The Muddied, the Muddled and the Confused
The London Capital Markets guru Brenda Kelly tweeted last week, “Nobody has a clue what’s going on”. It was a brave thing for a senior executive to do – and also, searingly accurate. But in pointing out the presence of utter and total snafu, one is of course looking at the symptoms of chaos, not the causes of it.
The long-term cause of our current surfeit of flying anti-matter was lots of greedy idiots taking the half-baked theories of Milt Friedman, and swearing eternal allegiance to them purely for their own lasicivious need to have more, and more, and more ad infinitum….or nauseam, depending on whether one is inside or outside the tent.
The medium term cause has been the adoption of the drivel’s provably wrong and/or selfish tenets by the business and political media commentariat….to the point where it chirps parrot-like about growth, reform, privatisation, liquidity, QE, Zirp/Nirp, philanthropy and austerity-recovery as if it made any kind of sense. The best example of this is the way inflation has changed from being Spawn of the Devil to Little Baby Jesus in twenty years flat. It’s codswallop framed to excuse debt – period.
In some ways, I have found the ease with which Madthink was sold in after 1985 truly terrifying. The fact that an overrated, ivory tower Sorcerer found many elves (made willing by self-interest) didn’t just deliver unto us Sorcerer’s Apprentice syndrome: what we have today is a world run by the Tommy Cooper Was God sect.
But the short-term reason why nobody knows whatTF is going on is unquestionably down to denialism from the political and media big beasts, and their desperate defence of every last piece of Luis Vitton baggage that comes with neoliberal monetatist globalism. Either side of this, almost like an old-fashioned pre-digital soundtrack, is the narrow narrative insisting that any deviation from the Holy Trinity of Friedman, Levitt and Thatcher is beneath contempt….and probably an anarcho-socialist plot to boot.
It has become, effectively, a stream of monotonous obfuscation.
I think many of those of us repelled by ideology and undeserved privilege have expended enormous effort in trying to reveal Madthink for what it is. Perhaps we have been a little too inclined to follow the Jesse James approach of robbing banks and blowing up iron horses. Maybe the time has come to switch from attacking injustice to pointing out the enormous advantages to all but a few fatties of an economically viable alternative….and above all, showing its advantages holistically – rather than the tactic of those Defenders of the Faith spouting cod mathematics, putting up endless charts and talking jargobollocks at great speed on the 24/7 ‘news’ channels.
Before you all get the glazed eyes thing, let me assure you it is not my intention to attempt that from A to Z today: that needs a book, not a blog.
But I do think that starting from the basics in a positive way has more chance of influencing the increasing numbers of people who are now hovering around the ‘doubtful and confused’ crossroads. Too often, what we get today is akin to the Marquis de Sade debating the sanctity of human life with Bertrand Russell: gripping, but unlikely to persuade either side. We’re back to the old adage, “Never try and teach a pig to sing: you won’t get a song, and it just annoys the pig”. (A good example of this is the contemporary proliferation of Leavers and Remainians goading each other on Twitter)
For starters, a key thing is to eschew technical jargon, get back to a straightforward, quantified case constructed in plain English, and make the deconstruction of nonsense accessible to the doubters.
What follows now is a small selection of examples to (I hope) make the point.
Telling it like it is
Issue: worker salaries in the West are not recovering, and nor indeed are hours worked. Long-term unemployed figures are, however, rising everywhere.
The élite’s answer has been in turn to talk about ‘the jobless recovery’ (more Madthink) and then assert that ‘once salaries start to move up again, confidence will return’. There is no linkage at all in that thinking, but it never holds them back.
This is the empirical, chartable Truth: a combination of moving jobs to Asia, computerisation, robot development, and uniqely rapid technological change means there are no longer enough jobs to go round in the West. They are not coming back.
All these developments have occurred for the sole purpose of enriching the few….and have in fact been exacerbated by senior executives preferring bonuses/stock buying to investing in training – as indeed, the bourses prefer to slam down hard on any failure to deliver the numbers, rather than accept now and then that workforce and product development are sound investments.
Alongside the social consequences of this has come the biggest single complaint against all large international IT and comms companies: the truly disgraceful, devious and frustrating nature of appalling after-sales service.
The Law needs to force ‘service’ providers to do what it says on the tin, and provide well-trained humans at the end of a phone likely to have the same first language as the customer.
This is not collectivist job creation, it is demanding that the laissez-fairers walk the walk: if the Customer is King, stop treating your customers as if they were smelly meths-drinkers creating a nuisance in Reception.
‘Increased productivity’ that decreases customer productivity ought to produce new competition to punish this short-termist attitude. But it doesn’t, because Suprastate bureaucrats, TTIP and a million corrupt politicians prefer big donations and brown envelopes from globalists to listening to their own citizen constituents. That’s why with less globalism we will get better services and more jobs. That’s why with more alternative ways of raising capital to bourse neurosis and shattered banks, we will get more competition and SME job creation.
Issue: Sovereign, corporate and household debt is at astronomical levels, and is the factor above any other that distracts from the development of responsible and renewable capitalism
The élites either ignore this topic, or suggest the opposite is bad “because we godda have liquididy”, and credit is “a driver of markets”. It never occurs to them that if no market can grow without credit any more, the problem is almost certainly systemic. The steadfast rule remains: no debt foregiveness.
Since 2010 The Slog has argued consistently for debt forgiveness where (a) there are obvious and pressing humanitarian issues (b) the loan was sold perniciously, irresponsibly or usuriously (c) the loan bonds have later been bought from lenders at a massive discount purely for insurance gain (d) a tiny élite in the borrowing sovereign has benefitted from the loan and/or embezzled a lot of it, or (e) the money loaned was created out of nothing by crooked fractional reserve book-keeping in the first place.
Given one or more of those points apply to almost every cent of sovereign debt borrowed this century, there is an obvious solution: forgive all of it, and move on. Except that this would, overnight, potentially implode most of the private banking and lending sector, and render every bourse trader on the planet bankrupt. So nobody takes that one very seriously. I would, because it has always seemed to me that caveat emptor is a tad one-sided: why does nobody ever suggest that caveat auctor should also apply?
But that’s a debate for another day: the truth is that most Sovereign debtors go to the money markets and borrow via bonds – gilts, T-Bills and so forth – and then that debt is frequently traded on ‘second-hand’ markets. One therefore winds up with an eclectic bunch of people who are holders. They’re often referred to pompously as ‘the creditors’ in a sort of linguistic attempt to suggest precedence, respectability and worthiness of the sympathy vote. (As often as not they’re vulture funds and other assorted necrophiliacs: but what everyone’s learning now is that we the banks’ customers have suddenly become creditors….and it doesn’t seem to make us deserving of any precedence.)
The bottom line fact is that every loan comes with risk. The fact that lenders want to charge a premium for the risk (but then flatly refuse ever to accept any losses) has always amused me, but then such hypocrisy is wired in at the factory….and it should not guide remedial action.
Despite the degree of unfairness loaded onto the borrower, we have to be realistic: the only solution that will ever fly is one in which, after any form of debt Jubilee, nobody wins or loses.
The financial sector as a whole continues to insist that, come what may, in the derivatives sector every gamble made is ‘netted’ with the opposite gamble ‘so there is no risk’, and the cheque’s in the post. Now that – especially over the last 2-3 years – everyone from Mrs Kowalski in Chicago to Ms Yellen at the Federal Reserve is becoming equally mired in unsustainable debt, it seems to me something of a no-brainer that we could introduce debt forgiveness netting.
The more sharp-eyed among you will have spotted that this issue was on the last G20 agenda. Nobody got very far on it…least of all the Wheelchairbound Ball of Bile from Berlin. With the Germans, it’s a historical compulsion; with the bankers, it’s greed.
Issue: Everyone obsesses about growth. Does there really have to be growth every year?
“Of course” says the econo-financial clique, looking at the questionner as if he might be mad.
The logical free-thinker, however, asks “Growth for whom?”
It is completely, hypocritically potty to say growth is a must when (a) far too much notional money exists anyway (b) the sharing of the fruits of it is so obscenely inequitable (c) a ridiculous amount of it is financialised and available only to the super-élite (d) for many Sovereigns, much of the income goes into servicing debt, and above all (e) it palpably fails to deliver any improvement in life quality….on the contrary, it tends to dilute it.
It’s not that hard to see why growth is necessary in an emerging region where the default housing was a ditch prior to economic development. But the last fifty years in the West deny the case for it among the mass citizenry.
Sometimes, I marvel at the life my Dad enjoyed in his forties. There was little credit, falling UK ouput, 83% top tax rates, and a vast public sector. He was home by 6 every night, and we had a family car, a telephone, modern kitchen appliances and varied television. He had four weeks holiday a year and a six-month rolling contract. He retired at 60 – with more than enough to see him through to his exit at 91.
Despite the religious fervour used to describe growth in Western economies, by the time I retired the economy – which had allegedly doubled in size – hadn’t produced one single benefit for the population at large. I had, without doubt, less free time, higher housing costs, higher educational costs, higher health insurance costs, a poor balance between home and office life, a better car, and in real terms, a bigger bank balance.
And I am very, very lucky. The vast majority of UK citizens have smaller pensions, poorer services, lower real-worth wages, zero job security, zero capital, and zero hope of cutting the millstone rope.
Growth in the West has failed the classic Benthamite/Utilitarian test: the greatest fulfilment of the greatest number. It has done so because unregulated greed, opportunistic corruption and sharp practices have sucked up 95% of the material benefits for the 3% – leaving a good 60% to ‘enjoy’ a quality of life reduced by 50%, while walking the tightrope above a 40% weaker safety net for a 70% bigger population.
You have to admit, it’s a scam.
Why are we stuck with this blatant theft of our opportunities?
There are many social, educational, media, desperate apathy, energy, geopolitical and global development reasons why our lives have seen a catastrophic change for the worst, but only two reasons why an unopposed, self-appointed élite hasn’t been stopped from ballsing it up any further long before now.
Those two reasons are, as ever, ideology and privilege.
Ideology divides without adding any new arguments in favour of change. It forms tribes, and the tribes squabble.
And human wiring insists to most Alphas that an accident of birth should bestow upon them endless privileges, perks, and immunity: that’s the thing with those who see themselves as exceptional – they insist on being the exception to the Rules.
Because the various Resistance factions would rather hurl insults (at the élite, but also at each other) and debate angels on a pinhead rather than coalesce into solidarity, the minority of piggies stay with their noses firmly in the trough…and absorb their rules into a new Rule of Law – a body of political legislation that, eventually, muzzles the opposition forever.
75% of those entitled to vote did not vote Conservative in 2015, but the Party achieved power with a working majority of MPs. The Labour Party is ideologically split, the Liberal Democrat Coalition collaborators were almost wiped out, and the Scots are only interested in secession.
I blame the activists, not the apathetic. If the neoliberals suffer from Madthink, the traditional opposition ideologies suffer from Tunnelthink.
Bottom-of-the-heap apathy stems from a collective variety of desperation, endless dashed hopes in the past, a risibly accepting model of education, the soundbite tabloidisation of media, and low IQ. These people combine with smug south-eastern white collar Conservatives to form the 65-70% group who represent liberty’s biggest enemy, Don’tthink.
If we are to shift the balance back in favour of decency, then the politics of Resistance will have to become genuinely ecumenical, and its critiques far more accessible, positive and persuasive among the divided decency spectrum that already exists. Only once this has been achieved, and the costed alternatives to Friedmanism made abundantly clear, will this reality diffuse down to those media consumed by the most disadvantaged…and at least stand some chance of being converted into boycotts, other demonstrations of citizen power….and ultimately, enough doubters and sufferers casting their votes in favour of the radical change our civilisation so badly needs.