Goodness me, but don't we have a great furore this morning? Following the sentencing of various morally deficient rioters, people are starting to protest that these sentences are too harsh. This, I'm sure you will remember, comes after a week of demands to ensure that anybody conviceted of involvement in the riots was shown a bit of tough love, and it's this kind of wishy-washy pussy-footing about the issue that got Britain into the mess we're in today. A great deal of our problems can be put down to politicians and the public in general not having the moral conviction to carry through their aims. Get a grip! If you decide to do something, stick to your guns, or those same guns will be turned against you.
A main point of contention in this debate surrounds the fates of Perry Sutcliffe-Keenan and Jordan Blackshaw, both jailed for four years for inciting violence on Facebook. Apparently, the fact that no rioting or looting resulted from this incitement should be considered in their favour. I say that no matter how staggering a criminal's ineptitude at actually committing a crime, he remains a danger to society through his attitude, just as if he had succeeded in his nefarious plans. "But four years is such a long time!" wail the apologists. "Such a sentence will ruin their lives!" Assuming they even had fine and upstanding lives in the first place, a willingness to destroy other people's livelihoods for a bit of fun deserves the ruin of your own. As for those who whine about rehabilitation, if there is one thing we should learn from the riots, it is that the criminal element holds no more regard for our pifflingly useless attempts to steer them onto the straight and narrow with a couple of months in a nice comfortable chokey than it does for the victims of its muggings and rapes.
Stick 'em away for a good long time, and if they do it again, put them away for longer. And for goodness' sake, stop letting them watch TV while they're in. It's not a holiday.
Wednesday, 17 August 2011
Tuesday, 16 August 2011
We Hold this Money to be Self-Evident
Continuing my commendably civic concern for the political fallout of last week's riots across England, I note with some chagrin that the dastardly bankers are coming under fire again, particularly on Twitter. "How can you condemn looters when the bankers looted our country and got away with it?" cry the shrill voices. The reason, dear readers, is that "bankers" did nothing of the sort. Indeed, it was more or less inevitable that credit would be extended too far as a result of the nature of modern economics. Allow me to explain.
Fiat Money
In 1971 Richard Nixon ended the dollar's last link with gold, effectively bringing the era of the Gold Standard to a close. Since then, all world currencies, but most importantly the reserve currencies, have floated against each other to a greater or lesser degree. Since money now has no physical anchor, it is intrinsically worthless and means something only because we believe it does. Money therefore now exists primarily as computer data, and can as a result be summoned in and out of existence at the push of a button. Moreover, since the money used to buy stock, shares, derivatives, bonds, gilts or any number of other financial instruments is worthless, these investments have no true monetary worth either. This is why Facebook can be valued at a sum out of all proportion to reality, and global debt now stands at $126 trillion, or just over 200% of global GDP. To put it another way, the entire world would have to devote every single penny to reducing debt for more than two years to do away with it. Evidently there is no way this can ever be paid off, and it is when you get into this situation, where non-existent assets attract huge values and debt is meaningless that the whole system starts to creak. So why do financiers allow such a thing to happen? Well, the simple answer is they don't, at least not actively. The primary reason is that
People (not bankers) are Greedy
That's right, you read correctly. The vast majority of people in the developed world keep their money in banks. Why? Evidently they are not safe places to do this - banks have been failing since their invention. No, most people keep their money in banks because they are greedy, and they want the interest. But that's it. That's all they think about. But think now for a minute. Why do banks pay interest? Where does the money come from? I'll tell you. Banks lend each other money and make investments with your money. As a fee for the use of your money, they pay you interest. And it's not just liquid assets that people muck about with. Banks frequently lend money and give credit - you tell them that you will pay them back the full amount, plus a bit in interest at some future date. They lend to you because these days that is where a lot of the revenues of a high street bank come from - it's their job. But then if you fail to pay the banks back, they come and take your house or your stuff to balance the payment. If enough people do this, suddenly the bank has no more money and cannot lend. Nobody can borrow money, so they stop buying things, and those who owe money have their house repossessed. That is a credit crunch. The important thing to note, however, is it is not the fault of the banks. They may have extended too much credit - been too credulous - but that is not wrongdoing. The debtors who failed to make good on their loans are at fault, as they have failed to keep the promise they made. If you require bankers to do your banking for you, do not whinge and moan if they encounter trouble because you fail to honour your responsibilities. As with all things, banking and finance in general constitute a two-way effort.
Everybody Is Too Rich For Their Own Good
Almost everybody in the UK has more than enough money, by which I mean money critical to survival. The UN categorises one of the markers of poverty as not owning a television. I do not own a television, but I am no poorer because of it, as a TV is not necessary to survival. Once everybody has enough to eat, well and good, but there are many people with a lot more money than that. And what do you do when you have everything? What does the upper-middle class do with its spare cash? It invests it, in any number of different things. Property is a favourite, and financial vehicles are popular too. But all this money swilling around simply feeds the two problems above. For a start, it doesn't really mean anything, and secondly it all feeds the behemoth of global finance. It's all a huge circle made of hot air and optimism, so if you don't like bankers sending your money on this merry-go-round, don't put it in a bank, and don't spend more than you earn. It's not that hard. Otherwise, stop whining and learn the rules of the game.
Fiat Money
In 1971 Richard Nixon ended the dollar's last link with gold, effectively bringing the era of the Gold Standard to a close. Since then, all world currencies, but most importantly the reserve currencies, have floated against each other to a greater or lesser degree. Since money now has no physical anchor, it is intrinsically worthless and means something only because we believe it does. Money therefore now exists primarily as computer data, and can as a result be summoned in and out of existence at the push of a button. Moreover, since the money used to buy stock, shares, derivatives, bonds, gilts or any number of other financial instruments is worthless, these investments have no true monetary worth either. This is why Facebook can be valued at a sum out of all proportion to reality, and global debt now stands at $126 trillion, or just over 200% of global GDP. To put it another way, the entire world would have to devote every single penny to reducing debt for more than two years to do away with it. Evidently there is no way this can ever be paid off, and it is when you get into this situation, where non-existent assets attract huge values and debt is meaningless that the whole system starts to creak. So why do financiers allow such a thing to happen? Well, the simple answer is they don't, at least not actively. The primary reason is that
People (not bankers) are Greedy
That's right, you read correctly. The vast majority of people in the developed world keep their money in banks. Why? Evidently they are not safe places to do this - banks have been failing since their invention. No, most people keep their money in banks because they are greedy, and they want the interest. But that's it. That's all they think about. But think now for a minute. Why do banks pay interest? Where does the money come from? I'll tell you. Banks lend each other money and make investments with your money. As a fee for the use of your money, they pay you interest. And it's not just liquid assets that people muck about with. Banks frequently lend money and give credit - you tell them that you will pay them back the full amount, plus a bit in interest at some future date. They lend to you because these days that is where a lot of the revenues of a high street bank come from - it's their job. But then if you fail to pay the banks back, they come and take your house or your stuff to balance the payment. If enough people do this, suddenly the bank has no more money and cannot lend. Nobody can borrow money, so they stop buying things, and those who owe money have their house repossessed. That is a credit crunch. The important thing to note, however, is it is not the fault of the banks. They may have extended too much credit - been too credulous - but that is not wrongdoing. The debtors who failed to make good on their loans are at fault, as they have failed to keep the promise they made. If you require bankers to do your banking for you, do not whinge and moan if they encounter trouble because you fail to honour your responsibilities. As with all things, banking and finance in general constitute a two-way effort.
Everybody Is Too Rich For Their Own Good
Almost everybody in the UK has more than enough money, by which I mean money critical to survival. The UN categorises one of the markers of poverty as not owning a television. I do not own a television, but I am no poorer because of it, as a TV is not necessary to survival. Once everybody has enough to eat, well and good, but there are many people with a lot more money than that. And what do you do when you have everything? What does the upper-middle class do with its spare cash? It invests it, in any number of different things. Property is a favourite, and financial vehicles are popular too. But all this money swilling around simply feeds the two problems above. For a start, it doesn't really mean anything, and secondly it all feeds the behemoth of global finance. It's all a huge circle made of hot air and optimism, so if you don't like bankers sending your money on this merry-go-round, don't put it in a bank, and don't spend more than you earn. It's not that hard. Otherwise, stop whining and learn the rules of the game.
Monday, 15 August 2011
David Starkey and the Foot in Mouth
The riots across England last week have, being quelled for now, been subjected to all sorts of analysis and reasoning, of which a particularly outspoken thread was to be found in David Starkey on Newsnight. His words have created an entire school of meta-analysis about racism and racial stereotyping, with Twitter being alive with calls to arrest him or otherwise silence this noted historian.Toby Young has, to the best of my knowledge, been the only person to suggest that racism may not have been at the top of Starkey's agenda in his Telegraph blog, for which he has been roundly lambasted, and this is unfortunate, because it shows that Britons, despite all the tough talk of the past week are no more ready to engage in a realistic debate about how such riots might be avoided in future than we were previously.
I will fess up to being on Toby Young's side here, as I do not believe that David Starkey was being racist. Rather, he was simply insufficiently prepared to back up the argument he had chosen, resulting in an ill-advised simplification of the issue. What he was getting at, as was made perfectly evident by his reference to Enoch Powell, was the failure of certain elements of the afro-Caribbean and Ghanaian immigrant populations properly to assimilate in their adopted culture, falling back instead on a semi-indigenous culture primarily informed by so-called "gangsta" culture, typified by a casual attitude towards violence and drug use and a truly astonishing degree of materialism.
The basis of most arguments posited against David Starkey is that in saying that such a culture has a damaging effect on youth, he was being racist. While Starkey was certainly inadequately equipped to discuss gangsta rap, speaking against it is not racist. As he said himself, it is an issue of culture, not of skin colour, and explicitly stated that unlike Powell, he did not consider the black man to hold the whip hand over the white man, rather that the musically-informed lifestyle of certain elements unprivileged black youth had come to hold sway over underprivileged children and adolescents in many areas, regardless of race or ethnicity.
In a forum such as Newsnight where expansive explanation of a point is not possible, it was foolish of Starkey to air such unfashionable views - all that resulted was a shouting match at the end of which everybody felt aggrieved and nobody was able to put their points across properly. However, he did raise an important question: to what degree is the culture peculiar to the majority of those involved in the rioting responsible for the evident decline in moral and behavioural standards among the youth of the underclass? My money's on "quite a lot".
I will fess up to being on Toby Young's side here, as I do not believe that David Starkey was being racist. Rather, he was simply insufficiently prepared to back up the argument he had chosen, resulting in an ill-advised simplification of the issue. What he was getting at, as was made perfectly evident by his reference to Enoch Powell, was the failure of certain elements of the afro-Caribbean and Ghanaian immigrant populations properly to assimilate in their adopted culture, falling back instead on a semi-indigenous culture primarily informed by so-called "gangsta" culture, typified by a casual attitude towards violence and drug use and a truly astonishing degree of materialism.
The basis of most arguments posited against David Starkey is that in saying that such a culture has a damaging effect on youth, he was being racist. While Starkey was certainly inadequately equipped to discuss gangsta rap, speaking against it is not racist. As he said himself, it is an issue of culture, not of skin colour, and explicitly stated that unlike Powell, he did not consider the black man to hold the whip hand over the white man, rather that the musically-informed lifestyle of certain elements unprivileged black youth had come to hold sway over underprivileged children and adolescents in many areas, regardless of race or ethnicity.
In a forum such as Newsnight where expansive explanation of a point is not possible, it was foolish of Starkey to air such unfashionable views - all that resulted was a shouting match at the end of which everybody felt aggrieved and nobody was able to put their points across properly. However, he did raise an important question: to what degree is the culture peculiar to the majority of those involved in the rioting responsible for the evident decline in moral and behavioural standards among the youth of the underclass? My money's on "quite a lot".
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