The pranks of two overgrown schoolboys are dominating the news agenda, while things like this barely get a mention, on Al Beeb anyway. It's not every day someone, a reservist no less, gets to bang his tabs in to Brenda, and get one of these.


Well Done L/Cpl Croucher.

Ms Smith was grilled by the Joint Committee on Human Rights yesterday. I've tried to detail her arguments in favour of banging brown people Terroists up for 42 days before charge both from yesterday, and from the Commons debate in June. They are, it goes without saying, almost entirely without merit. Let me know if I've missed any....

1. The threat is "unprecedented in scale". No it isn't. Islamic terrorists have not had the success the IRA had in killing people, so by that rationale we already have sufficient powers to deal with the problem without surrendering further civil liberties. In any case, by your own admission, most plots are foiled. This is not an argument, it's at best wrong, and at worst an outright lie.
2. The terrorists "are more ruthless" because they "use suicide methods" and "would use a dirty bomb if they could". The IRA killed members of their own community they thought were informing. They killed Catholics in the police to maintain the fiction that policing was sectarian. They used the anatomical noun "kneecap" as a verb. So they were ruthless. If a dirty bomb had been available to them, and they thought it would suit their aims, they would have used it. By not using suicide tactics they developed a corps of competent terrorists who are scarier than first time "Martyrs". This is a straight forward Argumentum ad Baculum ,The appeal to fear, and it is wrong.
   
3. Those against 42 days "ignore the terrorist threat". Jacqui's position is another ad baculum: the blame for any future terrorist acts will be on the head of those denying the police power rather than the Terrorists themselves. It is attempting to portray those opposing the Government as "soft on Terror", playing on politicians' fear of the Daily Mail.
4. The threat is "more international" than before. So the IRA were not plugged into an international network of terrorists then? ETA, Columbia, Libya, Palestine... Again, this is not a logical fallacy, it's just a lie.
   
5. The "Police want these powers". This is the appeal to Authority. Fine, if all or most impartial authorities agree then this may have some validity as evidence, but parliament is not there to do the police's bidding. In any case the outgoing director of public prosecutions and several former heads of MI5, who know a thing or two about the terrorist threat, think these powers are unwarranted. So do many Lawyers, soldiers and policemen. Furthermore, Many of those police officers demanding those powers owe their position to.... um... Ms Smith, so can hardly be considered impartial. Finally, it is not even certain that the Nu-Labiest of Nu Lab policemen, Sir Ian Blair can provide evidence that these powers are needed and admits this fact. Instead, police support for these powers is based on Trends and Forecasts. Hardly enough to suspend ancient civil liberties.
   
6. Opposition parties are not acting "in the national interest" by supporting the Government on an issue which is usually non-partisan. Lord Onslow demolished her, in his elegant way by pointing out that she was mistaking "consensus" with people simply not agreeing with her.
7. Growing complexity means it is taking longer to charge someone. It recently took one police force "27 days, 20 hours and 40 Minutes" to charge someone. This is merely demonstration of the fact that work expands to fill the time allotted to it. Habeas Corpus means that a detainee must know why he is being detained - which is why the charge must be early in the legal process. "Lazy policemen" is not a reason to suspend freedoms enshrined in Magna Carta.
   
8. When she says "There are safeguards" in the bill - she is referring to the idea that parliament must decide to invoke the law in a specific instance. This amounts to political imprisonment on a parliamentary vote, and is wrong on so many legal and fundamental constitutional levels that I don't need to search for a logical fallacy. Indeed it is unlikely that the Security service would release details of an ongoing operation to parliament, so the same Ad Baculum arguments would be necessary to get these powers allowed even should they be on the statute books.
   
9. Jacqui says "We cannot allow ourselves to be lulled into a false sense of security that might lead us to put at risk the liberty of all in Britain to live lives free from the threat of terrorist outrage and atrocity". This is bollocks. Freedom from risk is not freedom, Jacqui. This syllogistic fallacy is used to justify every power grab this Government has put in front of parliament. Because safety from bad guys is like safety from Government abuse, does not mean they are the same thought they share some superficial similarities, the public is protected from these dangers by different means means: The police protect us from the bad guys. The law, parliament and the separation of powers protect us from an overmighty executive and thier police. Undermine, these safeguards Jacqui, and YOU become the principal threat to the safety of the people.
10. Existing powers are "up against the buffers". In the Heathrow plot there were 5 people held for near the maximum period. 3 were innocent. The following exchange between David Davis and Frank field is telling...

    Mr. Frank Field (Birkenhead) (Lab): No, they were found not guilty.
    
    David Davis: Innocent. That demonstrates— [Interruption.] We can reiterate the argument that we had last time. The last time I used “innocent”, Labour Members exploded in uproar at the idea that those people might be innocent, so I told Labour Members that I had asked the police at the time whether they were concerned sufficiently to put those three people under control orders. “No,” they said. I asked whether they were sufficiently concerned to put them under overt or covert surveillance? “No,” they said. I asked whether they were carrying on any further investigations into them? “No,” they said...

    If labour MPs cannot accept "innocent until proven guilty" then one can see why there is such a problem with this government's approach to security. Basically this is "no smoke without fire" a mixture of the appeal to probability and the ad populum.
    
11. Labour members have repeatedly used the fact that most of these people held for near the full 28 days being found innocent as evidence, in itself, of the inadequacy of existing powers. This is the fallacy of many questions. It effectively askes the criminal justice system to suspend the burden of proof in terrorist cases.
    
12. The ad populum is used again whenever the public's support is mentioned. Of course the question "would you like to stop beating your wife lock terrorist suspects up for 42 days?" is not put in a civil liberties context, where a more equivocal question gets a more liberal response. Ms. Smiths assertion that "the people are on our side" is therefore fallacious.
13. Finally her final gambit is that she "is responsible for the safety of the country". This is superficially true, but it certainly doesn't follow that her decision is the right one.
    

Jacqui Smith's arguments have been torn to shreds, and any rhetorician in the last 3,000 years could have done so. Her arguments are weak, and she gets called on them because she dare not utter the real reason these powers are being put before parliament: There is no way any opposition could countenance something as repellent as the suspension of Habeas Corpus for brown people terrorist suspects, and would fight it. This allows the Government to paint the Tories as "soft on terror". Expect adverts saying something along the lines of "Tories opposed Labour's measures to fight Terrorism. Are you safe in their hands?" at the next election. They accuse others of playing politics with national security, whilst doing exactly that themselves.

There is nothing this Government has done which sums up their revolting opportunism, their transparent sophistry, their mendacious and partisan response to any catastrophe than their curtailment of civil liberties, using the blood of the 7/7 victims to end centuries ef liberty putting the people of this country at risk of a threat far, far worse than mere terrorist bomb: An unchecked government.

Jacqui Smith herself is totally unqualified to wield the power she's been given. A provincial school mistress of some education, but little intelligence herself cannot spot logical fallacies in her own argument. She reacts angrilly to the weakness of her position being made evident preferring to see the Commons doing its job of holding the executive to account, as a classroom of unruly school children. She is petty and vindictive. Possessed of the moral certainty of the truly stupid she is like a frumpy and overweight Sarah Palin, without the skill at reading aloud. Of all the home secretaries this Government has put in front of us she is the worst and after Blunkett and the Safety Elephant, I thought that was impossible.

Suspending Habeas Corpus is not enough for her though. Her latest wheeze is to attempt to keep records of every phone call, text message and internet search for the entire country - for reasons of national security. The same arguments as above will be aired by the same people. They will be no more right. Finally when this mother of all databases is complete, how long before we see the argument that the Database has created so much evidence that the police need 6 weeks to sort through it before charging someone?

Does anyone feel OK about this bacon slicing of our freedom from government snooping - the circular argument, the lazy sophistry. Does anyone believe that the powers will only be used against brown people terrorist suspects? Or do you suspect that we will see random trawlings of the database to catch people out for much more mundane crimes?

ID cards, Phone call databases and extended pre-charge detentions. These are lines in the sand we must not cross, and represent a reason for libertarians to vote Conservative. We can argue about the nicieties of an intrusive state afterwards, but for people to say "the Tories are evil statists too" is just plain ignorant. Let's get the rotters out first, then try to build a movement based on Libertarian principles.

We are not safe in this government's hands. Terrorists have been amongst us for a centuries. Rarely have they come near achieving their aims or even killing many people. The real danger to our way of life is a Totalitarian government. We are not there yet, and civil libertarians do themselves no favours by suggesting we are, but there is no doubt that if we are not careful, one day soon, we could wake up in fear of the fingermen as a result of decisions made right now.

Welcome once again to the Britblog Roundup hosted here at A Very British Dude.

Gordon's Gone to Iceland

Let's Start with Iceland, a small country in the Atlantic of 330,000 souls with a history closely tied to the UK. We invaded them in 1940 because we needed an unsinkable aircraft carrier during WWII. At least the times justified the extreme action. Not so the Great Brownian expropriation of Iceland's assets. In one of the most flagrant abuses thus far of the 2001 Anti-Terrorism, Crime and Security act, the UK bankrupted an allied democracy, for short-term political gain. Understandably the Icelanders are pissed off with us if this site, pointed out by Dodgeblogium is anything to go by. LibDem Voice takes up the baton concluding

"Gordon Brown, by going after the Icelanders, has confirmed the fears of every civil libertarian who ever dared to question Labour’s grab for power in the name of quashing terrorism. The Icelanders’ example is as important to questions of anti-terrorism as it is to finance. It reminds us not to issue blank cheques in our laws, and not to lend, to the politicians who would mortgage it, more of our liberty than they can credibly request"

Amen to that, brother. Such common sense hasn't helped the wooly in-betweens in the polls though.

Abortion

The other big issue in this week's post box is the abortion debate. I hate this subject with a passion. We are slowly importing the poisonous, morally charged tone of the controversy from America with evangelical Christians Digging themselves into Siege positions they call "pro-life" and Radical Feminists occupying a fortress they call "pro Choice". Both are shrill, and the debate is unpleasant, as everyone in it seems to enjoy absolute moral certainty. Those of us, who I suspect are in the majority, who self identify as neither pro choice or pro life are caught in the crossfire: I accept that abortion is a necessary evil, but it cannot be offered without limits.

The Anti abortionists are using the debate surrounding the rareish practice of late-term abortions to emotionally charge the debate around the much more common early terminations. Even the normally reticent Cranmer calls his post on the subject "Abortion, Darkness and Devils". In another post on the Subject, he derides Christians who liken the fight against abortion to that against slavery, whilst making many of the same anti-abortion arguments based on the sanctity of life, himself. But it is not abundantly clear when "life" begins. When does a knot of cells become human? The two extremes are conception and birth. In reality it is somewhere in between, and parliamentarians are paid to make these difficult choices.

The Government's decision to effectively prevent any debate on abortion therefore rightly comes under fire from both sides of the debate. Certainly the anomalous position of Northern Ireland, where God-Botherers have seen to it that Abortion remains illegal, is a bug-bear for Feminists - both the F Word and HarpyMarx report from a protest on the subject. Much as I have sympathy for the Wimmin of Northern Ireland, and agree that such an outdated law should not still be on the statute book in the UK, the pro abortionists do themselves no favours by making no compromises on the time limit. Any reduction is seen as the thin end of a wedge. The logical extension of this view seems to condone infanticide. Would you tolerate the termination of a 2-week premature baby? No. So the line has to be drawn somewhere and I am in favour of using the limit of viability outside the womb as a useful guideline, which given the level medical science has got to, means that I am relaxed that may mean the limit for abortions be cut to 20 weeks. I would also favour liberalisation to remove the 2 doctor rule. I am however intensely unrelaxed about this becomming a partisan issue. It should be a soberly discussed, cross party issue driven by the science and ethics, not by hysterical and well-funded lobby groups. Unity, Writing at Liberal conspiracy exposes many of the lies of the "Pro Life" camp - especially their use of poll data; whilst shrilly rejecting any opinion that isn't for the maintenance of the 24 week status quo, as 'Unscientific'. The Dude's rule is to disbelieve anyone who claims to speak for a scientific consensus on a matter of political judgement. This is a "debate" where everyone is wrong.

Whilst we're on the subject of Woman's rights, rumbold at Pickled politics argues for some enlightened colonialism over the subject, though I'm reasonably sure that is not how he would have put it.

Finally The F-Word gives a litany of misery caused by domestic violence.

Other Politics.

Phil Woolas is not popular at for his comments on Immigration. This is one post by Lee Griffin with which I concur, but I think when discussing immigration, Godwin's law should extend to the BNP too, which would be fun because it would remove one overused rhetorical gambit from the Liberal Conspiracy armoury. Woolas also comes under fire for a prediction that the Anglican church will break its link with the state 'within' 50 years. Cranmer's antidisestablishmentarianism* is clear,

Penny red delivers a damning indictment of the Home Secretary's vindictive approach to prostitution, which is hurting the most vulnerable prostitutes most with echoes of the most hypocritical victorian moralisers. The Heresisarch also gives both barrells over her plans for a vast communications database. The question is... Does anyone think Jacqui Smith is anything other than dreadful? Those who fear the profoundly illiberal measures from a succession of NuLabour home secretaries were heartened by Sir Ken MacDonald's comments on the unbearable future he sees with current Anti-Terrorist legislation. Cabalamat brings the story, and is less than whelmed by the Shadow Home secretary's calls for a "Debate" over the issue. Can the Tories ever persuade people civil liberties are safe in their hands. Not while such mealy-mouthed nonsense is being spouted by their front bench, they won't.

Unity educates us on another side to the HFE bill.

Craig Murray gives George Osbourne the Benefit of the doubt over the no cash for no favours affair, whilst suggesting that "God made Nathaniel Rothschild that size to be a convenient butt-plug for Russian and Uzbek oligarchs". Craig was once a diplomat.

Liberal England comes out against the licence fee.

Two doctors, Green MSPs the twain, liken a climate change bill which excludes Aviation and Shipping as "a detox with an exemption for crack".

Slugger O'Toole reiterates the compromises necessary to create a workable peace process, the great man himself appearing as a witness in this Al Jazeera documentary.

Here's a post by Stuart Syvret, which I'm not sure I understand. Maybe it will make some sense to people from Jersey.

Andrew Dodge lays into Tory supporters of Barak Obama. Et Tu Boris?

Finally the Heresiarch wastes his formidable talent fisking the Daily Mail. The Government's Sharia family courts really are a restatement of the existing position. Who'da thunk it. The Daily Hate making stuff up? Whatever next. It really is a good post though.

Miscellaneous

Random acts of reality tells us of one lucky lady.

Other Men's Flowers points us to an important controversy at that august association, the cloud appreciation society, one I think on which we all have an opinion.

A bloke called MacLean at OneManBlogs can't get his hands on a suitable domain. I know how he feels... My initials are MGB.

Barkingside 21 demonstrates that energy saving works.

Swiss Toni Gives us his thoughts on Super Heroes. He likes 'em vulnerable. Maybe he'd like the Karate Grandmother, or Anglo-buddhist Combine's chess playing Wing-Chun fighter.

HarpyMarx is a little more Highbrow giving us her thoughts on the 2008 Turner prize.

Early Modern whale suggests some musical accompaniments to a parrot.

Finally Several people bring up my post hanging my distaste for the surveillance state on a review of V for Vendetta, in which I argue that it is the welfare state which makes the surveillance state a necessity: Technology provides the means and terrorism the excuse for Governments to strip us of our ancient liberties. Cabalamat unfairly characterises my post as party political because I accuse the left of having an irrational hatred of the Tories, but I make accusations against the right too: party politics was not the intent - that bit was just badly written! It is reassuring, however that a leftie basically supports my dislike of means-testing. Devils Kitchen, a rightie monomaniac, thinks it's not the welfare state, It's those dastardly eurocrats, and anyone who thinks the Tories are going to be any better are "delusional".

To which I point to America. If libertarians are going to have any traction, it is as a strong wing within the main parties arguing against authoritarianism, wherever it is found. It is not going to be at a Libertarian party, which will be a talking shop, never to be elected and eventually foundering in a nightmare of inter-faction warfare. By abandoning the Tories, Devils Kitchen and his ilk are leaving the party likely to form the next Government to Nadine Dorries' ilk with their obsessions about controlling human reproduction. Do you want the Tories to look like a post-McCain republican party purged of moderates and existing to further the interests of a narrow religious, authoritarian world-view? You're an intelligent guy and a brilliant writer, Chris. Why can't you use your talents where they might be useful?

Next week is over at Mr Eugenides' Liberal England. Nominations as usual to Britblog [at] gmail [dot] com.

*Finally! an opportunity to Use one of the English Language's longest words.

I have finally got round to watching this movie. Now certainly, I agree with its political message - that the odious surveillance state being built right now means that "there is something terribly wrong with this country".

But...

There are two subtle political undertones which I think betray the movie. First is a virulent anti-Americanism. The soldiers throughout the film are operating in American kit. This may be because there are more extras available in that uniform and this is a low-budget British film and the message is only noticeable to the kind of anorak who knows foreign uniforms; or it might be sending a subliminal message that Americans are really to blame for everything. This latter explanation is emphasised by repeated mentions of "the American war" which usually accompanied images from Iraq, and the lazy assumption that this would lead to trouble at home. Once again, a movie aimed squarely at Blair's database state blames the war, without mentioning the welfare state, which is more often used in practice as an excuse for the more extreme end of state data gathering.

Second is the fact that the High-Chancellor is explicitly identified as a Conservative before he became a fascist. This is a typically lazy luvvie assumption that Tories are all vicious authoritarians, because they are 'on the right' and therefore on the way to facism. In the UK, we have become a surveillance state on Labour's watch, but this is not mentioned or even acknowledged, because the media elite cannot admit to themselves that they were wrong.

Finally Guido Fawkes, despite being the last person to enter Parliament with honest intentions (or so the sign above the Urinal in my local Pub says), is not some sort of anti-authoritarian folk hero. He was trying to reassert foreign, Catholic control over English public life. True, he did come from a faith which was being persecuted, but this was mild compared to what was happening to the victims of the inquisition (no-one expects etc...) in Spain - the country whose bidding he was doing. There is a word for people that want to deliver their country to foreign control: federast Liberal Democrat Traitor.

The real assaults on personal liberty have happened because the people have let politicians of all colours get away with trading liberty for illusions of security. It's not an issue of right and left - the Christian republicans have been no better than the post-idealogical Blair/Brown axis, but it is noticeable that middle England conservatives ('c' not 'C') have been more vocal defenders of liberty than the Socialists of the TUC.

Just as Generals fight the last war, so do those warning on civil liberties. Oppression is not going to come in the form of Homophobia or racism - black people and Gays no longer terrify the population. Nazi overtones will prevent anyone getting elected using a black and red colour scheme. Muslims could conceivably get themselves sufficiently hated, but the state will not need such scapegoats for what it is doing. Crime - Drug dealing, knife crime, gun crime, paedophilia. These are the enemies within. Any man alone with a child is suspect. Anyone could be carrying a knife. Anyone could get hold of a gun, or be a drug user. The very language of inclusion means we are all suspect, and this justifies the state watching our every move. Indeed the state, by making a virtue of its non-racial agenda (by refusing to acknowledge, against the view of most of the population, that most terrorists these days have something in common) gets to control more of all of our lives. There is going to be no Niemoller progression. They aren't going to come for the Muslims first, they are going to come for us all together.... In fact, they already have, with entirely arbitrary powers of arrest and a culture of targets in the police preventing them using those powers sensibly. It doesn't take the foresight of merlin to envisage a government even more hostile to the British people than Brown's getting the police to start lifting bloggers for calling the Prime minister a "Cunt, who should be hanged with barbed wire" (Abusive language, with the implied threat of violence - definitely arrestable). All it would require is a slight change in a couple of Hate-crime targets.

I think V for Vendetta therefore misses the target.

A state that can give you everything you want needs the power to take everything you need. The justifications given for the database/surveillance state are as often rooted in the spectre of defrauding of the welfare state rather than the Great big war on TERROR/PAEDOPHILES/KNIVES/GUNS/RACISTS or whatever the fear du jour is. It is the Multi-culti thought police who are denying freedom of speech - you can go to Gaol in a foreign land for your opinions, from the UK. This applies to (bonkers) historians as much as Islamic terrorists.

By demanding that the state sort out child poverty, you first demand that you know how much everyone earns and their wealth, so it can be 'fairly' redistributed. By creating a complex family tax-credit system, you demand that the state knows intimate details of your family's income. Job seekers allowance demands that the state audit your hunt for work. All these funcitons require databases to function. An ever more intrusive database state, monitoring ever more of our private lives is therefore nessesary for Gordon Browns war on Child poverty. All Tony Blair's War on Terror did is provide the excuses.

V for Vendetta merely exposes the problem with British politics. The left - many of whom are instinctive defenders of civil liberties, are embarrassed by the behaviour of 'Their' Party. The right, who normally couldn't give a toss for terrorists' human rights, are horrified by the vandalism of fundamental liberties - because it is the middle classes who fear the intrusive state, and always have. The whining left are still blaming Thatcher for being a nazi, whilst their party is behaving more despicably than any British government in history. They cannot admit to themselves they are wrong, not just about the Tories and their supporters, but about themselves and their project too. The Labour party, who normally focus on screwing the economy when they get office, have not had to face the contradictions of the socialist creed, because Labour never had a second term before Blair and thus could blame the failure of the post war consensus to deliver equality and full employment on the evil Tories. Because the Left have spent 30 years foaming at the mouth every time the Conservatives do anything, conservative-minded people cannot make common cause with their erstwhile enemies over Civil liberties.

New labour has divided and conquered: The left are still chasing the phantom of Hitler on the right, whilst condoning the ghost of Stalin in every socialist soul.

A while ago I wrote a couple of posts about people who work for the Trains, being officious, petty scum. I received a few comments from sorry, unionised sad-acts who thought that "just doing my job" is an excuse for petty jobsworth tyranny.

Here is another example. (Via)

I'll say it again. Working on the trains may just be a job, but it's a cunt's job and only a cunt would do it. Have a look at yourself in the mirror, the next time you threaten someone with arrest for making a mistake, and consider a more noble, honourable profession. Prostitution or petty theft for example.

The last time the Pound fell this fast was Black Wednesday, when the pound crashed out of the ERM, to the delight of Eurosceptics, Labour and Global Macro Hedge-Funds, and the dismay of the Major administration. This destroyed the Tory Party's reputation for economic competence for a generation.


This is because, in an attempt to prevent this event, interest rates touched 15% and billions were thrown at defending the currency - to no avail. The pound floated free of its artificially high peg and the UK economy subsequently soared as a result of throwing off its exchange rate shackle.

More recently, a reinvigorated Stirling has fallen from a December 2007 high against what was being called the 'North American Peso' of $2.10 to a low of $1.61 yesterday. Now part of this reflects the fact that America cut its interest rates further, faster and earlier, making the pound artificially attractive at the end of last year. Now rates in the UK are likely to fall, whereas the US policy makers have little firepower left, making Stirling relatively less attractive.

Whilst this represents a huge fall, it has only fallen to (or just below) its long-term average against the green back of $1.65. This is near the point at which a Big-Mac costs roughly the same in London as it does in New York ($1.56) and represents a sensible "fair value". It may well overshoot this, and head towards $1.40 or so, at which helps British exporters, and makes the UK a more attractive place to visit. Whilst this has a cost; more Frenchmen on British roads means more accidents; and imports become more expensive, stoking inflation; but the outward-facing Economy should benefit to some extent. In a deflationary recession, Britain, as a major international trading nation, may gain market share and a fall in the currency is, on balance, probably a good thing.

Hungary, on the other hand has raised interest rates by 3% to 11.5% in order to defend the Forint's Euro peg, just as the UK did in 1992. Like Stirling before it, the Forint will fail to keep its peg and in the mean-time take a sledge-hammer to their economy by raising rates at the start of a recession - they will also pour reserves into a declining asset. You can't piss into the wind.

Gordon Brown, by not getting involved in a macho-dick-swinging contest with other major economy leaders about who's got the strongest currency, has done the right thing. If we start to give the Ex-chancellor a hard time about Stirling's Black October, or whatever the Journalists call it this time, then he might be spooked into doing something about it.

Sure: the Pound's fall has removed one thing we can take the piss out of Americans for. It has made going on holiday to Europe or the USA more expensive. It has prevented the UK consumer from enjoying all the fall in the price of Oil, but there is no problem that can't be made worse by Government intervention. Please therefore, for the love of God, shut up about the Collapse of Stirling, in case the one-eyed Presbyterian twat in No. 10 notices.

No-one has yet been able to tell me why this crisis is any different to every other stock-market crash in history.

There's the "Derivatives exposure is going to kill us all" argument which definitely got an airing when LTCM went tits up. There's apocalyptic arguments about how houses are too expensive which I certainly remember from the early '90's. There's the high level of personal indebtedness which I definitely remember from the recessions of the 1980's. There's Sky-high government borrowing, which again featured strongly in every recession since the 1970's. There's the elliott wave theory bollocks, which tells us we're in a bear-market even when the market's been going steadily up for four years, and is based on the startling observation that if the market's been going down a lot, it should go up a bit some time, and vice versa.

There's the reporting of it too. There's the same moralistic "I told you so" from people who claimed to have predicted the crisis. Housepricecrash.com for example have been doing so for so long now they were always going to be right! If they had listened to their own advice in 2003 and rented rather than bought, do you think they would have been better off? (the answer is no, in case you're having trouble working out which questions are rhetorical). Professor Roubini has predicted Seven of the last Three crashes, and is finally having a field day.

Sure, what's left of the investment banking industry, which has done such a good job of spreading risk and capital around since the 1980's thereby generating the fastest growth since the industrial revolution, is probably going to get regulated to death. This will mean pulling out of this recession is going to be a lot less fun, as the people making funding decisions will be at the bri-nylon end of financial services. It also means people spotting opportunities in the rubble are going to have to fight through a more risk-averse class of bureaucrat should they wish to finance it. For what 'safe' lending actually involves is restricting lending only to those who don't need it because they already have it, and limiting risks to ones they understand - thereby stifling innovation. This is not meritocratic, and expect fewer small businessmen to own their own companies in the coming decade. THe result: If you're working class, the Labour party will see to it that you stay that way.

Talking of meritocracy, the hedge-funds too are going to be punished for calling this one right (by shorting the banks). They've already been the victim of some sideways briefing by bankers to their friends in high places. The short selling ban, for example caused hedge funds to unwind their long positions in equity too (i.e. the shares they liked) in order to prevent their having unhedged exposure to the equity markets. (thems being hedge funds, and all that) and directly contributed to the subsequent crash. Of course the extent of the selling after the ban was put in place was also unlinked to the unexpected margin calls from the Banks (who needed the cash), which of course in no way contributed to further liquidation of bank shares - the banks created forced sellers in their own shares, whilst simultaneously comitting suicide by refusing to lend to each other! (That's irony for those who didn't spot it)

The hedge funds got it right, and are now being killed by the regulators. Of course the regulators don't allow me to do the same - I am only allowed to advise one way, no derivatives advice allowed for private investors, who are, of course too stupid to be allowed to hedge their portfolios. Perhaps the Government wants to force them to pay Capital Gains Tax? After all, under Labour, only the very rich are allowed to go untaxed. Perhaps if I was actually allowed to seek alpha, then private clients would not be ringing me up repeating Daily Mail editorials and demanding that Hedge funds managers be shot. They would be filling their boots by shorting away like mad, if they were allowed.

Everywhere you look, you see articles by late-middle aged people who geared up in the 80's, enjoyed the twenty-year boom and the wealth owning their house and shares brought them, and are now urging regulation to prevent their children doing the same, whilst smugly blaming the Woman who made it all possible.

If there is one thing inevitable after every crisis, it some stupid, populist regulation will be thought up by the politicians, which will probably contribute directly to the next crisis. The regulators will be pointlessly checking compliance with regulations designed to prevent the last crisis, duplicating work which will be done by prudent risk departments, but will have no effect on the next one, which will come out of the blue and the FSA, SEC and others will be unable to prevent it. Worse, the banks should they be have the Government on the board, will ensure 'fair' access to loans by some favoured group or other. And so the whole sorry saga will start again. My guess is that it, whatever 'it' is, will happen in about a decade's time. After all the crises have come pretty regularly since I've been alive. 1979, 1987, 1997, and 2007/8. I've put a note in my diary to sell everything and go into Government bonds and Gold in 9 years and six months.

I will then link to this post and say "I told you so".

Is up at Amused Cynicism. It's here next week, so nominations to britblog [at] gmial [dot] com.

I am reading Anthony Beevor's history of the Spanish Civil war, The Battle for Spain. He tells an anecdote: During the battle for Madrid, Russian T26 tank crews fighting for Stalin the Republican government were measured by their political Commissars according to the number of shells fired. Of course the best thing to do under these circumstances is to go out of sight of the Commissar and fire off ammunition in the enemy's general direction without bothering to get in range first.

I do not need to explain either the military pointlessness of this spectacularly ill-chosen stakhanovite target, nor do I have to have to labour the point about this Government's analagous measurement of public services.

Some people have suggested to me that I support McCain simply because he's a republican. They're wrong. I support McCain because I always support the tax-cutter. Furthermore some of Obama's rhetoric has been decidedly protectionist, and in this environment protecting jobs is a route to global depression. The other reason I want McCain to win is because I will win £100 if he does. And finally If McCain wins, the look on evey lefties face over the whole world will make up for the shitty stock-markets we're experiencing. Can you immagine he glorious wail of dissapointment and horror from the Guardian if Obama were not the Next American President?

But he will be, of course. Obama has fought by far the better campaign - and he didn't chose an ignorant hick for a running mate.

Obamas weaknesses are small points because I don't actually think Obama is an idiot, despite the fact that he has never shown enough original thought to vote against his party. I think in power he will probably use some sense. Sure he'll cost every American several thousand dollars in extra tax and increase unemployment by shutting down free trade, but I can console myself with the fact the Democrats didn't choose that bloody awful Hillary creature, who would have been ghastly to see on the news every evening for 4 years.

I really don't care who wins - they both have their strenghts and weaknesses. Obama will repair America's reputation with the world, and will lance an extremely large boil on the face of American politics. 20 days to go 'till you elect your first black president. That's the 'discrimination' argument nailed.

So will you seppos just get on with it please? And get it right this time, Your election has been going on far to long and I'm bored of the whole shooting match. If we have to put up with months of fucking hanging chads and supreme court rulings to dicide this one, we shall be forced to revoke the declaration of Independence (again). On that note, I would like to point out to the BBC that I do not have a vote in the US presidential election yet, so you needn't gush quite so transparently for one candidate.

Bravo! The comments are brilliant too

With the financial chaos, it is easy to miss things that are quite positive. The noble lords rejected, by some margin, the Government's repellent plan to lock terrorists brown people anyone they fancy up without trial for 6 weeks.

The scale of the defeat, combined with the duplicitous narrowness of the victory in the commons means the Government will not bring the Fucking thing back this side of a General election, and certainly lack the political capital to use the Parliament act to force it through.

They may not be elected, but the other place has consistently shown itself to be more democratic - certainly more liberal than the elected commons. Imagine a system where everyone in the legislature owed their place to party lists as the Liberal Democrats fantasise about with their Proportional representation fetish and the Labour party seem to want to achieve in their half-baked Lords reform. Even the Tories are not much better; electing the lords would simply bring the same shit from the commons into the upper chamber. Just think what that means in practice: we'd probably debating an enabling law right now. Government bills would have no chance of failing. There would be no scrutiny at all. An Elected house of Lords is the same as abolishing them.

This is going to be my last post on the subject of the Credit crunch, a subject of almost total immersion at work and I would like to have some relief when I write my blog.

It has become piece of received wisdom that Thatcher's deregulation was the ultimate cause of this crisis (Because she's to blame for everything), and as such this refutes the very idea of deregulated markets and we'd all be better off if Thatcher had lost the 1983 election and the Labour party had got power, sold us to the Soviets Nationalised everything and tightly regulated to whom the banks could lend, whilst exercising a monopoly on industrial investment through a 'National Investment Bank'.

This is risible nonsense.

This is not an existential crisis of capitalism. It is one of a series of regular crises - like LTCM/Russian Debt default in 1998; Black Monday in 1987; and most of the 1970's. Which were before Thatcher, and therefore not her fault. Neither was 1929 come to think of it, or Tulip mania, or the South sea bubble etc... etc....

First, let's look at what Thatcher actually did on 'Big Bang': The distinction between Stock Jobbers and Stock Brokers was removed and share trading went from open outcry to screen-based trading. This had no effect on lending. Secondly in allowing banks to lend greater proportions of their capital, Mortgage finance was made available to entire generations of people - not just for homes, but to start businesses. Thirdly she ended a ludicrous closed shop in the city and in enabling foreign banks to come in, she ensured that a more meritocratic and rigorous city remained at the forefront of Global capitalism whereas before it had been slipping behind other centres. This enabled a great explosion of wealth in the 1980s. As an ex-army public schoolboy, I would have been fine under the old system, without all those dreadful oiks with their maths degrees to compete with. Is that what you want when you criticise the Thatcher reforms?

What North Briton Hunter (in every comment on the subject so far) is doing is, in effect criticising Fractional Reserve Banking. Even the pinkos over at Liberal Conspiracy are not polite about this attitude. It's stupid, luddite, and plain wrong to suggest that the banks were reckless in their lending to people - most of these debts are, and will remain good. It is in the financial engineering and risk management, where complexity based on them rather than actual underlying financial risk, played its part - and yes. In this limited sense, the investment banking reforms of the 1980's are to blame for this crisis. But if you think Thatcher is to blame, then you also accept that Jimmy Carter is too, for signing the CRA into law. Bill Clinton for encouraging lending on the basis of race rather than risk, and for allowing Fannie Mae and Freddie Mac to buy sub-prime and Bush for allowing sub-prime mortages to be securitised by Fannie Mae. See here and here for more detail on this view.

In the UK, you could possibly you could cite Gordon brown's decision to use CPI rather than RPI to control inflation thereby ensuring unnaturally low interest rates for a decade as housing costs are (unbeleivably) not included in inflation measures used to control monetary policy. This probably did more to stoke the Property bubble here than anything else. You could certainly criticise the regulatory regime devised by G Brown, which removed the Bank of England from its historic regulatory role.

You may have a case in criticising 'Mark to Market' accounting now fasionable on both sides of the pond for unreasonably depressing banks balance sheets during the crisis, forcing them to curtail lending. Assets can, in exceptional times, be worth less in the market than if held to maturity. This was done in the name of openness and certainly cased problems when MBS, CDO and CDS markets shut for business in late 2007. Ah... the law of unitended consequences...

You would probably be best, however blaming the banks themselves as they panicked, closing markets in instruments themselves and in refusing to lend to each other they played a game of russian roulette with the financial equivalent of a .44 Magnum with 5 Bullets in the wheel.

Or you could get a life, say "shit happens" forget the petty blame game, and get on with buying shares while they're cheap.

Up to you.

... is up over at Redemption Blues

With Both the (Halifax) Bank of Scotland and the Royal Bank of Scotland likely to be in Government control for the time being - and certainly in more of a mess than Barclays, Lloyds and HSBC, would an Independent Scotland have gone the way of Iceland during this crisis, or would they have come cap-in-hand to the English as they did the last time they got ideas above their station?

Scotland's banking sector is bigger than Iceland's and represents just about the only productive part of their economy now the North sea has run out of juice. I wonder if the Socialists (that's most of them) up there are blaming the English, capitalism or both for their national champions' humiliation.

Of course the major upside of this crisis in HBOS is that we may have to endure fewer adverts starring that bloody awful Howard creature and Tom his annoying Mobile-phone-salesman-looking gel-haired sidekick.

I wonder if Brown will make as much for the Tax-payer in buying Bank shares at the bottom as he lost selling gold at the bottom? I doubt it.

Nicholas Bloom writes a very interesting post on volatility in the market. Volatility is a measure of fear. In normal times the FTSE 100 might have a range of 0.5% in a day, with large company earnings perhaps moving the market by up to 1%. In 2008 there have been few days with a range of less than 1% and many with intra-day ranges of 3%, 4% or even more.

The last time volatility was this high was in 1929-30. Not a happy precedent. He writes

The crisis is shaping up to be a perfect storm – a huge surge in uncertainty that is generating a rapid slow-down in activity, a collapse of banking preventing many of the few remaining firms and consumers that want to invest from doing so, and a shift in the political landscape locking in the damage through protectionism and anti-competitive policies...

which is right. If anyone is going to ruin everything it is the politicians trying to protect jobs (which is my major fear about an Obama presidency). The post is cogent, well argued and intelligent, as befits a professor of economics. He then goes and spoils it by saying

In fact the only upside of all this is that the massive slow-down in economic growth will rapidly cut the growth rates of CO2 emissions. Pollution is tightly linked to the level of economic activity, so that a few years of negative growth would lead to reductions in pollution levels not seen since the 1970s. It seems ironic that the greed of Wall Street may have inadvertently achieved what millions of well intentioned scientists, activists and politicians have failed to achieve – a slowdown in global warming.

what most environmentalists really think: economic growth is bad. People are bad.

I don't know much about Mr. Bloom. He knows his economic history, and his free market credentials appear impeccable. However, there is no upside to a Global economic collapse. CO2 pollution may fall, but other types of pollution are improved by economic growth - particularly particulate emissions and chemical pollution. The Citizens of 'Emerging markets' will have to wait longer to escape grinding poverty. Companies in emerging markets will not have the spare capital to invest in clean technology, nor will the politicians be able to force them. Jobs at a premium at any price, and real pollution - the type that poisons people and ecosystems will be the result. There will be more widespread deforestation as poor people burn Biomass (wood to you and me) as fuel because their economies cannot give them electricity or butane. Without jobs they remain in slash & burn agriculture. Even CO2 is not the problem it's made out to be. A warmer climate is more productive, reducing the likelihood of famine across much of the world, especially for those remaining in subsistence agriculture.

When you think about the suffering your "upside" causes, I hope you are comfortable with dismissing the lives and livelihoods of countless millions (billions?) to indulge a Massive Catastrophic Anthropogenic climate change fantasy, which is only of relevance to post socialist lefties in the west, who need some reason to bash business.

Hat tip to Chris Dillow's 'top blogging' links...

The banks, and much business have been nationalised for some time. The Government taking a stake in non-voting preference shares does not change things one bit.

This is not a new opinion - I have, in fact been arguing it for some time, but it has been thrown into sharp relief by recent events, which sends it to the headline rather than throw-away remark within a post.

...most genuine libertarians however believe big business to be an agent of the state, which helps huge multi-nationals by making the regulatory playing field so complex and expensive to navigate that in many of the most profitable business areas - in particular finance and manufacturing - only large bureaucracies are capable of competing... Big business is, from an individual empowerment point of view, merely an arm of the oppressive state.

Ultimate blame for this crisis lies with the banks, who panicked and in doing so shut down the system by which even solvent banks balance their books at the end of the day. In failing to lend to each other, the banks committed suicide. But the idea that this is a "failure of the markets" and a refutation of "unregulated casino capitalism" which requires more regulation, as the socialist group in the European Parliament recently argued is manifestly false. If it is a failure of the banks, it is also a failure of a regulatory regime which is incapable of seeing where the risk comes from.

If this is a failure of markets therefore, it is a failure of regulated markets. What we have endured over the past 3 months or so is a total failure of regulators to spot problems before they become serious, and fail to act appropriately when they have identified a problem. They are still getting things wrong: Why are interest rates in the UK and Europe still so high when the only inflationary threat is oil, which has fallen by 43% since its highs? Why was the likes of RBS allowed to purchase ABN Amro and in doing so taking its core tier 1 ratio so close to regulatory minima? Why was sub-prime borrowing encouraged by governments at the hight of a bubble? Why did The bank of England not make more money available to the banks earlier? The answer is 'because regulators are no better predictors of the future than the executives they police'. They have, however, less at stake and therefore are just as succeptable to short-term incentives with out the compensation of payment for getting it right.

The problems started with the bursting of a US property bubble. Perhaps the Spanish property market went first, but it was the sharp uptick in defaults amongst US sub-prime borrowers, which HSBC brought to the Markets attention in early 2007 was the 'sarajevo moment' which ignited the current crisis. The economies which are suffering most are the ones where the Property market was most 'over built' - Ireland, Spain and the Sun-belt of the USA. Secondly the economies where property prices had run up fastest - The UK, Spain the USA, where the greatest level of debt is secured against assets which are percieved to have the furthest to fall.

So the regulatory regime allowed an asset price bubble to inflate, by keeping interest rates too low whilst house prices were rising, and are now keeping interest rates too high in a fevered fear of non-existent 'core' inflation, becuause the inflation rules by which inflation is measured exclides housing costs! It even excludes taxation. Indeed inflation in the UK - energy prices excepted - is almost entirely taxation and regulatory costs over which Government, local or national, has direct control. Real wages are stagnant and yet the cost of living is rising sharply in a manner entirely ignored by the official measure of inflation. Again I've been arguing this for some time.

The regulators in the US, who have a more poisonous and insidious box-ticking, rule based approach than other agencies around the world were happy to enforce the Community Reinvestment Act, agencies regulated by which were responsible for about half of Sub-prime lending (admittedly the less toxic half). The Clinton administration allowed CRA loans to be securitised; finally the decision taken under Bush to allow Fannie Mae and Freddie Mac to take on these sub-prime-backed securities expanded the sector in the final explosion of the US housing boom. It is these decisions which led to the 125% negative amortisation loans to people who were never going to repay, as people became desperate to "get on the property ladder". It is the defaults on these loans which has led to collapsing Bank balance sheets.

There is no way such predatory lending - only in the interests of the salesman who writes the loan - should be allowed under any sane regulatory regime. But it was, because regulators assumed property prices would just keep rising, and as long as the salesman fulfilled certain rules, he could sell what ever he liked. Any advice is totally self serving, and the regulator too is at the whim of Governments who have agendas different from raw financial risk. No-one in the system is incentivised for long-term financial stability. Likewise in the UK self-certified loans and the dodgier end of the Buy-to-let market (which actually has lower default rates than residential due to conservative lending criteria) were tacitly encouraged to encourage 'access' to the property market to poor and young middle class people. The regulator in giving the appearance of reducing risk actually encouraged banks and individuals to lard up on it. By diluting the time-honoured principle of 'caveat emptor', risk went un-noticed by customers as much as the regulator.

So today's announcement is an admission that the Government and the Banks got it wrong together and the tax-payer (you and me) have therefore to bail them out. But we all bought into the bubble on the way up, so it's only right we should suffer some of the pain on the way down. This only goes to show that nothing changes: Bureaucracies, even in the private sector, are incompetent; The herd, especially in financial markets, is almost always wrong; and regulators are like generals: they fight the last war.

The best you can hope for therefore is to regulate so that no business gets "too big to fail". All that represents is adequate enforcement of the principles of competition. 'Down with big business', and you can say "down with the regulator" too.