Banks: Too Clever by Half

A lot of this post flies above my head, but what I think he's telling us is that the banks are on a 'heads-I-win-tails-you-lose' deal. If there are large scale collapses of other enterprises they have insurance deals called synthetic collateralised debt obligations (synthetic CDOs) that basically mean they get sheds loads of money and the rest of the economy suffers. So no more 'credit crunch', just a unthinkably big transfer of wealth to the financial sector from the rest of the global economy.

Or not, as the case may be. The author is hedging his bets between financial Armageddon and the possibility that,
"... the credit crunch will come to sudden and complete end, like the passing of a tornado that has left devastation in its wake, along with an eerie silence."

Which to my untutored brain sounds suspiciously like the aftermath of financial Armaggedon. Just with a different bit of the economy at the eye of the storm.

Stumbling, on the other hand, has gone all po-mo on us, and lets on as if the recession doesn't exist, just because he can't get the computer game he wants. (Here's a clue as to why his tongue might be firmly in his cheek: he lives in Britain. Everyone knows that, each Xmas, there is one must-have toy you can't get, irrespective of the state of the British economy. It's a tradition for chrissakes...)

But would you trust the future of broadcasting to a cartoon cow?

Via
Obama has appointed Kevin Werbach, assistant professor of legal studies and business ethics at Wharton,as a co-chair of his Federal Communications Commission transition team. Roughly speaking, it appears that this is the American Ofcom.

Werbach is a World of Warcraft player - a level 70 Tauran Shamen no less.

Waltermonkey speaks for us all, I'm sure,

"... I feel much safer with a shaman than I would with a mage, warlock, rogue or hunter, all of which are strictly damage-oriented."

Unqualifed Offerings is positively upbeat:

"So, anyway, seeing that having a Minotaur-American alter ego is no impediment to becoming a mid-level administration official gives me some hope that politics won’t be restricted to those who never spent time on the internet. " Couldn't happen in Britain of course- we're a far more hide-bound society.

The immortal guardiansguild.com go even further:
"I’ve had a political dream for a while now that I think all of us WoW players can agree on: someday, I hope, we will have a President in the White House that plays videogames. We’re not quite there yet, but we’re closer...". Isn't that sweet? Even immortal guardians still having dreams...

There's a political moral here somewhere, I just know it. Just give me a moment to stop giggling and I'll try to find it....

What Ex-Eurocommunists do rather than surf the net for pornography

We read book reviews like this. I think the clue to why this feels dirty might just be in the title:
“Socialism and Left Unity – a Critique of the Socialist Workers Party” . From the Socialist Party, nee Militant, those well known practitioners of Left Unity. Good old fashioned, knockabout 'As-Soon-As-This-Pub-Closes' stuff no doubt.

Mind you, this is just the soft stuff. If we're really feeling perverted we redundant Euros washed up on the tides of history even spy through the keyhole at conversations like this balanced, reasonable and entirely dispassionate discussion of internal shifts of personnel in the SWP Central Committee (234 entries on the discussion thread as I write these words, but rising fast - I wouldn't be surprised to see that thread top 500 contributions).

And- yeah, I know I'm sneering as well. Which isn't nice. What's worse I'll no doubt laugh like a drain when Splintered turns his attention to the matter. But I'll be laughing in despair really. It was ever thus in my youth, as I've mentioned here and here. Why hasn't it got any better?

Update: awh, fooey. Splintered's gone all serious on the SWP thing. I retain hopes of him turning a beady-eye on the Taffe book though.

The Owl of Minerva Flies at Dusk

Hey, Kondratiev's in fashion again! Haven't heard of him since wading through Ernst Mandel all those years ago. Since his long wave theory is so difficult to prove - or indeed, disprove - it can function beautifully as a kind of 'magic bullet' which buttresses any particular argument anyone would like to make about the short term economic future.

But for some historians, Kondratiev is a wimp focused on piffling short -term issues.

Here's Cicero on the Roman credit crunch:

"Defend the republic from this danger and believe me when I tell you - what you see for yourselves - that this system of monies, which operates at Rome in the Forum, is bound up in, and is linked with, those Asian monies; the loss of one inevitably undermines the other and causes its collapse."

Er, yeah. & then came Sulla, followed a generation or so later by the collapse of the Republic in favour of the Empire.

Little Brown Jug

I'd forgotten about this: a drinking song from my youth. Do young lefties still sing?

Actually, do they still drink?

N.B. Honest - I never sang the dodgy 13th verse...even then I thought that level of sectarianism was naff.


I'll sing you one - O!
Red Fly The Banners, O!
What is your one - O!
One is Workers' Unity and ever more shall be so.

I'll sing you two - O!
Red Fly The Banners, O!
What are your two - O!
Two, two, the workers' hands, working for a living - O!
One is Workers' Unity and ever more shall be so.

I'll sing you three - O!
Red Fly The Banners, O!
What are your three - O!
Three, three the Rights of Man
Two, two, the workers' hands, working for a living - O!
One is Workers' Unity and ever more shall be so.

I'll sing you four -O!
Red Fly The Banners, O!
What are your four - O!
Four for the Four Great heroes ( Shout Marx, Engels, Lenin, Stalin - or Gramsci- to taste)
Three, three the Rights of Man
Two, two, the workers' hands, working for a living - O!
One is Workers' Unity and ever more shall be so.

I'll sing you five -O!
Red Fly The Banners, O!
What are your five - O!
Five for the years in the five year plan
And four for the four years taken,
Three, three, the Rights of Man!
Two, two the workers' hands, working for a living, O!
One is Workers' Unity and ever more shall be so.

I'll sing you six -O!
Red Fly The Banners, O!
What are your six - O!
Six for the Tolpuddle Martyrs,
Five for the years in the five year plan
And four for the four years taken,
Three, three, the Rights of Man!
Two, two the workers' hands, working for a living, O!
One is Workers' Unity and ever more shall be so.

I'll sing you seven -O!
Red Fly The Banners, O!
What are your seven - O!
Seven for the hours of the working day
Six for the Tolpuddle Martyrs,
Five for the years in the five year plans
And four for the four years taken,
Three, three, the Rights of Man!
Two, two the workers' hands, working for a living, O!
One is Workers' Unity and ever more shall be so.

I'll sing you eight -O!
Red Fly The Banners, O!
What are your eight - O!
Eight for the Eighth Red Army
Seven for the hours of the working day
Six for the Tolpuddle Martyrs,
Five for the years in in the five year plans
And four for the four years taken,
Three, three, the Rights of Man!
Two, two the workers' hands, working for a living, O!
One is Workers' Unity and ever more shall be so.


I'll sing you nine -O!
Red Fly The Banners, O!
What are your nine - O!
Nine for the Days of the General Strike
Eight for the Eighth Red Army
Seven for the the hours of the working day
Six for the Tolpuddle Martyrs,
Five for the years in in the five year plans
And four for the four years taken,
Three, three, the Rights of Man!
Two, two the workers' hands, working for a living, O!
One is Workers' Unity and ever more shall be so.

I'll sing you ten -O!
Red Fly The Banners, O!
What are your ten - O!
Ten for the Days that Shook the World
And Nine for the Days of the General Strike
Eight for the for the Eighth Red Army
Seven for the the hours of the working day
Six for the Tolpuddle Martyrs,
Five for the years in in the five year plans
And four for the four years taken,
Three, three, the Rights of Man!
Two, two the workers' hands, working for a living, O!
One is Workers' Unity and ever more shall be so.

I'll sing you eleven -O!
Red Fly The Banners, O!
What are your eleven - O!
Eleven for the Moscow Dynamos
Ten for the Days that Shook the World
And Nine for the Days of the General Strike
Eight for the for the Eighth Red Army
Seven for the the hours of the working day
Six for the Tolpuddle Martyrs,
Five for the years in in the five year plans
And four for the four years taken,
Three, three, the Rights of Man!
Two, two the workers' hands, working for a living, O!
One is Workers' Unity and ever more shall be so.

I'll sing you twelve -O!
Red Fly The Banners, O!
What are your twelve - O!
Twelve for the chimes on the Kremlin clock
And eleven for the Moscow Dynamos
Ten for the Days that Shook the World
And Nine for the Days of the General Strike
Eight for the for the Eighth Red Army
Seven for the the hours of the working day
Six for the Tolpuddle Martyrs,
Five for the years in in the five year plans
And four for the four years taken,
Three, three, the Rights of Man!
Two, two the workers' hands, working for a living, O!
One is Workers' Unity and ever more shall be so.

I Wish I'd Written That: No.764 in a Series

What's wrong with financial markets : the dummy's guide. Also there's a particularly neat graphic in his (Michael Perelman 's) previous post, ripped from the WSJ.

New Labour is Listening

The policy wonk's policy wonk goes to Brum:

"I popped into a New Street outfitters to buy a cheap suit for the RDI dinner tomorrow night. The assistant recognised me so we got talking about politics as I tried (successfully) to negotiate a discount. As is often the way in this part of the world other customers were soon joining in.

As I was leaving he shouted after me ‘anyway since the VAT cut we’ve been flooded with customers’. Call me gullible but I was genuinely interested to hear that the PBR has been such an instant hit. ‘Really’ I said taking a step back into the shop .To which he jovially replied to the immense amusement of the rest of the shop ‘have we f**k, you daft bugger’. Now, that’s what I call service."

The Fourth Green Field...( Well, if You Count Clockwise From the Top it is Anyway)

Tom, Paulie, the Fatman and lots of other people seem to be analysing their gender and personality type. As someone who once got sent home in disgrace from a 'management' training course for comparing those Myers-Briggs archetypes to signs of the zodiac I think I'll sit this one out. (Though the analysis that my blog is 79% male is remarkable - Mrs.Charlie tells me it is within one or two percentage points of being spot on.... )

I prefer the old stuff, like Political Compass. No better place to be than that green bottom corner.

7% Artists!?!

From Smash-Fight-Struggle Weekly,via Lenin: the occupational breakdown of everybody's favourite membership list.

Update: But none of us live for work alone, we all have other rich facets to our lives. So it is helpful that Modernity points us towards a list of BNP criminal convictions. No news on any art related crimes....

Further update: Jim Jay worries that people might take a Smash-Fight-Struggle Weekly graphic as an academically respectable data source. He's right about the dodgyness of the numbers of course. There are lots of people better placed than me to judge whether he's right about the motivation behind producing them.

If We Had A Choice We Wouldn't Start From Here..

McFall, the arch labour loyalist, was on Newsnight last night huffing and puffing about threatening the banks with full nationalisation if they don't start lending again. A year ago, suggesting that a New Labour politician would be making such nosies would have been grounds for a visit from the CPN. Now it is the fall back option of choice even for the IMF. So most of the Left are feeling a certain wind in their rhetorical sails, if only because of the sheer delight of being able to implicitly start every sentence with that silent, unspoken, " Well, we did tell you so..."

But here's a question from the American Left:do we want the banks even if we could fully nationalise them?

"Buy a bank and its liabilities are now yours. If you happen to be the US government, your full faith and credit is on the line for every penny. There is nothing radical, not to mention equitable or practical, about underwriting the vast quantities of dubious financial instruments that metastasized during the past decade. You want a publicly owned and managed bank to lend against the tide and finance reconstruction? Start a new one."

Is this practicable? How on earth would we get the mortgages and pension funds out of the clutches of the existing banks and yet leave them with the debt which they themselves magicked out of all those complex and rarefied financial instruments of destruction? If someone could convince me that we could disengage those mortgages and pensions I'd be really happy to let the whole bloody City of London collapse under the weight of its own moral failings.

Brownian Motion

Sorry for the delay in posting: I've been organising our local '2.5% off VAT' street party. Gran says it's like VE night all over again....

Will Hutton seems on board. Richard Murphy is prepared to give it a more than grudging time of day and the People's Polly is, of course, ecstatic. Yet both Mason and Crick were pretty nonchalant about it's supposed vast scale on Newsnight, and the Economist directly warns:

"......Britain is still heading for a painful recession, despite the government's fiscal stimulus. The reason why the Treasury was unable to do more was clear from the borrowing forecasts that Mr Darling unveiled. Although these include his new fiscal measures they were still breathtakingly high..."

Will it work? Who knows: whatever happens, the Tories will claim it made things worse and Labour will say things would have been worse without it. At that party-political/electoral level it is ultimately a game of spin and counter-spin, a hall of economic mirrors in which a mainly economically illiterate electorate stumble blindly.

But that may not be the question for very long anyway: almost unbelievably, the banks want more money. & Mervyn King and Robert Peston seem agreed we're going to have to give it to them. The scale of this reflation package is much, much smaller than that of the previous bank rescue funding measures, so why should any subsequent second tranche be very different? I suspect the Economist might find the public finances quite able to bear the costs of a second tranche of public money designed to support the banks.

It's not over yet. There are a lot more moves left in this macabre game of pass the parcel. I'm beginning to suspect there's even electoral mileage to be had for anyone who'll confront the banks head-on. Though whether that's Comrade's P's way is something I'm far less certain about.

I'd Forgotten About Minnesota.

The Observer has given away a booklet of party games today. But I suspect most of us in the political blogosphere would prefer to play the much loved Hanging Chads game, still running by popular demand in Minnesota. (via)

The Swedish Depression

I've long been of the view that the suddenly fashionable Swedish solution - the temporary public ownership/co-ownership of banks to allow them to be re-capitalised and sold back to the private sector - is, actually, not likely to be that temporary. Robert Peston reminds us that governments around the world have bailed out those banks to the tune of $500bn - about one sixth of the entire annual output of the world. That's not so easy to recoup in a declining market. Where are these private sector investors with another sixth of the world's output who would want to buy these recapitalised banks?

For banks to be attractive to private investors again they'd have to be profitable. Which is achievable, at least in principle: but only at the cost of being much, much more cautious in terms of who they lend too and at what rates. And therein lies the problem. New Labour - well, all mainstream politicians - are caught between a rock and a very hard place. Get their money back from the banks or get the economy working again. The point of Keynesian anti-cyclical reflationary measures is not boost government spending forever, but to stimulate a private sector up-turn. Which can't happen if the banks won't lend on reasonable terms.

Which allows the Newt a clever solution to that undergraduate essay so many people have blanched at about comparing and contrasting Marx and Keynes:

"...the most rational, and by far the cheapest, way to sort out the disastrous situation in the UK financial sector would be to proceed immediately to wholesale bank nationalisation. The immediate crisis, whereby the banks are refusing to lend even after the bail out packages, may make it the case that the only way out of the economic downturn is by wholesale bank nationalisation - a sort of Keynesian solution in the overall economy and a socialist solution in the catastrophically affected financial sector.
Indeed, t may be put more strongly. If the government retreats in face of the present policies by the banks, with their refusal to lend then it will not be possible to apply a Keynesian policy in the overall economy. Truly socialist policies, nationalisation, in the financial sector may well turn out to be the only way to apply Keynesian policies in the economy as a whole."

Well, yes, I can see that. Even mainstream politicians can see that. But there is a further twist for Britain in particular. Peston lays it on the line:

"On Monday, the chancellor will admit, by implication, that the government's industrial policy of the past decade has been something of a disaster.

Actually to call it an industrial policy is a bit misleading - but what I mean is the Treasury's celebration over many years of the UK's growing economic dependence on the City of London and financial services.

The City contributed around a third of our economic growth in the recent past and about 10% of total output....

The slump in the City has knocked around £40bn - yes £40bn! - from annual tax revenues.

And much of that tax revenue has probably gone forever, or at least for as long as the time horizon of most sensible forecasts (viz, up to five years). "

So I think this means that 'sensible people' - not bug-eyed lefty economic illiterates like me - are beginning to worry that:
(a) a Keynesian reflation package can't work without stronger state direction of bank lending practices ;
(b) But forcing the banks to lend on terms advantageous to the rest of the economy will, at minimum, delay their recovery of profitability and thus potential sale;and
(c) The banks aren't ever, at least in the foreseeable future, going to be as important to the British economy as they once were; so I ( if no one else) conclude
(d) We need to getting our people working in other sectors or face a future where the government can't afford to organise a meaningful Keynesian reflation in the first place.

I must go back to those books on the pre-1914 2nd International mouldering somewhere on my shelves. I have a distant memory of some people in that movement who argued that capitalism not merely had a inherent tendency to crisis, but contained within it the seeds of its own destruction and even that it would, inevitably, collapse almost without any intervention of the workers' movement. Laughable really - or at least I was taught to laugh at such lack of theoretical sophistication in my youth.

But the Swedes aren't famous for their jokes, are they?

Start of a New Series: Weird, Off Topic Friday Night Posts

It's not the clubbing which is killing off those seals.It's the mouse poo. No, really.

Well, except in Canada of course.

Time For City Whizz Kids to Put On Their Slippers?

Here's a thought: what if it wasn't profitable to own stocks?

"Absurd", did I hear you say ? John Ross doesn't agree,

"....the nominal decline of the Dow after 1929 was 89 per cent although, as overall price deflation was occurring, the decline in real prices was somewhat less. The maximum decline of the Nikkei since its peak at the end of 1989 has been 80.2 per cent - although ... the fall in terms of real prices is again slightly less....... At the close of trading on 20 November the decline of the Dow since its peak in 2007 was 46.7 per cent.

...... it took 25 years after 1929 for the Dow to regain its pre-crash level even in nominal terms. ....shows the performance of the Nikkei after 1989 was even worse than that of the Dow after 1929 - the Nikkei was still registering new lows almost 18 years after the beginning of its decline.

Performance of more minor stock markets, considered historically and for earlier periods, can be worse.

Prices on the French stock market failed even to keep up with inflation for 53 years from 1900-1952. Prices on the German stock market failed to keep up with inflation for 55 years from 1900-1954. Prices on the Japanese stock market, in addition to the recent fall of the Nikkei, failed to keep up with inflation for 51 years from 1900-1950. Prices on the Italian stock market failed to keep up with inflation for 73 years from 1906-1978."

So what would the money men do if it was so much harder to gamble? I mean, clever as Swiftian financial irony might be, there's only so often one can churn out this sort of thing. & - forgive me if I'm wrong - I don't think pension fund managers are famous for their comedic talents anyway.

Even as a non economist, I know the City works via many more financial devices than stocks alone: but surely company ownership is in some vague way pretty basic? So what happens when it is not profitable? Where else does the money go - under a mattress?

And what happens to a country where financial services represents 20% of the economy?

Here's an idea - use the money to make long-term investments in socially beneficial enterprises. Stuff like slippers. As Adrianb points out:

" About 50% of over 85 year olds fall every year; a person dies every hour as a result of a fall; fractured hips cost the NHS £1.7bn every year. A [local authority]scheme to replace worn out slippers was used to screen and provide information to elderly people. "

So let's issue a new pair of slippers to all over 65s four times a year as part of a wider Green programme. Like this one, only bigger. & with slippers.

What Does That Membership List Really Tell Us?

Today I've had some 20 entirely random email or phone call exchanges with people all round the country of various Leftist persuasions and various current levels of activity (from zilch to full-on-local councillor/ TU-full-timer/ campaign diehard levels). As I see my friends as typical of wider strata of opinion, I have a hunch that more or less the entire British Left has ignored the law and either holds or knows a person who holds the BNP membership lists.

Interestingly, not all of them actually felt OK about this: roughly half* felt that even BNP members were entitled to a level of personal privacy. But the temptation to go and download it was simply too strong. I mean it's not as if how to get it went under-publicised on the web.

If there is anything like a pattern in my randomly chosen respondents it is that those who are currently active in politics seem more chary of downloading it themselves for fear of legal consequences - but they all knew a friend who had done so. & they'd all been offered specific names and addresses in their neighbourhoods. Current non-activists didn't seem worried by the law at all - they just downloaded it. This activist/non activist division seemed more important than specific political allegiance.

Information 'wants to be free' say the geeks. Even people hard wired to argue about the politics and power relations of personal information can't resist getting hold of it once it escapes on the net. I mean, who did you ever know that heard of the existence of a juicy piece of gossip and voluntarily didn't try to find out what it was ? If there is a human nature I can't help thinking this need to gossip is one aspect of it - the human equivalent to chimps grooming. Secrecy isn't natural and now the net has given us the means to defeat it, it will be defeated almost everywhere.

But the politics of this is something I'm still grappling with because it is the State and Corporations who are most likely to make use of this vanishing secrecy, not the Left.

*The other half just wanted the BNP to be concerned that the Left 'knew where they lived' as our Liverpudlian friends might put it.

Economics for non-Experts: two approaches

1. Scared by the dismal science? Frightened by the crisis? Just look at all your news through this wonderful new web browser. Never again be scared by that 'r' word...(h-t Nigel S)
2. Genuinely curious about economics, but don't know where to start? Well, since he's given me a unexpected and unrequested plug the very least I can do is refer you to the very clear and well informed Tom P over at Labour and Capital : he'll fillet and translate all that gobbledegook for you.

Work/Life Balance: The Australian Approach

Via the jackdaw mind of the wonderful B&T comes news that the Aussie Navy has negotiated a 2 month Christmas holiday.

Now if we could just get our own Ministry of Defence to adopt a suitably multi-faith approach to this sort of thing we could get our boys home from Iraq and Afghanistan not merely for Xmas/Hanukkah, but for Eid, Passover, Diwali and all these religious festivals as well.

Paul Weller was Wrong: They Don't Always "Smell of Pubs and Wormwood Scrubs.."

A list of 13,500? Blimey, I thought: that's an awful lot. It's getting on for twice the membership of the Green Party.

& it remains an awful lot even when knowledgeable people tell me it is a vast over-estimate and maybe something closer to a contact list including ex-members. (Including one guy who left because he,"Objects to being told he shouldn't wear a bomber jacket."). But, still - doctors, teachers, police officers and prison officers. It ain't good, is it? We can laugh at them for losing the membership list and laugh even more - oh joy of joys -at them having to use the Data Protection Act to suppress it (which obviously won't work) but the real problem remains. Somehow or other, this bunch of creepy, neo-nazi losers have become the fourth party of the land.

I suspect they really are neo-nazis: whilst it is probably true Griffin still has quite enough, er, 'young men who prefer to wear bomber jackets' (sic) to hand, it is also true that he is cleverly playing a game to attempt to make the BNP the domestic functional equivalent of Haider's or even Fortuyn's parties. I tend to agree with the conclusions of this Europe wide survey from a Norwegian chap that the success of such parties is, in part at least, to do with the Left vacating the terrain of class identity. But only in part.

Nestling in that list is someone I 'm really curious about: a holistic therapist. S/he didn't join the BNP because New Labour 'abandoned the working class', I'm fairly certain. Perhaps her tarot reading told her to do it, or some inspiration came to her whilst sitting under a crystal. In any event, s/he - and the doctor, and police officers, and teachers - would seem to me to fit into the more traditional leftist expectation that it is the (jargon warning:old fashioned term coming up) petite bourgeoisie - who are most likely to form the base of fascist parties.

The trouble is, of course, that the class structure has changed; there are a lot more white collar workers who think of themselves as holding functional equivalents of 'traditional' petite bourgeois roles like shop keepers or junior managers than there were in the 1930s.

Update/cheap shot: Of course, in the 1930s, they did read the same newspapers ( thanks B&T)

Oi - Over 'Ere Mate,

Thank you Splintered for this gem of a link,
"Embattled Shadow Chancellor George Osborne has had voice-coaching lessons from a £100-an-hour expert in London’s Harley Street in an attempt to improve his image, it was revealed last night. Some observers claim that in the past year his voice has dropped in tone and his speaking style sounds less posh. Mr Osborne, 37, has received training from one of Britain’s leading speech therapists, Valerie Savage, who has advised several MPs and well-known broadcasters on how to improve their techniques."

& they say class politics are dead.

Pop Star Says Something Sensible Shock

The Iceland Weather Report makes the Guardian, and uses splendid prose to describe the range of Icelandic opinion on the proposed IMF loan:

"Some try to placate the masses – and probably themselves – by claiming the loan is merely there as a credit line, a guarantee, and we may not even have to use any of it (hope springs eternal).

Others are wildly indignant about the perceived extortion by the British and Dutch IMF representatives and loudly proclaim they would rather revert back to living in turf houses and spending winters eating pickled whale blubber and chewing on Icelandic moss than take some dastardly IMF handout on those terms.

And then there are those who claim the IMF is the only route to take; that without the loan the Icelandic nation would slowly sink like a stone into the frigid waters of the North Atlantic. That group includes the Icelandic government."

Apparently interest rates in Iceland are now 18%. But no one wants their currency anyway.

The Weather Report also points to a really excellent FT piece from a couple of days ago which quotes Bjork, of all people, on the real meaning of that benighted nations situation:

“Young families are threatened with losing their houses and elderly people their pensions. This is catastrophic. There is also a lot of anger. The six biggest venture capitalists in Iceland are being booed in public places and on TV and radio shows; furious voices insist that they sell all their belongings and give the proceeds to the nation. Gigantic loans, it has been revealed, were taken out abroad by a few individuals and without the full knowledge of the Icelandic people. Now the nation seems to be responsible for having to pay them back.”

Now what I want to know is simply this: is there a Icelandic Left and what's their answer to this*? Because whatever it is I 'll take some of it and apply it liberally to the-much-less-frightening-but-still-scary British situation.

Incidentally, unlike in Britian, no one in Iceland - left or otherwise - seems to think it was about mangers running riot, free of shareholders constraints. Everyone seems to agree it was a power elite issue with the government actively aiding and abetting the financial buffoons (cf.C.Wright Mill or even, whisper it quietly, Marx), not a Burnhamite problem.

Update: there is a Iceland Left: the Left-Green Movement with a claimed c3000 members (1% of pop) and 15% of the vote. However, if they do have a distinctive policy response to their county's financial crisis their website isn't translating it into English for me....

When & Why Did the Left Become Burnhamite?

Credit crunch? But that's soo last month darling...
Well, the Red Newt disagrees. Here is the Newt's conclusion after looking at a new Harvard Business School paper:
"Financial circulation has been restored in the core of the system. But circulation is stopping in the periphery of the system both geographically and in terms of financial markets within the most economically developed economies themselves. This is now where the credit crunch is most advanced. In addition to the importance of this development itself a key issue will be whether the poisons being produced from this financial gangrene will invade the core of the financial system again."

What's interesting to me is how many left commentators - see Richard Murphy this morning, or Tom at Labour and Capital, or Stumbling - see a key part of the problem revolving around the autonomy of management from ownership. Now, to any one educated in 1970s style sociology like me this immediately calls up memories of James Burnham - rather than, say, C.Wright Mills, who also worked on elites but stressed their cohesion, not how they were divided. I dimly recall a noticeable slice of the set reading for my degree was devoted to Marxist and otherwise leftist critiques of Burnham - but here we have a whole host of leftist commentators seemingly taking him as their starting point. Whilst this approach does undermine the pristine theory - well, pristine fairy-tale - of shareholder control, it also leaves a lot less space for the kind of traditional bosses v workers class struggle analysis so beloved of the left. There is a second tension: between owners and the robber barons of management who have effective but not titular control of any organisation's assets and strategy.

Or perhaps it simply shifts the ground of class struggle. Here's a link - via Casino Crash - to a very clear summary by a SOAS academic . His key points?

1. Real improvements in the distribution of income are needed. Increases in unemployment benefits, real wage gains and progressive tax cuts are vital to the restoration of economic stability.
2. The public provision of housing, pensions, education and health care needs to replace private provision through capital markets. Privatisation of these services has passed onto individuals not only their costs, but also the financial risksassociated with illness, labour-market uncertainty, and instability of investment.
3. Mass public investment programmes that bolster both demand and productivity are critically needed. We need a form of Keynesianism which helps wage earners, not financial capital.

Iceland: Where's the Lesson for Us?

A simple question: what is it, exactly, we're going to do as a nation now the idea that we can surf the 'Great Moderation' (RIP) as a provider of financial services has died the death. This seems to me to be a bigger question that simply who owns the economy: if we take more of it into public, social or mutual ownership what is it we're going to do with it?

But the financial sector is only -only! - 20% of the UK economy. It was a fair bit more in Iceland.
Haukur Már Helgason teaches philosophy at the Iceland Academy of the Arts. He is a founding member of the experimental literary band Nýhil*. He tells it like it is there in the LRB:

"Today, personal security is the only growing sector of the economy. Politicians and stock exchange ‘entrepreneurs’ are surrounded by bodyguards. After several years of private ownership and staggering growth, the country’s three major banks collapsed in the space of a week, unable to pay their debts. ... This is now the position of a neoliberalised country that until April considered itself one of the most affluent on earth.

The average Icelander owes euro 30,000. ... The country is caught in a web of international debt. Because it has its own currency, there isn’t much difference between our situation and so-called ‘truck systems’, whereby a labourer buys goods from the company he works for. His work and his consumption are noted in a single book of debits and credits, and the worker sees little or no ‘real’ money for his work. Young people, who took out big loans to pay for overpriced apartments in an inflated market, now find themselves stuck....the flats are impossible to sell, and since the loans are tied to the retail price index, in times of inflation the debt grows.

The result of all this is a very stressed society in which everyone is always running to stand still because they’ve never done enough to pay the bills at the end of the month; and if they’re late with payments, staggering default interest will sooner or later hit them.

There is such a thing as collective guilt, and I am guilty, by association with this tribe, of having participated in casino-capitalism. ....We had the chance to be decent people,and we blew it."

So what is Britain going to do now? Because relying on the banks sorting themselves out and re-establishing the City of London as the greatest casino on the globe seems like a really, really bad idea to me.

* Does this make him a Nýhilist?

Well, no, not that low cost, obviously..

The trade paper says almost half of all low cost home ownership schemes built by housing associations last year are standing empty.

"Associations have failed to shift 9,655 homes, according to a Housing Corporation survey of 215 social land­lords last month. Almost 40 per cent of the homes – with an estimated value of £640 million – have sat empty for more than six months.

The number of unsold properties is equivalent to 45 per cent of associations’ output of 21,538 low-cost homes last year. "

This is more than just a waste of a lot of homes. It might yet threaten the stability of significant numbers of associations, as I've argued before. At the very least it eats into the available cash in housing associations that might be used for buying out existing homeowners at the edge of their ability to service a mortgage through some kind of reverse shared ownership programme.

"

Helicopters Collect Whale Snot from Blowholes

No, really.

& in related news, Greenpeace scientists are working on the development of a really, really big Lemsip packet

If Only..

Read all about it

P.S. & the reason we have to say 'if only' is not unconnected to Stumbling's re-discovery of 'the Theory of the Leisure Class'. Let me be crude and controversial and simple minded all at once: inequality breeds war.

Go on then - tell me why I'm wrong....

Ruth Lea: Rhymes With Consistency

If Casino Crash have done the work in finding this wonderful graphic, the least I can do is tip my hat.

Another Roll of the Dice

It's not a photoshopped illustration: it is - or possibly was, as I doubt it is still in production - a real game, invented by a leftie academic in New York. Once upon a time I owned a copy. As a game it was basically dreadful once you got passed the initial fun of learning the rules and hoping to land on a confrontation square. But I've always had a soft spot for it because of its involvement in a true story I've been telling for 30 years now.

My girlfriend in the mid 1970s came from Oxford - her Dad was a shop steward in the car plant at Cowley. For some reason or other I left my copy of Class Struggle at her parents house. But they were moving. Their buyers had some hitch in their chain, so my girlfriend's parents ended up taking out a bridging loan, moving to their new home and still owning their old house round the corner . Furniture was thus moved in bits and pieces over several weeks rather than all in one go.

Then, to add to their property woes, the old house got squatted. My girlfriend's father, the shop steward, discovered this one Sunday morning when he went round to get some furniture to find a group of leery squatters sitting in what had been his living room playing Class Struggle. An entertaining conversation ensued.......

Why do I mention this? Well I've just discovered (via) there is an equivalent for our own benighted decade: War on Terror,the board game. I can only hope Al-Quaida don't do squatting...

More To It Than Pasties

I've lost count of the number of times I've first been alerted to an outrage in the world by the tirelessness of Peter Tatchell. Does the guy never sleep? There's a sea-green incorruptibility about him that's for sure. But he's never going to be any sort of British Robespierre. On the other hand, he might yet be a Green MP for Oxford East - a task at which I suspect he'd be absolutely brilliant.

& one of the many reasons he's be brilliant at it is his almost other-worldly willingness to take up issues which have absolutely sod all to do with the process of getting elected. For instance: Cornish nationalism. To date this CIF article has attracted 1400 replies, disproportionately mocking ones.

What interests me about all this is not swirling tales of ancient Celtic mystery, nor even the obvious poverty of the county, but the very real sense I get when I go to Cornwall, especially the far west, of the invention of a nationality. As you go down the peninsula the flags of St.Pirian become more and more prominent. There is now an adjunct of Exeter University based in Truro called the Institute of Cornish Studies with its' own Professor and academic journal. The local paper in Penzance runs a weekly column in Cornish - although I'm never certain which of the three competing versions of Modern Cornish it uses. There are a growing number of Cornish language classes and even children's playgroups. Some bugger has even invented a Cornish kilt for christ's sake. Let me be clear: this does not feel silly whilst you are there. It feels relatively real and authentic - though sitting here in London writing these words I have to remind myself of this fact as, from a distance, it can seem pretty risible.

What's going on? Is this simply make-believe twinned with a weather eye for EU subsidies? Is it an understandable reaction to the increasing centralisation - well, globalisation - of cultural and economic life?Is it just another example of the balkanisation of absolutely everything? Or is it a small petrel, flying ahead of the storm, warning of the creaking unsuitability of the ancient British state for the challenges of the 21st Century?

Best YouTube ever?

The 70 seconds of this one.

Disagree? Then send me links to something more suited to the format.

I'm interested in what people think is different about this cultural form, not what makes it like everything else (films, TV etc).

First Time as Tragedy, Second Time As....?

The big American car makers, the backbone of their industrial dominance for almost a century, are in trouble. Obama is under pressure - which he will, inevitably, bow to in some way - to save them through an injection of tax payers money. What constitutes a 'Leftwing' approach to this? I have two thoughts.

Firstly, for a Brit of a certain age, there are inescapable reminders of the long, painful decline of British Leyland. For all the endless re-organisation and cumulative nationalisations the basic problem was never faced: the need to modernise and retool for a different age. Throughout the seventies and early eighties, BL always had old fashioned products produced in an old fashioned way. This was, of course, primarily a failure of management and governments - but it is also true that the BL unions never once glimpsed the possibility of an alterative future in the way that the Lucas Aerospace Shop Stewards Alternative Plan did. Looking back it is hard to avoid the conclusion that this lack of an alternative industrial strategy made the successive ‘rescue’ plans all little more than a series of temporary sticking plasters. Nationalisation alone is not enough. Why should any American bail out of their car industry follow a different path?

Secondly, this is not the 1970s: almost all versions of the Left would wish to recognise green concerns. To what extent are such concerns compatible with saving the automobile industry? Sure, any bail out could be made conditional on the car makers switching away from SUVs towards hybrids and so forth. But a bigger change than this is surely needed. Mass public transport is surely the priority, not further production of cars. So what else can large scale car plants actually produce and how would they fit into any Green New Deal? Because the eventual closing, or very significant down sizing, of these kinds of facilities has got to be an option in the medium term. So either they can produce other things or, in the not too distant future, they have to go....and 'bail out' monies might be better spent creating alternative employment opportunities.

Once I Built A Railroad...

Via Marginal Revolution comes news of China's response to the crisis: a $586 billion infrastructural investment package. M-R doesn't reckon it'll work, but still...

They're going to focus on railways, subways, airports and rebuilding communities devastated by an earthquake in southwest China in May. So perhaps we all need to learn the Chinese for "Auf Wiedersehen Pet": 再见宠物

Gotta Publish before the Market Falls Out of Such Pictures

Drunk and Disorderly

So we have another small scale parliamentary hooha about alcohol. It won't go anywhere, which s a pity since there is much to be learned about the generality of New Labour's politics by looking at them through the bottom of a glass.

Alcohol is the site where its' sense of free market libertarianism - "I've got the money to do this, so why can't I buy my pleasure all the time?" - meets its' instincts for social control in the form of ASBOs and so forth. The result is a contradictory policy mess and our town centres being given over to alcohol fueled mayhem on Friday and Saturday nights.

Booze- of which I am a great fan - is just too cheap. That's all. It's about a third of the real price I paid for it when I was 20 and likely to have been one of those cluttering up the city centre late on weekend nights. Up the price and most of the social control issues will disappear like Scotch Mist (weak pun intended).

It's really not that complicated: and drugs needn't be any more complicated either. Legalise them, police their purity and make 'em expensive. I really believe that this would 'work' in terms of decreasing the crime rate overall which is massively influenced by the illegality of drugs.

Mind you, it would also almost inevitably add to the health costs. But that's a more or less direct trade off we all know about.

Dilbert Does Banks

Middle America stirs?

Glenrothes: A Sassenach Suspicion

So Labour won. & the Labour blogosphere seems both joyful and, to be frank, pretty surprised. Is everything in the garden rosy now, then?

Labour have certainly stopped the rot - but whether they have just halted, rather than completely reversed, their decline in the polls remains to be seen. It is instructive that the Labour vote went up - but the SNP vote went up nine times more in absolute terms. There was also a collapse of both Tory (down 48% on the general election) and Lib-Dem (down 80% on general election) votes. I wonder where those votes went? I doubt many Tories, for whom Unionism is the big question in Scotland, went directly over to the SNP. At least one was interviewed on the TV last night saying he had voted Labour to keep the SNP out. I do wonder if there has been a 'double shuffle' of voters: ex Tory and Lib Dem unionists voting Labour to stay British, and ex-Labour working class voters deciding that, actually, it doesn't matter whether their social democratic party of choice wears the red braces of Gordon Gecko Brown or a kilt. In any event, I don't think Labour can count on a collapse of the Tory or Lib-Dem vote in England.

As for the Scottish nationalism thing: it's not going away, it's just suffered a tactical defeat, as all political currents do from time to time. Alex Salmond in particular must regret waxing lyrical about an arc of prosperity including, ahem, Iceland...But they know that the Tory claim that there is a fundamental democratic deficit in the UK's current lop-side devolution is basically true. So the SNP can wait till that question raises its' head again, and make sufficient hay when the time comes, because any attempt to fix our strange and creakingly mis-constructed constitutional arrangements plays straight onto their home turf.

Now why doesn’t this surprise me?

Mathew Taylor, ex-IPPR, ex-Blairite policy wonk at No.10, offers quintessential New Labour advice to the new President elect. Basically - whatever you do, don't try to change anything.

Oh no. That would be just ridiculous.

Lotta Continua

Peston talks lucidly about why the Government's levers on the market aren't working. &, make no mistake, it might be the so called independent Bank of England which has just implemented the 1.5% interest rate cut but it is the Government which leant on them to do so. Paul Mason and Richard Murphy agree on this point, whilst Will Hutton restricts himself to telling us markets are stupid.

Whatever. The fact is this is an unprecedentedly large interest cut and we now have the lowest base rate since 1954. & still the banks aren't lending at rates the rest of us can afford. Peston puts this in polite 'economist-talking-to-the-masses' language,

"Lenders have - understandably - concluded that the risk of lending has risen very sharply, and are therefore demanding much greater rewards for providing credit."

But there is another way of describing this: straightforward, unadulterated class struggle on behalf of finance capital.

Er, could I just do the paper sale instead?

The British ultra-Left tend to confine themselves to head-banging targets involving absurdly unrealistic numbers of paper sales. Not so their Japanese comrades who are clearly made of sterner stuff.

Shown here are the "Japan Revolutionary Communist League Revolutionary Marxist Faction" steaming towards the USS George Washington in Yokosuka harbour on Sept. 25th.

Note to editors: it is lazy and possibly racist to make any reference at all, even in jest, to kamikaze practices.

The correct term is Kaiten.

The Colour Purple

It's a cartogram, showing the relative intensity of Republican (red) and Democrat (blue) voting patterns, with various shades of purple used to indicate split voting patterns. I found it here, along with lots of other ways of pictorially representing the results.

But I like this one because it makes it look as if the Republican vote is a fraying but still substantial net of ropes holding the country down.

The Global War on Terror Continues on All Fronts

Everyone’s favourite anti-mullah has provided the cow’s arse as the target; the banjo wielders of the Left line up here, here and, most entertainingly of all, here, to do their pre-ordained duty.

But they all concentrate on the Obama angle. They slide over the breath-taking assertion that Bush's Treasury is, "...about to open the way for sharia law to be imposed upon America’s banking system."

It’s worse than I thought: the Islamofascists control Hank Paulson.Now that's cleared up I'm going to look at the causal factors of the current economic crisis in a completely different light.

Buddy, Can You Spare A Dime..or A Gold Token if You’ve Got One

Facebook is running out of money. So the 21^st Century's very own hula-hoop craze comes to an end...

But the thin-air economy is moving East. 100,000 Chinese are employed simply to play virtual reality games so the tokens and virtual cash they win can be sold on e-bay...it's a $1.4 billion dollar industry, apparently.

Anything happening?

The political interwebs seem strangely quiet today. Surely something must be happening ?

I suppose one can always look back on more momentous times

Dubuyah's last hurrah?

In the West Wing, Barlet pardoned Toby Zeigler as more or less his last act as president. Lenin has picked up on a video which has a hint as to who Bush might pardon - the tech wizard who stole him an election.It's got to be one of those exercises in paranoid conspiracy which periodically overtake the Left...Hasn't it? Lenin's not committing himself to believing it and neither am I.

Well, not unless Obama has a completely non-Santos moment tomorrow I'm not, anyway.

Update. Even Karl Rove (official Spawn of The Devil by Appointment to Dubuyah)says it's an Obama landslide. Which, come to think of it, Matt Santos never got.

& the Huffington Post (via here) helpful reminds us that only 2 years ago a Obama-McCain contest was going to break 28-510 for the Republicans in terms of electoral college votes according to pollsters. Go look at the scary map...