Daniel Hannan is a legend. His blog on telegraph has been one of the most consistent sources of fresh air for a last couple of years. His speech in Strasbourg in front of Gordon Brown not only collected million hits on youtube, but may have played a role in changing the course of history. After all, Brown was there promoting the New Deal and The Biggest Fiscal Stimulus The World Has Even Seen - and that was his last public appearance before he climbed down from the tree and started pretending that this was not what he planned G20 meeting to be all about.
But here he was today on his blog, setting out a view that only Members of Parliament can become ministers in HM Government. According to him, being "democratically elected" is the only qualification needed to run any Government Department.
First of all, most of MPs are not even elected based on their personal qualities or abilities. People tend to vote for party rather than for individual who represents the party in their constituency. So the individual MP is actually democratically elected only by members of his party who happen to be registered in specific geographical area. And even this process is constantly being fiddled with, with candidates being parachuted by party establishment.
But let's put that aside for a second. Let's assume that all our MPs actually won over hearts and minds of sufficient number of people in their constituences to win themselves a seat in the Commons.
Does this make them more suitable to run a department than say, somebody who actually knows something about the field he is supposed to oversee ?
I am not saying that you can't acquire that knowledge after being elected as MP, but with ministers looking at their appointment as mere step in the career towards the top of the greasy pole, there is no reason for them to do that. What's more, usually, there is no time too, with cabinet reshuffled every year or so.
What we have as a result is a set of incompetent people, trying to govern departments they have no knowledge about. No wonder they can't get anything done - if you put me in pilot's chair now, I would not be able to take off, no matter how much I want it.
Unfortunately, this incompetent approach is rooted deep into our culture at the moment, with TV programms advocating the public vote as the best tool to determine one's suitability for specific role getting the best ratings.
It's up to Andrew Lloyd Weber and Alan Sugar to decide whether they want to distribute important jobs in their businesses based on public opinion.
But running a Government is a much more complicated matter than singing a song. And we need as many specialists there as we can get. Now more than ever.
And this is not how dictatorships start: specialist ministers seem to work just ok in US.
It's probably ok to insist that PM must be elected ( although some of the best British Prime Ministers in the glory years were actually sitting in Lords ) - but then it should be left to him to find the best man for any job, whether within the House Of Commons, or outside of it.
As a result, of course, less career politicians will be given ministerial jobs.
I can only hope that this is not what Mr Hannan is worried about.
Friday, 8 May 2009
Thursday, 7 May 2009
This Time Next Year ...
This just in: apparently, China is not esctatic about QE and is switching from bonds to raw material.
As Ambrose Evans-Pritchard writes in his telegraph article, "China is irked by Washington's response to the credit crunch, suspecting that the US is engaging in a stealth default on its debt by driving down the dollar."
Yep. That's exactly what US and UK are doing at the moment. If you can't pay off your debt, why not inflate it away ? They've been quietly doing it for a long time, taking most of their residents along for a ride ( wasn't it fun to borrow 125% of your house value to find out it's only worth 50% of the house a couple of years later ? ).
Now the debt became too big for usual inflation to erase it, so they are creating hyperinflation to clear the mess.
Who wins ? Anybody who borrowed money on a fixed rate - including US and UK governments. And anybody who lended money on a variable rate or linked to inflation. Rates will go through the roof, compensating for lost value of the original loan. And inflation-linked bonds will still be valuable even after the storm.
Who loses ? Everybody else. All the variable-rate borrowers, which will see their monthly payments rise probably much quicker than their wages during the hyperinflation. But also all the savers on fixed rates, including bondholders - both domestic and foreign.
No wonder Chinese are nervous.
There is a bit of difference though between US and UK here. Most of the major holders of bonds and currency are caught in a dollar trap - they have too much invested in it to be able to offload it without losing most of what they have. In a lot of ways, Chinese control the value of dollar every bit as much as Americans - but they are even more inclined than Americans not to let it drown.
Something tells me that they don't have a similar problem with the pound. They can give up on it without losing too much ground. That's why BoE should be extra careful not to give them additional reasons to do that if they want to avoid printing million-pound notes in 2011.
But then again - I am not sure they want to avoid it. I would not be surprised if they have asked their creative department to come up with ideas how such a note would look like.
All the Del Boys from around the country might finally get their wish - this time next year, we'll all be millionaires.
As Ambrose Evans-Pritchard writes in his telegraph article, "China is irked by Washington's response to the credit crunch, suspecting that the US is engaging in a stealth default on its debt by driving down the dollar."
Yep. That's exactly what US and UK are doing at the moment. If you can't pay off your debt, why not inflate it away ? They've been quietly doing it for a long time, taking most of their residents along for a ride ( wasn't it fun to borrow 125% of your house value to find out it's only worth 50% of the house a couple of years later ? ).
Now the debt became too big for usual inflation to erase it, so they are creating hyperinflation to clear the mess.
Who wins ? Anybody who borrowed money on a fixed rate - including US and UK governments. And anybody who lended money on a variable rate or linked to inflation. Rates will go through the roof, compensating for lost value of the original loan. And inflation-linked bonds will still be valuable even after the storm.
Who loses ? Everybody else. All the variable-rate borrowers, which will see their monthly payments rise probably much quicker than their wages during the hyperinflation. But also all the savers on fixed rates, including bondholders - both domestic and foreign.
No wonder Chinese are nervous.
There is a bit of difference though between US and UK here. Most of the major holders of bonds and currency are caught in a dollar trap - they have too much invested in it to be able to offload it without losing most of what they have. In a lot of ways, Chinese control the value of dollar every bit as much as Americans - but they are even more inclined than Americans not to let it drown.
Something tells me that they don't have a similar problem with the pound. They can give up on it without losing too much ground. That's why BoE should be extra careful not to give them additional reasons to do that if they want to avoid printing million-pound notes in 2011.
But then again - I am not sure they want to avoid it. I would not be surprised if they have asked their creative department to come up with ideas how such a note would look like.
All the Del Boys from around the country might finally get their wish - this time next year, we'll all be millionaires.
Printing Their Way Out Of Recession.
The Bank Of England has just announced that they are about to create another £50bn of new money to be used mostly to buy government bonds.
As Edmund Conway points out in his telegraph blog, the yields on the bonds (which are the perfect indication of level of reluctance in the market to purchase them ) went up in anticipation of BoE announcement and went down sharply when the announcement was made.
The message is simple - while you're buying the bonds, we'll buy some too. Once you're out of the market - we'll follow you through the door.
That more or the less leaves BoE and it's Governor (who is appointed by PM ) as the main (potentially, only) buyer of Government bonds - in other words, the only lendor still willing to lend money to the Government.
So, when the Government tells us that they are going to "borrow" some astronomical sums to service their client state, it should be clear that they actually mean to print the money they need. If only each of us could have had this option - to add arbitrary sums of money to our current account to cover any past or future excessive expenses...
What happens next ? It's quite simple really - unlimited supply of any substance devalues it. Sand might cost money in other parts of the world, but try selling it in Sahara. As there are no real limits to the amount of money BoE will need to create to keep this spendaholic Government afloat for the next year or so, pound is in real danger of becoming Sahara's sand ...
As Edmund Conway points out in his telegraph blog, the yields on the bonds (which are the perfect indication of level of reluctance in the market to purchase them ) went up in anticipation of BoE announcement and went down sharply when the announcement was made.
The message is simple - while you're buying the bonds, we'll buy some too. Once you're out of the market - we'll follow you through the door.
That more or the less leaves BoE and it's Governor (who is appointed by PM ) as the main (potentially, only) buyer of Government bonds - in other words, the only lendor still willing to lend money to the Government.
So, when the Government tells us that they are going to "borrow" some astronomical sums to service their client state, it should be clear that they actually mean to print the money they need. If only each of us could have had this option - to add arbitrary sums of money to our current account to cover any past or future excessive expenses...
What happens next ? It's quite simple really - unlimited supply of any substance devalues it. Sand might cost money in other parts of the world, but try selling it in Sahara. As there are no real limits to the amount of money BoE will need to create to keep this spendaholic Government afloat for the next year or so, pound is in real danger of becoming Sahara's sand ...
Getting serious
We've started off this blog a couple of weeks ago with some mockery stuff - but since then Brown and Co did everything possible to prove that they don't need any help to look ridiculuous. Most careers in politics have two phases - the rise and the downfall. And it's usually quite easy to pick out moments that identify each of these phases. The moment of triumph and the moment when it becomes obvious that the game is up.
With Brown, it's different. I can't think of a memorable high point, and there are too many low points to pick one. "Saving the world" was a perfect candidate, until the expenses horror movie appeared on Youtube. Once he's kicked out of No.10, he should really try his luck in Hollywood - this was the scariest smile on the screen since Jack Nicholson's "Here Comes Johnny" scene.
However, the scariest part here is that he may still have another 13 months to improve on this performance and deliver even better symbol of his disastorous reign.
So it's probably time to put the mockery aside and get serious.
With Brown, it's different. I can't think of a memorable high point, and there are too many low points to pick one. "Saving the world" was a perfect candidate, until the expenses horror movie appeared on Youtube. Once he's kicked out of No.10, he should really try his luck in Hollywood - this was the scariest smile on the screen since Jack Nicholson's "Here Comes Johnny" scene.
However, the scariest part here is that he may still have another 13 months to improve on this performance and deliver even better symbol of his disastorous reign.
So it's probably time to put the mockery aside and get serious.
Wednesday, 15 April 2009
Take Courage
So, now that their original "Take Courage" ad was banned, Wells and Young's brewers need to come with a new one.
I would suggest dropping the nice bloke they had on the picture from their campaign and use the guy who is in the most obvious need of some Courage - Gordon Brown.
Imagine a picture:
Gordon sitting at his desk in Downing street, looking slightly embarassed, lacking any confidence or conviction - in short, the way he usually looks.
In front of him, a letter starting with words "Sorry ..."
Or, maybe, a resignation letter ...
Or, at least, a document called "Calling an Early General Election".
A glass of beer on the desk. Text, in a speech bubble coming from a it, states "Take Courage My Friend".
That would sell quite a lot of beers, wouldn't it ?
What ? It is illegal to suggest that an alcoholic drink can change moods or enhance confidence ?
Ok then. Dump the beer from the ad as well. Just use the book Courage from the author on the picture.
If, as a result of the campaing, The Friend takes Courage, it probably won't help the brewers much, but can do wonders to the rest of the country...
I would suggest dropping the nice bloke they had on the picture from their campaign and use the guy who is in the most obvious need of some Courage - Gordon Brown.
Imagine a picture:
Gordon sitting at his desk in Downing street, looking slightly embarassed, lacking any confidence or conviction - in short, the way he usually looks.
In front of him, a letter starting with words "Sorry ..."
Or, maybe, a resignation letter ...
Or, at least, a document called "Calling an Early General Election".
A glass of beer on the desk. Text, in a speech bubble coming from a it, states "Take Courage My Friend".
That would sell quite a lot of beers, wouldn't it ?
What ? It is illegal to suggest that an alcoholic drink can change moods or enhance confidence ?
Ok then. Dump the beer from the ad as well. Just use the book Courage from the author on the picture.
If, as a result of the campaing, The Friend takes Courage, it probably won't help the brewers much, but can do wonders to the rest of the country...
Tuesday, 14 April 2009
Good Governance
If there is one person that is grateful to GB these days, it must be Tony Blair. Being forced out of office last year, not only he has managed to escape almost unscatched politically (How many of us blame him, rather than GB, for all that happens now ? Would it be easy for him to dump all the blame for financial disaster on his chancellor, were he still in power ? I imagine the answers to these questions are "Not so many" and "Probably not, even for a master of spin like Tony" ), but it also allowed him to cash in on his ability to look and sound very smart while saying trivial things.
This is the details of his earnings since leaving office:
Þ Speaking fees: £2.5 million per annum
Þ Advance for memoirs: £4.6 million
Þ Advisory role with JPMorgan Chase: £2 million pa
Þ Advisory role with Zurich financial services: £500,000 pa
Þ Prime Ministerial pension: £63,468
Þ Allowance for private office: £84,000
Þ Contract to advise Kuwaiti leaders on good governance: £1 million
Total to June 2009: £15,894,936
Personally, I would not pay £1 to hear what Tony has to say or what Tony's biographers would write on his behald - but it's probably just me, as apparently there are a lot of people who think otherwise. And considering that, it is hardly surprising that JP Morgan and Zurich want to boost their credentials with the popular public by claiming to listen to Tony's advise.
Also, it would seem surprising that the taxpayer is asked to provide £150 K a year to accomodate a pensioner, who looks to be doing just alright without government taking care of him. But if we pay for Jacqui's bathplug, I guess it's ok to pay off half of Tony's mortgages - because as we've been told already, if somebody exploits the rules, the problem is with the rules rather than with people exploiting them.
But I find myself stunned with the last bit of Mr Blair's additional income.
Kuwaiti leaders paying £1 million to Tony Blair to be advised on good governing ?
Just trying to follow the line of thinking of a certain Kuwaiti leader:
"My country is one of the richest in the world per capita. I have the oldest directly elected parliament among Arab states. My people are generally happy and there is no discontent. But something is missing. How can I make sure I am a good governor ?
I'll probably have to ask somebody's advise.
Tony Blair ? Let's see.
After 10 year in power, the nation finances are in one of the worst conditions of civilised world. Huge parts of society are addicted to benefits. There are millions of illegal immigrants. Army is involved in two wars, which people of the country genuinely objected. In fact, to get involved in one of the wars, Blair had to lie to anybody who would listen.
Throughout 10 years of his rule, filled with monthly scandals of any imaginable sort, he could not control his own chancellor, and eventually succumbed to his pressure and left the office without completing the term for which he was elected.
Yes, that's the man. This is the one that I am going to ask about Good Governing" ...
This is the details of his earnings since leaving office:
Þ Speaking fees: £2.5 million per annum
Þ Advance for memoirs: £4.6 million
Þ Advisory role with JPMorgan Chase: £2 million pa
Þ Advisory role with Zurich financial services: £500,000 pa
Þ Prime Ministerial pension: £63,468
Þ Allowance for private office: £84,000
Þ Contract to advise Kuwaiti leaders on good governance: £1 million
Total to June 2009: £15,894,936
Personally, I would not pay £1 to hear what Tony has to say or what Tony's biographers would write on his behald - but it's probably just me, as apparently there are a lot of people who think otherwise. And considering that, it is hardly surprising that JP Morgan and Zurich want to boost their credentials with the popular public by claiming to listen to Tony's advise.
Also, it would seem surprising that the taxpayer is asked to provide £150 K a year to accomodate a pensioner, who looks to be doing just alright without government taking care of him. But if we pay for Jacqui's bathplug, I guess it's ok to pay off half of Tony's mortgages - because as we've been told already, if somebody exploits the rules, the problem is with the rules rather than with people exploiting them.
But I find myself stunned with the last bit of Mr Blair's additional income.
Kuwaiti leaders paying £1 million to Tony Blair to be advised on good governing ?
Just trying to follow the line of thinking of a certain Kuwaiti leader:
"My country is one of the richest in the world per capita. I have the oldest directly elected parliament among Arab states. My people are generally happy and there is no discontent. But something is missing. How can I make sure I am a good governor ?
I'll probably have to ask somebody's advise.
Tony Blair ? Let's see.
After 10 year in power, the nation finances are in one of the worst conditions of civilised world. Huge parts of society are addicted to benefits. There are millions of illegal immigrants. Army is involved in two wars, which people of the country genuinely objected. In fact, to get involved in one of the wars, Blair had to lie to anybody who would listen.
Throughout 10 years of his rule, filled with monthly scandals of any imaginable sort, he could not control his own chancellor, and eventually succumbed to his pressure and left the office without completing the term for which he was elected.
Yes, that's the man. This is the one that I am going to ask about Good Governing" ...
First robot Prime Minister
Today, telegraph has published a very encouraging story about the first ever robot supermodel been unveiled by Japanese engineers.
According to the reports, the robot costed around £1.4 million and has 30 motors in her body that allow her to walk and move her arms as well as eight motors on her face allowing her to create facial expressions such as anger and surprise. It means she can imitate the gait and pose of models.
The report highlighted the technology gap between Japan and United Kingdom, which had seen it's own artificial intelligence project, launched with much fanfare about a year ago, falling on hard times recently.
With costs of the project nearing £1 trillion, the robot aptly named Gordon Brown ( with initials GB highlighting not only the fact that it was invented by British scientists, but also that it has been subsidised by taxpayer money ), is fully incapable of creating any realistically looking facial expression, of showing any emotions or developing any kind of independent thinking.
When programmed by experienced engineers, it can alternate between simple sentences which are pronounced in reasonably convincing monotonic voice. However, the limitations of the system don't allow it to be re-programmed frequently, leaving robot to repeat same sentences for periods of up to 3-4 months.
As it's Japanese counterfeit, it was originally designed to be used to entertain visitors in amusements parks - however, as the cost of the project spiralled out of control, it was decided that the country can't afford to maintain it along with bearing the costs of running the government and the product was launched as a live version.
Many experts expressed doubts as to whether enough testing was performed and potential damage costs estimated before Downing street deployment took place. However, government authorities assured at the time that all the necessary precautions were taken.
After a tumultous year, during which the robot's shortcomings were well exposed, the experts agree that the robot completely lacks any self-learning capacity, which is thought to be a cornerstone of any successfully developing artificial intelligence.
Initially, the project was supposed to run for 2 years, until the summer of 2010, but now questions are raised whether the country can afford the obviously failed experiment to continue for another year.
According to the reports, the robot costed around £1.4 million and has 30 motors in her body that allow her to walk and move her arms as well as eight motors on her face allowing her to create facial expressions such as anger and surprise. It means she can imitate the gait and pose of models.
The report highlighted the technology gap between Japan and United Kingdom, which had seen it's own artificial intelligence project, launched with much fanfare about a year ago, falling on hard times recently.
With costs of the project nearing £1 trillion, the robot aptly named Gordon Brown ( with initials GB highlighting not only the fact that it was invented by British scientists, but also that it has been subsidised by taxpayer money ), is fully incapable of creating any realistically looking facial expression, of showing any emotions or developing any kind of independent thinking.
When programmed by experienced engineers, it can alternate between simple sentences which are pronounced in reasonably convincing monotonic voice. However, the limitations of the system don't allow it to be re-programmed frequently, leaving robot to repeat same sentences for periods of up to 3-4 months.
As it's Japanese counterfeit, it was originally designed to be used to entertain visitors in amusements parks - however, as the cost of the project spiralled out of control, it was decided that the country can't afford to maintain it along with bearing the costs of running the government and the product was launched as a live version.
Many experts expressed doubts as to whether enough testing was performed and potential damage costs estimated before Downing street deployment took place. However, government authorities assured at the time that all the necessary precautions were taken.
After a tumultous year, during which the robot's shortcomings were well exposed, the experts agree that the robot completely lacks any self-learning capacity, which is thought to be a cornerstone of any successfully developing artificial intelligence.
Initially, the project was supposed to run for 2 years, until the summer of 2010, but now questions are raised whether the country can afford the obviously failed experiment to continue for another year.
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