Ides of March

The month of March is symbolic of a new start, fresh beginning and hope for the spring and summer.  The year starts here.  But for the first time in my life I am facing the spring equinox with some trepidation.  Normally I would be full of hope and excitement for the new year but this time round the mood is somewhat somber.   There comes a time when one starts to rationalize the changing seasons as the stepping stones of ones own mortality; we start to regret the passing of time rather than enjoying embracing the excitement of the changing seasons. 

The question's nagging away,  how many more summers will I get?  This fleeting morbidity will fade with the dry cleaning bill for my cricket whites, but its presence today is bleak reminder of a life well into the final half.  The mood is somewhat dampened by pension statements that confirm the undeniable truth; to keep on living (spending) at the pace we have become accustomed, will mean that I am likely to yoked to the plough until the very end.

Savers to the slaughter

Ben Bernanke’s (Chairman of the Federal Reserve) was hauled up in front of Congress to explain the rationale behind the Fed’s third, $85bn-a-month round of quantitative easing (QE), and to evidence that the benefits still outweigh its costs and risks.   Bernanke is in the same mould as our own, ex-Chancellor, Geoffrey Howe who’s debating style was described by Denis Healey as ‘…like being savaged by a dead sheep’ – but Bernanke got so angry that he told one of his inquisitors “none of the things you said are accurate”. Ouch!

Denis Healey - great eyebrows!

So what’s got Bernanke’s blood up?  My guess its nervousness that QE is actually the wrong thing to be doing.  He spent quite a bit of time warning Congress on the economic dangers ahead.  He picked out oil price increases and the inflationary pressure this will bring.  Although no one has the foggiest clue what the benefits of QE might be there is broad agreement on the dangers and top of the list is stoking up future inflationary pressure.  As the Fed’s own projections for growth in 2013 in December were at a pretty impressive 3 per cent one wonders why they want to pour more fuel on the fire.  The other risk that the Bernanke was keen to high light was the turmoil in the Eurozone, which took a turn for the worse yesterday as the Italians voted for chaos and disaster rather than more austerity.   Surely the Fed needs to keep its ‘power dry’ to help shore up the US banks in the event of a Euro meltdown rather than throwing banknotes off the roof of the Empire State building (about as scientific as QE).

The real danger of this blind faith in QE is that it gives the Republican Party a juicy bone to chew on.  With all the other important Fiscal decisions that need to be made, with Republican support, hanging on to QE seems to be unnecessarily dogmatic.  If the Fed needs further evidence of the worthlessness of asset purchase schemes (QE) they should look at the experience we have had in the UK where we have burnt through over £375 bn ($578 bn) in QE since 2009.  This has had the effect of:

1. Crippling savers throughlow interest rates / high inflation
2. Supporting thousands of  ‘Zombie’ companies that are limping along tying up valuable capital and resources
3. Soaking up valuable financial resources, which we may need when the wheels final come off the Eurozone (watch out for the German election in September)

Caligula's comeback

Recessions and the associated economic retrenchment that's required is painful but it does have some entertaining fringe benefits.  General speaking the music gets better and certainly the politics gets more interesting and this is absolutely the case in Europe.

Oh what joy the Italians bring to current affairs, to wake up the morning after their election to find that over a quarter of the electorate have, in an absolutely critical election, voted for a failed comedian and a bunch of policies that set out what politicians shouldn't do rather than how to save the crumbling economy.  In the maddest political moment since Caligula ( Roman Emperor from 37 AD to 41 AD) decided that he would promote his horse Incitatus to be a consul.

Incitatus 

Grillo's policies include:  a New electoral system, based on proportional representation; halving number of MPs; end of public funding of parties, fixed term for MPs. Support for renewable energy, free internet provision, Voting age reduced to 16 (from 18) and 18 for the Senate (from 25) and a Referendum on leaving euro. 

The result of this aberration is that we now have a hung parliament in which the dullest politician in Europe holds a third of the seats, Beppe Grillo the modern day Caligula holds a quarter as does Burlesqueoknee, (the worst politician in Europe), the rest being held but Super Mario Monti - the technocrat ex premier. One can only surmise that:

1. One third of the population of Italy are even duller that Pier Luigi Bersani - the centre left leader
2. A quarter of the population were paid by Silvion Berlusconi to vote for him
3. A tenth of the population are devoid of any political nous and voted for the failed technocrat
4. And the final quarter are horses that believe they are in with a chance of being one of Grillo's consuls

The Four Musketeers

Playing out of position

Watching the international rugby over the weekend I was struck by an obvious but important truth.  It's no good playing good players out of position.  In the previous two matches the French had tried to fit all their best players into a single team, this meant picking stars to play out if position.  One of their best players Wesley Fofana  has been stuck on the wing until Saturday when He was played in his regular position at inside centre. Stuart Lancaster the English coach has been admirable in his consistent selection policy playing people in position and if necessary leaving out star players to ensure the team is successful.  All change this weekend as the French started off with a team that had everyone in their favoured position; whilst the English experimented with Courtney Lawes at wing forward, he normally plays in the second row.  

Courtney Lawes out of position

The second row requires muscle, line out skills and close quarter tackling at wing forward the primary job in tackling in open play.  The defining moment of the first half was when Fofana evaded Lawes' miss-timed tackle and goes on to score a great try.

http://www.youtube.com/watch?v=Guuy1q9xXhc

Indeed the French were the better side up to half time.  In the second half we replaced Lawes for James Haskell  a proper wing forward and the French made a perfectly good scrum half play at fly half; and the rest is history 

England 23 France 13  

Whilst watching the rugby I was holding an interesting conversation with my daughter on the ups and downs of my working career.  She probably thinks I peaked early and have disappointed over the last 15 years.  She might be right and what is certainly true is that I have spent too many years playing out of position and the results have been predictable! I am currently contemplating a new job with another company so the lessons of rugby selection were well timed - unlike Courntey Lawes' missed tackle on Wesley Fofana (you should look at the youtube clip).

Barack's Brain Map

The elderly are very much the centre of attention these days. Whether it’s the higher education minister in the UK entreating people in their 70s to return to University to retain;  or a new study published in the Proceedings of the National Academy of Sciences of the United States, which concluded that 72 is the new 30.  The study proved that primitive hunter gatherers, at age 30, had the same odds of dying as a modern Swedish or Japanese man would face at 72.  It is becoming clear that we are no longer clear where the possible outer boundaries of human life stand.   The thought of being alive beyond 90 years when the body is physical giving incapable of delivering the results demanded by the brain is not appealing.

But as the gloom descends there may be help at hand.  President Barack Obama is expected to announce the Brain Activity Mapping (BAM) project next month, splashing out $3bn on neuroscience over the next 10 years.  This research if successful, it could radically improve our knowledge and treatment of  neurological problems - conditions ranging from autism to Parkinson’s disease. In parallel the EU chose the Human Brain Project as its €1bn flagship research programme.  As well as helping treat these common brain disorders the research also offers the prospect of solving how the brain is hooked up to the body to so we might develop treatments for disorders like paralysis. 

Blue Brain director Henry Markram, who will run the EU Human Brain Project, says the research will  help treat common brain disorders, and the research also offers the prospect of solving how the brain is hooked up to the body to so we might develop treatments for paralysis.  There will be benefits for computer technology as well as neuroscience, by developing “neuromorphic” machines based on the circuitry of the brain patients in trials are already able to control computer cursors and robotic arms by transmitting thoughts of movement through implants of just 100 electrodes. He added that the project teams current work is,  “the first comprehensive attempt to reverse-engineer the mammalian brain”.

It’s just a question of joining the dots and we arrive at a place and time where my perfect brain could be supported by a man made exoskeleton for an indefinite period of time.  The question is what sort of exoskeleton would I want?

More at http://www.ft.com/cms/s/2/534a5756-d0e9-11df-a426-00144feabdc0.html#axzz2Lv0B3mCh

The Moody Blues

The news this week that Moody have downgraded UK plc from AAA by one notch, is not unexpected and in itself it may have limited economic repercussions.  The pound has recently been allowed to fall and it is difficult to see that it will fall much further given the weakness of the competitive economies (US Dollar and Euro).  However, politically this is a body blow for the Tories and an unnecessary one.



Having sworn to keep the AAA rating George Osborne looks like a chump. But there is a wider issue here, which is that he keeps on asking us to judge him on things that are either unimportant or unattainable. In his first budget he pointed to a 'march of the makers' as our economic saviour ; based on one quarters data he told us that UK manufacturing would be the engine for growth.  Typical of the man, as manufacturing is just 11% of our economy it would have to have grown by 50%  in three years to match reductions in public spending!  Predictably, like an over loaded donkey this march descended into a stumbling walk.  Now every time we get poor figures on manufacturing the opposition can rub salt into the wound.


However, his biggest mistake has been his ambitions to growth GDP when hacking back the public spending.  How anyone can expect the economy to grow when we are reducing the size of the state by more that our historic trend rate for GDP growth.  Shouldn't he be asking us to measure his performance not on growth but by how much he is reducing government spending.

These are just three example of George Osborne simply not understanding the art of the possible.  My advice to Dave is that we need a realist in the job and we need one now, so let's cut George adrift!

Low Cost Apology

David Cameron visited India to beef up this important export market was also notable for his visit to Amritsar.  The scene of a dreadful massacre massacre in 1920, when India was under colonial rule. The massacre was one of the most shameful episodes in British colonial history, at least 379 unarmed protesters died that day, when troops under the orders of Brigadier Reginald Dyer opened fire on a broadly peaceful demonstration. Appropriately, Cameron harked back to the words Winston Churchill used at the time. The Prime Minister said: "This was a deeply shameful event in British history, one that Winston Churchill rightly described at the time as "monstrous". We must never forget what happened here. In remembering we must ensure that the United Kingdom stands up for the right to peaceful protest around the world." You will notice that he stopped short of using the word sorry!

Cameron has great ability when it comes to this kind staged event, when he has reflected properly and dug deep to craft the words. Sukumar Mukherjee, descendant of a massacre survivor, noted that the visit, hit the right note "He has come here, he has paid his tribute. It is more than an apology."

The prime minister also thought it was helpful "Today was fascinating and illuminating – to go to the place that is so central to the Sikh religion. I am proud to be the first British prime minister to go and visit the Golden Temple and see what an extraordinary place it is – very moving, very serene, very spiritual. It was a huge honour and a great thing to be able to do. I learnt a lot''.  One suspects that he also has one eye on the Indian and Sikh vote in the UK which is not unimportant.  But let's not be cynical - the visit was important and he delivered the right speech at the right time.



When he was planning his speech with the mandarins at the Foreign Office I am sure they kept in mind a 'monstrous' ruling made in our own high courts last October.  A court  in London rejected claims from the UK's government's lawyers that too much time had passed since the Mau Mau  insurgency in the 1950s, and it was no longer possible to hold a fair trial. Mr Justice McCombe, rejected the government's claim that claimants should be suing the Kenyan government, as it had inherited Britain's legal responsibilities on independence in 1963. Some estimate that more than 5,000 of the 70,000-plus people detained by the British colonial authorities are still alive. Many may bring claims against the British government.  This ruling may also make it possible for victims of colonial atrocities in other parts of the world to sue the UK.

So this brings us neatly back to the Cameron speech in India this week.  If we in the UK were to hold up our hands for all the injustices we have bestowed on an unwilling world we will be paying reparations for eternity.  In preparation for this we should be looking to start our own case against those who have damaged us over the years - we could start with the Norwegians (the Viking hoards), the Italians (the Roman conquest) and of course the French (for 1066).

Old Dogs New Tricks

The UK's higher education minister, David Willetts (Nickname - Two Brains) is entreating the over-60s  to go back to university and retrain because they will have to work longer. Willetts pointed out that age limit on student loans had been lifted, making it possible for older people to go back to studying. He said: "Education is such a good thing – it is not reserved for younger people. There will be people of all ages who will want to study. There is great value in lifelong learning."  His comments were prompted by report found that the country’s future economic success depends on the skills and contributions of older workers.  Some pension specialists think that few 60 year old's will think that a three-year university degree costing £27,000 is a good investment, but its not the money that's the problem..

It seems to me that Willetts is missing the point, which is that older people from the baby boomer generation are completely unsuited to life a University.  Today's student is a industrious individual - I should know I have two daughters at university - they are hard working, sensible and devoid of any radical opinions.  Speaking for myself and remembering the my first attempts at further education I am sure it would not work.  I would be aiming at doing only 2-3 months work for my finals, this continuous assessment malarkey would not suit at all.  Also the thought of being cooped up with thousands of young people who have no anger or fire in their bellies would be painful, who would I sit around with all night - debating inanely the meaning of life? Also you can't rewind the clock on alcohol - I simple could bear to sip Blossom Hill for three years!

It is clear that the government will be pushing water up hill and to have any chance of success they will need some role models to carry the touch for re-education and on this I do have some helpful suggestions.  The Duke of Edinburgh should be enrolled on a Chinese and Asian studies course to include a residential year.  This will give him the chance to establish whether his warning to British overseas students was prophetic or not. - on a trip to China in 1986 he told them ''If you stay here much longer, you'll all be slitty-eyed''.  The 91 year old followed this up yesterday with further insightful remarks for our Filipino friends.  When opening a hospital he said to one of the nurses: "The Philippines must be half empty - you're all here running the NHS." 

Another candidate role model might be Gordon Brown, who is enjoying retirement having destroyed our economy when Chancellor of the Exchequer.  Might I venture the idea that he complete degree in sociology so that he when he meets normal member of the public he does confuse them ''just a sort of bigoted woman''.    

http://news.bbc.co.uk/1/hi/uk_politics/election_2010/8649012.stm

Publish and be damned

It is now clear that Lord McAlpine (the former Tory Party Chairman) is going to pursue Sally Bercow for her potentially Libelous 'Tweet' following the Newsnight programme, which wrongly claimed that the senior Ex-Conservative politician was a paedophile.  

Mrs Bercow, who had 57,000 Twitter followers at the time, tweeted after the broadcast: “Why is Lord McAlpine trending? *innocent face*.”   Mrs Bercow, a Labour Party activist, is married to The Speaker of the House of Commons, who was a Tory before taking up armed neutrality as the independent Speaker.

This might be seen as a form of revenge by the Tory Party establishment against the family Bercow.  When elected to the Speaker's Chair, Gordon Brown remarked "It is said that you have now cast aside all your past political views - some of us thought you had done that some time ago." This was a reference to his journey from the Right wing of his party to becoming a neo-socialist. 

Once he became speaker his wife embarked on a career of shameless publicity both embarrassing to her husband and more importantly to the Office he holds.  Any way we are now spared the worst as she has closed her Twitter account after taking advice from her lawyers and generally has disappeared into the shadows.  Although the impending trial will change all that.

What does this mean for the rest of us engaged with social media - I suppose the main point is that without an 'in-house legal team' to approve our content we all have to have a degree of common sense and remember the lines from Shakespeare's Othello

Good name in man and woman, dear my lord,

Is the immediate jewel of their souls:

Who steals my purse steals trash; 'tis something, nothing;

'Twas mine, 'tis his, and has been slave to thousands;

But he that filches from me my good name

Robs me of that which not enriches him

Darwin turning in his grave

The Tories set great store before the last election in widening the appeal of the party, by encouraging a more varied group of people to stand for election.  Out with the aristocracy (apart from the cabinet) and in with the Oiks.  This approach was endorsed by notable worthies like Portillo who said '...much of the Parliamentary Party is reactionary and unattractive to voters'.  This process was known as the 'A list' - prospective members of parliament were foisted on local party committees to refresh the party.  The Party of the free market should have known better.  Natural selection obliterated the dinosaurs before and should have been relied upon to bring in new blood.

We now have conclusive evidence for the cock-up.  The prospective candidate for Eastleigh, who I described in my last blog on this subject as the UK's answer to Sara Palin, is proving to be a total liability.

http://getwd50.blogspot.com/2013/02/touch-of-class.html

A recent photo shows how little the Tories want us to see of Maria Hutchings

Her public utterances have been so bad that she is now limited to speaking in public for two minute sound bites only and she didn't take part in a live radio debate that was organised - The Telegraph has more.

http://www.telegraph.co.uk/news/politics/conservative/9884810/Eastleigh-by-election-Tories-trying-to-hide-candidate.html





This mess is further evidence of Cameron's over riding problem, which is that he is a lousy recruiter.  Both within the Cabinet and in the party at large the wrong people have been selected.  Darwin would be turning in his grave - we should return to natural selection and let the best rise to the top.  Genetic engineering is not the answer.

Taxing question

The Tories have been focusing their efforts for the low paid on increasing the tax free allowance - increasing the amount of money we all earn before income tax starts being deducted.  As well as these changes Osborne has introduced literally hundreds of other tax changes which drive up complexity and accidentally  drive down the tax take.  Labour's Ed Miliband is proposing to reduce the initial rate of income tax for earnings below £10,000 to 10%.  This lower tax rate was scrapped by Gordon Brown (Ed's Mentor) only a few years ago.  It feels to me as if we are spinning in ever decreasing circles!

There has been a long running debate on the how to reduce the tax burden on the poorest in society whist not give too much away to the rich.  Both sides of this argument (increase allowances or reduce rates) are unable to resolve the conundrum that the rich benefit more from these changes than the poor.

John Kay in the FT explains the problem of margin tax rates at or around the £10,000 earning mark.

http://www.ft.com/cms/s/0/94639ab8-79f2-11e2-b377-00144feabdc0.html#axzz2LLnuFWtO

Suppose the starting rate of tax is 20 per cent and is payable on all income over £10,000. Now compare two policies. Either raise the tax threshold to £11,000, or introduce a lower rate of tax of 10 per cent on the first £2,000 of taxable income. Both these changes are worth £200 a year to anyone who earns more than £12,000, and the reduced rate halves the tax bill of those who earn between £10,000 and £12,000.
But the higher threshold eliminates completely the tax liability of everyone earning between £10,000 and £11,000 and reduces the tax liability of everyone between £11,000 and £12,000 by more than half. A higher personal allowance is always a better way of spending money on helping the low paid than a lower initial rate.

What Mr Kay doesn't model is that better off taxpayers receive the £200 benefit of the raised allowance or reduced rates and this is why cutting tax for the very poor is so expensive.

The simple innovation I have in mind is variable allowances.  The poorly paid should not pay any tax the better off should have a tax free allowance that reflects there total income. By simplify the tax system to link total earnings to variable allowances and simple flat rates of tax we can raise the tax take and solve the marginal tax rate issue.  My model looks like this:

Taxable income		tax free allowance		flat rate tax %		Top rate on all income over 115 k		total tax paid		actual rate of tax
under 15,000		15,000		0.00%		0.00%		-		0.00%
25,000		13,500		30.00%		0.00%		3,450		13.80%
35,000		12,000		30.00%		0.00%		6,900		19.71%
45,000		10,500		30.00%		0.00%		10,350		23.00%
55,000		9,000		30.00%		0.00%		13,800		25.09%
65,000		7,500		30.00%		0.00%		17,250		26.54%
75,000		6,000		30.00%		0.00%		20,700		27.60%
85,000		4,500		30.00%		0.00%		24,150		28.41%
95,000		3,000		30.00%		0.00%		27,600		29.05%
105,000		1,500		30.00%		0.00%		31,050		29.57%
115,000		-		30.00%		0.00%		34,500		30.00%
125,000		-		30.00%		20.00%		39,500		31.60%
135,000		-		30.00%		20.00%		44,500		32.96%
145,000		-		30.00%		20.00%		49,500		34.14%
155,000		-		30.00%		20.00%		54,500		35.16%

This has the benefit of making the calculation simple and removing the marginal tax rate issues also mentioned in Mr Kay excellent article.

Terrible shot

Lovely cover drive Sir!

Pictures of David Cameron playing cricket in India on his latest tour of the East show how off the pace his PR advisers are.  For the local Indian press the picture is a godsend - allowing  them to paint Dave as the old imperialist smashing his old subjects for six.  For the left wing press in the UK its another example of a privileged background.  The poor urchins on the labour front bench wouldn't be seen dead playing cricket, oh no they stick exclusively to football and cribbage.

Dave - away from the playing fields of Eton

John Major - warm beer ...

Cameron should remember the trouble that cricket got John Major into and he certainly didn't have the disadvantage of learning his cricket on the playing fields of Eton.  Major used imagery of warm beer and village cricket to characterise all things good about 'Britishness',  when a more accurate imagery would have been a yob gobbing at a policeman.

Ask Ed Balls, he knows a thing or two about the 'dark arts' of PR- remember these two.  'Annoying' Ed sticks the boot in at the footy and playing cribbage (he's the one smoking)!