Tuesday, 18 April 2017

David Cameron's Last Economic Wheeze....OPM Pension Fund Raid

What could have been a major discussion in parliament has been washed away in the mire of brexit and the Scottish indy 1, is the shift in private pension law. Previously pensions were managed via a very controlled move from pension fund over to a pay-out vehicle called an annuity. This suited the industry quite nicely because most of those reaching pension just carried on in ignorance to this and put it down to jargon and small print, allowing their private pension provider to continue control of their amassed small fortune.

However what Cameron, or rather his economic advisors desperate for growth drivers to inject fluidity in the economy,  noted was that this money is somewhat not the company's it is the pensioner's fund. There was a cash log-jam in the consumer economy to be unblocked just in time for the wave of baby boomers crashing onto the happy shore of retirement. 

 It suits Tory individual freedom of choice to move the law to making it very obvious that the pensioner has control of this in effect, lump sum. Now it has to be said that the pensions industry sell a premise which is building a million pound fund in order to give an annual dividend from interest of between two and five percent of the fund's top line value. Of course the pension's company and their fund managers hope to make a heck of a lot more over 10-20 years of payout of interest on that lump of cash, and over the 30 or so years of contributions have made a very tidy margin on everybody's payments collectively. At death the pension fund passes to spouse or next of kin, and is subject to death duties/ inheritance taxation . 

You could as a prospective pensioner, elect alternatively to balance annual income by drawing down from the pot as well as the interest, but that really would not suit the whole game the pension fund managers play - they need lareg sums to spread bet and expect above 5% ROI year on year as averaged over 10-20 years. Most people do unfortunetly die within 13 years of retiring, and that age is about to fall on average as the unhealthy baby boomers, who have enjoyed too much of fags, drink and nosh ups, hit the buffers earlier. So given you have a million pounds to offer say a £ 25,000 - 45,000 annual income from the old annuity route, you can see that taking 100,000 p.a. for ten years is attractive - in the context then if you do make it past average age of death at only about 77 y.o., and then letting your PAYE pension pick you up if and when you are in your dotage and need to sell your house anyway to fund nursing home

Now of course the government does nicely out of inheritance tax - eventually- but being able to inject a huge amount of cash which is sloshing around in pension company managed funds, internationally it must be said, then the country will gain by short term growth, as in the credit cycle before of the 80s and 1997-2008 periods, with the VAT reciepts and other tax revenues being high. Suddenly the finest crop of baby boomers born in 1950-1953 will discover that they can manage their own capital, and despite what ever smart alec IFAs say to them, they will want to spend, spend, spend and then rely on the state SERP PAYE pensions so many stayed in or had via state employment, for their really decrepit years, where capital penalises you by forcing up your charges in nursing homes.

Pensioners on average are of course not stupid and balancing capital extraction with interest payouts plus your true life expectancy, or qualiyears as some call it then fuck it, live for today..

..A year or two is positively geological time in politics these days , so a 'quick win' was to be had, injecting billions of otherwise locked up pounds into the consumer economy rather than the global investment banker network.

The essence of people's capitalism and self determinisation or just a credit bubble which will squeeze for example, buy to rent prices upwards? It certainly is a little cynical and possibly anarchic, especially if you are a Norwich Union fund manager (for example).

Sunday, 16 April 2017

Say Hello to Madame George

Trans identity and rights have been eclipsed by other madness in world events recently, but one old and very petty little debate won't go away. Say hello to Madame George.

Often held up as a trans song, there is in fact no reality in this, just the misinterpration of words. Van Morrisson wrote Madame George as the second part of a probably a highly autobiographical pair of songs , the other being Cypress Avenue , of course mentioned in the opening line again of the latter in the brace of ballads.

The myth of Madame George being an early pro trans song and alluding to a flirt with blurring the borders of sexuality and the artist's own experimention there in, are completely transparent. Firstly in the very name of the 'lady' being George. Secondly in the general poetic narrative suggesting a forbidden, underground flirtation which could never quite be requited. Thirdly the mention of what some claim is ' playing dominoes in drag' when the police raid the place.

Alas these are just misinterpretations. Firstly George is not referring to a first name, it is a well known second name in Ulster, and as both the well heeled middle class avenue and the 'soldier boy' husband suggests, a protestant one at that. Leading from this, the sexual tension and intrigue is more understandably heterosexual and extra marital, as the swingin late sixties afforded women a greater sexual freedom. Lastly ' in drag' is actually ' an' drag' , and not in, with the word meaning a card game played for petty bets at the time.

Van Morrison has spoken little of his specific inspirations for his modern folk master piece ' Astral Weeks' but he has mentioned that he had an affaire ( or several?) with an uptown lady which meant him walking up Cypress avenue in Belfast. ' Marching with the Soldier Boy Behind' seems to allude pretty strongly to a woman in control of her destiny with some contempt for her husband. This has also though, been 'decoded' to mean a gay lover in tow, walking two steps back to avoid attention.

The subject matter is though more clearly upon setting in context of the young openly heterosexual artist's formative years, centred around an affaire or unrequited relationship wirth a femme fatale. She may have been from the Republic due to the references to a police raid on their gambling den, and Van Morrisions seemingly obsessional need to get the train back to Belfast from Dublin. This seems also to refer to the innapropriateness of having a liason with perhaps a lady into her forties, and Van Morrison's dubiouty over the relationship

For me Madame George is then and Ulsterian Mrs. Robinson. She is a chance encounter for the artist. Out of boredom or awareness of her sexual needs, she leads the teenage protege into unchartered adult waters.

Tuesday, 17 January 2017

Trumpman's New, New Deal

Trumpanomics Round the Corner, or More of the Same-Old-Same-Old?

President Elect Trump's inauguration is just a couple of days away, and he has in his latest interview continued his hard line on ripping up a bad trade deal. The balance of trade with China in particular is staggering. He is really talking about protectionism.

For the last thirty years, protectionism and tightening national border customs control have been very untrendy. In fact they have been consigned to the extremes of politics, with entities like the Italian Communist Party and some of the Neo Fascist organisations being the only ones who support a retreat from internationalism in economic policy.

The thing is that the West can live with a bad trade balance as long as it has a positive investment balance ie companies are listing in the west. Reselling and design in the west, build in the east is highly profitable and efficient in the eyes of investors because it avoids all that nasty risk of having to manufacture yourself and face things like skills shortages, trade unions and wage pressure.

The Liberals Got Shafted By Accepting Neo Liberalism

When Bill Clinton signed the first major free trade deal with China it was in the 1990s when US manufacturing was doing rather well, having modernised and been able to get itself away from the bad days of excessive trade union power. The concept was then that rise paddy land would buy our higher value western consumer goods in return for commodities and the type of low tech, high labour intensive work the west had "grown out of". This has become a complete nightmare of a mirrored situation from anticipated, where China has eaten up all the manufacturing jobs and rendered much of that hidden under-belly of the US to what is called the 'rust belt'. All forms of jobs apart from retail and personal services, and of course public sector, have been going east.

It just doesn't matter to the major brands where their product is made or what politics it is made under. This extends also to the major web sites - the mega cyberbrands - and mobile app's too, which are increasingly being programmed in China and India. Worse that just losing jobs, the west are also losing brand dialogue and suppliers. The growth markets in the east have massive untapped potential- already the affluent middle class in China, India and the Island Belt (SingMalDesia as someone called it) is approaching half the entire population of the USA. Brands look to their tastes and needs first now.

Strategy for Balance of Trade based on Financial Markets, Premium Goods and Brands, Has Failed 

Selling our high value goods to this massive growth market has just not been a job creator. In fact the opposite, because some of these brands have been bought out by eastern investors, including those supported by good old Keynsian cash from national banks. Incredible that we allow a government and credit fuelled group of Tiger economies behave like this while the western worker has to accept that such spending is interference with natural market mechanisms. We forget all too quickly that there are other economic models than the neo liberal one, and that it has taken Trump of all people to drag off those ideological emperor's new clothes from the ruling elite in their Davos coseyness.

The biggest issue for the Democrats and left in the EU countries is that they swallowed the 'new consensus' on more free trade and less borders is always good. In effect there became no fundamental opposing economic policy, rather with the Clinton period and New Labour period, and the Social Democrat period in the EU and scandinavia of the 1990s, it was on who couls spend the tax best and offer the consumer a better deal on their visa card.

Real Living Cost Inflation and Erosion of Wages As Bad as The 1970s?

We are in fact also in a wharped mirror decade which is looking a lot like the 1970s to people who have to balance family budgets. Then we had an energy crisis, and overly powerful unions which lead to high inflation in retail prices and a devaluation of western currencies over the course of seven years or so. Now in fact we have of course real living cost inflation in that housing, commuting and utilities are all costing more, but none of these show on the consumer price index which is the great beaming siren of health in the economy. Only it of course is an outdated index in terms of erosion of spending power and standard of living.

What capital has been able to pull off is a health chart for the patient which shows there is no disease in the west, that we only need to all work harder to get on. Their capital assets and income increase in value based on this rentier economic investment in housing, privatised utilities, transport, health and retail. There is no consumer price increases which worry the currency markets, who are myopic to the balance of trade. IN fact you could say that the anarchic currency trading system is exacerbatic to real inflation for ordinary employees because it values also a high total stock value and private equity flow into the country's housing market. That keeps demand for dollars up.

Neo Liberalism is the Run Away Goods Train of Ideology Which Has Delivered Social Unrest

What the left really did not realise is that Neo Liberal globalisation is a hurtling goods train for the delivery of poorer living standards for a very large proportion of the workforce. It not only exposes workers in manufacturing to the global pressure to compete with the lowest common denominator, or the highest secretly subsidised state. The management philosophy sweeps sideways into the domestic service economy and over into those middle class, high value added jobs which now have wages which are stagnant, and thus become eroded Unemployment and oversupply of graduates is good for the bad bosses out there, because it means they can offer take it or leave it initial conditions, and even reduce wages or increase working hours on an unpaid basis. In several professions in the US now, it is necessary for ordinary workers to do an extended period of wages free internship. This is all just the market, the facts of life, the value you have as a person versus the next man or woman in line.

We used to call this DOLE RULE and we used to something about it via organising our labour. Post war we, the western middle class, strung out our time of imperialism, and protected our imperial markets to a large extent allowing slow growth in bilateral international trade. We rebuilt europe on keynsian principles, and the US white worker at least, never had it so good under the 'virtuous cycle' of the 50s and 60s. Keynsianism. Protectionism. Collective Bargaining via Unions. Free Education. All these bads. Yet our economies grew faster in that peiod than the subsequent three decades, there was a higher spending power and lower basic costs of living relative to wages. In fact inflation during this period is lower than it was in the last three decades.

It all went wrong in the 70s with several key factors, one of which was unrelated: the arabian oil crisis. The other one which was political and local was on the one hand powerful unions and on the other management struggling to raise investment for new technology and plant to increase productivity. We entered a kind of perfect storm of inflationary pressure and decline in those companies which did not modernise production or methods. We saw rising automation too, but it was general difficulties in teh economy coupled to the baby boomers being too proliferate which lead to job losses. In fact unemployment and in particular under employment became a lot worse in the 1980s, but this is a little facile because women entered the work force as full timers en masse and this was also a disruption. A lot of things caused the malaise of the 1970s and set the route to slavery the Neo Liberals pushed us out upon in the 80s.

The net result is the US Rust Belt and growing social unrest in the old west. Scapegoats are easy to find, and the free movement of Labour and blind eye to Mexican labour the Neo Liberal epoch permitted is coming to an abrupt end with Trump's wall and Brexit. We want your markets, but we don't want your people and we won't buy our brands made in your country any more.

 In the UK, there is a surprise low productivity to economists, but if they bothered to look away from the Financial "City" and the North Sea, they would see everyone selling insurance and cappucinos to each other, or offering nail manicures, or being marginalised in privatised services into low wages and temporary contracts. We are in a malaise, and the lower third of society are paying highest for it, yet often lack the articulation or understanding for how they were put in this situation of stagnant wages and a hard labour market yet with rising living costs.

Trump knows that the balance of trade is paid for somewhere. It is paid for by the personal credit mountain and government spending. In part of course, the government had to prop up and subisdise the failing financial credit industry, in a similar way to the sick car industry of the 1970s. In other ways, a large part of the economy is driven by imports being sold to people on the public pay roll, and an increasing proportion of American internal industry is paid for by government spending such as Medicare and defence. Because the market for labour is so saturated, employers can get away with marginalising retail and service workers into precarious low hours , taking top up benefits from the state.

The trouble is of course that Trump does not just oppose an Ideological Economic Epoch, he also opposes huge vested interests in the USA and lobbying power in Senate and Congress on both sides of the house. China is a major investor in both the stock exchange and private equity (mostly real estate). The big brands don't want to have to manufacture in the US when they can do it easier and cheaper in China, and get loans there from the state's back door. Retailers are a powerful lobby who dont want inflationary pressures or a threat to their supply of cheap labour. Health companies and defence manufacturers dont want the US public purse to get a 'better deal' as Trump wants. He faces entrenched political channels for all these interest groups, and a stock exchange and currency market which may punish him.

Further to all this picture of Trump being perhaps the Left's new surprise hero or stalking horse to more equitable national economic policy, he has reiterated this week his committment to building infrastructure in the US. This is a keynsian and Federal approach to fixing problems, both of which are abhorrent to Neo Liberalists. It starts to look more like Truman's New Deal than Reaganomics take II.

These ertswhile socialist policies though are not going to be brought in with a punative taxation plan for the upper third and top 2% of society, quite the contrary. Trump looks to balance the books over 5 years via productive activity in the economy dragging the labour maket up, and a better more symmetric trade deal with China. He will cut defence if he can get away with it, and ease the sense of  New Cold War growing with Putin. He will cut propping up Israel. Trump's economics seem to be from the radical left mixed with Thatcherism of the purse strings in the handbag. Trump has been a supporter of the democrats before. Who is this man really? A lot of republicans asked the same question during the primaries, but now he has his uber right power base established they do not dare dissent before they see weakness down the line. A republican " house and hill " is quite a rare combination taken in the context of the last half century. It is seen as political opportunity for other reforms and regressions of laws and systems. Also they know now that people do not beleive in the revamped Bushanomics offered by their other presidential candidates.

The Neo Liberal, globalised model is broken for the US working class and has also eroded the standard of living for the middle class. Like Lenninist Marxism in the USSR, the public finally find a mouth piece in the corridors of otherwise entrenched doctrine and ideological worship. Trump is that Gorbachev for Globalist Neo Liberalism.

Simplistic solutions for limiting immigration and negotiating better trade deals behind closed doors seem to favour the worker in the street, but the structure of the national economies are not there to actually make the change. They are still oriented around globalisation and Neo Liberal anti organised labour policy. It will take brute force to shift this old epoch out of the way and it is Trump and Brexit which are either those forces or the stalking horses to a new era. It is going to be different.

If you say that Brexit and Trump have pushed through a log-jam of political correctness, in fact it is far more true in motivation to vote, that they are a move away from Economic Correctness in the Neo Liberal epoch.

Friday, 30 December 2016

Jerome K Jerome ....a Man of Surpise and Some Disappointment

Jerome k Jerome is of course as synonymous with "Three Men in a Boat" as Joseph Heller is with "Catch 22” or Slade are for "Merry Christmas". He can too easily be taken as a one hit wonder.

For the fan of the spell binding cameo of quintissential English middle class leisure that 'three men' " is, I wuld recommend not first and foremost going on to Three Men on the Bummel. Rather take a necessary detour through his wonderful autobiography.

He is far from the typical english gentleman if we consider the child being the father of the man. He spent much of his childhood in relative poverty in a famly where financial peril was always at the door, or trampoing right in over the threshold. Far from just being a humourist as he was once labeled, he is a marevllous writer on contemporary history and debunking cynic on politics and the nature of man. His life spans the late Victorian and Edwardian period, and  experienced perhaps the second large wave of 'metropolitisation' of London as its collection of villages and minor townships conurbated  with the loss of pastures, parks and stables and much of the remaining ancienne housing and 'cottages' was swept aside in the rush to modernism and the rebirth of the city as the banking capital of much of the empire and hence world. From horse to horse power, and the expansion of the underground London was conjoined with arteries of traffic for the speed and pace of a 20th century power house. With this too, many of the old quaint customs and foibles of coach travel died away, many of which had been in place since 'Good Queen Bess' donned Crown.

If we talk of the "gig' economy today, then we need only read back to Jerome's own experiences of very loose connected work as a young school leaver to realise how tenuous life with no labour safety rules was. His career we may interpret as strangely modern from thus outset through his 'struggling' writer phase, his theatrical flirtation and his enterprises in publishing and media. A true portfolio career with his books , hunorist novels as th may be, not only being major milestones but also punctuating the flow of real living history which ran through his life. His works are largely autobiographical on the oine hand, and on the other they are steeped  in clever observation of his fellow human kind, and witty social and political comment. In driving for a few-more-bob, and living often a little hand to mouth in his formative years,  having been born into a financially naive and misadventurous houshold, it seems he let his quick wit get the better of him perhaps in pursuit of next month's rent payment?

His writing life times span a transitionary period which had great uncertainties, impirical arrogances and social exploitation which culminated in WWI in western Europe, and the revolution in Russia. The pre war Edwardian period gets little mention in the history books without this very after context. He manages to capture a sense of what was actually happening in the various strata of  English society in the upheaval of modernity which came in the wake of the wealth created by the industrial revolution. He also is very pro German as is clear in his Autobiography and "..On the Bummel" which is set in Germany.

The sequel to Three Men in a Boat, is a pale cousin in structure and althougnh the content is rich and often delightful, it dwells too much on the minutia of the Germany of the 1880s. The first book has strwgnths in havng a natural structure and literal sense of direction in being a journey both well known and in the mundane Thames, while of course revealing the hidden nature of river life and idiosyncrasies which only the itinerant floating traveller truly experiences. Also he has three equally bumptious, pig headed and clowning fools to develop in character and test in mettle by the trials of a Thames holiday. Not forgettting Montmorency as a foil and distraction which gains our instant affections and shines through as the only one in t party with a grain of sense. In '..on the Bummel' Jerome fails to advance the characters and their friendships, over familiarness and petty rivalries. This and the rather disjointed and unaquainted route they choose mean to me at least, that the whole book lacks cohesion and becomes a series of witty essays, observatiin of the then teutonic and character cameo inserts.

I have had time on my hands to re-read "...in a Boat" , many notes upon its route along the Thames, his autobiography and "...on the Bummel" yet being somewhat idle, have not come to "idle chap" or his other novels. I find Jerome to be very much like myself. Interested in the truth of matters, and prone to a self opinionated view of the world, witty and crass and a little disorganised. "Three Men in a Boat" gave him what I too need in life, a hand rail to feel his way forward in a new modern style, and perhaps a scaffold to build his architecture. When lacking this machinery of a well ken't and easily parceled journey, his narrative wanders off into self indulgent journalistic commentary or these character cameos which just last too long in ' on the Bummel"

I feel he could easily have been the English Joyce if only he had written more on the passing plights and social moires of his times, and produced perhaps a "Londoners" or his own great greek framed divine comedy of a Ulyssian tome. I am sure James Joyce was indeed influenced by Jerome when I consider the charactures, the dialogue, the wit and the pathos we find in "Three Men..." . Scholars of course point  how clevery-clever Joyce was to quote and follow the Greek meta structure which they so care to extrapolate to and pontificate on. Ulysses is titled though out of Irony as our anti hero, our mundane king of Dublin, is really better understood by those of us who have spent time on the lower banks of the Liffy amongst the Irish and their stream of wonderful collective consciousness. What irony that the imposition of a foreign, conquering g Imperial tongue  upon the people's of the emerald Isle would then bestow upon them the possibility to extort the same language to heights of expressiveness in the every day street banter and the  literary genius. Some consider Ulysses to eclipse all of Joyce's other work, but for Jerome it is true that his Thamesian excursionary tale is by far the author's greatest novel. 

Thursday, 10 November 2016

Trump - A Gift to The Left

Trump is a gift to the left becasuse he is the first republican in three decades to renounce global neoliberalism as failing the blue and white collar workers of his western homeland.

Bernie Sanders has been quick to pick up on this point. which may come as a total shock to many on the left. However his positive comments are to be welcomed by all.

Neo Liberalism has the common sense appeal that you are worth as hard as you work. The republicans have cut income taxes such that a significant proportion of employees in the US don't pay a jott. This has been the compensation for the removal of those nasty restrictive union negoatiations, which hindered the economy- according to the 'old' - new-right. Only that after 30 years a larger amd larger proportion of the US workforce is finding it harder to even make ends meet, let alone save for the size and location of house they need, or a college education for their kids.

Trumpanomics are set to sweep aside Reaganomics. Where the republicans once fought for NAFTA and Milton Friedman followers  completely burried their heads in the sand when it came to socialist, keynsian China, Trump offers the soltuion which only the so called fringe anti globalist left, like Bernie Sanders and a younger Jeremy Corbyn touted before.

Anti globalism was an underground movement. Mask wearing students with rucksacks and cycle helmets toying with the Police at G8 summits to grab media attention as the bad-boy rebels of our age. Now anti globalisation is at the centre of the neo-neo-conservative government of the USA.

Neo liberalism and the concepts of Milton Friedman and others are a bit like Keynsianism- they maybe work to create well being in closed economies. When you globalise, they both fall to bits. Being only worth what you work for means that your job will inevitably go to a cheaper land, unskilled shop floor or skilled CAD designer. In a world with so many countries having moved vast elements of theirn population outbof subsistance and barter since the 1970s, this is inevitable.

So Keynes and Friedman just don't really work in a global economy, because you actually have endless labour supply and maybe a half century in each developing country before the standards of living and costs of living render the difference negligble. On the Keynsian side, you can't "print" money when half of it is spent or invested abroad- you can't underpin the world economy by US 'qauntitative easing either'.   Unless like China, you cheat.

China has on the one hand access to global markets virtually uninhindered by virtue of both trade deals and global corporations moving production there. On the other hand they restrict access to their market by owning domestic suppky chains and artificially deflating their currency through Keynsian printing, while restricting also the free exchange od that currency. They tackle inflation as RPI only with a huge supply of cheap labour, massive investment in agriculture and some degree of command competition, where in fact there are many more competitors in some markets than typical of the west. Their banks are national and lend money to support all of this. Living cost inflation for actual workers is as bad or worse than in the USA, but real life style inflation is dressed up as desirable capital gains in private property. Whilenthe central banks and finance systems of all the major economies underpin this with public money and inadequare housing policy.

Trump has not only defied the politically correct, to the joy of the "phobes" and "ists" of the country, he is also not economically correct. He defies this system, and offers an alternative. When he stood in front of blue collar workers in a Michigan Ford Corp' plant, he threatenrd Ford management with 35% tariffs if they moved to Mexico. Clinton and Bush era just went along with more and more globalisation and lived with mediocre real, money economy while the super rich expanded their immense wealth in real estate by astronomical figures, pricing many ordinary workers out of ever owning a home in the cities or within an hours' commute of all the main Metropolii in the USA. He knew there was a fundamental disconnect between wealth creation and globalisation which was punishing the working person. No one else dared go against the monetarist orthadoxy, even though it was dead on arrival in september 2008.

That my friends, is why Trump won and will be a remarkable president it has to be said.


Why Then Is Trump a Gift to The Left?

Barack Obama stood 8 full years against a partisan republican congress, who frustrated and slowed much of his policy and continued with economics which secured wealth for the rich and an expanding poverty for a greater percentage of employees. Hope could be sold, but those hopes could not be delivered because the Reaganomic hang over is rising costs of living on wages falling in real terms, or actually cent for cent lower than they were 20 years ago. Affordable healthcare took longer to come into effect, and congress sat back without interfering as the inflationary pressures it exacted, went unchecked by policy and tougher negotiation with suppliers.

We had an impasse. At a time when hope was promised, and so much money was used fixing the broken laissez-faire that the US government may have well shot the bankers and payed everyone directly. There was a bad political situation, which in part reflects the republican 'partitioning' of the geodemographic electoral system, but it just was not tenable. Clinton in charge of a republican congress would be more of the same.

It is then now far better to let the republicans get on with it. Why  is this better than a Blue POTUS, Red Congress?

This is because by no means is this business as usual. Trump has won on a promise to cut immigration drastically from Mexico, and protect  US manufacturers from Chinese and Mexican (the two main 'outflagging' nations for the US)    This goes against two of the long held Republican Tenets  of ideological free market economics. Free movement of goods and labour. Protectionism - against cheap currency in China, and slave condition labour in Mexico (just one step down the supply chain if you are a 'clean' investor in plant there)

Also it puts a focus back on manufacturing and primary extraction of raw materials domestically. These are two alien concepts to Reaganomics. The republicans and Bill Clinton years did nothing much but allow industry to become less productive, while the rising sun of socialist bank rolling China was too tempting even for those with free market religious fervour. The rush to the east was on again, after Japan had penetrated the US in the 60s and 70s. 

This is the biggest gift to the Left across the world. The left has swallowed so much of monetarism since the 80s that it did not dare suggest protectionism. China was touted as the sunrise land where the west could sell its' higher value products, against inflation busting supply of the cheap, unimportant stuff. This is a completely wrong strategy for China at the wrong time. China is printing money - lending companies huge sums to start up and grow, building enormous infrastructure the likes of which HAVE NEVER BEEN SEEN ON EARTH before. Manufacturing companies in the west, even when they are profitable, are told by their investors to move to the far east. Reasonable ROI from production twenty years ago are no longer good enough when the opportunity for more margin and easier expansion is on the cards in China. In effect the balance of trade will continue to grow worse until all the West have left are local service industries and protected defence and health industries. The US is already perilously close to that with the next round of relocation on the cards.

Despite the promise of China being an ever bigger market for western wares and services, the balance of trade will get worse. Luxury brands which become successful in China, will be bought out by the Chinese and production moved there. The qausi private/state banks and their chinese clients are investing big time in the 'rentier' economy round the pacific rim, and as far away as Sweden where the state banks own the 'privatised' high speed services. Property, leisure and golf, mining. They are like locusts over the world, all with socialist printed money and command capitalism. Yet we in the west have had to swallow this, with stiff monetary policy and wage control in the tide of higher real costs of living.  We are told that we have to compete, we have to be cleverer, we need more capitalism and freedom of movement.

The Left would never dare have gone back to protectionism. Yet Reagonomics had run its course, in a similar way to how post war Keynsianism ran against the buffers of inflation in 1973, so in 2008 the house of cards fell in on itself when so much of the economy and money supply was tied up in the housing market yet there was no real value adding economy underpinning the growth in property wealth and debt. It seems thirty years is about the time economic orthodoxies take to cycle through before they stop working, or people come up with alternative theories which can be put into practice.

In fact Reagonics and Thatcherism did not stop the fundamental idea of growth through the money supply - printing money. Both relaxed access to mortgages and consumer credit. This meant that people for a decade could enjoy a higher standard of material goods, while wage rises were moderate. Many ran up debts they could never expect to pay off, and many home owners took out long term interest only loans. Growth was further fuelled by tax cuts, and of course in fact, expansive public spending on defence and health care (The US government employee contributions are the lions share of medical insurance payments in the USA, and it gets a long term bad deal on drugs and treatments because of bought out congressmen) After the volatility of the late 70s and early 80s,  quietly, manufacturing industry decayed further and when China came on line as a free supplier with trade deals which could only make for a bad balance for the west, the decline accelerated. The internet bubble burst and it was down hill for the west after that, with entire economies living off national credit cards and the circulation of money through debt. Qauntitative Easing is basically keynsianism and it basically secures and benefits the banks and worlds richest investors at the top of the Pyramid. The lie of trickle-down became the diffusioin of socialism for the rich, and that trickle-up in wage/cost of living to the rentier rich had eaten the quality of life of not only the lower working class, but the ediucated middle class.

The UK is only now an inch behind the US in this respect, with further privatisations, brexit related errosion of employment laws,  and a tight supply of housing. There has been a 71% increase in child poverty since 2010. Camerom's response was to redifine our western, 'luxury' level poverty line. The Brexit vote was largely about immigration and that was largely about competition for jobs. Instead of any unionisation or national wage negotiations for tariffs based on skills ( as they still have in several EU and EEA countries incdentally) a market solution could be offered, and many hope for deportation not just 'control' over immigration. Also in respect of China, it just cannot be really economic to fly fresh Salmon from Scotland to be filleted and packaged in China, and then flown back for sale. There is something fishy with that! The chinese are subsidising via bank loans and infrastructure.

Trump then can achieve much for the Left against the old neo liberal establishment if he really is serious about flagging-in US jobs and investment. This protectionism will be inflationary, but China may be brought to a less skewed place by harder negotiations which render US and western products more competitive domestically, and protect the key auto and aero industries from unfair competition.

Of course Trump may fail on this policy, because his own Republican Congress may block him. But that will be hard, the message is out there, and it is based on the truth. China and Mexico are stealing jobs unfairly. If he does fail to secure a better trade deal because of congress, then who knows, he may jump ship and become a democrat? Also this will leave a new, more left Democratic leadership to rush in and claim this ground and get control of congress and POTUS.

Raging Against the Trump Machine

There are a few other areas of policy which he will find resistance to over time. Firstly he is the great blue collar hope, so worsened pay and conditions which are likely under the republicans, may lead to a back lash of disappointment over percieved broken promises. He has to deliver to a lot of discontented people in blue and white collars who are struggling to make ends meet, and can in no way expect the material standard of livbing and free time their parents generation enjoyed.

Climate is there also. Finally the sceptics and their paid for, minority report, pseudo science and doubt calling gets centre stage. However Global warming is happening, and at a rate which is quite possibly purely antho-acclerated. Nearly the entire population of Florida will be adversly affected if the antarctic and greenland ice caps melt by a third. It will destroy land, infrastucture and  in so doing demand vast public spending or a decimation of the economy there. Rivers and harbours in the US will also be threatened. Four years more warming under Trump and a reversal of climate policy may then lead to real fear scenarios with more extreme weather and more rapid melting measured on the ice caps. Soon we will have  over 50 years of weather satellite data to analyse and 150 years of sea level measurements.  Fear of the unknown for the public and fear of economic catastophe for the state will drive post Trump politics back to the green.

In terms of minorities, where as Trump could cynically exploit the racist and islamophobe vote, the Democrats can secure more of the Latino vote and retain their black vote. With Pence as VPotus, there will be a clear anti LGBT bible-belt agenda. These may seem like small minorities, but they can have a large impact on the overall result as we see with the Bush/Dukakis and other runs which have been closer than Clinton/Trump.

Most of all we come back to the economy, stupid, and Trump has broken the wheel of Reaganomics, of globalisation, of putting up with your lot and not expecting politicians to actually change anything but for lower taxes. Even if Trump is frustrated by congress, or the economy falters for other reasons, the net result is that new economics are on the cards, and Keynsian new deals for the people and protectionism, could once again form a new epoch of growth in well being for western citizens. Shorter working hours, better pay, better holidays, more free stuff from the state. All these terribly bad things that Thatcher and Reagan tried to sweep away and sold the public on 'nanny capitalism' - your own best efforts from cradle to grave will secure you a good future alone, in a free meritocracy. Breifly we saw this hope flicker, but it has soon been taken away by on the one hand investors moving plant to China, while on the other the same investment over class tightening supply of housing and forcing more money to flow from your pockets to theirs via capital investment and the banks they own.

Coming out from all this then, there are four years with positive economic ground-shift changes from the broken epoch to a new, and very much else to rally against. Race, climate, nature and environment,  worker's rights, women's rights, healthcare for lower paid workers, access to higher education. All these are issues which like the in the civil rights' period will come to be movement issues once again and new campaigners will emerge organically, without the backing of billionaires, but via word of mouth and social media. The trad' media will continue to go on line, and new battle lines will be drawn now that the centre of politic is drifting to the far right such that some media will find themselves on the left.

There may even be a new moderate 'anti tea party' republican movement who try to drag politics back into the centre, with common sense if Trump goes wild with Pence in arms with him. No longer have we the 8 year dichotomy of hard right congress and a progressive President, we have a way out there right wing candidate with a conservative mid right trailing behind him in where they stand and how to react. We have four years of  Republican against republican with a POTUS & vPOTUS agenda which is more radical and less tolerant than all the Reagan and Bush 1&2 put together. The public can no longer blame one side, there is only one side, and republicans blaming republicans in congress or against Trump,  looks a lot like civil war and hitting the self destruct button.

Trump is a gift then. Like Thatcher and Reagan, Roosevelt, IKE, Kennedy and Clement Atlee, he is symptom of a demand for change after difficult times and an impasse in the ways things have been done in the outgoing, failed epoch. The Left need to ride this four year wave and in the UK, tackle Brexit outside the EU or by going in again, but in either way, the hipocrisy of command capitalism in China needs to be tackled in order for the west to do any value adding activities in production, and not keep on living off the house of card property and consumer services' industies. That is the recipe to grind the western worker into poverty, and Trump is breaking that mould.

Wednesday, 2 November 2016

Why Brexity Dear God?

Brexit is just a lot of hassel for me personnally and also I can see that lots of people in business are going to hate all the administrative and customs/ quota related bull shit which will result when the EU has the boot on its foot as the larger of the two in this quarrell.

Brexit was not about our pucker fishermen and back bone famers - they only make 1-2% of GDP and including food processing, only about 5% of employment. It wasn't about becoming an offshore investor haven, because London is so entwined with EU investors that it will be subject to legislation anyway, and also of course as is happening, a chicken run to the continent. It wasn't about British manufacturing being hindered by those ISO EN's which even the Americans and Chinese are adopting. Nor was it about CE labelling, and the existing right for national sellers to use local country labelling anyway.

It was about " johnny foreigner taking our jobs and women". It was about the percieved threat of mainly mulsim and african migration. 

On the first , it offered the neo-new-right, a way of dressing up a market solution to solve low wages and unemployment, while avoiding any other legislation - the UK would still be a wonderful place to invest due to its weak labour laws and easily sacked, overtime free and otherwise exploited work force. On the second, the war in Syria will come to an end, and migrants form Somalia, Ethopia, Afganistan, Sudan and Eritrea will be sent back and blocked eventually from coming because those countries have large safe areas and the young men leaving ar just economic migrants in the vast majority, not persecuted sects or political assylum seekers.

The key question then is will controlling EU worker immigration actually be a market solution which will force up standards of living and training or will the net loss of flexibility and skill availability in the work market slow the economy enough that other "British jobs for Brits" will be lost? Is there in simple words, a net economic benefit from EU workers being migrant and seasonal or relocating to the UK or not?

What is actually in reality affecting those glorious UK manufacturing jobs and exports is China more than anything. A socialist dictator state which prints money to keep its' currency artifically low, and fiddles with various different rare metals and silicon chips. Command capitalism with party lead 'private companies' and the national banks investing in businesses and infrastructure like there is no tommorrow.

 In a word, a Tory hades, economic hell on earth, a dystopia for the Tory dream of free markets and supremacy based on the good old days of British endeavour. The balance of Trade with China will be negative for a long time. Salmon from Scotland, gets freighted by plane and filleted in China and shipped back fresh and frozen. In factories funded by 'socialist hand-outs'. Ooh, but the growth possibilities for those luxury goods the UK wants to sell ? Well the Chinese are very interested in buying up those brands and shifting production to their nation. And buying property. And land. All under pinned with the printed money that David Cameron was so keen to warn Jeremy Corbyn about on his first stand at the despatch box.

Trump bless his cotton socks, knows this. He sees China as the fools gold of western capitalism and as the major threat to the economies of the old west and the whole concept of free markets. Pity he's a lunatic.

Monday, 19 September 2016

Irony of Therese May Leading the EU to Solve the Refugee and Migrant Crisis

Ironically Therese May will now lead the campaign to shore up the flow of migrants. Which is in fact no more than for following the actual rules of the international convention on refugees- that they have the right to seek assylum in the first country they come to.

Furthermore the UK leads the way now on offering assylum to families with young children directly from camps, which is of high humanitarian value in the face of the alternative of illegal trafficing to seondary states and migration to perfered state of assylum. Further to this, is the consideration of safe areas in Afganistan, Somalia, Sudan amongst others countries, where single males of non persecuted ethnicity in particular, could be expected to relocate to  instead of migrating.

 A stage yet further would be to consider the status of Eritreans and Ethiopians in particular who are not political assylum seekers, rather fleeing poor economic possibilities.

These types of sensible actions coupled to a closure of borders and setting up of assylum centres on the periphery of the EU and in such as Turkey, Jordan, Egypt, Libya and Lebanon are the way forward for the EU to show that they have control and are acting legally and decently. Merkel can no longer wish for 2 million new, cheap workers to make up for German women wanting to have careers and using contraception.