Only the state should dominate the media, right Ed?

The ludicrous circus that is the Leveson Inquiry, has been filling media time for many weeks now.  In part because the media is so excessively solipsistic it think everyone else gives a damn.  Most don’t.

The key “story” being manufactured by this waste of time and money is whether News Corporation and Rupert Murdoch have “undue influence” over politicians.   The inquiry is meant to have a wider mandate that beating up on News Corp, but it is driven by politicians and bureaucrats whose agenda has that narrow focus.   

It’s important to bear in mind the extent to which News Corp is allegedly dominant in the UK media.  It owns, effectively, two daily newspapers.  The tabloid Sun and the more serious Times (and Sunday Times).  Like most British papers they don’t shy from expressing editorial views regarding politics.   However, that isn’t unusual.  The Sun’s direct competitor, the Daily Mirror has long been seen as a left wing tabloid, consistently supporting Labour (which of course means accusations of impropriety aren’t flung its way).  Its other competitors in the tabloid market (such as the Daily Star) take next to know interest in politics.  The mid market Daily Express and Daily Mail have tended to take an angry “anti-politics” view that slammed the last government and are not much more keen on this one.   

Of the serious papers, the Guardian/Observer is the leftwing rag of record, followed closely by the Independent, which largely tended to sympathise with the Liberal Democrats.  The Daily Telegraph has long been seen and acted as the “Torygraph”.  

This diversity of newspaper choice is astonishingly wide, and whilst the Sun and the Times are influential, it is generous to claim either are dominant, when the market is so split among others.  The Daily Telegraph remains the leading circulation serious paper, although the Sun leads the tabloids.

In broadcasting, BSkyB (minority owned by News Corp which sought to take it over 100%) is the major pay TV provider, yet it has competition in that market from Virgin Media (for the half of the country with cable TV) and BT.   However, the most influential broadcasters remain the TV extortion tax funded BBC and commercial operator ITV (followed closely by commercial state owned broadcaster Channel  4).  Sky News is one of the news channels, but it faces direct competition from the 24 hour BBC News channel (let alone a panoply of foreign ones).

So when Labour leader Ed Miliband decides that newspapers shouldn’t be “allowed” to have more than “20% of the market”, you might ask some questions not only about what he means by that, but why he thinks it is ok for the state to be dominant in TV and radio broadcasting.

For a start, the “market” he says is not clearly defined.  Does he mean nationwide newspapers?  What about local or regional newspapers?  Besides which, what if people actually LIKE buying the newspapers with bigger market share, does it mean that a proprietor with a very successful newspaper must do something to be less successful?

All this nonsense is taken even further when one looks at the British government’s overwhelming presence in the broadcasting market.

It owns two major free to air broadcasters.  The BBC and Channel  4.

The BBC itself has seven fully owned national TV channels, and owns a 50% shareholding in a company that broadcasts another ten channels.   It also has nine continuous nationwide radio stations and a network of regional and local radio stations.  

Channel  4 has six fully owned national TV channels (and five timeshifted +1 channels on top of that).

The state is by far the dominant TV and radio broadcaster in the UK, with its channels gaining a majority of the audiences in both media.  The BBC is also one of the most popular websites.

Of course it should hardly be surprising that the Labour Party thinks the state supplying news and entertainment to the masses is a good thing, since it presided over the rapid expansion of the BBC when it was in government.   However, this is a point the Conservative Party should be making.

Media dominance is the newspaper sector in one of the most competitive newspaper markets in the world is ludicrous, particularly when it is a sunset industry as circulation continues its ongoing erosion and people seek out online media and other options.

The questions raised about the influence of a single proprietor of two newspapers and one TV news channel are never raised about a vast organisation that dominates the TV and radio market, that has been recession proof (having been funded by a extortion racket called the TV licence that criminalises people who don’t pay it and haven’t the wherewithal to evade it successfully).  

The state should not have its hands on so many levers of media in a free society, out of principle.  That’s setting aside the myth about the impartiality of the BBC and Channel  4, both of which carefully select stories to report on with a line that demonstrates a certain perspective (for years, Euroscepticism was treated as the view of cranks, but not now).

I don’t have to buy the Times or the Sun or subscribe to Sky TV in the UK.  The influence of Rupert Murdoch on me is my choice.  I also don’t have to watch or listen to the BBC, although if I have a TV I am forced to pay for it regardless of whether I want it or not.

Attempts to restrict media ownership when plurality of the print media is so obvious are absurd, particularly when attention ought to be drawn to the dominance of the state in British broadcasting.  That dominance is not only unnecessary, but it is unsettling and has a profound influence upon political and public discourse.  It is about time a debate is had about weaning the UK public off of state broadcasting.  Privatising Channel  4 should be an uncontroversial early first step.   The bigger step should be weaning the BBC off of the TV licence fee so that every day it has to convince people to pay for it, not threaten them with court.

Calls in the UK to stick up for capitalism

For too long those of us who have stood up for free market capitalism have tended to wonder why it seemd quite lonely.   With the exception of a handful of think tanks, the voices in favour of less government and more freedom have been few and far between.  Most of the media seems to be inhabited by the "what is the government going to do about it" school of questioning regarding any issue or situation that comes along, precious few ask "when will the government get out of the way".

So it is gratifying that in the UK, at least, two voices have come out in the past day in favour of capitalism and less government.

The first comes from Sir Terry Leahy, former Chief Executive of the largest supermarket chain - Tesco.  He is no libertarian and he wasn't advocating stripping back the state like I would, but writing in City AM he said:

"As a believer in the free market, and someone who trusts people, in my eyes taxes are still too high.  Insufficient incentives exist in the UK to encourage investment, hard work and job creation.  The ambition to steadily cut corporation tax is laudable.  This, though, should be part of a much wider programme of tax reduction, which does not imperil plans to cut the deficit or spook the markets, but gives employees, employers and investors more money to do with as they wish."

More of their own money of course.

"what is needed in the UK: a rebirth of capitalism. Business cannot sit idly by and expect politicians to do this alone.  If we have the courage of our convictions, business people need to get stuck into the debate, taking this message not just to the media but elsewhere, including schools.  Every student should be taught about wealth creation and entrepreneurship."

Quite.  Business people have for far too long stood by and let politicians on the left push anti-business and anti-capitalist agendas.  The chimera of "corporate social responsibility" has been used to shroud the idea that fundamentally business and capitalism is "bad", and that it needs to compensate society for what it does.  Utter nonsense.  More recently the idea of "green business" and "triple bottom line accounting", have been spawned by those pandering to the ecological-left, in the hope that it will chase away threats of more taxes and regulation, when all it does is surrender the intellectual argument to them.  There is no harm in seeking to be more energy efficient, to gloat about how environmentally friendly you are and the like, but to surrender the intellectual argument that in fact - your business creates wealth, makes people better off, satisfies consumers and employs people - all through voluntary exchange - something government fails to do, is a disaster.

It parallels the businesses who embrace corporatism, who think "government relations" is about seeing what favours can be granted to their sector, whether it be reduced competition, more subsidies, regulation of competitors, taxing of competitors - rather than encouraging government to get out of the way, except when it is about protecting property rights and contract enforcement.

For Leahy to say this is welcome, but the other promoter of capitalism is more bewildering, although one might hope encouraging.

It's the Chancellor of the Exchequer George Osborne.  He said businesses need to fight back against anti-business sentiment that "dominates current political discourse".  He was quoted by City AM saying "If you are not out there, engaged in those arguments, then you are going to leave the field open to those people who want to fill that space, and who argue that companies... have got to pay more tax".   He wants businesses to retaliate against "the politics that says it's perfectly acceptable for the state to take half of all national income".

Naturally I agree, but isn't this his job too?

Shouldn't he be arguing in favour of not just simplifying planning law, but by scrapping it in favour of private property rights?

Shouldn't he be actively cutting all areas of state spending, not ringfencing the Soviet style NHS with half-hearted reforms that incentivise more contracting out, not ringfencing aid to developing countries?

Shouldn't he be abandoning the "Green Investment Bank" boondoggle, not waste money on an unprofitable (and uneconomic) high speed railway, abandon green taxes on electricity generation and be winding back and abolishing the legion of regulators for so many sectors?

Shouldn't he be leading the charge against the ban on new airport runway construction by the private companies that own London's three biggest airports?

In other words, shouldn't he be the government's chief advocate of capitalism, less government and freer markets (let the Liberal Democrats argue the contrary)?

The morality and the empirical evidence of what capitalism has enabled should be getting shouted from the rooftops, especially when the UK media is dominated not by Rupert Murdoch and News Corp, but the state owned BBC - itself almost entirely funded by the forcible extracted extortion system known as the TV licence.

Spain's bailout for dummies

What's gone wrong?  A cluster of Spanish banks loaned money during the credit boom years of low interest rates in the Eurozone to a large number of investors whose investments have now proven to be worth far less than the loans.  Most of this is the property bubble in Spain which has popped, with property values dropping by 30-50% in some places.  The banks are facing insolvency because if they write off the bad loans they will fold.

It is not a sovereign debt crisis of the kind being witnessed in Greece.  In fact Spain's total national public debt as a proportion of GDP is less than Germany's (although it has had a serious budget deficit issue risking escalation of that debt) at 68.5%, although it was predicted to hit 78% at the end of this year.

Whose fault is it?  It takes three to tango this one.  None of these loans would be taken out if people or businesses hadn't borrowed to "invest" in the Spanish property bubble.  Nobody forced them to do this, so they bear responsibility for their own personal tragedy of poor choices and being lumbered with liabilities.  Of course, they wouldn't have received such loans if the banks had been more prudent about their predictions about the property market and had considered the risks of an inflated property bubble.  So the banks bear responsibility for lending money in circumstances that were overly optimistic.  Finally, the European Central Bank sets the interest rates for banks accessing its fiat currency.  As interest rates were set based predominantly on the dominant economic drivers in the Eurozone of Germany and France, this effectively created a line of cheap credit out of nothing at all.   Of course, since the European Central Bank makes money from thin air, it doesn't really bear any consequences of anything, as it is those who own and loan the currency that bear those consequences.

Why should governments get involved?  They shouldn't.  The banks should go bust.  Their shareholders and creditors should bear the losses.  At the most, if there is a deposit insurance scheme, then depositors up to a certain level should be protected, but there is no good reason for governments to do anything other than to have a framework within which bankrupt banks can wind down.   Of course, regional Spanish governments own a majority of the largest bank being bailed out - Bankia - which indicates that it going bankrupt means that those governments lose their "investments".   Naturally, none of them are very keen on this because they want their own decisions to be vindicated.

Why doesn't the Spanish government do it?  It can't afford to do so.  Whilst its relatively new government is eagerly cutting spending (and increasing taxes) to cut the rampant overspending of past governments, it is finding that interests rates on newly issued sovereign debt lie over 6%.   If it was to try to swallow the bankrupt banks it would see its debt as a proportion of GDP slide up by another 9% of GDP bringin it close to 90% (and 100% in 2-3 years' time).  It doesn't want to do that, and claims that Eurozone countries are like a big cozy club that look after one another (although German, Dutch, Austrian, Slovak and Estonian taxpayers might have a wry laugh at how one way that relationship is).

Where is the money coming from for this bailout?  Thin air.  It is part of the slow fiat currency issuing of the Eurozone called the European Financial Stability Fund, which is to become the European Stability Mechanism.   In both cases, they can only lend money to governments, so the Spanish Government will be effectively borrowing from its Eurozone supporters, adding to its public debt, pass on the money to the banks (presumably in the form of capital) and the banks will then pass on that money to the European Central Bank to provide liquidity in the face of their bad debts.  Of course don't think that making money out of thin air and passing it through a merry-go-round has no cost.

Who will pay?  Taxpayers directly in the solvent Eurozone countries (i.e. excluding the PIIGS) and all Euro currency holders indirectly, as they contributed involuntarily to a fund to socialise the losses of the banks.  Spanish taxpayers will be expected to pay too, as they guarantee the repayment of the "credit line", so ultimately will have to pay more unless miraculously the bailed out banks can be sold for more than the bailout funds.  Of course, given Spain's precarious budget deficit, public debt and national economic position, the real risk is that it lays the path for Spain to follow Greece - and so demand more money from Eurozone taxpayers.

Who will win? Creditors of the bailed banks (even if they face major writedowns in their shareholdings).  Owners of Euro debt in Spain.

Who will lose?  Taxpayers across the Eurozone, who collectively will see more of their future earnings diverted to save bad investments.  Ultimately this means the Eurozone economy being dragged down a small notch, again, for many years.  Holders of Euro currency deposits or cash lose as well, because it ultimately contributes to inflation.

What happens next? The markets will lemming like treat all of the propaganda around this bailout as gospel, and get a sudden shot of confidence, until the realise it helps to inflame a sovereign debt crisis in Spain.  The Eurozone economies will be no more better off.  Economic growth will not be facilitated.  The lunatic far-left parties in Greece (including the fascists) will clamour that Greece should get the same support, as will Irish politicians and those in other profligate Eurozone countries.  None will acknowledge that this is not about sovereign debt and actually increases Spain's sovereign debt.  People in France will have voted for a socialist Parliament, which will seek to continue the "print it and bail them out" philosophy that pretends that fiat currencies can be used to just print your way out of recession.  The ideological debate in Europe will continue between three groups:

-  Austerity and Integration:  Led by Germany, it is the view that things will get better if only the PIIGS would follow the policies of the 5 or so Eurozone countries that have budget deficits lower than GDP growth, improve competitiveness and then create a new European Treaty that harmonises budgetary, taxation and economic policies. Spain's current government has tended to share this view too.

-  Profligacy and Integration:  Now led by France, but also driven by leftwing and populist politicians in the Eurozone.  It is the view that the Eurozone should socialise its gains and losses.  In other words, Germany and others should pay for the debts and deficits of the PIIGS, and there should be extensive transfers across the Eurozone, as if it was a United States of Europe.  

-  Disintegration:  A growing view that the Euro is unsustainable in its present form, and the way to resolve the crisis is for it to split into two zones or multiple independent currencies, so that the PIIGS can devalue their way to "competitiveness", and the European project becomes a looser free trade association and customs union.  This is the view of Eurosceptics generally, although there are versions of this argument against any form of open Europe (from Marxists and fascists) or against new small fiat currencies (supporters of commodity-based currencies).

The one thing is sure, don't expects sun to rise and everything to be rosy.  For the Greeks have to vote again to decide if they want to swallow reality and take their medicine, or run away from it and truly see what it takes to become a tinpot backwater that makes Albania look good.

North Korea's bad? The Sun thinks it's about circus animals

Regular readers will know I have a particular interest in North Korea (aka DPRK).  The reason being that it is, in my view, the most totalitarian regime the world has seen for any extended length of time, having now existed for 64 years, and is now the only successful three generational personality cult.  It is, as one writer described it, as if George Orwell’s novels “1984” and “Animal Farm” were taken not as warnings, but as instruction manuals.  Moreover, I’ve been there, although I am legally bound to not publish anything regarding that visit, and it is in the interests of my guides (who were exceptional), for me to do just that.

The sheer horror of the all pervasive denial of individual freedom and rejection of any objective consideration of reality, in favour of an “official view” is difficult to get across.  It is dehumanising, debilitating and life is cheap there.  It has all but scrubbed capitalism away, with private property rights virtually non-existent beyond a few personal chattels, with all employment defined and prescribed by the state.  Where you live, what job you do and your spare time are all almost entirely determined by others, and is a mixture of chance, favour and whim.   For those who insult the personality cult heads, or are deemed to be counter-revolutionary, the future is grim for them and their entire families.  If a man is said to have said something illegal, or folded a newspaper the wrong way (creasing an image of one of the leaders), or the like, it is to the gulags that he goes, with his wife or girlfriend, his parents, siblings and children.

You see in the DPRK, children can be political prisoners.  Forced to live in prisons high in the mountain valleys, from babies.  They receive rations that are starvation level, those who survive do so by eating bugs, mice and other things they can forage or hunt for.  Many are physically abused, some sexually abused, when old enough they are forced to work from dawn to late in the evening, every day.  It is one step removed from Nazi concentration camps, in that it isn’t gassing used to eliminate them, simply hard work, cold and malnutrition.

That horror isn’t easy to visit in the DPRK, for obvious reasons.  However, DPRK watchers have been adept at mapping, in great detail, where such camps are, with a brilliant Google Earth overlay.  For actual visitors to the DPRK, the horror is more subtle.  It isn’t in the power cuts, the propaganda, the relatively barren streets, crumbling infrastructure or the regimentation, it is what is not so obvious.  For there is a surfeit of videos and pictures of the DPRK’s key spectacles, none of which is that new.

It is the lack of children playing spontaneously, for their before and after school and weekend time is all taken up by state organised clubs and associations, all designed to promotion loyalty to the leaders, the party and the state, including dobbing in their parents for not being sufficiently loyal.  It is the orphanages where infants are shown off singing and dancing a song like “Kim Jong Il is our father”.  It is the constant climate of fear among citizens about who sees them, who listens to them and what will be said.  People who have had much history and information about the outside world kept from them, and what they do get is frequently heavily distorted.  People who are anxious to know about the outside world, to understand and to be free of fear.  Of course you never see those who are taken away, imprisoned, tortured or simply starving to death because of a regime that imprisons them and steals from them all to maintain a true 1% elite of privilege, gained by force, birth-right and fraud.

So what did Sun journalists Alex Peake and Simon Jones think was most important to focus on?  The treatment of circus animals.  The two of them lied their way into the country for a rather asinine story, probably wrecking future business of the tour company Lupine Tours, and quite possibly risking not only the end of the career, but also possible imprisonment of their tour guides.  A bit of research with DPRK experts (and there are a number of noted academics) would have told them the real cost of their “story” lies with others.

Now I’m all for thwarting dictatorships and embarrassing them, I’m particularly keen on getting more information into them and engaging with people who live there.  I’m also interested in raising the profile of the most serious atrocities of such regimes.  For the DPRK it must be the use of Stalinist type Gulags to imprison and enslave the children of political prisoners (though one can count the banishing of the disabled, uncounted public executions of political prisoners and the mass starvation of millions whilst the leadership dined like oligarchs).

However, for the Sun, it no doubt figured its readers were more interested in finding a country where they don’t know Michael Jackson is dead (hardly surprising, since the moon landings were never ever reported, and the Holocaust isn’t commonly known to have happened either), and where circuses involve the undoubted cruel treatment of bears and baboons.

Sad though it is, the treatment of the bears and baboons is not unusual outside Western Europe, and would also be found in many former Soviet Republics and China.  Quite simply the cultural norm of treating animals with compassion is alien to many cultures, and hardly a surprise for a state which retains structures and systems little changed from the ones the USSR transplanted onto it in the 1940s.

However, for the Sun to regard this to be the real tragic story of the DPRK is a travesty.   Although I would not be surprised if the human hating fraternity called PETA thinks the treatment of bears is more of an issue than the treatment of humans in the country, and that compassion for animals in the UK tends to rank higher than that for people.

I don’t belong to the feeding frenzy of hate-mongers who think any media owned by Rupert Murdoch is somehow evil – far from it.  However, this sort of “journalism” is not only rather facile, but at best is not useful, and at worst counterproductive.

For a start, if it means less people get to visit the place and expose it to foreign ideas and questions, because Lupine Tours is shut out of the market, then that is unfortunate.   I expect Lupine Tours to sue for breach of contract (presuming it was clever enough to include a contract that restricted the journalists).

However, the likely reaction of the DPRK is going to be more simple.  It will stop including the animal circus on tours visited by Westerners.  It wont save the animals.   However, it will give the impression that this is what matters the most – the treatment of circus animals.  It shouldn't be.

You see the impression most people have of the place is ludicrous dictators and nuclear weapons, with big monuments, mass regimentation and all other sorts of spectacles.  The unadulterated evil behind it all is largely ignored, particularly by the likes of Amnesty International and the leftwing protest movement - all too keen to damn the USA on its treatment of Islamist terrorist suspects, but never raising a protest against the torture of children by the DPRK.

A far more useful article would have sought out defectors, and discussed what they saw and experienced, and talked about the gulags with children in them.   This is what must be raised, again and again – the gulags must be opened up, letting the ICRC in and get closed down.  Children should not be political prisoners – ever (even though, in reality, virtually everyone in the DPRK is a political prisoner).

Better reporting on the DPRK is here in the Economist, about the horrors of the gulags, pointing out it is easier to lampoon the regime as freaky than to confront the true horror of the place.

This video of a starving orphan girl in the country is far more harrowing and disturbing than grotesque circus animals.   Although, I doubt PETA really thinks so.

Austerity and the Euro need not hinder growth

So what if I said that there is an economy in the Eurozone that has embraced austerity and is experiencing economic growth.

You'd probably think I mean Germany, given it runs relatively low budget deficits and it is widely believed that the depressed value of the Euro is a boon to Germany's export driven industries.

However, I don't mean Germany.  This country grew by 7.6% in 2011, Germany grew by 3%.

Its public debt as a proportion of GDP is 6%, Germany's is 81%.

It has been a Eurozone member since 1 January 2011.

This is Estonia.

According to CNBC, its economy shrank in 2008-2009 by 18%, as the financial crisis hit hard.  Estonia having had its own credit bubble and property speculation bubble to go with it.  The crisis also made it difficult for Estonia to sustain ballooning budget deficits.  So the government there did what had to be done, it cut spending.

All public sector salaries were cut by an average of 10%, but cabinet Ministers had a 20% cut.  The age to receive the state pension was raised, and labour market reforms introduced.

Things are not all rosy, with unemployment at over 11%, growth is essential just to help pull Estonia up.   Estonia lowered and simplified taxation, with a flat income tax rate of 21% (down from 26% when first introduced in 1994).   Not for Estonia is the pseudo-austerity seen in France, the UK and Greece of raising taxes (taking money out of the hands of citizens and investors) to cut the deficit.  It was spending cuts, shadowed by tax cuts that shrank the state and boosted the economy.

The economy has picked up as technology firms have emerged, growing an IT sector that is thriving.  For an economy that was once based on being a colony of the USSR, Estonia now rates Finland and Sweden as its biggest export markets.

Estonia has thrived following real austerity, and it has thrived still even having moved from a minor fiat currency to a major one.  The Euro has not been a problem, as Estonia increased in competitiveness not by destroying the savings of its citizens by printing money, but by increasing productivity, reducing waste in the state sector and making it easier to do business.   

Let's remember that Estonia's economy has twice been decimated in the last 20 or so years.  First by independence from the USSR which saw most of its industry shut down for being inefficient and obsolete, and secondly by the bursting of its credit bubble in 2008.  In both cases the reduction in GDP was greater than that experienced by Greece today.  Greece, after all, put aside dictatorship in 1974, not 1991 (nor was Greece occupied for 50 years).  Estonia has had much less time to get its act together, and until 2004 it was not a member of the European Union either, so neither enjoyed the completely open market, nor the offer of subsidies for agriculture or infrastructure that Greece has supped from for many years.

Estonia has per capita GDP less than Greece, real wages lower than the Greek minimum wage and its farmers receive subsidies which are one-third of that, for the equivalent properties, of those in Greece (or indeed France or the rest of the EU-15 - those EU Member States that were never part of the Warsaw Pact or former Yugoslavia).  

So Greece ought to embrace real austerity.  Cut its state sector.  Don't hike up taxes, but rather reform them to simplify and lower them - minimise exemptions, but lower rates and fewer taxes.  

Secondly, talk of exiting the Euro would be unnecessary as an alternative.  For a bankrupt state that can't keep its spending aligned to its revenue can't manufacture a fiat currency that will be trusted by anyone.  It will be like remaking the Zimbabwean Dollar.  

Finally, the Cato Institute has rightfully fisked Paul Krugman's misuse of statistics to claim Estonia was hit by austerity, when the recession it faced was prior to any austerity.  The President of Estonia, Toomas Hendrik Ilves, has since called Krugman "smug, overbearing and patronising".

So isn't it about time that journalists took the over-quoted prick on some more?

Check out Mr Ilves's wonderful tweets damning Krugman in this Huffington Post article - bear in mind this is in English and not Mr Ilves's first language, but he runs rings around any current leaders of English speaking countries I know of.   Bear in mind also that he is a centrist in Estonian political circles.  He is no libertarian, he is no radical, but the mainstream of Estonian politics is fiscal austerity, low tax and low levels of regulation.

Finally, Mr Ilves wrote convincingly on the Hoover Institution (Stanford University) website about how his country got to where it is, with some damning of those on the left in the West who thought people in the USSR simply loved living under the authoritarian yoke of the CPSU (point fingers at Sue Bradford and friends).  He points out the issue that countries like his are being expected to contribute to bailouts for countries with higher per capita incomes than Estonia.   How long will taxpayers in those countries tolerate that?  The answer is that they shouldn't.

In short, the clear point is that there are European countries that had it far harder for far longer than Greece, have "followed the rules", and have been reaping the benefits of the hard work involved in rebuilding a productive economy with much less government.

If eastern Europe gets it (and not all of it does), does it mean that in future, the term "southern Europe" will be a synonym for stagnation, corruption and economic malaise, more than the east?

Furthermore, what does it mean when voters in Greece and France choose governments that essentially campaign on forcing voters in other EU countries to pay for their profligacy?

UPDATE: Anonymous below points out that income tax in Estonia is not all it seems as employer social security contributions are 33% on top of income tax, which is obviously a heavy burden.   See more on Estonian tax here.

Sometimes culture is corrosive

One of the big news stories this week in the UK has been around the conviction of nine men in the Greater Manchester for systematic sexual exploitation of vulnerable underage girls.   

I don't want to go into the lurid details, but essentially these men, using two takeaway businesses owned by them, lured girls in their early teens into relationships and being passed from man to man, and with other men.  They plied them with liquor, bribed them with mobile phones, gifts and money, and the girls engaged in a wide range of sexual activities, including group sex.  The men almost acted as their pimps, and were deliberately predatory.  The face lengthy jail terms.

In one example, the BBC reports:

sentencing the ringleader to 19 years in prison, the judge called him an "unpleasant and hypocritical bully" who had ordered a 15-year-old girl to have sex with takeaway worker Kabeer Hassan as a birthday "treat".

However, the elephant in the room on this issue is about race and culture.

The men range in age from 24 to 59. All are Muslims, eight are Pakistani, one is Afghan. 

None of the girls abused were Muslim, they all appeared to be British.  

So?  Well the judge found that the men treated the girls "as though they were worthless and beyond respect" and that "One of the factors leading to that was the fact that they were not part of your community or religion"

In short, these men targeted girls, not just because they were young and impressionable, not just because they tended to come from broken or troubled low income homes, so were needy, but because they had blatantly misogynistic attitudes towards girls and women who are not of their ilk.

Pakistani Muslim girls, after all, are expected to remain virgins until marriage and to be under the control and supervision of their fathers until it is the time for their husbands.  English girls of course are, from the point of view of the men, sluts to be used and disposed of as objects for their satisfaction.

The fact that some of these men are married, with their own daughters, was irrelevant to them in their hypocrisy and dehumanisation of their victims.  One of these married fathers got a 13 year old girl pregnant.

Of course there are millions of men who rape and exploit women and girls, of all races and cultures.  Indeed misogyny is the norm in most countries outside the Western world.  I know no one who would try to claim that such behaviour is confined or dominated by Pakistani/Afghan Muslim men in the UK.

However, culture is a factor.  It is a factor in the men's behaviour, but sadly has also been part of the Police's response to early complaints about their behaviour.  The men have also claimed that the prosecution is "racist" and the conviction is racist because the jury happened to be all-white - as if the UK is dominated by the attitudes of the British National Party/National Front (neither of which can muster more than 2% of the total vote at the last general election).

Former Labour MP Ann Cryer says the Police did not proceed with prosecution of one of the men for fear of being branded "racist".  In short, the cultural relativism and hypersensitivity to the left's instant response to anyone of a ethnic minority accused of crime, cost time, pain and suffering to the victims.

However, the race industry supporters have stood by claiming it isn't about race and religion.    Leftwing journalist Sunny Hundal claims that it is irrelevant because Muslim men also rape Muslim girls, and that it was just misogyny.  Ken Livingstone sycophant/leftwing activist Lee Jasper simply claims it is not race.

Strictly speaking they are right.  It isn't race per se, but it is culture and identity.

The liberal values that most people in the West reflect are ones that treat women with respect as equals, and also treat young women and girls as deserving of protection and respect, rather than as objects for the satisfaction of men.

It is not a value shared by men people from most other cultures. 

Both law and practice seen in almost all non-Western societies is to treat women and girls as subservient.   In parts of Africa, raping virgin girls is seen as a cure for AIDS, indeed Chairman Mao once considered it appropriate to "cleanse" himself with girls in that way.  From the boundaries of the EU across the Middle East, South Asia, Southeast Asia, up through East Asia through to Japan, misogyny remains the norm.

Pretending that all cultures deserve respect maintains the corrosion of the bigotry and mindlessness so many perpetuate, which those of us proud of individualism should remember, is so young in our own cultures.  It was, after all, not that long ago that a girl going to the police about rape would be treated as if she asked for it - and it is sadly far from unknown for that attitude to still be expressed.

Fortunately, more than a few Pakistani Muslims in the UK have demanded that attitudes must change, that working class young girls who are vulnerable are not fair game for married fathers to rape, abuse and treat as if they 'asked for it' (as one young man of similar extraction volunteered to a TV camera last week). 

It isn't racist to point it out, as much as the real racists in the near corpse of the BNP are trying to milk it for. 

It's simply supporting the individual rights of those who get exploited by those who hold cultural values alien to the country they have chosen to reside within.  Values that should be alien to ALL countries - values that belong in the past, with slavery (and indeed the worship of a pedophile prophet).

three elections - three stories - little reason

So in the past week or so there have been four elections which have had greater or lesser coverage in the international media.  What are the key lessons from them all?

1.  The all involve people choosing politicians, which is the worst form of government ever devised (except for the alternatives).  Nearly a million people think Ken Livingstone, a warm supporter of Fidel Castro, is a fit and proper person to spend billions of pounds on a city.  More than half of French voters think a man who has never created a job in his life, should run Europe's third largest economy.  A majority of Greek voters want to be told what to do by authoritarian Marxists and fascists.

2.  Boris Johnson is a funny engaging man who woos women and is intelligent and entertaining.  Moreso than Ken Livingstone.  He won because he captures people's imagination, and he didn't pretend to be offering that much.  He offered frugality, a 10% cut in the Council Tax levied by the Greater London Authority, but also didn't pretend to not be a private educated, Oxbridge, upper class chap.  In an age where being a celebrity and a character is more valued than most things, it worked.

3. Ken Livingstone is a bitter nasty old socialist who plays class warfare politics, who blamed the riots on austerity, who says one thing and does another, who plays fast and loose with comments about rich Jews and says one thing about gay rights whilst giving succour to Islamists.  He's a politician of the past, and cost Labour victory.

4. Beyond the London mayoral elections, Labour did well because over 60% of voters didn't bother at all.   The core opposition to the government was motivated, the core support was not.  The Liberal Democrats continue to erode into what looks like fourth party status.  The Greens, despite some efforts in doing well, have barely lifted their support as the environmental arguments don't wash well in a recession.  The socialist fascist BNP lost every council seat it defended, including losing what had been its single seat on the London Assembly.  UKIP gained some votes but not seats.   People are fed up with politicians, don't trust them and given the gaffes around the last UK budget, it's hardly surprising the UK coalition is uninspiring.

5. The French have always voted for socialism, it has long been a matter of degree.  Now they have voted for a hardened socialist rather than a softened champagne socialist who preaches austerity, but really lives it up large at the cost of future taxpayers and who preaches suspicion of foreigners when he himself is the son of a Hungarian migrant.  Now they can pretend that they can stop trying to live within their means, get taxed more and just borrow to prop up their socialist economy where, despite the mythology, manufacturing is no bigger a part of the economy than it is in Britain.  Bear in mind a fifth of the French are warm towards a fascist and another 15% are warm towards communists, then you see that liberte isn't as big as equalite in France.

6. The Greeks have voted in protest.  The two formely major parties responsible for decades of overspending, lying about debt, a culture of corruption and rent seeking, have been decimated.  The "centre-right" New Democracy party has the greatest number of seats, but 108 in a Parliament of 308 is far from enough to govern.  The "centre-left" PASOK party which led the last government is third with 41 seats.  Second is the Marxist "Coalition of the Radical Left" with 52 seats - a party of communists, Trotskyites, environmentalists and Maoists.  It promises to reject spending cuts, reject austerity and somehow magically produce a socialist motherland where money can pay for the big warm maternal state that makes everything happy again.   Fourth is the new Independent Greeks party, with 33 seats, which is an odd nationalist party wanting the Germans to pay war reparations, rejecting loan agreements with the EU and wanting politicians and officials responsible for the crisis to be prosecuted - well I can agree on the last one, but I think the Germans have done Greece enough good by lending to it when nobody else would!  Fifth is the Communist Party of Greece, which picked up to get 26 seats.  The party that is Marxist-Leninist and would have run Greece like a totalitarian twin of Bulgaria had the Greek Civil War gone differently, not that anyone noticed. However, everyone noticed that  Sixth is the fascist Golden Dawn Party with 21 seats.  It rejects the Enlightenment and the industrial revolution, is radical Greek Orthodox, and wants removal of foreigners.  Greeks almost certainly will face no stable government that will enable their bloated state to be funded - indeed, the future looks bleaker now than ever before.

So for London?  Business as usual - nothing to see here.

For France?  A little man (shorter than Sarkozy) is going to fight austerity - that hasn't even happened- but will inevitably bow to reality, because he is, at the heart of it all, a man who will listen to the grand French statist bureaucracy.   Expect little change, although there are reports that real estate agents in South Kensington in London are facing record queries from wealthy Parisians seeking to flee punitive taxes Hollande has promised.

For Greece?   Hardly anyone has been telling people in Greece the only solutions to their problems are:
-  Accept the government has failed them, make their own arrangements for retirement, healthcare and education.
-  Move all their money into foreign bank accounts, preferably not in Euros, or buy precious metals.
-  Hunker down and accept that the next 5-10 years will be very hard for those who can't or wont make provision for themselves.

Greece's tragedy should be lesson to all

Greece's radical leftwing party, Syriza, has one policy I agree with - the prosecution of the politicians and bureaucrats who are the architects of Greece's current tragedy.

That is all though - the policies to "reject austerity" are so demonstrably absurd, that they will demonstrate the simple failure to learn the lessons of the past couple of decades of Greek reality evasion.

As much as Syriza, the Communist Party (truly communist, in the Marxist-Leninist - Soviet model was the way to go sense) and the fascists want to paint it, Greece is not in an economic crisis because of foreign bankers or even the European Commission.

It is in a crisis because perpetual budget deficits are unsustainable.

This will continue, even if Greece exits a fiat currency supported by large economies for one supported by its own incompetent government.  For let's be clear, Greece is no more likely to be able to reject austerity with a currency that will be as trusted as the Zimbabwean dollar than one trusted like the Deutschmark.

There is literally no alternative to austerity in one form or another.

So what are the options?

1.  Greece follows the deal previously done with it.  That means reducing its budget deficit to ultimately balance spending with revenue within the next few years.  Bear in mind this deal already includes 80% of its debt being written off by the creditors.  Not exactly wealthy bankers demanding their pound of flesh when most of what they loaned Greek governments is being written off.   Of course what this means is shrinking the Greek state, less welfare, pensions at ages similar to other EU countries,  less subsidies, privatising trading enterprises (e.g. railways, broadcasting, postal services), cutting the public sector and streamlining the tax system so that it is at a level people may be prepared to pay.    If Greece accepts a public sector that it is willing to pay for, it can stay in the Euro and live within its means.

2.  Greece rejects the deal and defaults.  That means simply being unable to pay its way.  The state can't overspend because it can't borrow (who will lend to it outside some German led guarantee?), so it stops paying wages to public servants, stop paying other bills and essentially shuts down.  It becomes interesting if the military can't get paid. In effect it is instant austerity.  Instead of the Eurozone deal lending, lending ends, so the budget deficit is wiped out - instantly - because you can't spend beyond your income if you have no credit.   In this context, the Euro takes an enormous hit because of perceptions that Eurozone sovereign debt is no longer "safe", so it devalues somewhat.   The Syriza party effectively thinks that Germany will be forced to lend to Greece to cover it - in other words that the Eurozone becomes like the United States - with the richer parts transferring money to the poorer parts.   However, if Germany refuses (why should German taxpayers prop up an ungrateful, previously fraudulent Eurozone country that doesn't think the rules apply to it), then Greece truly faces a hard time, and will be tempted to take the next step...

3. Greece rejects the deal, defaults and announces a new sovereign currency.  As easy as some commentators think this is, it is almost inconceivable.  It is option 2, but with the printing presses coming out to issue a New Drachma which would be the new state currency to pay public servants and pay bills, and new debt is issued in the new currency.  The effect will be collapse of Greek banks as Euro deposits are withdrawn en masse, and millions of Greeks open up new Euro accounts in non-Greek banks.  All Greek businesses and citizens with debts in Euro face default, but suddenly Greek exports and tourism to Greece becomes remarkably cheap because of the new dud currency.   Yet without austerity, Greece will rapidly face hyper-inflation from the government printing money to cover its deficits, plus a massive increase in the prices of imports, such as oil.  In short, Greece turns into the stereotypical tinpot third world country, with a non-convertible currency that makes the Bulgarian Lev look like a safe bet.   

4. Greece rejects the deal and gets a German led bailout with surrender of sovereignty.  It isn't far removed from what was previously agreed, but this time it will be more thorough.  The deal to keep Greece in the Euro includes direct government to government lending, but with surrender of Greek sovereignty in the meantime.  You can just guess the attitude of the Marxists and fascists in Greece to the spectre of this.

Unless taxpayers of wealthier Eurozone countries let their government bail Greece out (which I doubt they will do), Greece faces living within its means.  It will have to do so within the Eurozone or without it.  At the very worst, Greece will put its head in the sand, default, be unable to pay for the army and it will stage a coup - seeing Greece kicked out of the EU and NATO and become the new laughing stock of Europe.  Then the people of the former Yugoslav Republic of Macedonia, the people of Cyprus (especially northern Cyprus) and other neighbours might fear what a new militarised Greece will be like.   

The lesson from all this is astonishingly simple.   

Government's cannot evade reality forever.  

They cannot borrow endlessly from creditors, especially ones that have already written off many of their past debts as bad debts.

They cannot borrow from other governments, accountable to taxpayers who want to know why their money is being loaned to a government that no one else will lend to, because its taxpayers refuse to pay for the state they demand.

They are not better off if they can just print money to cover spending - because people are not so stupid to believe there is real value in a currency manufactured by the government because nobody else will lend to it.

Austerity is not a policy choice on a whim, it is, as I have said before, just living within your means.

The tragedy in Greece is that the lives of millions are now being hit because past governments pretended this was not necessary, facilitated by public servants and facilitated by past creditors.  They have been hit by the fraud of the profligate deficit spending state.   They gained a welfare state more generous than most of western Europe, and state health and education systems they didn't have to pay for - and now face losing much of it all.

The real insanity is from the hard left, who believe that bankers should be forced to lend the Greek government other people's money, or the German government should force German taxpayers to do so.    They have bemoaned profligate lending by banks that needed bailing out, but now want the same banks to lend to a feckless government that can't control its spending.   They are deluded and use language that claim those demanding Greece face reality as "murderers", when it was their own welfare state philosophy that has brought Greece to its needs.

It is the peculiar brand of statist politics that has ruined Greece - the idea that government can offer more and more without producing more, without getting more money to pay for it.  The idea that better healthcare, education and more generous pensions can just be given, not saved for and earned.

The big question is not whether Greece has austerity or not - it will have it, whether it comes from choosing to cut spending, being forced to cut spending or cutting spending in real terms by shifting to a new nearly worthless fiat currency.

Hard working productive people in other countries are not going to pay for Greece's bloated state sector, and they wont do it whether it is as it is now, or some Marxist or fascist version of the same.   Greek citizens either have to hunker down and work within their incomes today, or leave.  If they choose the chimeras offered by the far left, whether they be Marxists or nationalists, then the austerity deals of today will look like paradise compared to the ostracism their country will face.

UPDATE (since I'm in NZ for now):  Idiot Savant still doesn't get it either.  How can it be a bailout for German banks when it is the Greek government that needs borrowed money to function?  This rhetoric is not dissimilar to the banker bashing that the Greek far-right/far-left is employing.  What do the reality evading statists think will pay for the massive gap between what Greek governments spend and what they collect in revenue? There is NO repayment of debt under the bailout, just a government guarantee for deficit financing.  The gap in understanding is palpable.  The willingness to excuse rampant deficit spending is surreal.   The belief in flat earth economics is expected though, because it's how Greece has been run for the last three decades.

London mayoral elections - Back Boris to kick Ken

Whilst not as dire as the French elections, it is clear that there is no candidate for the London mayoralty who supports local government doing less and getting out of the way of people.  

The line up ranges from a Uruguayan candidate for the fascist BNP, to a former public servant standing as an independent, an anti-car Green, gay former cop Liberal Democrat and then of course the two main candidates - the Marxist Islamophile Ken Livingstone (George Galloway-lite) and the bumbling Tory toff Boris Johnson.

UKIP has a candidate who is campaigning on having a tax for visitors to London, a cap on immigration, free parking and other policies that the Mayor has no legal power to implement.   All this is a plain insult to my intelligence.

What I WANT in a Mayor is some fairly clear policies based on what the Mayor can actually do.  The role has some clear powers in transport, housing, policing, economic development and emergency planning.  

For emergency planning and policing, I want competence, commitment to accountability and with policing in particular a focus on real crimes, crimes against people and property, and to promote a culture that respects the public's right to go about its business in peace, but which takes a firm line defending people from the initiation of force.  This includes assisting with national agencies against terrorist threats.   It means not letting people riot day after day, it means not letting people "occupy" private property in mobs as a "protest", it also means being accountable when members of the police assault innocent members of the public.

Beyond that, I don't see a long term role for the Mayor.  Economic development should be about getting out of the way, lobbying central government and local boroughs to get out of the way.   The Mayor should be an advocate and promoter of the city, but not be trying to plan it.   For starters the Mayor shouldn't be opposed to expansion of Heathrow (or any of London's airports if the airport owners can fund it privately).

Housing?  Well the one thing London does need is a Mayor to get out of the way and eliminate urban development limits within Greater London, and set free land for private development.   Local government housing schemes have long been breeding grounds for anti-social behaviour, attracting desperation and criminality rather than aspiration and community.  The ridiculous overly prescriptive planning rules that stifle development and inflate housing prices must be scrapped.

Then there is transport.  You'll know I could write a post about this on itself, but that needs a wholesale shift.  The tube should be privatised, bus companies should receive the fare revenue paid on buses, the congestion charge should be expanded and made more sophisticated to replace council tax funding of roads and to fund a programme of major pavement renewals, the backlog of sign and line maintenance and targeted intersection and corridor improvements.  All traffic light controlled intersections should have pedestrian crossing lights.  Finally, private enterprise should be asked to investigate new road corridors to be toll funded, for both new Thames Crossings and new arterial routes to open up south London.  

Finally, I want a Mayor who will reduce council tax, who will shrink his role to policing, emergency services and advocacy.  For whom planning means property rights and transport means getting from central government enough of the share of motoring taxes paid from using London roads to pay for their maintenance and to maintain spending commitments to public transport upgrades.

Nobody comes near any of that.  Given the UKIP candidate doesn't even remotely dabble in any of this, it comes down to whether there is a qualitative difference between the two leading candidates.

Boris Johnson is the incumbent.  His mayoralty has been characterised by pet projects for bikes, buses, a cable car, giving everyone over 60 free public transport and building "affordable homes". 

On the plus side he has taken a tough line on crime which has achieved some results, even though early management of the riots was disastrous.  He's improved management of utilities digging up roads and put some money into improving traffic management more generally.  He cut wasteful spending on media, froze council tax and gave up first class air travel (Ken liked a first class trip to Cuba when he was Mayor).  Finally, he is proposing a 10% cut in council tax over the next four years, it's not much, but it is in the right direction.

Ken Livingstone is trying to regain the Mayoralty from Boris, having had it from 2000-2008.  Livingstone is promising a public transport fare cut to be funded from the surplus in the Transport for London accounts that has resulted from deferred capital spending on new tube trains.  A surplus that will disappear in one year, but he insists it can be afforded.  He is promising to resell electricity bought by the Greater London Authority to Londoners at a huge discount, as if running a massive retail utility is without cost.  He wants to set up a government real estate agency, and even introduce a welfare benefit for young people who stay at school.   Ken loves being the big man for outside politics he is nothing.

Ken is an expert at spending other people's money.  He spent £10,000 a year on subscriptions to the communist newspaper the "Morning Star" and spent money on first class junkets to Havana and Caracas to visit Marxist dictators.  He is warm towards both regimes, ignoring the Castro brothers' use of mental hospitals to incarcerate political prisoners or Hugo Chavez's bullying of media and supporters of the opposition.  His use of the London Development Agency as Ken's "bank" to back causes he supported, his support for Lee "black people can't be racist" Jasper, who also said Anders Breivik has similarities to Boris.

I couldn't care less about the allegations of Ken using a company to reduce his tax liability, except of course it proves his hypocrisy, as does his continued use of private healthcare whilst being a strong advocate of the NHS.  I do care about his embrace of Islamist hate preachers and wanting London to be a "beacon of Islam".  If Boris wanted London to be a beacon of Christianity wanting all non-Christians to understand the religion, he'd be laughed at for being some US Republican style religious zealot.

Ken Livingstone seeks to court the votes of gay and lesbian Londoners, and claims to care for the rights of women and the oppressed, but then worked for Press TV - the overseas propaganda TV channel of the Islamic Republic of Iran -  a regime that executes homosexuals and rape victims.  Even Labour stalwarts like Sir Alan Sugar are opposing him, following Livingstone saying he didn't expect rich Jews to vote for him.

Ken cites "achievements" of his time leading London in the early 1980s - when he called capitalists "filthy" as recently as 1992.  

He makes it too easy.  Vote for Boris to keep this vile little man out of power.  Boris is no libertarian and far from perfect, but he is promising less local government and he wont be appeasing Islamists, communists or funding his radical racist mates.  Finally, Ken has said he wont stand again if he loses this time - let's hope that's a promise he can keep.  Besides, who wouldn't prefer Boris at the Olympic opening ceremony quoting Latin and bumbling his way informally through it all, over the nasal whiny forked tongue envy peddling friend of George Galloway.

Anzac Day 2012

Not PC's take on it

My past post's here, here and here

France in denial on its long path of stagnation

The Economist got it right when it had its cover page with the very title “France in denial” and today City AM’s Allister Heath said it more clearly about the French Presidential election:

“The useless Nicolas Sarkozy was given a bloody nose; the awful, economically illiterate Francois Hollande is in the lead...there is no pro-capitalist, pro-globalisation, low-tax, Eurosceptic, outward looking party in France... what passes for the centre-right in France is social democratic and fanatically pro-EU”. 

 Quite. A look at the candidates for President says it all. If I was French I couldn’t stomach any of them. Of the ten candidates, three are communists (Melenchon, Poutou and Arthaud), one is fascist (Le Pen), another a conspiracy theorist/quasi-fascist (Cheminade), two are liberal socialists (Hollande and Joly), one is a soft "moderate" socialist (Bayrou) and the other two are conservative "Gaullist" socialists (Sarkozy and Dupont-Aignan). What a choice! It's about "how would you like your more government sir, with a red flag, black shirt, green banner or just some more tax and protectionism?" 

Whether they embrace the EU or reject it (and there are plenty in that group rejecting it, because they see the EU as a free market capitalist project), they all support an economic nationalist fortress France, they all support more taxes (Sarkozy’s “austerity” programme has been mostly about tax increases and he embraces financial transactions tax), they all reject free trade - the free movement of goods, services, capital and people. They all, to a greater or lesser extent, paint the bogeyman not overspending governments that can’t keep their fingers off of the credit cards to bribe voters with borrowed money, but the new scapegoat “the bankers”. They all paint any alternative involving less government as “failed Anglo-Saxon” policies, despite the fact that manufacturing as a share of GDP is the same in the UK as in France, it is just the UK industries are more numerous and smaller than the grand state owned or subsidised industries that are national champions. 

The French story is one of despising capitalism, but as the Economist points out, it is rather contradictory:  

The French live with this national contradiction—enjoying the wealth and jobs that global companies have brought, while denouncing the system that created them—because the governing elite and the media convince them that they are victims of global markets. Trade unionists get far more air-time than businessmen. The French have consistently been told that they are the largely innocent victims of reckless bankers who lent foolishly, or wanton financial speculators, or “Anglo-Saxon” credit-ratings agencies. Mr Sarkozy has called for capitalism to become “moral” so as to curb such abuse. Mr Hollande has declared that his “main opponent is the world of finance”. Few politicians care to point out that a big part of the problem is the debt that successive French governments themselves have built up over the decades.  

The forthcoming contest between Sarkozy and Hollande is really a matter of how much more socialism do you want for France? Bearing in mind that part of France’s socialism, its molly-coddled rural sector, is actually funded by German, British and Dutch taxpayers through the EU. If Sarkozy wins, and he unilaterally implements a financial transactions tax, he will chase the financial sector from Paris to London and Zurich tout suite. If Hollande wins, he will do that and more, with a new 75% top tax rate (at 1 million Euro) just to make sure the message is clear – France doesn’t want really successful entrepreneurs (which of course, the 250,000 or so French expats in London already know), and he is looking to lower the pension age, just when it is clear how big a demographic problem France has in paying state pensions in the future. 

What both offer is a different speed of the process that Portugal, Spain, Italy and Greece followed for the past couple of decades, of growing the state, growing spending, growing taxation and pretending that this works. France’s GDP per capita ranking in Europe has slipped in recent years, now between the UK and Spain/Italy. It hasn’t run a budget surplus for nearly 40 years, and its visibility in the international marketplace for services is low, despite it being the largest component of the economy. Public debt is 90% of GDP, it has the largest state sector in the Eurozone at 56%. It has banks chronically exposed to bad debts in the Eurozone periphery which are grossly undercapitalised. Its labour costs are 10% higher than Germany’s, but French unemployment is 10%, Germany’s is 5.8%. France hasn’t had unemployment less than 7% for 30 years – putting a lie to the socialist myth of how caring a big state is with strong labour rights. The Economist suggests neither of the two leading candidates will address these structural problems: 

 “If Mr Hollande wins in May (and his party wins again at legislative elections in June), he may find he has weeks, not years, before investors start to flee France’s bond market. The numbers of well-off and young French people who hop across to Britain (and its 45% top income tax) could quickly increase. Even if Mr Sarkozy is re-elected, the risks will not disappear. He may not propose anything as daft as a 75% tax, but neither is he offering the radical reforms or the structural downsizing of spending that France needs.” 

 Furthermore, if France embraces an agenda of protectionism, closing borders, higher taxes and more subsidies within the EU, it will clash with the German, British, Dutch and Danish visions of what the EU should be. It will, fundamentally reveal what has long been the underlying tension in the EU – those who want to use it as a shelter and as a super-government to fund their own national rent-seekers, and those who see it as part of a project to break down borders of trade and travel (a third group see it as a source of money to milk while their economies are relatively poor - yet French farmers get three times the subsidy per capita as Polish farmers, as part of a compromise because expanding the Common Agricultural Policy to pay for 12 new states would have bankrupted the EU).

Germany calls the shots in the EU today and can be expected to block such nonsense, but what is next for France? 

Five years of Hollande chasing away business, with more stagnation, more credit rating drops and disappointment that he can’t mould the EU in the image of nationalist socialism? 

Or five years of Sarkozy fiddling enough to stop things sliding too fast, playing lip service to his own nationalist rhetoric, but by and large representing the status quo or slow progressive decline? 

What’s most repulsive is how popular fascism remains, seen now when Sarkozy – son of a Hungarian immigrant – talks of “too many foreigners” in France to woo voters from the seductively dangerous Marine Le Pen, despite he himself having spent five years embracing the political union that facilitates open migration among 27 countries. 

Or indeed the popularity of communism, with a sixth of voters choosing options that have been tried, tested and delivered misery and poverty across half of Europe. What does it say about the desperation of French voters who are swamped by the miasma of stagnation that they blame foreigners or businesspeople, and think a strong authoritarian leader will save the day? Where have we seen this before?  Fortunately, most French voters will never embrace fascism or communism proper, but they are almost infantalised to think politicians, with advice from those educated at the closed shop École nationale d'administration (Civil service school), can fix their problems with more laws, more spending and more taxe.  (Perhaps it is the philosophy behind THAT school that needs to be investigated)

Whatever does happen, one thing is abundantly clear, the future French President and forthcoming government will not be friends of capitalism, free trade or open markets. They will continue to seek protectionism at the price of French consumers and taxpayers, the unemployed and those who fund the EU. France will be the most strident force in international trade against free trade, less subsidies, more transparency and smaller transnational government. More strident indeed than even China. The question is to what extent it gets ignored and sidelined as it embarks on its continued process of relative economic delay, or if it ends up slowing the Western world down with it, given its prominent role in Europe. Given how central France is to supporting the growth of the EU project, and how it is the single loudest opponent of liberalisation of trade in agriculture, it is fair to say that, for those of us in New Zealand (and indeed in all efficient agricultural exporting economies), France will continue to represent the biggest stumbling block to getting progress in opening up international trade in agricultural produce and services.  For those of us in the UK, it remains the fervent cheerleader of a Federal Europe, and opponent of the UK vision of the EU as an open area for trade and business, rather than a protectionist fortress.

Editor supports individual freedom for the UK, but do the people?

I've written before about City AM, a free newspaper that is avowedly pro-capitalist. It has a circulation of over 100,000 in London, and is distributed across metropolitan London every morning (although to be honest just because I've always lived somewhere where it is distributed doesn't mean it is everywhere!).

Its editor Alistair Heath is a bright young finance and business journalist who shows he thinks well outside that world in his regular pithy commentary about public affairs, politics and economics.  He has successfully managed to become a regular commentator on BBC and Sky TV news programmes, and on a range of radio stations, so his influence is growing.  A breath of fresh air when the UK political discourse is dominated by so many arguing about what government should do, rather than whether government should do anything at all.

His latest editorial demonstrates he isn't just a man for the economy, but a man for freedom.  He writes:

LIBERTY. Freedom. When did you last hear these two words in the UK political debate? Well, I certainly can’t remember. Our country is dominated by busybodies and collectivists who believe that they and the state have the right and duty to tell us all what to do, to spend our money for us and to control what we can eat, drink, trade or say. It’s all gone too far. Individual freedom and its twin sister personal responsibility are the cornerstones of successful Western, liberal capitalist societies; yet these are being relentlessly undermined. Ultimately, there is no difference between economic and social freedoms. Attacking one endangers the other.

So this is my plea: let’s put the emphasis back on the individual. Let’s stop trying to ban everything. Let’s stop describing a tax cut as a “cost” to the government or – even worse – as morally identical to public spending. Let’s stop assuming adults should no longer have the right to eat fast food, or smoke, or drink, or paint their walls bright green, or build a conservatory in their back garden, or whatever it is they wish to do with their own bodies and with their own private property. Let’s once again speak up for the rights of consenting adults to choose how to live their own lives, even if we disapprove. Let’s allow people to hold, discuss or display their beliefs freely, especially if we disagree. 

I could easily just copy the whole lot, but it is worth a read in its own right.  Why should it come to this?

The examples of government seeking to boss people around and demonstrate the attitude of "we know best" towards citizens have continued to grow under the Conservative/Liberal Democrat government.  Despite early claims of a "bonfire of regulation" touted by the Liberal Democrats, it is clear that any pretensions towards individual freedom from that party have gone up in the smoke of pragmatism.  Politicians so easily outwitted by Oxbridge educated bureaucrats find it difficult to fight on principle, and as Conservatives who have had at best a checkered history of defending individual freedom, especially since David Cameron started the "transformation" of the party into an bullwark of environmentalism and activism, treat freedom as something you declare when the other lot are in power. 

Examples in recent months of clampdowns on freedom include:

- Proposals for new powers to require all telecommunications companies and internet service providers to retain records and  make them freely available to the security services of all phone calls, all emails and all internet website visits for all users for the past year.  The Deputy Prime Minister, Liberal Democrat Nick Clegg glibly reassures people that it doesn't include the contents of such communications, but the government will be able to access, as of right, records of everyone you every called, emailed and indeed everything you looked up online.  Of course you are meant to trust the Police, security agencies and indeed the whole apparatus of government not to abuse this to snoop on people's private affairs, inquire why people might search all sorts of words or visit certain websites.

- Proposals to force property owners to install energy efficiency measures if they build an extension or replace their boilers.

- A new law to prohibit the sale of tobacco in anything other than plain packs or to display tobacco in shops.  Already health authoritarians are demanding alcohol and fatty foods be treated the same way, or that there be a new fat, sugar and salt tax on"unhealthy food".

- Grasping measures to claim more tax from the wealthy by capping tax allowances for charitable donations, capping income tax free allowances for pensioners, imposing extortionate taxes on the sale of homes worth more than £2 million.

- Prosecutions for men who have made offensive and racist comments on twitter about footballers.

- Proposals for the state to recruit (as private contractors) tens of thousands of nannies to provide parenting support for those on low incomes.

- Fiddling with the planning laws which do little to change the need for the consent of ones neighbours, council and various interest groups to make changes to your own property that don't infringe upon the property of others.

The antipathy of politicians towards freedom does reflect a disturbing streak among some in the UK.  It was most visible when comedian Alan Davies said it was wrong for Liverpool Football Club to boycott playing on the anniversary of the Hillsborough disaster because similar events don't provoke similar abandonment of activity.  In response he received death threats and what would have been called (had it raised his race, gender or sexuality) hate speech.  People so angry they would threaten to kill a man because he expressed a different opinion.  A cultural attitude of absolute intolerance of those who offend you.  This is the sort of attitude seen all too often in public places when drunken ferile (typically young) men or women "take people on" because they think someone said something or look at them the wrong way, or they were "disrespec'ed".  A sense that one's view of the world, even the way people react around you, is a right that you can defend with force.

What does this mean? It means that there is an underbelly of grotesque intolerance about other views, an intolerance rooted in the justified fights against the state backed racism, sexism, censorship, sectarianism and bigotry of the past, but which now embraces an attitude not only of what is called "political correctness" (which the left deny even exists), but of generalised intolerance about those who offend others.  Some Muslims demand it, Christians are rightfully demanding they be treated with the same kid gloves as Muslims are, now it's people from regions and even the smug Scottish First Minister, Nationalist Socialist Alex Salmond has said the Economist magazine will "rue the day" it made fun of Scotland with a cover page depicting an independent Scotland as Skintland.   This is the language of Islamists upset about Danish cartoons, now being assumed by a leading politician.  

Is it any wonder that people across the country think it is ok to get angry and threaten violence if someone offends or upsets them?  

Is it any wonder that politicians think it is ok to regulate, tax and control activities, language and monitor communications that is contrary to the goals they want to achieve?

Allister Heath's editorial is welcome.  It should be replicated in the Daily Telegraph, which once ran a campaign about individual liberty - when Labour was in power of course.  

Labour presided over a 13 year period of ever encroaching state control and new laws, the Conservatives have shown they have been dazzled by bureaucratic promises that everything will be "ok" and threats that without new powers, people might die.  After all, every extension of the Police state would, of course, reduce crime (and who can argue against that?).  The Liberal Democrats meanwhile are no longer liberal in any sense of the word, and just a different sectarian part of the socialist brand unaffiliated with the unions.

It is time for Britons who do believe in freedom to stand up, to say no and to demand the end to the ever increasing calls to regulate, tax and monitor people's lives for their own good.  You wouldn't expect bureaucrats and politicians to tell you what to eat, what to wear, what to watch, what to say, where to go and who to associate with normally.  Yet that is exactly what they all do, to a certain extent, right now.

Politicians in the UK respond to one overwhelming trend - public opinion.  Only when the people who demand freedom shout loudest and demand to be part of the political discourse, will that opinion move and the erosion of freedom be stopped because voters don't want any more of it.

In the UK,  the Adam Smith Institute, the Taxpayers' Alliance, the Libertarian Alliance and the Institute of Economic Affairs are all at the forefront of taking on the statists.  It is time that more stood up for simple right to live one's own life as you see fit, as long as you do not interfere with the right of others do the same.

100 years ago today - a disaster in the making

Today millions of people will be commemorating an event that happened on 15 April 1912.  It wasn't uncommon in itself, having similarities to occasions that happened before and since, but over many decades it passed into legend.  Movies, books and songs have been written about it, and more than a few people have made it an obsession and a fascination.

The people who were injured and killed as a result of the chain of catastrophic errors that followed are themselves largely forgotten, except by the remaining relatives and friends of those who were lost. 

However, the hype that surrounds the event today is ridiculous.  It isn't something to be commemorated, for it has caused millions to be wrapped up in a romanticised version of events, that underplays (and even glorifies) the horrors that can't be denied.  Although it has sustained the careers of thousands feeding the industries surrounding it all, is it right that this be such a focus for so many?  

I was tempted to go to the place which is the epicentre of the commemoration of the event this year, because I know it would not be repeated on the same scale given it was a centenary, but decided not to feed this monstrous caricature of reality.

No it's not the 5th largest peacetime shipping disaster, more an event that spawned a man whose decisions killed millions and enslave millions today.  

A dictator was born.

The star in the sky commemorates the event for these folk