The Stock Market Collapse

This crisis in the Stock Market should be a serious worry to us all. There was a good peice in the Telegraph this morning, about the possibility of a major US bank defaulting, and another in the Guardian suggesting that we might be about to see a base rate cut by the Fed.

What should worry us about this is not the possibility of a bank defaulting, but the possibility that by pumping more liquidity into the market we will be supporting the reckless economic behaviour which has led to this crisis and make a future economic collapse worse.

"But what if the Fed cut rates because it knows something the markets don't? What if a major US bank really is in trouble? Even if America now implements the "nuclear option" of a sudden cut in the "Fed funds" rate - the equivalent of our base rate - that may not help very much. Hundreds of US mortgage lenders, thousands of house-builders, and millions of Americans have already gone bust."

Alone

Alone... The word is life endured and known.
It is the stillness where our spirits walk
And all but inmost faith is overthrown.

Siegfried Sassoon

Chavs: The new underclass?

I've just been reading a few articles about the delightfully middle class slang word used to describe the "white trash" of England and I find it all quite amusing. In an article in The Guardian for instance; John Harris quotes Simon Heffer to caricature the attitude of Middle England:

"Our underclass has been allowed to get out of control ... They and their children regard school as optional. Drug dealing and theft are the main careers, nicely supplementing the old staple of benefit fraud."

...and goes on to argue that such talk is elitist nonsense which unfairly writes people off without giving them a chance. (Well, if you do insist on throwing up a straw man John!)
A similar line is taken by Julie Burchill of The Times, who goes on to suggest, with much middle class, guilt-ridden hand-wringing that calling people "chavs" is akin to racism:

"Whenever I stand up for chavs — on the basis that the white indigenous English working-class is now the one group you can insult without feeling the breath of the Commission for Racial Equality on your neck, which makes it pretty damn cowardly apart from being what I call “social racism"— there will always be some joker who will bend over backwards to reassure me that not ALL the working class are wasters..."

It is at this point that my blood (quite understandably I think) starts to boil.

Frankly, I don't think either of these columnists really have the faintest idea about what they are describing. The "chav" may be something approaching a caricature, but it has come to be synonymous with the underclass of Britain; many of whom who seem to wear it like a badge of honour. These people are not "working class," and to describe them as such is an insult to hard-working people.

No, these people populate the dole queues, benefit offices, STD clinics and street corners of our fair nation, and though we may laugh at the caricature. It is actually a symptom of a class who totally lack aspiration because they were born, not just into poverty, but moral despair.

The poverty of old had a cure. Namely, a rigid morality, which gave a pang of guilt when you did something wrong and which spurred you on to try harder. A morality embedded in a society where mutual concern was predominant and where "keeping up with the Jonses" was somewhat less to do with the size of the Satelite dish on your council house and somewhat more to do with decency and getting on in life.

I'm a libertarian, and I think that that liberty has a price, and that this is one of them. It is a sympton without cure, and the consequences of this are grim. Feel free to disagree.

Alcoholism

My name is James, and I am not an alcoholic.

My mother had been sober for two years. She went into hospital with a slipped disk and she never came out. The doctor's didn't say so, but we knew it was the drink that had done it.

My brother was 24. He was found a year later on the floor of his bedroom. He never did deal with my mother's death.

A Spot of Bother

I'm reading A Spot of Bother by Mark Haddon at the moment, and it is brilliant. Extremely funny and strikes so many chords. The following passage really made me miss my boyfriend though:

"He wanted to strangle Tony sometimes. The poor house-training mostly. Then he'd catch sight of him across a room and see those long legs and that brawny, farmboy amble and feel exactly what he felt the first time . Something in the pit of his stomach, almost painful, the need to be held by this man. And no one else could make him feel like that."

Civil Partnership: Is it enough?

"The homophobia of the ban on same-sex marriage is now compounded by the heterophobia of the ban on opposite-sex civil partnerships. It's official: one law for heterosexuals and another for lesbians and gays. Since when have two wrongs made a right? Imagine the outcry if the government prohibited black people from getting married, and established a separate partnership register for non-whites. It would be condemned as racism and apartheid." - Peter Tatchel, 19th Decemer, 2005

I understand what Tatchel is saying. It is a strong point and it is important. But it is hardly something for me to get excited about. After all, the civil partnership legislation brought into force in 2005 is legally equivalent to marriage and it is even called marriage by large sections of the press and population.

Indeed, just about the only distinction (other than semantics) I could find is that whilst marriage has to be a public ceremony, civil partnerships can be conducted in private like any other legal arrangement.

A lot of gay people, it seems, do not accept my assessment. They feel that despite legal equality civil partnerships have a second-class status in the eyes of the public. Two such people are Susan Wilkinson and Celia Kitzinger, a lesbian couple who fought in the High Court to have their Canadian marriage recognised in the UK:

"I do not wish my relationship with Celia to be recognised in this way because we are legally married and it is simply not acceptable to be asked to pretend that this marriage is a civil partnership. While marriage remains open to heterosexual couples only, offering the "consolation prize" of a civil partnership to lesbians and gay men is offensive and demeaning. Marriage is our society's fundamental social institution for recognising the couple relationship and access to this institution is an equal rights issue. To deny some people access to marriage on the basis of their sexual orientation is fundamentally unjust, just as it would be to do so on the basis of their race, ethnicity, and nationality, religion, or political beliefs."

Whilst I do genuinely see the point of this "symbolic" difference, I think that they are taking the argument a bit far and I certainly won't be getting off my backside to protest about the symbolism of the "semantics" of equality.

In this matter, the semantics are already changing. People are using the language of marriage despite what legislation says. Even the BBC, with its strict editorial policy, is using the language of marriage, although it seems they have been told to put these heterosexual references in "scare quotes" for the time being.

It is my view that it is in the hearts and minds of the British people that this debate will be won, and not in a high court ruling, and gay activists should have a little patience and trust in this before making us all seem to be throwing the baby out with the bathwater.

Reagonomics and the Laffer Curve: Can you cut taxes and increase revenue?

According to legend the Laffer Curve originated in a dinner meeting and was originally drawn on the back of a napkin.

The Laffer Curve explained
The Laffer curve operates on two central premises:

• At a 0% tax rate there is no tax revenue.

• At a 100% tax rate nobody will be willing to give the government any money, because they will have nothing for themselves. Instead they will hide it, send it overseas or hire expensive accountants to make it disappear, or, alternatively, Nobody will bother working for money anymore and the entire economic system will collapse.
  

The important point to note it that somewhere in the middle there must be an optimum tax rate which is not 100%, and so in some circumstances lowering taxes will actually (counter-intuitively) raise revenues. This is "Reagonomics."

Reagonomics: Does it work?
According to Stephen Moore in the Wall Street Journal it does:

"In the 1980s, President Ronald Reagan chopped the highest personal income tax rate from the confiscatory 70% rate that he inherited when he entered office to 28% when he left office and the resulting economic burst caused federal tax receipts to almost precisely double: from $517 billion to $1,032 billion."

The alternative proposition, is that moments like this only occur when marginal tax rates are very high and that a "Laffer effect" will not be seen in present conditions, because current Marginal tax rates are low, and are thus likely lie on the upward sloping part of the Laffer curve. Indeed, this is exactly what is oserved in a study by Autan Goolsbee (1999):

"The notion that governments could raise more money by cutting rates is, indeed, a glorious idea. .. Unfortunately for all of us, the data from the historical record suggest that it is unlikely to be true at anything like today’s marginal tax rates. It seems that, for now at least, we will have to keep paying for our tax cuts the old fashioned way."

Do we still have a reason to cut tax?
We do not have to rely on Reagonomics to support cutting taxes. Taxes are a burden on individual citizens and they prevent people using thier own money as they see fit. Additionally, taxation and government spending is wasteful and can creates distortions in the econommy.

It is for this reason, and not because of a graph drawn on a napkin that I support lower taxes...

Can science solve Global Warming?

According to a nobel prize winning scientist, the answer is possibly yes!

Paul Crutzen, a Dutch atmospheric chemist, proposes that the answer to the solution is to pump Sulphur Dioxide into the stratosphere in order to increase the reflection of sunlight away from the earth.

This solution, would cost an estimated 25 to 50 billion dollars per year and has the advantage of being easily adjustable, since Sulpher particles will only remain in the atmosphere for 2 years. It would however increase the problem of Acid rain.

Crutzen maintains that this potential solution should only be used as an emergency measure, but even so, an article in the Independent suggested that his solution:

"...is so controversial that some scientists opposed its publication in the peer-reviewed scientific press, fearing that it may encourage the view that it is easier to treat the symptoms rather than the causes of climate change." - Independent, July 31st 2006

...and on a related note. It has come to my attention that Junkscience.com have launched a competition that will award $100,000 to anyone who can prove that human action is causing "catastrophic global warming."

Any takers?

Giuliani: anti Palestinian state

If you thought Bush was right-wing on foreign policy, you should take a look at what leading Republican candidate, Rudy Giuliani had to say in this week's Foreign Affairs magazine.

The most notable departure from US policy came with the following remark about Palestinian statehood:

"It is not in the interest of the United States, at a time when it is being threatened by Islamist terrorists, to assist the creation of another state that will support terrorism. Palestinian statehood will have to be earned through sustained good governance, a clear commitment to fighting terrorism, and a willingness to live in peace with Israel. America's commitment to Israel's security is a permanent feature of our foreign policy."

He is also believes a withdrawal from Iraq would be "worse" than pulling out of Vietnam, he supports "Star Wars" (SDI) and he is in favour of extending the powers of the Patriot Act.

US elections '08: The Gay issue

Gay rights in the US are shambolic.

There is no federal recognition of legal equality in the workplace for homosexuals, the Defence of Marriage Act attempts to prohibit gay love and the religious right persist in a bigoted campaign to keep the US in the Middle Ages in the arena of equality legislation for gay people.

...and yet, it remains an issue on which the leading Democratic candidates must play politics, after all 77% of the gay community already vote Democrat, and their vote only accounts for 4% of the US population.

For instance, leading Democrat candidate, Hilary Clinton, who tops all of the latest polls has said that the morality of homosexuality is for "others to conclude," whilst Barack Obama gave the following response when asked about gays in the military for a third time:

“I don’t think that homosexuals are immoral any more than I think heterosexuals are immoral … I think that people are people and to categorize one group of folks based on their sexual orientation that way I think is wrong.”

Having said this, every Democratic candidate has come out in support of civil partnership (which is marriage in everything but name) and the leading Republican candidate, Rudy Giuiliani, has a strong record of supporting gay rights in New York, he is in favour of gay civil partnerships and he lived with a gay couple when he divorced his wife in 2000. Facts, which he would probably like to be less well known, considering the political inclinations of his Republican base.

So, the initial indications are good for gay rights, but gay people in America may want to listen very carefully before blindly falling in with the Democrats on this issue.

A-level grade inflation

The leader in today's Telegraph confirms what many already suspected to be the case. Namely, that A-levels are getting easier. The pass rate has risen for the 25th year in a row, and according to a study conducted by the University Of Durham:

"...students of the same ability are scoring a grade higher now than they were 10 years ago, two grades higher than they were 20 years ago."

The government's solution (as of 2010) is to introduce a new A* grade to the A-level system so the Universities and employers can single out the best and brightest.

To me, this seems absurd.

Surely the real solution is to make A-levels tougher and to ensure that only a pre-determined proportion of pupils can achieve the specified grades.

Hottest year on record... 1934?

It seems that an ameteur meteorologist has managed to convince NASA that it was wrong about which year is the hottest on record in the US. Basically, they made an error, and whilst the fundamental climate science remains unaffected, it does mean that the hottest year on record in the US is now 1934 and not 1998 as previously stated:

Telegraph: Nasa climate change error spotted by blogger

In the climate debate, polemic and spin matter, and this is a significant shift. I don't think that we are about to see an end to the "end of the world" type stories that permeate the media, but it is interesting that this readjustment has recieved little media attention.

Iraq: Better off under Saddam?

I supported the war.

I did so because I had watched for years as the Iraqi people were tortured and bullied by a violent despot, whose lives were made a misery by the sanctions regime we imposed.

I did so because the only alternative was to stick with a containment strategy which was not working. A strategy which had caused the deaths of around 1 million Iraqis, including 500,000 children (UNICEF).

I reckoned that Saddam Hussein was a bit of a thug, and that we'd lost control of him. He had ignored 17 UN resolutions over 12 years. He was not complying with the weapons inspectors and the only alternative left him in power and did nothing for the plight of the Iraqi people.

Unfortunately, I now think that this humanitarian case has been blown out of the water.

In 2006, a team at John Hopkins University estimated that 655,000 people have died since the invasion of Iraq in 2003, and that these deaths are in excess of those which would have occurred anyway if the invasion had not occurred.

Most of this increase can be tracked to a staggering increase in violence as a result of the total lack of order in Iraq; something which the post-war planners should have anticipated.

So, looking back, I got it wrong, and I'm going to bite the bullet and say that Iraq was better off under Saddam Hussein. He was a thug, but he maintained order in a country with no national cohesion, which, it is now clear, was in need of a strong hand to prevent civil war amongst factional groupings.

Additionally, it is clear that Saddam Hussein's WMD programme had been severely curtailed by the sanctions regime and that he posed no threat to the West.

The future of Iraq is a more difficult question. What it needs is a very strong military presence to restore order, but what is occurring is a gradual drawing down of forces to be replaced with Iraqi forces, who do not seem capable of keeping the peace: something which is evidenced by the increasing disorder of Basra, where 4 British soldiers have died this week alone.

It is my opinion that we cannot simply pull out. That, in my view would be a disaster. In the words of John McCain, 2008 Presidential candidate:

"I have no Plan B...I cannot give you a good alternative because if I had a good alternative, maybe we could consider it now. Every alternative that I know of that is keyed to a date for withdrawal, which that would dictate, is chaos in the region. And genocide."