Summarising economic policy over the last 6 or so years

A thing that confuses me is why the main thrust of economic policy isn’t summarised in ways that are honest, open and easy to understand. It’s a pain because if they were, then the rationale behind them could be considered more readily along with their objectives and outcomes. Plus those who stand to win or lose by them would be better placed when it came to elections. It would also provide a useful means of responding to the usual charge of politicians being all the same.

Partly, I reckon, the problem is to do with the Oxbridge way of presenting everything in guarded, coded language. However, the main thing is the political process wherein a third of a party’s MPs are too thick too understand and aren‘t in a position to do anything anyway, a sixth oppose “it” on dogmatic grounds because whatever “it” happens to be doesn’t fit in with their world view largely on point of “principle“. Another third don’t understand it, but do have a sense of there being “something” in place, its just they’re too busy climbing greasy poles to question anything the party machine turns out, which leaves a final sixth who are both in the loop, understand what’s going on BUT know a bald statement of how shit is might alienate 17% of a crucial demographic in 23 marginal constituencies.

It all hammers home the point we get the politicians and politics we deserve. Despite that I reckon the following is a reasonable summary of how shit has been the for the last 7 years or so, which you can make of as you will.

1) Pre-2007 or the Sarah Beeny years; these were characterised by low unemployment, sustained growth, Chinese cheap labour made import driven low inflation and light touch financial regulation that supported a cheap credit fuelled consumerism and asset bubbles, the assets being company values, houses and commercial property.

Ahh, the good times, when any idiot could buy a house to do up, then sell and as long as he or she spent too long cocking it up the market would have moved so much they’d still make a profit (and kid themselves it was all down to their financial acumen).

Alongside this government got taxes from property sales, construction and the financial sector to piss away on grandiose projects like the multi-billion pound Connecting for Health disaster, PFI/PPP shite and a tacit regional policy of inventing all these government call centre jobs that involved redirecting taxes paid by the London and the South East into offices located in ghastly Northern, Welsh and Central Scottish post-industrial shit holes.

2) 2007 - 2010 or Panic Stations; oh shit, the credit crunch! Even instinctive Tories I know think the Labour government handled this well. I agree with them and think its funny cos politically all the credit should go to Alistair Darling. What stands out is the extent to which government was (a) creative in its responses, most obviously with the Asset Protection Scheme, when to address the crisis of confidence in banks it drew an insurance policy line under them, and (b) did so while avoiding the moral hazards seen in Ireland and the US, by making the banks pay for the insurance AND building in one fuck of an excess.

Alongside this government spending was maintained in a counter-cyclical type style to the point where these few years will probably be considered a golden age for public sectors workers - they had job security, good pensions, pay rises and even better benefited from monetary policy.

Monetary policy here had a coupla strands. One was the quantitative easing experiment, a thing economists, then economic historians will be arguing about for the next hundred years. Essentially, this - based on what Bank of England bods have said at shindigs I’ve attended - propped up corporate asset values. Err great.

Alongside this the Bank slashed interest rates to 300 year lows, which meant existing debt became fuckova cheap i.e. more affordable, to avoid hunners and thousands of personal and corporate insolvencies. It also encouraged people to spend cos they were getting fuck all interest on their savings and meant all the fannies that were balls deep in debt were let off the hook as long as they were on a variable rate mortgage.

Sterling was also made to take a tumble because the Bank was hoping to make exports more competitive/prompt an export led recovery because that’s kinda all they know what do to in response to an economic downturn (see fer instance the post Exchange Rate Mechanism experiment period and also devaluations prior to Sterling moving to a floating exchange rate in the early 70s).

3) 2011 onwards - Now is the winter of our …… fucked up discretionary spending and real household disposable incomes gone tae buggery; except, counter cyclical spending can only ever last so long, which is why now that financial markets are volatile, but relatively stable compared to what we saw in say 2008 and 2009, we’re entering into an age of austerity when public spending gets the big, bad, rough wahoo.

Here is when shit should get interesting because the real ideological differences should start to emerge, like this Tory fucktard speaking out in favour of flexing the minimum wage.

Now this is a lovely example of ideology, except, of course, single issues have the tendency to get picked up by and run with by politicians so as to blow them out of all proportion to avoid any debate about the big picture (just like during the election when there was all that pointless shite about how to most effectively tinker with VAT).

But, fuck it. In this new age of austerity lets try and do some big picture stuff. Like in the 6th biggest economy in the world is it right that the wages of thousands of people should be so low they need to be subsidised via tax credits? And why the fuck in such a large economy, relative to the population, should pensions and car for the elderly be an issue? Why is inequality increasing alongside the emergence of these questions and is there any connection between this and the ongoing assault on pensions, employment conditions and what no?

Just some random thoughts I guess. Oh and this Ed Balls shite about is the public sector being lured into a trap - the grotty wee cunt should ‘fess up; Labour doesn’t want to be associated with (a) strikes and (b) explicitly preserving decent terms and conditions of public sector employment. By contrast, the choice the public sector is facing is straightforward - get fucked or get fucked after putting up a fight.

As a P.S. the 1926 General Strike was a bag of shite. The tragedy for the left is that the only general strike to have worked in Britain was driven by Northern Irish bigots, which is why it is perpetually swept under the carpet.

Rings

Ring fence? Ring piece more like. The UK banks that got fucked during the current credit crunch, got fucked because of the following:

- They were over reliant on wholesale funding (i.e. they borrowed too much money from institutions as opposed to yer average man in the street) to finance their lending, an approach never tested before in a financial crisis.

- The sudden mass realisation US sub prime mortgage debt wasn’t triple A (and no one knew what losses it would actually generate), followed by the subsequent Lehman collapse and associated realisation banks could be allowed to fail, prompted, then drove a global, institutional crisis of confidence in banks. As a result wholesale funding dried up.

- Those banks most reliant on wholesale funding had coincidentally enough also gone mental with their property lending both to yer average man in the street buying a new build buy to let reclaimed land/city centre en-suite yuppie flat, but more importantly to commercial property investors and developers. And seriously, by mental I mean absolutely fucking mental.

- A vicious circle was then rapidly established wherein the mental property lenders couldn’t finance their mental property loans and property prices built on having mental money thrown at them collapsed. This in turn gave wholesale funding institutions even more reason not to lend cash to the UK banks reliant on them because the banks had suddenly gone from having commercial property loans done at say (lets be charitable for a mo) 90% loan to value to holding billions of debt secured against assets with a loan to value of say 130% i.e. call in the debt, sell off the asset and its still 30% under water/a 30% loss on loans where the lenders had only been making say 1% p.a..

- RBS adds a bit of colour to this because it also pissed away its cash buying up a bit of ABN Amro. However, stories like this, this and that suggest it also went as mental as an Irishman with the property lending.

The reason for raking up old coals, stating the obvious etc., is straightforward; it wasn’t casino banking wot dun it for the UK banks that were nationalised, baled out or taken over, it was shit-mental lending and funding arrangements.

This isn’t news, this is fucking obvious. This is shite the ring fencing of banks doesn’t address. Like why the fuck is ring fencing such a big deal as opposed to introducing Tobin taxes for all the rentier casino bank financial activity that does nothing but generate volatility, add a commodity price premium we all have to pay and generate otherwise avoidable transaction costs simply to finance commodity/derivative/currency trader bonuses?

I reckon its due to politics and prejudice. Rather than tackle, address or more importantly redress the actual causes of the current fucked up British economy, ring fencing keeps the focus on the casino banking rhetoric and all that entails in terms of bemoaning the multi-million pound bonuses paid to well not that many people actually.

Now personally, I’d be happy enough if the few that did get the big bonuses got fucked roughly into a cocked hoop by a horse-cocked gorilla with anger issues. Except I don’t see ring fencing affecting them in the slightest (unless it increases the cost of capital associated with their activities and hey presto they become less profitable/generate smaller bonus pots), rather they’ll be moaned about in political soundbites, but otherwise left to their own devices.

What ring fencing will do though is let politicians claim they’re doing something, anything even. And by doing so politicians will be able to avoid actually doing anything about the cunts that caused all the problems for the British economy in the first place. Like why aren’t the mentals involved in all the mental property lending being strung up by their balls around Trafalgar square? Don’t worry we’re ring fencing casino banking. Aren’t banks continuing to lay off tens of thousands of staff who had fuck all to do with the losses? Don’t worry we’re ring fencing casino banking. And so on.

And if you really want to identify who made the big bucks out the bubble, it wasn’t actually bankers. Check out property week instead which will give hints to the mental property lending that at its height involved shit like:

Some joker sets up a Special Purpose Vehicle (SPV) i.e. a standalone company/legal entity

Said SPV borrows say £90m to do something involving property with the Joker/founder chipping in say £10m. In the event of things going pear shaped well tough cos there’s no recourse to any other assets the Joker owns what with him having a proven track record, being terribly sophisticated, having invited very senior bank bods to his daughter’s wedding and what not.

That’s day 1. Day 2 the SPV uses the loan to pay the Joker a £20m dividend thus making sure he gets all his money out plus another £10m.

Day 3, who the fuck cares, the Joker has already made a 100% return/£10m. I don’t know, mebbe the SPV buys a portfolio of Belgian public toilets or mebbe a shopping centre. Does it matter? Yer man has already made his money and then some with no recourse to his other assets if it all goes tits up.

Day 4 the bank declares big losses on Joker loans that have left big holes in the bank's balance sheet. The taxpayer bails out the bank, filling in all the multi-million pound Joker holes.

So yeah, ring fencing, casino banking ya de ya de ya avoid the issues, doesn't point any well deserved fingers and so on. Cunts.

Best not

All the shite about bankers being bastards is fair enough I guess, like yesterday I kicked an auld cripple in the face just for the hell of it. But, for the most part, the vast majority of those working in British banking today don’t get the big wages and big bonuses that make all the headlines. I reckon for the vast majority a chunk less than the national average topped up with performance related bonuses that aren’t pensionable constitutes their total, annual earnings.

Of course that’s a shite story for the papers so its probably best to keep schtum about it. Or at least it was until the RBS head of UK corporate banking went rogue. Like according to this mad, maverick man, the average tenure for RBS business managers i.e. the bods that go out and about trying to arrange loans and bank facilities for corner shops, is 12 months. This was a bad thing it seems because it got in the way of relationship banking, hence business managers will have to go out and work in a small business for a coupla days a year to make sure they empathise with and understand their clients.

Really? Like is that the answer? I thought the real issue here is why the utter fuck are business managers changing jobs every year? Are RBS not paying the going rate so people fuck off elsewhere (bearing in mind paying the going rate is the argument RBS use to justify paying multi-million investment banker packages)?

Alternatively, I’ve been fortunate enough never to have had fuck all to do with business banking, but I’ve blethered to a few who have and who've made clear its an sales target driven fucking nightmare. So are RBS, that admirable civil service institution, working people too hard by setting their sales targets too high? I think as taxpayers we should be told given the additional recruitment costs this would appear to be imposing and the poor quality service it would appear to be delivering as a result.

In the meantime it was a good laugh reading shite like this given the complete lack of self-awareness there appears to be about how the business is being run and the associated insight into what actually matters to exectives. It was also rather lovely of the Telegraph no to even ask why so many bods leave so quickly. There again business managers do tend to be rather common.

The (New) Left is dead

I mind a while back looking at what the left had to say about shit given the inevitable collapse of capitalism due to its innate contradictions and what not was integral to left thinking. I mind when I did it was totally depressing because I had to spend an age finding anything and I mean ANYTHING that actually mattered a fuck.

Scanning the last 9 months of articles published by the New Left Review was even more depressing than that because it has absolutely fuck all to say about well anything really. The best you can say is that at least they watch the telly and presumably fulminate about the latest headlines then workshop an appropriate theoretical response with the aid of feminist, eco-lesbians who have a passable grasp of critical theory (Adorno mind not that Walter Benjamin malarky). Apart from that, they lag the times, only ever commenting after the event and in the process come across as a bunch of high-bourgeoisie, privileged elderly shifters at a complete remove from reality thanks to the trust funds and tenures attached to the silver spoons rammed up their rectums at birth.

To give some practical examples – the New Left Review thinks discussing Mao right now actually matters and that shit like the following “The work of Thomas Hirschhorn as artistic primer for a precarious world. Appeals for explanation and engagement in makeshift monuments or plaintive placards, while overflowing installations lay bare the excesses of late capitalism” doesn't just mean whoever writes shite like that is a tool.

Nah, fuck that. If that’s all they can say at this critical juncture i.e. NOW given all the shite that's gone done and is going down, then that’s it, it’s official, the Left is dead, largely, it seems, via auto-anal-asphyxiation.


P.S. this is a positive thing when you think about it. The fact the old lefty figureheads have chosen to render themselves utterly irrelevant makes clear new people and new thinking is needed, give or take ignoring shitfers like this twat like the plague. So thank you Perry Anderson, thank you for rendering yourself an utter joke and reemphasising the fact your brother got all the brains in your family.

The Mafia, the law and positive discrimination

Was funny reading Nick Cohen's piece on how there's an Omerta i.e. code of silence, at work in financial services.

To summarise, the real reason yer average punter knows fuck all about how shit actually is in the financial services sector is that there are 1) legally binding, contractual obligations to keep schtum at every stage of the process, 2) its fucking obvious speaking out will permanently fuck your career i.e. no other employer would touch you with a barge pole if you speak out about your superiors and 3) you get more money keeping schtum than you ever would in an employment tribunal and with no risk/legal expense.

None of the above to me constitutes an "Omerta" give or take point 2), but then that applies all over the place, most obviously to Doctors. Rather, its economic self-interest that's the main thang at work here. Some practical results of this are that any inside account of how the financial service sector actually works tend to be the odd fictional account written by city boys that bailed out after they got their last big, bonus, plus the case details generated by the only time senior/high paid financial sector types go to law, which is when they think they can get a gender/sexual orientation discrimination case going what with the payout for those being uncapped (unlike what you get in a bog standard employment tribunal). Consequently, the public generally doesn't have a fucking clue give or these odd exceptions, which by definition are atypical and unrepresentative.

Practically, following on from the above, fuck the mafia parallels cos they're just for dramatic effect. Rather, employment law needs a changing as does the treatment of whistleblowers. Fuck knows about the latter, but as for the former, well that's dead simple - employment tribunals should be allowed to award multiples of salary including annual bonuses. There. Sorted. More people will go to law and more of the shit that actually happens will get exposed. Except there's no fucking way the current ConDem shites will do that.

Al Capone, Fred the Shred and structural socio-economic inequalities

The thing about the Sir Fred of Shred super injunction that seems to be in the process of getting forgotten is the way the peer that raised it in the Lords neatly justified his actions by highlighting how the former RBS employee's employer had a conflict of interest policy for its employees.

Put simply, fuck all the super injunction freedom of the press some tart blackmailing a footballer shite, rather did one of the key archi-cunts of the credit crunch that is fucking the lives of hundreds of thousands of people across Britain breach his own company policies while an RBS employee and if so should he have been dismissed for misconduct rather than early retired on a multi-million package? This is the straightforward thing that needs investigated now.


The issue is NOT whether Sir Fred of Shred having a bit of illicit luvin' influenced his decision-making in ways that fucked the bank because that's (a) a facile idea and (b) impossible to prove. Rather, its did he breach a basic term of his employment and if so can we (a) revisit his package in an actually you can fuck off with no cash ya cunt type style and can we (b) have the heads of all those cunts who may have turned a blind eye on a stick as well please?

As an immediate P.S. its no exactly a new idea right enough given this or more famously Al Capone getting done for tax evasion. But, stickin' em with the technicalities delivers results and scares the willies out of all current company directors who know damn fine well they‘ve been a bit economical with the actualite in the past when it comes to their expenses claims. Oh shit, that last bit means it'll probably get buried/smothered by a different story. In the meantime eeeuuurrrgghh, imagine Sir Fred of Shred looming down on you sexy style with his cum face. Euuurrrgghhh.

A May 23rd PS - Is it Nelson in the Simpsons that points and says "ha ha, ha ha"? Regardless, the additional details now coming out about the Sir Fred of Shred's "romance" are brilliant. So according to this not only did he have an affair with a colleague he "oversaw" her getting her second promotion while elsewhere unnamed senior sources are letting it be known that neither of the chairman Sir Fred served under were aware of the conflict of interest; now you could fuck this up by trying to do some bigger picture shit like how this illustrates how he ran the bank as a personal fiefdom, but so fecking what, that's what all CEOs do.

Rather, the real issue is straightforward and remains getting Al Capone on his ass i.e. get 'em on the technicalities over TWO questions/potential breaches of company policy:

(a) Did Sir Fred follow his employers conflicts of interest policy as he was presumably contractually obliged to
(b) If not was he involved in any decisions where there was a clear conflict of interest he was contractually obliged to flag up (i.e. overseeing the promotion)

And lets be clear(a)applies to potential situations and is simply a point of principle that means the relationship should be flagged up regardless, whereas (b)could be an actual and therefore an additional issue and potentially a muthafuckin' smoking gun.

And lets also be fucking clear about the context here; terribly senior bods get terribly big pay packets both because they are clearly worth it, but also because they are regularly assessed on the extent to which they explicitly lead by example i.e. did Sir Fred deliberately withold information that might have adversely affected annual assessments of his performance (oopsy - if such behaviour wouldn't have affected it, then that would indicate there's one rule for the senior and another for everyone else, which is not a good thing to make public knowledge in HR terms)? Now this last part is the kind of wanky bullshit that gets explicitly included in annual performance reviews for very senior bods i.e. they get a bigger bonus the more of an example they set to us plebs. So what kind of example did Sir Fred set I wonder? Plus, the FSA is presumably mindful of the fact that the appointment of a senior bod at a systemically important financial institution was potentially tarnished by unmanaged and unstated conflicts of interest i.e. this shit actually matters big time in principle.

In fact fingers crossed the public interest now being taken in this might prompt the FSA to try and claim a real scalp. They might even engage some HR consultants and start going after the other cunts that fucked the UK economy by investigating their adherence to company HR policies (nah, I doubt it).

kultuR studies

Cultural studies is bad enough, a micky mouse, middle-brow mash-up of sociology and misinterpretation tarted up with quotes from dead Frenchman, but cultural commentators are in a league of cockness all of their own. These rent-a-bollocks zeitgeist surfing dicksplashes* provide colour like toddlers paint; terribly important for all those directly involved, but meaningless drivel to everyone else. And so in an Evening Standard article about new Missing middle (class) consumption patterns the cultural commentator Stephen Bayley was quoted saying “You either have to go super-bargain or super-prestige. There is no room for mediocrity”. To substantiate this point the article quoted a different, unnamed commentator; “(i)n car terms, everyone wants luxury German or cheap Korean”, which is very lovely I guess except its bollocks.

Here are the top ten cars sold in Britain in 2010:

1. Ford Fiesta … 103,013
2. Vauxhall Astra … 80,646
3. Ford Focus … 77,804
4. Vauxhall Corsa … 77,398
5. Volkswagen Golf … 58,116
6. Volkswagen Polo … 45,517
7. Peugeot 207 … 42,185
8. BMW 3 Series … 42,020
9. MINI … 41,883
10. Nissan Qashqai … 39,048

Now maybe the point was it’s not what people buy, but what they aspire to. But, then that’s also to claim Ford Fiesta drivers actually want Kias, which they don’t. And sure plenty aspire to the latest tuned up BMW, but then they always have.

Then I found another quote elsewhere from Stephen Bayley and just thought WOW!

“In an age robbed of religious symbols, going to the shops replaces going to the church. We have a free choice, but at a price. We can win experience, but never achieve innocence. Marx knew that the epic activities of the modern world involve not lance and sword but dry goods. “

I mean seriously, WOW! The contents are such incoherent bollocks they simply don’t warrant scrutiny (other than to highlight the US example of mass religion and mass-consumerism shits on the opening assertion), but the language does illustrate how the (ab)use of portentous words and phrases is more important to this kinda of shite than dull things like accuracy. What, I wondered, was the point of shite like all of that?

That was where my head was at as I sat reading my “essential executive toolkit”, the British Airways business:life magazine. In it was an article on “The mindset revolution” by James Reed, chairman of the Reed global recruitment business his dad founded in 1960. Nepotism, schempetism I say, yer man Reed is also a member of the UK Government's National Employment Partnership, a fellow and regular speaker to the Chartered Institute of Personnel and Development, a former associate of the Prime Minister's Delivery Unit and a member of the Institute for Public Policy Research Taskforce on Race Equality and Diversity in the Private Sector. So in labour market and employment terms he’s quite a big cheese and worth a peruse at the very least.

Now James paid some bods to ask thousands of top employers what they “really look for in employees”, then do some “groundbreaking” research and even run a few workshops. What these discovered was revolutionary, 96% of the employers surveyed would pick someone with the right mindset, but not the complete skillset over someone with the complete skillset, but not the right mindset. As I was reading this on a plane I started praying like a Sunday shopper that the employers surveyed didn’t include those of pilots.

Prayers cast I read on to discover this research “totally undermine(s) one of the central tenets of the job world that better skills equal better jobs”. Again I was shocked. I didn't realise that was the case or at least hadn’t since I read Richard Hoggart’s 1957 musings on how certificates were all very good, but things like personal character and class really mattered when it came to the distribution of economic rewards (in The Uses of Literacy).

Perhaps Reed was simply using rhetorical devices here, building a straw man to portentously knock down with further revelations? Nope, I think he actually believes this shite, so much so he’s written an entire fucking book on what he calls the 3Gs that constitute the “fundamental components” of a winning mindset. These are the Global, the Good and the Grit (rhymes with…....). I kinda lost it at this point when it came to understanding what these entailed, but they followed on from a bit about top employers stating en masse that they value honesty, trustworthiness, flexibility, commitment and so on above all else. Thankfully, top employers it seems attach no importance to the servility, obsequiousness, fear, aggression, sycophancy, hypocrisy, double-think, arrogance and so on, the "behaviours" I’ve seen pretty much every day of my working life alongside those other more admirable traits. Except,my personal reality would suggest yer man Reed is clearly talking bollocks, so much so I started thinking about the question the cultural commentators had prompted; what’s the point of such drivel and does it actually matter?

Starting with what’s the point, for Reed and British Airways, there’s some obvious pragmatism at work given the article meant free advertising/free copy and the high heid yin of a company that probably uses the airline a bit getting his obvious ego massaged. So that’s tickety-boo then, except this shite is being presented as something to be taken seriously and isn’t that a bad thing given the co-author of the book the article was drawn from is a guest lecturer on the Harvard Business School Executive Education program i.e. he influences global multinational executive thinking? Like wouldn’t we rather the people that run things were schooled in reality as opposed to bollocks? I don’t know, I mean I’m one of those naïve feckers that thinks the only theories worth having are ones that abstract from the reality they try to explain and that the ones worth pissing on are biased shite imposed like dogma on a reality that is then butchered to fit.

The other thing is that this kind of shite, besides being shite,is profoundly conservative because at no point does it threaten the self-image or sense of self of the executives being sold 3G mindset courses as I write this. This is a pity; given top employers only recently did their best to drive the advanced Western economies over a cliff, perhaps a more introspective, critical assessment of top employer mindsets is in order? And instead of fixating on the individual given the recent dominance of group-think and herd behaviour perhaps a more sociological assessment would be more appropriate? And anyhow, I reckon anyone that takes shite like the above seriously is a fucking idiot and not to be trusted with anything more important than his or her own spoon and pusher.

Sadly none of this will turn out to be the case. Instead, a few years from now poor sods across the globe will sit down in neon lit rooms staring at flipcharts and workshopping their mindsets for 2 hours before being handed a voucher for staff canteen sandwiches. They’ll turn up for work the next day clutching a course folder and a new desk tidy spattered with truisms and get back to the real business of sucking up to their boss’s boss. As for cultural commentators, well at least no one is forced to workshop them, they don’t influence the culture of the organisations we endure 5 days a week and they don’t piss away shareholders’ cash either, so I guess they can be safely disregarded as a bunch of ignorant tossers.



* Or has some other word replaced zeitgeist rendering my use of it tragically jejune?