I don't know about you, but I have my own financial adviser, therapists, student loan bankers, in-house medical specialists, career advisers, child care volunteers, business consultants and educators. It is a highly effective support and advisory network but best of all I get is all free!
This may sound all very surprising but it is part of a deal I was given (I didn't even negotiate it) when I was born. I joined something called a 'family'.
At the moment, there are a lot of people suffering from economic woes and understandably so. There are a lot of people who think they have the answer to the aforementioned woes too. Usually it falls into one of two brands 'austerity' or 'growth' (for growth public borrowing). But I've got an new engine for growth. More people can sign up to the same thing I did when I was young, a 'family'.
Amazingly the burden this would lift off the state would be extraordinary. I mean think about it. Everyone could have far greater support than they do now, saving them from relying on the public purse, maintaining the standard of living while reducing everyones costs.
How do I know that this would work? Well interestingly these groups have already been rolled out across Asia and are doing a great job there of internalising problems and expanding access to various skill sets. For example, say there is a 'family' of 5 people. Statistically at least one of them is likely to be unemployed. On their own they couldn't afford to retrain, for example. However, the other 4 are likely to be employed and so if they can share their money in such a way so that the fifth retains and starts work then eventually the fifth person will return to productivity and be become a net contributor to the 'family'.
Well so far no different from the state, right? Wrong. There are additional advantages of using the 'family' paradigm. For example, where as the state doesn't know you or me personally, the 'family' will, so they will be in a reasonably good position to judge whether the training is of value or whether it is just a scam to get more money off them. This is something that would be very difficult for the state to do, but due to the small nature of these 'families' they are aware of what the course is like and whether it suits the person taking it. Amazing huh!
There is another plus too! When payment has been made and the member of the 'family' has retrained, the other members of the family often don't even demand direct repayment! How incredible is that, so it turns out that person will not be sullied by huge amounts of debt, constantly creeping up due to interest when they are just starting off in their new and (usually) not highly paid work!
The benefits just keep coming too, because fraud is reduced as the 'family' members are usually fully aware of whether their members are working or not, it makes it incredibly difficult to claim money for being unemployed or injured if they are if fact lying.
Wow, no wonder Asian economies are so efficient! What may surprise you more is that such 'families' are in fact already in use in some places in the UK, but have become over the 40 years far less popular. Individuals appear to only see the benefits of independence from 'families' despite the fact that this provides far less support and costs the tax payer way more.
Most worryingly, most politicians, instead of championing the cause of 'families' and promoting them in schools, educating those who could be future members seem very reticent in doing so. They are usually far more in favour of expanding the state instead, despite its inability to regulate fraud, its higher costs and inability to provide full support and personalised guidance.
There seems to be a belief among many politicians that if one supports the 'family paradigm' it is somehow saying that non-members are inferior or that they are selfish because they are not willing to spend more on the vastly less efficient state spending.
This is a shame, because countries don't waste time thinking that non-'family' members will feel inferior, their culture just keeps families together in the first place. I just wish we'd follow suit, rather than thinking the best way to help a dog who has lost his bone is to take the bones off all the other dogs to make sure he doesn't feel bad.
Wednesday, 23 May 2012
Monday, 23 April 2012
Very liberal... just like a dictatorship...
Is it just me, or is the left and the far right starting to look like the same team?
For those who don't know, the far right is meant to be authoritarian, believe in strong state control and often characterised as intolerant towards minorities of race/religion etc.
The liberal left is meant to be about minimal intervention from the state and providing freedom to everyone to as much as they want within the limits of what will affect those around them (ie, you're not allowed to shoot someone, because they interferes with their life etc)
Generally everyone hates the far right for obvious reasons, while the liberal left is 'cool' because they are usually for legalising drugs, reduced sentences for criminals and for all round telling people that whatever lifestyle you go for just fine and dandy.
The flaws with both are simple:
Far right: see Nazi Germany
Liberal: it doesn't take long to realise that most people's behaviour has a cost for someone else, ie, you take drugs and you'll end up being treated by the NHS... which is paid for by me or your neighbour or whoever else didn't want to have to pay for it.
Anyway I'm not actually on my point yet, which is, as I said at the start, that actually these days the liberal left is starting to look like the same team as the far right. Maybe they don't play in quite the same way, but their tools and practises are starting to have an uncanny similarity.
I'll take a few examples that are going on around the world right now:
Sweden & Germany:
Sweden is usually portrayed by many people as a liberal paradise. They have high investment in rehabilitation and relatively 'pleasant' prisons. What they now also have, is a total ban on home schooling your own children. Not only this but the government controls the curriculum for any non-state schools. What difference does this make? I hear you ask. Well ignoring for a moment the fact that on average home schooled children tend to get far better grades and be more involved in the community, the problem can be summed up in one sentence: the government has legal control of what every human in the country (excluding immigrants) must be taught at a young age, that is when they are most impressionable.
The scope for indoctrination is staggering. Anyone who says anything that the government considers untoward can the act as a flag to have their parents investigated. The Nazis were known for encouraging children to report their own parents if they said anything in the home against the Nazi regime, amazingly this could easily have a similar effect. Just set the curriculum on whatever you want, get people to discuss it and chances are they'll say what they've been taught by their parents. The fact that it was also adopted in Germany isn't encouraging. Last year some parents pulled their children out of a sex education class, they were fined €2,340. How liberal is that? You don't even have the liberty to educate your own children on 'family matters'.
United States, New York:
Recently in New York they have made it so that churches cannot use state school premises for a place to worship on a Sunday. Never mind the fact that this brings in money for state education (ironically something that liberals in America always complain is underfunded and inadequate), never mind the schools aren't used on Sunday so essentially it is efficient use of resources (something that American liberals also claim to care about) they've decided that churches can't use state premises because... it suggests that the government supports Christianity.
Once again irony knocks considering the pledge of allegiance often recited in schools states "I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God" and that the money which they hand over in order to pay for the hire of the premises states "in God we Trust". The fact is, hiring out a hall constitutes an endorsement, according to New York state. Presumably those who hire out a wedding premises endorse the match and the couples choice. Does the state favour pilates over yoga if it rents out a community hall to a pilates class? Does the state endorse Tae Kwon Do over Karate if it rents a hall to a Tae Kwon Do team? Or maybe one could go further and say that is an endorsement of Korea's right to use violent defence (Tae Kwon Do is Korean) over and above China's?
The list could go on forever, it is just retarded to think that venue hire actively endorses an activity just because it allow it to go on. Don't get me wrong, there may be a time when a venue is expected to refuse to allow someone to use its premises but that is when they are actively against, it, not passively indifferent.
So this example isn't illiberal, it is just absurd.
The United Kingdom
For the UK I'm going to pick one that is topical. Gay marriage. Now as I said before a liberal in theory wants people to be able to do what they want without affecting others. At the moment Gay people are able to get a civil partnership that provides every legal right of marriage. If you're heterosexual you can't have a civil partnership if you're homosexual you can't have 'marriage', but essentially they provide exactly the same rights and benefits. Those who have the one are legally treated the same as those who have the other, no exceptions. In theory those who have a civil partnership don't have a religious aspect to their service, but in reality any gay couple are free to find someone who is considered to have religious standing in the community to add a 'religious' aspect to their special day.
So from a liberal point of view people can have what they want and no one can impose their desires upon another. Arguably there is an equilibrium where each party can do as they wish without being able to force their version of events upon another.
But liberals are seeking to ensure that gay people can legally have a marriage, something that I'm sure lots of liberals would think is a great idea. But in the UK there is an act called the Equality Act which means if you do something for one person, you have to do it for another and you cannot refuse on specific grounds. One of these involves sexuality. While this may make sense in a work case scenario, that means all of sudden not only will the change allow gay people to marry, it will also mean that anyone (vicar/minister etc) whose consciences tell them they shouldn't be performing such ceremonies will not be allowed to follow their conscience or even redirect them to someone else, and will be fined large sums of money if they do, and potentially imprisoned if they don't pay up. In short you can't just endorse what you want to endorse, you have endorse what the state tells you to too. How liberal is that?
So to summarise modern liberalism is all about laid back freedom. Allowing people to make their own choices and live their lives in anyway they wish to as long as it doesn't interfere with other peoples' rights to do the same.... that is unless they think they could explain something better/educate their child better than the state, unless they want to hire a venue that the state owns, or follow the convictions of their conscience on the life-styles they choose to endorse. If you want to do any of those things then chances are liberals are not so laid back, not so freedom loving and actually far more the 'drag you before the courts and fine you thousands of £/€/$' types. And if you don't pay up, you're going to jail.
An easy way to get around this of course, is just do whatever the state wants and don't disagree with any of their values or stances or try to express/teach anything different or abstain from behaviour you wish to avoid... a bit like what the far right expects of people. See simple!
For those who don't know, the far right is meant to be authoritarian, believe in strong state control and often characterised as intolerant towards minorities of race/religion etc.
The liberal left is meant to be about minimal intervention from the state and providing freedom to everyone to as much as they want within the limits of what will affect those around them (ie, you're not allowed to shoot someone, because they interferes with their life etc)
Generally everyone hates the far right for obvious reasons, while the liberal left is 'cool' because they are usually for legalising drugs, reduced sentences for criminals and for all round telling people that whatever lifestyle you go for just fine and dandy.
The flaws with both are simple:
Far right: see Nazi Germany
Liberal: it doesn't take long to realise that most people's behaviour has a cost for someone else, ie, you take drugs and you'll end up being treated by the NHS... which is paid for by me or your neighbour or whoever else didn't want to have to pay for it.
Anyway I'm not actually on my point yet, which is, as I said at the start, that actually these days the liberal left is starting to look like the same team as the far right. Maybe they don't play in quite the same way, but their tools and practises are starting to have an uncanny similarity.
I'll take a few examples that are going on around the world right now:
Sweden & Germany:
Sweden is usually portrayed by many people as a liberal paradise. They have high investment in rehabilitation and relatively 'pleasant' prisons. What they now also have, is a total ban on home schooling your own children. Not only this but the government controls the curriculum for any non-state schools. What difference does this make? I hear you ask. Well ignoring for a moment the fact that on average home schooled children tend to get far better grades and be more involved in the community, the problem can be summed up in one sentence: the government has legal control of what every human in the country (excluding immigrants) must be taught at a young age, that is when they are most impressionable.
The scope for indoctrination is staggering. Anyone who says anything that the government considers untoward can the act as a flag to have their parents investigated. The Nazis were known for encouraging children to report their own parents if they said anything in the home against the Nazi regime, amazingly this could easily have a similar effect. Just set the curriculum on whatever you want, get people to discuss it and chances are they'll say what they've been taught by their parents. The fact that it was also adopted in Germany isn't encouraging. Last year some parents pulled their children out of a sex education class, they were fined €2,340. How liberal is that? You don't even have the liberty to educate your own children on 'family matters'.
United States, New York:
Recently in New York they have made it so that churches cannot use state school premises for a place to worship on a Sunday. Never mind the fact that this brings in money for state education (ironically something that liberals in America always complain is underfunded and inadequate), never mind the schools aren't used on Sunday so essentially it is efficient use of resources (something that American liberals also claim to care about) they've decided that churches can't use state premises because... it suggests that the government supports Christianity.
Once again irony knocks considering the pledge of allegiance often recited in schools states "I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God" and that the money which they hand over in order to pay for the hire of the premises states "in God we Trust". The fact is, hiring out a hall constitutes an endorsement, according to New York state. Presumably those who hire out a wedding premises endorse the match and the couples choice. Does the state favour pilates over yoga if it rents out a community hall to a pilates class? Does the state endorse Tae Kwon Do over Karate if it rents a hall to a Tae Kwon Do team? Or maybe one could go further and say that is an endorsement of Korea's right to use violent defence (Tae Kwon Do is Korean) over and above China's?
The list could go on forever, it is just retarded to think that venue hire actively endorses an activity just because it allow it to go on. Don't get me wrong, there may be a time when a venue is expected to refuse to allow someone to use its premises but that is when they are actively against, it, not passively indifferent.
So this example isn't illiberal, it is just absurd.
The United Kingdom
For the UK I'm going to pick one that is topical. Gay marriage. Now as I said before a liberal in theory wants people to be able to do what they want without affecting others. At the moment Gay people are able to get a civil partnership that provides every legal right of marriage. If you're heterosexual you can't have a civil partnership if you're homosexual you can't have 'marriage', but essentially they provide exactly the same rights and benefits. Those who have the one are legally treated the same as those who have the other, no exceptions. In theory those who have a civil partnership don't have a religious aspect to their service, but in reality any gay couple are free to find someone who is considered to have religious standing in the community to add a 'religious' aspect to their special day.
So from a liberal point of view people can have what they want and no one can impose their desires upon another. Arguably there is an equilibrium where each party can do as they wish without being able to force their version of events upon another.
But liberals are seeking to ensure that gay people can legally have a marriage, something that I'm sure lots of liberals would think is a great idea. But in the UK there is an act called the Equality Act which means if you do something for one person, you have to do it for another and you cannot refuse on specific grounds. One of these involves sexuality. While this may make sense in a work case scenario, that means all of sudden not only will the change allow gay people to marry, it will also mean that anyone (vicar/minister etc) whose consciences tell them they shouldn't be performing such ceremonies will not be allowed to follow their conscience or even redirect them to someone else, and will be fined large sums of money if they do, and potentially imprisoned if they don't pay up. In short you can't just endorse what you want to endorse, you have endorse what the state tells you to too. How liberal is that?
So to summarise modern liberalism is all about laid back freedom. Allowing people to make their own choices and live their lives in anyway they wish to as long as it doesn't interfere with other peoples' rights to do the same.... that is unless they think they could explain something better/educate their child better than the state, unless they want to hire a venue that the state owns, or follow the convictions of their conscience on the life-styles they choose to endorse. If you want to do any of those things then chances are liberals are not so laid back, not so freedom loving and actually far more the 'drag you before the courts and fine you thousands of £/€/$' types. And if you don't pay up, you're going to jail.
An easy way to get around this of course, is just do whatever the state wants and don't disagree with any of their values or stances or try to express/teach anything different or abstain from behaviour you wish to avoid... a bit like what the far right expects of people. See simple!
Wednesday, 4 April 2012
Don't going giving out reasonable advice..... it is too dangerous
It really worries me sometimes when, as moronic as governments can be, the public as a whole acts in a manner that is even worse.
Recently a govenrment minister told people that they should probably be keep in mind the potential of a (petrol) tanker drivers' strike and as a result keep a reasonable amount of fuel in their tanks. No need to queue, but if you get the chance, pop some fuel in and maybe keep a bit in a jerry can.
What resulted was a reasonably sizable amount of queuing while flustered drivers drained the fuel station's forecourts dry. Petrol stations actually run out of fuel despite there being no shortage whatsoever.
Now this idiocy wasn't too much of a surprise, but what was, was the result. After this panic, after the British public demonstrated that they had no greater ability to mashall their powers of reason and emotion than a herd of edgy wilderbeast, the blame was laid at the feet of... the government.... for 'causing panic'.
Perhaps I was brought up in an odd area, but if someone says 'you probably want to take reasonable precautions to avoid 'X'' and then people act in a completely different way and over react then the fault lies at the door of the person who was acting unreasonably. Yet that isn't what happened. Apparently now, it is not only the government's job to give advice, but also to account for the fact that some people are totally unable to keep a sense of perspective or use an ounce of logic and will hear something completely different to what you actually said.
How can anyone work in conditions where you ask someone to behave reasonably, they don't and then it is your fault. If you think like that the goverment isn't our government, but rather our parents, and when they try to act like our parents they will always fail, because:
a) they aren't our parents;
b) they can't take the place of our parents because they don't know us/care like parents;
c) we're meant to hold them to account, not the other way around;
d) we're meant to be adults.
Perhaps a new strategy would be, when people totally disregard what someone says and acts irrationally, instead of blaming the person who gave them reletively reasonable advice, we admit to ourselves that some people will always act in a ridiculous way and the people who need to change their behaviour.... is them. Just a thought. Is that too irrational?
Recently a govenrment minister told people that they should probably be keep in mind the potential of a (petrol) tanker drivers' strike and as a result keep a reasonable amount of fuel in their tanks. No need to queue, but if you get the chance, pop some fuel in and maybe keep a bit in a jerry can.
What resulted was a reasonably sizable amount of queuing while flustered drivers drained the fuel station's forecourts dry. Petrol stations actually run out of fuel despite there being no shortage whatsoever.
Now this idiocy wasn't too much of a surprise, but what was, was the result. After this panic, after the British public demonstrated that they had no greater ability to mashall their powers of reason and emotion than a herd of edgy wilderbeast, the blame was laid at the feet of... the government.... for 'causing panic'.
Perhaps I was brought up in an odd area, but if someone says 'you probably want to take reasonable precautions to avoid 'X'' and then people act in a completely different way and over react then the fault lies at the door of the person who was acting unreasonably. Yet that isn't what happened. Apparently now, it is not only the government's job to give advice, but also to account for the fact that some people are totally unable to keep a sense of perspective or use an ounce of logic and will hear something completely different to what you actually said.
How can anyone work in conditions where you ask someone to behave reasonably, they don't and then it is your fault. If you think like that the goverment isn't our government, but rather our parents, and when they try to act like our parents they will always fail, because:
a) they aren't our parents;
b) they can't take the place of our parents because they don't know us/care like parents;
c) we're meant to hold them to account, not the other way around;
d) we're meant to be adults.
Perhaps a new strategy would be, when people totally disregard what someone says and acts irrationally, instead of blaming the person who gave them reletively reasonable advice, we admit to ourselves that some people will always act in a ridiculous way and the people who need to change their behaviour.... is them. Just a thought. Is that too irrational?
Saturday, 28 January 2012
Bishops, I'm glad you're helping the poor, but you're doing it the wrong way
We have a disturbed view of the poor. This is a statment with which most people would probably agree to a greater or lesser extent, but probably not for the reasons that I'm about to put forward.
My rant starts with an article I read that said that the UK was the worst country for social mobility, citing that those who are from poorer background are less likely to do well than their European counterparts. But I have a problem with that. What has that got to do with social mobility? If the people who are born to poor backgrounds work hard and never go anywhere then there is a problem, but if they are lazy and don't go anywhere then that is how things should work, isn't it? Or are the lazy to be promoted above others?
So far, so harsh. Now I'm not saying we forget social mobility, it is very important, I just recommend a different measurement, how about we take those who are from poor backgrounds, who get AAA (or ABB etc) at A-level (unlike me) and then ask where they end up. That way what we're asking is 'what happens to those from a poor background who are competant and work hard?' If the answer is still 'they don't suceed', then we've got problems!
Unfortunately this lack of understanding goes even into the Church. The Bishops in the House of Lords recently defeated a bill that would cap the amount people could get from benefits. I'm sure they thought that this was a win for Christian charity, sadly I'm not so sure. This is based on what I would call 'rights' verses 'grace'. When someone can be given over £26,000 in benefits, they are unlikely to work. Who would? Work is hard, tiring and often boring. It requires dedication, persistence and the ability to concentrate on the tidious and the repetitive... why would someone do that if they can get far more doing nothing? And remember the average wage is £26,000 BEFORE TAX, which means someone being given £26,000 in benefits is getting a net sum. To get £26,000 net a working individual would have to earn around £35,000!
Meanwhile to pay for such benefits we need to borrow until our country is in serious debt and tax people who have earned money giving them even less of an incentive to do so. That makes no sense, unless you want to try to force the system to collapse.
Anyway that isn't my main point. I'm not in the take all the money off the poor and let them rot camp. Far from it. What I want to point out is this:
Lets say you're in trouble, you can't pay your rent and you don't want to be thrown out of your home. You tell me about your troubles and I say to you, well I'll pay your rent for the next two months while you look for a job. Two months goes and you find a job, would you pretend that you haven't and keep taking money off me?
No, of course you wouldn't. Why? Because you would feel terrible that you're ripping off your friend who was there for you when you needed it and because sooner or later I'd find out and then you'd lose the type of friend everyone needs around.
But this is basically what government benefits allow people to do everyday. When a friend gives you money it is an act of grace, recieved with thanks. But when a benefit is given to you by the government, it is a 'right' that you ought to demand. Why not after all? You are entitled to it!
But really both scenarios are the same, when a benefit is handed to someone, it is not government money, it is money that has been taken off someone who earned it. It did not come from a bottomless pit that people think of the government as being, it came from a man or woman, who worked hard, then had their due wages taken off them by HMRC and then given to someone who hadn't worked for it.
I've been told of people who have told the government that they need a house because their girlfriend argues with their mother.... when they don't. And who have stayed in a hostle two nights a week so that they are classified as homeless to get a house sooner, even though there was no reason for them to say there, they just wanted to be shifted up the list. This was because it was their 'right' that they were entitled to. But no one would lie to their friend in such a way, despite the fact it is the same thing.
Further each time that money is taken off people and then given to another there is an army of civil servants who are required to do the taking. They need to take the money, process it, analyse who to give it to, get it to them, and chase up those who don't pay or claim when they shouldn't. All of that costs money which is also taken off the person who works. That isn't efficient.
So what is the answer? Do I think we should let the poor suffer? No of course not. But we can't 'nationalise' our poverty relief. It just leads to people treating the government as an infinite source of cash, it leads to people cheating the system, and plenty of money being syphoned off in the process. Oh, all the while giving every working person less of the money they earn.
What we need to do it organise our giving ourselves. Cut back benefits, cut back tax. We'll all have more money and when we get it we need to give it away. How much? Well is you're earning the average £26,000 per year and over night you stopped having to pay tax, you could afford to give away £3,700 per year to charities. Now I know that the government is important for certain things, defence for example, or the NHS, but those don't account for the £700,000,000,000 (£700Bn) the government spends!
Think of what could be acomplished if we only spent the bare minimum on the government, say £150Bn (the cost of Defence and the NHS and a bit more) and then spent the rest on charities and each other instead?
You know your friends so they aren't going to rip you off like they would the government and if a charity is wasting money on unecessary things then you can just give it to a more efficient one... so you don't have to pay for arts grants of £50,000 for something useless.
Our fellow man would be a lot better off as long as we were generous. We can do that, right?
My rant starts with an article I read that said that the UK was the worst country for social mobility, citing that those who are from poorer background are less likely to do well than their European counterparts. But I have a problem with that. What has that got to do with social mobility? If the people who are born to poor backgrounds work hard and never go anywhere then there is a problem, but if they are lazy and don't go anywhere then that is how things should work, isn't it? Or are the lazy to be promoted above others?
So far, so harsh. Now I'm not saying we forget social mobility, it is very important, I just recommend a different measurement, how about we take those who are from poor backgrounds, who get AAA (or ABB etc) at A-level (unlike me) and then ask where they end up. That way what we're asking is 'what happens to those from a poor background who are competant and work hard?' If the answer is still 'they don't suceed', then we've got problems!
Unfortunately this lack of understanding goes even into the Church. The Bishops in the House of Lords recently defeated a bill that would cap the amount people could get from benefits. I'm sure they thought that this was a win for Christian charity, sadly I'm not so sure. This is based on what I would call 'rights' verses 'grace'. When someone can be given over £26,000 in benefits, they are unlikely to work. Who would? Work is hard, tiring and often boring. It requires dedication, persistence and the ability to concentrate on the tidious and the repetitive... why would someone do that if they can get far more doing nothing? And remember the average wage is £26,000 BEFORE TAX, which means someone being given £26,000 in benefits is getting a net sum. To get £26,000 net a working individual would have to earn around £35,000!
Meanwhile to pay for such benefits we need to borrow until our country is in serious debt and tax people who have earned money giving them even less of an incentive to do so. That makes no sense, unless you want to try to force the system to collapse.
Anyway that isn't my main point. I'm not in the take all the money off the poor and let them rot camp. Far from it. What I want to point out is this:
Lets say you're in trouble, you can't pay your rent and you don't want to be thrown out of your home. You tell me about your troubles and I say to you, well I'll pay your rent for the next two months while you look for a job. Two months goes and you find a job, would you pretend that you haven't and keep taking money off me?
No, of course you wouldn't. Why? Because you would feel terrible that you're ripping off your friend who was there for you when you needed it and because sooner or later I'd find out and then you'd lose the type of friend everyone needs around.
But this is basically what government benefits allow people to do everyday. When a friend gives you money it is an act of grace, recieved with thanks. But when a benefit is given to you by the government, it is a 'right' that you ought to demand. Why not after all? You are entitled to it!
But really both scenarios are the same, when a benefit is handed to someone, it is not government money, it is money that has been taken off someone who earned it. It did not come from a bottomless pit that people think of the government as being, it came from a man or woman, who worked hard, then had their due wages taken off them by HMRC and then given to someone who hadn't worked for it.
I've been told of people who have told the government that they need a house because their girlfriend argues with their mother.... when they don't. And who have stayed in a hostle two nights a week so that they are classified as homeless to get a house sooner, even though there was no reason for them to say there, they just wanted to be shifted up the list. This was because it was their 'right' that they were entitled to. But no one would lie to their friend in such a way, despite the fact it is the same thing.
Further each time that money is taken off people and then given to another there is an army of civil servants who are required to do the taking. They need to take the money, process it, analyse who to give it to, get it to them, and chase up those who don't pay or claim when they shouldn't. All of that costs money which is also taken off the person who works. That isn't efficient.
So what is the answer? Do I think we should let the poor suffer? No of course not. But we can't 'nationalise' our poverty relief. It just leads to people treating the government as an infinite source of cash, it leads to people cheating the system, and plenty of money being syphoned off in the process. Oh, all the while giving every working person less of the money they earn.
What we need to do it organise our giving ourselves. Cut back benefits, cut back tax. We'll all have more money and when we get it we need to give it away. How much? Well is you're earning the average £26,000 per year and over night you stopped having to pay tax, you could afford to give away £3,700 per year to charities. Now I know that the government is important for certain things, defence for example, or the NHS, but those don't account for the £700,000,000,000 (£700Bn) the government spends!
Think of what could be acomplished if we only spent the bare minimum on the government, say £150Bn (the cost of Defence and the NHS and a bit more) and then spent the rest on charities and each other instead?
You know your friends so they aren't going to rip you off like they would the government and if a charity is wasting money on unecessary things then you can just give it to a more efficient one... so you don't have to pay for arts grants of £50,000 for something useless.
Our fellow man would be a lot better off as long as we were generous. We can do that, right?
Monday, 12 December 2011
Please don't leave us isolated from the Titanic
Ed Milliband has recently warned that we're going to soon be living off raw potatoes and stale bread.
He attacked David Cameron over his decision to keep us out of any new European treaty. I won't quote him exactly but in summary; Britain will be isolated, the city will fall apart and before long you'll be queueing up in Soviet style mile long queues just to get some bread.
I exaggerate of course, but he genuinely does think the city (by which I mean the financial heart of London) will be worse off for being left out. This is rather strange considering the reason Cameron didn't go into the treaty was because the EU wanted the UK to be subject to the same new financial rules as everyone else in the EU... in other words, they wanted to control our financial industry. Doing this would mean there was no incentive to be in London, because it would be the same as anywhere in the EU. This would mean it would make most sense for a bank to move Germany (close to the European Central Bank where the power would be).
I apologise for this first part, how dreadfully dull I know. But now I'll move on the the crux of what I actually wanted to say. Isolation from the EU, how will we survive?
Well I would suggest that we'll survive in the same way someone does when a ship is sinking and they 'isolate' themselves by getting into a lifeboat.
The enormous disaster that is the mainship takes on water and the person in the life raft remains safe and dry, even if they are a bit rocked by the waves caused by the ship going down. This leaves the person in the life boat in a great position to get on another ship should one that is seaworthy turn up.
I'm hoping we're all getting the analogy.
You see, while free trade is excellent the political control of the EU is largely unnecessary and extremely expensive. Having public workers do any job is usually quite expensive (excluding Teachers, Nurses..) but having public workers do a job where no one in the building speaks the same language so everything has to be translated 20 times is the Mercedes A-Class of expensive, ie its not just expensive, its not that good either.
So what is to be done? Well what if we keep the free trade regulations and bin everything else? I mean EVERYTHING else. That particularly includes the Common Agricultural Policy... which for those of you who do not know, it where your money is taken off you and given to vineyard owners, so that they can tell you that Champagne is only called Champagne if it is from a specific region of France, otherwise it is 'sparkling white wine', very useful. In fact, it is worse than that, but I'm trying to give you a flavour.
So we're left with just the Common Market provisions, wouldn't that be nice? Is it even possible you ask? Well yes, we know this because Norway and Switzerland already have this arrangement. Both basically enjoy the free market but without having their countries run... well, from another country. And how does it affect their economy?
Well I'd like to finish with this. Below is the top five countries by GDP per captia. That is, how much money the country makes, divided by how many people in that country, it is an excellent way of working out how rich a country is proportionate to its size (population wise):
Luxembourg (tax haven, doesn't count)
Norway (in EFTA but not EU)
Qatar (not European)
Switzerland (in EFTA but not EU)
United Arab Emirates (not European)
So apart from a tax haven, the only countries in the top five that are European are outside of the EU but within the European Free Trade Area (ie they enjoy the Common Market, but don't have to waste their money on paying for bureaucrats to tell them what to call Champagne).
In fact, pretty much anyway of measuring the proportionate wealth in a country leaves the Swiss and the Nords way out in front of Germany, France, the UK etc. Which leaves us with the question, why aren't we joining them. And that is a question to which I just don't know the answer.
He attacked David Cameron over his decision to keep us out of any new European treaty. I won't quote him exactly but in summary; Britain will be isolated, the city will fall apart and before long you'll be queueing up in Soviet style mile long queues just to get some bread.
I exaggerate of course, but he genuinely does think the city (by which I mean the financial heart of London) will be worse off for being left out. This is rather strange considering the reason Cameron didn't go into the treaty was because the EU wanted the UK to be subject to the same new financial rules as everyone else in the EU... in other words, they wanted to control our financial industry. Doing this would mean there was no incentive to be in London, because it would be the same as anywhere in the EU. This would mean it would make most sense for a bank to move Germany (close to the European Central Bank where the power would be).
I apologise for this first part, how dreadfully dull I know. But now I'll move on the the crux of what I actually wanted to say. Isolation from the EU, how will we survive?
Well I would suggest that we'll survive in the same way someone does when a ship is sinking and they 'isolate' themselves by getting into a lifeboat.
The enormous disaster that is the mainship takes on water and the person in the life raft remains safe and dry, even if they are a bit rocked by the waves caused by the ship going down. This leaves the person in the life boat in a great position to get on another ship should one that is seaworthy turn up.
I'm hoping we're all getting the analogy.
You see, while free trade is excellent the political control of the EU is largely unnecessary and extremely expensive. Having public workers do any job is usually quite expensive (excluding Teachers, Nurses..) but having public workers do a job where no one in the building speaks the same language so everything has to be translated 20 times is the Mercedes A-Class of expensive, ie its not just expensive, its not that good either.
So what is to be done? Well what if we keep the free trade regulations and bin everything else? I mean EVERYTHING else. That particularly includes the Common Agricultural Policy... which for those of you who do not know, it where your money is taken off you and given to vineyard owners, so that they can tell you that Champagne is only called Champagne if it is from a specific region of France, otherwise it is 'sparkling white wine', very useful. In fact, it is worse than that, but I'm trying to give you a flavour.
So we're left with just the Common Market provisions, wouldn't that be nice? Is it even possible you ask? Well yes, we know this because Norway and Switzerland already have this arrangement. Both basically enjoy the free market but without having their countries run... well, from another country. And how does it affect their economy?
Well I'd like to finish with this. Below is the top five countries by GDP per captia. That is, how much money the country makes, divided by how many people in that country, it is an excellent way of working out how rich a country is proportionate to its size (population wise):
Luxembourg (tax haven, doesn't count)
Norway (in EFTA but not EU)
Qatar (not European)
Switzerland (in EFTA but not EU)
United Arab Emirates (not European)
So apart from a tax haven, the only countries in the top five that are European are outside of the EU but within the European Free Trade Area (ie they enjoy the Common Market, but don't have to waste their money on paying for bureaucrats to tell them what to call Champagne).
In fact, pretty much anyway of measuring the proportionate wealth in a country leaves the Swiss and the Nords way out in front of Germany, France, the UK etc. Which leaves us with the question, why aren't we joining them. And that is a question to which I just don't know the answer.
Tuesday, 29 November 2011
You've lost that entrepreneurial feeling
We need more jobs!
Unemployment is high and the economy is only just about 0% growth. This isn't an inspiring time to be unemployed. Therefore it is the government's job to make jobs, apparently.
For the retarded amongst us that means they should borrow more and then spend it to 'create jobs'. Or as I call it borrow more money to give away. After all if there is a job to be done, surely people will pay for it themselves. If they can't afford it as a person, it is highly unlikely we can afford it as a nation. If people won't pay for it themselves then it is probably because they don't really want it or it costs more than it is worth.
This doesn't always apply of course. We know that the NHS works best because everyone (officially employed) has to pay it. Old and young, rich and poor, fit and unfit. This means we all pay a little rather than some paying a fortune and others paying virtually nothing.
But generally paying public servants is very inefficient, because you can never choose to stop paying them. If my car insurance company is rubbish I can stop paying them and go to another company. If the bus service is rubbish I can stop paying them and take a train. If a public service is rubbish, then I'm stuck paying for rubbish service. There is no pressure on them to slim down when they have too many people because the money rolls in regardless of the service provided.
Anyway, I'm getting distracted. What I wanted to talk about was what I discovered when I was in California a few weeks ago.
We tend to think of the US as the place of big businesses. What we know of the USA is largely based around films, television and the chain stores that make it over here to Great Britain. Many of us go on holiday to the US (if we're blessed with some extra money) but often that is to the East Coast and more specifically; Florida.
But what I didn't realise until recently was for every Starbucks/ McDonald's/Burger King in America there is a Carl's Jr/Chilli's/independent. That is for everyone huge shopping chain that makes it across the pond, there are several smaller mid size or just totally independent restaurants that we in the United Kingdom, have never heard of.
Why is this relevant to anything? I heard you ask. Why did you start talking about the economy and now reach hamburgers? Well you'll be glad to hear I haven't lost track. My point is the reason why the USA has so many huge corporations is partly because it has so many small ones. When you have a decent size base of small companies, statistically some are bound to do really well. This is good for everyone.
But this leads me on to another point, Americans just have a different attitude to starting businesses to us. I think this is for a couple of reasons. first off, British people are far more pessimistic than Americans. I have heard it said that the difference between British people and Americans is that Americans think that they are going to live forever and British people know that they are going to die. I thought it was an exaggeration but American people genuinely do seem to avoid thinking about death at all cost. Which seems a bit odd, since that and tax are the things that are certain for all (perhaps not co-incidentally tax is the other Americans avoid at all cost).
Either way, this incredible optimism combined with a feeling that they are part of a 'pioneering' culture and a belief that anyone can make it if they work hard (potentially with the spur that you keep the money you make and you don't get lots of welfare support) means that people in the US set up businesses a lot.
In contrast we can look at the UK. In the UK we are very skeptical of anyone who says that something can be done, easily, quickly and with huge success. In fact, we are just skeptical. This has good sides to it. We are less moved by emotive speeches by politicians, so we're less likely to elect a 'Hitler' (although this is never impossible). It also means that most of us are less likely to be convinced by advertising which promises to change your life when you by a new mop, or taste a new sweet. Some will, but the majority with roll their eyes and want to slap the person back into reality.
Our heritage too is completely different. British political and economic heritage stretches all the way back to 1066. Almost a thousand years. Here it was established (or should I say confirmed) that those in the establishment lord it over those below, who work hard and are kept at the bottom of the social scale. Today of course, this is not the case, but the culture still comes from that same source. Which is why, you'll notice, that a large part of being rich and successful in Britain isn't just about being rich and successful, but also about entering the establishment.
This is why much more credence is given to established professions in Britain than to almost any other work. There is almost instant respect for Doctors, Barristers, Solicitors and accountants. This is despite the fact that (whether it is known or not I don't know) many managers earn more than all of the preiously mentioned professions. The reason being of course because a profession seems far more 'upper class' than saying I'm a manager, because there is a whiff of the nouveau about it. Like some how you could have reached a managerial position without knowing which cutlery to use in a fine restaurant, and somehow these manners are important.
As a result the British legal system is one of the finest in the world. Many of the worlds largest law firms are based here (Slaughter and May, Freshfields, Linklaters, Clifford Chance and Allen & Overy but to name the obvious). Ernst & Young and Pricewaterhouse Coopers' profits run into tens of billions of pounds, they are enormous organisations unsurprisingly based on professional services such as accountancy.
So there is no doubt that both sides have their benefits. Americans have huge businesses, the British have huge professional practises. But the thing is professional services generally services business.
In this time of recession the one thing we don't have, is enough businesses. The news largely seems to show people complaining that the government isn't providing enough jobs. But the question may be asked, at what point did the government start being responsible for jobs. Now I have to declare at this point that my money comes, indirectly from the government. Not all of it, but most of it comes from central government. So feel free to discard everything I say. But I think it is worth hearing me out.
Why wait for the government to create jobs, when each person has the freedom to create their own. Finding something that people are willing to pay you to do, then doing it has been the basis of income for the free man for years (the exception being the peasant tied to a lord and slaves).
Maybe, we need to take a little bit of our American cousins' attitude to heart and once again stimulate the entrepreneurial spirit.
The wise among us at this point will point out that the US is also down the pan right now. I would agree, but I'd also note that they seem to have developed their own dependence on government a little like us.
No doubt there are things that the government can do to help, reduce paperwork and invest in infrastructure being the main ones. But generally that isn't much else they can do without borrowing more money and essentially just making the matter worse. In reality the economy rests on the shoulders of the people, not the Prime Minister.
PS When I've got £10,000 saved I want to start a business, any other investors?
Unemployment is high and the economy is only just about 0% growth. This isn't an inspiring time to be unemployed. Therefore it is the government's job to make jobs, apparently.
For the retarded amongst us that means they should borrow more and then spend it to 'create jobs'. Or as I call it borrow more money to give away. After all if there is a job to be done, surely people will pay for it themselves. If they can't afford it as a person, it is highly unlikely we can afford it as a nation. If people won't pay for it themselves then it is probably because they don't really want it or it costs more than it is worth.
This doesn't always apply of course. We know that the NHS works best because everyone (officially employed) has to pay it. Old and young, rich and poor, fit and unfit. This means we all pay a little rather than some paying a fortune and others paying virtually nothing.
But generally paying public servants is very inefficient, because you can never choose to stop paying them. If my car insurance company is rubbish I can stop paying them and go to another company. If the bus service is rubbish I can stop paying them and take a train. If a public service is rubbish, then I'm stuck paying for rubbish service. There is no pressure on them to slim down when they have too many people because the money rolls in regardless of the service provided.
Anyway, I'm getting distracted. What I wanted to talk about was what I discovered when I was in California a few weeks ago.
We tend to think of the US as the place of big businesses. What we know of the USA is largely based around films, television and the chain stores that make it over here to Great Britain. Many of us go on holiday to the US (if we're blessed with some extra money) but often that is to the East Coast and more specifically; Florida.
But what I didn't realise until recently was for every Starbucks/ McDonald's/Burger King in America there is a Carl's Jr/Chilli's/independent. That is for everyone huge shopping chain that makes it across the pond, there are several smaller mid size or just totally independent restaurants that we in the United Kingdom, have never heard of.
Why is this relevant to anything? I heard you ask. Why did you start talking about the economy and now reach hamburgers? Well you'll be glad to hear I haven't lost track. My point is the reason why the USA has so many huge corporations is partly because it has so many small ones. When you have a decent size base of small companies, statistically some are bound to do really well. This is good for everyone.
But this leads me on to another point, Americans just have a different attitude to starting businesses to us. I think this is for a couple of reasons. first off, British people are far more pessimistic than Americans. I have heard it said that the difference between British people and Americans is that Americans think that they are going to live forever and British people know that they are going to die. I thought it was an exaggeration but American people genuinely do seem to avoid thinking about death at all cost. Which seems a bit odd, since that and tax are the things that are certain for all (perhaps not co-incidentally tax is the other Americans avoid at all cost).
Either way, this incredible optimism combined with a feeling that they are part of a 'pioneering' culture and a belief that anyone can make it if they work hard (potentially with the spur that you keep the money you make and you don't get lots of welfare support) means that people in the US set up businesses a lot.
In contrast we can look at the UK. In the UK we are very skeptical of anyone who says that something can be done, easily, quickly and with huge success. In fact, we are just skeptical. This has good sides to it. We are less moved by emotive speeches by politicians, so we're less likely to elect a 'Hitler' (although this is never impossible). It also means that most of us are less likely to be convinced by advertising which promises to change your life when you by a new mop, or taste a new sweet. Some will, but the majority with roll their eyes and want to slap the person back into reality.
Our heritage too is completely different. British political and economic heritage stretches all the way back to 1066. Almost a thousand years. Here it was established (or should I say confirmed) that those in the establishment lord it over those below, who work hard and are kept at the bottom of the social scale. Today of course, this is not the case, but the culture still comes from that same source. Which is why, you'll notice, that a large part of being rich and successful in Britain isn't just about being rich and successful, but also about entering the establishment.
This is why much more credence is given to established professions in Britain than to almost any other work. There is almost instant respect for Doctors, Barristers, Solicitors and accountants. This is despite the fact that (whether it is known or not I don't know) many managers earn more than all of the preiously mentioned professions. The reason being of course because a profession seems far more 'upper class' than saying I'm a manager, because there is a whiff of the nouveau about it. Like some how you could have reached a managerial position without knowing which cutlery to use in a fine restaurant, and somehow these manners are important.
As a result the British legal system is one of the finest in the world. Many of the worlds largest law firms are based here (Slaughter and May, Freshfields, Linklaters, Clifford Chance and Allen & Overy but to name the obvious). Ernst & Young and Pricewaterhouse Coopers' profits run into tens of billions of pounds, they are enormous organisations unsurprisingly based on professional services such as accountancy.
So there is no doubt that both sides have their benefits. Americans have huge businesses, the British have huge professional practises. But the thing is professional services generally services business.
In this time of recession the one thing we don't have, is enough businesses. The news largely seems to show people complaining that the government isn't providing enough jobs. But the question may be asked, at what point did the government start being responsible for jobs. Now I have to declare at this point that my money comes, indirectly from the government. Not all of it, but most of it comes from central government. So feel free to discard everything I say. But I think it is worth hearing me out.
Why wait for the government to create jobs, when each person has the freedom to create their own. Finding something that people are willing to pay you to do, then doing it has been the basis of income for the free man for years (the exception being the peasant tied to a lord and slaves).
Maybe, we need to take a little bit of our American cousins' attitude to heart and once again stimulate the entrepreneurial spirit.
The wise among us at this point will point out that the US is also down the pan right now. I would agree, but I'd also note that they seem to have developed their own dependence on government a little like us.
No doubt there are things that the government can do to help, reduce paperwork and invest in infrastructure being the main ones. But generally that isn't much else they can do without borrowing more money and essentially just making the matter worse. In reality the economy rests on the shoulders of the people, not the Prime Minister.
PS When I've got £10,000 saved I want to start a business, any other investors?
Sunday, 30 October 2011
Got you by the Bonds
When you have the money, you don't need guns to manipulate a country.
That was the claim I made in my last post. I wasn't going to go into detail because frankly these posts always seem to go on a lot longer than I anticipate. I guess argument just takes time.
However since China appears to be helping out the EU by giving us money, it actually seems like a prime opportunity to explain why having huge amounts of debt to another country is really concerning.
To begin I'm afraid we need a brief history lesson. The scene is post war Europe. The UK hasn't gone into the EU, because we didn't need to. Europe has huge debts to the US because after the war Europe had spent every penny it had trying to kill off Nazism. Britain and Germany had practically destroyed themselves in a fight for supremacy, while in the mean time, for most of the war, the US was happy to take over the trade the Britain was unable to serve because it was too busy trying to save Europe from the Nazis.
Not exactly America's proudest moment, but in fairness it was American citizens who didn't want to get involved in another costly war and no one knew about the holocaust until later.
Anyway, after the war the US bought huge sums of British bonds in order to give the UK the money to rebuild itself and get back on track. Largely it had.
So that is the scene. Now Egypt decides that it is going to take over the Aswan Dam, a French and British owned structure. The British and French unsurprisingly don't find this amusing. They launch a military invasion and sort the matter out within 5 minutes. Militarily Egypt was not a challenge for countries that knew how to fight.
So far, so straight forward, so where does the debt come in? Well at this point its 1956 the cold war between the Soviets and the US is going on... by cold of course we mean there was no war, there were just two countries (the USSR and the US) getting ready to beat each other into the stone age should war actually break out.
Egypt was doing a fine job of playing the two countries against each other. It went to the US for weapons, they said responsibly... fine but only if you're trained and supervised by US personel, the Egyptians didn't fancy that, so they went to the Soviets instead who said "sure, whatever you want, if you've got the money (or even if you don't) we've got the guns. Egypt also recognised China too a new communist state even though the US really didn't want this to happen, so all in all Egypt was doing a great job at playing the two off each other.
So you can imagine how wary the US was when two of its biggest allies went in and started kicking in Eygpt like an annoying little brat who isn't giving respect to the sixth formers.
The US feared that the USSR would come in to help Egypt and before you know it the cold war would turn very very hot. Bear in mind we are talking WWIII with nuclear weapons hot.
So the US told the UK and France to back off. Of course, Britain, like a good independent country would, told the Yanks to jog on and get on with their own business. Now if there was no debt, chances are, that is where the story would have ended. Possibly the US would have paid both the UK and France the cost of the Dam and quietly they would have left Eygpt with some excuse about respecting national autonomy or some other rubbish.
But the US didn't need to do that. It had bought all our bonds, remember? It just said to the UK, get out of Egypt or we'll sell all the bonds we own in the UK government. In doing so supply would have shot up, while demand stayed the same. The price of our bonds would have plummeted, the pound would have dropped like a stone and our economy would have collapsed. So perhaps unsurprisingly, we got out.
How embarassing. Annoying behaviour from the Yanks, but understandable when you consider what the cold war was about; essentially stopping the world from wiping itself out.
So that is the end of the history lesson. Well actually the true end of the story is that after this the UK joined the EU, obviously annoyed that there was the potential for foreign powers to interfere with its policies, it thought the best thing to do was to get into a bigger gang to look after its interests. Personally I don't see how taking orders from the EU is any better than taking orders from the US, in fact, I'm confident it is worse.
Back to China and today; I'm guessing you get my point. China is now buying bonds in the European Financial Stability Facility. Hmmm, do you see a pattern here?
Of course China has its own benefits from loaning Europe money. Europe is the country buying its products in the first place so if Europe goes down, so does their Export economy. Also as long as the amount of Debt owned by China remains low over all their influence will remain limited. But with the papers suggesting it could be as much as £62,000,000,000 that is a little concerning.
(see http://www.independent.co.uk/news/world/europe/china-holds-europe-to-ransom-over-16362bn-bailout-deal-2377396.html
http://news.xinhuanet.com/english2010/indepth/2011-10/30/c_131220069.htm)
Either way though it just seems to signal a worrying desperation to keep the EU afloat. Surely a lot of people are wondering why it is such a good idea to keep borrowing money, rather than letting those who are going to go under, go under.
Sure lots of countries would be bankrupt initially. Money would be lost and there would be problems. But then instead of borrowing to finance borrowing money could be spend investing. Lots of companies would become worthless and their assest can be bought by companies that are doing well and want to expand. Businesses that are efficient could borrow money and invest it, instead of governments borrowing money just to spend on interest payments. It would allow the system to re-settle itself with the companies that made mistakes dying off and those that didn't being in a better and stronger position than before... I'm willing to accept that I'm not certain about this, but I can't help but get the feeling all this borrowing is just postponing the inevitable.
Part of the problem is that we're too used to having what we want. We think that because we live in the West we're entitled to have the best of everything and the rest of the world is another matter.
In reality the West only ever had all it had because of a work ethic and a level of morality that meant you worked hard, didn't cheat and you weren't corrupt. Even now thankfully the level of corruption in the UK is way lower than in China. But I doubt that is going to stay the same. After all it is no surprise to me that the wealthiest areas of China are usually those that have the highest Christian populations, and a true Christian (I imagine a fake one is pretty rare in a country where it draws adverse attention from the authorities and can land you in jail) isn't likely to behave in a corrupt manner. This combined with the exploding Christian population in China at the moment means it is likely that corruption is going to decrease.
But while we're not too corrupt, areas of the West do not have the right work ethic. When the banks went under, people still refused to give up their bonuses. What sort of work ethic is that? You and your team fail so badly you send your country into crisis and you're still not willing to give up your bonus? What? If I was the government minister responsible I would have fired them on principle. I don't know where they think they are going to get new jobs when they have just made such a hash of their previous one.
Anyway, I digress, my concern is, with that sort of attitude in the West and the increasing efficiency of the East, that predicts storms coming our way, regardless of who has got us by the bonds.
The one thing that is likely however, the moment that problems do come, it may be that we start to sort ourselves out, moving away from materialism and more towards family and community... one can hope eh!
That was the claim I made in my last post. I wasn't going to go into detail because frankly these posts always seem to go on a lot longer than I anticipate. I guess argument just takes time.
However since China appears to be helping out the EU by giving us money, it actually seems like a prime opportunity to explain why having huge amounts of debt to another country is really concerning.
To begin I'm afraid we need a brief history lesson. The scene is post war Europe. The UK hasn't gone into the EU, because we didn't need to. Europe has huge debts to the US because after the war Europe had spent every penny it had trying to kill off Nazism. Britain and Germany had practically destroyed themselves in a fight for supremacy, while in the mean time, for most of the war, the US was happy to take over the trade the Britain was unable to serve because it was too busy trying to save Europe from the Nazis.
Not exactly America's proudest moment, but in fairness it was American citizens who didn't want to get involved in another costly war and no one knew about the holocaust until later.
Anyway, after the war the US bought huge sums of British bonds in order to give the UK the money to rebuild itself and get back on track. Largely it had.
So that is the scene. Now Egypt decides that it is going to take over the Aswan Dam, a French and British owned structure. The British and French unsurprisingly don't find this amusing. They launch a military invasion and sort the matter out within 5 minutes. Militarily Egypt was not a challenge for countries that knew how to fight.
So far, so straight forward, so where does the debt come in? Well at this point its 1956 the cold war between the Soviets and the US is going on... by cold of course we mean there was no war, there were just two countries (the USSR and the US) getting ready to beat each other into the stone age should war actually break out.
Egypt was doing a fine job of playing the two countries against each other. It went to the US for weapons, they said responsibly... fine but only if you're trained and supervised by US personel, the Egyptians didn't fancy that, so they went to the Soviets instead who said "sure, whatever you want, if you've got the money (or even if you don't) we've got the guns. Egypt also recognised China too a new communist state even though the US really didn't want this to happen, so all in all Egypt was doing a great job at playing the two off each other.
So you can imagine how wary the US was when two of its biggest allies went in and started kicking in Eygpt like an annoying little brat who isn't giving respect to the sixth formers.
The US feared that the USSR would come in to help Egypt and before you know it the cold war would turn very very hot. Bear in mind we are talking WWIII with nuclear weapons hot.
So the US told the UK and France to back off. Of course, Britain, like a good independent country would, told the Yanks to jog on and get on with their own business. Now if there was no debt, chances are, that is where the story would have ended. Possibly the US would have paid both the UK and France the cost of the Dam and quietly they would have left Eygpt with some excuse about respecting national autonomy or some other rubbish.
But the US didn't need to do that. It had bought all our bonds, remember? It just said to the UK, get out of Egypt or we'll sell all the bonds we own in the UK government. In doing so supply would have shot up, while demand stayed the same. The price of our bonds would have plummeted, the pound would have dropped like a stone and our economy would have collapsed. So perhaps unsurprisingly, we got out.
How embarassing. Annoying behaviour from the Yanks, but understandable when you consider what the cold war was about; essentially stopping the world from wiping itself out.
So that is the end of the history lesson. Well actually the true end of the story is that after this the UK joined the EU, obviously annoyed that there was the potential for foreign powers to interfere with its policies, it thought the best thing to do was to get into a bigger gang to look after its interests. Personally I don't see how taking orders from the EU is any better than taking orders from the US, in fact, I'm confident it is worse.
Back to China and today; I'm guessing you get my point. China is now buying bonds in the European Financial Stability Facility. Hmmm, do you see a pattern here?
Of course China has its own benefits from loaning Europe money. Europe is the country buying its products in the first place so if Europe goes down, so does their Export economy. Also as long as the amount of Debt owned by China remains low over all their influence will remain limited. But with the papers suggesting it could be as much as £62,000,000,000 that is a little concerning.
(see http://www.independent.co.uk/news/world/europe/china-holds-europe-to-ransom-over-16362bn-bailout-deal-2377396.html
http://news.xinhuanet.com/english2010/indepth/2011-10/30/c_131220069.htm)
Either way though it just seems to signal a worrying desperation to keep the EU afloat. Surely a lot of people are wondering why it is such a good idea to keep borrowing money, rather than letting those who are going to go under, go under.
Sure lots of countries would be bankrupt initially. Money would be lost and there would be problems. But then instead of borrowing to finance borrowing money could be spend investing. Lots of companies would become worthless and their assest can be bought by companies that are doing well and want to expand. Businesses that are efficient could borrow money and invest it, instead of governments borrowing money just to spend on interest payments. It would allow the system to re-settle itself with the companies that made mistakes dying off and those that didn't being in a better and stronger position than before... I'm willing to accept that I'm not certain about this, but I can't help but get the feeling all this borrowing is just postponing the inevitable.
Part of the problem is that we're too used to having what we want. We think that because we live in the West we're entitled to have the best of everything and the rest of the world is another matter.
In reality the West only ever had all it had because of a work ethic and a level of morality that meant you worked hard, didn't cheat and you weren't corrupt. Even now thankfully the level of corruption in the UK is way lower than in China. But I doubt that is going to stay the same. After all it is no surprise to me that the wealthiest areas of China are usually those that have the highest Christian populations, and a true Christian (I imagine a fake one is pretty rare in a country where it draws adverse attention from the authorities and can land you in jail) isn't likely to behave in a corrupt manner. This combined with the exploding Christian population in China at the moment means it is likely that corruption is going to decrease.
But while we're not too corrupt, areas of the West do not have the right work ethic. When the banks went under, people still refused to give up their bonuses. What sort of work ethic is that? You and your team fail so badly you send your country into crisis and you're still not willing to give up your bonus? What? If I was the government minister responsible I would have fired them on principle. I don't know where they think they are going to get new jobs when they have just made such a hash of their previous one.
Anyway, I digress, my concern is, with that sort of attitude in the West and the increasing efficiency of the East, that predicts storms coming our way, regardless of who has got us by the bonds.
The one thing that is likely however, the moment that problems do come, it may be that we start to sort ourselves out, moving away from materialism and more towards family and community... one can hope eh!
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