Portugal Reduced to Junk

The economic crisis is far from over and I guess most of us haven’t a clue what it is about.  Moody has just slashed Portugal’s credit rating to junk.  Greece is screwed, Ireland screwed and Spain and Italy look very vulnerable.  Germany is riding high, doing export-led manufacturing (which is where Britain should be an is not) – and this is partly due to the low Euro – something of a German currency manipulation.

Economics is at its best when you can be safely ignorant of it – and nearly everyone is ignorant of economics.  The standard now on undergraduate courses is that of a little knowledge being dangerous.

What people need to understand now is that freedom is at stake.  Money is no longer linked, other than negatively, with genuine effort.  Productivity has been rising sharply since WW2, but over the last 30 years wages have been falling.  You need to earn 20% more in the UK this year to maintain last year’s position and inflation is stocked up to rampage soon.  This situation is much worse if you are poor to average.  No political party is responsible for this – politics in this sense hardly matter, though public sector cuts are not the answer.

We have been borrowing to maintain ‘GDP increases’ (this applies to China too, where 12 ghost cities remain with no one in them and massive local government borrowing is being written-off).  This borrowing is odd because we could have prevented private borrowing through higher wages linked to productivity, and governments are using our ‘money’ (futures almost) to prop up idiot and greedy banks.  Essentially, like likes of Fred Goodwin have had it off with our ‘money’ and Lord knows what else.

The nightmare story lurking beneath any notions we are encouraged to have about profligate Greeks, Portuguese and so on, is that ‘our banks’ are the real culprits having made reckless loans and had it away on their toes with bonuses and so on.  I have little doubt this is true on the figures.

The real question is why ‘you’ don’t know.  I’m no ‘commie’ and always detested the Soviet Paradise.  What I’ve seen is the collapse of what was worth believing in – reasonable freedom gained by work reasonably easy to get and reasonably paid in reasonably dignified conditions.  This is almost swept away now.  The classic example may well be Gadget and his claims that to tell the truth would mean he would have no mortgage-paying abilities.  This jobsworthness is now writ large almost as our organisations.  With the ‘Zil Chill’ factor this was the hallmark of the Soviet Block.

The ‘world’s debt’ has not been spent on anything we have as public capital.  You’ll find none of this in Portugal or Greece or Italy or Ireland – it’s gone on speculative gambling and a pernicious form or organised crime.

The plan is to re-adjust money through inflation (you’ll be noticing the price of your food and energy) – quantitative easing and other jargon – but also to buy up public assets to rent them back to us.  This is incredibly similar to Hitler’s plan – Nazi Germany’s expansion was all done on credit they could not repay other than through war-looting.  So who is going to be the target of looting now?  The USA is in Germany’s old position, brimming with debt and military.

We need a new politics to stop what’s coming and there is no sign of any.

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White-collar Crime

Statistical reasoning is part and parcel of my daily routine.  Most people don’t get close to capability in this area and my own abilities soon pale when I meet the mathematical experts in this field.  I’m talking science here, not the much governments and performance management departments churn out.

Bwanking (there is acceptable banking) is an area that makes use of highly complex mathematical scheming, broadly to lie about real positions.  Police statistics and a wad of others from government and local government are also used to lie.  In science, the method is used to explain and manipulate complex interactions and to a fair degree we know we are still dealing with approximation.

We have an obvious problem in social statistics in that the ‘end-user’ is Jane Muggins and she is likely not to be functionally literate and numerate enough to spot flim-flam.  In science, we often start positing stuff like ‘dark energy’ only to find that the equations we are using also work well if we put in numbers from other assumptions such as ‘time slowing down’.  This doesn’t stop engineering being better than not doing it.  Generally, ‘realism keeps us honest’ – though these days scientific realism realises it is structured.

Economics and particularly ‘bwanking and accountwing’ can delay ‘realism’ until its ‘scientists’ have had it away on their toes with our cash and got this invested in the property under our feet; indeed literally taking the ground away from under our feet.  I’ll give one disgusting example (though these are as common as the stories Ambush Predator reveals on our ‘evil poor’ and buffoon laws).  Prestigious US university alumni funds are involved, through a British hedge-fund, in deals as revolting as the Scottish Enclosures, in taking African soil away from its tenant farmers.  One cannot even give money to world wild life funds without risking something like this.

I would just ask you to think about what’s on offer in Dispatches, Panorama and other bits of investigative journalism.  This is not proof and you have tor remember that most people don’t even get this far.

The most forceful contemporary statement of [the instrumental argument fort democracy} is provided by Amartya Sen, who argues, for example, that “no substantial famine has ever occurred in any independent country with a democratic form of government and a relatively free press” (Sen 1999, 152). The basis of this argument is that politicians in a multiparty democracy with free elections and a free press have incentives to respond to the expressions of needs of the poor [Sen, A., 1999, Development as Freedom, New York: Knopf.]  What one has to add is that the famines and deaths continue outside the democracies and that the first democracy (Athens) practiced genocide to ensure its own grain supplies and boost its own treasury (found empty despite ‘statistics’).

In the same way that we might posit ‘dark energy’ or ‘time slowing down’, I would like to see far deeper questioning of our economic system through a range of possibilities.

The first of these is to consider ‘economics’ not as a scientific subject, but as cover for white collar crime.  One can also do this in specific areas such as ‘police statistics’ and those on local government performance and supposed financial performance.  I don’t see this as essentially about numbers, but will give a few as a guide.

Fred Goodwin took more than £30 million (pay, bonus, shares and pension) from RBS in seeing it from a bank lending on the basis of its deposits to utter disaster.  One can only estimate and can only estimate the bank’s losses at, say, £28 billion.  The jobs of maybe a million people may also have been lost because of the ‘necessary’ bail out – the equivalent, perhaps, of the turfing-out of tenant farmers in Africa via greedy funds wanting the mineral rights.

We often hear that bwankers such as this are essential to our economic well-being. Questions arise as to whether Fred was ever worth a bean and whether selection for such roles is remotely correct.  My own view for a long time has been we are ‘choosing’ psychopaths as our management class. Many others in RBS took fortunes from building its collapse.  RBS is only one example in many.

We should be able to command a simple explanation of what has and continues to go on. Generally, finding that an elite group has made loads of money through claiming massive profits only for us to find the cupboard not only bare but full of liabilities, we suspect theft and organised criminality.

Our laws in intent include recklessness.

What ‘ecwonomics and accountwing’ have been providing is a system of denial of responsibility when things go wrong and justification of an enormous cut of the cake on the basis of ‘special skills’ that  are unlikely to exist.  The metaphor is that of betting on all the horses in every race – a surefire way of handing over your money to the bookmakers – but being able to continually defer the losses and live off the winnings.  The key is not to be betting with your own money, unless you can choose to pull out your bets when you are winning.  I will always win money off you on the toss of a coin if I can always double my stake and you can’t leave.  Bookies and casinos don’t allow this.

Imagine what short shrift you would get if you had engaged in such activities with the contents of your firm’s safe,lost the lot and claimed you never intended to defraud anyone, but were really trying to make everyone money using a fool-proof system.  ‘And throw away the key’ seems likely.

How could you advance a defence of no criminality because you believed in the system?  Remember Horace Bachelor?  He sold a worthless pools perm and made money because there were bound to be winners.  He just let a lot of people gamble and took a percentage from the winners.  Simples!  Lots of other people just lost their money.

If we can pin £30 million on Freddy Boy, how much can we pin on the whole process of speculation?  I believe we can build the spreadsheet of this, showing how much is involved and who the winners and losers are.  I believe this would demonstrate a scam very similar to Horace Bachelor writ large.

What we need is a massive social change that we organise.  We are in the hands of organised crime and rigged markets.  This is affecting food, gas and housing prices as surely as the Russian Mafia thug ensuring that traders don’t drop their prices in real markets to protect their margins.  It isn’t capitalism, it’s crime.  They are using our money as surely as if they’ve taken the notes from our mattresses.  It’s all real theft, based on lying about the future and taking money now.  We live in fear of what will happen when the protection racket is broken.

Just when were any of Freddy’s drawings from his business really justified?  The cumulative debt dwarfs anything of the supposed profits.If we add up what’s been taken in inflated salaries, bonuses and options and think what might have been had this been invested in public services  – why don’t we know, why is there no public accounting on the opportunity costs?  The answer is that they want to hide the crime from us.  We’ve been had.