29 November, 2007
Blow after low is landing on Brown. A senior Conservative backbencher stands up. Will this be the coup de grace? No, for it is Sir Patrick Cormack, who defuses the tension by asking the PM what he would like for Christmas. The relief on the Labour benches is palpable.
Cormack features in the opening paragraphs of Peter Oborne's book 'The Triumph of the Political Class' for a couple of instances of his refusing to damage or embarrass the Government. He is almost the archetype Political Class man: we are all in this together, the little cadre that run the country; we don't want any fisticuffs, or strongly held views.
Really, his constituency needs to deselect him pronto.
28 November, 2007
The way they will express it is 'If we want to avoid this sort of thing happening in the future (as if it has been a natural phenomenon and not abuse of power by the Political Class) we should regulate by law the amount they can receive and this obviously leads to State donations'.
It would be hard to exaggerate what an awful thing it would be if this were to be let through. A minor, but significant argument against it is that small parties would find it hard to grow, starved of funds and unable to get them anywhere else (as a founder of the UKIP I am sensitive to this). But far, far more important is that the Parties (the big ones, that is) wouldn't have to try to behave in such a way as to attract membership and donations. The Political Class (and I am aware that is the third time I have used the term in this post but that is what it is all about) would become even more detached from the people than they are now.
I have occasionaly referred to the systemic corruption in Italian politics where they have State Funding. It is the same in all the others including the European Union itself.
No, we must resist it at all costs in the UK.
27 November, 2007
When I was an undergraduate at Oxford mnthg years ago we often had extreme left wing speakers without rioting that they shouldn't be given a platform. You don't just learn from people you agree with.
26 November, 2007
The FT Article, by Wolfgang Munchau, discusses an increasingly commonly held belief. He traces world economic systems like geological strata. First we had the gold standard; then after the war we had Bretton Woods, the system under which all currencies were quoted against the dollar. Then we had Bretton Woods II which is what we have been living under without knowing it, and now that has come to an end.
In my view the theory, which to be fair Munchau doesn't much like, seems to have missed out a bit and exaggerated the recent bit. Bretton Woods established fixed exchange rates against the dollar which, to a diminishing degree, was backed by gold. After that we had floating exchange rates (which started for Britain back in Ted Heath's early years). And then we had globalisation.
What some refer to as Bretton Woods II is the system by which the Far Eastern economies, China, Japan and the smaller ones, sell goods to America in amazing quantity. What would normally happen under a system of floating exchange rates is that the Far Eastern currencies would then rise against the dollar. But that wouldn't suit China (we'll deal with Japan in a minute) because it would make its exports more expensive. So China manipulates the exchange rate, keeping the Yuan artifically low and their exports cheap; Chinese exporters can't hold dollars but have to sell them to the Bank of China at the artificial rate, and the BoC buys US Treasury Bills thus keeping the dollar relatively high and dollar interest rates relatively low so the American Consumer can buy more Chinese goods. So all Bretton Woods II is, then, is the failure of emerging economies to adapt to floating excvhange rates, and a large dollop of globalisation.
And now it is unravelling; the dollar is falling. But the dollar has been here before. In 1985 the problem was Japan. The US current account deficit was going through the roof, just like now, because Americans were buying Japanese goods, and the dollar had to fall to prevent severe recession. So the major powers, and Japan for the first time, got together and intervened in the currency markets to let the dollar fall. US exports rose, ironically to everywhere except Japan where they didn't like the idea of foreign goods. The people who suffered were the Europeans.
And this, in my view is what will happen again. Not currency intervention - the markets are too big for that, but an agreement between the US and China. Don't forget who suffers most if the US stops buying Chinese goods: the Chinese. Europe, with its export based economies and mature markets, think the euro is already strong enough against the dollar. I heard Airbus is unprofitable at $1.25; if it goes to $1.50????
Yes there will be a US recession, yes that will affect us, yes the falling dollar will affect us more. In the UK consumer spending might hold out, keeping our factories open. I am more pessimistic about Europe. If governments start holding the euro as their reserve currency it will make matters even worse. Unless something can be done we will import America's banking crisis, and we will import America's trade deficit. Europe will ask China to revalue the Yuan. But I have a feeling China is only interested in the USA.
24 November, 2007
The Italian Sherlock Holmes Society celebrates its 20th anniversary in Florence on November 23rd
The Italian Foreign Exchange Office said tourists spent 4.8 bln euros in Rome in 2006, up 12.3% compared to 2005. With control free borders and a currency used by most of the rest of Europe, how do they know?
Archaeologists drilling into an unexplored area of the Palatine Hill next to the home of Emperor Augustus have discovered the Lupercal Shrine, the cave where adherents celebrated the suckling of Romulus and Remus by a wolf.
Farmers’ organisation Coldiretti says there has been a flood of Chinese tomatoes imported into Italy, amounting to perhaps 25% of the market. Coldiretti says that the imported tomato puree should be tested for safety. From January 1st all tomato puree sold in Italy will show where the tomatoes were grown.
This winter's influenza season is expected to peak between January and February and around three to five million people will catch the flu, according the Italian Society of Medicine. They’ll be giving us their names next.
A platoon of women soldiers took over guard duties at Italy's presidential palace for the first time on 23rd November
Vittorio Emanuele of Savoy, the son of Italy's last king, and his son Emanuele Filiberto, are claiming 260 million euros in compensation for their exile, which ended in 2002 when parliament decided to allow them back. They claim it was contrary to the European Convention on Human Rights. So far there does not appear to be a rush of politicians supporting the claim. Early days, I expect
The sports shirt maker Umbro, Italian for Umbrian, is in fact a contraction of Humphrey Brothers, a clothing firm in Wilmslow, Cheshire. Well, it was news to me.
The murder of Roberto Calvi known as 'God's Banker' was done by the Mafia to punish him for mishandling their money. There are reports of panic across the European banking system in case the idea catches on.
22 November, 2007
The nature of the French strikes is, prima facie, enough to make you want to support the strikers. A previous administration (Mitterand's, I think) allowed railway workers to retire early, at 50. I have recently been reading Zola's La Bete Humaine, with its descriptions of early railway life and this looks as if it was a late 20th century solution to a strictly 19th century problem. Drivers sit in air conditioned cabs in front of something more akin to a computer than an engine, and as for porters - have you been to a French railway station recently? Why should they need to retire at 50? The pensions scheme is absurd and the government wants to stop it; the workers feel rightly aggrieved that they have done a deal and the government must stick to it (although they have been offered current compensation).
But it's more than that. Sarkozy has identified a large number of reforms which the French economy badly needs. If he loses this he will find it difficult to get the others through (this is what Prodi has learned in Italy) but the unions realise that this is only the thin end of the wedge.
Mrs Thatcher succeeded by picking the right fight at a time of her choosing (the increasingly unpopular miners at a time when she had surreptitiously built up coal stocks). My guess is that Sarkozy has chosen the wrong fight, and that he will back down. In short that he will be the same as Chirac, Mitterand, Giscard and the rest.
We shall see. In the meantime don't go to Paris (Rome is far nicer anyway and you can get a decent meal there)
21 November, 2007
No, what interests me is how the government happened to have all these details on disk - 25 million people! - and be posting them somewhere else. The answer leads us again back to Gordon Brown. His policy has been that everybody should be dependent on the state: there are examples of people earning £50,000 a year and still able to get government handouts, and he won't stop until Jonathan Ross is on some income supplement (the rest of us won't stop until he's on unemployment benefit but that's another matter). It is quite absurd that payments should be made to people who don't need them and the result is a bloated - and incompetent - state, hungry for information about you, eager to turn you into a dependant, a welfare junkie. And worse: they know who you are, where you are and what you're doing.
Applied for your ID card yet?
It is not, to say the least, what one might expect of such a place. Perugia is provincial, not just in the sense of being a province but inward-looking, with a tradition of independence stretching back to its having been one of the twelve cities of Etruria and displaying a sometimes haughty disinterest to the Roman Empire. But the town has never seen anything like this. A friend who has been going there for 25 years says the place has changed almost overnight. People look at each other suspiciously; every hooded youth could be a drug dealer with a knife; or worse, a reporter.
The social fabric of Perugia, particularly in the evenings, is dominated by the Strangers’ University. This was set up by a local philanthropist in the early 1920s and soon appropriated by Mussolini as an international propaganda tool, for the dissemination of modern Italian culture world wide. Some people say that the problems started when, short of money, it found it could pay its way by attracting the children of the rich, many of them Arabs, now Russian. The deal seems to be something like a holiday gap year and the understretched students are easy fodder for the drug dealers.
The Universita’ per Stranieri is a good idea but it needs to change. It needs to become more of an academic institution, less of a summer camp. It needs to select its students academically rather than by wealth, but alas there is no tradition of this in Italy, where everyone can go to University and employers are prevented from discriminating between one university degree and another.
The Universita’ per Stranieri could be the goose that lays the golden eggs for Perugia or its millstone, a burden from which the town can never free itself, a druggy free-for-all that brings down the whole city. It must choose.
19 November, 2007
I am not at all sure that I am, though.
Firstly, the discretion to prorogue parliament and call an election is technically not the Prime Minister's but the Queen's. Now, I know that with most aspects of the Royal Prerogative, such as the right to declare war and appoint peers, HMQ doesn't get much of a look in, but I am not sure it is necessarily the case here. Remember when Tony Blair wanted to call an election after two and a half years (to match some temporary increase in his fortunes or more likely trying to get a few more years before a downturn in public opinion): there were rumours, presumably emanating from Buckingham Palace, that it should not be necessary and the Queen might not allow it. Blair might have called the Queen's bluff but that would have generated a lot of negative publicity. He held on until a decent four year period had expired.
Secondly, I have a general feeling that tinkering with checks and balances concerning the monarch's role should be given a lot more thought; it is easy to destroy an age-old tradition but not so easy to reinstate it.
Third, the calling of an election is very much a test of the Prime Minister. Heath called an election under the 'Who governs Britain' banner and the public replied that we had been paying him to. He was voted out. Brown dithered about calling an election he would certainly have won and the electorate now seem likely to penalise him. Whoever calls the election, the voting is in our hands.
Lastly the fear that a government might inflate the economy in time for a General Election is to my mind somewhat irrelevant. If it knows the election will be in five years time it can still manipulate the economic climate to meet that date - what could be easier?
People should think before tinkering with the Constitution. There are more important changes to be considered, such as the make-up of the House of Lords (see here)
16 November, 2007
Some fun stuff on Danny Finkelstein's Times blog (HERE) (I liked 'Mathematically, we could still qualify')
My offer: Kleptocracy, Bureaucracy, Hypocrisy
I am often reminded of the dictum of Christopher Fildes: giving capital to a bank is like giving beer to a drunk. You know exactly what he will do with it but you don't know which wall he will choose.
The stance taken by the Governor of the Bank of England, Mervyn King, (and I mentioned at the time that it was unfortunate that the bank he had to practise it on was New Labour’s in-house bank with branches in marginal constituencies) is that of the moral hazard. This says that if we indemnify depositors and investors against the risks they are taking, they will become risk happy: I could set up a bank tomorrow and it would have the same credit rating as Barclays because the government guaranteed the depositors. This is even more true of shareholders and professional lenders. Why should my taxes underwrite a South Korean bank lending to Northern Rock? Or a Canadian pension fund buying shares in it?
So everybody should stand to lose something? Not so easy. The people must have confidence in the banking system. After all, the reason I haven’t opened a bank is that the Bank of England would not have granted me a banking licence. And here we come to the nub of the problem and the largely unmentioned culprit. What used to happen, and the reason we haven’t had a run on a bank these few hundred years, is that the Bank of England knew what was going on in each bank, knew in advance of any problems and sorted them – even arranging for a takeover by a larger bank. And this has happened many times, to my knowledge. What changed was Gordon Brown’s new architecture for the financial system, a tripartite system with the Bank of England, the Financial Services Authority and the Treasury. Banking supervision was transferred from the Bank of England to the FSA so the Governor could no longer raise an eyebrow and call HSBC telling it to splash some cash. Gordon Brown, who drums himself up as an intellectual but didn’t seem to have the ability to think this through properly, is one of the main causes of this fiasco.
The answer now, apart from giving the Bank back its supervision of the banking system, and Gordon Brown apologising for introducing half thought through measures (Ha!) is that taxpayers’ money should not be used to bail out professionals. The loans should be at a proper rate of interest and should expire in February or within 6 months (there are some difficult maturities coming up so a short extension might be easier). To keep public confidence, particularly now that a large bank has been seen to go under, depositors should be given a 100% guarantee, but only up to £10,000. If you have that amount of savings you should have the nous to open an account at another bank.
The toll of injuries among policemen rose to 40 by Monday morning from a night of street violence around the city's Olympic Stadium in the wake of the fatal police shooting of a Lazio fan on Sunday morning. The policeman who shot the fan said his gun went off by accident and is now facing murder charges.
The new Fiat 500 has been named car of the year. By my calculations this is the twelfth time the FIAT Group have won it. The first FIAT Cinquecento was built before the competition started.
A Gay art show has been put on in Florence after the Milan authorities refused it permission. I am told that many people in Italy do not believe there are any gays in the country at all so it will be fairly deserted.
Italy's tireless efforts to obtain a UN resolution against capital punishment have taken a step further after a successful committee vote. It will now be put to the General Assembly.
The lack of rainfall and high temperatures has resulted in early harvests for both grapes and olives with overall production for olive oil and wine down 10% or more over last year. Round here I can tell you it is more like 50%
Florentine Carlo Ferrini is the Oenologist of the Year according to the 2007 Wine Star Awards given by Wine Enthusiast magazine, foolishly ignoring the claims of some smaller Umbrian winemakers.
An Italian unmanned aircraft has set a European endurance record flying for eight consecutive hours with a full load. Built by Alenia Aeronautica, the Sky-Y aircraft set the record at the end of a one-month test campaign in Sweden. The Alitalia entry has yet to arrive at the testing ground but is expected soon.
14 November, 2007
And how well is this money spent? Well, for the thirteenth year running the Court of Auditors has refused to approve the accounts. It has approved of about 40% (up from 33% last year, the Commission boasts, so it must be doing the right things!) leaving something like €60 billion which is subject to error, poor accounting or fraud. One of the favourites this year is that now agricultural subsidies are being doled out on the basis of the agricultural land area rather than production, they are being claimed by golf clubs and railway companies.
And yet we tolerate it. Why? Because the political class won't allow too much argument in case the thing unravels. As Daniel Hannan points out in the Telegraph: it's a racket - a mechanism for redistributing wealth to people who, directly or indirectly, are on its payroll. We need one country to refuse to pay its contribution until the accounts are in proper shape.
Don't hold your breath.
Now after two minor floods and more than a day's work, we are getting there and my attention has been drawn to.......
08 November, 2007
- Interview with Prodi: in an interview with the Financial Times Mr Prodi sought to take the heat out of the situation. Yes, there had been a massive influx of Romanians - perhaps half a million - and they made up 75% of the people arrested for serious crimes but that had to be set against the 22,000 Italian companies employing 600,000 Romanians over there. He is in talks with the Romanian foreign minister but in the meantime Veltroni the mayor of Rome is rounding them up.
- Biagi dies: the distinguished journalist Enzo Biagi has died aged 87. He ws a much loved figure in Italy, fiercely critical of governments of all persuasions
- Student murder: the death of a British student in Perugia appears to have been as a result of sex games with an American flatmate, her Italian boyfriend and a Congolese bar owner. Arrests have been made and police say the case is closed.
- MS Breakthrough: another astonishing success for Italian medical research. A team in Rome have established that EBV, a variant of herpes, causes Multiple Sclerosis, making treatment easier.
- 10 commandments: Police have discovered during the arrest of Salvatore Lo Piccolo, the Boss of Bosses, a list of rules governing the deportment of a mobster, which include 'Appointments must absolutely be respected' and 'Wives must be treated with respect' making the Cosa Nostra unique among Italians
- Saudi meets Pope: King Abdullah has a historic meeting with the Pontiff. These heads of small wealthy countries whose very word is law have to stick together
07 November, 2007
Youth need advice and here is mine: putting your name to a New Labour press release is like accepting sweets from a stranger. Don't.
No, I haven't got it in for New Labour women (the men are just as bad) but I have to tell you this. Ms Smith is, somewhat surprisingly, the Home Secretary. The Times reports (HERE) that after she had seen members of the Youth Parliament (I shall try to find out what this is - the main one seems childish enough - and how much it costs) three representatives, Natalie Irvin of the North East, Dan Kent for Sutton and Natalie Hall for Staffordshire all said exactly the same thing in their press releases including 'It is good to hear that gun and knife crime is a key priority for the Government' (which will be news to anyone who lives in a British city).
So the government makes a big splash about consulting 'Yoof' and then tells them what to say, dressing it up as their own thoughts. This, in a nutshell, is how the country is run. And not even an apology this time.
One of the bidders is Air One, the Italian internal airline with the heron on its tail (airone is the Italian for heron - geddit?) which says it wants to maintain its character. This 'character' is of baggage handlers who block the luggage tags reader while they go out for a smoke, ensuring your luggage goes nowhere, strikes, absurd over-staffing by militant unions and appalling delays such that you cannot rely on the airline to get you anywhere anything like on time.
I have done a fair bit of corporate finance advisory work in my time and my advice to Air One's CEO Carlo Toto is:
Lie down in a darkened room until you feel better.
06 November, 2007
Anyway we are due to hear a bit about the Constitution today, it is rumoured, in Gordon Brown's first Queen's Speech. This is the bit, if you remember, where he sets out his 'vision'.
So here is a suggestion or two.
House of Lords: 80% elected, the rest a minimal number of political appointees, enough to keep parliamentary business flowing, and ex-officio members, such as a couple of bishops, the Chief Rabbi, Head of the Muslim Council, former Prime Ministers and other holders of the Great Offices of State, Law Lords, Governor of the Bank of England, Head of the National Trust etc etc. Everyone to retire at age 75.
Voting: House of Lords Commission to oversee voting, prevent fraud, introduce new voting methods such as by computer etc
Referenda: Any constitutional change put to the people in a referendum. House of Lords committee to rule on what is a constitutional change (eg changes to Habeas Corpus in Anti-terrorism measures)
West Lothian Question: English Grand Committee as suggested by Rifkind, only English MPs to vote on purely English laws; Scottish Executive to be given tax raising powers.
Abolish Human Rights Act and submission of English Courts to European ones.
Well, that's a start.
Something tells me that none of the above will be in it. I am also guesing that there will be a few surprises, and that Gordon Brown will come out of it marginally better but not much. We shall see.
05 November, 2007
I'd have sacked him for stupidity. His leader Cameron has cleverly introduced the subject of immigration into the political scene, having taken the unpleasantness out of the verbiage. This was a clever move by Cameron, for whom it could be a vote winner. Hastilow's outburst was a gift to Labour.
In my view, more than half the country subscribe to the view 'Enoch was right', in what is known as the 'rivers of blood' speech, but less than 1% of them have any idea what he did in fact say. It was 'Like the Roman I see the Tiber foaming with much blood', a quote from Virgil's Aeneid. The Tiber. Not the Thames or the Ouse. 'Like the Roman'. You'd have thought even the daftest person might guess this was some sort of ancient quote. Virgil also coined the phrase 'timeo Danaos et dona ferentis' but each time anyone says 'I fear the Greeks bearing gifts' it isn't thought to be some racist comment on our European partners. I'm afraid the new ignorant class has been led by the Left to allowing the persecution of an educated man (Powell, not Hastilow). But he's dead now and it can't hurt him.
I think that with Hastilow's departure the average IQ of Conservative candidates will have risen but it all seems so silly,
04 November, 2007
The Political Class is a term I have been using for some time, mainly about Europe, but Oborne (former political editor of the Spectator, now with the Mail) traces its rise over the last 30 years to its apotheosis now (in the unlikely event of it becoming a film, Apotheosis Now would be a good title).
Whereas we once had an establishment, the governance of the country is now in the hands of a self protecting class of people which can be entered only at an early age. Almost all of them have no experience of anything outside Westminster and politics is so much a profession that even party political distinction is blurred: they borrow each other's policies simply to occupy political space as if the asppirations and needs of a nation were a chessboard. The result has been poor government, based on preserving the interests of the Political Class above serving the people, low voter turnout (what's the point?) and corruption, many instances of which Oborne cites.
This is a stunning indictment of what we have allowed to happen in Britain. I hope the book is widely read before it is too late.
02 November, 2007
The report into the Jean Charles de Menezes killing however is critical of systemic failings in the Met. He was in charge.
Of course he must resign. What are people thinking of? We can't have the country's top policeman having no support from the public, no credibility. OF COURSE HE MUST GO.
These signing arrangements are redolent of the Constitution itself: something for the political class to feather its own nest at the expense of the people.
01 November, 2007
- Italian medical research, a somewhat unsung success, has been active: Teams working under Luigi Naldini in Milan and Cesare Galli in Cremona have managed to rewrite human DNA in a breakthrough that holds promise for the treatment of a range of diseases.
Italy's leading expert on breast cancer Umberto Veronesi says that in ten years the survival rate among breast cancer patients should rise to 85%
Andrea Decensi, director of the oncology department at Genoa's Galliera Hospital, said a drug used to treat osteoporosis has proven to also be effective for the prevention of breast cancer
Teams working at Aviano near Pordenone and Rome's Tor Vergata University have discovered that chronic lymphatic leukemia (CLL) is more aggressive when the tumour cells contain a specific protein on their surface.Valter Gattei of the Aviano lab said the breakthrough was "promising" because the protein is "easier and cheaper to detect than other markers".
A team from the universities of Rome and Ancona have found a marker in human bile they claim can identify bile-duct cancer before surgery becomes the only, high-risk option.
Not bad, eh?
- Bread and pasta prices, currently being investigated by the competition commission, have been a major cause in the rise in the inflation rate
- Cortina d'Ampezzo, a ski resort, has voted to switch from the northeastern Veneto region to Trentino-Alto Adige. The referendum was held to preserve the Ladino language, spoken otherwise only in the Alto Adige, but some think the positive vote may have been influenced by the lower taxes paid by their neighbours in Alto Adige.
- The number of legal immigrants in Italy climbed 21.6% last year, over 2005, the highest growth in the European Union
- Dario Fo is the only Italian in a list of living geniuses published Monday in the Daily Telegraph.The Nobel prize-winning writer came seventh; the creator of The Simpsons was fourth, Osama bin Laden joint 43rd
- The Vatican has published a document from the secret archive saying the wiping out of the Knights Templar in the 14th Century may have been a little harsh. They were bad, but not that bad
- Signposts have been erected marking the via Francigena route for pilgrims from Rome to Canterbury. There is renewed interest because it has been shown to be quicker than queuing for Ryanair