Europe is in the midst of a revolution. Democratically elected governments have been quickly and silently removed and replaced with government by technocrats.
The new Italian government is being led by a man recently ennobled as a “senator for life”, a position which last appeared in the public eye when enjoyed by General Augusto Pinochet.
Who has caused these coup d’etats? Not the armies, nor even the people of these countries, but “the markets”, whose confidence is desperately sought after the installation of these unelected technocrats.
In this they have been supported by the EU. The newly installed Italian government have received a vote of confidence from the unelected “President” of the EU, Barosso and his European Parliamentary henchman, Hermann van Rompuy. At the head of this new enforcement agency lies a duopoly of Sarkozy and Merkel. Both at least have some democratic legitimacy as leaders of France and Germany, but none in Italy or Greece.
Italy’s borrowing crisis reached a peak last week when an organization called LCH. Clearnet increased the costs associated with purchase of Italian government bonds. Not, apparently, because of concerns about the countries ability to repay its debt but out of concern about the sluggish rate of growth of the Italian economy. None of the features of the so called austerity package seem calculated to encourage growth. Their point rather more bluntly appears to be insure against the countries ability to repay debt.
Greece has many endemic problems, not least of which is its Olympian standards of tax avoidance. Papandreou was elected on a platform of economic growth and has ultimately fallen on his sword because of his unpreparedness to tackle tax evasion and his inability to deliver economic growth. If inability to deliver economic growth had been the key factor in late twentieth century elections, Margaret Thatcher and Ronald Reagan would not have been re-elected at the first time of asking.
The new leaders of Greece and Italy are, respectively, a former central banker and an economics professor. Both appear to be gentlemen of unalloyed integrity and fundamental decency. Both appear to be acknowledged experts in their fields, though those fields have not been entirely innocent in the recent economic disaster. Both, whilst having the qualified support of their parliaments, have no democratic mandate.
How far does democracy go before technocrats have to step in and over-rule? What are the challenges facing those who believe in democracy in this situation? When push comes to shove, who decides?
What does the crisis also mean for Capitalism? Is Capitalism ultimately sustainable? Why do economies – corporate and national – always have to grow? Indeedn do they always have to grow? Why? What does untramelled growth in the west mean for the rest of the world? Is such growth environmentally sustainable? What does it ultimately mean for peace and security?
Monday, 14 November 2011
Monday, 24 October 2011
My bucket list
Inspired by someone I follow on Twitter, @bookshop_girl, this is my bucket list. A bucket list is like a To Do list of things that you have always wanted to do. I've kept mine deliberately short. For career reasons I haven't published a few things but amongst the other things I would like to do with my life are:-
1) Teach people things
2) Write a book
3) Go on a long trip round Europe seeing the places I've read and learned about
4) Ride a stage of the Tour de France
5) Cycle from Lands End to John O Groats
6) Live and/or work abroad for a period
7) Complete a PhD
That should do to be getting on with. Now lets hear yours.
1) Teach people things
2) Write a book
3) Go on a long trip round Europe seeing the places I've read and learned about
4) Ride a stage of the Tour de France
5) Cycle from Lands End to John O Groats
6) Live and/or work abroad for a period
7) Complete a PhD
That should do to be getting on with. Now lets hear yours.
Wednesday, 5 January 2011
Radix Malorum est Cupiditas
...is frequently mistranslated as "money is the root of all evil" which is wrong as it actually means "The love of money is the root of all evil". It's the love bit that makes the crucial difference and it also goes some way to explain the miserable condition of our national finances today.
Of course, the banks have a substantial - a very substantial - responsibility. And don't get me started on how bankers can earn bonuses when their firms are majority owned by the tax payer and they are still making losses. (I'm still considering a 100% tax on bank bonuses to be a good idea.)
But the fundamental reason we got it into such a mess is greed, pure and simple greed. Which is, oddly enough, one of the original translations of the Latin maxim. But it's something for which we all bear responsibility. We've all been responsible: spending irresponsibly beyond our earnings, buying houses at ridiculous salary multiples and for what? Has it made us any happier? It is therefore no surprise that clever financiers seeking more complex and remunerative products saw a market for bundling debt and then re-selling it on the international financial markets and it is therefore something for which we are all responsible.
All of which partially explains why I am in favour of today's increase in VAT to 20%.
It is a tax on discretionary spending with the most important essentials excluded :food, children's clothing and (most importantly) books. It therefore largely applies to items that we do not necessarily need to buy and should therefore reconsider. A trip to the Perth recycling centre is instructive in this regard. Look at the electronics recycling section and count how many modern functioning TVs have been discarded. Multiplied across the country and it shows just how much money is unnecessarily being spent replacing perfectly serviceable electrical goods.
With house prices being the main reason for the current recession, it makes me wonder why VAT shouldn't also apply to house prices. It would discourage spending, irresponsible mortgage lending and encourage people to settle in their existing homes. Spending on home improvements could be excused from VAT to maintain employment in the building trade and to encourage people to adapt their existing home to suit their purposes rather than move every three or five years.
I think the bottom line is that I would argue that a large, modern home and a flat screen TV is not a recipe for happiness. It brings with it additional pressure and worry and the potential for a greater fall if things go wrong. Nor is my suggestion meant to inhibit ambition. In fact I am extremely ambitious but my ultimate ambition is for contentment and that wont be affected by the rise in VAT, a bigger house or a flat screen TV.
Of course, the banks have a substantial - a very substantial - responsibility. And don't get me started on how bankers can earn bonuses when their firms are majority owned by the tax payer and they are still making losses. (I'm still considering a 100% tax on bank bonuses to be a good idea.)
But the fundamental reason we got it into such a mess is greed, pure and simple greed. Which is, oddly enough, one of the original translations of the Latin maxim. But it's something for which we all bear responsibility. We've all been responsible: spending irresponsibly beyond our earnings, buying houses at ridiculous salary multiples and for what? Has it made us any happier? It is therefore no surprise that clever financiers seeking more complex and remunerative products saw a market for bundling debt and then re-selling it on the international financial markets and it is therefore something for which we are all responsible.
All of which partially explains why I am in favour of today's increase in VAT to 20%.
It is a tax on discretionary spending with the most important essentials excluded :food, children's clothing and (most importantly) books. It therefore largely applies to items that we do not necessarily need to buy and should therefore reconsider. A trip to the Perth recycling centre is instructive in this regard. Look at the electronics recycling section and count how many modern functioning TVs have been discarded. Multiplied across the country and it shows just how much money is unnecessarily being spent replacing perfectly serviceable electrical goods.
With house prices being the main reason for the current recession, it makes me wonder why VAT shouldn't also apply to house prices. It would discourage spending, irresponsible mortgage lending and encourage people to settle in their existing homes. Spending on home improvements could be excused from VAT to maintain employment in the building trade and to encourage people to adapt their existing home to suit their purposes rather than move every three or five years.
I think the bottom line is that I would argue that a large, modern home and a flat screen TV is not a recipe for happiness. It brings with it additional pressure and worry and the potential for a greater fall if things go wrong. Nor is my suggestion meant to inhibit ambition. In fact I am extremely ambitious but my ultimate ambition is for contentment and that wont be affected by the rise in VAT, a bigger house or a flat screen TV.
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