Saturday, 10 October 2009

Thoughts on Spending 31 Hours in a NHS A&E with a 87 year old

What, I wonder, would the various denizens of the blogosphere have been saying if they were sitting there with me and my ailing Mum?

The rabid right-wingers would have blamed the incentive-free state bureaucracy I suppose. But they would be wrong there; I really don’t think it had anything to do with the governance arrangements or lack of a direct profit motive. The people, from the consultants down to the porters and cleaners , did seem genuinely open, friendly and willing to help.

Most of my comrades on the left might have muttered about still catching up with years of underfunding, and there were certainly evident staff shortages , though mainly, as far as I could see, unpredictable ones as at least two nurses went off sick in that 31 hours. It’s hard for any organisation to deal with that.

My blogroll’s resident HR expert might have had something to say about the composition of the staff team though; to be frank I thought there were too many doctors and not enough nurses. This may seem an unusual complaint. It only makes sense when one realises that the doctors appear to operate in separate little kingdoms of medical specialism. About a third of our wait was simply down to the A&E team referring some x-rays to the orthopaedic surgeons for a second opinion on whether there had been a fracture. And whilst we waited for that second opinion nothing else happened, no temporary admission could be made because the separate specialist kingdoms hadn’t decided whose kingdom (i.e. what kind of ward) Mum was going to be admitted into. I believe this is called silo working in management speak. Meanwhile the nurses on A&E were doing their A&E thing which, when it comes down to it, is basically triage. So if someone is marked as awaiting a second opinion they just move onto the next case unless there is some urgent call from the bed which has been parked in this triage operation. No thought beyond basic feeding and toileting is given to the cases not identified as urgent. If there had been more nurses the various doctors’ instructions might have taken effect rather quicker – and more holistic care might have actually been provided. Also, I’m not certain why it would have been such a great disaster to get Mum somewhere comfortable, even if it did prove to be the wrong ward and meant her having to be moved the next day.

My blogroll’s representative Spiked-influenced commentator and general enemy of the risk adverse culture would also have passed a few harrumphs about the reason for the final section of our wait – the seeming impossibility of assembling two spare members of staff to push the bloody bed containing my Mum to the ward. First we got a single porter; then we got a cleaner but no porter, and finally, 4 hours after the consultant had instructed an early transfer to a ward, we got both. Of course I pleaded and pleaded to be allowed to help to push the bed myself – but, no it was ‘against the rules’, 'not procedure' there were Health and Safety concerns and so on. So Mum sat waiting, immobile and in semi-public view, in A&E till two people could be assembled, one to push the bed and one to simply open the doors and push the lift button.

But most of all I reckon Boffy will be slowly and sympathetically nodding his head and biting back the urge to say, "I told you so - the left has got to be about more than just knee jerk defence of the NHS" . & so he did. Several times.

Sunday, 27 September 2009

The Challenge of Avoiding Junk Food

Don't like McDonalds? But they're hard to avoid- each dot of light on that map above represents a branch. The answer says Weather Sealed is to move to South Dakota:

.... McDonald’s cluster at the population centers and hug the highway grid. East of the Mississippi, there’s wall-to-wall coverage, except for a handful of meager gaps centered on the Adirondacks, inland Maine, the Everglades, and outlying West Virginia.

For maximum McSparseness, we look westward, towards the deepest, darkest holes in our map: the barren deserts of central Nevada, the arid hills of southeastern Oregon, the rugged wilderness of Idaho’s Salmon River Mountains, and the conspicuous well of blackness on the high plains of northwestern South Dakota. There, in a patch of rolling grassland, loosely hemmed in by Bismarck, Dickinson, Pierre, and the greater Rapid City-Spearfish-Sturgis metropolitan area, we find our answer.

Between the tiny Dakotan hamlets of Meadow and Glad Valley lies the McFarthest Spot: 107 miles distant from the nearest McDonald’s, as the crow flies, and 145 miles by car!

Say what you will, Anglo American capitalism has always been great at providing choice, I'm sure you'll agree...

Via

Saturday, 26 September 2009

Seven Deadly Sins: Their Distribution in the US

Yes, I've got John B's range of problems plus a few more, but once my family sorts itself out I'll start blogging properly again. Meanwhile check out Angie Androit on Sociological Images:

Some geographers at Kansas State University recently did an analysis of the spacial distribution of EVIL in the United States. Which part of the country is most afflicted by sloth? Lust? Greed? Envy? Wrath? Gluttony? Pride?

That’s right, folks – these geographers have operationalized sin, quantified it, then measured and mapped it. Pride is the aggregate distribution of all other sins, since it is supposedly the root of all evil (though one could also make a good case for apathy). Here’s how the sins are measured (and here’s a good view of the maps):

  • Greed: Average incomes versus total inhabitants below the poverty line
  • Envy: Total number of thefts (robbery, burglary, larceny, and stolen cars)
  • Wrath: Total number of violent crimes (murder, assault and rape) per capita
  • Lust: Sexually transmitted diseases per capita
  • Gluttony: Number of fast-foot restaurants per capita
  • Sloth: Expenditures on arts, entertainment and recreation versus rate of employment
  • Pride: An aggregate of the six other sins

There are clearer maps over at Flowing Data.

Monday, 14 September 2009

A Question

The Problem

My mother is very old and very frail. She has various chronic medical problems which mean that she has severely restricted mobility and stability, so there have been a number of recent falls. She has lost the effective use of her right hand which means that she can’t cook or even cut her own food up. I call these problems ‘medical’ in the sense they each have at least one medical name – but, truth be told, I don’t really see them as separate ‘medical’ problems. Mum is just old. & she lives alone. She's also poor: she lives in a ground floor privately rented flat and gets full Housing Benefit.

She is now in a care home for a spot of respite care after her most recent fall, and I'm trying to sort out the necessary services to allow her to return to her flat - aids, adaptations, meals on wheels and so on. As a woman who was 8 on the formal abolition of the workhouse - and only 26 when they really ended - she views residence in any kind of institutional 'care', from hospitals down, as a sort of shaming personal disgrace. And I live two hours drive away in a house with no downstairs bathroom or spare bedroom. My only sibling lives abroad and Dad is dead.

The Question

Mum is going to die at some point in the probably not-too-distance future I know. But it is her chassis and wheels that are failing, not the basic engine - her heart and lungs - so this might take a number of years. I want her to have a good ending.

I invite all all you lefty - or even perhaps not so lefty - bloggers to explain how your particular take on politics and the world might help achieve this. Or are there things about the nature of welfare and old age which are just beyond politics as we currently understand it?

& it's OK, I'm not asking you to solve my problem let alone my Mum's. It's not that personal. I just want to see how the left can attempt to connect its formal politics to lived experience. I don't want to 'tag' anyone formally, but I'd be interested in responses from anyone, especially anyone on my blogroll.

Saturday, 12 September 2009

On Anniversaries


The last fortnight or so has been a time of anniversaries: the outbreak of WW2, 9/11, the collapse of Lehman Brothers. All of them lovingly covered in depth in the Press and on TV. After all, it's easy copy. You don't have to do the spadework of a real news story, just gently remind everyone of what happened in Event X, list the plans to commemorate it and get a few talking heads to intone on Event X's significance. Happily for our media friends you can usually rely on a new someone or other each year to come forward with a different perspective. So this year we've had 'WW2 -The Polish Version' in the mainstream media. (I'm as one with B& T on that one by the way).

Except the Credit Crunch/Financial Crash of course. We haven't even agreed what to call that, much less decided what it means. Peter Clarke expands on this point in the Guardian today with the help of a variety of the allegedly Great and Good: Skidelsky, Keynes biographer, says Keynes is back; Peston admits he thought things would change faster; David Hare wants to know why no politician has thought all this through as yet; Fay Weldon gives us a plug for her new book. And so on. Meanwhile Wiliem Buiter in the FT says, almost in the style of Manuel from Fawlty Towers, that he knows noooothing, albeit in a very erudite way. Krugman in the NYT says the whole economics profession got blindsided - but other economists seem to believe that their profession didn't pay enough attention to their own nostrums. The Crash is certainly a Great Event, worthy of an anniversary - but no one has a convinicing narrative, there is not yet an established Myth to reinforce or to attempt to knock down.

It is, in short, as yet a Phoney War that no one quite knows how to characterise at the moment - because it isn't finished and may yet have barely begun. Who knows if we're about to bounce, 'V' style, into a sunny upland future of a new Long Wave upswing or be seduced by a false dawn ? What will come to be seen as the defining moments of the financial crisis have yet to occur. Sure, unemployment has risen. Sure, some familiar firms have got belly up. Nonetheless, we're told that on all sides that the formal conditions that indicate a technical end to Depression are looming on the horizon. Perhaps. The real story - the anniversary signifier, the thing our children will remember it for, the Dunkirk, Barbarossa, Kursk and D-Day of this economic crisis as it were - lies ahead.

I can't help but believe that this story, when it emerges, will focus on the three re-negotiations of power:

  • The inevitable one that will occur in my lifetime between the 'West' as we have traditionally understood it and the BRIC countries, especially China. People who make things aren't going to put up with not getting anything but a fraction of the fruits of their labour for ever and a day;
  • The renegotiation of power we need and which I hope for, but which may never materialise - the one between the merchants of relentless growth, and the planet. This can only be done through re-distribution - because, as Chris points out, just stopping economic development per se kills babies. But more babies - and toddlers, and other children, and adults - will die unless we act to stop the potential for runaway climate change. So redistribution is key;
  • The renegotiation between state and civil society and the organised power of Capital. This is the most complex of all in some ways - and perhaps even less likely to happen than a coherent response to climate change. But we need such a renegotiation if all this is not to happen again.
Happy anniversary.

Monday, 31 August 2009

That Wire Analogy (Yet Again)

So I get back from whatever it is I've been doing to find the long shadow of my favourite TV show still bugging the blogosphere - and indeed mainstream journalism. Chris Grayling's comparison of inner city Britain to the version of Baltimore peddled in the Wire is the gift which just keeps on giving.

He's been given such a hell of a kicking on all this that I thought it might be fun to try to sketch out some ways he might, inadvertently, have stumbled on something. Not, obviously, in terms of crime. The local Manc paper dealt with that :
"[Baltimore], home to about 600,000, was blighted by 234 murders last year. That compares to 35 in Greater Manchester, which has a population of around 2.5m."
No, the real comparison is about how our lives - like the lives of The Wire's drug dealers, police, dockers, politicians, schoolkids and journos - are haunted by an imbalance between agency and structure. Or just by structure, actually.

The whole series could have been written by Talcott Parsons or Louis Althusser: no one, or almost no one, escapes their circumstances for any length of time. Structures call forth successions of individuals - Avon, Stringer, Marlo - to fulfill essentially the same roles. People change in all-to-predictable ways: just as Daniels, who makes Commissioner, has a guilty secret from his time on Narcotics, so Carver, originally a kind of joke, puts his days of petty corruption behind him and rises up the ranks as a reliable officer. But you just know he won't leave his past behind, any more than Daniels manages too. Individual initiative is, ultimately, crushed, be it Bunny's Hamsterdam or Carcetti's new broom in City Hall. Even the great symbol of individualism - Omar - loses, and I reckon we see in Michael's trajectory a proto Omar in the making, so even the individualism at the heart of the American Dream is structurally produced.

Yeah, that strikes me as being quite like Britain today - even before one gets into in business of 'public service reform', performance targets and the near universal 'gaming' of these things. There is no real social mobility, no real opportunity for individualism. Chris Grayling is right, inadvertently.

Monday, 17 August 2009

Haiti of the North

Since we're being told on all sides that France, Germany and - a hard one to swallow this - Japan are motoring out of recession I thought I'd take a peek at the Icelandic situation once again. You remember Iceland, don't you? That country that Daniel Hannan wanted Britain to be more like.

There are another round of demos getting underway according to the Weather Report and the latest one featured a speech by
Einar Már Guðmundsson, an Icelandic writer(that's him in the picture).

"Self-made bondage is the strongest form of bondage. Thus wrote Sigfús Daðason, and thus is our situation today. The constitution was mortgaged without the nation being asked, and now we are to acknowledge the collateral and confess to the crime. We are confessing to a crime we did not commit. Let me quote Eva Joly: “This small country of 320,000 inhabitants is now reeling under the weight of billions of Euros of debt, which has absolutely nothing to do with the vast majority of its population and which Iceland cannot afford to pay.”

Yes, we are being enslaved. The Icesave agreement is stage one, the conditions of the International Monetary Fund stage two, and so it will continue until sometime in the future, when we receive an apology for the mistake that is being made … but by then it will be too late. They say we will become the Cuba of the North if we do not ratify this agreement. But shouldn’t we add: We will become the Haiti of the North if we do ratify it. They fulfilled all the IMF’s demands – and are now plagued by a famine. ... That is the reason we are here today – and we oppose this. All of us. We are being made to confess to a crime we did not commit. We are to shoulder the burdens of the global financial system, to become their underdogs.

In truth, this problem is not the nation’s problem, but that of the owners of the privatized banks who vacuumed up cash using the Icesave accounts. Our problem is that the government of this country and its politicians want to remove this problem from the bank’s owners and hand it to us and – not least – to our descendants. We cannot let this happen. We oppose this – all of us.

To you inside the parliament building I say: Stop your bullshit. Stop talking about “friendly nations”, “deposit insurance”, “global community”. The “global community” is a community of wealthy nations, “deposit insurance” is the socialization of losses, and “friendly nations” is wishful thinking and does not extend to authorities, or capital. The Swedes are not our enemies, yet the Swedish financial system financed the banking system of the Baltic States when it was placed on the market – and robbed. The Swedish financial sector looks at the similar collapse of our banks and understands Gordon Brown’s arguments as well as he, himself, does – no, do not confuse this with friendship. Gordon Brown is one of the main theorists behind the financial system in London City, and its regulations, or rather its absence of regulations, became the guiding principle behind the Icelandic financial system. In light of this, none of your legal opinions matter, nor do the names of people in the negotiating committees. A financial war is raging throughout the world in which a decrepit system tries to rev its engines, and in that workshop it is our authorities who are madly shoveling the coals. One of the world’s wisest economists states: “The International Monetary Fund is a sort of debt collector for global creditors and collects revenues … for them. Amazingly, nations the world over are losing their financial and economic freedom, without resistance.”"
Thanks to the Weather Report for the translation - you'll find the full speech there.

Buffettism

You might as well bookmark this link now. Because you're going to need it sooner or later. Just for this quote from Warren Buffett:

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”
Via

Sunday, 16 August 2009

Of Health and Social Care

The Observer leads to day with the – oh, so shocking – news that quite a few of the Tory front bench, including that nice Mr.Gove, have endorsed Daniel Hannan’s call for the NHS to be replaced by a new system of health provision in which people would pay money into personal health accounts, which they could then use to shop around for care from public and private providers. Those who could not afford to save enough would be funded by the state.

Which rather sets the stage for health being a central election issue, this time, no doubt, with Labour tying a big pink ribbon round the NHS and claiming to be the ‘patriotic’ party in defending it not like those horrible market obsessed US-wannabees in the Conservative Party. Oh no, no like them at all.

Except of course, in the small matter of social care, where Labour Ministers never miss an opportunity to big up their commitment to individual budgets and self directed care.It's basically the same idea, just transfered to a not-that-dissimilar sector.

Friday, 14 August 2009

.01 % of Yankees Are Doodle-Dandy

It's been fun, hasn't it ? This sense of national unity in outrage at the attack of the vile foreigner on our treasured NHS. Like 1940 all over again. Very 'cockney-sing-songs-in-the-tube-stations-we-can-take-it-Mr.Hitler-Blitz-spirit-ish' I'd say. We've even managed to get that nice Daniel Hannan to agree to play the part of Lord Haw-Haw. (B& T suggests his success in this role should be lauded to the skies by New Labour).

But as I've just come back from spending a holiday with a group including a - really very nice - American I thought I ought to put in a word for one thing they definitely do well: inequality. The Huffington Post is reporting a new paper which says inequality levels in the States have reached levels beyond those of the Great Depression. In 2007 the top .01 percent of American earners took home 6 percent of total U.S. wages, a figure that has nearly doubled since 2000.(see chart)
"...while the bottom 99 percent of incomes grew at a solid pace of 2.7 percent per year from 1993-2000, these incomes grew only 1.3 percent per year from 2002-2007. As a result, in the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth."
All joking aside, this is why Obama's otherwise pitifully limited health reforms matter so much and why they're arousing so much anger over there. Yup, it's class. One side has got so used to taking everything that they can't quite deal with the idea that they might have to share a little in order to keep most of what they've got, the way their own All-American predecessors used to.

Thursday, 13 August 2009

Progressive Conservatism: Meet the New Boss Just Like the Old Boss

Back from my hols and I find Will on cracking form, not only on progressive conservatism but on its conjoined twin, Blairism:

I can well envisage a version of progressive conservatism that is too 'progressive' to ever conserve anything and too 'conservative' to ever achieve anything that might look like progress. That would be one harsh description of Blairism. If there is an alternative to this, it will be founded on that amorphous sense, felt by many, that calculation, competition, surveillance and comparison are scarcely achieving their stated goals, let alone supporting happiness and social stability.

Tuesday, 28 July 2009

The Metaphor At Platform 10 Will Be Departing in 2 Minutes..

It’s a Bulletin train adapted to British conditions. They call it the Javelin. Neat, isn’t it? Sleek, stylish, modern and all ready to whisk people from Kings Cross/St.Pancras to the 2012 Olympics in 7 minutes.

That would be the Olympics at Stratford, built on a site which used to make locomotives when the Olympics were last here in 1948 according to Jonathan Glancey.

Glancey implies that we don't make trains any more so these ones were imported from Japan*. Never mind, I'm sure someone in the City of London arranged the financing deal, insured it and offset the risk with some clever derivative instrument.

But now the City's buggered, might it just be an idea to have an industrial policy which worked to turn that situation around, so we could build more stuff like this? Or even, somewhat more to the point, stuff like Vestas wind turbines? Go look at the Vestas 2008 order book at the bottom of this page: not one order from Britain. 240 wind turbines ordered by China.

P.S. I see the workers occupying Vestas on the Isle of Wight now have their own blog. (via). Is it too late to organise a write in campaign to get this in the top ten political blogs?

*I'm told this is not so - see comments from John B

Monday, 27 July 2009

Balance Sheet Recessions


Via, I learn of the concept of 'balance sheet recessions' at Vox. These, apparently, aren't like normal recessions. Oh no: in a normal, 'textbook', recession capital and labour gradually trickle our of unprofitable sectors of enterprise and reassemble in new areas of endeavour where profits can once again be made. Not so in a balance sheet recession:
The financial crisis has put much of the banking system on the edge – or beyond -- of insolvency. Large segments of the business sector are saddled with much short-term debt that is difficult or impossible to roll over in the current market....

The holes that have opened up in the balance sheets of the private sector are very large and still growing. A recent estimate by Jan Hatzius and Andrew Tilton of Goldman Sachs totes up capital losses of $2.1 trillion; Nouriel Roubini thinks the total is likely to be $3 trillion. About half of these losses belong to financial institutions which means that more banks are insolvent – or nearly so – than has been publicly recognised so far.

So the private sector as a whole is bent on reducing debt. Businesses will use depreciation charges and sell off inventories to do so. Households are trying once more to save. Less investment and more saving spell declining incomes. The cash flows supporting the servicing of debts are dwindling. This is a destabilising process but one that works relatively slowly. The efforts by financial firms to deleverage are the more dangerous because they can trigger a rapid avalanche of defaults...deficit spending will be absorbed into the financial sinkholes in private sector balance sheets and will not become effective until those holes have been filled. During the years that national income fails to respond, tax receipts will be lower so that the national debt is likely to end up larger than if the banking sector’s losses had been “nationalised” at the outset."
In other words, those people piously worrying about public sector economic stimuli 'crowding out' private sector investment are in cloud cookoo land. & even if he asks nicely Alistair Darling is unlikely to get the banks to move very much on lending to the 'real' economy: their first priority is to get back all the money they've lost and they'll do that by absorbing public spending onto their balance sheets until they're looking healthy again. Which took absolutely years in Japan.

This, I believe, is sometimes called rewarding successful risk management in line with market conditions. Me, I'm a simple minded soul, and I call it old fashioned class struggle. But with only one side fighting.

Saturday, 25 July 2009

Zombie Ideas

John Quiggin, a social democratically inclined Aussie academic economist, is writing a book including a chapter on the Efficient Market Hypothesis (and other 'zombie' idea): he's trying out rough drafts of bits of the chapter over at Crooked Timber. It's all worth a read, but I like this bit:

"Once the EMH is accepted, there is no need to worry about imbalances in savings and consumption. International capital movements can be seen as the aggregate of a large number of transactions between ‘consenting adults’, buying and selling financial assets in markets which, according to the EMH, have already taken into account all available information about future risks. If a national government has better information, the appropriate response is not to act on it, but to release the information to the markets.

On the traditional, income-based view, by contrast, asset-based arguments are misleading and dangerous. By the time sentiment shifts in asset markets, the opportunity for an orderly adjustment will already have been lost. Advocates of the traditional view pointed to episodes of contagious panic in financial markets..."


Well, quite.

A Question of Theory?

I'm working my way through this book; it's not a great choice for a non economist like me, and some of it is a bit above my head. Moreover, some professionals seem to confirm my inexpert feeling that it's a bit of a curate's egg as well. But given the title I thought I had to give it a go. Well, the title plus the fact he wrote a couple of smashing Spokesman pamphlets thirty years ago: Socialism and Parliamentary Democracy and Trotsky and Fatalistic Marxism. Both of those influenced me a lot as a teenager...but he's changed his view of the world it seems to me, though I'm cautious about judging the theoretical development of people whose theories I don't fully understand.

What I will take away from the book, however, is this rather striking set of phrases:
The...standard core of utility theory is non falsifiable. ...Boland (1981) asks if any conceivable evidence would refute the standard assumption of maximising behaviour. He shows that such an attempt at falsification could never work. Any claim that a person was is not maximising anything can always be countered by the response that the person is in fact maximising something else. Given that we can never in principle demonstrate that 'something else' is not being maximised, the theory is invulnerable to empirical attack...

The problem with the maximisation argument are doubly severe when it assumes utility is being maximised. There is no experimental or other phenomenon that cannot in principle be 'explained' within a utility maximising framework...No evidence can, in principle, falsify the assumption that behaviour results from individuals or households maximising their utility.....by encompassing all possible arrangements and interconnections, the important relationships and connections are lost in a sea of universal possibilities. Accordingly, the universality of a theory does not necessarily mean it is useful or informative...
A chapter of carefully phrased caveats and examples follow. But my interest remains with this broad opening claim. Does it imply that the model of 'rational' behaviour which underpins mainstream economics is actually unprovable? & isn't this the very complaint that Popper raised against Marxism all those years ago?

Friday, 24 July 2009

No So Much An African Grey, More A Govan Bluenose..

I really should be above this sort of thing, but this makes me laugh at all sorts of levels. The clue as to why is probably in the surname I use on this blog...

"Jim Watt, from Horizon Housing Association, confirmed a complaint had been received from another tenant but said Linda and Rio had been cleared of the bigotry claims.

He said: "We spoke to the tenant with the pet as well as other neighbouring tenants. We took the view that there had not been anti-social behaviour which would include sectarian behaviour.""

Via Slugger

Thursday, 23 July 2009

Open Left? Let's Have An Open Hearted One...

The whole Open Left thing is a tacit acknowledgment that the New Labour government is about to go down to defeat. I’ve come across the idea of ‘getting your retaliation in first’ before but this may be the first time I've stumbled on the idea of getting your ‘post-defeat soul searching in first’. This is perhaps one reason why it’s all such an unsatisfying slurry of words and vaguely defined dangling questions.

I'd advise all these angst ridden wannabe 21st Century lefties to go read Orwell:

The inability of mankind to imagine happiness except in the form of relief, either from effort or pain, presents Socialists with a serious problem. Dickens can describe a poverty-stricken family tucking into a roast goose, and can make them appear happy; on the other hand, the inhabitants of perfect universes seem to have no spontaneous gaiety and are usually somewhat repulsive into the bargain......The Socialist objective is not a society where everything comes right in the end, because kind old gentlemen give away turkeys. ..... We want a world where Scrooge, with his dividends, and Tiny Tim, with his tuberculous leg, would both be unthinkable. But does that mean we are aiming at some painless, effortless Utopia? At the risk of saying something which the editors of Tribune may not endorse, I suggest that the real objective of Socialism is not happiness. Happiness hitherto has been a by-product, and for all we know it may always remain so. The real objective of Socialism is human brotherhood.
I've always taken this to imply several things things:

1. Socialism doesn't depend on some idealistic concept of the perfectibility of human kind;
2. Socialism won't bring universal happiness (though there is no reason to imagine people will, on average, be any less happy than under capitalism);
3. The specific and distinctive policy objectives of 20th Century socialism - the predominantly social ownership of the means of production, distribution and exchange; or significant resource distribution between individuals on the basis of need, not effort -were, in fact, only a means to an end: the end being what Orwell called 'human brotherhood', but what we might now describe as social solidarity or community inclusiveness, the lack of which is the key sickness at the heart of our society.

We need a 21st Century equivalent vision. I don't care whether it's called 'socialism' or not any more.

Total Bankers Redux


Dunc wanted to know where all the anger's gone a couple of days ago.

Look Duncan, the anger's over here, waving and shouting "coooee" at us:

"...Goldman last year, after it converted to bank holding company status, announced that it was “taking steps to reduce leverage.” But what’s happened since then is that Goldman has actually been emboldened by all its state backing to borrow more and gamble more than ever. This is the equivalent of a regular casino gambler who hears that the house has doubled down on his credit line and decides to stay up at the tables all night, instead of going home and sobering up. Just look at Goldman’s VaR, or Value at Risk, which measures the amount of money the bank puts at risk on any given day: it’s soared since last year.

var1

Taken altogether, what all of this means is that Goldman’s profit announcement is a giant “fuck you” to the rest of the country. It is a statement of supreme privilege, an announcement that it feels no shame in taking subsidies and funneling them directly into their pockets, and moreover feels no fear of any public response. It knows that it’s untouchable and it’s not going to change its behavior for anyone. And it doesn’t matter who knows it.

There are going to be some people who say that some of this stuff isn’t government subsidy so much as ordinary government contracting. After all, do we criticize Boeing for making airplanes or Electric Boat for making submarines during a war? If we don’t do that, then why should we be pissed about Goldman making a profit underwriting TARP repayment stock issuances, or Treasuries?

The difference is that Boeing and Electric Boat didn’t start the war. But these guys on Wall Street causesd this crisis, and now they’re raking in money on the infrastructure their buddies in government have devised to bail them out. It’s a self-fulfilling cycle — beautiful, in a way, but at the same time sort of uniquely disgusting. That they’re going to get away with it is bad enough — that they’re getting praised for it, for being such smart guys, is damn near intolerable."



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Socialised Medicine: May Contain A Worse Threat Than MRSA....

Slugger led me to a long, long debate on American Healthcare Reform over at Reddit. My favourite comment is about 1000 down, from a Canadian coming to terms with the US system now he's living south of the border:

If you're American and have grown up used to the idea of a private health-care system, try picturing this: Imagine going to a new country and finding out that to call the police was for-profit, and you had a variety of options for licensed police services. If you paid for a good plan, you'd get sub-5-minute response times, you'd get detectives assigned if your car was stolen, and you'd have a cop patrolling your neighborhood on a somewhat regular basis. If you were on a budget, you'd only get a 10-minute response time, and no detectives assigned for major threats or patrols
Well, yes, most of you might think. But as another poster warned, there can be hidden dangers to thinking this way:
But aren't you glad that the government didn't tell you what doctor you had to go see? Like they don't do in any socialized medicare country that I know of? Haven't you considered the various imaginary problems that socialized medicine could cause? You know even talking about it could turn you communist like every other western nation. I'm a Canadian and I've seen people come out of hospitals drop to the ground and suddenly become communists, happens all the time.


Update: Sean at The Soul Of Man under Capitalism has a brilliant Fox TV clip where they seriously discuss the idea that socialised medicine encourages jihadist doctors...

Wednesday, 22 July 2009

Who Is Your Top Political Blogger?

As various people have noted, its voting time for the Total Politics Top 100 Political Blogs.You're not suppose to publicise who you've voted for in case a pattern of 'voting by slate' emerges. Which is sort of fair enough if it stops the net libertarians all piling in behind Guido Fawkes, but I suspect it won't. & Paul is right to point out it is largely unenforceable. The blogs have to be 'based in the UK, run by UK residents are eligible or based on UK politics'.

Anyway, this has provoked me to reflect on what exactly is it that I value in other people's blogs. It's certainly not ideological conformity or confirming my ideas: I voted for people who are considerably to both my Left and to my Right, though I drew the line at voting for purely academic sites or anyone associated with the Tories or LibDems. So what criteria did I use?

Firstly, the ability to not shout. This is rarer than it might seem on the internet. The default mode at CIF, for example, is shouting - and this is replicated in discussions at Harry's Place and Socialist Unity. Bloggers can't be blamed for the 'rats in a sack' attitude of people who comment on their posts of course, but they can set a tone I think. & I'm just too old to take any notice if the tone is shouty.

My second pre-requisite is a two parter: good blogs must know what they're talking about, but also know the limits of their expertise. This combination is more uncommon than you might imagine. The blogosphere is full of sites which 'own a hammer and therefore think every problem is a nail' as it were. Avoiding this is perfectly compatible with political commitment and ideological fervour. It's really about having a curiosity about the world as opposed to just a preset plan to reshape it.

Because I've become fascinated by economic issues since last autumn's economic crisis I regularly enjoy a variety of blogs dealing with matters of political economy, from the austere but rewarding Willem Buiter on the establishment wing,through the gifted Paul Mason to the wonderfully eccentric unorthodox Troskyist Boffy. John Ross is always readable, be it on his own site or Ken's. But my current favourites are the Left-Labourish Duncan and, pre-eminently, Stumbling and Mumbling, both of whom have a commitment to opening up complex economic debates to us non-specialists. Tom at Labour and Capital deserves a mention for his sheer 'stickability' on a very narrow brief (or so it seems to we non experts) - and for the best single political comment in less than 200 words on the economic crisis I've read anywhere. & Anne Pettifor is a routinely worthwhile reference point over at Debtonation. Bubbly Alice lets me peek at the economic world as the Right see it - a strangely fascinating experience if one takes it with a sense of moderation.

But I also like folk who know stuff I don't know that much about - people like parliamentary insider Hopi, the gorgeously phrased writing of Fat Man On A Keyboard and that foreign policy specialising far left humourist, Blood and Treasure. Splinty is also well informed on foreign policy, amongst other things, and regularly funny; he should be considered a national treasure for one or other of the national traditions he reports on from Belfast, and perhaps for both of them. Jim at the Daily (Maybe) is my gateway to greenery, while Flipchart Rick prowls along the other side of the politics-management border from me.

Lastly, there are two people I regularly read who know about stuff I once knew about but have forgotten. A Very Public Sociologist reassures me that the subject matter of my 30 year old undergraduate degree hasn't changed that much, whilst Potlatch convinces me it has. They're both good writers with a hinterland of interests I find fascinating.

That's 16 people, none of whom I've ever met and none of whom know my real name. Go vote and keep them all in mind in choosing your ten. Remember: anyone but Guido...

Tuesday, 21 July 2009

Of Fool's Gold, Belatedly

I've only just finished the book: and it is what everyone says it is, a sparkling good read. It is beautifully written with a clarity which most financial commentators can only aspire to. At a personal level I found her authorial 'voice' deeply humane. But it is told as a morality tale of small group psychology: the unstated implication throughout is that if only everyone was as sensible as the JP Morgan gang she foregrounds then things wouldn't have gone so wrong. History only make an appearance in the book in the form of hallowed company traditions; power structures are only 'the regulators'. Despite her clear understanding of the way in which the selling and reselling of increasingly complex derivatives let to a chain of unquantifiable risk linking the big institutions and national economies together she doesn't really present capitalist finance as a system. The best short assessment I've come across is a review by a commentator called Brigg57 on the Red Pepper discussion boards of all places.

I suspect the book is good enough to become the default 'popular' (i.e. used by the non specialist media) account of the origins of the credit crunch, a sort of Galbraith's Great Crash of 1929 in miniature. But it's not a critical account in any structural sense whereas Galbraith's book drips with contempt for the main players of 1929 and their methods. Which might be why Donald McKenzie in the LRB found so much in the Tett book to agree with.

So we still await an influential view on the current crisis which might politically resonate with the the deep if often inchoate unease at what the financial sector has actually done to our economy, society and state finances.

Monday, 20 July 2009

Total Bankers

Fictitious capital: that’s what Marx called "money that is thrown into circulation as capital without any material basis in commodities or productive activity” (the quote is from David Harvey). You can’t knock ol’ Karl’s gift for phrase making, can you? Even now, I’d hazard a guess that the label – if not the content of Marx’s idea - conjures up something very important about popular understanding, or lack of it, of the financial markets. Many of us think they’re just playing silly games with pretend money.

Now this isn’t quite right of course. & every now and again one of the Masters of the Universe will descend from Mt. Olympus to haughtily explain to us that it isn’t like that at all, it’s about the most efficient allocation of capital and of risk which is A Very Complex Matter, & Probably Beyond The Ken Of We Mere Mortals. But Gillian Tett ends the very readable Fool’s Gold with this observation,

“In many ways the craft of finance is not so very different from that of the water industry: both exist in order to push a commodity around the economy for the benefit of others. If those pipes are wildly inefficient, leaky or costly, then everyone suffers.”

In any case, a rather basic question does suggest itself: efficient allocation of capital and risk for what? On this subject, it seems to me, theorists of financial markets are very largely silent. Or they just snort with derision at such a silly question. Risk is the risk of gaining or losing money. Efficient allocation of capital is making sure that that risk ends up in the hands of those most prepared to entertain the possibility extremes of winning or losing. Or so the theory has it.

But that’s not reality. Those with wealth but the wrong balance of capital ‘risk’ may sometimes lose on the market, but those without substantial capital assets, or whose few capital assets have effective ownership rights exercised by others of a different class (cf most pension funds), always lose in comparative terms. That's why inequality has been been growing at such a rate for the last generation.

And what if, actually, inequality made us ill? Or more likely to go mad? Or less likely to trust each other? Or just simply fucked up our kids? Would that suggest that capital wasn't being 'efficiently' allocated?

Marx spoke of 'fictitious' capital. But, having read Tett, what I'm left with is a sense the cleverest people in the the financial markets have developed a range of 'fictitious' risk avoidance techniques, akin to the image I've illustrated this post with (note the small text at the bottom). Yes, CDOs and all the rest of the architecture can, if not used to extreme, moderate the risk of losing money. Yes, those who argue in favour of 'financial innovation' and 'not throwing the baby out with the bathwater' have a (slender) point.

But this is not the issue. The issue is capital is being used to fuck most of us up, most of the time. It's got to stop. That 'risk' has to be controlled for. Let's start with with bankers 'wages'.

To be Candide about it, perhaps it is time we should shoot some of them to encourage the others. Failing that, if it is status they're worried about, can we organise a national laugh-in at these overgrown Pru salesmen? Can we just make it seem ridiculous that people who ensure a continual supply of water, and guard against the risk of water failure, get normal wages whilst bankers get paid fortunes?

Saturday, 18 July 2009

Please God, Let It Be Photoshop.

(Via)

This is so wrong I feel dirty.

And not in a good way.

This is the name of the man who said,

‘The challenge of modernity is to live without illusions and without becoming disillusioned.’ On a numberplate in Berkeley.

Tuesday, 14 July 2009

The San Andreas Default?

The State of California is paying people with IOUs, because it is broke. Well, perhaps not broke (Willem Buiter points out its debt levels are comparatively trivial) but stuck with a broken political system. Like a lot of US States it lives under a formal constitutional requirement of having to balance the budget. But since its' political representatives can neither agree the formal definition of a balanced budget nor, especially, agree a budget which requires a 2/3rds majority in each of their two State houses, it is paying people with what Buiter calls 'funny money'.

Paul Solman summarises the impasse:

"California is desperate. Like so many of us, it lived beyond its means, or taxed below its spending, or both. Three classes are now resisting the reckoning: those who "spent" the money and owe the shortfall (taxpayers); those on whom the money was spent (employees, vendors, other recipients of state funds); and those who loaned the state money (bondholders). Understandably, no class wants to take the hit, or take the hit first. For political reasons at least, the Obama administration is reluctant to come to the rescue...."
Buiter reckons the only way out is direct rule from Washington, though the comment on his blog suggests he has a bit of a tin ear for American constitutional niceties and, ahem, 'States Rights' to coin an unfortunate phrase. (Which doesn't mean he can't still be right on this point). He says,
"When the banks stop accepting the IOUs except possibly at massive discounts, which will happen soon unless an early resolution of the budgetary stalemate is achieved, the state of California will close down for business. Municipalities and counties dependent on state funds will follow suit. Before long the teachers won’t teach, the fire fighters won’t fight fires, the police won’t maintain law and order and neither garbage nor taxes will get collected. It will be a grand Hobbesian experiment."
Hence his expectation of federal intervention.

But the really interesting question, at least for a saddo like me, is whether these IOUs constitute money. Mark Thoma discusses this point, and the comments on his post educate this Brit on one of the less well known passages of the US Constitution,

"Article I, Section 10 of the US Constitution:

Powers prohibited of States

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit*; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility." (my emphasis)

So, on one reading, there's no need to wait for Willem Buiter's 'grand Hobbesian experiment': California has already declared Independence and it's time for Obama to send in the troops and restore the Union.

Monday, 13 July 2009

But British Capital Is Pants!

I’ve been silent on the blogging front for a couple of weeks simply because I have had nothing to say. Or nothing even I found interesting anyway.

But I see Rick over at Flip Chart Fairy Tales has waded into a discussion of that James Heartfield piece that so impressed me, and this has sparked a number of thoughts.

Firstly, just to clear some ground, let me say I simply didn’t know that Heartfield was an ex-RCP/Institute of Ideas/Furedi groupie/Astroturf merchant type when I first read the piece. Generally, I find their analysis a bit ...well, silly, in its single minded downplaying of climate change risks and bigging up of technological ‘progress’ as an unqualified good. But even if, as a commentator on my initial post said, it is just a case of a stopped clock being right twice a day I did find lots to agree with in his post. In particular it exposed the whole ‘public sector bad private sector good’ type arguments for what they are: ideology. A large part of the British public sector spending is actually a form of outdoor relief for the private sector, and quite a lot of the New Labour programme of public sector ‘modernisation’ (consumer ‘choice’ , contestability, marketisation and so forth)has actually been a way of shifting resources from delivery to people – however well or poorly done - into propping up this system of private sector relief.

One part of Heartfield’s explanation for this is, essentially, that British Capital is basically pants. It has lost the will to innovate. It expresses all its strategies in terms of risk, and especially risk minimisation – a language borrowed, in essence, from finance. The bastard off spring of actuaries who price the ‘lifespan’ of profit now rule the roost. The hero-innovators of Marx’s day – those who constantly remade the world - are long gone; their great grandchildren need the succour of a State which appears ever less separate from their own interests. They’ve lost their will to do big things, so they need the rest of the world to be remade in their own image by statutory decree.

Rick sees things differently. But then, to be fair, he’s a manager, not a politico, so he would. He sees the problem as one of public sector managers being more hidebound than their private sector counterparts, and much more trapped in rule bound systems of employee relations. So the public sector needs to call in the private sector for help. I think he just means that unions are stronger in the public than the private sector – though, of course, they’re pale shadows of what they were when Rick and I were growing up.

Of course there are difficult employees. But you can’t change the world on the basis that all employees are difficult. You have to give the people you work for and with something to believe in. And this is where a purely managerial perspective will never penetrate. The greatest weapon – at an operational managerial level – that social democracy ever had was the idea of public service, which grew out of the political ideas of community and mutuality and solidarity. What we’ve got in its place, in my view, bears a passing resemblance to the ‘Old Corruption’ of the eighteenth century : endless initiatives and restructurings and cost cutting done by ‘consultants’, a euphemism, in general, for large multinational firms. A teat which constantly feeds the private sector. No wonder there is workforce resistance.

& now the establishment call for cuts to be made – and to an extent they’re right, even if they exaggerate the immediacy of the necessary decisions, ignore the potential for offsetting tax rises and embellish the potential for ‘protecting frontline services’ whilst doing so. But nowhere, or almost nowhere, is there an alternative vision. If I had to generalise, I'd say it is this blindness which the public sector has imported from the private sector, not 'efficiency'.

Tuesday, 7 July 2009

Classics of Marketing Education

You can't sell either the sizzle or the steak if the meat is tainted. No, not even with one of the most powerful marketing arms on the face of the planet.

Thursday, 2 July 2009

"Them Good Ol' Boys Were Drinking Whiskey & Rye..."

& also knocking back the burgers by the look of it. So this might well '...be the day that they die'.

The map is from my current obsession: Sociological Images.

Do check out some of the French and German anti-AIDS adverts on the site. & I defy anyone to make sense of this French Orangina advert:

"The sexual availability of the female…um…wildlife, all of whom are sexy and sexualized and dancing with the one male, the bottles of Orangina erupting from between the female zebras’ legs, and the female octopus squeezing Orangina out of her boobs…there’s a lot to work with."

Wednesday, 1 July 2009

A Non-Economist Asks...

Anne Pettifor says bank money is not a commodity.
....most assume that credit = savings, and that only by mobilising savings or surpluses (generated by production of one sort or another) is it possible for banks or financial institutions to lend money to finance economic activity. In other words, that money (deposits/savings/credit) exists only as the result of economic activity; and those deposits/savings/credit then create economic activity.

On the contrary: it is bank money/credit that creates economic activity - and only then are deposits, surpluses and savings generated. And not the other way around.....

.....we do not have to beg powerful barons - or even rich country taxpayers - to hand over a portion of their savings. We simply have to “use the computer to mark up the size of the account” held by that poor country.

This is what banks were doing for their favoured private clients, and for the less-favoured sub-primers - with the active support of that great credit bubble-blower, Governor Alan Greenspan of the Federal Reserve. It explains why effortless and effectively costless credit creation has to be so carefully regulated. So that it is directed towards productive economic activity - not the kind of lazy, rentier ponzi finance capitalism of this past era when bankers lifted not a single productive finger but effortlessly grew richer and richer by the hour….

When you understand how easily credit/bank money is created, you realize that, unlike oil, or gold or Dutch Tulips, bank money is not a commodity.

Its a human construct, and all it requires to make a loan is for a man or woman to enter a number into a ledger/computer, and to check the loan against collateral and a potential repayment stream. As such there need never be any limit to the creation of bank money/credit."
Now in what sense is this true? Even bank money has a use value and an exchange value (interest rate), or so it seems to me. Help me out here people...and whilst you're doing so perhaps you might link your explanation into Willem Buiter's formidably technical exposition of the precise mechanisms by which the European Central Bank is propping up the big banks of the Eurozone. He appears - at least to my untrained eye - to be saying the banks have captured the 'State' (if the Eurozone can be thought of as a State which it isn't, quite) and that the 'human construct' of credit is simply being used to prop up the system as exists, at the expense of the people who live in it:

"...ECB’s enhanced credit support is mainly a slow and inefficient mechanism for recapitalising the banks - the ECB recently estimated short-term capital needs in the banking system of the Euro Area at about €280bn - without giving the taxpayers and other citizens of the Eurozone a claim on the banks in exchange, it turns the ECB into an agent of the banks (or more precisely of those in control of the banks and of the banks’ unsecured creditors) rather than of the 340 million citizens of the Euro Area."

Sunday, 28 June 2009

On That Matter of The Coming Cuts

No one should be allowed an opinion on ' state functions we can do without' (TM), or, indeed, what we should protect, until they have read and thoroughly digested James Heartfield on the background:
Is the State being privatised in Britain, or is it taking over the private sector? The answer is that both are true, and neither. What we have is not a new private sector boom, but a growing state-dependent economy of concessions. Companies like Qinetiq and Capita only exist because of the way the state contracts out its services. Government's loss of faith in its own ability to organise production leads to an astonishing abandonment of its authority to chaotic and destructive shell companies...

All the time the established boundary between ‘state' and ‘civil society', between ‘public goods and private benefits', is being redrawn, or broken down altogether. What emerges is neither an enhanced private sector, nor coherent state provision, but rather a hybrid, dependent on public finances to survive, and increasingly operating according to a mixture of political, administrative and business models that makes little sense.


Saturday, 27 June 2009

We Shall Not See His Like Again

"Rocking Robin"; "Beat It";"Billy Jean";"Thriller" - all that creativity and he still found time to be Chief of Staff of the British Army and Deputy to the NATO Supreme Allied Commander in Europe. Polymath or what?

I think Jim's Donkey blog best captures the popular mood.

Friday, 26 June 2009

What's My Line?

A comment in the post below has just reminded me that the single most convincing outline of an alternative 'what-to-do-about-the-banks' policy was provided by Richard Murphy, back in October but no one, absolutely no one as far as I can see, ever took up the idea and ran with it. &, on the net, last October might as well be neolithic times, as we've all got the attention span of goldfish. So go read it now and see what you think.

It's not a strategy for socialism tomorrow. But it is a strategy for structural reform, for breaking the hold of Big Finance on our economy. It is, to use that well worn phrase, a 'modernization' strategy of the Left. (Remember when the Left used to think it knew how to surf the wave of the future? Ah, such memories....)

Now, think about it, what is the Left without a vision of a future? It is a group of people who fight, and quite often lose, defensive battles. Battles to stop things changing for the worse rather than battles to make things change for the better. & I've had a lifetime of it and I'm feeling really, really sick at the prospect of doing it over again when the cuts come after the election.

So let's have Richard's network banking; let's have Boffy's and Chris' self managed organisations (which are more productive anyway); let's have an industrial programme of arms conversion; let's have a Greening of the economy; let's have a different way of looking at public service value In short: let's have some reason to live through the economic pain. Let's have a future.

It is true that the Tories and their allies are trying to log roll the country into the default assumption that cuts must come, and must come quickly and severely after the election whoever wins it. No doubt all those Keynesians are right to say we should wait till the upswing to cut, but the gilt markets might turn at any point and give us very little choice. & whilst I agree with Duncan's newly discovered Texan Post Keynesian that it's about income and wealth equality in the long run, I detect no enthusiasm for an equality of national decline.

It ain't enough for the Left to say 'it-was-the-rich-wot-broke-it-so-they-should-fix-it'. We need a programme. A new AES.

Best Comment on £9.6million p.a. to run RBS

The ever reliable Blood and Treasure:

"It was probably wrong to say that various banks were nationalized over the past year. It would be more accurate to say that after working for the banks as a regulatory contractor for a number of years, the government agreed to be taken over directly by them in a deal funded by the taxpayer. The new financial-political entity is now free to divest itself as much as possible of loss making non-core functions like education and health, freeing up money to remunerate Mr Hester and his friends"

Thursday, 25 June 2009

Who Owns the Sun (No, It's Not Murdoch...Yet)

See that image to the right? I've no idea who it belongs too: I've just typed the word 'Sun' into Google and chosen one of the thousands of images offered. Perhaps someone has it copyrighted. Prove that and I'll take it down from this blog with fulsome apologies - because I don't want to pay.

But the idea that anyone who does own it might care that much as to find this obscure blog and ask for some money is unlikely. After all even the multi-billion pound music and cinema industries are fighting a losing battle to retain any enforceable property rights. Ask Sweden's Pirate Party. If I were dreadfully old fashioned I might argue that this is a classic case of the emergence of a conflict between the forces of production and the social relations of production. But perhaps that would be trying to shoehorn a widely recognised cultural and economic change into some much loved heirloom intellectual categories

But Potlatch isn't old fashioned at all and asks a much more unusual and thought provoking question : who owns the Sun? & if we're really going to move into a post carbon powered future, my that really does matter, as he points out. Go read him.

Wednesday, 24 June 2009

Housing Associations Are 'Hybrid-Public Authorities'

Big stuff in the housing world - and potentially in the world of government strategy for 'choice and the small state' as well. Housing Associations, it seems, are 'hybrid-public authorities' according to the Court of Appeal. So they have obligations under the Human Rights Act. Why? Because:
  • Their significant reliance on public funding.
  • Their close working relationship with local authorities in the allocation of their stock.
  • Their provision of subsidised housing should be properly regarded as a governmental activity.
  • They act in the public interest.
  • They are regulated by a Government agency in such a way as to promote governmental policy objectives.
  • They have some functions of a public nature e.g. in relation to anti-social behaviour.
Which strikes me as potentially also being true of quite a lot of other charities and so called third sector organisations in other fields, such as social care or even health and education. A world of Judicial Review against such bodies might be about to emerge. ( Perhaps with Mr. Coates leading the charge?)

At least as interesting to me, however, is the link that the Housing Associations own trade body make to a 'separate, but allied, cause for concern': are they public bodies? Because, if they are, then their borrowing will count against public sector borrowing requirements - and their relative attractiveness compared to Councils as agents of housing development will lessen to governments of any colour. The NHF say:
"...it seems likely that carrying out a “function of a public nature” for the purposes of the Human Rights Act does not necessarily give rise to reclassification as a “public body”. However, it is stressed that classification as a “public body” does not depend on any single factor, but it based on the totality of an organisation’s relationship with the state. In this context a decision such as Weaver is certainly unhelpful even if not determinative in itself."
But its getting closer by the day, you can feel it can't you?

Banks : Too Big Too Ignore

Willem Buiter doesn't like the idea of big banks:

"In banking and most highly leveraged finance, size is a social bad. Fortunately, there is quite a list of effective instruments for cutting leveraged finance down to size.

  • Legally and institutionally, unbundle narrow banking and investment banking (Glass Steagall-on-steroids).
  • Legally and institutionally prevent all banks (narrow banks and investment banks) from engaging in activities that present manifest potential conflicts of interest. This means no more universal banks and similar financial supermarkets.
  • Limit the size of all banks by making regulatory capital ratios an increasing function of bank size.
  • Enforce competition policy aggressively in the banking sector, by breaking up banks if necessary.
  • Require any remaining systemically important banks to produce a detailed annual bankruptcy contingency plan.
  • Only permit limited liability for narrow banks/public utility banks.
  • Create a highly efficient special resolution regime for all systemically important financial institutions. This SRR will permit an omnipotent Conservator/Administrator to financially restructure the failing institutions (by writing down the claims of the unsecured creditors or mandatorily converting them into equity), without interfering materially with new lending, investment and funding operations.

The Geithner plan for restructuring US regulation is silent on the too big to fail problem. That alone is sufficient to ensure that it will fail to result in a more stable and safer US banking and financial system.

In the UK, the otherwise enlightened head of the FSA, Adair Turner, does not see a problem with banks of huge size and with a staggering range of unrelated or conflicted activities. Of all the parties that matter, only the Governor of the Bank of England, Mervyn King, is clear that ‘too big to fail’ is at the heart of the financial crisis we are trying to exit and will be at the heart of the next financial crisis that we are preparing so assiduously."

Stumbling goes further: we need smaller banks not just because big ones will drag us all down if they fail, but because otherwise we have no chance of influencing their behaviour and making them invest in firms, not households. But government policy is just to fatten 'em up and flog 'em back to the market to carry on as before, or so he very plausibly speculates.

So we have the outlines of three broad, overlapping but distinguishable, political economy worldviews:

1. The official position of both Tories and Labour: flog the banks back to the public sector once their balance sheets look a little less seasick, reduce the burden on public finances as soon as and as much as possible and twiddle the regulatory frameworks a bit at the edges. Those memories of the Great Moderation are so sweet that it seems impossible not to recreate that Arcadia, though perhaps we need a few more Black Swan management techniques.

2. The position of the 'guardian-priests' of the international financial system like Buiter, and, possibly, King: twiddling the regulations ain't going to work, though it is no doubt very necessary. We have to save the system from itself by radically redefining the power relationships between its component parts. We've had our Minsky Moment and we don't want another one. If that means governments - and tax payers - have to fore go some temporary relief, then so be it. We're playing for big stakes here and we can't afford to lose. Banks can't be so big as to potentially ruin us all. Interestingly, Vince Cable sometimes sounds like he's in this camp.

3. The position of the unbelievers: it's not just that our international banking - and shadow banking system - has proved so unstable, it's also how it operated before hand. Great inequalities were amplified and massive transfers channelled from poor to rich across the globe. Furthermore, in the heartlands, innovation and new enterprise was radically unattractive because it was so much less profitable to fund than consumption items, like housing, or simple speculation itself. We need to change this, perhaps for reasons of simple national competitiveness, perhaps for reasons to do with the need to green our economy or fry at some point before the end of the century. The banks should work for the rest of us, not the other way round.

What's interesting to me is that the debate around the wisdom or otherwise of stretching out or curtailing the current neo Keynesian demand stimulation policies - that whole 'Austerity v Growth' schtick - can be had within each of these perspectives*. So you get people who actually want very different things apparently agreeing with each other.

*2 hours later I discover Mervyn King has stepped forward to prove my point on this one. To Duncan's very great annoyance.