The Spectator

It seems Matthew d'Ancona is leaving as editor of the Speccie, after a very successful few years. New editor will be Fraser Nelson, who is quite a good egg.

Berlu and the Church

I can't help wondering if Silvio Berlusconi, normally politically sure-footed, hasn't picked the wrong enemy. He was due to attend the annual Celestine Pardon, as part of a rapprochement with the Holy See, but has pulled out, after Cardinal Bertone the Vatican Secretary of State, cancelled a dinner due to be held afterwards. The Vatican is concerned about the stories surrounding Berlusconi and an impending divorce, although to be fair to Silvio it is his wife trying to divorce him.

Berlusconi is suing La Repubblica, the Italian equivalent of the Guardian, for presenting innuendo as fact and suggesting he could be open to blackmail (it was La Repubblica who paid the prostitute to bring a tape recorder with her) but it isn't that which is the problem. The case will take so long to come to court that the matter will be forgotten.

What looks like an uncharacteristic strategic mistake from the normally cunning premier is that Vittorio Feltri, editor of Il Giornale which is owned by Berlusconi's brother, has made an attack on Dino Boffo, editor of Avvenire, the bisops' newspaper, saying he was unable to make moral judgments because he was a homosexual who was accused of harasssment and paid a fine in a plea bargain to avoid going to jail. The paper claims to be in possession of the court documents and, just to make it more complicated, it is the harassment if a woman in Terni he was accused of - he was having a relationahip with her husband. But whatever the rights and wrongs, Boffo has important friends.

Berlu has already dissociated himself from the piece but I think it was ill advised. The Church is widely respected here and the deal is that the people are allowed to criticise it privately but their leaders must show respect.

Let us see how Berlu gets out of this.

Adair Turner - turn him off

Adair (Lord) Turner, the head of the Financial Services Association (FSA) has made perhaps the most stupid speech I have heard this year, against some pretty stiff competition. He has said that bankers are socially useless and that the financial sector is too big and needs to be cut back.

I have been trying to imagine how it must feel to be a hard working person and be told you are socially useless, and told that by a bureaucrat ennobled and handsomely rewarded by the taxpayer. Suppose Lord Turner decided that gardeners were socially useless, or bricklayers or politicians? One wonders who has authorised him to make this judgment.

More serious is the idea that the financial sector should be cut back. It’s not just the facts of the case – every year I can remember Britain has run a trade deficit with the world, wholly or partially recouped by a surplus on invisibles – largely banking. The financial industry has been bailing us out of the mire for ages.

But I could agree that banking is so strong an industry for Britain that there is perhaps an imbalance. What should we do? What should a country do if it had one very strong industry – say agriculture or oil or electronics? The liberal adviser would say encourage other industries to grow. The illiberal bureaucrat says hack the successful industry back down to size.

Turner is new to the FSA but he must be aware that it was charged with regulating the financial industry and yet failed to notice the banks were leveraged to 30%, failed to understand what was going wrong at Northern Rock. Let’s remember this when we talk about people being ‘socially useless’.

Ted Kennedy (2)

I railed against Kennedy's knighthood earlier this year. Now the old charlatan is dead. This is a man who has occupied public office since the 1960s and seems to have done nothing except let down his family and his country.

Fitting, I thought, that one of his last pronouncements should have been to complain against the release of Megrahi while having been an active supporter of the IRA for years. Some terrorists, you see, are beyond redemption whereas other terrorists are a useful political bandwagon.

De mortuis nil nisi bonum, I should have mentioned, does not apply to this blog. Let the blighter be judged by a higher court.

The lottery

I should have mentioned that it might be seen as obvious that the Malaspina (bad back) should have chosen Bagnone (big bath) as their home but, as I said, they were swine.

Incidentally, the Malaspina were in some large part responsible for the Salic Law on inheritance being maintained, that is that an estate should be divided amongst the (male) children, which led in France and Italy to smaller farms than in England and these were less efficient when mechanisation arrived and this meant that they got a greater subsidy than British Farms when the EU came into being.

I don't think we can blame it all on the Malaspina (Salic Law was much earlier adopted by Charlemagne). But the lottery ticket can be seen as their final curse.

The lottery: and the winner is...

Bagnone is a Tuscan hilltop town above La Spezia and has suffered two misfortunes in its long history. The first was to be the chosen home of the unpleasant and warlike XIV century Guelph family the Malaspina, and the second is to be the home of the lottery jackpot ticket. The newsagent who sold the winning ticket (himself in for around €7 million) said three people bought tickets. One man, a tractor driver, was seen to be behaving strangely while watching a football match shortly before the result was announced (the Superenalotto, needlessly complicated as only the Italians can make it, depends on football matches, selected towns, and numbers).

I felt genuinely sorry for the man. To win €1 million, or, given the price of houses and low yield on pension investments, €5 million, would be a great good fortune. But €148m? It looks to me as if it can only bring bad luck.

The sensible thing, and what I like to think I would do myself, is to give away €140 million. But if I actually had the cheque in my hands......

The Ashes Series

I posted in July that the First Test had been a compulsive listening experience and so it has been throughout. That draw to begin with, our last two batsmen holding out almost impossibly, the incredible win at Lords for the first time in three quarters of a century, the rain-affected draw at Edgbaston, the appalling surrender to Australian supremacy at Headingly, from which many thought a disheartened England could never climb back, and the dramatic finale at the Oval, Australia’s top batsmen blown away in their first innings by a young man thought likely to lose his place in the team.

Even with an unprecedentedly high score to chase it looked, on a couple of occasions, as if Australia might just do it. But it was over abruptly, around the time of the aperitivo. I felt empty and purposeless for a while, wondering what it was I did before the Ashes started. Ah yes, something about a book.....

EU: the increasing rip-off

The Sunday Telegraph points out that in the UK Treasury’s European Union finances document, cunningly slid out after Parliament had risen for the summer, the net contributions to the EU of £4.1 billion are due to rise by more than half to £6.4 billion next year.

Just what we want in a recession. In large part it is because Tony Blair and Gordon Brown gave up Mrs Thatcher’s rebate. This rebate was because the Common Agricultural Policy favours inefficient (French) farmers. Blair and Brown came back from the summit saying it was a great deal for Britain because they had secured a reduction in agricultural payments overall. What they had in fact secured was the promise to look at agricultural payments, which the French have now decided are about right.

But unfortunately it is only half the story. Next year we are forecast to pay over £15 billion into the European Union. What we get back (ie the £9 billion which makes the net £6 billion) is dependent on their whim. If they want it to be spent on infrastructure projects it has to be. What the UK government would like is to use this £9 billion to reduce debt, but that is not permitted. And much of this money is dependent on 50/50 financing so we would have to spend £9 billion to get £9 billion back.

The figures can be seen at

http://www.hm-treasury.gov.uk/d/european_community_finances_2009.pdf

on page 29.

No. Our payment to the EU is £15 billion. That is the amount we could save by leaving.

Megrahi: best forgotten

I rather admired Kenny MacAskill’s statement on the freeing of Abdelbaset Ali al-Megrahi, the Lockerbie bomber. It was to the effect that whilst Megrahi had shown no leniency to his victims, we, a higher form of life, would show mercy and that mercy would be irrespective of the heinousness of the crime.

But I didn’t believe a word of it.

Megrahi suddenly appeared before the courts eight years ago, handed over by Colonel Ghadaffi. It is inconceivable that he could have done the job without help, but his was the only name put forward by a man notorious for his instability who had suddenly decided, in the wake of Islamist uprisings threatening his dictatorship, to seek a rapprochement with the west. I found the trial a farce and I find Megrahi’s freeing a farce. If it depended just on medical certificates, why did MacAskill visit him in prison?

Whilst it has been put about that dropping his appeal was a condition of his freedom, I find it equally likely that his freedom was a condition of dropping his appeal. It is a regrettable comment on such an important person in public life, but I find that evidence of Lord Mandelson's involvement is further reason to suspect trickery.

This has been a shoddy business, best forgotten.

Italian news August

August is a difficult month for you news vultures so here is the Italian news, condensed for your convenience.

Security guards have occupied the Colosseum, in protest about having to work in the private sector. There are rumours the mayor will let the lions out.

The Superenalotto jackpot is now 135 million euros. The lucky winner would be able to hire Silvio Berlusconi at a party.

A seven year old girl has swum the 3.5km Strait of Messina, proving that no bridge is necessary.

70 endangered loggerhead turtles have hatched at Capo Bruzzano, Calabria

The Coldiretti farmers union have withdrawn an instruction that tomato pickers must drink water during the day or will be sacked, after Muslims claimed it was not permitted in Ramadan.

A man who found a way of retrieving cancelled text messages from his wife’s mobile ‘phone could face a year in jail.

After Silvio Berlusconi said he would offer sanctuary in his homes to the people of l’Aquila, Antonio Bernardini, a resident made homeless by the earthquake, has formally applied for a place, saying he doesn’t mind whether it is in his palazzo in Rome or his converted convent in Sardinia. I’ve heard the parties are better in Sardinia.

Investigators are looking at the estate of the late Gianni Agnelli, president of FIAT, suggesting that as much as 1 billion euros may have gone missing from the tax authorities.

The church in Caltagirone, Sicily, has forbidden the performance of Mascagni’s opera Cavalliera Rusticana during the festival of the town’s patron saint on the grounds that the story line is immoral.

Some 750 nuns of the order of St Clare will be praying for an improvement in Italian television. The nuns do not themselves have television sets.

The healthcare fog

Mr Obama is to be applauded for trying to improve the healthcare system in America but the inevitable strongly opinionated debate about his proposals seems to have thrown up more heat than light and has now regrettably moved to Britain. Our own ignorance of the US system – I was surprised to learn that 50% of healthcare in the USA is provided by the state and that since 1986, federal law has required all hospitals which receive federal money (just about all of them) to provide emergency care to any patient who turns up – and their complete ignorance of our system has meant unwarranted criticism flying across the Atlantic and a peculiar nationalism, even describing itself as patriotism, growing in defence of our own, 60 year old healthcare system.

All this seems unfortunately to have obscured any useful debate. Despite the fact that I don’t want the American system in Britain – Obama doesn’t want it in America, either – I don’t think the NHS is without room for improvement. I had always been brought up to believe the NHS was the best system in the world and that foreigners were unfortunate not to have it. The first time I went abroad, it was to Switzerland, I was understandably nervous. But far from there being children with rickets and tubercular beggars wheezing in the streets, the Swiss looked healthy and prosperous, without the aid of a state owned healthcare system.

We should look at what other countries do. I think the government could farm out much of its own risk. For example, we pay monthly (through our wage packets) to cover an indeterminate healthcare need. That is insurance by any other name and insurance is best handled by insurance companies. I don’t see why the state needs to own almost all of the hospitals – they should be run by private hospital companies. I think it absurd that a millionaire gets the same free treatment as a pauper: anyone who can afford to pay should be pursued for the money.

The government should confine itself to the principle that everyone gets treated, irrespective of income. It should leave healthcare to healthcare professionals. And if we can improve our system by borrowing from other countries, let's do it.

The minimum wage

There are whisperings in a couple of right wing think tanks that we ought in these difficult times to be having another look at the minimum wage, currently £5.73 per hour.

It has been said that a minimum wage is either useless or dangerous and there is some truth in this. Imagine it were 57.3p per hour (about £23 per week): it would have no effect whatsoever. No one works for that kind of money any more. But imagine it were £57.30 per hour, that is to say it would be illegal to employ anyone for less than £2,300 per week: huge swathes of British industry would be wiped out, millions on the dole.

What proponents of a minimum wage say is that a happy medium can be found which doesn't reduce employment but does help people. Whether this is true or not (and I think it is not true), that figure would be different in bad times to what it was in good times. There is a good argument for saying it is now too high and that we shall emerge from recession more slowly if companies cannot employ people for what they can afford to pay them.

Perhaps we can chip away at the minimum wage by creating more exemptions, for young people, for certain industries etc, and committing ourselves not to increase it. Some politician needs to show the courage to raise the subject. Mr Cameron? I think not.

The 'phones

We have been constantly reminded that it is the 40th anniversary of the first moon landing, but it is worth thinking about that it is also the 40th anniversary of President Nixon talking to the astronauts on the telephone. He clearly wasn't using Telecom Italia equipment. The 'phones here have been out for the second time in 2 months. As I said to a new expat recently, the best thing is to assume that the 'phones aren't going to work when it's raining, and occasionally you may be pleasantly surprised.

Back up and running now, however.

The BBC: from worse to better

The BBC seems to be making the headlines for all the wrong reasons recently. There was the villa in the south of France where they entertained, George Alagiah having to step down as patron of Fairtrade because of conflict of interest (more about Fairtrade in a later post), senior managers profiting from contracts their family companies have with the Corporation, Jonathan Ross’ viewing numbers plummeting, the list goes on. Russell Brand does not of course work for the BBC any more but the other day some enlightened licence fee payer pushed him into a fountain.

In the midst of all this we have Test Match Special, a safe haven of decency, humour and peace. Which ever executive came up with the idea of having Phil Tuffnel as a commentator deserves a lucrative family contract.

Jackpot

The top prize in Italy's SuperEnalotto, for which you have to guess six numbers correctly, has not been won since January. The pot is now €115 million, the second highest ever in Europe.

In the Sicilian town of Ficarra, the mayor and his cabinet colleagues stumped up €115 to buy tickets on behalf of the town, saying the winnings would be spent on public works. They didn't win, despite having chosen numbers connected with the town's patron saint, the Virgin Mary of the Assumption.

The odds of winning the jackpot are thought to be 622million to one, but Ficarra's mayor, Basilio Ridolfo, said that was better than the odds of receiving funds pledged by the state.

The new Italy?

Der Spiegel asks us in which European country

- a soft porn starlet is being considered for a cabinet post,
- labour representatives jet off to company-paid visits to brothels,
- a media mogul crazy about music controls 80% of the tabloid press
- according to a World Bank Report, the red tape required to start a company is more inscrutable than Rwanda or Kazakhstan, business executives run their companies into the ground and then expect bailouts from across the Alps, and the population, despite catastrophic economic data, wants none of the economic crisis and instead insists on living la dolce vita as if nothing had happened.

The answer is Germany (the starlet is Dagmar Woehrl, currently a secretary of state in the economics ministry, the media mogul is Mathias Doepfner and the World Bank quote is from their report ‘Doing Business’, 2009).

The BBC: the future?

The excellent Frank Field MP (I am so glad he didn't become Speaker of the Commons, we would have lost the benefit of his extra parliamentary work) has come up with a paper on the future of public service broadcasting. It goes under the title 'Auntie's Dying: long live public sector broadcasting'. You can link to it here.

Field's thesis is that 'Because public service broadcasting is paid for by a poll tax licence fee the BBC feels compelled to spend most of this money in delivering entertainment which by no stretch of the imagination could be thought of as public service broadcasting.'

'Public service broadcasting is too important to be left largely in monopoly hands. Now is the time to free the glory of this idea from BBC shackles.'

His idea is the BBC should be reduced to BBC 2 and 4 and Radio 3 and 4 and the World Service, and that there should be created a new body, The Public Service Broadcasting Corporation which would allow companies - anyone - to bid for finance to make their own programmes, which would go out on any of a variety of formats. The rump of the BBC would exist largely off PSB money (although the World Service gets some from the Foreign Office) but others could be involved in the scheme. An example he gives is that he is a trustee of the 2011 Trust which celebrates the 400th anniversary of the King James Bible and he would be able to bid for licence fee money to make TV or radio programmes.

I think this an excellent idea, although with so many people now not listening to public service braodcasting I would prefer to turn the licence fee into a trust so people don't have to shell out every month for something they don't want.

But this should be the start of a national debate.

Italy: it's the economy, stupido

The thing to remember about Silvio Berlusconi is that no one ever says he lacks intelligence or that he is out of touch with the people of his country. He is probably the best politician Europe has seen for 50 years (although certainly not the best leader). You have to think about this when looking at what has made the news in Italy this year: his social life, his divorce, his parties; his success with the Naples rubbish, with Alitalia, with l'Aquila. Now talk has started again of the Messina bridge. And all this has diverted attention from the real problems facing the Italian people.

The graph shows the long term moving average growth of the economy, that is to say the average of the previous 10 years. So in 1980 the average for the previous 10 years (ie the 1970s) was nearly 4%. In the 1950s and 1960s it had been over 5%. By the end of next year however it will have been zero, meaning that the economy will not have gone forward since the turn of the century. Retail sales have been falling steadily for over 2 years. In the first three months of this year the economy contracted at an annualised rate of nearly 10%.

Many of the problems will be familiar to anyone following the UK economy, only worse: the state is too large and the debt burden enormous. The regional disparity between the wealthy north and the impoverished, corrupt south far greater than the difference between, say, Glasgow and London. The native population is falling, and whilst this is offset somewhat by immigration, immigrants can go elsewhere when there is no work. The country cannot afford its pension system as too few productive people support a long lived population, with an unaffordable requirement for healthcare. The scale of organised crime is so great that it is best not to think about it.

When the banks started to crash in America and Britain the government announced that Italy was largely exempt from these problems. The Italian banking system, barely emerged from the 1950s, had not got around to considering these new CDOs and SIVs. Italian banks are among the best capitalised in Europe, but this is at least in part due to them not using their capital efficiently. Firms find it difficult to borrow from these sleepy monoliths who in any case charge vast fees for the simplest of transactions. The system has been allowed to continue only by a policy of refusing entry to foreign banks.

The industrial system, a post war marvel, consists in large part of small family businesses, often with loose associations and geographical specialisation. It is little suited to the modern world. As The Far East and India expanded on the back of lower labour rates, western nations have had to climb the quaity chain, creating new technologies their emergent competitors could not rival. The very structure of Italian industry precludes this: the family companies shoud have merged years ago, economies of scale financing research and development. But they didn't. There is no stockmarket to speak of, only a few of the largest firms being floated, and there is no venture capital / start up market. The procedure for setting up a company is one of the most time consuming in the western world, and the appalling over regulation keeps entrepreneurs away and consumer prices high.

All this will have been going through Berlusconi's mind, which is why he isn't too troubled by the news being obsessed with a couple of starlets and a hooker or two. He knows, too, that the political will does not exist in the country to effect the required change and that the people have, by and large, accepted the fact that theirs is a nation in decline. He probably also knows that whilst they can accept the slow debasement of their reputation, when it filters through to living standards it will be a different matter. That will probably be a problem for his successor.

Berlusconi: I've seen the light

The Times reports that Berlusconi is going to sell his Sardinian home Villa Certosa, and at the end of the summer make a pilgrimage to the shrine of Padre Pio.

This story gets better and better, and conveniently means no one is talking about the Italian economy, on which I shall post later.

Defending our borders

I think most of us feel there are too many laws being passed with too little thought going into them and here is a prime example. The Government seems to have given up on its plan to impose immigration controls on travel between the mainland and Northern Ireland and the Chamnnel Islands.

I am grateful to the following summary from the excellent Samizdata blog:

'You can basically sum up the UK Government's dilemma as either they are going to have to tell Gerry Adams he has to have a British ID card to live in Northern Ireland or tell Ian Paisley he's going to need a passport to travel from Belfast to London.'

Or, if you find yourself in a hole, stop digging.