

Of course the problem with this attitude is it means they just can’t understand why for example Rolls Royce or JLR would suddenly want to move thousands of jobs out of the glorious thousand year reich British empire mark II (because they are companies with shareholders perhaps?). Nor can they understand why the EU are being such assholes and threatening to cut the UK off from intelligence data and the European arrest warrant (because they have this thing in Europe called “rights” and “laws” and the UK will join Belarus and Kazakhstan as the only non-signatory to the ECHR). In other words, they are blind to the consequences of their actions. Like the suicide pilots flying their plane into the world trade centre they cannot see the obvious insanity of what they are doing and genuinely think they’ll be going to a better place.

Lock em up….by which we mean the kids

In between picking fights with China, Trump has been busy locking up kids in cages after tearing them out of their the parents arms (what’s the bet he’ll put Roy Moore in charge!). Conditions at the facility where the kids are detained, referred to as the dog kennel, are described as inhumane and equivalent to a prison. Experts warn of the emotional scaring this will inflict. Parallels have been made to concentration camps and the detention of Japanese Americans during world II.

The day you know you’re living in a fascist state is the day you hear your justice secretary (soon to be named ministry for state security) deny he’s running concentration camps. The irony is one of the justifications of the Alex Jones mob for opposing Obama was that he was black was planning to set up FEMA concentration camps.

Oh, and for good measure the US is quitting the UN human rights council. Because clearly the words “human rights” and “America” should not be sharing the same sentence right now, even Trump can figure that one out.

Let’s be clear if you voted for Trump (or voted for a third party in a swing state, which is basically the same thing under the US system) then this is what you voted for. And frankly it shouldn’t surprise anybody, its exactly what was warned would happen if Trump was elected. At least now when reading the history books and you wonder, how could the Germans vote for Hitler, well now you know how and why. And part of the reason why international pressure failed to contain him, wasn’t because Neville Chamberlain was a weak and naïve leader. It was because he was leading a divided Britain, which had more than a few (Daily Mail reading) fascists of its own, who couldn’t understand what all the fuss was about.

Trump, upon realising that this might not look so well, immediately tried to dodge responsibility, blaming the democrats, the immigrants themselves and pretty much anyone else he could think of. Its worth noting that something similar played out during the holocaust, the Yugoslav civil war and the Rwandan genocide, in which often those in senior roles were separated from the actual atrocities and generally tried to avoid taking responsibility for such things, leaving it to a handful of fanatical racist nut cases to do the dirty deeds. This of course made it so much easier to order more of the same and treat as mere bureaucratic exercise. Forget the lessons of history and they will repeat themselves.

The really big short

Trump’s tariff policy has sent stock markets crashing to the point where all of this years gains have been wiped out. And the main losers won’t be in Wall street, they’ll be ma and pa firms across the US, as well as many ordinary Americans who are about to see their living costs rise in response to these tariffs (you’ll be paying them, not the Chinese). It sounds like typical Trump. He’s not doing it because he thinks its a good idea, its an action driven purely by ego…..

…Or is it? Given that Trump has not actually fully separated himself from his businesses (which is illegal btw), we need to consider the possibility that he’s colluding with others, and doing a little bit of insider trading. Its possible to profit from a falling market by shorting the market. If you can correctly guess that the stock of a particular company is going to fall, you can bet on the share price declining (by borrowing shares, selling them at a high price and then buying them back later after the price has fallen).

However, shorting is a risky business. Its the equivalent of betting that Brazil or Germany were going to lose their opening matches. Now while this will happen occasionally (as indeed happened to Germany….guess they won’t be eating Taco’s for a while!), but the odds are you’ll be wrong more often than you are right. And to make matters worse its possible with short selling to lose more than your original investment if the market moves against you. Hence most traders will often hedge their bets (basically bet both ways, but slightly bet higher one particular way). This reduces the risk, but also the profit margin.

Of course if you have access to insider information, e.g. you are the president and you know there’s a big tax cut coming, or you’re going to impose tariff’s on the EU, then change your mind and then impose them anyway. A trader with advanced knowledge of this could easily adopt short positions and profit considerably from this.

But, not only is it illegal for a president to be in any way linked to these sorts of deals, but insider trading is also illegal and for good reason. Because if you get it wrong (and markets can be difficult to predict, even if you have access to insider information) things can go from bad to catastrophic pretty quickly. Consider how rogue trader Nick Leeson managed to lose over £800 million, wiping out Barings bank.

Indeed one has to look at Trump’s real estate losses in a new light. People laugh and say oh Trump is such a loser he can lose money running a casino. How can you do that? I mean people literally walk into a casino and hand over their money!

Well, not if your running a casino skim operation. Its possibly that Trump, under pressure from his mob connections, was deliberately running the joint into the ground. Its just they miscalculated. Normally you skim just a little off the top, but not enough anyone will notice, nor that might risk bringing down the racket. But Trump was such a balloon head, or he and his co-conspirators just got too greedy, they managed to bleed the place dry. Which doesn’t bode well if this same lot are at the helm of the US economy.

Enabling fascism

Speaking of fascists, in Italy the populist horseshoe government is split because one of their leaders, looking to emulate Trump, wants to build his own concentration camps….sorry I mean happy camps (I’m sure they’ll come up with a more PC name!). He also wants to count Roma gypsies and presumably make them go around with little stars on them, I mean nothing bad ever happened from doing that. He’s also suggested that an anti-mafia journalist, who criticised him should have his police protection removed.

This has all come as a bit of a shock to a number of 5S voters. But what should it? You enabled a bunch of fascists and helped them into power, now they are enacting fascist policies. What did you think was going to happen? They were going to go door to door handing out milk and cookies?

Its possible that this might bring down the horseshoe government a little earlier than was expected. Which I’d consider a good thing…..if it weren’t for opinion polls suggesting a likely win for the Northern League and Forza Italia (Mr Bunga Bunga’s outfit).

The Glasgow school of art fire

In Scotland the Glasgow School of art burnt down. Designed by Rennie Mackintosh, the Mac, is to Glasgow what the Casa Mila is to Barcelona. This fire occurred just four years after another fire, which destroyed the college library, which was in the process of being rebuilt. Incidentally, lost in the story about the art school fire, was the fact that another important building, the neighbouring ABC theatre, had also burnt down after the fire spread to it.

Two fires in the space of four years is more than bad luck. Clearly there’s something up with the building in terms of fire safety. My understanding is the contractors for the restoration after the previous fire were on site, so they’ll have some questions to answer.

The library of the Glasgow school of art, prior to the fire in 2014

But clearly there’s some issues with fire safety that needs to be addressed. And this is not just a problem for the school of art. There’s been several large fires in older buildings in Glasgow and the basic problem is, they ain’t up to current fire codes and need to be modified accordingly. This article discusses some of the issues, although in the context of post-war era buildings, but much of the same policy should be applied to Victorian and Edwardian era buildings. E.g. fitting external fire escapes (as in New York) and sprinklers, fire resistant barriers, etc.

Meanwhile the question now being asked is whether the art school can be rebuilt. Some suggest it might not be feasible, others feel it is possible. We’ll have to see. There will inevitably be a strong desire from the art community and the Scottish government to rebuild it, but some polls suggest there might be opposition from the public, if it costs too much money.

For the moment, given that its basically now a burnt out shell, the best that can be hoped for is facade retention. Which would have to be undertaken quickly, given that its on a hill and exposed to the winds (it probably won’t survive the winter in its current state). Even then if the building were rebuilt, you’d be rebuilding everything inside that retained facade. And as noted, you’d have to modify the design to account for modern fire codes, which would require considerable modification from the original. So it would be more of a replica, rather than the real thing.

The thinking wing nut’s troll

The Toronto academic Jordan Paterson has been in the news recently, largely thanks to an encounter on Channel 4 news earlier this year, which has made him something of an intellectual hero for the alt-right. However, in truth he’s just a slight better inform right wing troll, who engages in many of their same tactics (gish gallop’s, contrarian arguments, weasel words, etc.)

Take this example where he attempts to argue that much as the right is basically anti-liberalism ID politics (his alt-right followers only hearing what they want to hear will have no doubt filtered that out) that the left is basically the same. That many on the left for example only support social welfare programs that they’ll never benefit from due to a similar commitment towards ID politics.

This position combines a number of contrarian arguments based on a falsehoods. It relies on the myth that working class people tend to vote conservative, and its the “champagne socialists” who vote for left wing parties. However, data from both the last UK election and US elections show that those who are working class tend to vote for left wing parties. When those on right try to claim the opposite, they are often forced to use weasel words statements (e.g. focus on white men over 40 in specific states).

But certainly it is true that a certain portion of those on higher incomes do vote for left wing causes. As I happen to be one of those, although real ale socialist would be more accurate, I can tell Mr Patterson my views have nothing to do with ID politics. Its because I understand that I might end up needing that social welfare safety net myself someday. No matter how hard working you are, or how well paid, all it takes is one accident, cancer diagnosis, bankruptcy of your employer or misadventure and suddenly you’re in a world of trouble.

For example (and this is just one of many examples I could give), I know a guy back in Ireland, hard worker, used to lead scouting groups, took a fall at work one day. He seemed to be fine after a few days, but as the months and years passed he developed ever worse back problems (not unusual for these to take time to surface) and eventually he had to give up work. Now if we take the right at its word, he should be dragged to the side of the street and left to die just because he had the misfortune to have an accident that wasn’t his fault (should you wonder why he hasn’t sued, his employer went bust during the crash and it was only a small building firm anyway, there won’t have been any money to sue for).

That’s all it takes to ruin your income. I wonder if Mr Paterson has paused to consider what would happen to him if he, or one of his relatives, were to fall ill and need expensive medical treatment, which his HMO wasn’t willing to cover (pre-existing conditions and all that). In fact I know of a lecturer who found himself in this very situation. A relative got ill and he had to drop everything, give up his well paid job and fly home to Pakistan. Now while last I heard he’d gotten a part time job over there, but I’m going to hazard a guess its paid a lot less than a lecturing post in the UK. And given his likely outgoings I suspect he’s probably only just about managing. Voting in favour of social welfare is not ID politics, its basic common sense.

Indeed perhaps more the question is why is it that some, notably those over 40’s blue collar workers don’t vote for left wing parties. I would argue that this stems from a long instilled ideology of rugged individualism (you’re considered less of a man if you ask for help), as well as the usual right wing lies and propaganda. And more crucially this tendency does tend to be growing (while those on lower income tended to vote overwhelmingly for left wing candidates by at least 80/20, now its closer to 60/40). So its more a sign of desperation and frustration than meaning an increase in support for the politics of the right. Which perhaps isn’t surprising given how the right doesn’t really have a political philosophy anymore, other than “anti-liberalism”.

The calm rational logic of Trump voters

But either way, the only real difference between Mr Paterson and Alex Jones (and they are both believers in the paranormal, living on wing nut welfare, which kind of makes his point regard social welfare more than a little hypocritical), is that Paterson knows how not to look and sound like a nut, even when he’s saying pretty crazy things.

The Wakanda conundrum

I came across an interesting little video on youtube, which discuss “the Wakanda conundrum”. For those who didn’t see the movies (Black Panther, age of infinity), or don’t read comic books, Wakanda is a small yet highly advanced African country which has kept itself hidden from the world for many centuries (for reasons we won’t get into right now). It owes its formation to the arrival of a meteorite from space made of a strange and nearly indestructible metal. As a result its now extremely wealthy and century’s ahead of the rest of the world technologically.

So what’s the problem? Well there’s simply no way such a society could exist. No matter how valuable this resource is, without trading with the outside world (and thus sharing ideas and technology) they’d struggle to figure out how to exploit it. And without trading this resource, they’d never be able to earn any cash from it and thus never be able to buy in the stuff they’d need to exploit the resource and develop their economy. In short the economic policy of Wakanda is basically the same as that of North Korea, and they ain’t exactly the richest country in the world, nor the most advanced (I’m sure Trump would tell you differently tho!).

And speaking of which, the government of Wakanda is an absolute monarchy, with kings picked by barbaric fights (okay, if you’ve ever seen a bunch of politicians fighting over whose in charge, its not that much different maybe). The problem with such a system is all it takes is one bad king to ruin everything. And essentially, that’s the plot of the Black Panther film, but they ignore the consequences of that.

Then there’s the matter of the so-called “resource curse”, which means that small countries with valuable resources can sometimes end up worse off than countries without any. While this doesn’t apply in every situation, Iceland and Norway or Bahrain, for example. But generally countries tend to only avoid the resource curse so long as they’ve got open borders, good trade and a reasonably free society and competent government. Inevitably Wakanda would hit the buffers sooner or later and descent into a corrupt, autocratic mess.

And the other problem with having resources is it tends to draw attention to you. African dictators surrounding Wakanda, not to mention western colonists (notably the Belgians), would soon learn of it and be very quick to swoop in and try to take over the country. And given how in the last film the Wakandian army got the snot kicked out of them by a large pack of dogs, I doubt they’d be able to hold off an invasion, regardless of how advanced their technology.

Uber scooters

A number of silicon valley based firms have begun to set up dockless bike and scooter hire schemes. The logic is, rather than the traditional bike hire schemes, where bikes are picked up and dropped off at designated spots (which can mean trucks rolling around transporting bikes from docking station to docking station). Instead, the system is more free flowing. You pick up the bikes wherever you find one (a mobile phone app directs you to the nearest one) and then leave it wherever you are when you’re finished. Simple!

So what’s the problem? Well many of these schemes are being set up by companies without the support of local governments and councils. This is causing all sorts of problems, from people riding bikes and electric scooters on pavements, then abandoning them in the middle of the pavement, where they represent a trip hazard, particularly for blind people.

I think this is a good idea that needs to be developed more, indeed I’d be curious to see if its possible to marry this idea with current car sharing schemes. However, clearly there needs to be some sort of regulation. Frankly the operators of these schemes are lucky councils didn’t just classify all of their scooters as litter and bin them (then fine the company for waste disposal), which is actually what happened in China. No doubt these rules would specify where the bikes and scooters could be used and that where they can be left (if not at designated docking points, then off the pavement and parked neatly). Presumably a system of fines imposed (and/or penalty points) on those who break the rules might bring some discipline to the situation. So it would be a good idea for these firms to start working with local authorities, rather than trying to go the whole uber.

So long and thanks for all the fish

The one shining reason for brexit we were told was the fish. The fish, dear god will someone think of the fish! Those poor fishermen, Farage said as he cried crocodile tears. Well, aside from the fact that this ignored the realities of how trade deals work, and that the Tories have already screwed the fishermen over, there’s a more specific problem – the fish are moving.

As a result of climate change North sea cod and north Atlantic cod are migrating northward out of UK waters and into Scandinavian waters. You would think the Scandinavians would be delighted about this, but they aren’t. Their preferred fish is the Arctic cod and the increasing presence of North Atlantic cod is not only making fishing difficult for them, but threatens the long term viability of their industry. While I’m not much of a fish eater, I’m told by those who do that there’s a distinct difference in taste between the two types and that as a result, the Arctic cod is considered a more valuable product. So you can see the problem. Its issues like this that underline the need for action on climate change.

One possible temporary fix would be for the Faroese, Greenland, Norwegian and Icelandic governments to agree to let EU boats into their waters (for a fee of course) to catch the North Atlantic cod and basically take em back down south. Of course given that the UK is leaving the EU, its inevitable we’ll be cut out of any such deal. Given that all are part of the single market, its going to make a lot more sense to deal with the EU than the UK. So it looks like the UK isn’t even going to get a smoked kipper out of post-brexit fishing deals.

Free range parenting

I got into a discussion on another blog recently about how parents are becoming increasingly controlling of their kids, so called helicopter parenting, and how this wasn’t a good idea. Well now its official. A study from America suggests that overly controlling parents can lead to behaviour problems.

I’d argue the problems go much further. We end up with students in university, who are used to having every little obstacle swept out of their way and thus haven’t learnt how to strike a work life balance or think for themselves. Its long been my observation, as both a student and a lecturer, that students from the strictest parenting background tend to be the ones who become complete tear away’s in uni.

They’ll show up in the first week of term dressed like a Mormon, or in full islamic dress, but by the end of the first semester they’re complete party animals (for whom breakfast consists of peeling last night’s pizza off their face before eating it), who start missing classes and falling behind. By contrast those from more “liberal” backgrounds (who’ve already learnt how to manage their time and say no to a night out) are able to maintain focus. And they tend to be the ones more likely to drop out, not least because it can sometimes turn out that their parents picked the course and uni for them, which turned out to be something (or somewhere) they didn’t want to study.

In contrast to this is so-called free range parenting. Rather than for example, walking the kids to school, parents take the view, well he/she knows what time classes start, they know how to get there, so its the kids responsibility to get up on time and get there. If they don’t, its going to be a steep learning curve. While there are merits to this, there are problems with it, not least of possible legal issues.

But my view is that parents need to think of the long term impact of what they are doing. While you have to have some rules and boundaries with kids, if you don’t give them some level of independence, they’ll never learn it. Then you are stuck with them living at home and you have to get them evicted. Birds won’t leave the nest if they don’t learn how to fly.

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.

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).

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.

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.

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.

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.

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!).

The bursting of the London property bubble

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.

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.

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.

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.

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.

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).

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.

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.

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.

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?

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.

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.

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 model” point 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.

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!).

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.

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.

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.

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

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.

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.

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

….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.

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.

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.

….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.

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.

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.

Of course the brexiters said, that’s nonsense, why this report didn’t analyse the deluded crack smoking fantasy “bespoke” 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.

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.