Mugged by Moggmania

I have a terrible confession to make: I think I like Jacob Rees-Mogg. Believe me, this comes as a shock to me more than to any reader of this blog (who must be broad minded to still be reading it). Logically, this change of heart makes no sense. Jacob and I are chalk and cheese. He is a very English, upper-middle class, privately-educated, Tory, Brexiteer Catholic monarchist Unionist married father of six; I am none of these things. Other than language and number of legs, we have nothing in common. Watching his contributions to debates in the Commons, I had dismissed him as a standard-issue, bool-moothrd denizen of the snug Home Counties.

Well, it seems I was wrong.

Yesterday, he intervened in a Commons debate about a private member’s bill. He cited Hansard with the fluency of a man who had written it in support of his contention that only the government may ask parliament for money. I normally deplore jobsworths who hide behind dusty documents to make their case. But Jacob made it with such lucid clarity, while being both gracious and generous with interventions that I found myself watching in admiration. Though I disliked his contention, I found myself conceding that he was right. This was most unsettling.

Then today, he appeared as Guest of Honour on BBC2’s Daily Politics. Despite having a clip shown of him as an insufferably precautions 12 year old, he acquitted himself with both dignity and conviction in discussions: he defended his Catholicism against a probing Jo Coburn; abortion against an outraged Jo Swinson and his hard Brexit stance against a Cambridge don. So what; any politician would have stood their ground.

But it was how he stood his ground that impressed. Precise and articulate, he made his views clear without being didactic. He listened and acknowledged other views without being condescending. Most importantly—considering the weasly way the average politician avoids answering—he came across as sincere, not defensive and someone with conviction in his strong beliefs. The most telling of all was it during the link with the new Mayor of Sheffield, Magid Magid. It would be hard to imagine someone more alien to Jacob than a 28-year-old black Somali refugee muslim from the Green party and I expected this to be a hurdle at which he would fall.

Not a bit of it. He went beyond simple recognition and congratulation to establish a rapport of obvious enthusiasm for the changes Magid hopes to make in Sheffield. This was no Hooray Henry, given to snapping fingers at waiters. This was no Sloan Ranger, easily out of their depth in a multicultural metropolis. The man displayed intelligence, articulate wit, graciousness, depth and subtlety in measures that I had seriously underestimated. Should he chance to read this, I offer my fulsome apology for such a mistake.

The sole remaining negative thing I have to say about him is that I regret is likely progression to greater things in politics, if just because I hold diametrically opposing views to his on just about anything—even as I relish the elevated quality of debate.

 

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Boardroom Banditry

Over thirty years ago, the London Stock Exchange (LSE) switched from traditional face-to-face share dealing to electronic trading that helped it outpace competitors and become a magnet for international banks. The City jumped from the 19th Century into the threshold of the 21st and a long way since a broker named John Casting listing prices of commodities at Jonathan’s Coffee-House in 1689. Trading has since grown to over £5bn per day; powered by the febrile financial hub of Canary Wharf, the LSE has leaped from 19th please to be among the world’s top three markets.

There is a cogent argument that it was the key stage of boosting the British economy out of the doldrums that beset it in the 1970s and pave the way for two decades of steadily growing prosperity. There is also a cogent argument that it produced the 2008 Financial crash. And, considering developments over the last decade since, it also spawned recent headline-grabbing financial train wrecks captained by Fred ‘The Shred’ Goodwin at RBS, Phillip Green at BHS and Philip Green (no relation) at Carillion. Each calmity from which executives stroll away rich make those of us not on their boardroom gravy train wonder just who is looking out for Joe Public. In all such cases, the workers, suppliers and small investors are the ones who take a bath, if not lose their shirts.

We are not talking about unintended consequences here, as when a new computer hedge program runs out of control and causes wild market fluctuations.  Nor is this about tough and/or changing market conditions, such as those sinking Maplin Electronics, Toys’R’Us or Mothercare as viable concerns. In those cases, directors and managers broadly exercised their best (if flawed) judgement, but were swamped by market conditions, such as the internet’s effect—first on the High Street and, later, even on giants of retail.

What we are discussing here is pure, selfish greed and abuse of power to satisfy it. Once the shock waves of the Big Bang dissipated, some clever people started exploiting the new opportunities offered. The end of fixed commissions and fast electronic trading were just the thin end of the wedge. Bowler-hatted  ‘something on the City’ gave way to brash boys in bright braces, who found Mergers and Acquisitions, currency speculation, market manipulation and pension fund plundering offered far richer pickings. And, as  scrutiny was still exercised by the bowler hats, something of a lawless frontier ensued.

While it was only a matter of a few Young Turks bagging themselves a few thousand by having the cojones to follow their hunches, small harm ensued. But the braces brigade were overtaken by heavyweights hunting for big game. Much snapping up of small fish by big fish ensued. The first major example of fiscal indigestion was Robert Maxwell had to plunder £1/2bn from his Mirror Group’s pension fund in 1991. A quarter century later its fund (and its pensioners) are still in trouble. Next year, the stakes got higher. Britain tried to keep the pound within the Exchange Rate Mechanism (ERM—forerunner of the Euro). George Soros bet against the pound so forcefully that on ‘Black Wednesday, the UK admitted defeat. The pound left the ERM, having cost the Treasury £3.3bn, much of which had landed in Soros’ bank account.

Through the ’90’s, while Sid did get a little richer by buying shares in BA, Ngen, BT, RailTrack, etc, the already-rich did even better, thanks the legal and accounting firms whose creativity with accounting wheezes and offshore tax havens made their clients both rich and grateful. Benefiting most from such business were the ‘big five’ accounting and consulting firms, viz:

  • Ernst & Young.
  • Deloitte & Touche.
  • Arthur Andersen.
  • KPMG.
  • PricewaterhouseCoopers.

Every FTSE100 (i.e. major) firm in Britain had its books audited by these firms—at a cost of millions each year. But who was checking on these ever-cosier relations? Companies House simply registers firms; the CBI only represents British industry; the Financial Services Authority lasted 2001-2013, replaced by the Financial Conduct Authority was set up to avoid another 2008 crash. Few boardroom bandits have been brought to book by either—especially considering their beefy 3,800 staff and hefty £430m budget.

There might be some argument that the 2008 crash happened before their watch. And indeed the excesses of junk mortgages, toxic fiscal bundles and acquisition over-reach (as when the RBS python tried to swallow an indigestible ABN-Amro) all smack of a lawless frontier. But even after major corporate corpses like Lehman Brothers litter the landscape, the big five did not change their cosy practices—nor has the FSA/FCA seen any urgent need to make them.

Which makes the latest series of dubious accounting causing fiscal train wrecks all the more reprehensible. In each case, both the board and the auditors have been complicit in creating and concealing accounting practices that—while technically legal—violated most sensible, if not moral principle. Unless you happened to be a boardroom benefactor Phillip Green drained £580m from BHS over his 15 years in charge, then sold it in 2015 for £1. It rhen went bankrupt, with a loss of 11,000 jobs and a £500m hole in its pension fund.

Now this month, Carillion, holder of 450 lucrative Government contracts, including Birmingham’s new hospital, goes into liquidation. Executives are still receiving £450,000 salaries, plus bonuses in the most egregious example of draining company assets by those whose responsibility is to safeguard them. To quote a Carillion insider “For any other organisation, this kind of activity would be gobsmacking. For Carillion’s directors, this was business as normal“. Auditors KPMG signed off the accounts as healthy less than three months before. This collapse leaves almost £1 billion in debt, more than £500m of pension deficit. It puts 19,000 employees and 30,000 unpaid subcontractors out of work..

There is the usual wringing of hands and gnashing of teeth by parliament and regulators alike. A damning report from a parliamentary select committee does not mince words, condemning the practices that led to this. But, as with BHS and RBS, nobody in the cab of the train when it wrecked will even have their pay docked. Two years after BHS, Phillip Green hasn’t even barred from being a company director. Rather than another select committee buried in the bowels of Westminster, such practices need public exposure and serious repercussions for silk-suited wide boys who are taking the public (not to mention employees, shareholders and suppliers) for a ride. What rhis needs is:

  • A Business Standards body with swingeing powers. It should be staffed with a balance of laymen and professionals, plus experienced directors.
  • Swift and brutal powers to remove (if not reversing) bonus awards, all outside of board control and guided by long-term fiscal performance
  • Eye-watering fines for accountants who fail to sound alarms when they should
  • Funds from above  sources to be used to publicise good practice and broadcast the misdeeds of shameless miscreants
  • Consideration that any bonus (and part salary?) be paid in company shares
  • A ban on politicians serving on boards —and vice-versa
  • Permanent exclusion from directorshipd for the worst cases (r.g. Green)

Such steps may not redress damage already done to public trust in board members by the behaviour of a greedy few. But they may inhibit the sleazier aspects of the ‘Big Bang’ and so drag capitalism in Britain out of the morass into which it has sunk. Curbing the excesses of a rich-list-bias and resurrecting a free market accessible by all might restore Joe Public’s faith in putting his shoulder to the common weal. And benefit us all.

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Forget the Free: It’s the Land of MONEY

America is an amazing place. The country is huge, blessed with spectacular scenery, bountiful resources and a diverse population sharing a can-do attitude. So, to speculate on its imminent demise may appear counter-intuitive, if not downright perverse. The 20th century was clearly the American century. They powered into prominence just as European prestige eroded through internecine wars, social upheaval and fragmenting empires. Exploiting abundant space and resources, they brought the world new wealth, bigger toys and new ways to enjoy both.

But there is a lesson for them from exactly a century ago. In 1918, the British Empire was at its greatest extent; Germany lay defeated; the Royal Navy bestrode the oceans; British ships and factories dominated world trade. But, within a decade, a General strike, a stock market crash and a persistent Depression laid its economic weakness bare.  A half -century of relative decline followed, leading to the inflation, unrest and stuttering econony of the 1970s.

A hundred years on, senior politicians in America do not see their globe-straddling behemoth standing in similar danger of decline. Why should they? That century brought relentless innovation: mass production; industrial farming; movies and television; computers and chips; fast food and microwaves, satellites and smart phones. America is still setting the pace with  Amazon, Google, Facebook, Uber, etc. With Trump now playing trade hardball with their main competitor China over steel and intellectual property, everything in the American garden it Is lovely. Isn’t it?

If you buy into President Trump’s bluster, it might seem so: illegal immigrants stemmed; Assad’s chemicals blitzed; ‘Little Rocket Man’ brought to the peace table. But look deeper. Stocks are down 15% from their peak at Christmas. The leading stocks are not the Exxon,/GM/Intel/Boeing-type production titans of yesteryear. Today’s success stories don’t actually make anything tangible. Small economies like Singapore or Switzerland might prosper on service alone.. But consumption-hungry giants like the US can’t afford to import all their cars, clothes, electronics, appliances, and other pricey consumable. Even their $678bn arms exports don’t balance imports worth $2,400bn . Add this to a decade of budget overspend and America’s yawning $12,000bn debt charm (= $35,000 per head) should have fiscal alarm bells ringing off the wall. This dwarfs Britain’s $10.4bn owed in 1918—even allowing for inflation that was “only” $3,600 per head. Let’s be clear about this: the self-proclaimed “fiscally conservative” Republican party, who blocked every attempt by Obama to spend more, passed a budget that will add $1,500bn to the debt each year and Trump hailed it as a victory.

Such an insane Financial posture might be sustainable, were the Chinese appetite for US Treasury Bonds to continue forever. But it won’t. They buy them for the same reason oil sheiks snapped them up in the 1970s oil crisis. But once the Gulf States developed their own investment options (hotels, tourism, infrastructure, airlines), they switched to these more profitable returns. The Chinese will soon do the same. Now that Republicans control Senate, House, Presidency and heartland states, they are now rolling out undiluted neocon policy with the fire-and-brimstone fervour of Evangelicals dispensing salvation at a revival meeting.

This policy is not subtle. It consists of cutting taxes—basically the Reaganomics of 30 years ago. The argument is that tax cuts stimulate business investment, creating more jobs and wealth for all. Sounds plausible. Reagan blew a budget surplus proving this did not work. Bush tried it 15 years later and was forced to raise taxes, despite his “read my lips” campaign promise. Early this year Trump signed into law the latest round of tax cuts, slashing corporation tax from 37% to 222%, plus some sweet giveaways to the rich. Regular punters do benefit to the tune of £1,132 per household—but these soon expire.

All this ignores not just last-century history but recent experience. Republican-run Oklahoma cut state taxes four years ago— and is now all but bankrupt, Civic services are understaffed. Schools close one day a week to save money. Kentucky is in a similar mess for similar reasons. Arizona bought off a popular strike by teachers with a 20% raise, Governor Ducey plans to fund this through a 1% hike in sales tax—a regressive move that hits the poorest hardest. Eroding the quality of general education is the economic equivalent of eating your seed corn, especially when you hope to complete in (if not lead) this 21st-century information economy.

America does have top notch universities. But few can afford the their fees. At any time there are just 564,000 students at “Ivy League” universities. Meantime, there are 2,220,300 citizens in jail—and 1,140,000 police busy putting them there. In this increasingly dysfunctional society 142,000 people die from opioid overdose, 33,636 are killed by firearms; 32,479 die in traffic accidents and 44,965 people take their own lives. For all its riches and opportunities, is there not something disturbing about any society where one in every 20 deaths is not from natural causes?

Statistics that shocking are not those of a stable society. One that embraces risk can tolerate a level of guns or drugs or ghettos behind them, provided opportunity for betterment is available to all. But things are coming adrift. Not only are the world’s “huddled masses yearning to be free” no longer welcome, but universal belief in the American dream of success by hard work and merit, no matter how humble their beginning, is wearing thin.

The original Founding Fathers’ vision of a classless, egalitarian society is fading. Class defined by wealth is replacing it.. The ‘Upper Middle’ class (Europeans would call them ‘rich’) are monopolising prosperity. They live in gated communities, leafy suburbs or lake/golf-course-studded tracts. They drive shiny new SUVs. They pull down six-figure salaries. They retire into affluence, move to the sun belt, take cruises—and book their children’s ticket to the same comfortable life by funding the $100,000+ it takes to get an Ivy League degree. The other 75% live in another part of town, in older bungalows behind chain-link fences, where guard dogs bark and there are more liquor stores than trees. Once, such barriers mattered little: but now they have become hard to climb. Ambition and hard work don’t cut it any more and that poorer 75% are losing faith in having access to the American Dream.

“In the USA, the top 10% of families (those with over $942,000 in assets) control 76% of its $79 trillion in personal wealth. Families in the next 40% account for another 23%, averaging $316,000 per family. That means the remaining half of the US population controls just 1% of the nation’s wealth.”

—Congressional Budget Office

As the party of the rich (and of those who aspire to be), Republicans are crowing over their long-promised tax rollback. These seem either oblivious or insensitive to the average American—especially the young—struggling to pay the rent (or, if lucky, the mortgage), who average, $137,063 in personal debt, much on over 20% credit card rates. They may be too busy to wonder why anti-abortion action has precedence over social programs, or why aircraft carriers are funded while medical insurance is not, or why Trump should woo the NRA Convention while school shootings remain commonplace. But they do wonder what’s in it for them.

In Washington and in state capitols across America, Democrats and Republicans are eyeballing each other with partisan political venom. This is unfortunate. If ever America needed visionary, non-tribal leadership while its principles and cohesion were both under threat, it is now. But their institutionalised two-party system does not have the flexibility and their politicised presidency does not have the objectivity to produce such of figure. The present circling  of the wagons by the rich not only betrays all that America once stood for but risks alienating the majority. Then the unrest that produced Selma and anti-Vietnam protests may seem trivial by comparison. Progressive major states like California and New York are mad at this reactionary neo-con agenda gripping the country. Nobody (besides Israel) likes the  damage all this is doing to American prestige and trade among friends and allies.

Mid-term elections due in November may provide a wake-up call. But Senators and Congressman are deeply entrenched in this ossified system where money again plays a pivotal role. So they will go back to more ritualised battles and constipated legislation. The real story how American overthrew institutionalised dictatorship of the rich while a once-great democracy languished may have to wait another century to be fully appreciated. Unless another Loncoln comes along to lance the boil.

 

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Summer of Love: 50 Years On

Yes, I confess it: I am old enough to remember the Summer of Love when the 60s really got into their stride and 19-year-old idealists (as I then was) found a world of button down suits fixated with material wealth and the Cold War far less beguiling than an alternative mantra to “tune in, turn on and drop out” . Though this held less appeal on the grey, dreich streets of Edinburgh, beside the sun-speckled waters of the Golden Gate, it made far more sense.

Fir the unquestioned epicentre of this counterculture was San Francisco, already known as a wacky melting pot of cultures and ideas. The beat generation of Kerouac and Ginsberg had already colonised the City’s North Beach. But hippies favoured cheap rental of ornate Victorians in Haight/Ashbury, and bred Grateful Dead and Jefferson Airplans, as well as a lively drug culture the media referred to as  Hashbury or Psychedelphia. It was also close to Golden Gate Park, where the resulting influx  camped out on Fremont Hill, which is still known as Hippie Hill and a focus for the annual 4/20 dope smoker gathering to this day its legalisation.

This month, I spent a long weekend in San Francisco again. April is a beautiful month to visit this, my favourite city. Cities around the world offer a cornucopia of Charms, but none stack up to San Francisco’s livability. Gorgeous vistas of waterscape bettering Edinburgh or Lisbon abound; imaginative architecture beats Boston or Berlin; culture is rich as Paris or Vienna; business dynamic rivals New York or Shanghai. For quality of life in a first-rank city on a human scale, it is only rivalled by  Munich or Barcelona.

But what I love most is the sheer exuberance of the dense housing, the cultural melting pot (and hence cuisines) like no other, all enlivened by a civic and political awareness that would put any capital to shame.

For five days, I bounced around the city’s tight-knit 49 square miles from Lands End to North Beach; from the Presidio to SoMa. Despite intervening half a century,  character and vibrancy have not skipped a beat. New are the dark-windowed coaches gliding techies from their City life to make more billions for Facebook and Google and Apple down in nearby Silicon Valley. The social resilience of the City still derives from its many lively local centres, as if it were a dense collection of villages, rather than sprawling suburbs. Whether Noe Valley, the Marina, Glen Park or the Mission, each has a ‘high street’ of shops with character (retail chain outlets are rare) and social centres like cafes. The mild climate, a dense streetcar/bus network and nightmare parking means the population interacts in droves. Proper dim sum from numerous carts is still available in Chinatown. You can still browse City Lights bookstore or run into Ferlinghetti in North Beach. Soma still buses with the myriad Studios, ateliers and galleries of a lively art scene. The Mission buzzes with myriad Central American restaurants but in the middle of it, on Valencia, is the best Italian deli in town with Ravioli made by angles.

So, ( as the Scott Mackenzie song goes) if you go to San Francisco, by all means do the standard tourist shuffle: visit Fisherman’s Wharf, take the ferry to Sausalito, drive down crooked Lombard Street and ride the cable cars. The once derelict waterfront is now a linear park with historic streetcars and fabulous views across the Bay to Marin, Alcatraz, the Oakland Hills, etc.

But, if you really want to know this beautiful city, take the N-Judah out to the Avenues and find the sprawling Botanical Gardens in Golden Gate Park, with its myriad plants from the seven Mediterranean regions of the world—and if you can’t find a memorable lunch among the restaurant lining the street car line, you’re not trying. Or take the J-Church and enjoy the spectacular view of downtown as it struggles up Balboa park and hop off at 24th to explore the heart of Noe Valley. If you really want to see how San Franciscans live, ride the J a little further—to 26th and enjoy Chloe’s restaurant; to 28th to get java’s up with the locals at Marths’s cafe; to 30th for a great breakfast at Toast.

Or hot the bus to the intersection of Haight with Ashbury and try to tune in, turn on and drop out, even though it may be Half a century too late. The nice thing is that none of the locals will bother you. Doing your own thing is an old San Francisco tradition—and yet another reason why I so love the place.

Will bother you

 

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Grand Masters

The world has no shortage of clever people. And, despite the many obstacles in their way, many of them do rise to positions of power and influence where such skills can be put to good use. Unfortunately, overcoming the obstacles to political success where real power over their fellow citizens can be exercised, requires skill in subterfuge, dissimulation and appeal to the masses. Principled idealists need not apply. The sole exception of Mahatma Gandhi was our product of incompetence at the colonial office, who made a pig’s ear of dealing with Indian nationalism.

The present eyeballing going on between America and several other Powers is being over-egged by a handwringing Western media where tabloid sound-bite journalism has pretty much taken over the asylum. While the airwaves spotter with numbers of refugees/ deaths and/or Chemical/ suicide atrocities, the real story of how the power game is played seems to escape “serious| commentators like the BBC or NPR, let alone agenda-pounding dingbats at Fox, Breitbart or the Murdoch empire.

But even fraught International situations like the Middle East lend themselves to rational explanation of the players’ motives which would go a long way to diminish the chance of world War III. Arabs in general are a proud people—but one that has been pushed around by colonial powers (Britain, France, Turkey) for centuries. That they would have a chip on their shoulder, even without the state of Israel appearing (re-appearing?) In their midst, seems understandable. And That they should have lost the civilisation-leading enlightened in science and social structural of the early caliphs is a loss to all concerned. The siege mentality that characterises Israeli attitudes to their modern equivalents.

Where is it just that bipartisan divide, a lifting of lapels and banging your head by Objective outsiders might solve things. But into the mix comes Shia versus Sunni, who are abrasive in differences as Protestant (once?) was from Catholic. The Truly sad part is how regional powers exploit this for their own ends. Hence Saudi Arabia fights a proxy war in the Yemen, balanced by Iran’s support for Assad in Syria. There is little incentive for either to back off because they perceive this as a chance to increase their regional influence and train the troops, with no real down side.

There is no downside because, though the cold war is technically dead, the so-called Great Powers assume a right to middle and use their veto to castrate any attempt by the UN to act as anything more serious then PC Plod. Despots know this. From Papa Doc Duvalier to Robert Mugabe, they knew they could economically rape their countries three ways from Sunday and know they were to insignificant for anyone who could do something about it to care.

Assad’s Syria ought to fall into this sad fraternity. But geography played its hand. For centuries, Russia has suffered being landlocked. Trapped by the Kattegat and the Bosphorus, generations of Russian admirals have hungered for a warm water port. Having equipped Assad’s dad with hundreds of clanking T-72s to use against the Israelis, the payback started during the 1970s when Tartus became a major port servicing warships of the Soviet Union’s Fifth Mediterranean squadron. One civil war broke out, Assad’s desperation for Russian support meant not only was the base expanded to handle nuclear-powered and equipped ships but a complete modern airbase was established at Khmeimim with two 3,000 m runways.

Which gives Russia more than a passing interest in Assad’s future. It may know make much sense too the sensitive Western public that a half million dead, millions of refugees and use of band chemical weapons can suit any rational leader. But this deadly Game is not being played by Fabian Society rules. Assad knows he can do as he likes to win because Russia needs him and will keep an impotent UN off his back. They also check any serious intervention by the US.

Russia, on the other hand, is a Grand Master at this global game. They knew from the start they had a free hand in Chechnya, Crimea and Ukraine. Een the Americans have neither the reach nor the strength to intervene there. Russia has always been pragmatic and relentless in pursuit of their aims. When, during World War II, Stalin was cautioned about offending Catholics, his rejoinder was : “And how many divisions does the Pope have?

So they will be back Assad to the hilt, because it suits their purpose. Every ambassador and spokesperson will calmly assert no chemical weapons were used, spread disinformation that it was a British plot and play up the illegality of anyone else’s intervention, such as the raid on April 13th. But just because they come across as stony stonewallers, do not think them dumb. They will run rings around Trump’s ever changing circus of newbies.

For it is not just at chess that the Russians produce Grand Masters. Despite much huffing and military puffing from Britain, France and the US, it is not they who are gaining ground in the Middle East, nor even, for all its victories, Assad’s rotten regime, but the Russians.

 

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A Zuckerberg Born Every Minute

Just about everyone wants things to be run for the good of the public, as opposed to the despotic barbarism abusing it that litters human history. Where we get ourselves into conflict and difficulty is in agreeing on what constitutes the public good in specific circumstances. A very 21st century twist on this conundrum was in evidence over the last two days as Facebook CEO Mark Zuckerberg was grilled by US Congress over the security of personal information on social media in general and abuse of access to it via an app by Cambridge Analytics of some 87 million clients’ data in party killer.

The amazingly low level of understanding what social media is and how Facebook works among committee members was, on the one hand, alarming but, on the other, probably illustrative of the ignorance among Facebook’s 2.2 billion users how all the information each user voluntarily provides (up ro 21,000 data points) is actually exploited.

Social media has undoubtedly revolutionise communication among people. In this fragmented and mobile society, the ability to easily post news, pictures, videos, etc. to friends and family instantly at no cost seems a no-brainer and explains the meteoric growth of Facebook into a profitable giant, valued around $500 billion. Zuckerberg may be a Harvard dropout but he is no dummy. The brilliance of his business plan was the steal commercial television’s idea all making their “product” free to users and making their money selling access to those users to advertisers.

Along with Google, Facebook has cornered 60% of advertising revenue on social media: their share was worth $40 billion last year. This helps explain how the sheer price is stable around $160, despite glaring media spotlight and 87 million disgruntled users. Compared to an amateur performance wearing a T-shirt in public eight years ago, a suited & booted Zuckerberg gave a polished performance to Congress–despite some harsh and pointed questioning—showing humility, admitting mistakes, apologising and even appearing to accept the need for legislation to control the whole business.

Sounds good—so far.

But, ah hae ma doots. This is not the first time that Facebook has been lax about the implication and use all the terabytes of data it holds. Each time, they have been suitably apologetic but have declined to alter their business model. As an example, proposals of that users should choose whether to share their data or not or strictly  policing exactly what apps which access user data can do with it have never been seriously considered, let alone implemented. The unofficial Facebook model is “Move fast and break things”. Not a bad credo for a Silicon Valley startup birthing some future gizmo in some garage. But a global giant (FB is used in Burma to hunt Rohinja and in the Philippines to direct death squads) needs to update its mantra.

Contrite thought Zuckerberg appeared, my money is on him laughing all the way back to Menlo Park. Even if Congress learns techno-jargon, it took them years to pass a tax bill and they have shut Government down three times recently by failing to agree on almost anything. They are unlikely to pass any Real legislation in the rest of the year. So Zuckerberg could afford to play nice and promise almost anything, knowing he could go on building his monster without legal interference.

And, as a kind of the insurance policy, Zuckerberg channels some of his personal $69 billion where it will best ensure minimal interference. This year brings mid term elections in November. Republicans are wetting themselves that the combination of and incompetent Congress under their control, coupled with an erratic and unpopular President Will gift the Democrats sweeping gains in both hands. Given that money is a major Factor in America elections, facebook’s $12 billion in  campaign donations (Google ponied up $18 million) Will go far in keeping the Fed’s fingers out of their lucrative pie. Chip in similar amounts being paid to top Washington lobbyists for the same purpose and you wonder if the much vaunted “American system” is fit for 21st century purpose.

The European Global Strategy on Security and Data comes into force next month and will protect EU citizens around the globe. It will protect their data from being “mined” for commercial purposes without their consent.. Zuckerberg may not be a despotic barbarian in deliberately flaunting the public good. But when it comes to social media, tmany more than one are born every minute. And, just like there is an element all the Wild West still apparent in American driving, resource exploitation, town planning and firearms, social media there seems condemned to suffer the same corruption of the meaning of “public good”.

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Brexit Bovver Boyz

“Fog in the Channel; Continent cut off!”

Exactly one year from now it will be too late to overrule what is primarily a Home Counties fixation with the Channel being restored as an antiseptic moat to safeguard English culture. Enthusiasm for Brexit is their worst self-harming delusion since they endorsed giving Charles II free rein as absolute monarch. Although there are many types of Brexiteers banging similar drums, the most successfully siren-like is a small and set of quasi-clones—five senior Tories sharing Oxford, leafy homes/constituencies and a passion for things British (by which they mean ‘English’). Their perorations how great Britain will  be again, once we cast off the shackles of Johnny Foreigner are as pervasive as they are persuasive.

We all know who they are: Billy Bunter’s Brexit Bovver Boyz—a.k.a. “Form 5B”, Obviously Billy Bunter Johnson himself is leader of this jolly jape, if only because  his disarmingly dishevelled  demeanour is more affable than the unapologetic conviction of  his gang of zealot swots. Liam Fox, Michael Gove, Jacob Rees-Mogg and John Redwood. Each has seized a speaking parts in this farrago, and with all the moralising certainty of 17 -year-olds, Form 5B have control—not just of Theresa May but the entire country through dominating the media agenda. It is as if Form 5B had hijacked the school rugby bus for a pubs-crawl and can’t believe how they are getting away with it. No-one demands to see their documentation (whether ID or business case); no one queries supervision (whether an accompanying adult or statesmanship on the scale of Atlee or Churchill). What a beezer wheeze!

Form 5B betrays a typically teenage penchant for heroics, as if they see themselves re-enacting the American Okinawa memorial, onlt with the Union Jack replacing Old Glory and their Saville Row tailoring looking dapperly outsmarting maribe combat fatigues. It is Dunkirk as Waterloo (with a whiff of Zulu), a ghoulish disinterment of the ghost of Empire to be shouldered high again, set to an emotive leitmotif that blends the ‘thwack’ of willow on leather with the clink of bone china or of bell-ringers echoing across  peerless lawns seem through the pristine prism of a perfect G&T.

There is nothing wrong with cherishing such a soft focus visions of England’s thatched cottages across bucolic greens. But, with a serious amount of that same “green and pleasant land” lying within commuting reach of London is under the commercial cosh. Iy is being paved over by the same 21st-century technology that sustains this, the world’s 5th (oops! Sorry, India) 6th-biggest economy, So it makes a poor basis for building Britain’s economic future. Each of Form 5B seem to have snagged an unpaved bit of southern bucolic, so there is consistency in defending it. But the farther you stray beyond their Oxbridge commuter/cultural enclave, the flimsier the connection with Form 5B’s English idyll. It is quite true that Brummies, Scousers, Geordoes, etc. all once built, embraced and benefited from ‘out’ Empire, as much as Jocks, Taffies and Paddies—let alone the home Counties. A century ago, nobody much minded being class-bound, living in a Downton Abbey-style cultural apartheid. Those in charge all spoke the same cut-glass tone—never how the locals spoke. After all, you knew where you stood and Britain being top of the global heap offered financial—if not social—advancement for all.

Were Form 5B preaching to an Edwardian audience from then, they would sweep all before them. Unfortunately, we are dealing with the future, from this point a century later. An analogy even 4th Form might understand: Britain has been playing in the 1st XV. Newer team players have had the temerity to tell veterans how to play rugby, In a huff we leave the team and flounce off to the muddy bottom pitch where the first-years have churned up expecting others to join us and play by our rules.

Britain’s transformation from Kipling-esque colonial masters to an enlightened state has taught us much, not least the value of friends. One key variant on that: rather than waging war every half-century, Europe profits most from lowering barriers and heightening collaboration.  Abandoning our common market of 350 million and any opportunity to influence it flies in the face of self interest, let alone is growing Global Billage. Were Form 5B playing hooky the day they taught how Benelux boomed by not  pretending to be three  autonomous countries? Or how  France and Germany, by burying a war-wagon-ful of ancient rancour, overtook us economically—with no empire, oil boom or special US relation to boost them.

Form 5B argue Britain is a great power being shackled by Brussels. The present parlous state of UK finances (underfunded NHS/military/councils/etc.) is accepted by most. But it was caused by our being a second-rate power, deluded vy nostalgia into believing it is still a first-rate one. Our £1.8 trillion debt was not caused by either the EU or European neighbours. It’s just they make better cars/cheese/appliances/chocolate/spacecraft/etc. then we do. And as a lone 60m-population fish in a 7 billion global ocean, if Form 5B think they can arm-wrestle Li Keqiang into a dynamite deal by the 21st-century UK equivalent of a gunboat up his Yangtze, then they are dangerous, as well as delusional. As our (soon–to–be–ex) German colleagues say “Die sind auf dem Holzweg“. In this brutal, competitive world, for a country to prosper, it needs either a USP, or good friends. Switzerland offers stability and  banking; Singapore offers to–die–for location… and banking. Thought once distinguished, even revered, British banking went down-market into red braces/loadsamoney/oligarch banking. That’s the same kind of banking Caymans/Bermuda/Bahamas do equally well and more cheaply. Such azure idylls have neither nuke subs, nor 12.5 million geriatrics to feed. Guess who’ll win the business. Now the oil income has been squandered, Britain is struggling to find a USP of any sort.

Which leaves friends. Except that, walking out of Europe won’t leave us many. Business has little time for sentiment. Any country with no USP outside the world’s great trading blocs—be it Brazil or Britain—will struggle. Our fearless friends in Form 5B bluster we will forge new deals. Indeed, we may still land a contract for, say, six helicopters with Parador. But don’t expect the next Eurofighter to include any British components. This weal position will weaken further as existing links into Europe atrophy and all those  immigrants keeping our NHS, agriculture, hospitality and other sectors afloat go home.

If Form 5B were just flat caps nodding under horse brasses in the Dog & Duck, or florid whiskrts thundering from wing-back chairs in deepest St James, they might indeed voise the wistfulness many feel at Britain’s decline. But, as a formula for all our futures, it ranks right up there with Canute’s concept of coastal management, ASLEF’s insistence on firemen for diesel trains or the idea that each car required a man walking in front with a red flag. Form 5B fatal flaw is to think they speak for Britain. But they resonate poorly with 75% of Britan. They would take ‘Our Country’ back from the clutches of  Aliens—and hand control control to a Home Counties thinking just as alien. Yet that is all that Form 5B knows…or seems to care about.

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Trading Up

This week saw the first meeting for the upcoming season of NBBC . Who? Well,, it is hardly surprising our far-flung readership might not have heard en NBBC. But even most locals are equally in the dark. Now, before Auntie Beeb get all bent out of shape about a new broadcast rival setting up as the North British Broadcasting Corporation, let me assure them that North Berwick Business Collective is no such thing. It is the latest incarnation of the NB Business Association, which was in turn begat by NB Traders Association, which saw to the commercial success of businesses in the town for half a century.

Regular readers in search of this blog’s usual incisive analysis may feel the topic too parochial for their taste, but beer with us while we argue such an ad hoc collaboration may be the key to successful communities, as opposed to faceless suburbs and fragmenting society.

Back in the days of two-week bucket-and-spade holidays, the old town councils ran the show in North Berwick—and in small holiday towns like it. But the people most concerned with keeping holidaymakers happy where local retailers, who formed traders’ associations to persuade people to visit and entertain those who did. The result was a plethora of seasonal events: swimming galas; garden fetes; sandcastle contests; putting contests; etc. Visitors had a good time; traders made good money; everyone was happy.

The bloom in package jet holidays in the sun scuppered all this. Holiday town high-streets suffered the thing decay all other towns and malls and hypermarkets drained the retail business away. But in the last few years, people have more leisure time and more money to enjoy it. Two weeks in the sun I’m not enough—they want to go skiing, to explore their country, to visit friends/family, to have long weekends to do so. They are also tired of malls that all have the same Clinton Cards and Shoe Fair shops. Once they have done the monthly grocery shop at Tesco and dressed the kids for school at Asda, they hanker for some recreational shopping offering unusual items on a human scale where they don’t have to wander an airfield-sized car park in the rain.

Several Scottish towns have nailed this one: Pitlochry, Peebles, Kirkcudbright, St Andrews and Kelso—to name a few. North Berwick should be up there with the best of them (as could other pretty East Lothian towns like Dunbar and Haddington). But North Berwick already has two key advantages: 1) the Scottish seabird Centre is open all year and attracts thousands, including foreign visitors; 2) a regular ScotRail servers that puts it with them Half an hour obvious centre of Edinburgh. Unusual high-street shops, cafes and restaurants are already succeeding with their “recreational retail” offering. But, because both Scottish Enterprise VisitScotland and East Lothian Council are pretty clueless about this kind of business it succeeds more by luck than design. It could be a whole lot better.

Which is where North Berwick Business Collective comes in—and they don’t need millions to be a game-changer. A reason to visit?—Already have that = SSC. An easy way did get there?—Already have that = ScotRail service. Hard to believe but there is no alluring brochures for the town anywhere, let alone in VS TICs or bedroom packs. Hard to believe but there is no simple visitor guide with map of the town. Hard to believe but historic Scotland three Tantallon and Dirleton Castles as it they were on planets separate from each other and from the SSC and Museum of Flight, who reciprocate the ignorance.

Key to unlock this unnecessary one jam of mutual oblivion is NBBC. By distributing “Come to NB” leaflets across Scotland, they might increase visitor numbers. By running a pro-active social media campaign on top of the website, they will do the same. By welcoming visitors with a map and guide at entry points and in guest packs, they will ensure visitors enjoy all that is available to them and attractions enjoy maximum football. And, by banging a few heads, they might get attractions to benefit from visitors already on their doorstep with such radical notions as multi-access day tickets.

Fanciful? Ambitious? Perhaps. But it would take no more none of four-figure budget, fired up with chutzpah and imagination by a handful of believers to achieve. Some ground work has already been done by others. After the dreadful FirstBus stopped pretending to run bus services in East Lothian, the Edinburgh-North Berwick route has been provided by the clean and reliable East Coast Buses. And they have already cut a deal with the SSC—not for a joint ticket, but to advertise their Day Ticket on SSC member magazine and show the SSC is on their route. Not much…. but a start. It will be up to the NBBC to get better ideas—and run with them to show how the heart can be put  back into our high streets… and, as a result, into our communities.

EcoastEaster

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Newspeak As Fudge

Connoisseur of Scottish politics will be familiar with the woolly Nrespeak that has become the day-to-day language of politicos, mandarins and wannabes who swim and survive in its murky waters. It creates a world where only opponents make mistakes, commitments are malleable, “progress” can be used as a slippery verb and answers to direct questions always answer a different question.

Providing your own career/hopes/job lie elsewhere, all this can be entertaining. But, for those whose idealism has not been drowned in Newspeak obfuscation gushing from Holyrood and town halls alike, two decades of devolution has not differentiated Scotland from the yah-boo-sucks bear-pit that is Westminster. This is now seems to apply within— As well as between—parties. Take this month’s exchange (reported in Holyrood Magazine) between Cabinet Secretary for Economy, Jobs and Fair Worth Keith Brown (ex-marine, former council leader and non-numpty decent guy) and Holyrood Local Government and Communities Committee chair Bob Doris (long-time Glasgow grassroots street activist, now MSP).

Just the complexity of their job titles hinte that what either of them say may not be as crisp and clear as mere mortals would prefer. It is probably unfair to pick on Keith and Bob (who usually do better) when so many others getting paid £50,000 for waffle exist.

The Gilded Balloon Award for “saying nothing with many ill-defined big words” does go to the two of them for the following guff on City Region Deals. They win jointly for the sheer scale of woolly Newspeak used. It is so woolly, it could as easily be about turnip production or the safe limit on the number of qualified angels permitted to dance on a union-approved pinhead:

The Scottish Government has responded to concerns Holyrood’s Local Government and Communities Committee highlighted about Scotland’s city region deals.In January, the committee said the deals have “significant issues” which must be addressed.

The deals, which have seen a £3.3bn investment in Scotland so far, were extended to Scotland as a partnership between the UK Government, the Scottish Government, local authorities and other partners to boost jobs and grow regional economies.

Cabinet Secretary for Economy, Jobs and Fair Work Keith Brown wrote to committee convener Bob Doris.

He said: “The way that growth deals are developed is an evolutionary process. In our on-going engagement with partnerships and the UK Government, we will be mindful of all of the recommendations made by the Committee.

“In particular, we will focus on issues linked to transparency of investment and partnership inclusivity. As we move forward, it will be increasingly important to see growth deal investments as part of a Regional Economic Partnership’s entire effort to achieve accelerated inclusive growth.”

Doris said: “We wanted greater clarity around the pursuit of economic growth by the UK Government and inclusive growth as pursued by the Scottish Government. This has been accepted by the Scottish Government and hopefully the UK Government will soon follow suit to deliver the partnership work we all want to see.

“These economic growth deals have the potential to raise communities out of poverty and transform people’s lives, but only if they are delivered properly. We recognise that city region deals are still in the very early days of their lifespan and our committee will be keeping a close eye on their progress in the future.”

…erm…whit? “…engagement with partnerships…”? “…accelerated partnership inclusivity…”? “…inclusive growth…”? Where, outside of a cosily pensioned bureaucracy, do people talk like that? We;re talking £3.3 billion of public money in City Deals—£638 for each of us in Scotland. If some kind reader could clarify from the above just where all that money will gor—even in general terms—everyone else would be most grateful.

But, as a matter of urgency, hey should also send it along to Keith and Bob, who have clearly spent so much time breathing Holyrood’s febrile atmosphere that they need an urgent refresher course in Plain English—especially the meaning of the word “transparent”.

 

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Beast from the East

Readers me be forgiven for assuming that the title means I will be banging on about the Baltic weather we have been suffering most of the month. While it can indeed been difficult to find a brass monkey out and about, this blog concerns itself with brass necks more then monkeys. Brass necks and politicians are terms many consider interchangeable. But the leading exponents appear to come from dictatorships, most especially the former Soviet Union.

Before we go farther, let me state I yirld to no-one in admiration for the Russian people and their achievements from Akhmatova to Zhukhov But, be that as it may, their grasp on social politics has barely moved beyond the Middle Ages.

For the Beast from the East in question is Putin’s Russia, whose idiosyncratic politics have this week clashed with those of the West and are brewing into the worst face-off since the Cold War. For the last week, there has been media outrage over poisoning a former spy using nerve toxins developed by Russia. This compounds incidents like businessmen dying in suspicious circumstances and Litvebyenko dying horribly from radiation poisoning.

By 21st century Western standards, such incidents are barbaric and belong to another age. Without wishing to excuse any of this, an outraged eyeball–to–eyeball Mexican stand-off may not be the sensible way to come to a resolution that does not involve nuclear winter. My contention is that we are judging Putin and his Russians by our standards, not theirs.

The first and fundamental point is to realise that, at an international level, Russians are paranoid and also suffer national inferiority complex. Why the largest country in the world with 200 million people who were once the other Great Superpower should feel this way is not immediately obvious. But few in the West have been there, have come to know the people or their history. In this present flap, we are judging Putin and his Russians by our standards, not theirs.

All Europe has suffered invasions. But far fewer in the last millennium, with the exception of the great Mongol invasion of the 13th century when 500,000 people died, hit what was to become Russia harder than anywhere. Unlike Britain, Russia had few natural boundaries. On a regular basis, they would find themselves invaded by Poles, Lithuanians, Swedes, French, Turks so that the only way they saw they could stand up for themselves was as a monolithic state under an autocratic ruler. The Ivans and Peters who forged the harsh rule of the Czars also forged an inward looking Empire from empty Eastern wastes, driven by an oligarchy of   nobles. European countries spanned the world, with individuals contributing and benefiting as much as any landed elite.

It took some time for those European countries to realise that the tortures of the Inquisition, the flogging of sailors, the trading of slaves, the persecution of minorities had no place in modern civilisation. Russia may have absorbed some of this, but not at the same pace, nor with the same enthusiasm. In fact, it could be argued 100 years ago that, while the West had industrialised both manufacturing and the society that ran it, Russia—while achieving the former—it was run by a mediaeval society. There was little by way of a middle-class to link peasants with mobility or to provide a path for the ambitious.

Which goes a long way to explain the success of the October revolution. While several five year plans did drag Russia into the 20th century, a party-based elite replaced a mobility-beast elite but the lot all the average Russian improved more slowly them that of workers in nowhere. More tellingly, a centuries-old habit of obedience to authority played right into authoritarian Bolshevik hands. That Stalin seized power might have been expected. But that he held it with not a glimmer of counter revolution spoke volumes for the ingrained respect the Russian people gave for decisive leadershop.

It was that stoic endurance—rather then any leadership from party or Stalin—that brought them through the worst ordeal any country has have to suffer in modern times. The British are quick to cite the Dunkirk spirit, the exploits of The Few and Alamein. But it was the Soviet Army that beat Fascism—but at the cost of 3 million soldiers, 10 million civilians and devastation of all main cities.

On top of all that, Stalin’s megalomania swallowed up a number of countries behind the Iron Curtain, provoking America into McCarthyism and an arms race whose purpose—as far as most Russians could tell—was to put them in their place and undermined their morals with capitalist materialism, amoral rock music and belittle their earlier success is space would spy satellites and a series of moon launches with which they could not compete. Taking this together with earlier history cited above, national paranoia and inferiority complex is more than understandable.

So when not just the economy but the whole Communist System broke down trying to compete with a richer capitalist West, pride as well as pocketbook took a hit. Because they had no experience developing independent lives, let alone careers, he average Russian had a little clue how to exploit opportunities presented.

But many in the party hierarchy did—which spawned the class of oligarchs no spending their millions in London. They have replaced the party , who had replaced the mobility.

Meanwhile, the bulk of Russians are trying to get by as even professional salaries devaluing by the minute so that a kilo of bananas costs a week’s wages. They witness the superpower for which they made sacrifices disintegrate, lose face and become run by drunken ex–bureaucrats like Yeltsin.

So, when someone with strongman KGB credentials calls for and enfeebled Mother Russia to be made great again, who are you going to well for? Putin stomps on Chechnya for wanting to go it alone? Send ‘em right! He cuts off gas supplies as part of negotiations? That’ll teach ‘em! He stokes up civil war in the Ukraine? They should never have split off in the first place!

So, when the military win Assad’s civil war for him or track down and polish defectors in places like Salisbury Putin is showing that you mess with Russia at your peril and Russia than call again—not to mention Putin standing tall so he will win his up coming election.

His methods maybe nasty, even brutal. What they are popular with most Russians—even the ones with more International prospective. Because Russia shares more than a common Communist past with North Korea. It has also realised that, by painting an American-led West as bent on the country’s downfall, then portraying the present leadership as the only one strong enough to prevent this is as smart a ploy four permanent premiership as you are likely to find.

This Beast in the East has far more to do with securing Putin then any real danger to the West. As long as the oligarchs continue making obscene amounts of money on the LSE, the bear may growl but will forego any use of claws or teeth. Nobody in the West believes the polls that make Putin appear unbeatable; but he is.

However, until Russian society develops its own substantial middle-class, the social conscience, political correctness and squeamishness of media so prevalent in the West will be seen as foreign and hostile in Russia—and strongarm leaders will milk that. Equally, what is regarded as tough but necessary there, we’ll see as harsh and barbaric Not just Putin and the oligarchs, but the bulk of Russians who always have thought differently will wonder what these Western milksops are on about.

 

 

 

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