Let's be absolutely clear. The near-failure of the financial system on Gordon Brown's watch was not entirely his fault. Thus the rise in the deficit from 3% to 11% of GDP isn't directly Brown's fault. At least not in the short term. But the slow recovery is his fault. And here's why.
It's not just the defict. A 3% deficit once in a while is ok. No Government can balance the books every year. But running a deficit every year for a decade, that's wrong. Running a deficit bigger than growth increases the debt to GDP ratio. This is fine, when the stock of debt is low, but doing so during a "boom" is wrong. And increasing taxes to fund increased spending isn't always wrong either. doing so during a boom is fine in moderation. But increasing spending, over inflation, and during the biggest rise in peace-time taxation in British history, year, on year, on year (as Brown did) was not just wrong, but insane. It's difficult to over-state how insane Brown's fiscal policy actually was. He raised taxes during a boom, then spent it all but it STILL wasn't enough. So he borrowed more, and more, and more, every year on top of booming tax-receipts to keep illusory growth coming. Gamblers call this approach 'the martingale', and it always results in catastrophic losses, because of house limits. Brown believed there were no house limits. But there are, even for Governments.
The pips were squeaking long before the market blew up. The private sector was over-taxed and barely put on any net new jobs at all over New Labour's tenure. Squeezed by regulations and crushed by rising demands, business stopped hiring. A group of workers, the non-financial private sector, which were not growing, nor were they enjoying increases in living standards under Brown, were being asked to fund a massive increase in the number of, and payment to the public sector. All Brown's "end to Boom and Bust" growth was debt-financed public sector spending. All the net new jobs were courtesy of the Tax-payer. And when those massive tax-receipts from the City which had allowed this to appear OK stopped, the wheel came off.
Brown's regulatory regime failed its first test, but so did every regime, everywhere. The Greenspan put, which I ultimately blame for the crisis was standard political economics everywhere at the time. Doing the standard thing does not make Brown culpable.
The financial crisis may not have been Brown's fault, and his response to it was (I'll grudgingly admit) not too bad. It's not exactly what I would have done, I'd have let the banks fail, secured depositors only (not bond investors) and used helicopter money to bail out PEOPLE not bank. But Brown's approach certainly wasn't wrong, and represented one of the better options on the table. But the fact is Brown appeared to believe he'd ended Boom and Bust beforehand, and left Britain with no fiscal wiggle-room at all. The fact the crisis was as bad as it transpired to have been for this country was absolutely Brown's fault. Financial crises happen. Brown though he'd stopped them for good. That is pure hubris. The Tory charge, that he didn't fix the roof when the sun was shining is actually quite accurate.
Brown overspent when he should have been saving. He rose taxes when a prudent government should have been able to cut them. He left a huge, bloated public sector, the cuts to which are slowing down the recovery. (That the cuts are slowing growth does not mean we should stop cutting and miraculously get growth, nor would that growth allow the deficit to fall). Thanks to the grotesque tax-hikes of Brown's tenure, there's no scope for further rises to close the gap. In isolation, each of the defences of Brown's fiscal policy hold water. Together, they don't.
Like the Irishman giving directions "Well I wouldn't start from here", should form the Tory critique of Brown's time as Chancellor and PM. We should have been running a 1% surplus in 2007. This means the deficit would have been 7%, not 11% in 2010. We should have been a creditor nation by 2007, having almost entirely paid off the net national debt and been sitting on great piles of T-bills, JGBs and Bunds. Our stock of debt would have gone up, but we'd be rapidly approaching 40% of GDP, not 100%. There would be no need for decades of Austerity. The fiscal fire-power the Government could have deployed to keep the wheels moving would have been much greater.
But counter-factuals are pointless. All that's left, is the long, slow, grinding process of austerity to bring the insane levels of state spending under Brown 2000-2007, back under control. This will take decades. I will be paying more tax, thanks to Gordon Brown, for the rest of my life. For that, I will never forgive him. For cheering him on, I will never forgive Labour.
Friday, 28 June 2013
Let's be absolutely clear. The near-failure of the financial system on Gordon Brown's watch was not entirely his fault. Thus the rise in the deficit from 3% to 11% of GDP isn't directly Brown's fault. At least not in the short term. But the slow recovery is his fault. And here's why.
I've just finished Afghansty by Sir Roderick Braithwaite. The parallels between what the Soviets tried to do, and what ISAF is trying to do, are striking.
Like American and British forces, the Soviets lost no tactical engagements, and left with a compliant regime in place. Like the Soviets, we've been there for a decade, nominally at the request of the Government in Kabul. Like the Soviets, we're actually taking part (again) in a 300-year-old inter Pashtun civil war between Kabul and Kandahar/Quetta, for control of Afghanistan.
Like the Soviets, most of our kit is heading North when we leave.
If they've any sense, the Americans'll avoid the Friendship Bridge over the Amu Darya into Uzbekistan where the picture above was taken. Nevertheless There will be a picture of American troops and vehicles crossing the same border, over a bridge, somewhere. Whether Karzai and democracy survive in Afghanistan for 5 years or 500, that picture will be the legacy of a decade-long adventure, that the media narrative will decide was lost. Like the Soviets, that will not be entirely fair.
Wednesday, 26 June 2013
This is only tangentially about the decision of the Supreme Court to overturn the egregious 'Defense (sic) of Marriage Act'. DOMA was about the rights in tax and inheritance that many gay people in the USA do not yet enjoy.
Gay marriage in the UK was not about rights per-se. Thanks to civil partnerships, British homosexuals already rightly enjoy the legal, tax and inheritance rights of marriage. Having achieved this, none of the Gay people I know were really agitating for 'marriage'. It was an issue for a fringe, the perma-outraged Peter Tatchell of Stonewall. It seemed mainly, aimed, it seems mainly at hurting the Christianists by parking a pink tank on the Traditionalists' lawn.
In pushing so hard for this largely symbolic gesture, the unintended consequence is that the British Christian right, for so long quiescent in the Bosom of a moderate Conservative Party, has now unfurled a banner and started to fight.
Gay Marriage was the issue more than anything else which drove right-wing Tories to UKIP, a 'libertarian' party which seems now to march to a hang'em and flog'em tune of the reactionary right. UKIP saw the opportunity, and rapidly purged itself of any liberals in order to maximise the Tories' discomfiture.
Issues of Sexual Morality, long settled on this side of the pond around some broadly liberal consensuses on abortion and Gay rights, are now open for negotiation. The battle lines are drawn. The Christian bigots have
Marched out and declared culture war. And they now have a party, one which is probably going to win the European elections next year.
Of course I think Gay People should be allowed to marry if they wish. I also see the reasons many think they shouldn't (and I find most of the given reasons risible). What I don't get is why everyone cares so much. We've all had to choose sides, and winding up god-botherers is good sport
But what is the cost of this victory. Is it worth it, if we Brits have to endure the Toxic culture wars which disfigure American Politics. The christianists have long sought to roll back Abortion rights. And now they are unified following their defence of a mere word, 'marriage' they may yet be successful in securing a tightening of Abortion laws. Women may lose real freedoms, so Peter Tatchell can hurt some bigots who'd already lost.
We social liberals may yet rue the day we prodded the god-botherers out of their sleepy acquiescence to basic freedoms.
Noisy Christians are now no longer just a problem for the Americans, thanks to tireless single-issue cranks, like Peter Tatchell, and a need of the Conservative party to lay to rest the ghost of section 28 by pandering to them. Every time sex is debated in parliament, badly dressed people will sing hymns of disapproval outside.
Was it worth it?
"backed with hard-hitting evidence that most people intuitively sense already.."by which they mean the data has been mined to within an inch of its life in order to confirm left-wing prejudices. Of course naughty people squirrel money away from Governments. They always have. Perhaps if Governments didn't take more than the 40-50% of marginal product (the current highest marginal tax rate in the UK is 62%), or seek to tax away someone's capital, people might think the tax demanded by greedy states was reasonable. This is why the 50% rate raised no money in the UK. The people who were supposed to have paid it thought it spiteful and vindictive. Which it was. Most of them were business owners, so they tightened their belts a bit, cut their income and paid taxes at a lower rate instead. 40% (plus NI) people could live with. 50% they couldn't.
"Most people easily recognise that a vibrant economic life in a nation does not come from the domineering, patronising sneer of an arrogant overbloated sector"They're talking about finance, without Irony, or noting that the Government is spending 50% of GDP. Which sector: finance or Government is more "overbloated"?
In the past, radicals have complained about taxation. Now they campaign in favour of it (on others). The left is now the establishment. Labour is the party of the unionised public sector, the benefits claimant and those paid to farm them; and they're demanding the rest of us continue to fund their lavish salaries and pensions.
The fact is, I can't think of a less productive and more wasteful way to spend money than taxes.
Is a marginal tax-rate of 50% really reasonable, on anyone? Most people who actually have to pay it say 'no'. Government needs to tighten its belt more. Because thanks to the Last Government,
"there is no more money".
Monday, 17 June 2013
Electoral turnout is falling, and those that do bother to vote are increasingly not opting for one of the two main mass parties: Humans for the Conservatives and Labour for the Orcs. This means any Prime-minister (who is more or less guaranteed to be either David Cameron or Ed Miliband after 2015), is going to lack legitimacy. Some say the fact that the likes of Tony Blair or David Cameron, who became PM on a small plurality of the vote, discredits democracy. By this analysis, our system, because the House of Commons is not the result of an accurate tribal headcount, is illegitimate.
All this represents is the fact political argument in the west is no longer about whether everyone gets enough to eat. Everyone now does. Political argument, even in these times of "Austerity" is really about the distribution of plenty. We're now so far up Mazlow's hierarchy of needs that even Sun-readers who have a roof over their heads, and more than enough to eat, now expect their unconsidered views to be listened to.
The four stages of learning are:
- Unconscious incompetence: You don't know how little you know.
- Conscious incompetence: You now know how little you know
- Conscious competence: You can make the right calls with the right information, if you think about it.
- Unconscious competence: Like changing down a gear in a car after 20 years of driving, you can do it without thinking about it.
The political anger is due the fact that having found out a bit, some people have started expressing opinions, and now feel ignored. They have learned to find a profit & loss account and do some basic arithmetic and conclude that corporate tax is being "underpaid" without troubling themselves to understand why this might be. Some people hear some funny accents on the bus and conclude they're being "swamped" by immigrants. Yet these "problems" are ones of enormous complexity, utterly unsuited to the simplistic solutions being proposed by the man in the pub. But there are politicians prepared to ride the wave of this solipsistic anger, hence the rise of minor parties, especially between elections, when the electorate don't feel they're choosing something important like the Prime-minister.
People have found out a bit, and don't like what they see, because a little knowledge is a dangerous thing and people fear that which is only partially understood. Here be dragons.
I reckon I'm at level 2. All I understand is how little I know, and I am deeply sceptical of anyone who claims to have the solution to complex political problems. There are trade-offs, but no answers. Side-effects are unknown and unknowable.
The list of people at level 3. in matters of modern political economy is very, very small, consisting of Ben Bernanke, a couple of Nobel Laureates (but NOT Paul Krugman), a few central bankers, people at the top of a few businesses. Even these people might just be level 2. but with power. Everyone else who claims to have the answer, is lying.
No-one is sufficiently able to collect and process the data to successfully manage an economy at level 4.
The answer is, of course more direct democracy hoping a semi-engaged electorate can be bothered to turn out for local referenda; and trusting to the wisdom of crowds. The answer is also the 'electorate of one' allowing markets to give people power over their own lives and removing a lot of competences from political control, devolving them to the individual and family.
It's because of my scepticism that I favour market solutions, and resist political control. Not because I think it's an answer, but because I don't think there is one, so we should let everyone make up their own minds about their priorities as far as possible. The job we're asking politicians to do is impossible. So let's make it easier, by getting government to concentrate on its core functions (there is an argument to be had about what the core functions are). Let's take back the power (and money) from politicians as far as possible, and so make decisions at a level where mistakes aren't catastrophic.
Libertarianism, the only solution for people who have sufficient wisdom to know they're ignorant.
Monday, 10 June 2013
It appears the NSA and GCHQ are able to read people's e-mails more or less at will. The whistleblower, Edward Snowden, who made this startling revelation has fled to.... China.... (well, Hong Kong, but the irony remains).
Of course the NSA and GCHQ can read our communications, THAT'S WHAT WE PAY THEM TO BE ABLE TO DO. The difference between countries like Britain and America, and those like China, is the security agencies of the former are genuinely looking for people who want to hack soldiers' heads off in the street or blow themselves up on buses, while mostly ignoring people saying "I disagree with the Government". China on the other hand, is about monitoring its citizens' opinions of the Government.
Now, I'm not going to defend in detail the hyperventilating response of the US authorities to people like Snowden and Bradley Manning. Manning, in particular has been vindictively treated, and Snowden is rightly afraid of the same treatment. But the wikileaks scandal did lead to widespread legitimate questioning by electorates about what is being done in their name and that is a good thing. The USA is in danger of losing sight of what made it powerful - the freedom enjoyed by Americans to think what they will. The suspicion of Government has been replaced by a fawning deference to the intelligence-military-industrial complex. But this is a cultural battle, not a political one.
There's a reason some things are secret. Large-scale, indiscriminate leaking of information can cost lives if it means agents and sources in hostile countries can be identified. In an ideal world, our Governments wouldn't need secrets, but we don't live in an ideal world and there's always an ideology of the angry - radical islam, before that Communism, anarchism and so forth which demanded surveillance. There's always going to be a battle between those who favour security, and those who favour openness, in which will be impossible to strike the right balance at all times. What's important is to keep the tension so that neither security prevents free thought, while allowing spooks to monitor some bad-guys. Libertarians on Twitter, most of whom have absolutely nothing to do with the intelligence agencies, are instinctively outraged about attacks on privacy by state agencies and kick up a knee-jerk fuss without thinking the issue through. As the overlap between Twitter libertarians and Geeks is almost total, internet freedom is felt very personally. Most people (and we live in a democracy) are more outraged when the spooks whom we pay to keep us safe, fail at their task.
It's too easy as a libertarian to start from a position of "all state action is wrong" then work from there. It's possible to make the intellectual arguments about how wicked the intelligence agencies are or even deny their utility. Of course they're there to defend the Government and the State. Only an extremist could think this somehow wrong. Because the one part of the British state which appears to be doing its job is the intelligence agencies who are actually protecting ordinary people. It won't be the politicians getting blown up on buses. In crying foul when intelligence agencies are doing what we pay them to do, you leave the non-aligned with the impression that Libertarianism is rather childish, and has nothing to say about the problems facing the world today, preferring to imagine a perfect state-free utopia. But Libertarianism is not anarchism. The state has the right to defend itself, and the majority law-abiding population, from those who would seek to use violence and subversion, rather than democracy, to achieve political ends.
Don't believe we've got the balance right? How many countries would let parties which openly call for the break-up of the country to sit in the legislature? That's allowed basically in Western Europe and the Anglosphere. If you're prepared to use democratic means (which means persuading voters) you're legitimate, more or less whatever you want to say.
Clearly, the intelligence agencies have foiled all but a handful of big attacks on our society, and they have done so by quietly watching the enablers and inciters. It seems probable had 'the not-employed-as-plumbers' Adebolajo and Adebowale gone into a hardware shop and bought a load of pipes and chemicals, they'd have been lifted for preparing a bomb. The fact these two were known to the intelligence agencies at the time of the Woolwich attack at all means MI5 is doing something right. The fact they weren't lifted suggests the agencies have a mind on civil liberties. No intelligence agency can be wise to every threat, or use perfect judgement and most people are realistic enough to see that.
If the PRISM data is held, to enable people already of interest to be looked into more closely (and social networks here are vital) then this is understandable, and frankly despite protestations to the contrary, I expect the NSA to be able to do this to US citizens too. This is going to happen anyway, but I'd rather it be in a legal grey area as it is now, which will persuade the spooks to not 'take the piss'. During the cold war, Left-wing organisations and trades unions were often accused of being in league with the enemy - the Soviet Union. Most were not, and some like the Communist Party of Great Britain were openly sympathetic to Moscow. MI5 had files on Labour movement figures, many of whom ended up in Government.
Before mass communication, it was easy. You tapped telephone lines, steamed open letters and broke the codes of people you thought might be a wrong 'un. Laws enabling agencies to do this, in extremis, were enacted. Nowadays it's a bit harder. The sheer volume of electronic communications leads to agencies to data mine using algorithms to look for data in which they might be interested. The problem is that most extremists are, by nature, thick and incompetent. They're easy to find by traditional means. The intelligent ones who're actually capable of organising the big atrocities are harder to pin down. Simple encryption will defeat data-mining of PRISM data. No encryption is perfect, but it requires resources that will only be deployed if the agencies are already looking at you. It's the network analysis from the thick and incompetent foot-soldiers and human bombs which leads to the clever, effective terrorists.
To me, the Cold War 'Spycatcher' stuff on Labour figures is reassuring. MI5 had a look, found nothing of interest and ignored them. People who had been of interest for a bit were not prevented from seeking high office. Preventing politicians of one side from entering office would have led to scandal of epic proportions. The very legal grey area the in which the spooks operate appears to have been a protection far better than any law.
Now, with all intelligence agency behaviour to be subject to laws, laws will be drafted to allow the Government to monitor communications. Given this legal top-cover, the Agencies will do so with alacrity. The volume of data stored, and the freedom with which it will be used, will rise exponentially. Any competent plotters will regard the Internet as fundamentally insecure, and will find other ways to communicate thus rendering them invisible. Furthermore, there's the opportunity cost: spooks will spend all their time checking out people who tweet they're going to Blow the Airport sky-high, and missing the next competent killer as a result.
The spooks belong in the shadows, collecting information, but being careful what they do with it, lest anyone find out how. William Hague said "we've nothing to fear from GCHQ", and I agree with him. But the argument of Labour home secretaries that "if you've nothing to hide, you've nothing to fear" (which I've long thought should be criminalised, punishable by 42-days in prison) does not follow. Data, in the volumes it's generated these days, can be mined to create an entirely false picture of a person. A number of angry tweets will be used to demonstrate in court a violent personality disorder. An essay which in context is obviously dripping with irony, will be used at face-value out of context to demonstrate the opposite of what's meant. (*innocent face*). Too much data means the wood will not be seen for the trees, as innocent people fall under suspicion.
The East-German Stasi used to monitor all and sundry, keeping detailed records of pretty ordinary lives. To what end? They failed to spot the imminent collapse of the regime because they were too busy recording the conversations of playwrights. Couldn't happen here? Look at the Regulation of Investigatory Powers Act (RIPA): it was supposed to bring what was already happening under regulatory oversight. What it allowed was local councils to see who was sleeping where, to prevent benefit fraud. The law supposedly designed to protect the British people caused the (presumably) unintended consequence of council bin-snooping and so extended the power of the state.
Britain is not becoming like China where free expression of political thought is illegal. Nor has the British government over-reacted to a now-minuscule terrorist threat, like the Americans have since 9/11, and thrown all oversight of their intelligence agencies out of the window, with criticism of the Government agencies deemed unpatriotic. There is a judgement to be made. So long as the spooks have at least as much to fear as a result of getting it wrong, then it's probably right to say 'if you've nothing to hide, you've nothing to fear' in this instance (...42 days in gaol? I'll go quietly, yer-'onner). The right people: people who want to blow themselves up on public transport, are subject to surveillance, and no-one should think this is wrong. It's what we pay intelligence agencies to do. There have been remarkably few stories of people incorrectly so targeted, unlike the bin snoopers brought about by RIPA.
If PRISM became wholly and undeniably legal, then the risks the spooks run by using its data would fall, and the temptation to abuse it would therefore rise. So. Let's not give 'em the temptation. The Data and Communications Bill in particular would force exactly the sort of network data contained in Prism to be stored, but thankfully it has been killed off by the Liberal Democrats and some Tories. (You see why I like the coalition? The sillier instincts of both parties are tempered) This bill would have given the intelligence agencies powers they neither should have, nor need to foil the current threat of Islamist extremist terrorism.
However the spooks are doing it now, semi-legally or not, it's working well. So it doesn't need fixing.
Wednesday, 5 June 2013
If you're debating with a certain type of lefty, you might get told to "Check Your Privilege". This confusing order means that if, for example you're debating the welfare state, if you're securely employed and don't know what it's like to live on benefits, your opinion is irrelevant. It's effectively saying "you're borgeouis, shut up". Dan Hodges dug deeper for the Telegraph.
Apparently the phrase “check your privilege” first originated on the social justice blog Shrub.com, (no, I’ve no idea what a social justice blog is either). Shrub was set up by Andrea Rubenstein...'CYP' can be frustrating. But this post by Pete Spence argues some of these ideas could be an important part of libertarian thought, if Libertarianism is not to be an intellectual ghetto for rich, white, smug men with good jobs who don't want to pay tax.
The concept of Checking Your Privilege asks you to ask yourself “is life different for other people?” and asks you to listen to those who have different experiences. It’s a sharing of information. e.g. If you are not considered overweight, you may not be aware of the extent to which those considered overweight are harassed. You may not be as acutely aware of the overrepresentation in TV and advertising of people considered to have a “normal” body type.
Intersectionality asks you to remember that individuals are affected by several different things at once. e.g. Someone considered overweight may also be considered successful, and have a high income and good education. They are relatively privileged when compared with someone considered overweight who is also unemployed.Of course we all ignore this when debating, and descend into shorthand. The key is to always blame the system, for example when discussing benefits and unemployment, not the people, who're mostly just responding to incentives. A rule I'm pretty good, though not perfect at adhering to.
These three concepts are all inherently individualist ones. They ask you only to remember that information asymmetries exist. People can not be treated homogenously, and suffer particular issues that are individual to them. We should act accordingly.Of course when a rabid feminist tells you to "check your privilege", they're trying to shut debate down, not asking you to think about the other's condition. It's a form of 'ad-hominem', saying your argument is wrong because it's a rich, white guy making it.
A consistent approach requires libertarians not just to be critical of state power, but also of overbearing corporate power and the power of societal expectations and shame. The ideas of privilege, checking of privilege, and intersectionality help us to do this. The complexity of our world is a practical reality, and a problem for centralised approaches, not a call for them.And here the libertarianish twittersphere in particular falls down, because it's not clear many people realise how much power large companies wield. It's too easy to see non-state players as somehow on my team against the state, whereas it's a core role in a night-watchman state to protect people against the interests of rapacious companies for example by enforcing competition law.
Libertarians should not be anarchists, always railing against the state, without considering the proper functions of Government, including economic regulation. Monopolies, state or private serve no-one except the interests of the producer. Extremism, morally blaming weaker members of society for their plight or acting as an apologist for Companies is not going to help the central idea of libertarianism spread.
That is social liberalism, and economic liberalism can go together, ideas which appears to be the future of British politics. Let's not scare potential supporters off by not considering why some people might be scared by the concept of freedom from state interference.
Monday, 3 June 2013
Saturday, 1 June 2013
You can rebuild an Army from a small core. You can rebuild a Navy and Air Force. Benefits cuts have positive effects on incentives, as well as the more obvious negative effects. But the science budgets should be maintained. It's short-sighted to cut an area where Britain retains a comparative advantage, and one where private industry and charity cannot mobilise the resources neccessary.
The UK still has world-class universities, and punches well above its weight in pure science. Many of our leading companies have developed around these - Silicone fen in Cambridge for example where ARM develops the chips that power Apple and others.
Above all, it's the long tradition of medical research, where state spending complements the tendency of the Pharmaceutical industry to seek solutions to the shrinking problems of Rich people, where state spending can have positive effects, not just for the British economy but for the good of the whole of mankind.
I'm not the kind of Libertarian who thinks all state spending is wasted. There are things the state can do where business and charity is limited. Much of the state support for science supports the globally important work of medical charities.This money is emphatically NOT wasted.