Quote of the day:On Miliband's speech

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John Rentoul in the Independent with the cruelest summation of Ed Miliband's address to the Labour Conference:

...I thought it was lamentable, weak, clichéd, embarrassing, uninspiring, stylistically inept, vacuous, unambitious, grandiose, cringeworthy, patronising, foolish, an unappetising blend of impossiblism and incrementalism, and a complete and final disaster for the Labour Party.

Ouch!

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On the stupidity of socialism...and price fixing

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I gather Ed Miliband wishes to fix energy prices "while the oligopoly is sort out" or some such. And reintroduce socialism. Here's why this is stupid:

Flights out of Venezuela to anywhere are 100% sold out, months in advance. Yet many planes are flying half-empty. Why? The official exchange rate is 6.3 bolivars per dollar but the black market rate is more like 42 bolivars to the dollar. Few people are allowed to convert bolivars to dollars at the official rate but there is an exception for people with a valid airline ticket. As a result people with an airline ticket can convert bolivars to dollars at the official rate and then sell the dollars at the much higher black market rate.

Socialism was stupid when the Russians did it. Stupid when the Cubans did it. Stupid when Labour tried in in the 1970s. Oh, and always corrupt - the elite do fine (look at that Venezuelan story - the latest from the country where toilet paper is impounded, its production nationalised because the boss can't wipe his arse). It's the poor that suffer - they get the queues, the black outs, the rationing.

That is socialism. It is evil. And stupid.

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Competition in banking? Now that's a radical idea...

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In that irritating way of today’s politics, the newspapers are report on a speech that Ed Miliband will make tomorrow. And Ed nearly gets it right for once:

The Labour leader will call for the big five banks - Barclays, HBOS, HSBC, Lloyds TSB and RBS/NatWest - to become seven, with privately-run "challenger banks" to buy up to 1,000 existing branches. It is hoped that this will increase competition and choice for consumers as well as reduce bank charges.

I say ‘nearly’ because firstly banking isn’t driven by branches any more. For sure I have a ‘branch sort code’ but that’s pretty virtual these days and it’s a fair while since I actually visited that branch. And the future of banking lies in this virtual world not in grandly portico’ed high street branches.

Secondly, I should get to choose where I bank – if Ed’s banking reforms force me to change because they’ve forced my bank to sell its Bradford branch to a newly formed “challenger” bank, I shall be just a tad annoyed.

The problem with banking is that we have made it more and more difficult to operate as a retail bank let alone start up a new one. It didn’t use to be that way – governments passed laws that made it so:

As a result of these legislative changes, provincial limited-liability joint-stock companies started picking off private banks. After lengthy negotiations, three of the largest Quaker-run banking firms--Barclays (which had become Barclays, Tritton, Ransom, Bouverie & Company after a merger in 1888), Jonathan Backhouse & Company, and Gurneys, Birkbeck, Barclay & Buxton, along with 17 smaller Quaker-run banks, agreed to merge and form a bank large enough to resist takeover attempts. Barclays took its modern form in 1896 when the 20 private banks merged to form Barclay and Company, Ltd., a joint-stock association with deposits totalling an impressive £26 million. This marked the beginning of Barclays' tradition of service to farmers and fishermen.

And we have – for all sorts of reasons, good and bad – continued to pass laws regulating the activities of banks that acted to make it harder to start up a new bank. That made banks a special case in capitalism – because market entry was so hard, because banks could offer free banking to retail depositors, because banks had what we believed to be an essential partnership with government – for all these reasons banks had no good reason to focus on being the service businesses that they were once (and that their advertising still claims them to be).

While the big banks were careful cautious and focused on the day-to-day job of lending, holding deposits and such, this lack of competition didn’t really matter much. The public got truly awful service – banks elevated saying ‘no’ to a semi-religious status – but the banks weren’t threatening the foundation of the economy.

But then someone discovered the money tree and introduced bankers and governments to its wonders. By the wonders of this thing, banks and governments – in cahoots – could shower the economy with billions in “investment” while providing a bottomless purse of welfare, care and bacon paving. The essential partnership between banks and government was forged anew – in exchange for bankers making untold billions, politicians could bribe the voters with grand projects and freebies. The politicians would keep interest rates down (abetted as we now know by the bankers) allowing asset values to sour giving the illusion of great wealth and on the back of this higher taxes would allow for higher borrowing – more profit for the banks, more votes for the politicians.

We need more competition in the pretty straightforward job of taking my money, keeping it safe, paying it people I want it paying to and providing (at a charge) loans should I need them. It’s not a complicated business, there’s no reason why it can only be done by massive multi-national corporations. Yet that is the case.

If Ed Miliband had proposed such a real change – opening up banking licensing to the general market and allowing us to make choices about where we keep our money – that would have been interesting. Instead we get proposals to “break up” the banks and give us a choice of seven where there are now five. I guess that will suit the banks. And government still has that essential partnership with those banks. That hasn’t changed!

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So does Ed Miliband really like morris dancing?

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Today Ed Miliband, for reasons known only to those who advise him, has come over all English:

We in the Labour Party have been too reluctant to talk about England in recent years. We’ve concentrated on shaping a new politics for Scotland, Wales, and Northern Ireland. But some people in England felt Labour’s attention had turned away.

That something was holding us back from celebrating England too. That we were too nervous to talk of English pride and English character. Connecting it to the kind of nationalism that left us ill at ease.

I am pleased for Mr Miliband. Outside the Labour Party people have never stopped talking about England, have never been "too nervous" to talk of English pride and English character. We smile - with an element of rueful nostalgia - at the old Cecil Rhodes quote:

Remember that you are an Englishman, and have consequently won first prize in the lottery of life.

It's true, of course, but no longer in the manner that Rhodes meant it. After all, England is unsurpassingly gorgeous in both its scenery, its heritage and, on a good day, its people.  To live here is a prize worth grasping and to protect the idea of Englishness is a fight worth fighting.

I fear that Ed Miliband's Englishness is somewhat wafer thin but hope it isn't. I wonder whether we're seeing a theme - first raised in Ed's slightly worrying and protectionist, 'Blue Labour' period - of invoking nationalist sentiments, of seeking to capture the idea of English nationhood without changing the substance of English grievance.

No doubt this Englishness won't run to liking morris dancing, folk music or free speech. It will be a card played once or twice - ahead of a major football tournament in which England are competing, for example - to snaffle a little of that working class nationalism that, in truth, Ed Miliband and all around him despise.

So no Ed Miliband doesn't really like morris dancing. His Englishness is worn too lightly for that.

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Ed Miliband, flat-earther

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I try hard to find some semblance of consistency, of common-sense within what passes for policy for the Labour Party but as ever it is notable by its absence. Take growth - here's Ed Miliband:

Growth, he said, was the current "missing ingredient"

Let's grant him that observation. But what part of an effective growth strategy involves tax rises? How can you believe that - when the problem is that people have too little to spend and that there's too little business investment - the right approach is to take more money off people?

If the problem isn't the need for "austerity" but the need for "growth" the solution isn't - and will never be - to make sure that people have less money. Yet this is exactly and precisely what the Labour Party - not to mention assorted socialists across Europe - are proposing.

A brave left-wing leader would reject the "government can fix it" solution and argue for something different - perhaps a return to mutualism and co-operation, maybe flexible employment laws and a Swedish or German approach to minimum wages or even (inspired by a re-reading of Thomas Paine) the embracing of free trade in finance and food.

But instead Ed Miliband joins the flat-earthers - visiting a dreadful deception on people by claiming that, contrary to truth, there is no need for austerity, that there is no recession and that we can carry on blithely spending other people's (and our grandchildrens') money on grand schemes, central planning and on the sustaining of a vast bureaucracy.

No government - right, left, centre, socialist, liberal, rainbow coalition - ever created growth. All government does is spend money - consume. People on the left rant and rave about out "consumerist" society but never recognise that the biggest and most indulgent consumer - the monster devouring ever more scarce resource - is not the rich banker or the flashy football star but their beloved state.

Once - as is now the case right across Europe - the state sucks up more than half what other people earn, the dire, inevitable end is in sight. Half of the state's spending is "nice to have" rather than essential to the nation's smooth operation. Yet people like Miliband persist with this bizarre belief that it will be OK is we just take even more away from those who earn it and give it to those who don't.

There is a problem and it is a problem of regulation, of the establishment, of selfishness.

The selfishness of a bloated state.

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Sorry Ed but you didn't meet the "voters of Bradford West"...

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It was a carefully selected audience designed by Labour Party hacks to give you a platform:

Mr Miliband told the invited audience of 80 Bradford West residents, students, business people and community leaders that he would “personally guarantee” that Labour would take their concerns seriously. 

The problem for Ed Miliband is that, despite this careful selection he still didn't have an easy time - watch the video (and most of that audience were known Labour activists some of them not even residents on Bradford West).

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"...pretty heroic"

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According to Ed Miliband the marchers (you know the folk who trashed Fortmun & Mason, terrified shoppers on Oxford Street and smashed random windows across London) were:

“pretty heroic, actually”

I'm sorry Ed that isn't heroism - this is heroism:

A soldier who saved 30 members of his unit in Iraq has been awarded the first Victoria Cross for more than 20 years. Private Johnson Beharry, 25, from London, twice saved the lives of colleagues while under enemy fire, but insisted he was just "doing his job". He is still recovering from head injuries caused in one attack by a rocket-propelled grenade round.

You can read the full VC citation here.

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Yes Ed, inflation is a problem but one of your making and to which you offer no solution

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The Labour Party, in the form on the Two Red Eds that lead it, has discovered inflation:

Labour leader Ed Miliband has warned of an impending "crisis" as the cost of living outstrips wage rises for people on low and middle incomes.

In a speech he said people were working "harder for less" because of long-term changes to the British economy.

And Ed Balls:

In an interview with the Sunday Times, the shadow chancellor warns of Britain's "cost of living crisis," and demands that George Osborne reverse the VAT increase. Much of his pleading is made on behalf ofof days ago – face punishment at the petrol pumps. motorists, who – as I pointed out a couple

Doubtless we shall see dozens of similar comments from Labour politicians and their friends none of them speaking to the central issue in this debate – the real worldwide increase in costs. And we can point to two factors driving this inflation. The first one is over in China:

"It is becoming impossible to find people to work," said Han Zhongliang, a 46-year-old factory boss from Hubei. "I have been here ten years and I used to have 30 to 40 employees. But this year I will be lucky to find 20 who can do the job are willing to work for the wage we offer: 5,000 yuan (£490) a month. If things keep on like this, there won't be any labour at all in South China in five years time. Since the Olympics, it has just been worse and worse for our business."

The rapid growth in China is raising the cost of the biggest input – wages – and this is feeding through to our high street. Coupled with China’s own inflation issues (which their government has been slow to respond to as it prefers an exchange rate that promotes exports), this is the first factor driving our high inflation rate.

The second factor is closer to home:

The Treasury has approved the MPC to buy up to a total of 150B pound of bonds through the creation of central bank's money. This represents 10% of GDP, 7.5% of broad money supply (M4), 12.3% of M4 by households and non-financial corporate and around 3% of the total assets of UK banks. The Chancellor also requested that among the 150B pounds, 50B pounds of which should be used to purchase private sector assets.

In the coming 3 months, the BOE will deploy the initial 75B pound in medium- to long- term gilts (outstanding maturities of 5- 25 years). The purpose of such policy is to boost broad money supply and credit and thus raise 'the rate of growth in nominal spending to a level consistent with meeting the inflation target in the medium term'.

Note that last sentence – the treasury expected inflation to be above trend in the short-term. And of course these phrases, “short-term” and “medium-term”, are supremely flexible (and, of course, in the long-term we’re all dead). And it has, of course, come to pass:

The Bank of England claims to target (and hit) inflation two years hence. And as you can see, back at the start of 2009, the Bank of England's "central forecast" ...saw UK consumer price inflation slipping towards zero by the end of 2010...

Ah right, that didn’t happen – inflation stayed above 2% throughout 2010, we never had that deflation we were promised by all those economist bods. So is the bank about to raise interest rates – the main tool to control inflation?

Perhaps that's where the FT's economics editor got the idea that the Bank of England is about to raise rates. Because, if symmetrical targeting were really the aim, as stated, then an aggressive series of rate rises would surely be warranted by inflation running above the upper-tolerance of 3.0% for 13 months in a row.

Well either that or:

In its latest quarterly report published today, the Bank upped the probability of inflation overshooting its 2% target over the next three years.

While it reiterated its central forecast that inflation will fall back to 2% in two years' time..., the Bank bases this on 'market expectations of rate rises' - the implication of which is that rates will go up this spring, with May as the best bet.

So there you have it folks – currently the Bank of England, guardian of our monetary stability, is happy to collaborate in destabilising the currency in the interests of reducing the impact of debt. After all, every month of higher inflation – and its current double the target rate – reduces that debt burden a little more easing the government’s pain.

At the cost of our savings, of course!

It’s an easy target for The Red Eds to talk about the “cost of living” – and the government could do more by reducing fuel duty and cutting taxes – but much of the problem came from the policies that Mr Balls and Mr Miliband supported while they were cowering in Gordon Brown’s bunker. However, just as was the case with past Union-controlled Labour leadership, the Red Eds seem more concerned with the level of wages than with the price of goods or the rate of interest.

Mr Miliband said a single-earner couple on £44,000 a year with two children "sounds well off" but would be hard hit by the loss of their child benefit.

He said the rise in VAT combined with the scrapping of child benefit, cutting the childcare element of working tax credit and public service cuts would hit families with children: "Taken together I believe these changes will mean a cost-of-living crisis for ordinary families in Britain which will have a deep impact for years to come".

And he suggested companies could be rewarded with tax incentives to pay staff a "living wage" - higher than the minimum wage - and encouraging companies to invest in training their employees to help them get on.

So in The Red Eds’ world, the way to deal with “cost of living” pressures (aka inflation) is to raise the costs of employing people – either through higher taxes (on everything except petrol it seems) or higher wages. With imports more expensive due to the pound’s relative weakness and those imports further subject to upward price pressures from China’s growth, Middle East revolutions and the commodity price spike, making it even more expensive to run a business will only increase inflation!

Yet again we see the left drifting towards the policies that brought us wage and price controls, inflation rates in double figures and loud, beer-bellied union leaders dominating the political debate with loud demands for more.

In short, any strategy for tackling the squeeze on living standards has to see unions and collective bargaining as part of the solution. The right get this, but from a wholly different political perspective - witness the assault on unions and collective bargaining in Wisconsin, or the Economist’s recent call to arms against public sector unions.

Seems nothing changes!

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"I am a socialist..."

Yet again we’re discussing what on earth the term “socialist” means. And I guess if Ed Miliband wants to be prime minister we need to understand what exactly he means when he says – following an admission to being a socialist - that:

I’m not embarrassed about it. I’ll tell you why I’m not embarrassed about it. Am I a socialist? Look, my dad was a... he would have considered himself a socialist too, but he would have said we need to have public ownership of everything. I don’t... or many of the most important things of society. I don’t subscribe to that view. What I do say is that there are big unfairnesses in our society, and part of the job of government is to bring about social justice and to tackle those unfairnesses. And that’s why I’m a politician, that’s why I’m in politics.

Because quite frankly I haven’t the faintest inking of what on earth Ed Miliband is prattling on about. Indeed, there are times when the word ‘socialist’ is simply meant to suggest being ‘caring’, ‘having a conscience’ and, of course, not being an Evil Tory Bastard. I guess socialists are like this (courtesy of James Delingpole):

“…devil-may-care; good in bed; raffishly tousled; cool; sexy. They: sympathise with the underdog; hate injustice; respect the working classes and people of all races and creeds; regardless of looks, physical ability or gender; nurture the environment; have great taste in music; oppose violence; loathe inequality; and kind to children and to small furry animals with lovely bright eyes and floppy ears and expressions on their sweet pink little mouths you could almost mistake for a human smile.”

But somehow this remains deeply unsatisfying and takes us no closer to what exactly Ed Miliband is prattling on about. He says he doesn’t agree with his Dad – the refugee from totalitarian socialism who supported its imposition on the nation that saved him – so what does he agree with? What is this ‘socialism’ stuff he professes to?

Now there are some out there who really do believe in socialism – in the imposition of that totalitarian state Ed’s Dad wanted. A kind of Cuba with fish and chips. Or maybe an East Germany with irony? I don’t get the attraction of all this but at least these people – let’s call them socialists – have a vision of society. A nasty, unpleasant, dictating, controlling and authoritarian vision but nonetheless a vision.

Ed Miliband seems mostly to believe in a mushy, cuddly, ‘aren’t we nice’ kind of socialism. One that uses regulation rather than ownership. Controls, limits and guidance rather than outright bans. And a kind of passive-aggressive, ‘you’re not really welcome here entrepreneurs (unless of course you bung loads of money to the Party in which case will sort it for you)’ approach to the creativity of the private sector. Ed Miliband’s socialism is the selfish, ‘right-on’ of the wealthy left-wing elite – filled with sanctimony and fuelled by a long attachment to the teat of public funding. This is the socialism of Polly Toynbee, Michael Foot, assorted Benns and a host of wealthy, posh publicly-funded panjandrums within “The Arts” and media.

However, Ed Miliband may be different. He may actually believe that those “unfairnesses” can be addressed, that the lives of the poor, the sick and the unlucky can be made better through the choices that Government makes. In which case he’ll support:

1. An education system that gives a more equal chance to children of similar intelligence?
2. A welfare system that encourages and rewards work, discourages idleness and comforts misfortune?
3. Health care that is built around people’s needs, is flexible and treats us like humans rather than numbers
4. A tax system that doesn’t take money from the poor to give to the relatively well-off
5. A system of public finances that gives priority to the needs of all and the concerns of the poor, sick and unlucky rather than the pastimes of the well off
6. A housing system which doesn’t feature people on £50,000 plus living in subsidised housing while others sleep in boxes under bridges
7. Scrapping an international trading system where our goods are freely traded while poor countries goods are barred by tariffs and import controls
8. International relations founded on conversation rather than the aggressive, post-colonial exporting of “democracy” to places without any effective, functioning government of any sort

If this is what Ed Miliband wants – and therefore ‘socialism’ – then I’m a socialist. And funnily enough so is the current government because that list is a list of coalition aims. Some of the things our Government wants to achieve.

Sadly, I fear Ed Miliband just wants high taxes, more bureaucracy, more regulation, more control, more guidance and greater centralisation. If that’s socialism it’s what we don’t want since it means more poverty, more illness, fewer jobs and business and a dull, stagnant, uninspiring land.

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What's the point of lying Ed?

I am 100% sure that, had I been an MP in 2003, I would have voted in favour of British military action in Iraq – mostly because the Prime Minister lied through his teeth to persuade people like me of the case for war.

Now as it happened the new leader of the Labour Party was safely ensconced over at Harvard during this great debate. As far as we know, he made no public statement regarding the decision to invade Iraq. I am 100% certain that, had Ed Miliband been an MP back in 2003, he would have supported the line from Blair and Brown. His period in America seems to me as somewhat akin to an extended visit to the dentist!

Now, I’m prepared to say that I was wrong back in 2003 and now take the view that the invasion of Iraq was wrong (not illegal but definitely of no strategic significance to my country). What I find odd is that Ed Miliband – covered by the tiniest or tiny fig leaves – can’t say the same. Especially as he appears able to do so on the banks, the deficit, ID cards, incarceration without trial and public spending cuts.

But then Ed Miliband lives in a world where the truth is a man in rags staring in at the opulence of bullies and liars.

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Red Ed Arrives - more of the same then!

So Ed Moribund begins his campaign to be burgermeister:

Some are jumping up in the air--say "We're drowning in a torrent of blood!"
Others going down on their knees, seen a saviour coming out of the mud
Oh Mother! It's eating out my soul
Destroying law and order, I'm gonna lose control
What can I do to stop this plague, spread by sight alone
Just a glimpse and then a quiver, then they shiver to the bone
Ah, look at them go!

Labour have chosen a new leader after a process of such length and dullness that it brings to mind Paul Neil Milne Johnstone . Indeed there were moments when I feared that the body politic would revolt simply to see an end to the interminable boredom of this leadership campaign.

Now all the pundits are rolling out their assessment of Ed’s prospects – how the unions put him there and will demand a price, how the rejected Dave Moribund will become some kind of king over the water for Blairites and how there are little skips of joy and pleasure at ‘Red Ed’ getting the job at Conservative Central Office.

And Ed starts in the manner he’s conducted his campaign – with a wholly disingenuous victory speech and a cynical appeal to the electorate. All wrapped up in a wholly content-free presentation. I fear – and he has some competition – that Ed Moribund could become the most vacuous, dissembling political leader since Harold Wilson lied his way to the top.

So we have another elitist, self-serving, carpetbagger at the top of politics. Another man born with the right spoon in his gob (albeit in this case a very socialist spoon). Another man who while mouthing words like ‘community’, ‘middle-class’, ‘poverty’ and ‘hard work’ has no understanding or empathy with what they really mean. Another product of London’s metropolitan nomenklatura – effortless sliding from school, to university, to sinecure, to safe seat.

And that’s what is wrong with our politics.

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So Ed Miliband is an economic illiterate after all! No surprise there then!

The are moments when I am tempted by the blandishments of the left – the sense of justice, the desire to right wrongs using the power of government, the noble cause of a better society. It’s rather like the moment Galadriel is offered the ring.

And then I am reminded of just how economically illiterate much of the left’s thinking has become.

Ed Miliband’s latest wheeze looks pretty ace doesn’t it? We get firms to pay a ‘living wage’ and make a saving by not paying in-work benefits. Plus offering those firms the incentive of a tax break (or rather not allowing the lower rate to apply to bad firms who don’t sign up to Ed’s jolly scheme). Now we know that minimum wages affect unemployment – marginally when the rate is very low as it is in the UK but to an increasing degree as the rate rises.

The impact of Ed’s scheme will be as follows:

1. Where the tax gain is equal to or in excess of the cost of the ‘fair wage’, firms will comply. Most firms would do this in any case as they employ few, if any, people at below the proposed £7.60 per hour. Obviously, for employers with large numbers of people paid below that rate the benefit is unlikely to exist and they will not take part – preferring instead to reduce tax exposure

2. Firms participating in the scheme will be less likely to take on new workers as this increases the cost and, at some point, is likely to take them to the point where the marginal cost of employing someone extra is negative. This will sustain levels of current unemployment and have a further negative impact on benefit levels

3. The main benefit is gained by firms who do not pay anyone the between £5.80 and £7.60 per hour. Most of these firms are paying higher wages because the market dictates that without higher wages they would not be able to recruit the skills needed to do the work

It all seems very sweet, the Guardianistas are frothing with excitement but, and this is a big but, it is crap economics and will act only to reinforce barriers to work and to sustain the benefits culture.

Maybe that’s what Ed wants?

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