The Strike

The greatest strike since the General Strike did not materialise and has been a damp squib. What a waste of time for those who went on strike and the rest of us although buses, the underground and trains were all working perfectly well. The only evidence of a strike that I saw were two young females with strike stickers on their jackets, schoolchildren and their mothers on the bus going out to lunch and an open top bus with union flags belting out music and only ten people on board. The strike was a token effort since most people know that the gold plated pensions of those working in the public sector simply cannot be justified and are grossly unfair on the rest of us. Miliband failed yet again at PMQs. You would have thought his union supporters would have kept him informed about the meetings they were having with the government. They had not told him a meeting had been held yesterday, that another was planned for tomorrow and another for Friday. He was left flat footed having accused the government of not having had a meeting since 4 November. The strike has probably done the unions no favours particularly as it came a day after the Autumn Statement. The latter has left many of us angry about the euro and the stupidity of those who brought it into existence, angry with the previous administration for the debt mountain they created and worried about how we are going to survive the retrenchment that is going to last for at least 6 years. On reflection I think I was a bit hard on Osborne yesterday. He has done some things with which I disagree but he has also done some brave things including a reduction in the civil service back to a more manageable size. The number of ministers also needs to be reduced to a more manageable size - the current number arose because governments always like to keep their supporters close in order to gag them. In this so called age of transparency it should be a point of honour to allow much more discretion to backbenchers. There will be less of them anyway after the next election as by then the number of MPs will have been reduced by 50.

The Autumn Statement

Whilst he was at it Osborne could have included the upgrade of the A21 to a dual carriageway for its entire length to bring greater prosperity to the South East corner of England. Although I suspect politically the Autumn Statement was a success I doubt it will be so from an economic point of view. It takes a gamble on the OBR's figures on growth being correct whereas on each occasion so far they have been wildly optimistic. Apart from hoping growth will be enough to provide the money to pay for his stimulants Osborne is to increase the bank levy. He is to help pensioners, SMEs, first time buyers, stalled construction projects, social tenants to buy their houses, commuters by holding down fare rises, infrastructure projects, and the building of more free schools. It would surely have been better to reduce corporation and personal taxes to encourage growth and to have stimulated the construction of infrastructure projects by proper tax and planning regimes. This is the kind of thing that would attract developers of e.g. the new Thames Estuary Airport. Osborne will be praised rightly for limiting pay increases in the civil service to 1% although to have cut back on the bloated numbers would have been much better for the economy. Cancellation of the January increase in fuel duty will be welcome but again fuel duty should be reduced and paid for by the cancellation of all the subsidies for wind farms and solar panels. A further tax increase on those travelling by air is though unfair. Osborne will be praised for reviewing the level of Overseas Aid and has at least been realistic on another green issue by saying that he will take action to help industry high energy users. If the euro collapses, which I understand foreign exchange brokers were considering almost inevitable last Friday, what will Osborne do then?  

The Taxpayers' Lament

There are so many ways in which taxpayers' money is misspent. Why are taxpayers paying at least £113million a year to trades unions? Why are the unions then allowed to use that money to fund the Labour party? Why is a strike allowed where less than 50% of the members of a trade union fail to take part in the strike ballot? Why do we have so many public servants? Of what possible use are they? Why are taxpayers paying so much to the EU? Why did Blair agree to a reduction in our rebate when he must have known that the CAP was never going to be reformed? Why do taxpayers have to support the BBC which mocks a good percentage of those who do by insulting not only their intelligence with sanctimonious rubbish but by feeding them a constant diet of left wing bias? Why are taxpayers being made to pay ridiculous sums of money to satisfy the whims of global warming claimants? Why are taxpayers being made to pay for grandiose overseas aid programmes? Why are we following a deficit reduction line which will cost taxpayers significant revenue when we could be reducing our exposure by following a more Icelandic path back to fiscal health? Why are we not reducing both jobs and pensions of the idle, pampered public sector? Why are we supporting the banks? Why are the nationalised banks not being split into bits and the bits sold to the public in order to encourage more competition? Why not reduce stamp duty or abolish it altogether? Why not reduce VAT, both the 40% and the 50% tax rates and corporation tax? Why not introduce real competition in the NHS by splitting it up and selling off the bits?

Double Dip?

It is clearly going to be a cliff hanger as we wait and see whether the OECD is right about the UK sliding back into recession in the early part of next year. Is there enough time to avert a return to recession? What can the government do? From reports in the press it seems that the government is not going to make further cuts but instead is going to increase its borrowing and use the money to fund things like more school building. The reports go on to suggest that the government will pay for the cost of the loans by raising taxes through another form of bank levy. One only hopes that enough banks remain solvent to be able to pay for the new levy since it is clear that the euro is going to implode of its own absurdities and bring a number of banks including French and Germans ones. The reports of what the government is intending doing seem like a gambler's last throw of the dice. If the gamble pays off that's fine but if it doesn't then there will have to be cuts and probably cuts of a magnitude that we would not have had to contemplate if the cutting had been done earlier. The cuts will not spare us from tax hikes either. All of which will slow down our exit from these straightened times.

To the Good Guys - Shapps, Lawson and Turnbull

The BBC really is outrageous. John Humphrys shows his true patronising, pink, self important, sanctimonious, self in his interview of Grant Shapps this morning on Today. You can listen to the interview here. John Humphrys is a journalist and as such has the obligation to be accurate in his statements. He also works for the BBC and is thus obliged to be impartial. Why would it have been Shapps's staff who made a cock up over the previously requested interview? Why could it not have been the fault of the BBC staff? As in any organisation they are bound to have snafus and for Humphrys to pretend otherwise is, well, arrogance of a BBC kind. I object to having to pay money to an organisation which fails to honour its obligations for impartiality and is against virtually everything I stand for.  The government really has to do something with the BBC. Either they should break it up and sell off the bits or they should split it into two parts with the vast majority of left of centre types running one half and right of centre types running the other half with each side being allowed to be as partial as they want to be. We could then have plurality of presentation not only on political issues but also on issues like climate change which the BBC for some reason believes it is bound to present as if there was no argument against the findings of the IPCC and other like minded organisations. The blog Bishop Hill is publicising here more leaked emails in what is known as Climategate which as far as I'm concerned proves even more that this climate change drama is a drama in the sense only that it is misrepresented by those who should know better, including the BBC. Whilst we are on the subject of climate change there is a wonderful open letter  here from Lords Lawson and Turnbull to that prat Chris Huhne setting him and his idiotic, dangerous and totally unaffordable policy to rights. You can feel the venom as each point made by My Lords sinks home.      

Paper Money Collapse

The Adam Smith Institute has a video on its blog here of a talk given by Detlev Schilichter about his latest book called Paper Money Collapse. It is a pity that about 41 minutes in the video repeats an earlier part of the talk. The first thing that struck me was how well he spoke English and the second how likely it is that his theory will come to pass. Detlev (it's shorter than Schilichter and easier to type) traced the history of paper money systems and how they all collapsed or would have done in the case of some if they had not been withdrawn. Detlev believes that we are at the end game as far as the present paper money phase is concerned. He wishes the government would voluntarily replace its paper money with gold but doubts that the government will do so. By not doing so a point will be reached he believes where people will refuse to deal in paper money anymore because through quantitative easing and easy credit it will cease to have any value at all. The consequences of paper money collapse will be devastating and worse by far than the boom and busts we have seen so far. Paper money allows governments to print more at very little cost particularly now as the greater part of it is generated electronically. Governments do this to encourage a boom but whereas booms occurred less often and the consequent recessions were shallower, booms now occur more frequently and the recessions become deeper. Mrs Merkel is right not to allow the ECB to indulge in quantitative easing but the euro will collapse anyway.    

German Bonds

Germany failed to sell all of its 10 year bonds up for sale today. It seems potential investors held back because of the low rate of return and their nervousness that Germany will start to underwrite the debt of the eurozone's weaker states. Germany's borrowing rates are about to increase making it more expensive to operate. This in turn will have an adverse effect on the rest of the eurozone if it is thought Germany is a greater risk than it was before the euro crisis. Roubini is reported as saying that there is at least a 50% chance of the eurozone breaking up in 3 years. A second rating agency, Fitch, is saying that France is in danger of losing its triple A rating status as the euro crisis is likely to generate liabilities which will spill onto its balance sheet which due to the increase in its debts France does not have sufficient capacity to absorb. Despite the failure of the US Congressional Super Committee to find an agreed solution to cope with the US deficit America is still able to attract buyers for its bond issues at great prices. As the world's reserve currency the US dollar is still sought after as a refuge in times of crisis particularly when it appears that China's economy is slowing down with manufacturing activity reported to have dropped to a thirty two month low this month. It will be great if our bonds continue to be bought at such prices we have achieved to date but unless the government cuts back the deficit it won't be long before our bonds fall out of favour.