Saturday, 31 March 2012
Opportunist of the week - The man who wants to be our Chancellor of the Exchequer giving an interview and actually trying to blame Francis Maude for the injuries sustained by the woman.
Pathetic news organisation of the week - The channels which actually half ran with that story for a few hours. (Are you independent news organisations or the PR department of the Labour Party? Make you mind up).
Knobs of the week - John Mann MP, Karl Harris MP and Lord Toby Harris (all Labour) who called for Francis Maude to resign on the strength of this news story.
Friday, 30 March 2012
Tip 1 - In reality, by-elections are simply a referendum in one constituency on how the punters there are feeling about the Government on that given day. Thus, most by-elections are protest votes.
Tip 2 - By-elections therefore tell you bugger all about (a) the Government’s real (un)popularity, b) the Opposition’s real (un)popularity or (c) public opinion on any one issue.
Tip 3 - Melvin’s ‘rule of thumb’ is that sitting Governments usually get a kicking, the Opposition usually prospers and occasionally a small bunch of one issue loonies surprises everyone.
Tip 4 - If the Government candidate does well, however, then that is probably significant.
Tip 5 - If the Opposition’s candidate doesn’t do well, then this is also probably significant.
Tip 6 - If a loony third candidate does well, this usually means fuck all and normal order is resumed at the next General Election, with said loony disappearing into obscurity.
Tip 7 - If it is a safe seat, then most other main parties don’t spend much time, money or resources on it.
Tip 8 - The party which wins, claims “this is an historic victory which will change the mould of politics for all time”. It doesn’t.
Tip 9 - All parties try to use the result to damage the other parties, even if their own result is woeful eg “Well, David, we didn’t do as well as we had hoped (swing against of 90%, they lost their deposit and their candidate committed suicide at the count) but really the story of the night is that this is a truly terrible result for the x party”.
Tip 10 - Any truly meaningful impact of the result is always completely lost on the media.
So how did last night’s Galloway spectacular measure up, then?
Tories - Did badly, as expected. Not really a shocker for a Government in the middle of an austerity programme.
Lib Dems - Ditto.
Respect - Typical, horrible Galloway campaign playing to the young disaffected Muslim vote. He has one card and he plays it well. He will make some amusing speeches but will be an irrelevance.
Labour - What a shocker. They were either complacent or incompetent or both. Their once brilliant election machine is history. Too much time is being spent right now arguing internally about who should be sitting on which deck chair while the very unhappy good ship Titanic further embeds itself in the iceberg. Bad, bad news for Millipede Minor. If he can’t win a by-election in a half-decent Labour seat right now, after a truly horrible week for the Tories, even loyalists must be wondering when to wield the knife. Expect manoeuvres in this weekend’s press from the Blairites and Millipede Major.
Thursday, 29 March 2012
Why has the Commentariat focussed on the latter and not the former?
You need to read Mark Penn’s Microtrends to understand. Penn was Clinton’s favourite pollster. He’s a shrewd guy. His book is a fascinating and very easy read. He picks out some clear trends from all his polling data. One of my favourites he called ‘impressionable elites’.
This is the term he used for educated, affluent people who focus more on personality than issues when it comes to evaluating political decisions. His research shows that those at the top end of the population are heavily swayed by gut and impression, not numbers and facts. They vote more on the basis of personality in campaigns, they buy products more on the basis of brands and they invest more on the basis of a tip than on sound investment logic.
Conversely, rational and informed behaviour is more widespread through the now better educated working class - those who now can get to university, often now have ‘information economy’ jobs and use the internet.
His logic for this is that those at the top of our society really have never had it so good. They may moan, and may have less disposable income than a couple of years ago, but there is food on their shelves and petrol in their cars’ tanks. In short, they don’t have to struggle. Thus they have the time and space to be able to be interested in what colour tie the candidate is wearing or what his wife looks like.
Meanwhile, those at the bottom of the pile are still trying to get out of the shit heap. They could not give a toss about the candidate’s tie or the attractiveness of his wife, they want to know about his policies and how they will help them get out of the shit heap.
So, back to the beginning of this post. Why has the Commentariat focussed on ‘Pasty-gate’ and not the Coalition’s economic strategy and the OECD?
Well, of course, journalists to a man all come from ‘impressionable elites’. Which is one reason why we get much too little sensible and objective news and way too much trivial nonsense.
Wednesday, 28 March 2012
Ken caught lying.
Ken caught insulting Jews.
Ken caught insulting gays.
Ken keeps promoting his over close relationship to London Islamists.
Ken defends taking Ahmadinejad’s money.
Ken avoids taxes.
Ken’s behaviour driving his own supporters away here and here and here.
Ken becoming an embarrassment to his fellow Lefties.
And all this in the last few weeks, the weeks before the London Mayoral elections. You could not make this up. This is the sort of list of events that if it was in a film we would all sit in the cinema saying: This is so unrealistic. It would never happen. No one is that stupid.
Prediction: Boris will win handsomely. Ken will never again be supported by the Labour Party nationally.
Tuesday, 27 March 2012
We already have limited funding of political parties by the taxpayer. It’s called ‘Short or Cranborne Money’ and gets dished out to the opposition parties in both Houses roughly in proportion to their number of seats. But this is as far as all right-minded people want to go. We should never propose taxpayer funding of political parties direct. We all have an interest in Parliament functioning properly but not in funding political parties’ election leaflets. You want to win elections? Then produce a manifesto that people want to fund and vote for.
The Tories always attract funding by business. This is not evil, Lefties. This is because they have policies which are business friendly. Labour always attracts funding by unions. This is not evil, Righties. This is because they have policies which protect unions. And no fucker gives the Lib Dems anything much because mostly they talk vague twaddle.
This is called democracy, children. I like your policies, I give you money. Simple. If you want more money, give me some more policies I’ll like.
Question - What is wrong with senior business people meeting the Prime Minister, or any of the Cabinet for that matter? Moreover, what is wrong with senior union leaders meeting the Labour leader? Or vice versa indeed?
Answer - Nothing.
Again, this is called democracy children.
What you can’t have is an un-level playing field, where your supporters are allowed to fund you but my supporters are not allowed to fund me.
For the record, if I was giving £250,000 to a political party, sure as fuck would I want to meet its leader to tell him what he was doing wrong! I might even want a blow job from his wife/mistress thrown in for good value. And of course, our American cousins just laugh at how cheap we are. Obama, Romney and the assortment of Republican weirdoes in Primary mode would just laugh at these pitiful amounts.
Our system is not corrupt. I have worked in Brussels, I can tell you about real corruption. Yet we make such a meal about these piffling issues.
Putting aside Labour’s endless childish attempts to try and skew that playing field in their favour, we actually need business and union leaders to all have access to Government. Otherwise politicians who have never run a business or union will do some very dumb things. And the Law of Unintended Consequences will apply on almost every piece of legislation. That is why lobbying is a force for good, children, despite what journalists of either colour will tell you.
Anyway, Labour had 13 years to increase the top rate of tax from 40p to 50p. They did nothing for 12 years and 11 months.
As they were about to be voted out of office, they increased the rate to 50p as a political gesture, simply to screw the Tories around.
At Budget time, they wanked on and on about how it shouldn’t have been reduced and how they would reverse it.
But last night they abstained on the vote on that clause in the House.
As ever, lying duplicitous political bastards.
Friday, 23 March 2012
Thursday, 22 March 2012
Every year I am amazed at how the Commentariat miss the point. They always fixate on one or two issues of detail and completely miss the big picture. They disappear off into the weeds, usually led by the Opposition of whichever political colour. This year they are gorging on the so called Granny Tax and new 45p top tax rate, two reasonably modest elements in the overall picture. The media are absolutely sucking up Labour’s empty agenda. It’s risible. The world is still coming out of economic meltdown and all Labour can find to talk about is a future tax allowance reduction for future middle income pensioners? Is that your main beef, Ed? Really? So everything else is fine then?
And why oh why can the Coalition never get its presentation right? Have they learnt nothing from the NHS reform debacle? They sorely miss an Alistair Campbell figure who innately understands how to present their agenda and can ‘deal’ with the media. Every fucking initiative bar one was leaked. (The problems of competing agendas in a coalition government, maybe?) And the one initiative that wasn’t is what the Left are lying about and exaggerating to death, with a benign media drinking their ludicrous spin. Sort it out, Cameron et al.
Granny Tax – The Facts
The basic personal allowance is climbing and so will overtake pensioners’ additional personal allowances. So something needed to change. And as the IFS has pointed out, pensioners have done pretty well out of the Coalition, suffering much less than the rest of us with generous increases in their pensions. Take your pain, wrinklies. This is a future reduction that will affect future pensioners. From Labour’s briefing which the media have hoovered up you would think that Boy George had actually taken cash away from pensioners as of today. And frankly, one rate of personal allowance for all seems fine now that the rate is going to be so high.
45p Additional Rate – The Facts
Mistake. This was the trap left by Gordon that Georgey Boy had to deal with. We should take all the pain now, down to 40p in one go, otherwise either (a) you continue the pain of the next 5p reduction into one or both of the two budgets left before the election or (b) we get beached on 45p, which isn’t low enough to make us internationally competitive.
Now for the good stuff. Overall, this was a good budget.
The really big news - Unemployment and inflation revised down and UK growth revised up while Eurozone growth is heading the other way. Nice. We're borrowing less and the deficit reduction is slightly ahead of target. A clear focus to stimulate growth by lowering corporation tax and the top rate of income tax (although by not quite enough as already mentioned). All good. Melvin is very happy.
The quite big news - Personal allowances on course towards £10k and the child benefit plan reworked and thus less painful. Good stuff. Personal tax statements will be a game changer in media and public opinion terms when they come in. Trust me on that. When all taxpayers see how much of their hard earned cash is being wasted on crap, there will be a more aggressively focussed view on high spending governments. The foreign rich are being soaked on expensive house purchases which is fine but the Lib Dems’ £2 million mansion tax is not good. This will depress the £1.5- 2.5 million housing market. If they can’t move, then others below them can’t move and so it goes on down the chain. And this will be a problem.
The small print - Future pensioner shit already talked about. Fags and booze - who cares?
He didn’t do everything I wanted him to do, but overall it was a credible job. He's quite a canny one, young George. They just need to sort out their presentation. Fast.
Wednesday, 21 March 2012
Tuesday, 20 March 2012
‘Medialand’ is of course fixated on the Budget day announcements. This budget is important, as I said here, because this is the last budget that will have any affect before the 2015 General Election. The impact for the first time of a ‘fixed term’ Parliament is important here. Normally, right now, Boy George would be having to run both a ‘go early’ strategy and a ‘full term’ strategy. The ‘go early’ option always used to pressure Chancellors to start the great give away sooner than was really sensible. Boy George has no such problem. He can afford another year of pain before two giveaway budgets in 2014 and 2015.
Many things the Coalition has done have had my full support. But if I have a fundamental criticism of them it is this: because of the shocking state that Government was in when they inherited it, and the depth and immediacy of the financial crisis we were all in, they have concentrated exclusively on the ‘here and now’. This Budget is the time to show the long term plan. Where do we want to head; what is our destination? We need the short term changes required of course, but set out against the backdrop of - to use a Tony Blair term - ‘the narrative’. You can only hit the punters with the stick for so long before you have to show them the carrot or else they start complaining.
So this is the Budget for Boy George to show his direction of travel upon which the Tories will fight the next election. He should be saying:
“Government cannot solve every problem. Individuals can mostly solve their own problems. The previous 13 years of the Left’s misguided faith in ‘Government action on all fronts’ has meant that Government has got too large, too bloated and, as ever, is terribly inefficient. We have looked for too long for Government to solve every injustice, every crisis, every problem.
“This has meant that it has taxed too much and borrowed too much to try and pay for everything it has tried to do (mostly badly) and that was one of the fundamental reasons our recession has been so bad compared to many other nations.
“And yet, we are still spending more than the taxpayer can afford. We still need to trim the size of Government. We need to decide what the Government actually does and what others are better at doing. Government needs to do less and do it better.
“And, most importantly, we are a low tax party. And we will progressively reduce taxes for all. We believe that people should keep their own money as they are almost always better equipped to make the right decision for their family on how to spend it for their benefit.
“So by 2020, we plan to have cut Government by x% and increased its efficiency by x%. At the same time we want to ensure anyone earning £12,000 or less pays no tax at all. And our top rate of tax should be under 40% to make us really internationally competitive. And this Budget sets us on that course.”
I’d love him to say that, but he won’t of course. Nevertheless, I am going to ignore all the Budget small print so efficiently leaked these days and concentrate on some of the bigger stuff I think he should be including.
What should the Government’s strategic economic priorities be?
First, pay down that deficit as fast as possible. Funding the interest on Brown and Ball's debt is costing us taxpayers around £50bn this year. That's about 7% of all Government spending. More than we spend on defence (£40bn), law and order (£33bn) and transport (£23bn). Madness. Thanks, Labour.
Second, aim to balance the national budget as soon as possible; that is, spending each year no more than we collect each year from us taxpayers. This year we are borrowing around £127bn to balance the books. Behind income tax (£158bn), but ahead of National Insurance (£101bn) and VAT (£100bn), borrowing is still the second largest source of income for our Government. Thanks Labour.
Third, as a fundamental matter of principle, plan thereafter to run a budget surplus over the term of each Parliament. Forever. Forget over borrowing. Keep us in the black. This means that we will always be prepared properly for the next recession and never be anything other than a AAA rated country. It also gives us the ability to do other things listed later in this post.
Rebalancing government spending
Our top 4 spending budgets are social security (£200bn), health (£126bn), education (£89bn) and defence (£40bn), (putting aside Brown and Balls’ £50bn debt interest as mentioned above which is the 4th highest spend in Government). This is completely out of balance. We are spending way too much on social security and health and way too little on defence and infrastructure - roads, rail, energy etc. This has to change.
To be fair to the Coalition, they have started well with IDS' re-engineering of social security and Lansley's much (unfairly) derided re-engineering of health. But much much more needs to be done here. To take one simple example, the DWP announced last week that 71% of disability benefit claimants either have no reason to be on the benefit at all or could work with some assistance. And that’s just one benefit. And don’t get me started on the NHS which always reminds me of that famous Ronald Reagan quote: “Government is like a baby: an alimentary canal with a big appetite at one end and no sense of responsibility at the other.”
Meanwhile our defence budget is in tatters. We are now a third world defence nation with second world needs and first world aspirations. We are building a couple of massive aircraft carriers but cannot afford the planes. Thanks Labour.
I don't know exactly what the right percentages are - greater minds than mine can work that out - but we need to rebalance departmental spending badly. We are currently spending around 2.7% of GDP on defence. Countries like Botswana, Chile and Morocco spend more than that. It’s pathetic. Thanks Labour.
How to pay for all this?
The cold hard truth is that until the deficit is under control, now it not the time for tax cuts, however much the Tory Right and business bleats. Any give aways tomorrow should be fiscally neutral ie should not increase or decrease spending or tax.
Let’s now cover that thorny issue of the 50p tax rate. This is very simple to deal with. As a matter of principle and good practice, no tax should cost money. All taxes should raise money. This tax costs and thus has to go. It’s pointless. It was a political not an economic initiative carried out as a cynical act the month before Gordy left office and expressly to make life uncomfortable for Boy George. And in that aim it has worked. But it’s loony. It depresses the money HMRC earns exactly when we taxpayers need HMRC earning more. Madness. Thanks Labour.
Georgie Boy will want to go for 45p first so that the Lefties can’t whinge too much. The problem is we may get stranded at 45p if the wind changes in the future and 45p may not change the rich’s behaviour. Remember where we are on that horrible league table of top rate income taxes. 45p doesn’t help us much. It is making us an unattractive investment target. It should go altogether. It makes no economic sense to keep it.
And on the subject of tax cuts, as I have said before, the only tax cuts that deliver growth are income tax top rates - that pesky 50p again - CGT and Corporation Tax. If we need growth, these are the ones to target, not basic rate thresholds (Lib Dems) or VAT (more Balls). The OECD agrees so I'm in good company.
The pay and rations of the public sector is already being squeezed. I’m afraid there has to be more. National pay is illogical and has to go. The indefensible union logic that public sector pay should be the same in Newcastle and Knightsbridge is risible. (This also nicely kills the unions’ endless strike ransoms at a stroke. Add to that slaying all the Pilgrims and listing unions as lobbyists. Mrs T would be proud, George).
And we need a new era of privatisation. Governments are always hopelessly inept at running services as the dead hand of expensive bureaucracy ratchets up the cost. Either sell off or transfer service delivery to those that are much better at it - the private or third sector. Don’t just stop at the Royal Mail. Be radical.
Now my reading of Jim O’Neil’s latest book has taught me a little about Germany’s success. Germany’s stellar growth in recent years is very seriously reliant on a clear strategy to manufacture and export to China and India. As China and the other BRICs shift from being cheap manufacturers of our consumer products to being consumers of their own products, we need to cash in on their new found wealth. Third World cheap mass manufacture has killed our manufacturing sector. But we have a hidden gem: precision high tech manufacture. We need a planned and targeted incentive regime to massively grow that sector fast because all those BRICs are soon going to need our high tech exports, just like right now they need BMWs.
A final thought: we need a UK sovereign wealth fund. We need to generate investment income just as China, Abu Dhabi, Qatar, Norway and all the rest. We can’t do that now, but we need a plan for it sometime soon.
Monday, 19 March 2012
Sunday, 18 March 2012
Saturday, 17 March 2012
The Mad Dog of Lambeth has resigned. And frankly, who cares? His Grace has opined wisely as ever.
The immediate coverage of whom the runners and riders might be is terribly amusing. I view this debate as something akin to forming a committee on the bridge of the Titanic to decide who should man the wheel as all the while the good ship sails full steam ahead at the iceberg. Church attendance is a straight line graph down and has been for decades.
Williams was a well-documented very Left wing academic with rather silly hair. He kept confusing his religious role with the idea that he might have something useful or meaningful to say on politics. Clerics should concentrate on helping the poor and needy, not lecturing democratically elected prime ministers on what government should be doing.
His watch has been dogged by the two issues of women and gays. The C of E needs to sort its act out here badly. Can women be priests or not? If they can, then they should be able to be priests at every rank of the priesthood, even Archbishop of Canterbury. Likewise, is being gay evil or not? It is not defensible to say you can be gay as long as ‘you don’t inhale’. These two issues show the church’s utterly unprincipled attempt to try and ride a horse in two directions at once.
I think we all want absolute clarity from our religious leaders. Just be firm in your view, then we can decide whether we agree or not. (On gays, Mr Cragsbury is firmly of the good Conservative view that everyone should be free to make their own choices. Be gay or straight or bisexual if you want to. I just don’t care. Your life, your choice. And on women priests, it’s all in or all out. Anything in the middle is just a muddle).
And for Williams' tenure to be completely dominated by these two issues and not the really important moral issues of the day, just shows how lost they all are. Get a grip.
So, advice for the new High Priest:
Sort out your doctrine as your believers are deserting you. You are becoming irrelevant to the majority of the population.
Tell the African and Asian clergy and all the other sexists to poke off. People, be what you want. If that means having gay and bisexual priests, then so be it.
And stop wandering into politics and concentrate on doing good for the poor and needy. It will help us all take you seriously and help you rebuild your brand and membership.
Friday, 16 March 2012
Lefties, you can’t slag off and smear those who ‘tax plan’ so they pay the least they need to pay and then do the same yourselves. Ken has banged on and on about how the rich are evil for paying the least tax they need to pay whilst doing exactly that himself, by setting up a service company to channel all his earnings through, thus paying 20% Corporation Tax rather than 50% Additional Rate Income Tax.
The Millipede is compounding that hypocrisy by endorsing Ken, trying to pretend that’s Ken’s tax avoidance is not the same thing at all as other people’s tax avoidance - there appears to be acceptable tax avoidance (by Lefties) and evil tax avoidance (by Righties).
If it looks like a duck, walks like a duck and quacks like a duck, then it’s a duck. After a few weeks trying to pretend otherwise, Ken actually fessed up yesterday on LBC:
(Great clip - Ken says (a) yes, he avoided tax, (b) it's the logical thing to do for any human being and (c) if you pay the least tax you need to pay you can then use your saved income to create economic growth. He has completely backtracked on years of his Lefty bollocks in one interview).
And it’s also clear that The Millipede and Mrs Yvette Cooper’s latest anti-Coalition PR strategy for next week’s budget is the well-worn ‘tax cuts for the rich’ slogan the Left always falls back on. This perennial favourite taps into the old class war/politics of envy that is still alive and well. Lefties always fan the flames of class discontent to help themselves spread smears about the Right.
When you then deconstruct the Left’s tax arguments, they are utterly stupid and completely self-defeating.
Are we actually suggesting that companies (and individuals for that matter) should volunteer to pay more tax than they need to? This in turn depresses their profits which mean they can afford less expansion, less investment, less employment creation and less pay for their staff? Only a swivel-eyed mad ‘big government’ Lefty would even bother arguing this point. It’s loony, faux logic I would expect from the ‘bruvvers’ on the Left of the trade union movement not national politicians promoting themselves as potential leaders of our economy.
And as I previously explained and predicted here, (a) the only tax cuts that actually deliver growth are Corporation Tax, Capital Gains Tax and the top rate income taxes, which my previous post pointed out the OECD also agreed with and (b) the Left always tries to smear these as tax cuts for the rich.
As ever, the Left plays politics not economics, rather like Gordy’s 50p tax rate which has actually cost the Government income not increased its income. It’s the old ‘fact versus ideology’ conundrum which the Left gets on the wrong side of every time.
Thursday, 15 March 2012
Sian is leaving BBC Breakfast today. (Sad face). Mrs Cragsbury rather likes her. But with the move of BBC Breakfast to Salford, this presents an opportunity, no?
For some years, BBC News has generally become more and more lightweight. Radio 4’s Today programme, The News at Ten and Newsnight all heroically cling on by their fingernails. Question Time has slipped badly. I mean, Will Young last week. Really?
The worst of all offenders has been BBC1’s Breakfast programme. It’s horrible. Really it is. Take today's offering for example. You essentially have a 30 minute recycling agenda. I have problems with that for starters. Radio 4’s Today programme can eruditely flesh out three hours of fascinating news each day, surely Breakfast can too, no?
But putting that to one side, do you honestly think that breathless reporting of the Belgian bus tragedy – Day 2! – and a report on potholes deserved 10 minutes of that recycled 30 minutes six times this morning? Really? We all feel desperately sorry for the Belgians involved in this tragedy, of course, and I’m sure potholes are important to someone somewhere, but come on, gives us some proper news. There seems to be received wisdom by BBC executives that we proles can't handle serious news or anything in more than a 3 minute package. Try us. Honestly. We’ll surprise you.
Take the plunge, Mark. Grip this unique opportunity with both hands. Soft focus morning TV news is a crowded market with ITV and Sky already well and truly camped there. We licence fee payers look to you to educate and inform us with your news programming. Leave endless and breathless over-playing of the tragedy of the day and potholes for daytime telly. Be brave, Mark. Give us something intellectual. We can cope.
PS Send Mrs Cragsbury’s regards to Sian.
Wednesday, 14 March 2012
“Today is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.
“To put the problem in the simplest terms, the interests of the client continue to be side lined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.
“It might sound surprising to a sceptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.
“But this was not always the case. For more than a decade I recruited and mentored candidates through our gruelling interview process. I was selected as one of 10 people (out of a firm of more than 30,000) to appear on our recruiting video, which is played on every college campus we visit around the world. In 2006 I managed the summer intern program in sales and trading in New York for the 80 college students who made the cut, out of the thousands who applied.
“I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.
“When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fibre represents the single most serious threat to its long-run survival.
“Over the course of my career I have had the privilege of advising two of the largest hedge funds on the planet, five of the largest asset managers in the United States, and three of the most prominent sovereign wealth funds in the Middle East and Asia. My clients have a total asset base of more than a trillion dollars. I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave.
“How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an axe murderer) you will be promoted into a position of influence.
“What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.
“Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero per cent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.
“It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behaviour, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.
“It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.
“These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?” It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave. Now project 10 years into the future: You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs out” and “getting paid” doesn’t exactly turn into a model citizen.
“When I was a first-year analyst I didn’t know where the bathroom was, or how to tie my shoelaces. I was taught to be concerned with learning the ropes, finding out what a derivative was, understanding finance, getting to know our clients and what motivated them, learning how they defined success and what we could do to help them get there.
“My proudest moments in life — getting a full scholarship to go from South Africa to Stanford University, being selected as a Rhodes Scholar national finalist, winning a bronze medal for table tennis at the Maccabiah Games in Israel, known as the Jewish Olympics — have all come through hard work, with no shortcuts. Goldman Sachs today has become too much about shortcuts and not enough about achievement. It just doesn’t feel right to me anymore.
“I hope this can be a wake-up call to the board of directors. Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.
Tuesday, 13 March 2012
If you want growth, you need investment. And if you want investment, you need development to generate those interesting returns that make investors invest. And the real benefit of all this for a Government is jobs.
So far, so good. But to get voted back into office, you need to be delivering increased wealth for normal people not just the business and investment community, particularly after you have had to squeeze them so hard for the last few years to pay down that deficit. And this, children, is through home ownership as demonstrated by Mrs Thatch in the 1980s.
For all the silly Government schemes of the Blair/Brown years which hosed lots of taxpayers’ cash around for little significant return, Mrs Thatch actually delivered social mobility through Right to Buy. Millions moved from defining themselves as ‘working class’ to ‘middle class’ during Mrs Thatch’s era simply due to home ownership and the wealth it generated for them. (Which is why I’ve always been so perplexed why Lefties (a) hated Right to Buy and (b) saw no redeeming features in Thatcherism).
So, increased home ownership is good. And of course more residential development also delivers more affordable housing which gets people off local authorities’ waiting lists which is better for the individuals and cheaper for the taxpayer. The Government has embraced this and has brought forward several eye-catching policies:
Right to Buy - A massive expansion of the scheme which Blair/Brown had tried to water down as much as they could for frankly ideological reasons.
Build Now, Pay Later - By letting developers plan, build and sell residential projects on excess public land marked for disposal and not demanding payment upfront but only when the developer has actually sold his newly developed houses seriously excites a development industry which is struggling to get banks to fund its development schemes. And it will seriously kick start the delivery of new homes and affordable housing.
NewBuy - Announced today, this scheme essentially provides 95% mortgages for first time buyers who are buying a newly built home. The developer puts an additional 3.5% of the purchase price (essentially roughly what they currently spend on incentives - mortgage fees, new carpets, new curtains etc) into a fund managed by the mortgage company with Government underwriting another 5.5%. This gives a serious cushion for any mortgage company should any future crash happen, thus enticing them to lend.
So with all this going on, everyone is getting into residential development. I have lost touch of just how many of my clients which previously have not been residential developers but which are now getting in on the act. And we’ve had a rash of private equity investors and developers buying up residential development companies - Macqarie, Carlyle, Development Securities. We even have a new entrant in the form of Skanska, which has residential experience in Scandinavia but never before in the UK.
And what have we seen from the media? Wild, misinformed, almost hysterical opposition, take this from Fraser Nelson at The Speccie as a typical example. Read the comments after the post. Some people put Nelson bang to rights on his nonsense.
But here’s the real problem: our residential development industry is now 50% of the size it was in 2007. So who is going to actually build all these houses? These smaller, leaner resi developers absolutely do not want an unsustainable boom. They are in fact not crazily expanding their businesses like they did previously. They are instead all paying large dividends to their shareholders who have stuck with them in recent difficult times. Persimmon, which was selling around 24,000 new homes a year at the peak, is now selling around 15,000 a year and is happy at this level. The new entrant, Skanska, is only aiming for 1000 a year; small beer.
The Government might be going to be rather frustrated sometime soon.
Monday, 12 March 2012
I have blogged about the right to die before, here and here, so shall not go over every detail again. In simple terms, I do not see why Parliament, the Government, the medical profession or various religions should take away my right to decide my own death as and when I see fit.
It is apparently humane and compassionate to put animals out of their misery but we humans must live a horrible half-life in medical purgatory because a group of well-intentioned busy bodies have decided that their opinions trump my rights.
The sooner euthanasia is legalised the better.
Sunday, 11 March 2012
Some guy who wears a dress in Scotland (Cardinal Keith O'Brien) hates gays and doesn’t want them to marry. Somewhat like a lot of guys in the Middle East who also wear dresses and don’t like gays either. But the Government doesn’t mind gays and would like them to be able to marry.
I mean, really? Are we still discussing this? Have we not all grown up and moved on? Next they’ll want us to all behave like Americans and start debating abortion again. The caravan has moved on and nobody apart from those that support the religious nuts who wear dresses, of whichever persuasion, really cares.
But I am loving the ludicrous arguments used by the dress wearers though:
‘Marriage is a pact only between a man and a woman’. Says whom?
‘Government can’t just change the meaning of this word'. Really? Since when did any religion own the legal rights to a word? And, hellooo, civil marriages have been around in the UK since 1940. Didn’t hear you wanking on about that at all, now did we?
‘Marriage is only for a man and a woman to raise children'. So, if you don’t have children is your marriage still valid? What about older people who marry? Are they, aged 70+, meant to be shagging like bunnies so that their children will validate their marriage.
I love the ridiculous word games and warped logic that bigots use to justify their bollocks whilst straining to remain PC. Reminds me of Nick Griffen’s pathetic well rehearsed answer when anyone asks him if he is a racist.
Saturday, 10 March 2012
Friday, 9 March 2012
Occupy has behaved like the usual Far Left protest group. They have been very savvy at running a publicity stunt, keeping the media occasionally interested over a sustained period, pissing off almost all normal people who have actually come into contact with them, then falling out with each other publically as they bicker about what they are trying to achieve and how to achieve it whilst losing all their legal fights, which of course we have paid for. (Loving the fact that they use our tax to pay for their pointless legal fights via Legal Aid).
Anyhoo, establishing what are Occupy’s central demands is impossible because depending on who you speak to at Occupy depends on what answer you get. The one thing that seems to reoccur in all their blatherings is woolly talk about the wealthy 1% who apparently are to blame for all the worlds ills.
Now here’s the thing. The activists of Occupy ARE the 1%.
Because the developing world is so poor in comparison with the developed world the cut off for the global 1% is an income of about £21,500, a lot less than you can get if you play your cards right on benefits.
Yesterday’s post about universities has made me think about schools. I am so bored of the Left denigrating and disapproving of private education, viewing users as evil oppressors of the poor. As ever - for Polly’s benefit - I’m going to get my declarations in upfront.
1. I and my siblings went to private schools, which my parents worked hard and lived frugally to afford; mine was not a flash one for the record.
2. Mrs C attended both private and state schools.
3. The two small Craglettes currently attend a private primary school and assuming our hard work keeps generating enough shekels, then Mrs C and I intend to give them the best educational opportunity we can afford by sending them to a private secondary school.
Now having got my declarations of interest out of the way, let me make my points.
92% of children go to state schools. Overwhelmingly, their parents are not be able to afford a private education or, for a small number, if they could possibly afford it, they choose not to.
Just 8% of school children are educated privately. In my school experience, and in my childrens’ current experience, overwhelmingly this is unflashy, above average income but not rich parents who have made a decision to take on a massive financial burden in order to give their children the best educational opportunity they can. Now sure there are some kids from rich families, but in my children’s school, there are parents who are working their nuts off; mums doing several part time jobs and dads working all hours, in order to afford this. And I salute their selflessness, their commitment to their children and their dogged determination to deliver on a promise they have made.
But these two child cohorts have, on average, very different educational outcomes. Why so?
First, I don’t buy the argument about ‘better facilities bring better results’. China, India and the third world churn out very educated children who are taught in very basic schools and NuLab hosed taxpayer’s cash on improving thousands of schools with absolutely zero increase in educational outcome. In my private school, I was taught for two years in a ‘portacabin’ as the school had suffered a bad fire the term before I arrived and was being partly rebuilt.
(Lefties look away now). It is simply an undeniable fact that the private cohort on average come from families with higher educational attainment (which gives them a little advantage over many of their state educated peer group) whom are likely on average to be more supportive of them as they make their educational journey. This is not in any way to diss the state cohort. It’s just an undeniable reality, uncomfortable though it may be for some.
Added to this, many better than average teachers migrate to the private sector. In my days in the army, we had an expression: ‘There are no bad recruits just bad instructors’. And I believe this holds true in education. Many above average teachers, understanding their market value, head for the private system where they can realise that value ie get paid more.
Now my first point here is merely to establish that on average the private cohort are thus more likely to be pre-determined to achieve slightly better results. This is the fact the Left in turn both hates and invents intellectual gymnastics to refute. They are wrong and their fury is misdirected.
The injustice here is not that a very small percentage of children (a) get lucky with the bed they are born in, (b) have more family support at home, (c) get to go to better schools and thus (d) achieve better results. No, it’s that the taxpayer's cash is being poorly invested in a state system which is not doing a good enough job at educating the overwhelming majority of the population. And we should all be angry and pissed off about that rather than endlessly criticising and attacking the small number who go to private schools.
But what are the causes of this worse educational outcome?
Putting aside family circumstances which means some children are sadly probably pre-ordained to underachieve, fundamentally just three things:
1. The political correctness of ruling out selection - can both our next Nobel Laureate and the local road sweeper achieve their best possible outcome in the same classroom?
2. Trendy teaching bollocks since the 1960s - competition isn’t evil, children, it’s life.
3. The retention of bad teachers in the system due to union power - read those annual OFSTED reports about how many failing teachers we have in the state system and see the unions' response everytime a school tries to discipline or sack a failing teacher.
Let's focus our anger, attention and resolve on the 92% who are not getting the education we all want them to have rather than the 8% who have exercised 'choice' which is a right, Lefties, not an evil that should be stamped out.
Wednesday, 7 March 2012
Now let me get my declarations of interest registered upfront. (Please note this, Polly, I am being honest about my life and choices not hypocritical by omitting them). I did not go to university. I had a place at LSE to read politics - who’d have guessed that, eh? - a real degree at a real university in the days when A levels were real qualifications, but I joined the army instead. It mattered much less whether you had a degree or not in those halcyon days. I could not make that call today.
Prof Ebdon’s plan is to academically compensate those who potentially might have achieved better A level results by taking into account their less than perfect educational and family surroundings and thus reduce the number of people at university who have achieved the results required possibly in part due to their better education and family circumstances.
This, children, is called discrimination. In this case, positive discrimination. Note that it’s still got the word ‘discrimination’ in it and that, children, is always a bad thing. However well intentioned.
The solution to a more balanced representative population in universities is not to discriminate against those who have done well in good circumstances by discriminating in favour of those who might have done with better with improved circumstances. That is utter madness. We should be addressing how we can make the 92% who attend state schools get a better education in the first place and thus reach their full potential.
Interestingly, on BBC Radio 4’s Moral Maze a week or two ago there was a debate on this very issue. The most telling contribution came from the Cambridge admissions academic who said (in broad terms) that he was desperate to discriminate (he is a Lefty academic after all, it’s what they do) but they simply cannot find reliable measurement criteria to be able to carry out the discrimination process.
The world’s gone mad.
Tuesday, 6 March 2012
Greece – Why is everyone so concerned about Greece. In GDP terms, China creates a new Greece every 11 weeks.
Italy – Why worry about Italy either. In GDP terms, the BRICs create a new Italy every 12 months.
Eurozone – The only Eurozone countries which fulfil the original EMU criteria are Finland and Slovakia. Outside the Eurozone, the only other countries which also fulfil the original EMU criteria are Sweden and Australia.
China – It is very rapidly moving from the cheap producer of Western goods to the consumer of all these goods too.
Germany – Exports more to the BRICs than to France. In the next year, China will become its number 1 export market.
You can no doubt read more of his brilliance in his new book, The Growth Map, of which he kindly gave me a signed copy.
Monday, 5 March 2012
"I am writing firstly to thank those colleagues who have been so vociferous and helpful in the debate we have had over the past few days over the work experience scheme. I also wanted to give you a bit more information about where we have got to with the scheme.
"One of the great ironies of the campaign against the scheme was that, whilst we are undoubtedly doing some difficult and controversial things in welfare reform, the work experience scheme is not one of them. It is a voluntary scheme that is extremely popular with those who take part, around half of whom come off benefits afterwards. We know that a substantial proportion are staying with the employers with whom they do the placement.
"Over the last week we have worked hard to demonstrate that the campaign against the scheme is being orchestrated by anti-capitalist demonstrators, with not a little help from some trades unions. We have also won the overwhelming support of commentators in the media.
"When I met employers yesterday, they were very clear that thy will absolutely refute any suggestion that unpaid work experience is a bad thing, and that they believe strongly in what we are doing. They did, though, want us to ease the conditionality regime for the scheme if they were to continue to take part.
"In reality we make very little use of sanctions on the scheme – fewer than 1% of participants have faced penalties, normally for serious offences such as theft, racist language in the workplace and abusive behaviour. Since the scheme is oversubscribed, getting people to take part has not been a problem.
"However we have agreed to allow people who sit down with their employer at any stage of the placement and say that they want to leave to do so without penalty. A JobCentre Plus adviser will then clearly sit down with that person and see if they require any additional intervention to help them with their job search. I should stress that the sanctions regime remains in place and those who commit serious breaches in their workplace will face penalties.
"We are now working to build up the scheme. We have already added three major new firms to the scheme this week – Airbus, Hewlett Packard and Center Parcs. Around 200 smaller firms have also come forward to express interest in supporting the scheme in the past two weeks.
"This is something that all colleagues can help with. JobCentre Plus staff are working around the country trying to find employers who will offer placements. They would welcome your help in encouraging local firms to participate. So if you have ideas, or contacts who are willing to take part, please do get in touch with your local JobCentre Plus manager, or email me so that I can put you in touch directly.
"We know that this approach makes a real difference to unemployed young people, and every extra opportunity can help – particularly for those from the most deprived backgrounds who don’t have the necessary contacts to find their first piece of experience in the job market.
"Thank you again for your support. With best wishes, Chris"
How anyone can actually oppose this initiative bewilders me.
Sunday, 4 March 2012
I have said before that when there was workplace injustice, unions had a point, a rationale, a ‘raison d’etre. But we now have one of the most regulated and ‘padded’ employment regimes in the world. So with virtually nothing of any relevance to say or do they simply resort to extorting money from the taxpayer through the threat of strikes and closed shop collective bargaining, so brilliantly laid out here by The Devil.
And as a Lefty campaigning organisation, they are also spent, now completely overtaken by the likes of UK Uncut, Occupy, Right to Work etc.
They have totally lost touch with normal people’s view of life. Len McCluskey’s silliness this week makes my point for me. When the nation is going to be engaged in the biggest national party in living memory during the Olympics, the unions and the Left trying to sour the party is just self-defeating nonsense. And when the eyes of the world are upon us, what worse advert could there be to international companies, investors and tourists that the UK is closed for business than petty politicking, unionised disruption.
Len McCluskey. Knob.
Saturday, 3 March 2012
Friday, 2 March 2012
The geo-political strategic battle that occurred from the early 1800s almost until WW2 for control and influence in central Asia has been well documented. Iran has always been at the centre of this battle which is partly why it is in the DNA of all Iranians to hate America and Britain and see conspiracy behind every lamppost. We are reaping what our great-grandfathers sowed. And the West and Iran have been playing this new version of ‘The Great Game’ for some time now, not least in various proxy wars - Iraq, Afghanistan, Palestine (Hamas) and Lebanon (Hezbollah). So, three questions: how, why and what’s next?
The West seemingly has had a two stranded carrot and stick approach: one diplomatic and the other military.
On the diplomatic front, the stick to provide leverage has been (a) ruling all military options - ie military attack - as still on the table and (b) increasingly strict sanctions. The first one of these has not been working too well as the Iranians don’t believe it and, in any case, the threat just makes them work faster on their nuclear programme to get to the end game more quickly, but more on this later. The second is apparently beginning to bite hard.
The carrot has been endless attempts to engage in negotiations with Iran over its nuclear policy. It has failed. The Iranians look like a cunning street fighter pitched against the Marquis of Queensbury with all his rules. Unsurprisingly, the street fighter has easily run rings around its Western opponent. The second front has been the IAEA trying to use an inspection regime to enforce the Nuclear Non-Proliferation Treaty. Another Marquis, another failure. And thirdly, it is well documented that all manner of diplomatic back channels - code for Russian ‘behind the scenes’ diplomacy - have also been employed. All to no avail.
On the military front, covert cyber warfare has been deployed - the Stutnext worm and probably others, unreported and unknown. The Israelis have used their well-worn assassination strategy to kill off key Iranian nuclear scientists as and when they can. The Americans and Israelis have continually been mooted as discussing possible military strikes. Under Obama, an American strike will simply never happen and is still extremely unlikely under either of the two probable Republican Presidential nominees - my man Romney and the nut job Santorum. The Israelis, however, are another matter. The closer the Iranians get to the key nuclear development stage, the more likely an Israeli attack becomes. All bets are on an Israeli strike this year if it is going to happen. Read this chilling article if you dare.
So, why does Iran want all this nuclear kerfuffle anyway? Two reasons, simply: the first was beautifully explained a couple of years ago by Mathew Paris on BBC’s Question Time. If your greatest enemies (nuclear armed America and Britain) have in recent years (a) invaded the county on your western border (Iraq), (b )invaded the country on your eastern border (Afghanistan), (c) had a massive military excursion in a country on your southern border (Kuwait) and (d) surrounded you with significant military bases and alliances - Turkey, Saudi, Bahrain, Oman etc - why the fuck wouldn’t you? Particularly, if your ‘Great Game’ ancestry has made you a pathological anti-American conspiracy theorist.
But secondly, taking note of the kid glove treatment these two nuclear armed military ‘aggressors’ give to other nuclear states - Israel, Pakistan, India, North Korea - this further enforces the logic that you must be in the nuclear club at all costs as soon as possible.
Short term - The immediate threat is an Israeli attack. If it happens, most money being on April-September apparently, withdraw you money from your bank and fill up those spare petrol cans in the garage sometime soon because Middle East tensions will go into hyper drive. In any case, as is often reported, for an attack to be successful is actually quite tricky and it would only set the Iranian nuclear programme back by a few years.
Mid term - Sanctions are beginning to work - albeit that this is, as ever, terrible for the innocent population - as Iran has once again offered to engage in negotiations, however false their tactics may be. Horrible thought though it may be, it seems that we can starve them to the table. But for us to be able to take this one step further and be a game changer, we need a very big, credible carrot. And no one seems to have one.
Long term - How big a problem is it for the Iranian regime to have nuclear weapons? Unknown. Whilst they have always been reasonably rational geo-political players, who knows who could end up with their fingers on the trigger. And the wider problem is that this will set off a simply inevitable Middle East nuclear arms race, the Saudis already declaring that they would have to arm themselves and Turkey next in line, quite apart from what happens in the end to the mess that is nuclear-aspirational Syria.
However, I firmly believe that the days of this hard line theocracy are numbered. Iran will for sure have its ‘non-arab spring’ moment. The demographics are against the theocrats. With Saddam Hussein taking out a million Iranian men in the eight year Iran-Iraq War, Iran’s population pyramid is lopsided towards a dwindling number of older people and a huge percentage that are young and more outspoken and who want their iPads and freedom. Mullah time is ticking away, assuming Israeli actions don’t kill us all before we get there.
In the meantime, let's hope the Supreme Leader's supporters win the election. At least they're semi-rational.
Thursday, 1 March 2012
The preposterous Argentinian claims are frankly risible. Britain, France and Spain all landed on the islands at varying times in the 17-19th centuries. The only people to ever inhabit them have been Brits, and from long before modern Argentina was even founded. No Argentinian seemed to give a toss about the Falklands until the second half of the 20th century. The population of around 2500 are almost exclusively British. If you believe in the principle of self-determination - it’s all there in Chapter 1 Article 1 of the UN Charter - then the Argies have no viable claim, despite their 'tortuous logic’.
The 1982 Falkland’s War is widely believed to have been an attempt by the then Argentinian military junta to divert popular national attention away from the dire situation the country was in at that time. When they lost, it did for them.
Now in 2012, the situation is very different but very similar at the same time. The Argentinian economy is in an even worse state. The country is in the toilet. So far, so similar. However, the
Argentinian army is emasculated, the navy almost non-existent and the air force reduced to a shadow of its former self. The military is technologically still living in the 1980s. Frankly, the flight of RAF Typhoons at Mount Pleasant, the Type 45 destroyer, HMS Dauntless, now stationed off the islands and the odd submarine would be able to sort them out in an afternoon.
Since 2007, oil exploration has been taking place in The Falklands. Funny coincidence. That same year, the Argies started making noises. And in 2010, exploratory drilling began. Then more finds in 2011. Another funny coincidence. The Argentinian Government upped their campaign that same year.
It’s so transparent; a political diversion and a desire for some of the spoils.
Afternote: And this today, which amounts to a naked attempt to try and establish an air link under the direct control of Argentina for later leverage. So childishly obvious. Playground politics.