News commentary and predictions of political trends and what the future holds

Economics

Tower in Flames

August 4, 2017

That the building industry thought that it was not risky to clad a high rise apartment block in flammable cladding is frightening enough. You may hope that it was mere oversight how many councils decided that the look of a building trumped the safety factors and not just clad their building in a pre-packaged instant disaster, but now are leading in the race to become of most productive in the calculation of terror.

That Governments implicate themselves by bonfires of regulation to allow businesses to do whatever they felt could be acceptable risk. It was not just trying to make things look better by covering these buildings with a flammable cosmetic. It is building in vapid negligence of safety regulations.

The non-flammable may be more expensive prior to the first fire. Now, perhaps it should be the only option on the market. The fifth tallest skyscraper residence, in Dubai, all 89 stories of it evacuated without even a single injury.

The money they spend on this edifice to structured living with unnecessary luxury, a concentration of wealth so desperately crammed together, these “homes”. Unbridled luxury or high rise poverty, the destruction of homes is the most terrible fear.

Notwithstanding, the safety record of that building compared to Grenfell, and witness now the Governments of the world have failed to regulate for safety due to budget constraints. That’s one terrifying omission. We want Governments to remove regulations that expose our lives to risks that can be avoided? The difference to less flammable classing for at least 80 dead people was only £300,000 at Grenfell. It would have been more on this and the 30,000 other risk clad buildings in the Middle East. Just think, the masses live in Tinderboxes at the dawn of the age of global warming. Good plan? Leadership? Or just an illustration of something more sinister? Human greed seems to create blindness to consequences of broadly shared risk. The owners of these buildings have a problem. The risks their designs pose to insurers and the risk of the loss of life and the loss of living. Cramped quarters are still someone’s digs. 80 stories of people Losing everything is tragic, but it is not as criminal as they at least got everyone out.


Religion and Extinction

December 15, 2014

We are different to any other species in that we have evolved what we call economics, science of extending survival. Or is it a massive inter-generational war that the current political generation are guilty of, increasingly responsible for causing environmental collapse.

Why do we measure progress by growth? When we solve that one, and measure progress with an economics that includes compounding interest for any future consequence of our indulgence.

Only then we can call ourselves good Christians or good Muslims or good Jews. We remain greedy and primitive in our mutual interests. Why think like this?

Part of the lesson of certain matters remaining secular and out of the control of the driving faith or the possessors of property or the military – but that the ultimate control must remain honestly in the hands of the people. So we have countries for that. But faith is a personal matter and your path to your saviour or prophet is a relationship between your self and something all powerful. Therefore when you are praying together it is as though a casting of individual threads to your personal heaven is a revelation to the self, not to the army, not to the workforce, not to the merchants, the bankers or even the holy ones we listen to preach their secret messages in sermons to the initiated. In all religions there seems to be a strata that pulls people up – spirituality is a wonderful thing, don’t get me wrong.

Having to take sides for your whole life is the commitment of belief. But the essence of individuality is the thing. It is the most important and elusive thing. Your thread can vibrate within a group but it can also find its own pattern. It does not matter. If we align beliefs into destructive paths then as a group we start to consume that which we have no right to, we take that we have to leave alone. The first lesson in The Book of Genesis was not to take the forbidden fruit from the tree of knowledge or die. Not to take the irreplaceable fruit means we must consider requirements of future life in our consumption.

The ways in which competing religions have interpreted this basic tenet of their own belief is astounding. The destruction of species is wanton, selfish and will result on our own death.

These words or wisdom are drowned by the clash of battle as we fight for our set of beliefs. But this fundamental exists. If we sow extinction, then we will become extinct. I am just not sure if today’s political science really gives a damn about the future.


The Greenhouse Treaty

November 13, 2014

China and America have agreed to targets for reduction in greenhouse gas emissions by 2025 for America, and 2030 for China. On the scale of problems, China is a significant player, with a much larger population competing for resources as economic growth strides into the greener parts, its lungs, pollution is rife, significant and horrendous to the increasingly aware population. It is they who are served by a mutual accord of the current world leaders. Both have already made history.

China’s pollution is evidence of a population growing too fast. Economic growth is reflective of a certain attitude to risk. Countries are examples to each other of how to do it or how to do it all wrong. Overheated economies destroy our habitats. The solution is not war, economic war or invasion. It is much easier than that.

According to World Bank figures for 2010 – 2011, developed nations afford to include the exponential cost of environmental damage, on the index the UK is about 20. China is 60. But compare that to Botswana, at 199. The problem is not China. It is the misuse of resources and the rape of land by too many competitive hungry humans. We have to evolve to stop killing our future.

We can do this by simply changing our thinking. Our economic system needs to evolve into one that is geared to reward economic contraction. Our religious beliefs need to encompass a new spiritual path that includes a respect for all life and ones descendants who are as much us as we are our ancestors.


Todays comments

August 7, 2014

A few Disturbing Trends with our comments in The Guardian:

7 Aug 2014

Boris Johnson’s bid for parliamentary return in 2015 leaves Tories divided

The true blue conservative denies they are running until the finish line is in view, their competitors unprepared, relaxed and busy elsewhere can then make a huffing and puffing dash for the main prize.

Salmond rallies SNP backbenchers after independence debate

If the UK had a government which paid a little more than latent lip service to the parts of the country that are not London, I really wonder if the Scots would fight for independence. The popularity of this possibly economically difficult endeavour is an indictment of the Coalition and the unfair lot dealt to the many to enrich the very few.

Democracy will finally defeat that act of “mentalism”. But the question, what options do we really have? That question is the emotional argument that precedes this revolution.

Of course we may be “better together”, but the majority have to ask “better for whom?”

NIESR says economic recovery slowing after weaker manufacturing figures

I fear that like the previous government’s folly with the city, and the horrors of the 70s recessions, that it is “shock” that suddenly causes fragile recovery to be history and disaster to be the sounding board for electability. It is “old thinking” that is still leading economic planning and reactivity to timebombs that manufactures “heroes”.
In other words you are so brilliantly right. Open your business to the world. Dependence upon “economic growth” (based on the value of assets) is simply not getting us anywhere.

Sorry, George but increasing London property prices is not economic growth. You got to create industries, cause people to invest in and start new ventures, be willing to take risks.
Worrying about interest rates and the resale value of your nest egg stultifies imagination and reduces the rationale for business growth. It is not just investment bankers having dosh, it is the actual activity that seems to be faltering.

6 Aug 2014 – on Martin Rowson’s cartoon on Lady Warsi’s resignation

Being “right minded” seems to be a qualification. Or is that encoded tory propaganda or merely ukip splashing about in puddles?

Or that vacancy leading the Liberal Democrats, he may have to resign also.

…governments that pendulum swing between building and destroying systems – how much waste that does that create? Democracy under First Past the Post is truly the most inefficient system, especially when it is polarised between opposite sets of values. Proportional representation is more effective as they get to be far less adventurous as their mandate is less total.


EU Elections

May 21, 2014

The European Parliament is a government body that decides upon the laws that join our people together. Issues like human rights. It is infected by “protest parties” who are only there to act as dead weight opposition but what is what achieving other than making the government of the EU less effective?

A strong UK voice in the European Parliament is a no brainer. Of course we need the best representation possible and make an effort to make the whole of Europe more and more prosperous.


Pollution

May 15, 2014

Pollution threatens all life. Man made pollution is the result of the industrial revolution and growth. Or it is the result of criminal expansionism?

Pollution is the addition of artificial byproducts from unclean industrial activity to a natural environment, too often with unforeseen consequences, or worse, known but hidden consequences. One of the pollutants we continue to add to the precious atmosphere is CO2. Unfortunately for us, there are many others. In the short term, we are most threatened by the consequences of CO2, but who knows what other accumulations of poisons in the food chain may cause breaks and starve us to death first.

For example, our chemical warfare on “pests” that seems to have a side effect of bee eradication, may be the end of us before lower Miami is fully under-water from sea rising with the melting ice-covers of Antartica and Greenland. That is ice above the land not, which when it is water will displace the coastline and reshape the British Isles. Is that how much we care about our countryside?

See also:
George Monbiot – Why we couldn’t care less about the natural world

Captain Sunshine


Corporate Taxation

May 12, 2014

If Google, Apple, Amazon and other multinational corporations can operate in the UK declaring all corporate profits in low-tax Luxembourg, then all companies that operate in the UK should operate out of a Luxembourg headquarters. They have been set a precedent, which if not legislated against fairly could cause a revolution of sorts, businesses becoming independent of the legislatures in which they operate. It effectively ends the concept of the corporation being a citizen of a nation.

To allow existing laws with all their loopholes to exist, the Government is allowing much capital dilution in the economy (inflation) but the unfair tax laws make repatriation of this capital unlikely and that allows the Government to hoodwink the population with “low inflation”.

Imagine, if all the tax-protected capital was to flood back into the UK at once, the inflation would be ridiculous. But by keeping UK interest rates low, by allowing this offshore sequestering of capital in tax havens, the Government uses QE without risking inflation showing up in the economy.

The Chancellor, the Government and the opposition are all guilty of short-term thinking. As they deflate the value of the currency by QE, they watch boatloads of tax protected funds being parked in offshore banks. So the money supply does not actually grow, but new investment is stimulated as those without can get loans. But the trick is on the general population as those who need such funding are paying larger margins than they should to borrow when the base rate is 0.5%.

Quite apart from these mechanisms of funding the destruction of existing retail businesses by competing with globalised companies means endemic unemployment. That alongside the enslavement of students by the charging of exorbitant fees to get a foot in the door of a career in an uncertain road, and you are witnessing the continuation of one of the most dangerous trends mankind has conceived. Economic racism.


Fukushima revisited

March 11, 2014

Read this in the Guardian just now.

Currently about 400 tonnes of groundwater is streaming into the reactor basements from the hills behind the plant each day. The plant has accumulated about 300,000 tonnes of contaminated water, which is being stored in 1,200 tanks occupying a large swath of the Fukushima Daiichi site.

Eventually Tepco hopes to have enough space to store 800,000 tonnes, but fears are rising that it will run out of space sometime next year because it can’t keep up with the flow of toxic water.

The Guardian.

They think it would be safer to pour contaminated water into the Pacific Ocean. The trouble with the Nuclear Power industry is that it has no real solutions the problems imposed by meltdowns. How much will nuclear safety have cost us 100 years from now? If Nuclear Energy is costed honestly it must incorporate premiums for accidents that can be bought back by safety record. It only takes one disaster to bankrupt a power company.

A better solution is to make all homes self sufficient using renewable energy. Power is still required for industry, but it is a politically achievable and meaningful result that has a positive effect on everyones’ life.


Fracking Earthquakes

March 8, 2014

A series of earthquakes measuring up to 5.7 on the Richter scale, across Okalahoma, USA were triggered by injection of waste-water from fracking.

The United States Geological Survey (USGS) issued a press release yesterday indicating that the magnitude 5.7 earthquake that struck Prague, Oklahoma in 2011 was unintentionally human-induced.

The USGS claims that the magnitude 5.0 earthquake triggered by waste-water injection the previous day “trigger[ed] a cascade of earthquakes, including a larger one, [which] has important implications for reducing the seismic risk from waste-water injection.”

Read article.


Will fracking bring it on?

August 13, 2013

The nature of the ground underneath us is that it is not the singularly solid mass we perceive. Our point of view is relatively spec like tiny and the size even of a country is hard to encompass as a personal experience. There is a lot of ground underneath us and drilling out ancient residues and making big empty caves may result in a few ground sinks but what are the effects of explosions followed by mass removal of part of the ground that we live upon?

To pretend there is definite scientific evidence that there are absolutely no risks of earthquake or ground damage is the stance of the Prime Minister. His advisors clearly are very pro-fracking and have said that there are documents that show there are minimal risks. I am sure that someone has studied them properly.

Now. it would only take a fairly minor earthquake – about 6 on the Richter scale – and thousands would be killed. The underground could be affected, it could be wrecked. Overnight London would cease to function. It may happen anyway, but fracking means letting off explosives underground and removal of solid matter that supports us. It probably will not cause earthquakes but the fear in the average person may turn to fury if something does go wrong.

There simply needs to be published proof that fracking poses no threat and not lurch into an industrial scale venture that many are convinced that may destroy entire communities,

The Prime Minister has a responsibility to do more than promote this as economic miracle – he needs to convince the electorate that the economic plans of multi national companies do nothing that endangers the lives of any citizens of the land.

If you search for the wonderful headline Quake Britain: UK overdue a massive tremor that could kill scores of people at any moment, warn experts you will find an article all about it.


The NSA and the Economy

August 2, 2013

President Obama told key members of Congress on Thursday that he was “open to suggestions” for reforming the National Security Agency surveillance programs that have embroiled his administration in controversy. Guardian article

President Obama wants to pull back the NSA’s far too extensive phone tap of the world and internet.

It is uneconomic activity. American values are offended by this data collection. The rest of the world is now in fear of the totalitarian juggernaut overwhelming the world with its moral values. In the last seven years it has prevented one terrorist attack. Acts of love and kindness may have well prevented another, natural causes may have prevented another, and the predator assassinations of the Al Quaeda leadership may have prevented a larger number of terrorist attacks. But if you spent the billions this programme must be costing on education, health, foreign aid and development and energy you would save far more lives.

Yes aid has been argued against as the results of it may not always be progressive. The tax system has not always benefitted the individual or hospitals always saved lives, but water and food production internationally is about to become increasingly significant in the future wars which will not be about religion.

The NSA data collection of intimate details of our private lives is every bit as scary as terrorism. And this incredible investment could be driven into into energy renewables that could slow the fatal decline into the global weather catastrophe that will lead to mass starvation and sunken cities.


Change the Tide

July 1, 2013

A divergence between the balance sheet of the US Federal Reserve and the price of Gold has appeared and what is interesting about this is that this has not happened previously.

Why? Does the massive large upward value of the assets of the Fed tracking gold showing this divergence mean the US has sold gold reserves?


Progress

June 24, 2013

Progress dictates that we determine our future based not on history but on future needs. We did not need an industrial sector before we had one.

The service sector is the largest employer and supplier of needs. Without technology and medicine, today’s world would be pretty awful. Those primary elements of productivity are not the source of all productivity. People are. Innovation and ideas are worth more than widgets or burnt coal.

I think we have yet to find an economic path that works for everyone, but so far what we have evolved with a thriving service sector is better than centralised wealth only consequential on primary production being the mainstay of all economic activity. More directly: the fewer people who can make money from the productive activity, the smaller the economy.

Banks do create money. Investment does create money. But for 100% employment to be possible, there has to be value for services and ethical organisations. Primary sectors are always smaller than what they grow. It is wrong to think we rely upon them for growth.

World class education is our most valuable export.


Primary Industry and the recovery

An argument against the assertion: “In political-economic reality, we’re still reliant on fossil fuels”

If all economic activity were purely there to convert energy, maybe that would make sense. But economic activity is actually to manage resources necessary for life. We do not have to progress into some kind of mythic space age to be successful. We have to live, grow, breed and die without making too much mess in the process. Progress means more result from less energy. Our service sector includes intellectual and cultural industries we are rather excellent at and form valid exports.

The model of human productivity and economy that depends on primary industry seems destined to fail. We can not expand primary production to solve our problems. Economic activity must be shared by all and what we make matters.

It makes little difference to the consumer if the public transport burns oil or electricity generated by nuclear power. They spend a fare or walk based on price. But this does not mean that to reduce transport costs we had better drill for more oil and gas. It is an example of how a service industry drove academic progress in science due to the war effort; the software revolution and being at the forefront of academic achievement in the sciences and arts is going to have larger economic effects in the long term than primary or secondary industry will.

Primary produce also includes agriculture and that in itself has an extraordinary economy involving much waste and unsafe practices.


Freemarket Trade

June 17, 2013

The UK faces a question of staying in the EU. Meantime the USA and EU are negotiating a free trade agreement, the largest trade deal in human history.

Scotland is facing a referendum on whether it stays with the UK or rules itself, as an independent member of the EU.

The possible future relationships include Scotland having a Free Trade with the USA but not proud independent England that becomes instead a massive tax shelter free wheeling gambling and banking hub for investment shills.


Value of Money

April 14, 2013

Does the value of money matter? This is the primary divide between left and right wing economics.  To the Conservative, the idea that old money becomes inflated away is an anathema.  To the Progressive minded, the idea that there is no social churn, allowing social mobility upward is worth it but still possibly hopes that does not mean inflating away wealth. Accumulated wealth is only power if not attacked by time.  Investors with large funds therefore must hedge themselves against extreme market turbulence while increasing their capital base by accumulating returns.  When the Government invests in reducing interest rates, it is effectively transforming the sovereign wealth to protect an early version of some horror monster that can leave massive footprints on wealth.  An important part of progress is not to accelerate risk beyond the ability of the state to meet it.  When there is relatively no state, as in a tax haven, then wealth is not tied to the fortunes of people.

The balance between state and the potentials of commerce that grows across borders inexorably is challenged


The Price of Gold

April 13, 2013

The price of gold was once $35/oz.  Last time I looked it was looking like it would exceed $1900/oz.  And now it is falling past $1,500/oz.

The taxing of bank accounts by Cyprus has sent a shudder down the spine of the very wealthy who believe tax shelters provide a safe haven.  However, without Government backing, their accounts are vulnerable to runs on the bank.  It was only EU intervention that saved them from a disorderly default by Cyprus.  Maybe that would have been better for the rest of the EU.

And now we see that the price of Gold is also vulnerable.  Indebted countries may have to see off their gold reserves to cover their debt and this sudden increase in supply depresses prices.  Also affects the very wealthy as only they could afford to invest in gold as a “safe” place for their liquid assets only to find that their own actions to avoid taxation now produce instability in every capital market.

Horror of horrors.  Wealth may have to be invested in business.  Building wealth for others and a fair level of taxation provide the stability that wealth needs.  Continued investment in tax shelters and avoiding mutual responsibility by favouring speculative investment over long term business building threatens wealth as well as welfare.

 


Soros

April 10, 2013

George Soros argues that Angela Merkel’s German Led Austerity is the wrong medicine for Europe.


Social Economics

The blood supply can suffer from pressure or the lack of it. A well beating heart is the key to health and the functions of all parts of the body. The ancients bleed the system when pressure got too much risking ruptures or arrhythmia   A single point of failure is risky.  By putting pumps all over the body, and charging us for the privilege, the banks have effectively added multiple points of failure. So the system can go crazy hot or it can leak.  Offshore tax havens starve the tax payer from the benefits of prosperity.  Sometimes that selfish money finds its way back in along with bailouts to try and restart the engine.  All this extra capital sloshing around is hyper inflationary, but nobody is able to take advantage and grow as the capital leaks out.

We are giving the banks our pensions and lowering our cost of living as our numbers increase too far. The disturbing trend is that Governments stopped trying to prevent poverty.

 

Originally a comment in the Guardian in reply to article The Cyprus crisis is a symptom of what is rotten in the EU by Slavoj Žižek

 


The secret of economic growth

April 1, 2013

Economic arguments polarise into Right vs Left arguments.  How about recognition that our democracy allows change and adapting to the environment is what we need to do more of.  What are we, the British public, doing to export more?

Businesses need to take note that tax-haven economies are inherently unstable and can go belly-up.  Governments at least provide ballast.  Ultimately we will do better because the EU will cause economic growth.   If we build infrastructure it will be there to grow into, if we do not, growth is no longer possible.
(published as a comment in The Telegraph here)

What is wrong with the Government’s vision

March 23, 2013

In the Telegraph, Jeremy Warner states “Lack of growth has completely poleaxed the centre piece of the Government’s economic strategy — getting the deficit under control.”  and concludes “Osborne is often accused of cowardice and a lack of radicalism. He needs to be much bolder if he is ever to get to grips with the public finances, critics say. This may or may not be true, but the perhaps surprising reality is that if he is given the five years now needed to complete his plans, he will have brought about a remarkable transformation — some £24bn in selected tax cuts at the same time as a fiscal squeeze which reduces the size of the state as a proportion of GDP back to where it was before the last government began its madness. Brown’s public sector expansion will have been entirely reversed.”

Clearly, the starving off of all the grand schemes Brown initiated as a policy filter is not that well thought out.  Progress is progress, so some of what is now dust was causing growth that has now been lost.

Long term growth is caused by small businesses that can adapt to new conditions becoming large concerns making stuff that the world needs.  Of course stuff now can include intellectual capital realised from the results of ecommerce and other profound changes in the economic sphere that the UK is utterly failing to become adept with because investment is impossible, so companies continue to ride the same wave to shore.  But the tide is still going out because the Government has to create more dependency on introduced capital as it has utterly failed to stimulate sales.  The worst kind of manager shuts the door to preserve demand.

 Certainly, we should not follow the economic model of the bird that sells off its feathers to pay the interest on loans.  What we need is to foster new ways to fly.  British design and ideas are exported and shared with the world.  It is our task to continue our traditions, not burn books to keep warm.

Why Bank Bonuses should be in proportion for the good of all

March 18, 2013

The derivative collapse caused severe economic recession as it vaporised wealth but still, savers need banks to return the backbone of prudence and stability and provide for inflation proofing of prosperity.  Banks that  invest in bonuses that represent winners who also require losers in the markets they work in.  Losers do not receive negative bonuses, so their accounting  funds that could have supported local economic growth.   Huge bank bonuses appears to be an international economic phenomena, with each market competing with others for the bankers with the most clout.  If a generation of bankers agreed to invest their winnings in local growth businesses it could change the world.


Italian Left Lurch

February 27, 2013

Twenty five percent of the vote in Italy went to a party that want an exit from the EU and a return of the Lira. The Monetary Madness continues apace. When a country could inflate away its debts and then revalue again after it had cleared its path back to being an attractive place to spread into some of ones’ investment risks. As part of a common currency they can not con each other in this way – they have to borrow to cover the shortfalls that stem from corruption in the political class. Italy has rejected austerity but the 25% is not a protest vote. It is a game changer. It is a kick in the face of the EU. It may be fatal.

However, if the PIGS were to leave the EU, they could form their own trading bloc – one hopes they call it SPIG rather than PIGS or GIPS or the less pronounceable IGPS – they would then be able to inflate their way out of their primary problem, together.  And then they could then rejoin the EU as a block and create economic treaty zones, consider an example set of economic zones:

  • Central EU (Germany, France, Belgium, Luxembourg),
  • South EU (SPIG),
  • Eastern EU (on or adjoining the Eastern border),
  • Northern EU (Scandinavia, Denmark, Holland, UK)

Each part of the EU has an exchange rate balancer, so if they want to devalue, they can by negotiating revaluation elsewhere.  The four zones have floating exchange rate mechanisms with each other relative to capital value.  So any shift of liquidity between the zones has its economic effect.

Monetary conditions are created by a mechanism like the trading of bonds (not cash) between the Super Governments – here are a group of talented long range analysts can set the degree of valuation (this model may in effect be five currencies), the democratically preferred flavour of financial control and regulation levels that at least disallow fantastic risks with people’s pensions that maybe once paid off but now wear away at value.  Perhaps Super Governments have no other function.

Each bloc contributes to a common currency pool and sells bonds to it to maintain an economic state of relativity.  However something like that may or may not work it should be understood that the awareness of very different political system is required.

Europe without a central federal body probably leads to too many demands for regulation being imposed in the wrong markets as well as the more significant, in body count at least, the absence of regulations that would have prevented disasters evaporating vast tracts of wealth in an instant.  Such an ephemeral quality wealth can turn out to be. Protecting it irrationally may backfire.

The central purpose is to introduce long range capital increases where they are needed. The absence of any Government led stimulus or infrastructure corrections that long range planning needs to consider in its calculation of growth.  You can squeeze an orange once, but a healthy tree means more future oranges and you better have the infrastructure to squeeze them.    

“a far less great Britain struggling with a mere percentage of its economy left yet more people to employ and an inability of the state to collect fair taxes”

The apparent Tory creed of demanding tax fairness, while protecting the tax avoiders who support them, will seem shallow as the record shows a far less great Britain struggling with a mere percentage of its economy left yet more people to employ and an inability of the state to collect fair taxes means it stubbornly refuses to finance progress. Italy may serve to push the EU into progress and reform the lumbering beast.


Tax Havens

February 17, 2013

Adam Smith wrote the seminal work about capitalism – The Wealth of Nations. Growth was then based on nations competing in the most extreme act of international piracy in history, colonialism.

These days we talk of “bubbles” as though these modern gold rushes were a certain financial rhythm. We developed a science to predict and thus invest as a business. The most successful have been investing madly and hiding it from tax authorities. Capital is continually extracted from the wealth of nations and poured into tax havens in a sort of reverse colonialism – only to find its way back into the economy funding more Government debt via bonds.

The only way that the Government can reduce these debts is to have a money supply from tax revenue exceeding expenditure, or to devalue the currency. Western economies continue to need to spend more than they take. What has happened to the Wealth of Nations?

Business Insider