Save the banks, kill the euro

A coordinated action by the world’s central banks (including our own dear BoE) underwritten by the Fed is tossing a lifebelt to Europe’s moribund banks. The inflated ring is made up of cheap dollars, to which the banks will now gain easy access. ‘Where the hell were you when we needed you?’ those Lehman brothers must be asking. We ought to ask a question that’s less emotionally charged but more to the point: ‘Where are those cheap dollars going to come from?’ You don’t get a multiple choice. There’s only one possible answer: the printing press. So the ring involves inflation in more senses than one.

Call me a cynic, but I don’t think the Fed is driven by predominantly altruistic motives. Central, or for that matter any other, banks seldom are. In this case they are clearly pursuing three highly pragmatic ends. One is to prevent a global banking meltdown, or rather try to do so. The second, less obvious, one must be to inflate the dollar, thereby reducing the real value of America’s national debt, currently approaching $15 trillion and denominated in dollars. The third, an even less obvious one, is to reassert the dollar’s tottering position as the world’s reserve currency.

The Chinese who hold a good chunk of the US debt ($2 trillion the last time I looked) grudgingly go along with the scheme. Though they may not be familiar with Thomas Jefferson’s homespun wisdom ‘half a loaf is better than none’, they don’t need a Founding Father to grasp the logic.

Where does all this leave the euro? On the way out, according to, the website run by Italy’s powerful press syndicate. According to their report Germany has already drawn a plan for overnight departure from the euro. The plan involves instant withdrawal of the old currency and its replacement with new banknotes complete with magnetic strips. The euro will stop being legal tender, and its import into the country will become illegal. The website doesn’t say what will happen to the euros in people’s bank accounts. Presumably they’ll be converted to the new currency, but such presumptions are dangerous when it comes to the spivocracies that rule the West. In any case the conversion rate will hardly be fair.

The plan is based on the sophisticated calculations prepared by Prof. Dirk Meyer-Scharenberg of Hamburg University. According to the good professor, keeping the euro from ‘going belly up’, in George Osborne’s elegant phrase, would cost banks and insurance companies about €560 billion. But casting it adrift would cost a mere €225 to 340 billion. Augmenting his arithmetic, the Swiss bank UBS (whose own value dropped from $116 to 35 billion between 2007 and 2009) reckons that the demise of the euro will cost every adult €9.5 to 11.5 thousand in the weak member countries of the eurozone and €6-8 thousand in the strong ones.

So a two-adult family in Greece, Ireland or Portugal will emerge about 20 grand worse off. Not that this will come as any great shock. According to the European Commission’s own poll, 87% of the eurozone dwellers say they’ve become poorer in the last few years, and 71% don’t believe the current measures will help at all.

In a fit of most lamentable Schadenfreude, a couple of weeks ago I sent an e-mail to my French friends, federasts to the last man, but jolly nice chaps nonetheless. ‘So do you still think the euro was a good idea?’ I asked, getting my own back for the 11 years of scorn poured over my unpopular ideas on the subject. So far I’ve received no replies.



Nancy dell’Olio: a follow-up

A couple of weeks ago (12 November, Nancy and Tony: a Tryst Made in Heaven) I suggested that Nancy and her putative lover Tony Blair are the signature types of today’s culture: important nonentities. Sorry, I didn’t mean to say the two are lovers — it’s just that, according to Nancy, her then lover Sven-Goran Eriksson was jealous of the possibility. Since then Nancy has also slept with Sir Trevor Nunn and has become a celebrity in her own right on the strength of her achievements, such as… well, see above. And the latest news is that she’ll be paid $250,000 for appearing nude in Playboy. Now I’ve heard about letting it all hang out, but this is ridiculous. Thank God and the late Steve Job for Photoshop.

Moderate Muslim, where art thou?

Messrs Obama and Sarkozy are making belligerent noises about Syria, which seems to be slated to become the next candidate for laser-guided democracy. It’s about time another anti-democrat saw the light (and presumably heard the bang). One can understand how they feel: so far the West’s interference in that region has been such a success.

In Egypt, there’s carnage in the streets; the Israeli embassy has been attacked; Coptic Christians murdered; a gas pipeline blown up; the American University set on fire (I’m sure I’m leaving a few things out). In Lybia, the neodemocrats from different factions are shooting at one another. In Iraq, hardly a day goes by without a mountain (well, a tor) of bodies piling up, while the seven (!) remaining Jews in Baghdad (a third of the population there were Jews between the world wars) are fearing for their lives after their identities have been revealed by WikiLeaks. In Tunisia… well, you get the picture. And we ain’t seen nuthin yet, as US marines must be saying.

The assumption that has been proved gloriously wrong is that, once the ghastly tyrants are out of the way, the moderate Muslims will take over and, rather than tossing grenades at one another and anyone else they don’t like, will start dropping ballots into the boxes. Halleluya!

Now I’ve met a moderate Muslim once; his name was Asif. But perhaps I haven’t been looking in the right places, an oversight to be corrected immediately. So let’s start our search from the Holy Book itself, the Koran. Let me see… Here: ‘Love thy enemy…’ Oops, sorry, got into the wrong book. Now, here we go:

‘Slay them [unbelievers] wherever ye find them…’ (2:91) ‘We shall cast terror into the hearts of those who disbelieve.’ (3:151) ‘Take them [unbelievers] and kill them wherever ye find them. Against such We have given you clear warrant.’ (4:91) ‘The unbelievers are an open enemy to you.’ (4:101) ‘As for thief, both male and female, cut off their hands.’ (5:38) ‘Take not the Jews and the Christians for friends…’ (5:51) ‘Slay the idolaters wherever ye find them, and take them captive, and besiege them, and prepare for them each ambush’ (9:5) ‘Whoso fighteth in the way of Allah, be he slain or be he victorious, on him We shall bestow a vast reward.’ (4:74) ‘…If they turn renegades, seize them and slay them wherever ye find them…’ (4:89)

There are 107 verses like these in the Koran, conservatively counted. And, unlike the rather violent passages in the Old Testament, all of these are open-ended, not tied into a particular situation or historical context. This should be enough to show that Islam, for all its sterling qualities, doesn’t foster moderation in its adherents. That isn’t to say that all Muslims are avid murderers of infidels and apostates. Far from it. Most of them are Muslims in the same sense in which Trotsky was a Jew or Richard Dawkins is a Christian. They were born to a faith whose practices they don’t really follow and whose dictates they don’t necessarily obey. So they can indeed be described as moderate — what they aren’t is Muslims.

Most of the Middle Eastern regimes overturned thanks to the West’s meddling were run by chaps like that —  awful, but not really Islamic zealots. Those we have installed are, or soon will be, both. Can it possibly mean that we’ve been wrong? And can we, for Allah’s sake, leave those people alone for as long as they don’t bother us or our allies? By all means, unleash hell if they do, no holds barred. But don’t try to build nations (except perhaps your own, which are all in dire need of shoring up). Such attempts will be as futile as mine has been to find a moderate Muslim. Those chaps seem to be either one or the other. Not both. Agreed, Mr Obama? D’accord, Monsieur Sarkozy?

A star is porn

‘She is the most photogenic of players: young, pretty, bare-footed; and, with her long dark hair and exquisite strapless dress of dazzling white, not only seemed to imply that sexuality itself can make you a profound musician, but was a perfect visual complement to the sleek monochrome of a concert grand… [but] there’s more to her than meets the eye.’ What, did she proceed to take that dress off? Don’t know about you, but I’m getting that funny feeling down there.

This isn’t the description of a budding lap dancer at The Juicy Lucy bar in a bad part of town. Rather, the cited passage comes from a review of a piano recital at Queen Elizabeth Hall. The article in one of our ‘quality’ papers is accompanied by a photo of the young lady in question reclining on her instrument in a pre-coital position with an unmistakable ‘come and get it’ expression on her face. The piano is bright-red, a colour usually found not in concert halls but in dens of iniquity.

The name of the aspiring pole dancer cum pianist was unknown to me, which is par for the course, as the definition of a star (or celebrity) these days is ‘someone I’ve never heard of’. To correct this gap in my cultural development I went to YouTube and found a dozen performances by her. Having listened to several, I can state with absolute confidence that a generation ago her kind of playing wouldn’t have got one into a decent conservatory, never mind onto a concert platform. The amazing thing is that most of the listeners’ comments are in agreement with this assessment. ‘Please… this is music, not Olympic games’ is a representative remark. Nor is it a strip joint, may one add.

Just for the hell of it, and a generally complimentary reviewer did once describe me as a ‘grumpy old man’, think of some female players of the past. Myra Hess. Maria Yudina. Clara Haskil. Marcelle Meyer. Marguerite Long. Can you, in the wildest flight of fancy, imagine a reviewer talking in such terms about those sublime musicians? Why, the chap, along with the paper’s editor, would have been taken away by the men in white coats as fast as an ambulance could go.

The circle is vicious: because tasteless ignoramuses use every available medium to build up musical nonentities, nonentities is all we get. And because the musical nonentities have no artistic qualities to write about, the writing nonentities have to concentrate on the more jutting attractions, using a vocabulary typically found in soft-porn publications. We are indeed a sorry lot.



National Socialist Infrastructure Plan

Tomorrow HMG will unveil the recovery scheme to end all recovery schemes, the National Infrastructure Plan. I suggest adding another modifier to reflect its essence more accurately.

The Plan provides for the construction and reconstruction of many roads and railways, which by itself is good. But that’s the only good part. For only £5 billion of the the Plan’s £30 billion budget will be derived from cuts in public spending. The rest will be looted from our pension funds, or else come from China’s largesse. To use either source of financing isn’t so much ill-advised as downright criminal.

Starting from the end, the world’s biggest communist tyranny isn’t much given to charitable impulses. Nor does it pursue strictly economic objectives. As with any other communist state, its economy is but a means to a ghastly political end. Add the two together, and it becomes clear that the Chinese tyrants will demand a steep price for their munificence. Since the price can’t be financial by definition (we are skint, to use a technical term), it has to be political: Britain’s support for, or at least neutrality to, whatever China wishes to undertake, which can only be nasty. The underlying message is that HMG will do anything for self-perpetuation — an ugly pot of message to sell our soul for.

Yet another raid on our already depleted pension funds is yet another outrage. Here the purpose is two-fold: one declared, the other real. The first is getting the money to build all those lovely things, which is the minor part. The second, major part is to reduce our independence from the state, driving us deeper into its clutches. Our inept spivocracy must realise that only those wholly dependent upon it are likely to vote it in. Hence it’ll swell the public sector and the dependent underclass until the whole society explodes. What does it matter, as long as their jobs here or in the EUSSR are secure?

The stratagem of using giant construction projects as a way out of economic mess lacks even novelty appeal. It was first used by Franklin D. Roosevelt to get America out of depression. Millions of youngsters were made to toil for $1 a day to pave the government’s way towards having more control over the economy in perpetuity. FDR used the Great Depression as a road to more socialism, and therefore a drastic increase in the state’s size and power. Another, somewhat more radical, socialist got the message, and Nazi Germany embarked on its own construction projects. A network of autobahns crisscrossed the country; trains began to run on time. However, as both socialists discovered to the world’s detriment, such giant, publicly financed schemes couldn’t by themselves pull their countries out of the economic morass. It took a war to do that. Auschwitz and Coventry, Dresden and Hiroshima, Stalingrad and El Alamein — 50 million dead, all told. And then the trains began to run on time again.

Historical parallels are crying out — is anyone listening? Coupled with the West’s brinkmanship in the Middle East, our governments’ methods of improving the economy are fraught with dangers that may be somewhat worse than the routing of our pension funds.

The only way a government can affect the economy positively is by affecting it negatively — by not extorting ruinous taxes, not spending more than it earns, not regulating businesses into bankruptcy, not providing education that doesn’t educate, not tying our future to that of another giant socialist project, the EUSSR. Leave positive actions to us, Messrs Cameron and Osborne. We may not all understand the difference between Lang Lang and Glenn Gould, but we do know how to make a living. If you let us.

I hope none of this sounds too alarmist. But, if there was one thing Marx was right about, it’s that history repeats itself. And reruns tend to be worse than the originals.

Democracy: a serious reply to a serious reader

The reader, a London vicar, writes, ‘I’ve enjoyed looking at your blog. Isn’t there a fundamental incompatibility between an aristocratic hierarchical society and one based on capitalism? Which do you now prefer? Would you extend your principle of taxation and the right to vote to impunity from military service without the right to vote?’

These are interesting questions. The first one is actually somewhat easier, if calling for a longer reply. There is an incompatibility, but I don’t think it’s either fundamental or unsolvable. Capitalist economy definitely abhors a rigid, or even rigid-ish, social structure, while an aristocratic society thrives on it. The answer lies first in the relative weight of the economy in the life of society and, second, the amount of elasticity in the hierarchy.

When the economy becomes the be-all and end-all of society, it comes with an awful price tag — and, as we are witnessing now, the price will be ultimately exacted on the economy itself. A society defined by consumption is indeed consumptive. That sitiuation didn’t exist in Britain during her most economically dynamic century, the 19th. And, as this reader knows better than I do, the main reason is simple: Jesus Christ hadn’t yet become a superstar. Christianity, as long as it keeps not just its form but also its content, puts brakes on economic totalitarianism by communicating in no uncertain terms that, though money may be important, it can’t be all-important. Though our life on earth is significant in itself, it’s also preparation for life in heaven. In that sense, our workaday lives should imitate the perfect balance between the transient and transcendent one finds in the person of Jesus Christ. Unlike materialists, we don’t think of life strictly in economic terms. Unlike Bhuddists, we don’t neglect the physical world. And unlike gnostics of all shades, we don’t think the outside world is evil.

England struck the balance in the 19th century, proving that an aristocratic society ruled by law can accommodate aggressive capitalism — partly because such a society, unlike out-and-out democracies, isn’t an ideological contrivance. It developed organically over 1,500 years or longer. With England (or other monarchies of old standing) one can’t pinpoint the founding of her state to any date or event. We all know exactly when Germany, Soviet Russia, Israel or the USA came into existence. With England, we don’t. That’s why the argument put forth by both Burke and de Maistre rings true: as the origins of an organic state disappear into the haze of the past, we might as well accept its divine descent.

One immediate spiritual and social effect of Christianity was the internalisation of man, the privatisation of the spirit. From that followed a man’s shift from the public square into his own house or chapel. Such a man lost the all-abiding interest in politics demanded by the Hellenic world — and now mandated by our democracies. Mediaeval Christians were happy to focus on their God and their family, letting the bellicose paladins boss things in the capital. The princes, in their turn, left the people pretty much alone — they were neither able nor willing to interfere with the familial organisation around which people’s lives revolved: guild, parish, village commune, township and of course what we now call extended family. Thus aristocracy, and by inference small government, is the most natural form of government in the West (a term I use interchangeably with Christendom in any other than the purely geographic sense).

For as long as the initial pulse shot into our body politic by Christianity didn’t attenuate, aristocratic society could handle capitalism with few problems. The society was not only hierarchical, but also mobile — witness the fact that only about 1% of British peerages predate the 19th century. Once that pulse died away, the square peg of the economy had to be jammed into the round hole left by Christianity. That was never going to succeed, and it hasn’t. What this proves, I think, is that there is no contradiction between the aristocratic society of Christendom and capitalism. There is, however, a glaring one between the democratic contrivances of modernity and Godless capitalism. Sooner or later, the resulting spiritual deficit will not only destroy our culture, family and social dynamics, but it’ll have exactly the same effect on the economy. As Aristotle put it, a society that pursues wealth rather than virtue will end up using this wealth against itself.

Universal franchise ipso facto means universal conscription at war time. If a mediaeval prince had to beg his vassals to spare a few soldiers, today’s democrats can conscript the whole population — and severely punish those who resist. This, as much as technological advances, accounts for the inordinate casualties of modern wars. The ‘progressive’ 20th century boasts somewhere between 300 and 500 million victims, half of them in wars — more than all other centuries of recorded history combined.

But I don’t think taxation comes into play at all. An 18-year-old footballer can play for a top club, but he can’t be its manager. By the same token, it takes a sage and experienced voter to manage his country (which enfranchised citizens do indirectly). Statistically, those under 25 can’t be confidently predicted to fall into that categority. So they shouldn’t vote. However, the qualities required for warfare aren’t the same as those without which responsible voting would be impossible. As anyone walking the streets of south London will tell, an 18-year-old is perfectly capable of killing, even if he’s unable to get a job and therefore pay taxes.

To summarise: one has to be a citizen to serve in the army, and a taxpayer to vote, but one neither has to have the vote nor to pay taxes to be a citizen. One-man-one-vote isn’t a sine qua non for a society of citizens — and neither is it the sole possible alternative to tyranny. The opposite belief made its historical entrance only in the 20th century, not coincidentally the most murderous period of history.

Our democratically demotic culture

Our democracy-run-riot is based on the assumption that reaching a certain, barely post-pubescent, age is a sufficient qualification for voting. The underlying belief is — and inevitably has to be — egalitarian: a tattoed, facial-metalled delinquent is deemed as able as, say, a doctor or engineer to make a contribution to the political process. This is as sure a way as any of vindicating Joseph de Maistre’s comment that every nation gets the government it deserves. Since we have considerably more juvenile delinquents than doctors or engineers, we deserve nothing better than our current spivocracy.

But it’s not just government that gets poisoned by toxic egalitarianism — education and culture are writhing in suffocating agony too. As anyone who has ever taught at school will tell you, the very notion of comprehensive education is an oxymoron. Forty-odd years of that, and British education, which at the time of grammar schools and secondary moderns was the envy of the world, has become its laughing stock. Education Secretary Michael Gove seems to realise this, which is why he is talking about reintroducing ‘elitism’ to our education. Good idea, that: excellence in any area is a pipe dream in the absence of a hierarchy, fluid as it should be. But the well-meaning Mr Gove is missing the point: we are now into the third generation of comprehensively ‘educated’ populace. Arranging millions of pupils in a hierarchical order commensurate with their attainment and potential will take hundreds of thousands of teachers capable of achieving such noble aims. Where are they going to come from? Most of the current lot are only barely more literate than their pupils, and almost as barbaric. It’ll take another two generations to get out of this vicious circle, by which time it’ll be too late, if it isn’t already.

If there is one lesson history teaches us, it’s that, in addition to its immediate destructive effect, egalitarian social experimentation has a knock-on effect. Once those dominoes start tumbling, there’s no stopping them. And there’s also another lesson, not yet learned by many: this institutionalised barbarism doesn’t result from a past mistake. There was no mistake. Our governments have achieved exactly the result for which their statist loins ached. Mass availability of real education would endanger their self-perpetuation. For a literate population would realise that our rulers are capable of committing dozens of solecisms in a short address. A numerate population would know that the cock-and-bull sums peddled by the government don’t add up. A population educated in the moral foundations of the West would be inclined to toss this bunch of self-serving nonentities out on their ear. Can’t have that, can we?

The venom of egalitarianism is all-pervasive — just look at what’s happening to our music. By this I don’t mean the pop flatulence that even in our conservative papers solely qualifies for the name of ‘music’ with no modifier. No, I’m talking about the modified ‘classical music’ that too has fallen victim to the universal lack of discernment cultivated by every institution in our society. The public definitely gets the music it deserves. Since, as a rough assessment, no concert audience these days contains more than a few people capable of telling a rotten performance from a sublime one, extra-musical factors are sole contributors to a performer’s career. That’s why, say, our piano scene is dominated by talentless hacks like Lang Lang who play the instrument with the dexterity of circus acrobats, and an artistic sensibility to match. The public doesn’t mind — any performance, no matter how inept, gets the same decibel level of ovation. Perhaps Mr Gove should cast his eye over this as well, for real music was composed for few by fewer. It’s hierarchical (‘elitist’ in today’s parlance) — or it’s nothing but cheap amusement. Make it egalitarian, that is universally available and paid for by the masses democratically voting with their cash, and you’ll end up with performers whose ignoble spirit is no higher than that of their audience, even if they have what these days passes for technical mastery. This doesn’t mean they have no talent — just that it lies in areas other than music. Tireless self-promotion, hard-working shilling, photogenic appearance, crass commercialism, cynicism, contempt for their art, and an avid devotion to all the deadly sins except gluttony and sloth all come to the fore.

One example, if I may, coming from a report by a highly reliable informant. The orchestras of Ljubljana and Zagreb recently joined forces to perform Mahler’s 8th Symphony, perhaps the largest-scale work in the choral repertoire, nicknamed the ‘Symphony of a Thousand’ in reference to the number of musicians required (but seldom reached). The project had ramifications going beyond music — it was a symbol of unity between Chroatia and Slovenia, countries that haven’t always seen eye to eye. Hence it attracted much attention from TV stations, and not just in the cities involved. And that’s why the orchestras invited a star conductor from Russia to guide the project through. A lot of work was needed for an undertaking of this magnitude, and many rehearsals. He was seen as the right man for the job.

Yet the conductor didn’t deign to turn up in that part of the world for a single rehearsal, not even one immediately before the performance. He made his entry backstage 15 minutes late, when the public was already beginning to slow-clap and the TV folk to worry about their time slots. The maestro then sequestered himself in his room and wouldn’t come out. Finally, the desperate orchestra delegated one of the first violins to find out what was what. The violinist deferentially opened the door a crack, only to hear the conductor discuss the sale of a huge consignment of timber with his business manager. Now can you imagine Sir Thomas Beecham behaving that way? Klemperer? Fürtwangler? Toscanini? Mengelberg? And musically the Russian wouldn’t have been fit to carry their scores to the concert hall.

Considering that the chap already has (as opposed to earns) an income in high seven figures, one would think he’d be able to show more respect for his art. But, a product of modern egalitarianism that he is, he doesn’t even understand what’s required. Like any modern spiv he pursues nothing but money, power and fame, devoting his time to flogging from one venue to the next (sometimes two in different countries on the same day). And he is a typical rather than exceptional figure, allowed to prosper by a comprehensively educated public, money-grabbing impresarios and concert organisers assisted by illiterate musicologists, including those working on our increasingly demotic BBC 3. (One cretinous critic wrote in the Telegraph a few years ago that Maxim Vengerov is ‘not only the greatest violinist of our time, but the greatest of all time’. Now Vengerov is a vulgarian with a quick bow who wouldn’t be out of place playing at a wedding somewhere in Siberia. Even to utter his name in the same breath as Menuhin, Szigeti, Stern, Oistrach, Szering and countless others is chronically stupid. Saying he’s superior to them goes beyond ignorance and stupidity, entering the area of conscious subversion.) How similar, how very similar to our politicians.


Fighting and biting in Russia

I really wish you could read Russian: browsing through their papers and websites is such fun. Here are a few snippets.

An award-winning newsreader was delivering a deadpan item on a disagreement between Putin and Obama. When the US president’s name came up, the young lady, without changing her dispassionate expression, made an obscene one-finger gesture to the camera. The next day she was fired, much to the dismay of millions of Americans who know how she felt.


Who says philosophy is dry and academic? A massive fight broke out during a heated discussion at the recent International Philosophical Forum in Moscow. Two philosophers, a man and a woman, had suffered serious injuries before the police (several dozen of them) broke up the fisticuffs. Getcha, you Foucault Kant!


A 46-year-old policeman has been charged with selling his service sidearm to a friend for seven thousand roubles (£140). However, the policeman only received two thousand, as he already owed his friend the balance. Fair is fair.


Late one night near Archangel a traffic policeman stopped a car obviously being driven by a drunk driver. The driver’s daughter, court bailiff Fedulina, was the passenger. When the traffic policeman tried to confiscate her father’s driving licence, the bailiff swore unprintably and bit the officer’s left shoulder. Since there were several witnesses present, Miss Fedulina was charged with ‘committing violence, not threatening to life or health, on an official discharging his lawful duty.’ The young lady must have felt peckish.


In an unrelated incident, a young girl in Chuvashia has been sentenced to 1.5 years of penal colony for biting several policemen. The officers had been summoned by the perpetrator’s mother who was unhappy with the drunken behaviour of the girl and her friends. Sounds like a generation gap to me.


In yet another unrelated incident, head of Mari police has been temporarily suspended for starting a drunken brawl with a businessman in the restaurant Lada. The perpetrator attacked the businessman, tore his jacket and bit him several times. When arriving policemen tried to quiet him down, he tried to bite several of them too. It’s not just the crisis that bites.


Speaking of the crisis, the Duma deputy (MP) Eduard Markin sent out his bodyguard to exchange 300,000 euros into rubles. The parliamentarian himself had found a bank willing to do the transaction. At the door of the bank the bodyguard was met by a man who introduced himself as the employee who had spoken to Mr Markin on the phone. The man then collected the euros and walked back into the bank, locking the door behind him. When after a while the bodyguard knocked on the door, he was let in only to find that the man was no longer there, while the door to the emergency exit was swinging on its hinges. When queried, the Deputy explained that he wanted to exchange the money because he thought the euro was about to collapse. Sound judgment of Europe, shame about the woeful misunderstanding of his native land.


Having left Russia as a child, my fellow ex-Muscovite Anatole Kaletsky doesn’t strictly qualify as an item in Russian news. Still, you can take a boy out of Russia… I’ve commented before that Mr Kaletsky is our most reliable economic analyst: you can safely bet that every prediction of his will turn out to be its exact opposite. His analysis of the present and past equals the acuity of his forecasts of the future. Germany got into her present ordeal, he writes, by sticking to manufacturing whereas ‘the modern economy is about borrowing money and financial services.’ Deputy Markin read the situation better.





Totalitarian taxation

The Centre for Economics and Business Research estimates that the 50% marginal tax rate on annual incomes in excess of £150,000 is costing the Exchequer over £1 billion a year. The reason is simple: Entrepreneurs up their sticks and move to sunnier economic climes. The actual figure is probably higher, for many foreign businessmen, entertainers and sportsmen who could otherwise move themselves and their money to Britain refrain from doing so. Though for obvious reasons their number can’t be calculated precisely, it’s unlikely to be trivial. The tax ought to be scrapped, conclude those not entirely bereft of common sense.

That only shows how little they understand the real purpose of modern taxation. It’s not so much keeping the government solvent (an end that’s out of reach for modern governments anyway) as keeping the people under its thumb. For any modern government, be it a democracy, a tyranny or a democratic tyranny, is innately totalitarian. Those who have no laws to answer to rely on coercion and violence to exert their control. Those somewhat restrained by a tradition of justice rely on economic levers instead.

High taxes, preferably but not necessarily accompanied by inflation (which is a tax requiring no legislative approval), prevent too many people from becoming independent from the state. Those from whom the state extorts 60% of their income (all told) have to devote every waking moment to making sure they can still survive on the remaining 40%. All the government has to do to bring them to heel is push the button on the money-printing press, and within a year or two the 40% becomes 25% in real terms. In fact, real incomes everywhere in the West have been stagnant for 20 years, and in Britain they’ve actually decreased in the last 10.

If, say, we paid a flat 20% rate, not only would we not bother to cheat, but we wouldn’t depend on the state’s largess in our retirement. That isn’t an outcome the state, as personified by our politicians, craves. They want to take, or inflate, our money away and then use it to create a huge underclass with a vested interest in perpetuating the government — in the hope that all those Peters robbed to pay Pauls will also come begging to the state’s doorstep when what’s left of their money runs out.

Promiscuous government spending inflates not only currency but also assets. Realising that their money is losing value people rush either to spend it or invest it into something that’s less likely to disappear, mostly property. A steadily inflating currency turns everyone into either a reckless spendthrift or freewheeling speculator, including those who are by nature neither wastrels nor gamblers. Thus quantitative easing (presumably ‘queasing’ for short) spells qualitative disaster. Add to this extortionist taxation, and the state has control over our economic destiny. Wishing to bind its citizens hand and foot, the state itself had to slip the tethers of fiscal responsibility.

And yet no one protests. Scrofulous youths climb into smelly tents because they hate capitalism and love hating. Yet responsible, Barbour-clad adults will march to protect their right to chase foxes but not to save society from totalitarian economism and tyrannical taxation. It is of course our patriotic duty to pay taxes — but only to a government pursuing patriotic ends. Anyone who thinks our Daves, Nicks, Georges and Vinces fit this description is sorely misguided.


From borrowed money to borrowed time

Dave ‘David’ Cameron has discovered that reducing our public debt is harder than he ‘envisaged’. Actually, as I ‘envisaged’ in my book The Crisis Behind Our Crisis, it isn’t hard at all. It’s either easy or impossible. It is, or rather would be, easy if we were governed by statesmen. It’s impossible because we aren’t.

A statesman would have the brains to knows what needs doing, the will to do it and the moral sense to put the country’s interests before his own. The first requirement is rarely met among our politicians. The second and third, hardly ever. All three together haven’t been seen since Margaret Thatcher, misguided though I think she was in many ways.

What has created our runaway debt isn’t mismanagement of the existing system but its congenital defect. Capitalist wealth creation can’t accommodate socialist wealth distribution. It’s as simple as that. Since abandoning what’s left of our capitalist economy (about 50% of it is already socialist) will lead to the kind of tyranny England has never seen, it’s socialist distribution that needs to be abandoned. Does this begin to make logical sense?

A series of ironclad laws need to be passed, a) limiting the state’s take to 25% of GDP, b) obligating the state to run budget surpluses until the debt has been reduced to below 10% of GDP, and balanced budgets thereafter, c) introducing a flat 20% income tax rate, while reducing corporate taxes, eliminating inheritance tax and severing most regulatory tethers on the economy (except for those that protect consumers against, say, cartels). Jobs and growth, so dear to Nick Clegg’s heart in word and so alien to it in deed, will follow with the certainty of night following day. And the debt will melt away faster than you can say ‘fiscal responsibility’.

I’m talking about first the rollback and then elimination of the welfare state. I’m also talking about developments that any politician will find so politically impossible as to be insane. As much as mention anything like this in Westminster, never mind Whitehall, and you’re out of a job. Off to Brussels you go, with an outstretched hand, begging ‘giza job’. (Actually, EU folk being less sensitive to the political imperatives of demotic English, our job seekers could even resume their posh accents. Why, Dave could even revert to David. Wouldn’t that be nice?)

So let’s make this more politically feasible, shall we? Taking a cue from the American revolution would help. That revolt was triggered by Britain trying to extract from the thirteen colonies a tax in the overall amount of £78,000. To put this in perspective, Britain’s national debt at the time was about £130 million, and it cost the country more than £200,000 a year to maintain her troops in North America after the French and Indian wars. So the amount was hardly exorbitant. Still, the colonists objected to taxation without representation on principle. (In due course they were to discover that they hated taxation even with representation, but this a different matter.) Their objection, which I suggest we echo, established a useful equation: taxation equals representation. Now if A equals B, then B equals A. Applying this proven logic to our situation, we obtain a different equation: representation equals taxation. Consequently, only taxpayers should have the vote.

If we began to regard voting as a privilege to be earned, rather than an automatic entitlement, then sanity could return to our politics. No longer able to buy their votes with our money, politicians would  have to focus on earning them. Then they wouldn’t pretend, usually by lying through their teeth, that they are doing something about reducing our suicidal debt. Phoney ‘austerity’ simply wouldn’t be on. All those measures so far have amounted to (possibly) slowing down the growth of the debt, not reducing it. It takes an inveterate cynic to carry on so. It takes a slave to nod his assent.

There’s no doubt that the steps I propose would create civil unrest. If even HMG’s pathetic pretence at ‘austerity’ brought tents to St Paul’s, real decisiveness may well bring barricades to Whitehall. But that would give the state a golden opportunity to vindicate its existence by fulfilling the very role for which it was instituted in the first place: public protection from external enemies and internal trouble-makers. The police would have to abandon the role thrust upon them, that of social workers, and disperse the riots, using whatever means it takes to do so. If army units have to be brought in to help, then that too would have to be done. And if a state of emergency has to follow, we’ll have to accept it as a necessary evil. ‘The desperate disease requires a dangerous remedy,’ as Guy Fawkes is supposed to have said.

Our disease is indeed desperate, one requiring chemotherapy, not aspirin. Chemotherapy hurts. But without it, the patient dies.

I know all this sounds unpleasantly extreme. If someone could suggest a nice, gentlemanly way out of our troubles, I’d be more than willing to sit up and listen. So far no one has. Our ‘leaders’ never will. That’s why our government will continue to live on borrowed money. And our society, on borrowed time.