Poverty p0rn

Stumbling and Mumbling is a brilliant blog I rarely read without coming away thinking about stuff. I was less sure about this bit though:


"(P)icture the 1930s depression. If you're like me, your visual images come from Steinbeck and Orwell, and the aural ones from Woody Guthrie and the Carter Family. Picture the 1980s recession, and we (I?) recall the Specials, Brookside and Boys from the Blackstuff. Now picture the recent Great Recession. What do you see? What do you hear? Nothing. Culturally, the recent recession didn't happen."

The images cited illustrate how history acts as a filter. Give or take "Broocckie", as time passes the mediocre and the average tend to be forgotten as those who write the past unavoidably impose their own current perspective and standards. But, that's by the by because the emergence of poverty porn (Benefits Street, the Scheme etc.,)  has already given us images of the recent recession, just ones characterised more by their gawping vindictiveness than the powerful notions of empathy we - like to think we can - see in the past.

That bastard verdict

Cycling to work yesterday the air actually felt tangible. I knew the result, had done for hours, and clearly everyone else did as well. This shared knowledge of what wasn’t going to happen had somehow generated a quiet and reflective calm, an atmosphere only broken by the rush hour traffic at the very centre of the city.

Before then, therre was time on my commute to reflect upon what it now means to be Scottish now that Scotland has chosen to be fear-mongered into mediocrity. Except, I realised I don’t actually know what being Scottish is anymore, what had been a national identity I’d worn with pride now felt dirty and tainted. 

So if I’m not Scottish, it seems I’m obliged to be resolutely British; no great national adventure for me, rather it’s the Royal family, penalising the poor, the sick and the disabled and endlessly worrying about immigration, the EU and house prices. Rule-fucking-Brittania.

Scottish Independence - and class (and hierarchy)

Like you, lots of the chat at my work these days is about independence. What's noticeable about this is the little divides that have emerged; as you ascend the corporate hierarchy in terms of who is saying what and how senior they are you notice how the younger and/or more junior the folks are the more likely they are to be pro-independence ("Yessers" even).

This stands to reason. A Yes vote is about dramatically changing the status quo, upsetting apple carts left right and centre (and is all the better for that fact). By contrast the more senior people actually quite like the status quo. Where I am the status quo is what pays for the company car (a 5 series BMW being the one to get at the mo, Audi's being so terribly passe), the 2 weeks with the family in Florida and yet another giant telly.

All these terribly, terribly competent folks basically want the referendum to go away because, well just because really, They've invested their skills, their values, their sense of self and a whole lot of free over time in things continuing exactly as they are. And - goddammit - they've done rather well as a result.

To which I say fuck them, fuck them hard into a cocked hat because a lot of the terribly, terribly, sensible and competent people currently saying no to Scottish independence where the same ones, certainly where I've worked, who said yes please to the fuck nuggets who did their best to blow up the UK economy in the credit crunch.

All these folks, (especially the ones that end words with the "bzzzsshzzz" Jack Docherty used to take the piss out of in Absolutely)  have no credibility let alone any great insight, what they do have is a big mortgage, school fees and a lifestyle they believe they deserve regardless of what such mealy mouthed, fiver grasping shite means for everyone else. Fuck 'em.

Scottish Independence - Banks moving to London is more silver lining than cloud

The chat about all the banks moving to London if Scotland says YES is incredible if by incredible you mean an obviously orchestrated political stitch up reliant on folks not knowing the real deal.

The first thing is to be clear what we're actually talking about here which is this - NO it is not a change in where any bank is headquartered, rather it's a change in where a company is registered. That's it, nothing more.

Fer instance, RBS can de-register from Edinburgh, re-register in London and ....... KABLAM, it's still run out of Fred's folly right beside Edinburgh airport (similarly all those investment companies registered in the Cayman Islands are actually run out of London, TopShop from Monaco etc.,).

And this is a good thing; right now banks are getting super aggressive about cost cutting, like well beyond the point of reason in an oh feck, my laptop isn't working and I can't do my actual job, kind of way. So when you take into account the fact that the cost of being based if not registered in Scotland (cheap labour, cheap offices) vs London you know any bank saying it's moving all it's head office staff darn Sarth would get shot down by its shareholders pronto.

And aside from the bank relocation chat basically being about a legal shoogle, there's also the big benefits to consider. Like here's Paul Krugman getting it surprisingly wrong about the status of Scottish banking if the vote is YES:

"We are told, for example, that Scotland need not worry because its fiscal position is relatively strong. But that was true — or appeared to be true — of Spain and Ireland before the euro crisis. What we’ve learned, alas, is that a seemingly strong fiscal position can evaporate very fast in a crisis — especially if banks need to be bailed out. In that context, it’s interesting to note that Scotland’s banks are very big relative to the size of the country, because they serve much of the UK. Nothing wrong with that as long as you have a political union; but without, what’s to prevent an Irish-type situation in which a small country is trying to bail out big banks? "

What's to stop it? They're all registered in London of course meaning a fiscal union would work hunky dory (or at least be less of an issue than it might otherwise be exactly because of the orchestrated banks moving all their brass plaques darn Sarth simultaneously chat) because the threat of a too big to fail bank failing would be England's problem not Scotland's.

But, setting aside the ignorance and the bollocks an awfy interesting person made some lovely points to me today; the referendum has got all of Scotland interested in its politics and the vote will see voting actually matter for a change.

That aside, the UK is run by and for London and the South East of England, an independent Scotland wouldn't be. How to vote on Thursday really isn't rocket science

Vapid Pt II *

So that's 13 or 14 weeks now of vaping instead of smoking. Nice. And during that time the World Health Organisation has come out with some vacuous shit about the "perils" of e-cigarettes subsequently kicked in the chops by an actual study issued by University College London. But, that's by the by because reflecting on my own experience as an actual and current non-smoker its the whole re-normalization of smoking tosh the Welsh BMI is trotting out to justify banning smoking in public places that gets me.

By this they appear to mean e-cigarettes act as a gateway to the real thing, an argument we already know, love and laugh at in relation to hash and heroin. I say laugh because only a non-smoker could take such bollocks seriously. Here's why:

Its a joke because smoking is disgusting, like really disgusting. When you start smoking you have to persevere and I do mean persevere; to begin with you turn green, you go light headed, it burns your throat, you cough, you gag, it stinks, jezuz christ it's expensive, it stinks, you feel sick, it really stinks, you cough some more.

Time passes, days become weeks become months until eventually you can take a proper draw of a fag, a French inhale even, without retching. Finally, you think you look THAT cool and can smoke without retching (my "thang" was to play guitar with a fag hanging out the side of my mouth).

E-cigarettes avoid all that bollocks; for over 3 months now I've been getting my nicotine fix without smelling, retching, gagging, coughing, turning green or setting tenners on fire every day. In fact I only actually associate with smokers because the dumb fuck anti-smoking lobby has forced me to hang out with them down at smokers' corner!

And in our no pain all gain consumer society it's difficult to see why anyone other than the dumbest of fucks would swap a relatively painless and cheap electronic simulation for the real deal. And anyway, anyone that dumb is going to do dumb shit regardless.

As for the WHO shite about how the efficacy of e-cigs hasn't been proven, well I don't actually know anyone whose tried a proper e-cig alternative and then reverted to the real thing meaning they really do work, and that's despite the anti-smoking lobby's best efforts.


* Yes electronic hookahs do look like a sonic screwdriver, which is kinda cool / appealing to kids. But no one in the anti-smoking lobby has made that argument yet, so feck 'em.


Jan 15  - a 6 month's not a single fag PS; so that's my dentist now explained to me all teh mouth medical benefits of using an e-cigarette instead of the real deal. And I still have to go outside for a puff (actually I don;t, they are pretty much odourless so I can sneak a sly puff in an empty office at work

Vapid

Smoking is fabulous. The first fag of the day takes you gently by the hand , then leads you through to the kitchen for coffee while the delicious digestif of a post-meal puff blesses you with even more tastes to savour. So yeah, I like smoking, preferably 15g of rolling tobacco a day. But, its as mad unhealthy as it is expensive so I’m now into my 5th week of complete no-smoking thanks to an e-cigarette, vapouriser, electronic shisha thing (and 24 mg bottles of  nicotine oil) making me – for the time being – one of those are “60 percent more likely to report success if they switch to e-cigarettes than if they use nicotine products like patches or gum, or just willpower”  just identified by University College London. The fact e-fags appear to work is why the anti-e-fag stance confuses the hell out of me.  

What makes them work so well is that besides nicotine, they give you the hot sensation at the back of your throat and something to inhale/exhale. But, because its steam not smoke, they’re a lot less unhealthy (one doctor recently said on a Radio 4 Analysis programme that if cigarettes are 100 on a scale of 1 to 100, e-cigarettes are 10) both to the “smoker” and all those around them.

So if there’s no passive smoking, health and safety being the rationale for the smoking ban, why can’t e-fags be used inside? The main arguments appear to be that their health effects aren’t fully understood (so better safe than sorry) and that they “re-normalise” smoking. 

Re: Better safe than sorry, well this can go fly because e-cigarettes are a damn site less bad than the real thing and in our “nudge” society that counts for a lot. As for the second, well this just confuses me. The picture above makes clear how in the US they’re desperately trying to make e-cigarettes cool (it also makes clear any US attitudinal based research isn’t especially applicable to Britain!) so here’s what you do instead – ban all advertising and product placement. There, sorted. As for the issue of kids taking up e-fags cos they're cool, possibly, except, as with alcohol and real fags, this is a retail issue and needs some perspective, which is e-fags are nowhere near as bad as the real thing

In the meantime, the British bans on “smoking” e-cigarettes inside are actively “de-normalising” e-fags. By this I mean, smoking is a habit and a cluster of physical addictions, which for me meant stepping outside to smoke. I (currently) don’t smoke, but still have to head to smokers' corner for a puff because the bans taken away the habitual and cultural differences between puffing on a real and on an e-fag. And by keeping the same habits in place the bans make it easier to fall back onto the real thing again; right now much of the anti-smoking lobby appears opposed to the best aid to giving up smoking ever invented!

In the meantime I think there's another reason for the bans; e-fags have completely bypassed the existing anti-smoking industry, rendering much of it a government grant funded irrelevance, which they don’t appear to like one little bit i.e. reading an Ash Scotland note on e-cigarettes, every benefit is acknowledged only to be immediately caveated and the threat of Big Tobacco flagged up as a not necessarily relevant bogeyman given the Chinese made e-fags and small scale British oil manufacturers and retailers that have sprung up, (there again Ash does appear to be trying to wangle a new e-fag funding stream as I type this).


(revised/tweaked  July 30th)

Scottish independence is bad for your health?

Usually it’s the trailer that turns out to be better than the film, this time it was an advert, the it being the Vote NO NHS one that’s subsequently been pulled.

Like other pro-independence supporters I think the ad reached a new low just not because the usual pro-Union fixation on scare-mongering was so distasteful. Rather, the argument presented was even more insulting  because it was so dumb. From what I recall it was along the lines of an independent Scotland would no longer have the same access to English based centres of medical excellence it currently enjoys.

Fair enough I guess, except this, to my mind, is to assume (a) there aren’t any centres of excellence based in Scotland that could be used as the basis for future negotiations, you know, like reasonable people because the No stance seems to be THERE WILL BE NO DISCUSSIONS OR NEGOTIATIONS IN THE EVENT OF A YES VOTE WHATSOEVER, NONE!

Alternatively, it’s (b) there really aren’t any centres of excellence in Scotland indicating UK level spending is skewed towards England (and Wales & N. Ireland) and that in the event of Scotland becoming independent, there would be some assets that Scotland should receive its fair share of and/or alternatively save money (to spend here) by not contributing to in future. Maybe we’ll never know given Ormond Street hospital told the no-vote lot they were talking utter shite.

Actually, the Vote No advert did present an implicit argument against independence – who’d want to be stuck in the same country as a bunch of wallopers that dumb (BTW the film was the new X Men one. Pfffffffttt)

A quick aside I was given some verbatim quotes today from two terribly, senior, London bankers talking about independence. For one, Scotland just doesn’t matter as a market whereas the other opined not even the Scots would be “bloody stupid” enough to vote for independence. And people wonder why we should vote yes?

Frosty Jack

Some bloke in North Lanarkshire doing a Limmy tribute - "aaaaahahahahahaaaaaa, ah want ma mammy!!!!!"

Same, but (very) different

Young, politicised men left Britain in their hundreds to fight in a brutal war overseas. Driven by ideology they were willing to make the ultimate sacrifice. Eschewing notions of nationalism, they threw themselves into the massed ranks of an avowedly international militia formed to fight an undemocratic, brutally oppressive regime. As is the way, foreign powers played a part, providing the volunteers with finance and munitions, all the while using the war to test tactics to eventually deploy on the bigger stage of their own ideologically defined grand, foreign-policy, designs. Clearly perspective matters, but when generalising, the parallels between Syria and the International Brigades of the Spanish civil war appear striking to me. Anyhoo.

New study proves Scottish independence would cost billions (and billions and billions)

Another day, another BBC anti-independence headline, this time its "Scottish independence: Cost of new bodies 'could be £1.5bn'"

Reading further we discover "The cost of setting up all the bodies needed in an independent Scotland could be £1.5bn, the UK Treasury has claimed. It based the figure on research into the costs of setting up an independent state in Quebec, which have been estimated at 1% of GDP"

One wee thing, aside from all the state institutions Scotland already has, struck me reading this, Quebec i.e. French Canada, speaks French, the rest of North America? Less so. So the comparison doesn't appear especially valid (give or take the likelihood of additional subsidies for cheucters) given language imposes additional costs on a state, like translators, documentation and what no. Then there are the savings to be made from no longer paying for London based civil servants (and the associated debate over what Scotland's share of those assets should be). Hey ho.

Sharklays have broken the rules again: Part 287

Surprise, surprise, Barclays has been caught out cheating yet another price index. This time it’s the price of gold and a deal did wherein it agreed to pay out $3.9 million if the price was X, then the guy running the trading desk gamed the system so the actual price turned out to be Y. Nice. That the actual deal was done the day after Barclays was fined £290m for libor fixing in 2012 just adds to it all along with the Barclays CEO’s recent comments about how you need to pay top dollar to get the best staff cos the best staff make so much money.

Picking thru the Financial Conduct Authority’s official announcement about all this, I read how one of the reasons they fined Barclays was because from 2004. when it joined the group of banks involved in this specific market, it had been: “unable to adequately monitor what trades its traders were executing in the Gold Fixing or whether those traders may have been placing orders to affect inappropriately the price of gold in the Gold Fixing … until 21 March 2013”

Plus, the incident they got fined for only appears to have come to light because the customer complained prompting the question how many others got ripped off like this over the 9 year period it was (a) possible and (b) actively encouraged via bonuses?

The 96 grand fine levied on the guy who did it in the first place prompts additional questions like; is that it? When do the fraud charges start? Why so small a fine given how much he received in pay and bonuses as the director of a trading desk because you know, you need to pay top dollar to get super star traders to work for you?

Then there’s the bigger picture and how when the libor scandal first broke some fools claimed there was nothing to see here and that we should all just move along because it was no more than one or two rotten apples. This argument was utter pants then and even more pants now that yet another investment banking activity has been shown up to have been open to systematic abuse for years and to have actually been abused in practice.

Next time someone speaks out in favour of big banker bonuses, the question they need to answer is how do they know these are rewarding expertise rather than criminality because what the latest Sharklays example makes clear is that the banks themselves can’t actually tell the difference (hence the FCA fine!).  In the meantime, where we to err on the side of caution, it increasingly looks like a reasonable chunk of big investment banker bonuses could be more accurately described as the proceeds of out and out crime!

Social mobility chat

Public chat about social inequality and social mobility is typically bollocks, 2 reasons being  ignorance about what happened in the past and a failure to acknowledge how classes actively strive to reproduce themselves as best they can.

Starting with the past, if I remember my (very simplistic) reading of John Goldthorpe correctly, essentially post war Britain saw the number of middle class jobs grow faster than the middle class could breed to fill them; lo and behold - more working class people got middle class jobs. Now? Less so, especially now that so many middle class women have actual careers.

Then there’s class reproduction, which for someone like me is about giving my child every practical advantage I can. This includes stuff like having the cash to move into the catchment area of a good school, paying for additional tutoring, a private education etc. Then there’s the practical stuff like what to wear for a job interview, how to write a CV or what careers to consider (and which uncle or aunt to talk to about them beforehand) etc., However, its the "soft" cultural stuff I remember most from my childhood, like exposure to ways of discussing and arguing and, the most powerful for me,  the basic assumptions and expectations about what I would go on to do with my life and where.

Oh and one final thing, the chat politicians come out with about training and skills and what no ignore the reality which is that there will always be low skill, low wage work. Plus, the training and skills chat buys into the high skills get high pay rhetoric used to justify inequality.

What I take from all of the above is simple. The first is you can’t change the structure of occupations overnight. The second is that greater social mobility would entail taking on middle and upper class parents who are all in favour of mobility when it involves their kids getting on, but less so when its a threat from "below". So debate all you want about education and what no, but in the meantime just introduce a living wage fer chrissakes.

Slaughtering the capitalists

Reading Allister Heath on Thomas Piketty was interesting, especially the last bit where he says  “supporters of capitalism need to get their act together. They are being slaughtered on the intellectual battlefield by opponents who are finding sexy new justifications for their old arguments. We need more and better defences of the free enterprise system, and we need them now.”

Poor Mr Heath. The problem he and every other supporter of capitalism in the liberalising, free-markets for everything mould face is their refusal to accept there is a ruling class and that what a ruling class does, wherever possible, is structure a society to suit itself so as to get and keep a disproportionate share of wealth and power (see fer instance the Chinese Communist party, Putin and the Oligarchs and those lovely people who sit on the boards of investment banks in Britain).

So while Heath and Piketty are essentially both challenging the same ruling class privileges (from differing positions), Heath's worldview leads him to try and defend the rich - rather than the ruling class - by justifying inequality as being for the good of us all (wealth creation, rewards for risk takers, ya de ya de ya da), whereas Piketty’s supporters are free to challenge the monolith, by tearing down some of the shibboleths.

Theory aside, facts are the other reason supporters of capitalism are getting slaughtered right now. We now know superstar investment banker bonuses frequently resulted from breaking regulations governing money laundering and every kind of price index imaginable, that our banks privtised gains and socialised/nationalised losses, that outsourcing can lead to fraud, that the Post Office privitisation fiasco benefited a mate of George Osborne, that much of what goes on in finance is simply tax efficient financial engineering not wealth creation, that celebrities and multinationals led by multimillion pound CEOs dodge taxes with impunity and so on and so forth at the same time as FTSE executive pay continues to grow faster than the economy i.e. the rich and powerful keep taking a bigger slice of the cake in exchange for less and less.

To Heath calling this out is “envy”. Except,  its not, its simply pointing out how the British ruling class actually behaves in all its smug, arrogant, fiver-grasping, self-serving, greedy, cheating, fraudulent and - most importantly of all - profoundly incompetent glory. And the reason I reckon Picketty’s book is finding such a wide audience is because in these austere times, with mainstream political debate barely acknowledging the way things are in any meaningful ways, ordinary people have fewer things distracting them from the pro-ruling class shite people like Heath are paid to rain down upon their heads.

P.S. Here's a few practical proposals even Mr Heath might agree with

1) The investment banks that advised on the Post Office sell off don't get any more government or government related work until they compensate the taxpayer.

2) The investment bankers getting done for the libor fiddling etc., - any found guilty also get done under the proceeds of crime laws i.e. their bonuses get taken off them along with their salaries and other assets.

3) private equity and multinationals start getting taxed fairly

4) executive pay is disengaged from company size, benchmarking takes European companies into account (in this global war for talent), total compensation is made a multiple of average company pay and golden parachutes are unpacked/got rid of.

5) Rather than tax amnesties i.e. discounts, for coughing up what's owed, the threat is prison and being barred from any roles with any meaningful responsibilities

Bullshittery

Barclays are truly the obfuscating spin-meisters. My personal fav remains the time they announced 2,100 redundancies in one area one day and 2,100 elsewhere shortly afterwards, the point being to generate headlines about 2,100 rather than 4,200 job cuts. And so it was today when you google the latest Barclays job announcement you get the BBC quoting 14,000 (later revised to 19,000), the Telegraph at 7,000 and the Guardian at 19,000. Job done. Then you had the BBC interview with the Barclays CEO himself where he said they’d no “set targets for branch closures”, which is most likely true to an extent i.e. they’re probably still debating how many to close, but you can bet – given the actual strategy document says “We believe that cost is the strategic battleground for our industry” - that plenty will be closing.

Aside from this being another example of supreme corporate bullshittery/media ineptitude, its interesting how little it appears to matter. The Barclays strategy of closing/selling/running down its European retail bank operations is not a good thing for the UK’s balance of trade. The actual job losses are pretty huge and follow on from the tens of thousands of job losses already seen across banking as a whole, the vast majority of which have not involved casino bankers on 7 figure bonuses. But hey ho, it’s a measure of how loathed banking is that this other kind of stuff just doesn’t seem to matter – a CEO gets multi million pound bonuses and pay offs for signing off on and leading a disasterous strategy? Well lets make 10,000 branch tellers redundant then, that’ll teach ‘em.

 

Them an'all

I’m always suspicious of middle aged men with stoopid facial hair, but Steve Pottinger’s letter to Café Nero about it not paying taxes is fun. Predictably, because of the Starbucks debacle, this got picked up by various media outlets none of which appear to have picked up on the bigger picture; Café Nero avoids paying taxes because it has a lot of debt and the interest it pays on this is tax deductible.

This is integral to the private equity business model – what Café Nero does (or doesn’t when it comes to paying taxes), pretty much every other private equity owned company does as well, meaning shops like Poundland, McColls and Pets At Home. You could also add Boots (from memory) to the list and utterly ghastly bastards like Wonga.

The tax treatment of private equity is a big deal I reckon, but then so is the tax treatment of transfer payment malingering multinationals, but hey ho, we’re all in this together, green shoots of recovery, galloping social and economic inequality and all that.

Labour's case for the union (is pretty sucky)

Woo hoo, I just got Labour’s case for the union posted thru my door. They say “We believe in an idea bigger than independence. That is the pooling and sharing of resources across the UK for the benefit of everyone in the UK” – ideas are lovely, but the reality is we have and will continue to have, without independence, a UK run disproportionatly in favour of London and South East England.

“What Scotland in the UK means for you”(you? me presumably)

“A stronger Scottish parliament with new powers over tax and welfare” – whit? Give more powers to the same shower of shite already esconsecd at Holyrood? No ta, I’d rather the structure of the Scottish polity was transformed thank you very much.

“Scottish pensions supported by tax paid by workers from across the UK” – but as net contributors to the UK exchequer we’re paying English pensions at the mo.

“ An increased minimum wage paid across the UK, not a race to the bottom on worker’s rights and pay” – Nice, but completely besides the point given the policies being discussed to make Scotland more business friendly are more to do with corporation tax than labour law.

“Scottish defence jobs supported by contracts from the UK government” – by contrast an independent Scotland could get an immediate peace dividend by right sizing its military spending into line with its actual economy. So with no change in total spending or taxes, public spending could be used to constructively create jobs by building say social housing instead of bombs.

“Our NHS, where you are treated on the basis of need not which part of the UK you come from” – Nice, but again completely beside the point given we already have NHS Scotland, which already runs according to different principles. If the argument being made here is that the NHS would be disbanded post-independence, then that’s hella dumb even by Johann Lamont standards.

“Lower mortgage and borrowing costs – we use one of the most secure and trusted currencies in the world and have the financial back-up of being part of the UK” – the currency is up for debate (though see this lovely article about it) and I’ve no idea where the lower mortgage costs spiel comes from given how closely linked the economies would be post-independence e.g. I’ll just pop to Carlisle for my mortgage thank you very much.

“Best for business – with a home market of 60 million people Scottish businesses trade twice as much with the UK than the rest of the world combined” – so we do, and? Or is the argument being made here the Rest of the UK would lock Scotland out? I don’t think so and that's not even taking EU membership into account.

So yeah, utter, utter pants based largely on bollocks scare mongering, petulance, made up tosh and the false notion that staying in the union means we’ll get to continue cadging off the Rest of the UK. Can I have some Scottish independence please!

Full employment vs the cost of living

As the credit crunch started to crunch, one big consolation (for those in debt to mainstream lenders only), was the decision to pull bank rate down to what, after inflation, was and have remained negative levels. For the indebted this was and remains a clear financial boon given pay growth also fell to and remains at negligible levels; I know I’ve personally saved more on my mortgage than I’ve got in pay rises these past few years. Recent chat about the squeeze in take home pay easing tends to ignore this other side of the coin (or any other side for that matter).

Except, the supposed “easing” of recent months is due to inflation slowing down (CPI was 1.7% in Feb 2014 compared to 2.8% the year before) not pay growth picking up (average weekly total pay grew 1.4% in Jan 2014 compared to 1.3% a year earlier). So the “easing” being referred to is no more than the rate of real terms decline slowing for the time being. Whoop-de-do.

That aside, low interest rates are one obvious indicator of limited demand in the economy (see chat on weak pay growth above) and yet there are still fools continuing to argue for rates to rise sooner rather than later; the why not being especially clear given rates are set in relation to a 2% CPI inflation target. Be that as it may, interest rates do appear set to rise in due course even if the why is currently beyond me given things like the historic Japanese example, the Eurozone currently appearing to be heading towards deflation, the scope for China – and associated inflation boosting global demand for stuff – to go phut, etc., but hey ho.

And rising interest rates, via higher mortgage costs, would of course adversely affect the finances of those in debt. So lots of folks are set for a lovely situation wherein pay might start incrementally rising in real terms (as unemployment continues to fall), but not by anything even remotely enough to make up for the lost real earnings of the last however many years. Moreover, even if pay growth does pick up, rising interest rates will cancel out any real terms pay gains.

Here are some illustrative numbers as to why – average pay in Britain is currently £26,500 and the average mortgage is £96,000 – so if interest rates go up  just 1% as many are forecasting they will have by 2016 (with another 0.75% on top during 2017), pay will need to go up 3.6% to make up for the £960 p.a. increase in mortgage costs. And then there’s inflation on top of that (as well as any other debts people have – though better savings rates will presumably temper this give or take no many people under 65 have anywhere near as much in savings as they do debt).

So if you were an average punter wanting to know when you’ll finally start feeling a bit less squeezed the answer is roughly sometime during/mebbe after 2017/18 if you’re fortunate enough to start getting and can sustain 4-6% per annum pay rises from now until then.

I reckon this is the context for the ConDem’s fullemployment chat. Like you say “My pay’s worth less than it was” they say “yes, but we have the highest employment rate in the Western world”, you say “that’s lovely, but I earn less now than I did 5,6, 7, 8 years ago and have to work harder to get it”, they say “Yes, but we have the highest employment rate* in the Western world (repeat ad infinitum)”.

* Goodhart’s law could well apply here in spades and even if it doesn’t its worth remembering Osborne used to use Britain’s AAA credit rating as a benchmark for his “success” up until the downgrades kicked in.

You can always get what you want

Yeah, economics, banking sector shenannigans, go figure - but bloody hell, lets deal with some reality here for a mo  which is this - Bobby Gillespie can't sing for toffee, has an immense Rolling Stone's fetish going on and yet Primal Scream have had a longer run of half decent to very good to excellent albums than the Rolling Stones ever managed. Just saying *.

* No seriously, even if you're being generous and include Goats Head Soup, that's like 1964 to 1973 i.e. 10 years tops whereas with Primal Scream you're talking 1991 for Screamadelica,  then 2013 for More Light i.e. decades more than the Rolling Stones. And yet  the fecker really can't sing for toffee????!!!!!!!!!

Trendspotting

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= Trendy boy

The thing that's interesting about the latest male look is the extent to which its composed of uber-masculine cliches; in a post-industrial society dominated by service jobs that have male strength is an irrelevance, to be trendy and attractive is to reassert the "butch".

As with any fashion, as it percolates down from the hip to the office worker to the point where you're almost disappointed the blerk serving you premium priced American craft lagers doesn't have a hairy face, it's well on its way to becoming a cliche, I mean heck if I'm aware of it, it already is.

What's different here though is how it's ready made for social media. Haircut'n'product aside, tattoos'n'beards offer fantastic scope to render being trendy a personal achievement with Facebook, instagram, tumblr etc., stages on which to present each new tattoo endured and every inch of facial hair grown as somehow meaningful accomplishments; this is more than just looking the part on a Saturday night, this is trendy being presented as an ongoing commitment.

What's also noticeable is how it rejects notions of the clean cut; in an era of mass graduation and declining social mobility and job prospects, it constitutes a cult of the self and the self-absorbed to be sure, but also a middle finger towards traditional lower middle class/respectable working class notions of how being suited, booted and clean shaven is the way to get on. Is this fashion as critique? Yes, but only in a wholly apathetic sense that says more about gender insecurity and dumb notions of gender. Rather, as with the "shopping riots", it's another example of how the mass response to the damage inflicted on us all by an increasingly abusive rentier class is to focus purely on the self and self-gratification.

News meh

The news is reported via tropes; predictable assemblages of assumptions, notions, images and characters that define what the subject is, what related events mean and what is (and isn’t) judged meaningful - i.e. newsworthy – and relevant.

Here’s an example; “casino banking” - cue video of a big office filled with 20 to 40 something men sat in front of multiple computer screens staring at numbers, cut to canary wharf office blocks, some reportage about bonuses complete with masterbatory images of luxery goods finished with some chat about risk peppered with acronyms you don’t understand.

Or try “car manufacturing” – cut to the junior minister for widget exports being very serious about something whilst stood on a pavement outside an office. Now change to a photo of a production line on the left hand side with some animated graphs swiggling on the right before introducing some vox pop interviews with ordinary blerks walking out of a factory. Is the news good or bad? Who knows because what’s next is a business correspondent stuck in front of a graph to say something terribly portentous in a serious voice.

What’s fascinating isn’t the extent to which the above bunch of bollocks is still so resolutely in place despite the internet (and The Day Today), rather it’s the extent to which all those producing it seem unaware as to why.

The usual starting point here is another trope, this one being “why are newspapers still so influential despite the downturn in their circulation and the rise of alternative media?”. Except this time, no, this isn’t a cue for yet another predictable discussion, the reason being the mainstream media can best be characterised as an aggressive daisy chain that periodically stops for a circle jerk before reverting to type. Here’s why.

Newspaper and TV journalists move between the two media on a regular basis. Newspaper and TV journalists pay attention to the media they currently and used to work in. Newspaper and TV journalists accord some value to what they do.

Politicians (which can include newspaper and TV journalists) read the papers and watch the telly. These are things they know and understand. These are also the things newspaper and TV journalists know. D’ya see the origins of my daisy chain and circle jerk references now? Good.

This is a bad thing; there is an effectively institutionalized means of transmitting the prejudices – or tropes - of one group to the other and in the process excluding outsiders however significant what they’re saying might actually be – like, are you a TV journalist? No, Newspaper? No. Politician? No. Then fuck off.

Or to give a practical example, Allister Heath is a right wing fool *, but he’s also a newspaper editor; cue the BBC  regularly getting him on the telly for late night adult debates and actually describing him as a serious thinker. By contrast, yer man Simon Wren-Lewis (better described as Britain’s terribly, terribly polite and Oxbridge Paul Krugman) simply blogs. Simon ain’t on the BBC much, which is a pity cos he’s a damn sight more credible than Allister the fool.

We lose out because of this media daisy chain (which is essentially immune to circulation numbers i.e. that’s not the fricking issue). We lose out because people who know what they are talking about are ignored in favour of people who are known (by the right people) and who buy into the existing tropes as to what is news. Just saying **

* in the interest of (spurious) objectivity, Will Hutton is marginally less dumb, but still an equivalent leftie muppet.

** -  read Antonio Gramsci on hegemony as well is all I'm saying.

2014 Budget preview: It’s all gone a bit Mitt

Some budget predictions – in the last budget George Osborne rightly slagged off Gordon Brown for selling off wodges off UK gold reserves at pretty much exactly the wrong time. Given the Post Office sell-off fiasco he’s unlikely to make this joke again.

There will be very little, if anything, said about any concrete let alone meaningful changes to corporation tax that will address the fact multinationals, particularly US multinationals hoover money out of Britain whilst paying no and/or piddly amounts of tax. That some of these companies – notably Amazon – are utterly ghastly as employers and claim more in subsidies than they pay in tax will definitely get ignored as will the fact they need access to British markets more than Britain needs them. That their tax dodging gives them a competitive advantage over local businesses that do pay tax will similarly be ignored.

There will be some twaddle about some new allowances for businesses that invest in new toasters/rate relief for businesses setting up 16.8 miles outside of Swansea or what not with this trumpeted as being some kind of economic development strategy. In due course various accountancy firms will work out how to use these new arrangements as tax shelters for wealthy clients probably including Gary Barlow.

Right now though the biggie appears to be raising the tax allowance to 10 grand; this is a very bad thing to do. Paying tax is a necessary - but also socially and politically important-  “evil”. Taxes are how we contribute to the state and the greater good; they’re a marker of citizenship and probably the single largest entry ticket to British society we have. So deliberately raising the tax threshold is also deliberately excluding people from these things.

This matters. If you want an example as to why think of Mitt Romney’s 47% gaffe. Yes he was factually incorrect and yes his moralising was disgusting, and yet his bile still had some purchase with a reasonably big chunk of the American electorate. Now think of Britain where we have our very own Taxpayers Alliance and are routinely told how the top X% of earners pay Y% of all income tax i.e. paying (income) tax confers both moral authority and a political voice. Excluding people from income tax excludes them from both these things, which I reckon is a dangerous thing to do right now.

Rather, to help lower earners, keep the allowance as it is whilst increasing work related benefits and/or raise the minimum wage, basically anything else really because in an era of ongoing public spending cuts and benefit reforms,  any opposition to future cuts are likely to be responded to in a Mitt Romney style, just in an upper class English rather than a Middle-American accent*.

* And yes everyone also pays VAT, its just indirect taxation doesn’t have the same purchase or “feel” (hence the pies who make the top X% pay Y% of all taxes argument tend to ignore the fact average earners pay a higher % of their incomes in direct and indirect taxes than the highest earners).

P.S. Woo hoo the actual budget is out. So if I was on a poverty wage (60% of average) of £15,900 p.a. I'd be £11 better off a month. £12 if I was on £26,500 p.a. i.e. average and £15 if I was on £50,000. Now in % terms the lower earner is better off, except we don't live in a world of percentages (can I have  42% of that t-shirt please etc.,). Plus the lower your income the bigger the difference even a small gain makes to your well-being and living standards. This is not news, what is is that the changes to the income tax bands make clear who the priority is of the current government - more for the well off, less for the poor.

Scottish independence vs Devo-max

I reckon there are at least two big problems with Devo-max or the devolution of more powers as an option. One, the shower of shite sat in Holyrood and two, it would leave the chip on the Scottish shoulder firmly in place.

Re: One – Devo-max would simply give more power to the existing MSPs. There would be no gradual transformation of Scottish politics wherein Holyrood became an end in itself as opposed to the ex-councillors' gravy train it currently is. Plus, the ongoing tension between what UK level political parties want and what their Scottish offshoots do would remain. To be fair this second point is primarily a Labour party issue given what the Tories do here is largely irrelevant as are the Greens and as for the SNP, well the clue’s in the title.

Re: Two – Devo-max would leave the blame England mentality in place, something both supporters and opponents of devolution have been known to buy into like perpetual adolescents.

The two problems are inextricably inter-linked; the key issues for a devolved government are getting and spending, by which I mean periodically negotiating (UK) central government funding levels, then apportioning said monies out across the various devolved areas of responsibilities.

And just as every council blames central government funding cuts whenever it cuts services, so a devolved Scottish parliament can blame Westminster when it fails to get what it wants out of negotiations or just for the heck of it.

What a devolved Scottish politics, as with any adolescent, doesn’t do is take full responsibility for the consequences of its actions. Remember, Holyrood already had the power to vary income tax, just not the self-confidence or political will to do so.

A British banking ponder

A thing that often confuses me, usually during formal conversations with terribly intelligent and important economists, is the extent to which context gets forgotten about. By this I mean stuff like the fact that interest rates have been negative, after taking inflation into account, for almost 6 years now, and very negative since base rate was cut to the 300 year low of 0.5% in March 2009. So in contrast to what the terribly dim economist Andrew Sentence said in 2009, things got and remain pretty ghastly – because if they weren’t base rate would be more than 0.5%!

Another bit of context that tends to get forgotten about is the major structural changes seen across British banking. For retail customers, the high street looks very different now that the Bradford and Bingley, Alliance and Leicester, the Brittania, Northern Rock, Bank of Scotland, the Halifax, the Dunfermline and what no have variously failed and/or been taken over. Online there are no more Icelandic banks (remember them?) offering enticingly high savings rates or the subsiduaries of US investment banks making mad mental mortgage offers.

The situation is pretty similar for SME/commercial banking customers, particularly those minded to dabble in commercial property. Previously, there would always, it seems, have been an Orish bank or former building society ready to throw money at anything involving British bricks and mortar (and caravans). Now? None.

Moreover, its not just the number of banks/building societies willing to lend (or borrow) that’s changed, the terms those still standing offer are a lot less “generous”. You could argue this is due to a reduction in competition, however,  I don’t think this is necessarily the case. Many of the banks that left after 2007 were relatively new entrants i.e. they did things few of the mainstream banks had ever been especially willing to do. Alongside them were a few established players hellbent on achieving  ridiculous growth targets that in turn drove them into increasingly dumb lending. So arguably instead what happened is that banking lost its lunatic fringe.

Except all of the above is so far removed from the ring fence investment banking tosh that constitutes the bulk of the political and regulatory response, it keeps getting lost sight of. This is a shame because, well for starters, it flags up how monumentally awful financial regulation in Britain was and how culpable the regulators were (alongside all the CEOs and their direct reports at the failed banks).

It also provides some context for the tosh politicians come out with e.g. banks need to lend more – which ones, the ones that failed due to not having a clue how to lend in the first place or the ones that did and are unwilling to do high LTV mortgages off their own back?

And then there are the wonderful rating agencies who rate the surviving banks using a methodology that appears to involve plucking out whatever they last had lodged up their jacksies, wiping it down, then committing it to PDF.

More generally though, there seems to me to be broader questions, besides those of justice and fairness, about what happened and what it means that aren’t getting asked. To give just one example, many of the failed banks had distinct local identities, you know Bradford, Dunfermline, Leicester etc., what does their loss mean to those locales? I’ve no got a scoob, but it still strikes me as being worth a ponder.

The BBC is a (fiscal) drag

As someone aware of the nastiness that is a lot of American telly and as a BBC radio podcast addict, I normally reckon the licence fee is well worth it mate, well worth it. Until you read shite like the following in the build up to "debates" about the next budget:

"The coalition government has raised the threshold at which people start to pay tax to £10,000 but the threshold for the higher rate has increased by less than inflation, meaning more taxpayers fall into the 40p band."

And you think hang on a mo, haven't average wages been rising slower than inflation for years now, like years with that in itself having become a relatively high profile story? Hmmm, am I paying for independent, quality journalism or is the BBC's pursuit of a Pravda-like status  (in its Soviet heyday) when it comes to everything economic ever going to end? And if not, why in feck should I pay for that?

Scottish Independence: The Vision thing

Inspired by a lovely Radio 4 "Analysis" programme on the Scottish independence debate I had a read of the pro-union Better Togther argument and was shocked to discover how profoundly cack it is. The Radio 4 programme asked the question what positive vision of the union is being presented to sustain Scotland’s continued membership of the United Kingdom. The answer? No much.

Here is the “Better Together” vision:

- We’re stronger as part of the UK, you know, “stronger”

- The UK is better placed than a separate Scotland or England to compete in the global economy

- As part of the UK we have real clout in the UN Security Council, NATO, the EU, AND we have Embassies around the world

- Lots of Scottish people live in England and lots of English people live in Scotland

(Then there’s the negative: “Times are really tough at home and really turbulent internationally. In the future Scotland's prosperity will be strengthened by keeping the British connection. We need more growth, more jobs, and more prosperity in Scotland. We don't need uncertainty, instability, and barriers for our businesses.”)

Now, I don’t know about you, but nothing in the above especially motivates or inspires me. For starters I’ve no idea what “stronger” means in this context. The economic (or prosperity) argument is interesting, except one of the factors encouraging independence is the way the economic, infrastructure and development policies pursued by successive UK governments have been disproportionately skewed towards London be it spending billions more building train lines into, out of, in and around the place or campaigning against EU restrictions on financial sector bonuses.

Then there’s international “clout” and what that’s actually meant in terms of the morally repugnant wars Scotland has been made a part of. Or there’s the billions wasted on a disproportionately large military budget give or take the rank hypocrisy currently on show with regards to Ukraine where – surprise, surprise – the fact Russian “oligarchs” buy London flats and financial products appears to have trumped any notion of a just foreign policy let alone one with “real clout”. Would an independent Scotland be any better? It couldn’t be any worse and there’s real scope to finally step away from the UK’s post imperial hangover and special relationship self-pleasuring.

As for people living here there and everywhere, so what? No pro-independence supporter is saying there would be any restrictions, just think about the voter eligibility requirements. Rather, it’s the anti-independence lot that’s continuing to threaten travel and labour market restrictions if Scotland has the audacity to vote in favour of a government that would actually take Scottish interests seriously.

Then there’s the basics “Better Together” just doesn’t seem capable of getting its head around. Like, Scotland’s political culture is different, OK? We barely vote Tory and voted the SNP into Holyrood when Labour was in power in the UK. Devolution accommodates this to an extent I guess, but when successive Westminster governments are so hell bent on unpicking the great UK institutions like the NHS and the Post Office that once actively made the UK united, then feck ‘em, Scottish independence is simply acknowledging this fact.

However, its not just that the “Better Together” arguments are in themselves cack -  which they are - it’s the pro-union lot’s complete lack of a compelling vision – give or take the chance for us all to wear Team GB swimming trunks -  that really strikes me.  Like the crux of their argument seems to be it might cost everyone c.£752.37 extra a year to live in an independent Scotland. Fine, I’ll pay up because by contrast and by definition independence offers Scotland both a transformative vision and an otherwise unobtainable opportunity to make this a better place.

Crime pay

And lo the dumb banker bonus chat has begun with a Barclays CEO interview:

Q. Bonuses are up even though profits are down, aren't bonuses were supposed to be profit related?

A. Yes, well in those specific businesses/departments/teams where profits are down, so are bonuses. But, you have also to bear in mind we compete for expert labour from Singapore to San Francisco, so need to be able to pay competitive wages (i.e. bonuses might also be up in areas where profits are down)

And that's kind of it it would appear, except it's not. In the same way government austerity measures and the associated double digit hacking back of capital spending on flood defenses are for whatever reason only barely being linked to the current floods, so the ongoing run of investment bank shenanigans isn't being linked to investment bank bonuses. 

But it should be. To give some very practical examples due to the various libor, Euribor, ForEx and what not investigations swathes of big bonus investment bank traders have been variously resigned, put on garden leave and sacked. And going by the we need to pay competitive wages to get the best people argument, there's presumably been a spike in pay for unbent libor traders, which are now in even shorter supply - from Singapore to San Francisco even - than they previously were. Or mebbe there's not given the actual number of people trying to get jobs in investment banks plus all those getting laid off elsewhere!

Plus, to what extent has replacing all the dodgy blerks with lovely compliant ones impacted the profitability of the libor, Euribor, ForEx trading departments? This would be nice to know given it would provide a start for assessing how big a share of investment bank profits were due to fraud and how much technical skill/luck (i.e. for any criminal fraud and proceeds of crime action, which you'd normally see if people other than highly paid bankers were involved).

I'm not holding my breath given the SFO's initial response to libor was to debate whether what was obviously a fraud was actually a fraud. In the meantime here's the lovely multi-million pound bonus story of Tom Hayes to keep you warm. What do you reckon he'll get - suspended sentence, not guilty or community service?

The nuclear option

So George Osborne, sources are letting it be known, will rule out the notion of a formal currency union with an independent Scotland? Interesting negotiating position if you're an utter walloper (1).

In that case, when Scotland hopefully votes yes to independence, the Scottish approach to relocating the Rest of the UK's nuclear bombs will presumably be; your problem pal, pick 'em up next Tuesday and F'right off in the meantime. Or not.

Actually negotiating both points would very obviously be the right, nice, sensible, intelligent and decent thing to do. Or is that asking too much of a Bullingdon Club Tory?


(1) interesting reading English people commenting on this and how its all about Scotland wanting its cake and eating it. Even if it was, and? Jealous? And that's besides the obvious benefits a currency union would also give to English businesses that trade with Scotland - or is the approach here one of sour grapes mixed with cutting 10% of your nose off to spite your face?

(No) stitch in time

That last Labour lot were an utter shower. It’s cos of them we’re in the mess we’re in, cos of them spending, make that wasting, all our money. Wasting I tell you.

Hold that thought for a mo ….. the scenes from waterworld/Somerset are truly gobsmacking as is the fact it appears to have been going on since Christmas. Clearly something should have been and/or must be done about this, except something already was – spending on flood defences in England and Wales was cut (in absolute and real terms) years ago by the current government.

This was part of the initial approach to austerity; routine spending e.g. benefits, are a bugger to cut as the Irritable Bowel-Duncan-Smith experience exemplifies. Capital spending on the other hand is relatively easy, you just cancel or postpone the building of new things like seawalls. Hence, in the early years of austerity, capital spending, even though it’s a relatively modest share of total government spending, accounted for a disproportionate share of the cuts. Capital spending on flood defences illustrates this perfectly, the total being cut 27% from 2010/11 (the last year of Labour spending plans) to 2011/12.

Now would a Labour government have done anything differently if it’d won the last election? Doubt it. But, some of the last Labour government’s spending looks a bit more sensible allova sudden what with them having started ramping up spending towards the £1bn a year level that’s been deemed necessary to cope with all the freak weather we now appear to have.

And there’s the obvious charge of short-sightedness that can be made against the current lot. Would keeping spending at Labour levels have prevented current events? Doubt it, but it might have ameliorated some of them, which, given what they’ll ultimately mean in terms of additional spending on tidying up the mess, lost economic activity and all our insurance premiums, suggests the spending cuts may eventually cost us all far more than they apparently saved *. Oh and it would have created jobs as well.

And BTW the above numbers are nominal i.e. don’t take inflation into account, meaning the reduction in spending is even bigger than it looks.

* you get the impression the nasty bedroom tax has already gone in this direction as well what with the time and money being wasted on chasing up newly created rent arrears and what not.