Malcolm Blair-Robinson's Blog, page 145
November 6, 2015
Quantitative Easing Explained:Download .99p P/back £2.99
QE in various forms is now very much part of the economic conversation, especially in connection with a fresh approach to financial issues by the new leadership of the Labour party. Dynamic Quantitative Easing remains under government, not bank, control and targets specific investment projects without borrowing, interest or repayments. It can reboot the economy, boost manufacturing and exports and enable sustained growth of real national wealth shared by all, rather than just asset inflation which is the downside of ordinary QE. If you want to find out more you can enjoy a lucid explanation of the original idea from the link below.
Bank Of England: Wrong Again
Economic growth is slowing. Inflation is historically low. House prices are rising at an unsustainable rate of 9.6%. Unsecured consumer debt is rising. Manufacturing is falling. Interest rates are to remain at tantamount to zero. Sterling is rising. The Bank Of England got its forecast, now given the smoochy term of ‘forward guidance’, wrong again. None of this is good news as all of it one way and another projects a slowdown in growth which will derail the Chancellor’s own forecasts.
Somehow over the years we have drifted from a position where government had some input into the direction of the economy, to one in which it is reduced to forecasting and distributing whatever turns up. Because the economy is driven by asset inflation and shopping with very little creation of new wealth, what turns up is never enough to pay the bills. Moreover central bankers themselves now admit that too much is expected of them; they are reluctant to use their powers to take what are essentially political decisions about the economy, so they do not take any.
In the case of the Bank of England, interest rates should have risen as soon as the initial financial emergency was contained, not least because savers need to earn. Additionally there was a clear case to treat personal borrowing differently to business borrowing, requiring a mortgage rate higher and separate to bank rate. As a consequence of all this silly forecasting and lack of action, the financial authorities are now stoking the problems rather than helping them. It is imperative for sterling to fall and that would normally have been achieved by reducing interest rates, but there is nowhere meaningful to go when they are stuck at .5%. Moreover there would be no dangerous housing bubble in the South East if the cost of mortgages had risen earlier.
So here we are with inflation falling and house prices rising, unemployment rising and manufacturing falling, growth slowing and sterling rising. The Bank of England governor describes this state of economic affairs as robust. Really? Are you sure about that? Doubtless the Chancellor who appointed him will deliver another riveting parliamentary performance when he presents his Autumn Statement. We know already what the centrepiece will be. Another forecast.
November 3, 2015
Syria Vote: Has Cameron Backed Down?
Not really. He always said that he would not go to the Commons unless he knew there was a majority for a bombing campaign on IS targets in Syria. It is now abundantly clear that no such majority exists and is never likely to. The intervention of Russia and Iran has changed the game. To send more planes into a crowded theatre would do more harm than good and make no practical difference whatsoever. It would be another tokenist military gesture of the kind Cameron loves and comes in his general folder of ‘doing the right thing’. Well it’s the wrong thing and it’s stupid.
Russia and Iran have a strategy. It is to shore up the state structures of the Assad regime, reduce the immediate threats to its survival, then to negotiate a political settlement with all reasonable parties. They believe, rightly, that to allow another state collapse, on top of Iraq and Libya, would ensure a quick take over by IS in Damascus, most likely followed in fairly short order by their arrival in Tripoli. Whatever anybody thinks of Assad, his is the only functioning government in the neighbourhood. Iraq is paralysed by internal discord and Libya has at least two, with additional warlords and bandits. Russia insists that Assad stays until there is a viable political settlement but are happy to see him go at that point. They see the uber enemy as IS. So does the West see IS as enemy no 1.
Unfortunately everything after that in the West’s muddled thinking is either impractical, impossible, based on wishful thinking or a fantasy. It has learned not one single lesson from Afghanistan, Iraq or Libya. It has no strategy or end game. It is buffeted by its Arab allies, some of whom push it in one direction while they themselves arm and fund another. It has not learned that you cannot replace a government led by a strong man, however big an ogre, by a coalition of nonentities who fall out among themselves the instant their common foe is vanquished. Until the West can grow up and produce a coherent strategy which looks workable and likely to deliver, it needs to avoid inflaming the problems by piecemeal campaigns and pointless bombings.
November 2, 2015
Air Safety
From the very beginning the notion that a ‘technical problem’ could cause a modern airliner to fall from the sky in pieces seemed the least likely of potential causes of the horrific and tragic Russian air disaster. One cannot imagine the anguish of relatives whose loved ones are suddenly gone. One can see why both the Russians and the Egyptians were so reluctant to admit that terrorism could be the cause. The Egyptian tourism industry is in enough trouble from the fear of terrorist attacks; an aircraft brought down flying from a supposed safe area still frequented by tourists would be very difficult to cope with. The Russians are now engaged in Syria and President Putin has widespread support at home for his policy, but terrorist outrages which kill innocent civilians in retaliation may weaken that.
Nevertheless there are now only two likely causes. Terrorism via a bomb on board or a missile fired from the ground. Or an exploding engine which ripped the fuselage and caused the plane to break up; even with that a systems failure really does seem unlikely, although not impossible. An engine might have been sabotaged, which could be an easier terror option than getting a bomb aboard. We should not have long to wait for the answer.
Whatever it is can little help the grief for those whose lives have been lost. But it will have wide implications. It no longer seems right to allow civilian airliners to fly over conflict zones and regions bordered by failed states. There is this theory that at a certain height the plane is safe from ground to air missiles, but that is no longer certain and the risk is too great.
October 29, 2015
Nazi Era Thriller
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Rudolf Hess, Hitler’s deputy and right hand man, flew to Scotland on a mysterious peace mission in 1941, which has never been convincingly explained, to meet unidentified politicians who wanted to end the war. The truth has been covered up for generations because to reveal it would somehow undermine the honour and constitutional fabric of the United Kingdom. Who was plotting against Churchill? What were the peace terms on offer? What happened to Hess? Was he killed in the War? Was the prisoner in Spandau a double?
There are many questions to which in the modern day one man, Saul Benedict has all the answers, because his parents were players in the drama involving Churchill, Hitler, leading politicians and an important Royal. Saul is an author and declares his intention to write a book to reveal all, but he is shot dead, apparently accidentally by a poacher. But was it an accident? Rick Coleman an investigative journalist determines to find out and in doing so to uncover the mystery.
Taking place in the modern day but with flashback chapters which gradually unfold the hidden secrets, the novel is a fast moving and compelling read based on the family knowledge of the author whose parents had connections to both Hess and Hitler and to British Intelligence.
Syria Negotiations
Long ago this blog said there could be no peace in Syria without engaging Russia and Iran. At last this is now happening. Unfortunately there remains a gap between the two sides (who agree in principle on a good deal and enough to build a political settlement) over the future of Assad. The West supports the tribal view held by many Arab states that his departure is a condition of progress. Russia and Iran have a more pragmatic approach driven by the priority of not allowing the State of Syria to collapse. They see too many failed states in chaos for that to be allowed. Assad must therefore remain until political negotiation brings a settlement. Then he can go.
It should be possible to bridge this gap somehow. It is not a question of Assad staying on; rather for how long he remains the titular head of the country. In practical terms much of his authority is now with Russia and Iran. The West and its Arab allies may choose to disagree with both, but Assad is in no position to disagree with either.
October 28, 2015
Thatcher Era Political Thriller
Set in the mid nineteen nineties, this fast moving 
thriller lifts the curtain on sex, sleaze and corruption in high places as the long reign of the government totters to an end, following the ousting of the iconic Margaret Thatcher. The novel catches the mood of those times with a host of fictional characters who engage in political intrigue, sex, money laundering and murder, pursued by an Irish investigative journalist and his girlfriend, the daughter of a cabinet minister found dead in a hotel room after bondage sex.
Flexible UK Democracy
Many feel the fact that you can amend and develop the UK constitution simply by precedence or whim is a plus. The fact that the constitution is the property of government and not of the people, who do not have to be consulted about changes, is far from democratic. In fact it is closer to dictatorship than democracy and is kept that way by a political class which is establishment based and keener on its own survival than the welfare of the people it purports to serve.
It is therefore only fitting that every now and again it backfires and scuppers a government’s intentions. This is what has just happened. The smarting Tories complain that it is because they have no majority in the Lords. By most modern standards of democracy they do not have one in the Commons either. They have a majority of twelve on 37% of the votes cast and 24% of the registered electorate. Nowhere else in Europe would this be tolerated. Maybe that is why a good number of them want to leave.
October 27, 2015
Osborne: Damaged?
So the Lords had their say and in spite of threats about constitutional crises inflicted not one, but two, defeats on the government. Politics is a curious occupation. Last week Osborne’s star was the brightest in the political firmament. Now it has all gone wrong. And it is entirely his fault for being too cocky. So are tax credits his poll tax? Probably not, but there is no doubting the colourful spin off. Boris looks a lot less like a busted flush today than he did at the same point last week.
