Will lightning strike twice?

Pop quiz: The BBC has kindly handed the Barclays CEO a special platform to use to convince us all that banking has learned the lessons of the past and is committed to changing its ways. Is this a reference to:

a)      Bob Diamond (as was) giving the inaugural Today programme business lecture in 2011 about how banks needed to be good citizens and restore public trust?

b)      Antony Jenkins guest editing the Today programme today on R4 after giving a speech organised by Robert Peston on rebuilding trust in banks?

You decide. In the meantime, Robert Peston’s latest blog was interesting but only because of what it left out. It didn’t mention how so many banks were run into the ground by the sheer incompetence of executives handed mega pay packages for being competent right up until it turned out they weren’t. Saying that, it did quickly run thru the litany of crimes, institutionalised frauds, industrialised miss-selling scandals and so on that the bulk of the banking industry has perpetrated in recent years. But, it failed to mention how many people had actually gone to prison as a result. 

Oh hang on, no one has and as long as that's the case i.e. as long as bankers remain above the law regardless of what they do to customers, it's difficult to see, regardless of how lovely the BBC is towards it, how the industry can rebuild public trust (moreover the threat of going to prison AND having pay and bonuses stripped as a result of their being the proceeds of crime would also function as a pretty nifty deterrent).

A bit of "fun"

John Kerry's recent chat about the protests in Ukraine reminded me of how the US authorities responded to the Occupy protests: "The United States expresses its disgust with the decision of Ukrainian authorities to meet the peaceful protest in Kyiv’s Maidan Square with riot police, bulldozers, and batons, rather than with respect for democratic rights and human dignity. This response is neither acceptable nor does it befit a democracy"

HS2 is No.4

Paragraph 28 in the Commons Transport Committee new report on HS2 is well worth a read, it makes clear that never in the field of British history have so few people been so willing to waste so much of other people’s money on so little (re: Number 4 here).

The BBC, in its bestest Pravda voice, summarised the report as follows: “The MPs heard from bosses of consultants KPMG, who said in a report that by 2037 HS2 would boost the UK economy by £15bn a year. Some economists who gave evidence cast doubt on this figure”

Actually, this isn't quite right. Professor Dan Graham of Imperial College, London, said "I do not think the statistical work is reliable" while Professor Henry Overman of the London School of Economics described KPMG's approach as "essentially made up". And lets be clear, an academic calling something “essentially made up” is more than casting doubt, he is saying it's garbage to an extent where this isn't actually a debate.

So what did KPMG have to say in response to being told their expert assessment, their professional competency even was "essentially made up"? Not much. When questioned they emphasised that their results were provisional and conceded that their methodology "does not have a firm statistical foundation”.

This second bit is worth repeating; the people paid to produce an economic analysis of the benefits of HS2 used an approach even they think “does not have a firm statistical foundation” and according to independent experts is "essentially made up" i.e. KPMG think the benefits will be £15bn, they admit they've no solid evidence to support this let alone a credible methodology for making such forecasts, but they still think the benefits will be £15bn a year. Or more. Or much more. Or perhaps less. How much do you want them to be?

Except we already knew this if only because the whole notion of a £50bn project delivering a £15bn i.e. a 30% return per annum in an age when you do well to get 2% on your savings is inherently ridiculous. We also already know that if it does go ahead HS2, like the olympics, will cost far more than all the early estimates and deliver a lot less because that's just what big government projects do. Tarting this up by wasting money on consultants to construct makey-uppy numbers using a makey-uppy methodology to suit HS2's political supporters is simply an expensive charade gone thru not so much to give the process any credibility – it doesn’t - but to distractingly fill up air time until too many contracts have been signed for this train wreck of a waste to be stopped, which is a shame really given the opportunity cost here i.e. the other things the money could be spent on e.g. say 10 x £5bn projects more fairly dispersed across Britain that would also have spread the risk and start generating benefits within years rather than decades (as opposed to one big super-duper project) isn't even being considered.

As to why, well I guess making massively subsidising a marginally quicker London commute the lynchpin of Britain's transport and infrastructure policies for the next few decades will eventually confer some benefits, but ultimately its because politicians don’t like being seen to be wrong and that’s kind of it really, their egos being apparently worth tens of billions of our pounds.

Scottish independence vs food vs a fair corporation tax

Another day, another piece of garbage anti-Scottish indpendence chat, except this time one with broader ramifications; it turns out that besides causing the four horsemen of the apocalypse to rise up and grind the very earth into cinder, Scottish independence would also make your weekly supermarket shop more expensive. Crivens. The “argument” presented for this is as follows:

“in today's FT, which reports that bosses of three of the four biggest supermarket chains are warning that food prices in an independent Scotland might well be higher than in the rest of the UK. ….Scotland has a large dispersed population, so transport costs - logistics - tend to be higher in Scotland than in England.
Scottish people eat relatively less fresh food than the English, and fresh food is much more expensive to transport and store (the logistics of supplying fresh food are highest). So it is relatively more costly to provide fresh food in Scotland….

….. at the moment, the big four supermarket groups - Tesco, Sainsbury, Asda, Wm Morrison - absorb these differential costs in a pan-UK pricing policy. They take on the chin that the intrinsic profitability of doing business in Scotland is less than for England.”

So there. Or not. First off, I don’t know about you, but last time I went anywhere noticeably dispersed in Scotland I didn’t encounter a single major supermarket outlet whatsoever (check what Yell has to say about supermarkets on Arran fer instance). Rather, what I encountered were corner shops that already were charging plenty extra for basic goods.

Second, well lets go to some of Scotland’s more distant locales that aren’t so dispersed then, Inverness for example, the capital of the highlands or as it's also known “Tesco Town” i.e. a far north location with a ridiculous concentration of major supermarket outlets where logistical scale economies are already being achieved to the point where the notion that yer average Inverness punter’s weekly shop is being subsidised is a joke (alternatively and in the interests of fairness try Stonehaven instead give or take what you’d discover there are the joys of living somewhere where the only supermarket on offer is the Co-op what that means in terms of crap fruit and veg).

Dull facts mean I’m not too convinced by the “argument” being made allova sudden. But, what the hey, lets take them at their word regardless, except (a) if transport costs really are all that, then presumably this creates a greater incentive to source local produce i.e. taking away the supposed English food price subsidy could benefit Scottish food producers and/or (b) as supermarkets depend on price and convenience to out-compete smaller, local rivals, if price was less of an option, then Scottish independence could benefit local retailers. Oh and (c) so howcome a pint costs more in London, especially London City-bastard-Airport than anywhere in Scotland then eh? Eh?

Besides not being especially convinced by the anti-independence argument being made, what really struck me was the associated chat about the limited appeal of the SNP’s proposed competitive corporation tax rate; “the supermarket groups tell me that the Scottish government's promise to cut the headline rate of corporation tax by up to three percentage points would be of little benefit to them. The boss of one says the health increment on the rates currently costs them more than four times what that cut in corporation tax would shave off their tax bills….. The biggest Scottish supermarkets, those with a rateable value of more than £300,000, and which sell both cigarettes and alcohol, pay a 28% "health" increment on business rates - which costs them collectively around £30m a year.”

Now just chew on that for a second. And another. And then some more. Yup, that’s right, cutting corporation tax wouldn’t actually matter because these feckers already do so much to avoid it cutting it would be largely immaterial.

Now this strikes me as being what’s actually important here, which is as follows; Scotland already provides a practical example of how big, global PLCs can be more fairly taxed than is currently the case because it operates a tax that uses the rateable value of premises to exclusively target big retailers rather than whatever profits supermarket accountants claim they make in whatever country they happen to be operating in. And have any major supermarkets left Scotland as a result because they’re not subject to this tax in England? No, they haven’t and no they won’t either, because they, like KFC, amazon, google, Multinational-Tax-Dodging Incorporated etc.,  need boots on the ground to ensure they can actually reach consumers as this droog refers to here and here.

So really whether food would cost more in an independent Scotland is besides the point not least because the arguments presented as to why are pants and potentially favour independence. But, do existing Scottish tax arrangements – hit ‘em in their cost base regardless of the declared profits - provide a practical example of how to quickly and easily tax multinational PLCs more fairly without this having any adverse effects whatsoever let alone requiring any grand international agreements to be made that will never actually happen? You utterly betcha.

No wonder the article I’ve heavily quoted from referred to supermarkets being afraid of going on record about what they think, its just the reasons why appear a lot less to do with a supposed fear of Alex Salmond saying nasty things about them and a lot more to do with people actually having a  think about how they're currently taxed.

Hmmmm, flip flops. Nice.

For reasons I’ll spare you I found myself in Edinburgh’s Hollister shop recently. What struck me about the place was that the poor sods getting paid to fold stuff were wearing flip flops. In Edinburgh. In winter. Given company policy is to keep the place as dimly lit as possible I felt genuinely sorry for the shop assistants’ toes as all the shoppers crunched past in their winter footwear.

Then I discovered the CEO of the US parent company, the 69 year old plastic-fantastic freakzoid pictured above, has a 40 page plus manual detailing what the male models hired to attend to him (and his dogs) on his private jet have to wear, from  pants, to cologne to flip flops i.e. the poor sods with bruised toes folding jumpers down George Street are actually the embodiment of one pensioner’s sexualised fantasies.  

This is profoundly liberating I guess in that it relegates men to the same eye candy standards traditionally imposed on women so engenders an equality of a sort.  However, rather than gender issues, I reckon it provides a useful warning as to the future direction of British society and British culture. No seriously, it does.

This is because it’s an example of what the super-rich, the ruling class, the 1% even, does when it's free to dictate how others have to behave. Want a job? Getting hassled by the broo to do so? Then put on some flip flops. Why flip flops? Because a very rich old age pensioner thinks attractive young men look cute in flip flops that’s why. And no you’re not a shop assistant (yes you are, you're not even a visual merchandiser) you’re a brand ambassador. So how does that make you feel when you put on the company flip flops, eh?

In Hollister-land the super rich clearly have no sense of let alone concern for the personal dignity of anyone other than themselves and their own. In fact, they don't just lack empathy, they blithely shred the dignity of those they employ on low wages whenever it gets in the way of their personal whims and sexual proclivities. And if challenged, they will readily draw upon free market rhetoric about how making people wear flip flops in winter is good for shareholder value, creates jobs (that would be there regardless cos we all need jumpers, its simply whose jumpers we choose to buy) and confers a competitive advantage in a globalized economy, etc..

The reality of course is more complicated than this; the super rich dodge taxes the rest of us pay and benefit from government policies focused on boosting asset values i.e. wealth and subsidising the low pay that ensures the rich continue to get an even bigger slice of the cake. Except, this would be to imply the super rich aren't 100% wholly responsible for their great fortunes and we apparently can't have that.

This all matters because if there’s one country in the world that’s gallavanting as fast as it can towards the American model of super rich, super poor and fuck all those in between, its Britain. So bring on the flip flops and lets hope - as per Abercrombie & Fitch/Hollister company policy - our photos are judged pretty enough at their monthly review for us to keep our jobs.

Decent and sustainable jobs vs amazon.com

Back in the day the various UK development agencies fixated on, fetishised even manufacturing when they went out chasing foreign direct investment. This reached its apogee with Chunghwa picture tubes, the central belt facility custom made to build cathode ray tubes just as the world discovered flat screen technology. Lessons were presumably learned until now it seems any new job is a job worth having. Except, is this really the case given the companies Britain now bends over backwards to attract?

The contrast between two things are prompting these questions. One was attending the Radical Independence conference on Saturday, the other is the BBC expose of working in an amazon.com fulfilment centre. Ignoring the actual proposals to sort things made at the conference, one of the key demands repeatedly made was for more decent sustainable jobs, a perfectly reasonable request when you consider amazon.com.

Now, the BBC thing is all very well, it will, I’m sure, highlight lots of nasty employment practices just in time for Christmas then be forgotten thereafter give or take some handwringing. Except the global chat about amazon.com has for years now made clear it's a ferociously shite employer.  Here, for instance, is an article about how Amazon set up a fulfilment centre in the US without air conditioning that got so hot emergency medical personnel were on standby to take workers suffering heat injuries to hospital (whether they get their pay docked after passing out from heat exhaustion isn't clear). Here you’ll get a flavour of how amazon.com’s aggressive employment policies are being contested in Germany where trade unions are actually listened to unlike as opposed to here where amazon.com’s anti-union stance is easier to impose. So even without the BBC it was already clear that as an employer amazon.com is bad for your health and your wealth.

Then there’s the wee thing you notice about where amazon.com locates its fulfilment centres. In the US this includes Baltimore - as in The Wire, as in post-industrial urban decay and high unemployment - which was so eager to get the centre it handed over $35m in enterprise zone tax credits, $5.5m in Maryland tax credits, a $1.25m loan on easy terms and discounts from the local utility company. Here, amazon.com has fulfilment centres in Gourock (I think they mean Greenock really) and Swansea i.e. our own hot spots of post-industrial urban decay.

So how much taxpayer funded aid did amazon.com get then to set up shop in Grerenock/Gourock and Swansea? And where else exactly would they have gone if they hadn’t set up shop there given its not as if their actual customers are moving anytime soon i.e. if amazon.com wants to sell to the West of Scotland and Wales, then amazon.com needs fulfilment centres in the West of Scotland and Wales (or bigger centres employing more people elsewhere i.e. no net gain in employment whatsoever). And hang on a mo, so is amazon.com getting millions of taxpayer moolah to do something it’d have to do anyway at the same time as it dodges paying British corporation tax, like how’d that work then?

Unfortunately, politicians aren’t much of a guide because they still sound like they’re lumbered with a Chungwa Picture Tubes mentality. Like when David Cameron responded to amazon.com opening 3 new fulfilment centres by saying “I am delighted that Amazon will create thousands of new jobs … this shows that the UK has the infrastructure and talent to continue to attract major investments from leading companies such as Amazon,” I think what he actually meant to say was that:

1)      amazon.com wants to maintain and improve its access to and ability to service tens of millions of profitable customers in one of the world’s richest online economies

2)      and to a lesser extent, by doing so it limits the scope for any potential (initially) UK focused rivals to emerge given by definition the amazon.com business model of selling online in itself doesn’t convey a sustainable competitive advantage whereas a logistics infrastructure does.

I think that was what he was meaning anyway, its hard to say other than amazon.com needs access to the British economy far more than Britain needs amazon.com.

So amazon.com, lovely. It dodges taxes, it treats the majority of its employees like shit and - am guessing - it gets big taxpayer handouts to set up warehouses it’d have to set up anyway. I think I;ll be doing my Crimbo online shopping a wee bitty different from now on until amazon.com starts providing “decent sustainable jobs” (with this presumably involving Jeff Bezos spending less on space ships and a wee bitty more on air conditioning and, heaven forfend, wages).

Paraphrasing the news

Despite the BBCs mendacious efforts to stay on message, a quick skek of what they’re currently reporting neatly conveys how things are. I’m paraphrasing here, but as I read it the following appear to be some of the big stories:

Today's headlines; the total cash paid to the rich people in charge of big companies is growing around ten times faster than the actual economy.

This is despite the notable example of the rich person in charge of a big company that may well have systematically defrauded taxpayers for years apologising for potentially systematically defrauding taxpayers for years. Sources report he is set to remain very rich regardless and retain what is likely to be a very big, most likely tacky holiday home somewhere sunny despite his having gotten rich running a company that may well have systematically defrauded taxpayers for years.

Elsewhere, very rich bankers, some of whom went to very expensive private schools, explained why they should be paid lots of money even when they do their jobs really badly. Sources confirm the small print in the contracts signed is such that the taxpayer clients involved don’t have no leg to stand on when it comes to getting any money back. Not a penny. 

When asked if this means the very rich bankers involved will ever be employed on behalf of taxpayers ever again, our sources advised that as the banks employing the very rich bankers are currently on the look out for retired government ministers and senior civil servants to employ as 2 day a week special advisors on what are currently understood to be 6 figure packages, then yes they would receive taxpayer funded gravy in future.

In breaking news the current Tory party fixation with drawing increasingly improbable links between the Labour party and an incompetent, drugged up party boy approved for a job he very obviously wasn't up to by people managed by someone the ConDem government subsequently knighted where judged to be highly successful at drawing attention away from the Tories letting a bloke who owns a chunk of Wonga and gives them money try and rewrite employment law in ways that would make him more money, but were for the most part dismissed as mental *.

And finally, ordinary people continue to be made redundant en masse because this is for the good of us all. Yer average punter didn't give a hoot either way because he or she continues to favour engaging in narcissistic, but ultimately apathetic pursuits instead.


* what's interesting here is that because party boy appears to have been so much of a party boy, the Co-op is now looking at his expenses claims. This, when you think of Al Capone,  has real potential in relation to justice and all the other boys that fucked the economy into a cocked hat.