Saturday, September 27, 2008

The stomach retches

I am an elderly gentleman and, in my youth, life was simpler than it appears to be in the modern age. I am therefore bemused by the current crisis in the world of finance; indeed I am perplexed by the responses of politicians who, as is frequent, appear to have learnt nothing from the lessons of history.

I once described the banking system as the stomach of commerce. It is a base comparison and yet so true in many ways. For sometimes a stomach may contract an infection; it may need to be cleansed and the results may be unpleasant.

For commerce to succeed, businesses must start and succeed or fail. There appears to be a belief at large that the great houses of commerce, the banks, are exempt from this rule. One bank teeters on the brink; the British government buys it. A second bank is harassed by the market, whether rightly or wrongly; officials of government arrange for it to be saved by another.

And still the whole system teeters and topples like Sisyphus and his rock. Governments may push it to the top of the hill but it will always roll down. In the United States, the Republicans seek to raise a sum of some 700 thousand million dollars to salvage the world of commerce. The public is outraged; and so they should be. It is as if the government walked into a casino and offered to pay the losses of those desperate gamblers who have invested their house, their savings into the addiction. It is the nature of the economy that the City of London and Wall Street deliver great, even monumental rewards to their participants. Those rewards are predicated, or should be on the scale of risk undertaken by those who earn their living toiling at this coalface.

For whose are the livelihoods that governments seek to protect, that are at risk in the current crisis? No other than these self-same people who have lived lives, created homes of unutterable luxury through their businesses, aided and enhanced it seems by the technology of the 21st century. It is said that homes and livelihoods of ordinary people are at stake. I have studied recent history and learnt how a Conservative government in Britain allowed the collapse of the nation's great northern manufacturing industries. Thousands of labouring people were cast out of work and no solution found; indeed government did not rush to their aid.

I cannot but remember the partners of the bank of Overend & Gurney attending my office some 140 years ago. In spite of their entreaties, we did not rescue their business; they had to pay the price of their recklessness, just as any other gambler. Others also who were thriftless had to suffer the loss of their business; but the system of finance did not collapse. Rather it thrived through the learning of a measure of caution and wisdom.

It is not apparent to me that the collapse of any individual lender of mortages will lead to the loss of homes to any greater extent than is already happening. The Americans perceive, I believe, even more than the British that it is those who have profited most from the gambling of previous years who are likely to lose least. If a bank, a lender were to go bankrupt, their borrowers need not be evicted from their homes, their savers need not be destitute. All that will happen is that another bank will purchase those assets at a market cost. The directors and shareholders may therefore suffer losses; that is a consequence of market failure and their own failure to administer their business in a proper fashion.

The governments meanwhile should save their pennies and their legislation for their proper task: to ensure that noone is destitute, that occupants of homes are not cast out on the streets, that mothers are able to feed and clothe their children.

Nil sine magno vita labore dedit mortalibus.


Sunday, September 21, 2008

Time to go

Each one of us, whatever the extent of our greatness, must consider, when we hold the highest offices in the land, at what hour and what day our time has passed. Sometimes it is possible to depart on a point of principle; sometimes we must recognise that age, infirmity or incapacity requires us to muster whatever dignity remains to us.

Mr Gordon Brown's political opponents may fervently wish him every success this week in Manchester. I will no longer mock him as the Queen's ghillie. He deserves the respect one accords to a mortally wounded opponent. Instead I give him this advice: he should beware the ploys of the Tories, who have never failed to stoop to the basest, meanest forms of political strategems and may well conspire to keep him in office.

He should also beware the high passion, the false success and the treacherous acclaim of the party assembly. I enjoyed spending a few days with the remnants of the Liberal Party in Dorset last week. It appeared to me at close quarters to be a party ready for government. That was not apparent to the nation at large; and indeed Mr Nick Clegg's rashness in discussions with the press suggests a continuing need for maturity and gravitas.

Mr Brown, on the other hand, claims these self-same qualities of maturity and gravitas, confusing them with the experience which he may rightly lay claim. It is apparent to all but himself - and a somewhat naive writer of children's books, a Miss Rowling - that he is unable to demonstrate the leadership the nation leads at a time of economic and financial crisis. The observer has no need to be Mr JS Mill to see that governments cannot claim to be holding the financiers to account whilst continuing to subsidise and underwrite their adventures.

On waking today I was astonished to hear the Prime Minister announce his solution to the ills of the nation, indeed, it seems, to the ills of the world and certainly, it must have seemed to him, to the troubles of his own party. The state, he proposes, will take care of all children of two. Like a nanny of old, it will take them from their parents and place them in nurseries. No-one shall have to pay for this nanny, no-one that is except the taxpayer in general and he will pay more when he has already paid enough; when he struggles to pay for his home and his transport to work; when he fears for his employment and his future. It was an announcement that was ill-timed and ill-considered; indeed it was an announcement that lays bare the Marxist soul of the new party of labour, the desire to control and organise every aspect of each citizen's life.

Mr Brown stated "I will do better" like a chastised child, one old enough to talk and discuss matters with his teachers. His lieutenants may assure him that he is doing better. He should ignore their false smiles and treacherous assurances, gather up his kilt with dignity and head for the Highlands.


Wednesday, September 17, 2008

The clergyman was right

I am alarmed to hear that a clergyman of liberal persuasion has been persuaded to resign his post at that most eminent and distinguished of institutions, the Royal Society. Her majesty herself would have intervened in such an unseemly dispute which may besmirch our national tradition of the liberal advancement of scientific endeavour; I wonder why her descendant does not take action to protect the reputation of the Royal insignia.

For it seems entirely in error that it can be stated that wearing the collar of the national church prevents a clergyman from participating in science. The Rev Dr Michael Reiss's offence, it seems, is to suggest that science teachers should not be restrained from discussing the significance of Holy writ and in particular Archbishop Ussher's thesis that Creation took place in 4004BC. The Society, it seems, wants schoolmasters to teach that Creation is nonsense, is not in any way scientific, and that the estimable Mr Charles Darwin is the true architect of the correct interpretation of our origins. The society says that evolution is a sound scientific theory - as indeed it is - but that creationism is unscientific.

It is my opinion that the Society should go on its knees to Dr Reiss and beg him, indeed implore him, to return to his post. For the question about the Creation is about theology; it is not about science. I do not know Dr Reiss's theology but he is a clergyman and must know a little. He might be able to help his scientific colleagues see the distinction.

For it is perfectly possible that Archbishop Ussher's view continues to be correct 300 years after it was formulated. It would be possible for the Almighty to have accomplished all the things that many of his adherents in the creationist movement say; indeed for Him to lay a false trail to deceive scientists and other clever men. For His wisdom is folly to men.

The question for theology - and here I concur that schoolmasters assigned to teach science must refer this to other forums - is why should the God of the Jews and the Christians and the Mohammedans choose to do this? Is this the way He has chosen to veil His presence on earth? Or is it simply that His purposes are entirely mysterious to mankind? If that is so, it is also possible that mankind does not understand the very ancient writings in the book of Genesis. They were not dictated by Jehovah but were given at some time to some scribe in antiquity. What was this scribe shown and what words did this individual have to write down his visions?

I was alarmed in my time by the theories that Mr Darwin expounded, alarmed they might spread atheism and lawlessness. In this century I am not reassured I was wrong; yet I understand that the weight of scientific discovery has continued to support Mr Darwin. Yet Mr Darwin cannot disprove God - and nor can his self-pointed heir Mr Dawkins; God could disprove Mr Darwin and Mr Dawkins but may choose not to. There is still plenty to understand in this age and the likes of Mr Reiss could assist all sides in a better understanding both of scientific and of Divine revelation.


A rousing ovation

A rousing ovation for young Mr Nick Clegg this afternoon following his delivery of a speech of substantial quality and content.

The party of labour is finished, Mr Clegg declared. We are the only party that can deliver social justice.

Speaking as if he were an accomplished orator, his words tumbling from his brain through his mouth, the Liberal leader responded to today's concerns, declaring himself willing and ready to take on the financiers and the speculators who, it is reported, lie behind today's banking crisis. It is reported that perceptive operators in the institutions of the City are able to speculate on the prospects for the weakest banks, knowing full well that this weakened and timid government will rush to their rescue with tens, nay thousands, of millions of taxpayers' hard-earned money. Mr Clegg and his lieutenant Mr Cable are correct to hold their ground. This is not the job of tax earnings.

Indeed Mr Clegg reinforced his message that high taxes do little to favour working people of modest incomes if those taxes are not spent wisely. His purpose, he stressed once again, is to reduce the burden of payments on the poor and to ensure that a favoured few do not continue to defraud the taxpayer.

His words were well-received by the Liberal party, which may now have found its soul, have rediscovered the spirit that enriched and freed the common man. It would be timely if the common man were to hear this message and be spared the folly of entrusting his fate once again to charlatans.


Tuesday, September 16, 2008

A trip to chapel

I undertook a very pleasant and most inspiring trip to Richmond Hill on Sunday night to the Congregationalist chapel.

I well remember the erection of this magnificent Non-Comformist temple when I made it my habit to visit the town in the latter part of Her Majesty's reign. Indeed at a time when many of the churches of Bournemouth appear to have been converted to be pleasure palaces, this building of Gothic style continues to serve its original purpose; in participating in worship with the remnant of the great non-conformist conscience of our nation, I almost felt as if I was in the true English church.

The minister considered the question of the exodus of the Israelites from Egypt, drawing some interesting and unexpected lessons from the story. It is a story which has inspired many generations of oppressed peoples to venture to seek freedom; I well remember how the abolitionists drew on these passages and indeed sought to convince me of the error of my youthful opinions by citing the text of Exodus.

This minister's theme related to each person's personal exodus, the journey of courage that must be undertaken if the will of God is to be exercised. It was a well-chosen message for an audience, many of whose members have set out on the hard paths of public service. It is to be hoped that encouragement was well-received and spirits lifted.


Debt and taxes

I am most cheered to perceive a political party that has returned to the principles that I espoused through so many ministries. It was always a matter of regret, indeed of alarm, to me that the state should extend itself into too many areas of activity; it was necessary in many cases, although too often modern politicians appear to have perceived of the bureaucracy of Whitehall as the answer to their problems rather than to trust the people with solutions within their own towns and cities.

Yesterday I observed the Liberal Democrat party declare that the burden of taxation is too heavy, is burdensome for working people of limited means. The matter was discussed most vigorously with a quality of speeches that offered me some hope as to the quality of the modern political sphere.

I must mention the member for Westmoreland, young Mr Tim Farron, whose outpourings excelled in many respects; indeed with maturity and application he may become a great orator. Mr Farron referred us to a woman from Cumbria whose earnings amount to some £7,000, which I understand to be regarded as a paltry sum. She pays in taxes, he stated, some £2,000 a year. A measure of retrenchment, a certain restraint in our view of Russia and other nations, Mr Farron, opined would assist in reducing the burden of taxation.

The Tories, he stated, gave tax cuts to the rich, the socialists gave them to the comfortable; "we will give them to the poor" he declared.

Further excellent contributions came from Mr Vince Cable during the day. It is proposed that taxes be reduced for the poor and that those members of wealthy classes who used various devices to avoid payment should be harried, indeed should be prevented from using the islands of the Empire for these purposes.

There is resistance, it seems, from those who fear this policy will be depicted as an intention to remove the state's apparatus of welfare, its ownership of hospitals and schools and its support for the poor. As I have noted before, it seems curious that a population that has benefited from generations of education at the hands of the state appears less able to digest political argument than when the franchise was first extended to working people. My career was spent in the pursuit of reduced taxation and yet it was necessary to allow the state to grow. The government does not exist to spend the taxes that the people pay; nor do working people pay taxes merely to sustain the government. It is merely a means of delivering communal benefits and the tax that is paid should reflect the cost of those benefits.


Saturday, September 13, 2008

A leader in command

It was gratifying to see the leader of the party, young Mr Nick Clegg, in much restored health tonight; indeed it was also pleasing that he had heeded the advice I gave on his last visit to this fair town and now pays some attention to the preparation and presentation of his public appearances. He has travelled some distance since his last visit to Bournemouth and it is to be hoped that the people at large come to realise his many virtues.

Mr Clegg spoke of the erosion of the ancient liberties of the British people and the sad state of decline of a Parliament that no longer governs or holds ministers to account. I confess a soupcon of envy of recent Prime Ministers, who, it seems, are able to win votes in this place without recourse to argument or challenge from members. Mr Clegg informed us that the Government has suffered just three defeats in 11 years of socialist dominance. What a miserable place it must have become.

I find that in my current disembodied state it is possible to preserve and somehow to publish snatches of memory of recent events. Here is one such memory of this evening's tour de force.


Fair Bournemouth

Travelled once again today to fair Dorset to Bournemouth, the home of the English sunshine, to join the gathering of members of the Liberal Democrat party. I have fond memories of this town, which is where I enjoyed my last partaking of the sacred Communion before an untimely and, if I may say so, premature departure from the affairs of men.

I had the pleasure today of sitting in a pavilion listening to the excellent Mr Chris Huhne expound on the virtues of a liberal approach to international labour. I have been astonished to find an era that places so much store on global trade placing burdensome and excessive restrictions who wish to place their skills at the service of others. It is understood that the working man may fear for his own employment; it is therefore better that those with skills come here to assist our own industry than set up in competition elsewhere.

Indeed this was a point that Mr Huhne and others alongside him wished to emphasise: we are a nation that has always benefited from immigrant labour. And the great United States has benefited even more. It is pleasing to hear that the dominion of Canada employs progressive policies that sustain its cities. I came away with such a sunny view of the prospects for improving the flow of labour that it was hard to see what the drawbacks must be. Yet it seems the Queen's ghillie, his kilt blowing in his face, has this week placed even further restrictions on the entry of skilled individuals into this nation.


Thursday, September 11, 2008

Advice taken

It is heart-warming that government has seen fit to pay heed to the advice of an elderly gentleman. The measures that are proposed today to help the poor and elderly are a little timid; nevertheless they represent investment and some recognition that the nation cannot for even continue to binge on the residues of prehistoric creatures.

The energy trade I understand has agreed to contribute some £900 million over three years. This would appear to be a good estimate of the surplus profits they are likely to enjoy as a result of the instability of the market for fuel. And the contribution will be made by voluntary levy, not by additional taxation, as I had advised. I wonder whether Mr Hilary Benn, who has negotiated this, is related to John Benn, a young radical who demonstrated considerable potential, I recall.

I am concerned nevertheless to learn from the excellent Mr Cable that these self-same companies have received considerable subsidies in kind from the government in the shape of free "carbon trading permits". I would wish them neither to be subsidised nor taxed in an arbitrary fashion.

However the nature of the investment strikes me as timid and likely to be ineffective. It appears to be restricted to "insulation" of fashionable kinds that will perpetuate dependence on carbon fuels. Indeed I am assured that the fashion of affixing additional panes of glass, separated by a notional vacuum, is not as effective as is claimed; indeed that the poor are likely to be subject to exploitation by those who would hawk these products. Regardless of the greed of salesmen, the raising of demand for a scarce product may inevitably raise its price. In these circumstances, consumers should by the law of political economy be enabled to substitute alternatives.

It seems to be forgotten that the British are a hardy nation who have resisted colder climates than these for centuries. A set of thick woollen curtains may be as effective as resisting the draught as pieces of plastic and metal and investment in these products might revive the nation's ailing textile industries.

We are also an innovative nation and many will wish to harness new technologies based on the natural sources of energy that emanate from Divine providence, the light and the heat of the sun and the wind created by the turbulence of the waters and the seasons.

I hear it is a frequent ploy of the Queen's ghillie to offer large sums of money to the public and then ensure they remain unspent. I fear this may happen in this instance if a greater measure of flexibility and discretion for householders is not introduced into the scheme.


Sunday, September 7, 2008

Nearly dumb-struck

I have been all but dumb-struck for a number of days by the actions of my successor in the Exchequer.

Mr Darling's candour is admirable in stating that the economy is the "worst it has been for 60 years". Yet I am struggling with the notion that governments can somehow govern the condition of the economy from year to year or that they can somehow defy the occasional hesitations that may cause temporary misery in the economy. I do not dispute that governments bear responsibility for the overall health of the economy; indeed it is apparent to me that many mistakes have been made in recent years. The foremost amongst these would appear to be to allow the pound to float freely, at the mercy of financial speculation, following the disintegration of the Gold Standard. It is apparent that Britain would be less vulnerable to international currents had the currency been shackled to our European neighbours at a constant rate.

I have read a number of attempts to understand the mind of Mr Darling in recent days. As always Mr Bagehot presents an admirable argument:  that it is part of the natural process of governments with a great deal to hide.It is also argued that Mr Darling seeks to distance himself from his Premier. I can fully understand his sentiments and would wish to support the Chancellor's independence. This, however, is a right honourable gentleman who has shown little independence from the Premier during his brief stay in office.

Indeed there is little sign that the measures proposed over the last week represent a coherent vision of political economy held by the Chancellor. There is a little something for house purchases, a temporary removal of tax at the bottom end of the range of prices. There may be help with capital for purchasers and for those who cannot afford to repay their loans. This may provide relief in this sector although  the question of whence the capital to assist the housing market may be found is outstanding.

From there public attention has turned to the rising cost of energy and those poor people who may face hardship as a consequence. It is an admirable notion that the businesses that provide fuel should provide relief even though the figures may not support the rhetoric. I am indebted to the Local Government Association for informing us that payments to shareholders to these companies increased by some £257 million in the last year.  This economic surplus is a large sum but at the present level of population equates to about £20 for each household. If it were directed to the poorest third of households it would be worth about £60 each. It would be possible therefore to provide considerable relief to the neediest households if such sums are still available; and indeed it is reasonable to assume they are.

I would prefer that this were done by means of voluntary levy. The populist concept of a "windfall" tax is not conducive to good government and is bound to undermine investment confidence and deter business. Nevertheless the present government has rushed to exclude this possibility when it would have been wise to retain some means of influence over the energy sector. But this is a government that seeks to control too many events and has found itself in control of too few of them. It shows every sign of panic at a time when national leadership has most need to present a calm facade.

Aequam memento rebus in arduis servare mentem.