When Will The Lying – From Police Statistics to the Economy Stop?

Plato wrote seven books on the training of people supposed to look after society – his Guardians.  I gave up after The Republik – you can get this free on line.  My rating of even this famous tome is dross – somewhere below a Zimbabwean high interest bond.  Students never came into my business maths modules to learn the maths and understand the limited application of such.  They were instrumental, after a piece of paper that would help them get a job.  They restricted their in class learning to being able to do the sums set in tests, not unlike the cops and others in ‘diversity training’ and other hapless nonsense learn ‘correct speak’.

Police statistics across the developed world show a consistent drop in crime.  Cops know there is really an increase in crime.  I’ve heard many comment that the burglars become ‘borrowers from  shops’, that there is a massive increase in fraud, the war on drugs is lost and so on.  What makes sense of the repeated claims that crime is dropping is a proper understanding of “performance management” – and ultimately the old Soviet style of performance management has taken over our societies.  Can you really say the word “targets” these days without wanting to spit?

Not long ago we were being told a new knowledge society was being formed – the left denounced this decades ago as a “risk society” and critique of mainstream neo-liberal, neo-classical and neo-con (there is no alternative) buffoonery stretches back more than a century.  Critique largely comes from people on sinecures of one form or another and largely fails to engage the population at large.

Pretty much any complex formal reasoning is beyond most of our population.  Universal education has largely failed in this respect.  I know plenty of people who can spot that police statistics lie and that bankers lie about their systems and the personal brilliance and risk taking through which they merit vast bonuses.  It is also easy to dismiss cops struggling in the day-to-day lunacy of the Swamp, Reservation and Everglades who believe ACPO are pathetic, careerist pen-pushers (think NHS, Care, Banks too).  This is “envy” or the attitude of malcontents.  The Catch 22 is that to avoid being envious or malcontent one must produce soundly argued critique and any such critique is broadly wasted because the population won’t be able to understand it.  Hence ‘dictatorships of the proletariat’ and other unimpressive top-down solutions that first require proles run towards bullets.

Most banks across the world have undergone ‘stress tests’ since the crash.  Banks in Cyprus passed theirs 18 months back and are now clearly worth as many multiples of a bag of rocking horse droppings needed to produce a big, fat, zero.  The UK and USA are very similar on the debt front on household, corporate and government debt per capita.  The UK has vastly higher financial sector debt.  I have seen no public exhibition on whether this financial sector debt is a good or bad thing, or even whose money is involved or at risk.  I can say, on the other debt, that a 30% wealth tax would put the UK and USA to rights  (i.e bring household, corporate and government debt to the supposedly optimal 180% of GDP).  When polices statistics get in the news it’s very rare for the material to be treated as performance management and the figures are taken at face value.

We are now 5 years post-Lehman and every six months or so the books get cooked again in front of us.  A magician tells us everything is hunky-dory and we get on with waiting for the next bail out – and now post-Cyprus for bail-ins that will take our savings accounts.  Across other performance managed tedium we wait for the next Hillsborough, next Baby P, next Nico Bento, next lousy hospital, next miserable treatment of the disabled and old – and so on.

The simple answer is that our “professionals” are lying to us as surely as any Soviet apparatchik (there the apparatchiks have become the entrepreneurchiks).  What we have lost, if we ever had it, is accounting based on reality.  A question I want an answer to is what would really happen if we collapsed the financial sector entirely, replacing it with small, local banks doing real investment and utility work.  Would we starve, not be able to have homes, medical care and things we really need?  This is a basic question about our security and one would think politicians and media-types would want us to know.

I regard many organisations as much worse than the police – social work, lawyering, accountants, banksters, politicians and my own academy.  The idea of a more “professional” police fore fills me with dread.  Our local bobby and CPSO are fine – the problems are in management and we should be looking at much less of this, not paying it more through professionalisation.

The bankers’ (and I think bankster now the better term) role in our society is not explained so we can understand what they do, and much the same can be said of our managers and politicians across our society.  They all seem to need vast amounts of produced wealth (sort of money) to do these jobs not explained to us.  There were claims not long ago that the financial sector might be producing as much as 40% of our GDP – but now it seems the accounting of this is in multiples of the bag of rocking horse droppings standardised in Value at Risk.  They can make up their accounts and do so based on various fantasies.

We need some good management – but I suspect we can’t get any until the lying stops.  In the police example we keep hearing the same performance management figures and such matters (if we look) as vast increases in the recidivist criminal population that suggest an opposite of any decrease in crime.  Our prisons are full, yet huge numbers of new arrivals already have a dozen community punishments.  Politicians may ponse on about human rights, but keep quiet about the UK (and US) as a very poor place to get legal help and access to justice in the developed world.

I take the guess that financial services are almost entirely criminal and no use to anyone decent (we only need utility banking and would be better off with general rather than ‘personal’ pension plans – to cut fees that destroy much of the investment – and banks that could invest in facilities we need and not chase “international rates of return”).  No one is explaining to us how our contributions to bail outs is supposed to work and why the vastly competent super heroes of finance can’t use their own kryptonite.

We know damned well what would happen if we abolished the police force and I doubt even criminals would vote for that (the rest of us would kill them).  Abolishing ACPO is another matter, as collapsing financial services to utility status would be.  Getting on with management reform after collapsing the lies might even give us more cops and allow guaranteed employment (I’d invest in cattle prod futures on account of our more recalcitrant welfare spongers – including banksters newly separated from their ill-gotten gains).

UK Financial Sector Debt and Assets May Be A Good Thing

National Statistics (ONS) say our external liabilities were £6.7 trillion in Q2 – 461% of our annualized GDP.  The UK is presented in a number of horror headlines as ‘the world’s biggest debtor.  Given most of us see debt as owing someone else and as a bad thing, all the financial services debt tends to be seen as a very bad thing.  This neglects that there are two columns to consider – debt and assets.  UK overseas assets are also big. They‘re £6.4 trillion. So our net overseas liabilities are just £309.4bn, 21.2% of annualized GDP. This itself largely a reflection of the fact that we’ve been running  small current account deficits for ever and a day.
Our huge gross assets and liabilities, to a large extent, reflect the UK’s position as a financial centre and much of the debt-asset combination is actually held by foreign banks operating in the UK.

If a UK bank  swaps a loan with a French one, UK assets and liabilities vis-à-vis France both rise by the same amount. The UK does more of this sort of thing than other countries, so our overseas assets and liabilities are disproportionately big relative to other countries.  We may have some severe problems if we’ve been doing dodgy swaps with Greeks, but if due diligence has been observed this won’t be the case.

In Q2 we actually had a small surplus (£3.4bn) on net investment income, as our assets yielded more than our liabilities.  This excludes capital gains or losses, but is what you’d expect from prudent investment.  After all, a business borrows money and incurs debt in order to make a profit – the idea is to make profit faster than you spend on costs.

Our big overseas assets and liabilities are just what we need if we haven’t just been buying pigs in pokes.  As sterling falls it’s a good idea to have foreign assets, though I guess our foreign currency assets are largely matched by foreign currency borrowing.

There are many questions on whether our financial wizards are keeping honest books and any of the assets are worth more than a ton of Max Keiser‘s goat poo, but in principle this aspect of UK debt does not turn us into the world’s largest debtor and could actually be healthy unless the assets it bought turn out to be high yield, delta-hedged Greek honesty bonds or securitisation of sub-prime mortgages in Gary Indiana. The question is whether the money was borrowed and pissed up the wall (in bankster bonuses), or used to buy investments that will pay an income or appreciate.  You’d think some overpaid BBC BimboJourno would be able to tell us.

The UK has been buying a lot of US paper of late (along with the other major international debtor Japan).  It may be that all this debt is part of a giant Ponzi scheme and that all will go tits up if some parties stop doing the trades (China and Russia are pulling the plug on US paper).  I can’t tell and the standard analysis, still absent from BBC Bimbo levels of reporting, is as above.  Nothing to worry about if the money has been used to buy real stuff or in honest trades.  After all, if you owe a few million, invested in houses and the rents pay the mortgages and give you a net income, life is sweet.  If you pissed it away on tonsil lubricant down the local or bet on a donkey in The Derby, it ain’t.  The latter would be the case if this UK financial sector overseas debt is floating on Greek credit derivative swaps.  Some hedge fund may well be betting this is the case.  If banks weren’t allowed so much secrecy I could tell you.  If I was a BBC journalist, I’d be making enquiries – but then who’d want to be that git Robert Peston?  I’d place a bet on him being next in line for Royal toadying.  Given our useless media, we’ll have to wait for the umpteenth Greek bailout to fail to know just what UK and foreign banks here have been buying.  I already have a bet on that failure!

In the meantime, we need to remember that debt is an investment and working out what to invest in instead of the doomed austerity project.  Crap like Facebook and business models based on advertising revenue won’t do and nor will financial services that need bubbles and asset inflation.  I’d go for an investment in our young and unemployed people giving them all three years international service administered by our universities and hopefully partnered across the EU and USA.  I’d put this on a war footing without a war.  And I’d make the rich pay by investing in the project.  The real problem with debt is we’ve been investing in the wrong things.  Money shouldn’t be allowed to make money and income should either be earned through work or invested in developing people rather than riches for a few.  Debt should be a matter of honour and gratitude for that investment, not debt peonage to the rich.  And what would be better than the entrepreneurial, creative private sector doing this public good instead of flooding us with plastic crap from China and horning in on those parts of the public sector already run better by the State?

Who Owns Debt?

Most people don’t do ‘economics’ – but actually quite a lot do end up running a budget of some kind – household, departmental and so on.  Of course,we can’t print money to make up for our blunders without the long arm of the law venturing near our shoulders.

The question my partner asks when I go off on one when media coverage sticks in my craw is ‘who owns the debt’?  This is a very Nietzsche-like question, as in the end debt has to be enforceable, and this makes it a police matter, much as one hopes that we don’t have police doing evictions.  The same principles that apply at Dale Farm apply in respect of debt.  If people won’t pay up the final resort is ‘sending the boys round’.

We have never managed to get rid of loan sharks (look at all the ads now for ‘payday loans’ and see if you can spot the interest rate at 2000% plus in the small print).  Their connections with banks are close.  All kinds of “specialists” are players in dodgy debt, including government debt, your debt and pretty much anything that can turn a profit faster than day-to-day business.  At the bottom of it all you will find such in-consequence as the suicide fashion that has killed a quarter of a million Indian farmers in very recent years.  Were they sold suicide insurance as I’ve seen included in Japanese loans?

We may like to think we have rid ourselves of the miserable exploitations found in ‘wog countries’  (what else are they in the mind of those who don’t care about these deaths?) – but they have reached Iceland, and even here credit card and other unsecured lending is being pursued by securitisation against property.

The truth on who owns debt is simple.  It’s owned by whoever can send the police round or the army in.  Britain’s government debt is 35% foreign owned – does this mean the Raving Loonies (who had a policy of selling Britain to the Arabs and giving us equal portions of the cash) got in when we weren’t looking?

We aren’t in the suicide misery of rural India yet.  But have a think about the cost of a reasonable time at university working only vacations is about £50K and in the 5 years of extra study you have lost maybe another £80K – £130K is about a mortgage.  You start paying back on £21K – which would get you a mortgage of about £60K.  We are thus loading many of our kids not only with serious debt by a bigger opportunity cost – and both are bigger than a sensible 30 year mortgage that would not buy a house anywhere in the country.  This system is as broken as the grim Indian farming debt system.

 

 

 

Is this coming for us?

This is coming to our streets.  I hate the idea.  We may as well have a one-party state.  I know former students with no job who have more debt than my mortgage thanks to useless degrees and a non-existent job market.  I’m moving into apprentice assessment so I can look at myself in the mirror.  I don’t mean the video as anti-cop.  Until we can vote law, what can they do?  The same cops who will be doing this are the ones between us and the looters.