Post-brexit trade delusions: Africa edition

Theresa May is starting to remind me of a 80’s film, weekend at Bernie’s, the plot of which was how two low level employees are stuck with pretending their boss isn’t dead, or else assassins will kill them. Not a great film (it has one joke that wears thin pretty quickly), but an apt metaphor for Theresa May dragging around her Chequers deal, unwilling or able to admit its bleeding demised and joined the choir invisible, because if she does that will be the end of her.

But for brexit to work both she and the hard brexiters still have to prove that life outside the single market can bring benefits to the UK. That we’re better off out than in, a question Corbyn refused to answer last week – six times!

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Theresa May’s Chequer’s deal, its just resting!

So, having realised that the kebab model ain’t going to work and having googled the south sea bubble and realised that South America isn’t a mysterious continent full of riches, that idea too has been ditched. And with New Zealand, the US and Australia leading opposition to the UK’s WTO proposed quota’s post-brexit, that suggests no empire 2.0. As a result now they are pinning their hopes on Africa, with May and Fox jetting off to set up trade deals….with the world’s poorest continent….which has a combined GDP less than that of France. Hardly sounds like they’ll be buying many UK cars! And via the EU of course the UK already HAS a host of trade deals with Africa that it will lose at the end of March 2019.

Furthermore trade with Africa is something that presents a bit of dilemma. On the one hand it is generally agreed that trade is the best way Africa can grow its economy and develop itself out of poverty. However, the issues with corruption in the continent means there is always a risk that money won’t trickle down to the people who need it the most. And least we forget a lot of Africa’s problems stem from past trade deals which screwed over the locals to the benefit of Western countries and a handful of the wealthy elites in Africa. So the devil is very much in the detail in any trade deal with Africa.

However, the hints coming from the brexiters seem to indicate that they plan the very worst of the exploitative trade deals of the past. They are talking about using aid for example as a carrot to subsidise the sale of British goods. What’s wrong with that? Well because it means locals (again, some of the poorest people in the world) paying over the odds for equipment they might be able to buy cheaper elsewhere, with corrupt local politicians often creaming off their share of the take (or simply sell the equipment on to a foreign buyer and pocket the profits). And it often comes with the further price tag of the locals having something thrust upon them (e.g. they lose their water supply to the benefit of a foreign owned farm growing cash crops).

And the brexiters also talk about getting “cheap food from Africa. Or to translate that into practical on the ground consequences, they want to take the food out of the mouths of starving children just so UK shoppers can save a few penny’s. If the UK starts buying more food, be it cash crops or worse the very food the locals rely on to survive, then this pushes up food prices in Africa. And it doesn’t have to go up by much to become unaffordable to locals.

Furthermore, there’s a number of practical reasons, why most countries are restrictive in their trade with Africa. For example the issue of disease, most notably foot and mouth. As I pointed out before its endemic in certain parts of the world, most notably Africa. If the UK starts trading in meat products (or feed) with Africa we’d lose our disease free status meaning UK farmers would lose access to many international markets. And recall a past outbreak of foot and mouth in the UK, an event the farming sector is still reeling from, was caused by someone violating these very rules. So all in all it doesn’t sound like a great idea.

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Foot and mouth disease is endemic in most of Africa

And hand in hand with free trade goes freedom of movement. If a African entrepreneur who wants to say, set up a new car brand (I met someone at a conference a few years ago and this was his goal) and he wants to export to the UK, or get finance through UK banks, he and his staff are going to be able to get in and out of the UK without having to apply for visa’s two months in advance (after filling in an 85 page form and paying £500 a pop) and having them turned down or delayed for no apparent reason. So any such trade deals would only work if the UK is prepared to open up its borders with Africa.

And the UK will not have Africa all to itself. Both China and India are actively investing in Africa and they can both make far better offers than any deal the UK could offer. Indeed, one of the brexiters big ideas is to lower the import tariffs into the UK to zero. Ya, ok but you do realise that under WTO rules all the other countries are legally obliged to keep the tariffs on UK imports at the WTO levels until an agreement can be reached. If the UK has already lowered its tariff’s what possible incentive do these other countries have to negotiate the lowering of their tariffs?

The brexiters seem to forget that the “exciting” trade deals they got in the past, which they signed on the deck of the Royal yacht Britannia, they only got those because they had the Royal Navy backing them up (and pointing the guns of warships at the city!). These days its a little different. Go into a trade negotiation now, even with African countries, and you are facing off against an army of lawyers and expert trade negotiators. Many of these negotiators will be Western educated (Oxford, Harvard school of law, LSE, PSE, etc.) and grizzled veterans of multiple past trade negotiations (of which the UK has almost no recent experience). The idea that the UK is going to get a better deal than the EU has managed, even against smaller African countries, is somewhat dubious.

And if the plan is to resort to the robber baron tactics of the past, Empire 2.0 and all of that, well like I said China and India are now backing these countries up. You’ll be facing off against global economic powerhouses….with two of the world’s largest armies.

And speaking of which, on brexit related matters, we have stories about how impractical and expensive stockpiling medicines and food will be, of the massive drop in nurses (the nurses union are now so worried about the shortfall that they are backing a 2nd referendum), farm workers (as well as fears of food shortages) and the likely impact of brexit on research (as well as the fact the UK will be frozen out of the Galileo navigation system). As experts have pointed out the government’s recent post-brexit advice is to go away and buy software (which doesn’t exist), hire a bunch of lawyers to fill out the tons of documents you’ll need to export (hardly practical for a small business)….then bend over and kiss your arse goodbye. Oh and if you live in Northern Ireland, talk to the Irish government (which is kind of like getting on a BA flight and the pilot saying “I have no idea what all these buttons do, you might want to find someone from Ryanair”).

Plus we now have clashes between French and UK boats over fishing rights (worth noting the boat actually doing the ramming below is a British registered trawler who has been found guilty of fishing offences before), probably a foretaste of what’s to come post-brexit.

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A British boat rams a French fishing boat off the coast of France as the Scallop wars start

And what’s the government’s solution to all of this? The go-to Daily Mail/Express solution to every problem, call in the army! Who’ll be parachuted in to protect fishermen (who again are the ones doing the ramming!), distribute food, fuel and medicine post brexit….and presumably pick fruit, staff hospitals and do scientific research (while riding on Unicorns one assumes!). I think Tories played with their action man figures a little too much as a child!

And I just got back from Ireland and it came up in idle conversation how a number of the UK chain which have gone belly up recently are actually still up and running in Ireland, including Maplin and ironically enough Poundland (ya while they’ve gone broke in the UK, they are still in business in Ireland even though we joined the Euro two decades ago!). The media agonises over what could possibly be causing this crisis in the high street, the internet? The weather? Changing tastes?…or maybe its because some dickheads decided to vote for brexit, causing a 25% drop in the value of the pound, which if your importing stock from abroad, means your costs just went up 25% pushing many firms into the red.

Like I’ve said before brexit is now the official state religion of the UK. The CEO of a company could jump off the roof of a building wearing a sweatshirt that said brexit killed my business and land in front of a UK journalist or politician and they’d put his death down to an unfortunate accident with gravity.

But all in all it appears even the brexiters are resigned to the fact that brexit is going to render the UK worse off. Its an unspeakable heresy they can’t dare speak, so they need to at least make sure there’s some positives they can point too. So when all the factories closing and millions are unemployed and certain food items have become harder to find than in Venezuela, they can at least point out, oh but look pork is now 3p cheaper per kg, aren’t we reaping the rewards of brexit…. just ignore the stories about food riots in Africa or a foot and mouth outbreak in Sussex and eat your brexit tripe.

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Tory towns go bust

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One of the things that annoys me about brexit is how its allowed many important issues to sneak under the radar, without any serious debate, e.g. Fracking was quietly approved, without any real parliamentary debate last month, against independent advise to the contrary.

But one big story that has been swept under the carpet is how several towns with Tory run councils are basically going bust. Northamptonshire council for example is in dire straits. In the town of Corby (which incidentally voted overwhelmingly leave) public services are being cut back to the legal minimum. This means things like rural buses services have been cancelled (meaning anyone without a car in a rural location is now cut off from the rest of the country), public libraries are being shut, day care and medical centres are closing down, public parks are at risk from developers, street lights switched off, road repairs halted, bin collections are being curtailed and so on. Even Christmas related festivities are being cancelled (yes, the Tories are cancelling Christmas).

So how did it get to this stage? Well quite simply put ideology and the legacy of Cameron’s no-so-little helper “porky” Pickles. Many of these Tory councils went about privatising public services and outsourcing them to private firms (in many cases Tory party donors and allies, e.g. Richard Branson got £2 billion worth of the NHS). And rather that wait for the magic of the market to kick in, they also froze council taxes as an easy vote winner.

Of course, as has happened any time public services have been privatised, instead the costs actually went up considerably. And a freeze in council tax amounts to a cut in taxes over time thanks to inflation. And at the same time the Tory government has been cutting the amount of money it spends on local government, as part of its policy of austerity. And the rise in inflation brought on by the brexit effect has hardly helped. So councils found themselves squeezed from multiple directions.

Worse still, some councils have responded to this crisis by squeezing any source of income available to them, notably small businesses. Hence some smaller firms got hit with massive hikes in their rates or rent. While some were able to just cope with those (generally those in more affluent areas) others simply folded (and the drop in consumer spending thanks to brexit has probably not helped here either). Of course, this creates a law of diminishing returns and councils have hunted the golden geese to extinction, decimating town centres in the process.

On the one hand, as many of these councils are Tory run (and often in areas that voted overwhelmingly for brexit) you are tempted to say, tough titty. You voted for this, you got it, if you were dumb enough to vote Tory (they ain’t called the nasty party for nothing) that’s your own luck out. However, often the people who are feeling the worse of this aren’t the ones who voted for it. Pensioners have their benefits triple locked and ring fenced. Its usually the young or those on lower incomes who are going to feel the worst of it.

What happens next is unclear. The government could step in to bail councils out. However, the danger is that if they bail out one they have to bail out all of them. And that would unleash a tidal wave. The truth is that most of the local governments in England are up sh*t creek and just about managing and have been that way for quite some time.

If we were to transfer all of those debts run up by local councils onto the UK government’s books, suddenly HM treasury is massively in deficit, worse off than they were when the started this policy of austerity. And inevitably that would mean pressure would come to cut back in other areas. Does the UK really need aircraft carriers, nuclear submarines, HS2 (or a no deal brexit), when councils literally can’t afford to keep the street lights on? Because ultimately councils are in trouble because they are having to pick up the pieces that result from Tory policy of austerity (e.g. a single parent gets evicted because her benefits got cut, what happens? The council have to pay for emergency accommodation) yet they have limited means to raise money to cover those costs.

A more vital question is how to fix the problem and I would argue that goes back to how councils are funded. The UK’s council tax system basically makes no sense, its the tax equivalent of a drive by shooting. And worse given how much property prices have changed since the rates were last updated its not really related to income anymore. I’ve long argued that a local income tax would be a better idea.

Yes this would likely mean those on middle incomes (like me) might see our taxes go up a little bit, while those on higher incomes would seem them go up a lot. But I’d rather pay a bit more to get good public services than not get any at all. And, given the ease with which council tax can be avoided (just put any literature from the council in the bin!), its more of a tax on honesty. I suspect a local income tax would catch out those who don’t pay council tax and it might turn out to be not as expensive as thought.

Also it is deeply hypocritical for Westminster politicians to be promoting a brexit, to allow the UK to “take control” and not send money to Brussels. Then jealously guard its own powers and insist they alone should decide how money is allocated, even to the councils who are having to pay for the consequences of decisions made in Westminster. In essence brexit is little more than a power grab and a bank raid by the government.

If a post-brexit UK is to have any future it will only survive if there is a commensurate devolution of power from Westminster to both local authorities and local assemblies (e.g. the Scottish government). Otherwise the legacy of the current Tory government will just be the disorderly destruction of most of the UK’s public sector and local government.

Brexit: More or less

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Brexit greatest enemy? Maths!

Contrary to much expert opinion, it is argued by brexiters of the so called European Research Group that leaving the EU without any deal, a so called “hard brexit“, won’t be so bad. And in any event, it would make sense to play brinkmanship with the EU, to get the best deal. Hence they have argued for example that the UK should start to stockpile food to show we’re serious.

Any sort of delays at the border present massive problems due to the fact most UK factories operate on a Just in Time basis (where as little inventory as possible is kept by the factory, with supplies arriving “just in time”), notably the car industry. However, Brexiter Brenard Jenkin suggested that trucks should just leave several days early and so what if they end up stuck in a queue at Calais (which suggests he has no clue about how JIT works!).

There appears to be a lack of awareness among brexiters of the magnitude of what they propose. So I thought it would be useful to put some numbers to these proposals, a sort of hard brexit version of “more or less”.

Let’s take car production for a start. How much warehouse space would you need to store all of those car parts? Or, if they are going to be stuck in a massive queue at Calais, how many trucks would we need? Well the approximate volume of a vehicle is 10-40m3. Note I use the term “vehicle” because the UK doesn’t just make cars, but also things like vans, construction equipment, military vehicles, ice cream vans, lorries, etc. So let’s take something broadly in the middle, 15m3 is the average volume of a medium sized SUV or an estate car.

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Next, we need to consider packing efficiency of the trucks or the warehouses. While some components can be neatly packed into boxes and stacked without taking up too much space, others are a bit on the bulky side. There’s only so many you can pack in at any one time. Some are either too heavy to be stacked one on top of the other, too fragile, or too big and awkward. And we need to remember that with logistics time is money. Yes, we could spend all day playing Tetris, but that’s going to cost more money than it would save. So let’s assume a 60% packing efficiency. 25% of UK car parts are of UK origin, so that’s 75% that comes from across the channel. Multiplying out those numbers, 0.75*(1/0.6)*15 = 18.75m3. We’ll round up to a nice even 20m3.

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The UK produces 1.7 million vehicles a year (currently 1.65 million, its slipped a little bit since brexit, but we’ll round up to 1.7 million all the same), so that’s 4,658 vehicles per day. So a seven day stockpile means parts for 32,606 vehicles, which means we’d need storage space for 652,120 m3. Assuming warehouses 10m high (which yields 7.5m of useful storage space), you’d need 86,949 m2 of floor area, which would cover about 12 football pitches. I’m going to pause and let you imagine 12 times the area of a football pitch covered in warehouses 4 stories high.

How many truck would be needed? Well assuming 80m3 per truck, that’s 8,151 trucks. BMW recently mentioned that they depend on 150 truck deliveries a day to manufacture the Mini. This gives us an alternative means of calculating the number of trucks. At 800 cars per day, that would imply that 32,606 cars would require 6,113 truck deliveries, noting of course that the Mini is at the lower end of our size scale (the clue is in the name!). Parked end to end, these trucks would stretch for between 110 to 147 km’s.

And that’s just the logistics of getting car parts across the channel and were assuming only one trip, when some components take multiple trips. About 80% of the UK’s car production is currently exported, mostly back to Europe (or transitions through Europe to other destinations), so that’s 26,084 vehicles you’re looking to move back over the channel every week. Parked end to end, they’d stretch for 107 km’s. It would take 4,075 trucks to carry them back over the channel (assuming 6 vehicles per truck) and those trucks would form a queue 73 km’s long.

I’m going to hazard a guess that we don’t have 10 to 12 thousand trucks going spare to handle these logistics. Should you wonder how the car industry copes at the moment, well they do so by not taking 14 days for their trucks to make a round trip across the channel (according to Google maps its currently an 8 hour journey from the Ruhr to the UK Midlands, or 4-5 hrs to the main industrial zones around Northern France & Belgium). And they also make use of railways, so its not just trucks queuing either side of the channel, but trains as well.

And should anyone accuse me of being mean, vehicle parts are easy (and represent only 12% of UK exports btw). It would be very expensive to have them stuck in a queue for a week, but at least they aren’t going to rot. But we can’t say the same for food. Faced with produce from the UK arriving late, as well as either rotten or frozen solid, it won’t be long before retailers the opposite side of the channel start buying local produce instead, even if its more expensive. And some chemicals or biomedical products are also time critical. They will not only spoil if they don’t get to their destination in a timely manner but can actually decompose and become hazardous (i.e. they catch fire!). So this would mean several industries that depend on such supplies, would have to shut down on brexit day itself, unless they can secure alternative supplies.

Indeed, even assuming shorter delays, say 24 hrs, you are still talking several thousand trucks being affected, all of which need to be checked (are there facilities at the ports to handle all of those vehicles? Do they have the staff?). Recall that delays happen at the ports as things stand due to various factors (weather, strikes, IT problems, etc.). The introduction of additional border checks will thus amplify the consequences of any such delays. Hence I’d argue that while perhaps it won’t be as bad as 7 days most of the time, that’s probably the sort of time frame you’d want to plan according too.

Currently the port of Dover handles about 5,000 trucks a day while the tunnel handles a further 5,000. The current plan, to stack trucks by closing off part of the M20 to hold 1,400 of them, will clearly become unstuck very quickly if delays build to any more than 4 hrs (which just a few minutes delay per truck at the front of the queue could quickly produce). And everyone seems to be forgetting that the main hub for freight traffic with the EU is actually Felixstowe and neighbouring Harwich, which handle between them 3 times the traffic that goes through Dover as well as nearly half of all the UK container traffic.

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Brexit, you’re going to need a bigger motorway!

There’s also the not so small matter of the 12,800 good vehicles that cross the Irish border every day. Or further traffic that enters the UK via the ports of Fishguard, Pembroke & Holyhead.

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The Irish border is busier than Dover and the channel tunnel combined and has almost double the number of crossing points then the entire eastern border of the EU!

And what about non-EU trade? Recall that the UK’s customs relationship will alter for practically everything entering the UK from overseas. To join the WTO (a critical part of any brexit plan, else the UK becomes the equivalent of North Korea!) the UK needs to agree a deal to split its WTO membership from the EU. All of the other 164 countries have to agree to the terms of this (unanimously, oh and btw a no deal raises the risk of an EU veto) and its already expected that several will object (including the US, Canada & Australia, you know the countries we’re going to get these brilliant trade deals with).

Speaking of food, how much storage space would the UK need to stockpile food? Well a standard can of food is 73mm in diameter and 106mm high. That’s a volume of 4.43×10-4 m3. Let’s assume we need 2 cans per person per day. And we’d want at least a month’s supply. So that comes to 3.6 billion cans with a volume of 1,596,000m3. Assuming a packing density of 75%, storing all of those in warehouses 10m high (which again yields 7.5m’s of useful storage space) they’d cover 37 football pitches (stacked with pallets of cans 7.5m high!)….so just to handle the cars and food, the UK needs over 50 football pitches covered in warehouses…..all of which needs to be built in 8 months time! So no pressure!

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Taking back control! Then again, the brexiters seem to live in the 1940’s, so they may just get their wish!

Possibly sensing the impracticality of what they propose, its being suggested by the brexiters that certain “priority” items such as food or medicines will be just waved through customs. What’s wrong with that? Well, firstly the EU might not reciprocate. And secondly, In the absence of a permanent solution, such temporary measures are likely to break down pretty quickly, so you’re just delaying the inevitable. Remind me, how did the foot & mouth outbreak a few years ago start? How long before smugglers just start labelling their shipments as “food”, stacking a few trays of week old potatoes at the door and fill the rest of the vehicle with whatever contraband they want to move? (fake Burberry, booze, cigarettes, weapons, migrants, etc.). And thirdly, why are we leaving the customs union if we’re not going to implement any border controls? That kind of defeats the purpose of the whole exercise. Its like going to the pub to get legless drunk but then only having mineral water all night.

But its not food or car components that worries me in the event of a no deal. Its energy supplies. The UK is a net importer of energy. There was much talk about how to provide for Northern Ireland in the event of no deal, with suggestions it would be buzzing with diesel generators, many of them on barges moored around the coast.

However, I’d worry less about the few hundred megawatts NI uses and be a little bit more concerned with the 3GW’s that Southern England draws from the European grid, which is often critical in winter. And the UK also imports 35.2 billion cubic metres of gas from the EU and Norway every year. Note that as Norway is part of the EEA they would get caught up in any trade dispute, particularly if the UK refused to pay its bills (Norway is a contributor to the EU budget). That’s an average of 96 million m3 of gas every day and several times that amount on a cold winter’s day.

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The UK has a grand total of 30 GWh’s of pumped storage, so that’s only 10 hours of reserves. In terms of gas the UK has a storage capacity for 4.3 bcm. So that would be exhausted with 1-2 weeks (depending on the level of demand). However 70% of that reserve capacity is contained within one facility (Rough), which recently closing down (which would cut the UK’s reserves to just a few days supply).

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Nearly all of the UK’s gas storage capacity is in one facility….which has just been shut down! Note that even prior to this, the UK has woefully small gas storage compared to other EU countries

And I suspect the national grid would point out that the UK’s pumped storage and gas storage facilities do not exist as a strategic reserve in case of a hard brexit. They are there to help even out the peaks and troughs that exist between supply and demand. And power cuts are usually not so much a lack of power on the grid, its a lack of grid capacity to shunt the power to where its needed.

So the reality is that the UK, particularly the South East of the country, could be experiencing an energy crisis within days or potentially hours of a hard brexit (depending on demand, e.g. a late Autumn cold snap). Its is difficult to see how the UK could make it through a winter if supplies were cut off. And given that the ERG plan is to essentially sacrifice farming and manufacturing in a hard brexit to the benefit of the financial services industry, rolling blackouts in London would be more than a little inconvenient. It would be a national crisis.

Pretty soon those barges up in NI will be unmoored and heading down to London (not that they’d do much good, you’d need tens of thousands to match London’s demand) with the DUP basically left to fend for themselves. If you want to annoy the public and start a riot, try turning off the lights for a while, at the same time as there’s shortages in the shops. I suspect that such a crisis would very quickly lead to a border poll in NI and a 2nd indy ref in Scotland (and possibly even one in London, which recall voted overwhelmingly to stay in the EU as well) and the UK starts to break up.

Now I’m not attempting project fear here (reality appears to be doing that for me!), I’m merely pointing out to brexiters the logistics of what they are proposing, and the potential consequences if they get things wrong. Its not being anti-brexit, its being pro-maths, and the numbers for a hard brexit just don’t add up.

And if the brexiters plan is to try and bluff the EU, well that is also unlikely to work, in fact it could be counter-productive. No doubt, some bureaucrat in Brussels has done the same sums I’ve just done and has realised that the hard brexiters are bluffing and the EU can easily afford to call their bluff.

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Worse still, they’ve also likely concluded that only a deranged lunatic would even consider a hard brexit. Which means that if they think the British are actually seriously considering a hard brexit, there is little point in the EU making any concessions, because you’d never be able to guarantee someone that crazy would stick to their side of the bargain. Hence why the UK threatening to withhold payment on the divorce bill is rather dangerous, as it implies the UK is undertaking these talks in bad faith.

And in related brexit news, the association of British insurers have warned that it might not be legally possible for them to pay pensioners living abroad their pensions in the event of a no deal brexit. Elsewhere MP’s were warned terrorists and criminals could walk free from jail in the event of a no deal.

While I would take these stories with a pinch of salt, equally I would point to real world examples which have already occurred, as I discussed in a prior post. The problem with a no deal brexit is that the UK government ceases to have any say in what brexit means. It will in many cases be left to lowly civil servants, judges and corporate lawyers around the world to decide what brexit means.

Another line of reasoning that is being pushed (which kind of shows how desperate they are getting) is that the EU should be nice to the UK, because the British people will blame them for the consequences of a hard brexit…..WTF? Oh, and apparently its the fault of those who voted remain that the UK voted to leave (conservative logic, don’t even try to understand it!). So the EU, and remainers, who wanted the UK to stay in, should be punished because leave voters (who were told all of this would happen prior to the vote) are such spoilt little snowflakes they’ll start to cry like a baby when they realise they aren’t going to get their lolly.

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The hard brexiters plan, hold their breath until they turn blue, hope the EU/nanny panics and gives them an ice lolly

And in any event, let’s get one thing clear, regardless of how well, or how bad brexit goes, regardless of what concessions the EU grants the UK, the tabloids and the brexiters will blame the EU (and remain voters) for whatever negative consequences come out of brexit. After all, their only other alternative would be to admit that this brexit thing they’ve been banging on about for twenty years was in fact a very bad idea. And as we’ve seen they value their ego well above the well being of the country.

As I see it, there are only three viable brexit options. Firstly, the hard brexit option. Revoke article 50 and agree some deal with the EU in which the UK stays in for at least a decade or two to give the country time to prepare and build the necessary infrastructure (i.e. those 50+ warehouses, new port facilities, etc.). Of course you’d want to be absolutely sure this is the “will of the people” before even considering this option (so a 2nd referendum would be recommended), else a future pro-remain government might come to power and just cancel the whole thing.

Secondly, go for the softest brexit possible, the Norway or Swiss models being good examples. This would be negotiated as an interim solution (a sort of “trial separation” as it were), leaving open the option at a future date to break further away (e.g. leaving the single market/customs union and ending freedom of movement) or re-joining the EU. I would note that this the option is the closest to May’s proposals. But its also the only one of the three that guarantees an immediate UK exit from the EU (something the brexiters need to consider next time her plan comes before the house).

Or thirdly, start over. If a hard brexit is undeliverable (in the short term) and a soft brexit just leaves the country a “vassal state (to quote several brexiters), then it might be best to question the wisdom of trying to undertake it in the first place. So you’d have to revoke article 50. Then after a suitable cooling off period (say 5 years), have another referendum, but this time asking the right questions (i.e. hard or soft brexit) and make sure everyone’s on board (i.e. a requirement that say 50% of the country has to vote for it and all major regions must back it).

The brexiters need to pick one of the three, they can’t have it both ways and they can’t just try and wing it and hope for the best.

The sadopopulist agenda behind brexit

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

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

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

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

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

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

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

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

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

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

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

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Dumb and dumber, spot the difference

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

Sadopopulism

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

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

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

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

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

Brexit reality bites

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So before the referendum we were told that there would be no exit bill when the UK left the EU. We won’t be paying a penny. As Boris Johnson put it the EU would be told to “go whistle” for its money. We’d stare Fritz straight in the eye and say nien…..

…….of course what the brexiters didn’t mention is that we weren’t hearing them right. Rather than saying “nein” what they actually planned to say to the EU was “nine“, as in “is ninety billion euro’s ok?“.Once Britain’s rebate on EU assets is taken into account, this will result in a net payment by the UK of £50-60 billion, depending on the breaks…paid in euros btw!

We were told the PM could never agree to this. That there would be rioting in the streets, the tabloids would abandon her (what and throw their lot in with Corbyn?) and the cabinet would resign en-mass. And this morning…..nothing. Largely because the brexiters want the news cycle to move on. They were warned repeatedly that this day would come, before and after the referendum and I mean years before. The truth is most of them merely see brexit as a ladder to further their careers and they understand full well it is an act of national self harm. No matter what happens the UK will be worse off after brexit, that is the unescapable truth.

In these “talks” Brussels holds all the cards. The EU doesn’t have to be nasty about it. As Donald Tusk advised at the start of this process, the mere act of brexit will be punishment enough on Britain (a punishment that was self inflicted by the UK on itself). Sixty million do not dictate terms to a trade block of 500 million, especially when the leadership of said 60 million can’t even agree what it is that they want. Expect similar climb downs on the Irish border and the ECJ in the coming weeks.

And the EU was very clear that this money is not buying the UK a trade deal. What the UK is buying is a choice between a Norway plus model that will grant free access to EU markets, but at the expense of surrendering sovereignty to Brussels, paying about 90% of what the UK currently pays into the EU budget and only very limited changes to freedom of movement. Or a Canadian style arrangement, although that will be incompatible with an open border in Ireland, so some compromise will be needed here, likely by throwing the unionists under the bus.

Its worth nothing that there are two unionist parties in the Northern Ireland, the DUP and the UUP. The UUP campaigned for a remain vote, not because they are a bunch of hummus eating europhiles. But because, unlike the DUP, they aren’t moronically stupid. They understood all too well that Westminster will prioritise English interests over the interests of a couple of bigoted creationists in Northern Ireland. If that means effectively paving the way to a united Ireland, well so be it. So before Arelene Foster has a tissy, keep in mind she is in a mess of her making.

Now a word from the UK’s greatest ally

Indeed there were question marks about who tweeted those 3 racist videos to Trump. I’d guess that would be Trump’s British drinking buddy, Nigel Farage (who has well known associations with the UK far right). He correctly guessed that Trump would re-tweet them, burying the brexit divorce bill story and taking it off the front pages. However Trump’s outbursts and his rebuke to Theresa May should underline the other problem with brexit. In effect, if we follow through with the brexiters plan, the UK is trading sovereignty it shares with EU states and handing that sovereignty into the sweaty palms of Donald Trump. Its not so much a case of the UK becoming the 51st state (that would give the UK voting rights in US elections), its the UK becoming another Puerto Rico.

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Again as always, the brexiters are poor students of history. If they’d paid more attention, they’d know the period from the end of World War 2 to the UK joining the EU was a frustrating time for the UK. Time and again, the UK found its interests being trampled on by a now dominant US. The Suez crisis, numerous proxy wars fought out in commonwealth countries during the cold war and the Skybolt crisis to name a few. The Skybolt crisis did work out rather well for the UK in the end, but it so frustrated them that, according to De Gaulle, this was one of the reasons why the UK wanted to join the EU in the first place.

After the UK joined, the relationship improved, simply because the US needed an ally in the EU clubhouse. Now that the UK is leaving, that abusive relationship of the past is going to resume (much as I predicted would happen back in 2011). I mean can you imagine any past UK PM (assuming the UK voted remain) putting up with Donald Trump in the way Theresa May has had too? The UK has no choice now but to put up with whatever abuse they get from the US, regardless of who is in charge. Meanwhile the French are already positioning themselves to be America’s new best buddy inside the EU.

But we’re going to at least get a great trade deal off the US aren’t we? Well when Trump says it will be “great”, he means for the US. The UK, notably UK farmers and manufacturers are going to get screwed six ways.

So the can anyone who voted leave please explain to me how paying £50-60 billion to get the crap beaten out of us by both the EU and US, risking the peace of the good Friday agreement and ultimately becoming a vassal state of the US, is a good idea. I mean if the brexiters want to get robbed and beaten up that badly, just go to into any pub in Glasgow and tell em how great it is to be in jolly old England….

 

Trump the African Dictator

We were warned by Trevor Noah, prior to the election, that Trump sounded a lot like an African dictator. Unfortunately, every day he and his regime are becoming ever more like one. The constant posturing for the sake of his ego, the lavish personal spending, the inability to accept criticism and of course the massive levels of corruption.

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Your tax dollars hard at work….

Trump promised to “drain the swamp” but instead, he’s done the opposite, with his cronies and family members increasingly using the assets of state for as their personal play things, be it to go shopping in Europe, holidays, or business trips abroad. The Secret service is at risk of going bankrupt given the huge bill its run up guarding Trump during his trips to Florida every weekend (where the state pays the cost of putting him up in his own hotel) or protecting and providing transport for his relatives on business trips to sign deals abroad, something that is in clear violation of the constitution.

Again, this is all reminiscent of the sort of corruption African autocrats are famous for. However, there is another aspect of African autocracies that Trump demonstrates – his supporters. African dictators maintain their hold on power through violence and intimidation of voters (which least we forget, Trump supporters also engaged in last election), but that only goes so far. A key feature of their rule is the fact that they have a core group of supporters, typically 20-33% of the population who will back them no matter what.

Make no mistake, the supporters of African dictators such as Mugabe or Obiang Nguema are well aware of the corruption and abuse of power that goes on. But they back such dictators regardless of this, because they are a member of the same tribe. Indeed, some even see a silver lining to such corruption as they expect the dictator to “share the cake. They look the other way to him embezzling billions in state funds in the hope that a few crumbs fall from the table which they can scoop up. Indeed, a candidate who actually ran on a promise to “drain the swamp” would probably lose votes.

And this is the role many in the Republican party have now fallen into. Many still back Trump not because they are unaware of the corruption allegations, or because they don’t understand just how serious his abuse of office is. Actually quite the opposite. The GOP is now a tribe, a cargo cult and they see it as necessary that they back their leader regardless of how bad he gets or how big a cliff he dives the country off.

This in of itself suggests that the conventional wisdom, that we must merely wait for investigations against Trump to conclude and see him impeached, or wait for the next election and see the GOP devastated in polls, might not work. If he’s this bad now and a hard core of the GOP are still backing up, its not going to be that straight forward to unseat him. And don’t expect future elections in the US to be free and fair.

Instead, we need to start treating Trump the same way that any African autocrat is treated if he is to be removed from power. And that means recognising that the checks and balances aren’t going to work. It means refusing to recognise his office and refusing to do business with any firm that does business with him or his companies (a list here, TK Maxx and Amazon being the key ones in the UK, along with Uber of course).

Indeed a boycott of US industry as a whole (encouraging firms to re-register themselves abroad and thus threatening a collapse in tax revenue) is really the only way forward. Its exactly how they brought down the apartheid regime in South Africa.

Should Bitcoin be banned?

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One feature of recent cyber attacks was how the perpetrators behind these ransomware programs wanted to be paid in Bitcoins. This isn’t that surprising, Bitcoin has become the preferred currency on the dark web and the criminal underworld. It is increasingly used for money laundering, tax evasion, to buy drugs, prostitution, fund terrorism or to even hire assassins.

While there is some “legitimate” bitcoin activity, this mostly seems to be restrained to speculative trading of bitcoins, operating exchanges or mining” of new bitcoins. Indeed one of the flaws in the ransomware attacks is that its likely to prove very difficult for the perpetrators to recover these funds without being found by the authorities. And the evidence is that very few of those effected paid up. However, its possible they might not care, the whole point of the attacks might just be an investment scam, to create an artificial jump in prices, allowing them to sell high and buy low.

If bitcoin is a vision of a libertarian world, it shows everything that is wrong with that vision. Indeed, as we speak bitcoin is a war with itself, largely because without any central regulating authority, there’s nobody to make the important discussions about how it should operate. This has resulted in the speed of service slowing to a crawl, at one point recently people were waiting 3 days or more for a trade to go through (not exactly convenient if you’re buying a cup of coffee!).

So it is perhaps high time for government’s to consider whether they would be better off just banning bitcoin completely. Now Bitcoin bugs will tell us this is impossible, however by doing so they simply show how naive they are to how governments, currencies or the law works (which of course is exactly the problem with libertarians!).

While bitcoin is technically legal in most countries, this doesn’t mean itslegal tender. In most countries there is no obligation to use the legal tender for all trades. In the Northern Ireland for example, its not uncommon for shops to accept euro’s. Around a number of US airbases in the UK dollars will sometimes be accepted. And in Argentina, where I was recently, they’ll often take euro’s or dollars. Indeed, even barter is legal in many forms (e.g. part exchange of vehicles, companies accepting payment in kind, etc.). In short, so long as you pay any taxes that are due, the government doesn’t really care what currency you use. In other words, bitcoin is in most cases not legal approved, but its not illegal. There’s a very big legal difference between the two.

In fact banning bitcoin would be scarily easy. All that would need to happen is for a couple of governments to get together (say the EU and the US) and ban the sale or ownership of bitcoins, citing the numerous examples of its misuse I’ve quoted above. At this point all the “legit” bitcoin businesses will either have to fold or move overseas. And given that the currency will tank in value at the same time, my guess is most will either fold, or find a way of establishing a new currency that conforms to this new legislation.

This means the number of bitcoin trades will decline significantly. Now bitcoin advocates think they “the gov’mint” can’t trace them. Well law enforcement says no, we can trace bitcoin trades if we have to, but its a lot of hard work. Given that virtually all the remaining bitcoin trades will be criminal in some nature they’ll find things a lot easier as the number of trades will drop significantly. In effect the criminals will lose their cover. Indeed given that even owning bitcoins is now a crime in of itself, even criminals will want to offload them, else they could be prosecuted for simply owning bitcoins, in much the same way Al Capone was imprisoned not for racketeering and murder, but for tax evasion.

So while there will continue to be some trade in them after such a ban, outside the west, much of the network that supports those trades will vanish and the currency will probably become too unstable to survive, particularly if a legally acceptable (and government regulated) alternative that is better supported then appears.

Of course the message to bitcoin bugs is for them to realise that they are not invulnerable. If they don’t do something to tackle the criminal use of bitcoin, eventually national government will do it for them, likely by wiping bitcoin out of existence.

Trading delusions

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They had something on the BBC the other night about the possible impact of brexit on trade, in particular on food prices and the UK food industry. Here’s a summary article from the BBC news website.

As I’ve mentioned before, one of the problems with the BBC, is that in the interest of “balance” and “fairness” they’ll have some expert on telling us what’s likely to happen, then they’ll turn to some swivel eyed right wing loon, to give the opposing view.

Two terms that keep cropping up with the brexiters are “new and exciting trade deals” and “push into new emerging markets”. Well first of all, why do you need a new trade deal with the other countries? Via the EU the UK already HAS a perfectly good set of trade deals. Brexit means the UK will have to spend several decades renegotiating those deals. The idea that a country of 60 million is going to get a better deal than a trading block of 400 million is clearly absurd.

Granted the TTIP trade deal between the EU and US looks like its dead, but to be honest that was kind of tainted to begin with. Its demise is probably a good thing. The danger now is that the UK will find itself forced to sign up to some version of that which blatantly favours the US, which could see the sell off of the NHS.

As for “new and emerging markets”, where exactly are these places? Have we found a new continent recently? I know we’ve been finding exoplanets recently, but its a bit early to be thinking of trade deals. Granted, as most brexiters seem to live in the 19th century to them “the orient” or “the south seas” might be a new and mysterious place, but we’ve been trading with these countries for years.

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Is this this what the brexiters mean by a new emerging market?

Given that the bulk of this TV programme seemed to be about food and beef, I can tell you, having been to Argentina and China in the last 12 months, they have a perfectly adequate supply of food and its very cheap. Indeed, that’s the problem, they don’t know the meaning of the word “small portions” in either country. There is no way the UK could undercut local prices. And given how much of the UK is owned by foreign multinationals, its not as if it will ever be a straight “us” versus “them”. It will be one UK based but Chinese owned firm, against an American owned firm in China.

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The new iconic London taxi….owned by a Chinese firm…who bought it off a Malaysian company

Indeed the danger is the other way around, that these countries with there lower production costs will flood the UK market with cheap produce and bankrupt UK industry. One of the things about trade deals is that if everyone wanted a perfectly free trade deal, then all you’d have to do is get both sides to sign a single piece of paper with “no tariffs” written on it. But nobody wants that because it would decimate their industry as the other side dumps goods at ultra-low costs (in some cases made at below the cost of production thanks to state subsidies). This is why the devil in any trade deal is in the detail. And inevitably the UK is going to struggle to get anything more favourable than the EU has managed to get.

Even competing against the US presents problems. Their farmers use all sorts of practices banned in the UK, growth hormones in cattle, feedlots, chlorinated chicken. Its enough to make you want to go veggie….until you realise how much of America’s cereal crop is of full of GMO’s. And US farmers receive very high levels of farm subsidies. Indeed, even US industry is heavily subsidised in some sectors (usually in the form of massive sweat heart deals to supply equipment to the military, FEMA or USACE), such as construction equipment, aircraft and vehicles, the very industries the UK is anxious to defend.

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Far from being the land of small government and free enterprise, the US is one of the most interventionist and protectionist regimes in the world

The idea of UK firms like JCB competing against titans like Caterpillar (America) or LiuGong (China), both with the backing of world superpower behind them is just laughable. And UK beef farmers with a few hundred acres competing against an Argentinian farm half the size of Wales, don’t think that’s going to work…particularly after anyone abroad google’s “British beef” and the first thing that comes up is “mad cow disease”.

The only way that UK firms could compete is by copying the same tactics. E.g. After these pro-brexit farmers go to the wall, the local laird (who helped bankroll the leave campaign) buys up their farms, rips up the hedges and country side and turns the entire county into one massive feedlot. Now if we are lucky he might hire a couple of destitute farmers on as farm hands. But then again, he might just sneak in some migrant workers instead. It depends who is suitably desperate for work.

So much for strong and stable!

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Its laughable this morning. Here we have Mrs strong and stable herself (I can’t write that while keeping a straight face), who undertook an election at the worse possible time, not because the country needed one, but so the Tories could selfishly exploit labour’s low polling numbers. And, having gambled with the UK’s future for the most cynical of political reasons and then lost, she has the nerve to ask for a period of stability during the brexit negotiations. I mean seriously, how out of touch are these Torybots. Not since G. W. Bush stood in front of a banner saying “Mission Accomplished” has a politician been so wrong.

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And let us be clear, the Tories lost this election, not because Corbyn is some sort of political genius, but because Theresa May was terrible. After the awful local election results, Corbyn spent most of his time visiting safe labour seats in an effort to shore up support. When the lib dems and Greens approached him about some sort of progressive alliance, being the clot that he is he rejected this, even thought it ultimately meant the Tories winning crucial seats (I mean god forbid someone who isn’t a bearded hard left brexiter winning those seats! Obviously Corbyn thinks it would be better a Tory win them instead!). Note that several high ranking Tories, including Amber Rudd and IDS only survived by a margin of a few hundred votes. Zack Goldsmith managed to get elected by just 50 votes. So had Corbyn agreed to this progressive alliance, its very likely we’d have seen some pretty major scalps last night.

He also flunked a number of TV interviews, getting basic facts about his manifesto wrong. They had to hide Diana Abbot away after she buggered up earlier on in the campaign. So this is clearly more a case of the Tories losing the election rather than labour winning. And they squandered a 20 point lead at the start. Because while Corbyn wasn’t great, Theresa May was unbelievably $hit! As the spectator put it “Theresa May has the warmth, wit and oratorical ability of a fridge-freezer”.

The Yellow Submarine

Around Whitehall Theresa May has a nickname – the submarine. Because when the going gets tough, she dives below the surface, hides and runs away. And that was basically what she did for the bulk of the election campaign. She chickened out of the debates, she refused to do interviews on local radio or on the BBC’s flagship Today programme, avoided crowds (save a few carefully choreographed campaign events) or “people” in general. When rumours of cuts to pensions emerged, a possible “dementia tax to go with the bedroom tax, she was flip flopping like crazy. At one point during a factory visit the press were locked in a room to stop them asking awkward questions. So I have to assume that when she talked about being “a bloody difficult woman” during the brexit negotiations, her plan involved hiding in the loo and waiting for the EU to push a favourable exit deal under the cubicle door at the 11th hour.

The two terrorist attacks didn’t exactly help, leaving the Tories looking like a deer caught in headlights. The Tory cuts to policing occurred on her watch as home secretary. This is something she can’t dodge blame for. She mumbled something about changing the law or doing away with the human right act, because we know how much the terrorists value human rights, that’ll show em!

And her best bro Trump didn’t exactly help matters by attacking the London mayor in the middle of a terrorist incident, something which she failed to condemn. And recall her invite to him to come over next month is still valid, something that inevitably cost her votes and almost cost her dearly.

Then there’s the issue of brexit, the whole reason apparently for her having an election. And what exactly is the Tory policy on brexit? F*ck knows! Other that the vague idea that we trust Mrs strong and stable wobbly and inept, she goes into Brussels, doesn’t talk to them or give away anything, keeps her cards close to her chest and somehow gets to have her cake and eat it. A sensible strategy if you’re playing gin rummy for a half a packet of crisps, but not when negotiating with the EU over something this important. Trying to play brinkmanship with the EU is like trying to play chicken with a freight train. It ain’t going to swerve or stop because it can’t and frankly it doesn’t have too. Just ask the Greeks.

By contrast the labour strategy, which is to negotiate something along the lines of the Norway model, or the lib dems (another referendum) are far more sensible positions. More importantly for a voter, you know exactly what you’re getting if you voted for them. It dawned on me a day or two ago how badly this could play for the Tories when I was talking to a brexit voting Tory. And he could not explain to me how the Tory strategy was going to work. So if brexiters and Tories are having doubts, you can imagine how this played with remain voters (or those soft leave voters who were essentially conned into voting leave).

Now too be fair, election’s are difficult times for Tories. They have to constantly resist the urge to resort to lizard form, they have to go outside during daylight hours and remember not to call voters plebs. They rely on the right wing media to paper over the cracks. And true to form the Daily Mail and Express editors had their tongues firmly attached to May’s ass for the last two weeks. But this time the cracks were more like chasms and crevasses. Attempts to shore up the Tories involved pushing things to levels of Monty Pythonesque absurdity where even UKIP members started to doubt them.

Consider that the Daily Fail devoted 13 pages on the eve of the election trying to paint Corbyn as pro-terrorist, because its possible that one of the terrorists might have once attended a labour rally (obviously to support Corbyn, not because he was casing the event as a possible future target). Okay, and Jimmy Saville was a Tory supporter, knighted by Margaret Thatcher, so by the same Daily Mail logic does that make all Tories pedo’s?

The great British weather

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Finally, we have the weather to consider. It was raining yesterday morning, although it cleared up a bit towards the evening. This would have effected the outcome because older people (who tend to vote Tory) tend to vote in the morning, while younger voters (who tend to vote for left wing parties) tend to vote in the evening on the way home from work. So its possible that a few hundred votes in key marginal seats were lost because some pensioners opened their curtains in the morning and thought well I ain’t going out in that and stayed in bed.

The Jock vote

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In Scotland the parties fought for every vote

In Scotland it wasn’t a great night for the SNP. That said, they won all but three of Scotland’s seats last time, so it was inevitable that they were going to lose some seats this time. Also the success in 2015 was borne out of two factors. Firstly labour took a very firm stance during the Indy ref of opposing independence, despite the fact that this meant pissing off 45% of the electorate and a majority of voters in several key seats in and around Glasgow. The Tories meanwhile spent the 2015 campaign going on about how Miliband would be in the pocket of those sneaky soap shy Scots. This meant that both labour and the Tories were almost wiped out in 2015.

This time around, labour took a more neutral line towards independence and the Tories focused primarily on soaking up the anti-independence vote. All the literature in my door from the tories was about how the lib dems and labour have no chance, only the true blue Tories can beat the SNP. There was even a Tory poster outside the polling station (which most surely be illegal) proclaiming that the lib dems and labour have no chance of winning here (just as well I voted SNP then, who beat the Tories!). For the record, the lib dems and labour won back several seats in Scotland.

Naturally the argument presented in the media is about how this means Indyref2 is off the cards. Well keep in mind the SNP still control 60% of Scotland’s seats and there’s a pro-independence majority in the Scottish Parliament. If the indy ref result was based on these metrics, they’d win easily. There is, as I’ve discussed before, a dilemma for the SNP. They would like to hold a 2nd referendum ASAP to try and ensure Scotland stays in the EU. On the other hand the more bad news from brexit builds, as well as the anger against the Tories in Westminster (given that independence offers the opportunity to rid Scotland forever of Tory rule) the more likely they are to win.

Weighting up the factors, I’d opt for the long game and wait. That said, I think the SNP need to put in place the necessary measures such that, if it becomes clear that the brexit negotiations are going to result in Scotland getting royally shafted (e.g. tariffs or migration restrictions that will wipe out certain key industries), then a referendum can be called and held quickly. In short there needs to be a big red button on Sturgeon’s desk and while she shouldn’t press the button, the threat that she might should be constantly hanging over the brexit negotiations.

Lessons learnt

So what lessons can we learn from this result? Well I would argue the reason why the polls were wrong this time, as with the previous election and the EU referendum is because there are a lot of angry and confused people who are trying to send a message. Its a rambling incoherent message from the sort of people who have no clue how politics works (e.g. the sort who were googling “what is brexit?” the morning after the referendum vote), but its quite clear what it is – no more austerity. The Tory policy of austerity has cast many millions in the UK into the sort of poverty we should have left in the last century. Until the Tory cuts are reversed, we’ll continue to see random and difficult to predict results like this in all future elections and referendums.

Now granted, ending austerity is easier said than done. Taxes would have to go up. Non-dom’s will have to start paying their fair share of tax. Areas spared from cuts (such as pensions or defence) might need to share the pain. While I think there might be a need to take certain privatised public services that are failing back into public ownership, wholesale re-nationalisation isn’t something the country can afford right now. And naturally a hard brexit is out of the question, given the negative impact that would have on tax receipts. There are, as the Tories say, no magic money trees, but that applies to both parties.

Given that we must now call into question the validity of the EU referendum result (i.e. a large chunk of the leave vote was just a protest vote), there is no mandate for a hard brexit. A soft brexit, with perhaps a 2nd referendum later seems a more sensible strategy. So less a divorce and more of a trial separation.

Thirdly, the UK needs to ditch its ridiculous first past the post election system. The rest of the civilised world used some form of proportional representation (or the two round voting system in France), which is a much fairer and more reliable system. Now supporters of FPTP will say, oh but PR leads to political instability and hung parliaments, while FTTP leads to more stable government….LOL! well I think we can bin that argument after last night.

I mean seriously, at the last election the Tories secured a majority with just 37% of the vote. Which when you account for turn out means they had a majority with the support of just 25% of the electorate. That’s not democracy, its a perversion of democracy. Had just 639 votes gone from the Tories to labour then we’d have gone from a Tory majority in 2015, to a hung parliament. And, as mentioned earlier, there are MP’s who lost their jobs, or came very close to losing this time by just a few hundred votes. They may well have prevailed (or lost) simply because it rained at a particular time of day. That’s how fickle the FPTP system can be. Its basically a form of high stakes lottery, an insane way to run a country and a grossly unfair system.

Send in the clowns

Are these lessons going to be learnt? Well not by the Tories! Already the word is they are going to form a coalition with the Ulster unionists. For those with bad memories, it was Tory pandering to the unionists and euroskeptic backbenchers that crippled John Major’s government and led to Tony Blair’s landslide victory in the 1997 election. To call the unionists unreliable allies is if anything an understatement.

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Theresa May is greeted by her new coalition partners

On paper they are fairly gung-ho, pro-hard brexit, send the EU and all the Poles to hell along with all the Catholics. Unfortunately, as a hard brexit will probably wipe out the Northern Irish economy and likely lead to a collapse in the peace process, a border poll and them all becoming Irish citizens, the Unionists will be prone to sudden flip flopping. We could see the scenario where the Tories are in the room negotiating with the EU, digging their heels in on a particular issue, only to be handed a mobile phone with a tweet from the DUP stating that not only do they no longer support the government on this issue, they will walk out of government unless they reverse their position.

Note that adding together the DUP and Tory seats, they have a majority of just 2 seats. So all it takes is a handful of MP’s (e.g. those who won by just a few votes in a pro-remain constituency) to either vote against the government or abstain…..and one of those is Kenneth Clarke (so on brexit its potentially a majority of one!)….and the government can be outvoted. And keep in mind that the fixed term parliament act means that in theory if the Tories form a government, which then collapses, the opposition can block an early election. Protocol would then dictate that the leader of the opposition (currently Corbyn) would then be invited by the Queen to try and form a government, presumably some sort of progressive alliance.

So returning to the question at the beginning, should the opposition parties cut Theresa May some slack? Absolutely not! Stick it to em! The Tories have selfishly prioritised their own needs above that of the country for too long, they will continue to do so, even if it means driving the country over a cliff edge. So the opposition should try to block them at every turn, using every trick available to them and basically paralyse the government in the hope of forcing them out. Then a progressive alliance can take over. And while I’m not a huge fan of Corbyn, he’s certainly a better pick for the job. Theresa May has demonstrated over the last two months why she is wholly unqualified for the job of PM. The Downing street cat could do a better job than her!

Rolling back the years

I have to finish by contrasting with the political situation in Ireland. We’ve just elected our first openly gay Prime minster, who also just happens to be the son of an immigrant (I suspect the Daily Mail readers all fainted when they heard that one). Keep in mind that it was illegal to even be gay in Ireland right up until the 1990’s (yes really!).

So Ireland has progressed a lot over the last few decades, in part I might add because we have this thing called “a constitution” (UK readers might need to google that one) and a PR based voting system. There should have been an election by now in Ireland, as there’s a minority government and both the main parties are keen to sort it out with an electoral show down. But it was decided, for now, that any election should be delayed until some progress is made with the brexit process. While Irish politicians aren’t great (a shower of gombeens, feckin edjits and cute hoor’s as me grandpa used to say), they are a heck of a lot more mature and professional than any UK politician. And again, that’s probably down to our political system and its checks and balances.

So while in an Irish election you face the choice about whether you want shower of gombeen’s or mob of cute hoor’s to take us into the 21st century, in the UK election the choice is between a labour party who wants to take the country back to the 1970’s and a Tory party who want to go back to the 1900’s. That’s how far the UK has slipped in the last few years. The UK is about as strong and stable right now as a one legged stool and its on the verge of becoming a basket case, a failed state.

The libertarian slavery paradox

Nolan_chart

The Political compass as libertarians see it

I happened to be watching the remake of the TV series Roots recently (based on the Alex Haley novel) and it did occur to me how it creates a bit of a troubling problem for libertarians. They like to see themselves as the ultimate liberals at the opposite end of the political compass to nazi’s and authoritarians. However I would argue that logic would dictate that any libertarian society would inevitably eventually become a slave owning society.

Think about it, in a libertarian society if someone owes you money or compensation for something, how do you get them to pay? Let’s suppose someone did a shoddy job tiling your roof, or he ran over your 6 year old kid and she’s now paralysed for life and needs expensive treatment, or someone simply defaults on their loans to a bank without paying (which is bad news for savers, recall there will be no federal insurance on banks under libertarianism, if enough borrowers default the bank goes under). Without a government, in a libertarian society with lax law enforcement and little to no regulations means that courts will be toothless. And without some sort of authority to enforce the law people, in particular the wealthy with their vast fortunes and private armies, can simply ignore the law. And those at the very bottom, can simply shrug their shoulders and say, well I’m broke, I’ve got nothing to pay with, I own no property, so your screwed, now if you’ll excuse me I’m going to go get drunk, then drive to the park and fire my gun at squirrels near where your children play.

And the thing is that this wouldn’t only be allowed in a libertarian society, it would be considered a perfectly moral act. Libertarians often claim to follow the philosophy of Objectivism, which basically amounts to saying that its okay to be a selfish jerk and that being a kind and caring person who gives the slightest thought for others is morally wrong. In such a society, it would be considered okay to default on debts and basically screw everyone else over. This will be normal. But if everyone did that, society would quickly fall apart. Banks won’t lend money to anybody, even those with good credit. Doctors would refuse treatment without payment up front (and patients with any sense would refuse to pay until the treatment was completed). Without some sort of a system (let’s call it “a government”) to make sure people honour their obligations, the whole economy would unravel.

Now libertarians would say, oh but we’ll just have this code of honour whereby if anyone does something bad we’ll give them a terrible review on Facebook or something. Ya, and is that actually going to help? Donald Trump went bankrupt four times, you’d think after the 2nd time people would have learnt the lesson not to lend him money. You’d think nobody, least of all libertarians would have voted for him, but here we are. There are a host of well known scams around, many of them simply modern takes on old con tricks, yet thousands still fall for them every day.

They have this TV programme on UK TV called “Rogue Traders” where they set up a sting operation and catch various con-artists, dodgy used car salesmen, telemarketing fraudsters, cowboy builders and rogue tradesmen and then essentially name and shame them. Thing is, very few end up out of business. Some of them keep appearing in multiple episodes, sometimes under a new name or sometimes openly trading under the same name (one even put “as seen on rogue traders” on the side of his van!). Generally what’s stopped these people becoming season regulars is that the authorities eventually caught up with them and put them out of business.

But in a libertarian society there’s no authority and no social safety net. So how do you enforce any sort of law or civil suit? My guess is that what will happen is when the repo men arrive to cart away someone’s stuff, if they don’t find enough stuff to pay the debt, they’ll take away the debtor and his family and force them to work off the debt. This is pretty much how slavery worked in a number of society’s throughout history and how the practice of bonded labour works to this day.

Now libertarians will no doubt say, no we’ll outlaw slavery. But its going to be impossible to enforce that when the rich and the powerful have their own private goon squad. And unfortunately even in this day and age there’s several parts of the world where bonded labour is still practised, despite laws outlawing the practice. And it tends to occur in places where the government’s authority is weak or corrupt. For example in Somalia and Libya, countries with little in the way of government and lots of guns (as close to a libertarian society as you’ll find!) there are active slave markets.

And there’s the second problem for libertarians, democracy would collapse pretty quickly in a libertarian society. Taking objectivism to its logical conclusion, the easiest way to win an election is to bribe election officials and intimidate voters. e.g. the wealthy landowner threatens mass evictions, the billionaire says his goons will go on the rampage if they don’t win the election. This is how African dictators can win elections with margins of +90%. And even if the wealthy lose the election, they can simply ignore anything the government does that they don’t like, as they are essentially untouchable in a libertarian society.

In a society whereby the wealthy can grow their fortunes unchecked and utilise the power it gives them without any checks or balances, then it becomes essentially impossible to have a democratic and free society. Take for example Rockfeller or the other billionaire’s of the “robber baron” era. With no government to break up his monopoly (and an Objectivist philosophy that basically said it would be morally wrong for him to give anything away to charity) his fortune would have grown even larger, his descendants would now not only control 90% of the US oil supply, but probably 90% of the US energy supply as well as many public utilities (e.g. internet access, water, hospitals, police, fire services, etc.). At this point, they become the defacto ruling royal family of the US, emperors in all but name, with the role of US president essentially becoming “ass kisser in chief” (you can just see the debate with Hilary and Trump demonstrating their butt kissing techniques).

Now libertarians will say, oh that would never happen, we’d just boycott the business of those we don’t like (in which case you need to go look up the meaning of the word “monopoly” cos that’s sort of the problem, you can’t boycott a monopoly!). Or they’ll argue that sooner or later another billionaire will build up an even vaster fortune and take over. Oh great, so because one rich asshole is better at screwing us over than some other rich asshole, he gets to be emperor instead. Ya, that sound way better than our current system of government!

The sad fact is that libertarianism only works if you ignore the last thousand years of history. A libertarian society would quickly become a feudal society, where the rich will grow vast fortunes unchecked and abuse their power without limit. Where the poor, if they are unable to pay the vastly overinflated prices the rich with their monopolies charge, will be at risk of being sold into slavery. Where speaking out will be impossible, as the press and internet are controlled by the rich. And those who do a Robin hood and fight back will be derided as socialists and terrorists.

In truth, if there’s anything that libertarianism is at the oppose end of the political spectrum to it is democracy and free markets.