Archive for August, 2012
Leveson Heat Rises for the Press
Posted by diarmid in Business and Society, News on August 30th, 2012
Since my post Leveson, the Press and Labour there have been further developments. The Prince Harry photos episode was hardly edifying for the press or the Royal Family. That the Sun editor could claim that publishing these photos of a silly over-privileged young man was somehow ‘about the freedom of the press’ should re-inforce my main point. The primary freedoms most of the current press industry are ultimately interested in are the freedom to make money and the freedom to promote their owners’ interests.
That News International in particular are an organisation whose values are seriously removed from human concerns was re-inforced today by the publication of a seriously awful picture of Cheryl Cole. She had been photographed through a car windscreen bleeding from the nose after an accident. For all the photographer knew at the time this image was taken, this woman had a basal skull fracture and was minutes from death. The fact that she is well known for her celebrity career gives only public prurience rather than public interest to this photograph.
The tendency for the press to close ranks in denial at the overall damage done by a press with skewed ambitions was emphasised yesterday in the Independent editor Chris Blackhurst’s BBC Radio 4 interview on the ‘Section 13′ letter he has received from the Leveson Inquiry outlining the criticisms likely to be made. Read the rest of this entry »
Unemployment and Policy
Posted by diarmid in Economics, Inequality, Politics on August 23rd, 2012
This post is on 2 pages. Please click on the appropriate page number at bottom of text to navigate.
There’s a very interesting take on UK unemployment trends in the July NIESR Review, written by the NIESR director Jonathan Portes. One should perhaps bear in mind that he has previously worked to formulate employment policy for the Blair and Brown governments.
His essential point is that while the overall UK 16-64 employment rate has remained steady for over 30 years, this has been combined with some major changes in the patterns of that employment. This has major implications for the likely outcome of current government policy towards those out of work and their benefits.
In this post I summarise Portes’s findings and analyse more closely two points his paper overlooked: the impact of increased part-time working and the discrepancy between a rising population, a steady employment rate and falling numbers of benefit recipients. The findings suggest that the situation may be rather more serious than Portes fears, with significant implications for social welfare and cohesion. Read the rest of this entry »
Leveson, the Press and Labour
Posted by diarmid in Business and Society, Politics on August 17th, 2012
This post was published on LabourList on 16th August 2012, under the title ‘Labour must free the Press’.
The first instalment of Lord Leveson’s inquiry report into the Culture, Practice and Ethics of the Press is due in the autumn. It’s vital that Labour are ready to argue for a truly free press. We should be well aware that the political right and the press industry itself have major combined interests in adhering as closely to the status quo as possible. Although the issue of privacy was the final trigger for the inquiry, the most important failure of our press is to provide high quality information about current events and a true variety of interpretations of their causes. We need these if we are to make good collective decisions on important matters. The truth-distorting bile that issues from some outlets has had a measurable effect in false impressions left on the public. Read the rest of this entry »
Northern Rock and the Bank of England
Posted by diarmid in Economics, Money and Banking on August 15th, 2012
Tim Worstall v. PositiveMoney
I note an interesting little discussion between Tim Worstall and Ralph Musgrave on money creation in the context of the Northern Rock bank crisis of 2007. Essentially Tim was claiming, against the PositiveMoney view, that the failure of the bank was evidence that it was not possible for banks to create money. Ralph’s point was that it is possible for banks to create money if they move ‘in step’, but since Northern Rock was creating money (by lending) faster than other banks this led to its problems.
In fact both Tim and Ralph are ignoring the role a crucial player here: the Central Bank – in this context the Bank of England (BofE).
The basis of our monetary system is money created by the BofE in the form of notes, coins and accounts held by commercial banks with the Bank of England. Let’s imagine a single commercial bank operating in the UK that holds a certain amount of this BofE money. This bank could certainly create additional money by lending up to the point that it could still cope with demands of depositors for banknotes and coin, or to pay taxes etc. to the government. Most transactions, however, would be between account-holders. All the bank need do for these is adjust its deposit records; no reserves would be required.
Lying in the Cause of Austerity – ‘Budget Hero’
“Budget Hero” – Public Media’s Most Despicable Financial Propaganda is the title of a great anti-austerity piece by William K. Black on the New Economic Perspectives site. It appears that some very strange and economically ignorant people have designed an on-line game to demonstrate their destructive view of how the economy works.
Bill Black is an expert on regulatory policy and fraud prevention and is the author of The Best Way to Rob a Bank is to Own One.
The ‘Budget Hero’ game is basically rigged to show that only major public expenditure cuts can avoid budget blow-up, irrespective of what the real impacts of those cuts might be. As Black points out, this rules out the sort of negative impacts of austerity we have seen in the UK and Europe. It’s evidently not even possible to adopt a policy of offsetting tax increases.
As I have pointed out before, and this confirms, only dishonesty can defend this type of policy.
The Riots of August 2011
Posted by diarmid in Business and Society, Inequality, News, Politics on August 6th, 2012
The riots that engulfed London and other cities in England began one year ago today. Just to hark back to my piece ‘Riots: Looking Deeper’ on this topic last year, written one week after they started. I think it’s fair to say that it was a reasonable analysis. In particular the Independent Panel set up to investigate their causes stated
Clearly the importance of those attributes becomes even more pronouncedwhen young people are faced with growing up in a time of austerity, a struggling job market and pervasive messaging telling them that criminality provides a fast track to achieving status among their peers. For example, while we know that most convicted rioters were not gang members, we also know that gangs operate in a large number of areas where the riots occurred. Some young people are exposed to imagery and attitudes associated
with gang culture from an early age, which glamorise a life of criminality outside the system and which eschews any empathy for the victims of crime.
An article by Richard Wilkinson and Kate Pickett (of ‘The Spirit Level’ fame) on today’s Guardian CiF specifically blames inequality. You might care to look here at my general response to that thesis.
As Laura Wilkes, Policy Manager at the Local Government Information Unit, points out today on LabourList
…with local authority cuts set to continue the environment will become more challenging than ever before – if we are to avoid a repeat of 2011 councils need to have the funding to invest in key intervention programmes, community development and economic growth; all things that could help to prevent future riots. As things currently stand, government policy could threaten this.
Is Banking Government-sponsored Counterfeiting?
Posted by diarmid in Economics, Money and Banking on August 3rd, 2012
Banking as Fraud
I’ve got involved with one or two on-line debates recently in which the issue of money in commercial banking is seen as a fraudulent process by which value is stolen from citizens. Usually the central bank is seen as the government’s enabler in this process, and so to blame for the resultant misallocation of credit or ‘malinvestment’. This is a view to be found among adherents of the ‘Austrian’ school of economics, and ties in nicely with their extreme views of the efficacy of markets and the villainy of governments. Even if they do not believe the only money used should be gold, they believe that its value should be tied to gold and that central banks consistently devalue the currency by setting too low the interest rates at which commercial banks borrow from them.
While the Austrians’ views are so dogmatic as to be fairly easily ignored, there has also been a recent tendency among some campaigners, such as Positive Money or GolemXIV, to blame the current discrepancy between rewards to the rich and punishment for nearly everyone else on the banking’s ability to ‘create money out of thin air’. According to this view the banks then profit from this costless activity by lending it to us at interest, either directly or indirectly via government. Read the rest of this entry »