Stick or twist?

There is an economic argument going on in the background.

Some pundits cannot wait to plunge us into trouble.  Like this one:

The Bank should be putting up rates now, in a gentle and gradual manner. The money supply is growing at a reasonable rate; nominal GDP is expanding  nicely; employment is soaring; wages of some professions (including brickies and architects) are shooting up; there are already some skill shortages; and the current account deficit is huge, suggesting that aggregate demand is too large compared to supply. Monetary policy should be forward-looking: decisions today have an effect with long and variable lags, so waiting until there is a problem is always too late. Sure, the UK economy remains smaller than at peak; but that will change before the year is up. It is a mistake to look merely at the macro effect of interest rates: the impact on big aggregates such as consumer prices, output or employment. The micro effect also matters hugely – the allocation of credit, capital and labour between different companies and all the myriad decisions that make up an economy are being hugely distorted by artificially low official interest rates. The economy is normalising – monetary policy must follow suit.

On the other hand, some take what appears to me to be a more sensible line:

Chris Giles at the Financial Times has argued that the Bank of England will have to raise rates soon, because recent job growth has been accompanied by low productivity -- a situation that could produce inflation unless the bank acts. The informal Shadow Monetary Policy Committee, which meets at a free-market think tank, has been calling for an interest-rate increase since February last year, when there was no recovery in sight.

What the policy hawks fail to recognize is how damaging a premature tightening could be. As Oxford Professor Simon Wren Lewis has noted, debt-service payments still occupy a large portion of households' budgets. In the absence of an adequate increase in income, even a small increase in interest rates could trigger defaults and foreclosures on a grand scale. Why would anyone intentionally precipitate such a crisis unless coerced by the prospect of rampant inflation?

Why indeed?

SNAFU

There once was a period of time, perhaps a brief period of time, but nevertheless there was indeed a time when a Minister of the Crown took responsibility for the actions of his department whether or not he was personally involved in those actions.  In the Crichel Down affair, Sir Thomas Dugdale resigned when the Ministry of Agriculture made a mess.

It is unlikely to happen nowadays, least of all as a result of the incompetence of the Department of Work and Pensions:

Thousands of people have been wrongly identified as liable for the bedroom tax, including some who now face eviction or have been forced to move to a smaller property, as a result of an error by Department of Work and Pensions.

Housing experts believe as many as 40,000 people could be affected by the mistake. The DWP says it believes only a "small number" of tenants are affected, which it estimates number 5,000.

All could be eligible for refunds worth on average at least £640 per claimant and millions in aggregate.

The error affects working age tenants in social housing who have occupied the same home continuously since 1996. An oversight by the Department for Work and Pensions (DWP) when drafting the legislation means that the housing benefit regulations dating from 1996 were not updated when the coalition legislated for the bedroom tax.

And so, another scandal sticks to the wall, with nobody accepting responsibility.

How not to do it

The Government's development of the universal credit system will become a case study to be examined in future decades as a classic example of systems development getting deeper and deeper into the mire, while its project sponsors maintain a wilful blindness to the absence of progress.  The Guardian charts the latest inanity:

Despite a scathing NAO report in September, Duncan Smith has been insistent that the project remained on time and on budget. In December he revealed a new plan for delivering the project.

Sources indicate that tensions between government departments spiked after Duncan Smith refused to restart the embattled project afresh – a move that would have incurred massive write-off costs and political embarrassment.

Duncan Smith is understood to have insisted on a "twin track" approach – keeping current universal credit development going to prove that claimants could use the service before the 2015 election – while ordering money and time to be ploughed into a web-based system that did not rely heavily on jobcentre staff to fill in claimant benefit details.

According to the newly approved plans, hundreds of thousands of benefit claimants will then be transferred from one design of universal credit programme to the other once the digital design is ready some time after the general election.

Plan A won't work, Plan B won't work, and transferring data from Plan A to Plan B will be nightmarish.  It would be laughable if it were not so serious.


 

On the one hand ...

The size of the state pension will be maintained:

The prime minister has vowed to guarantee annual increases in the state pension until 2020, and marked them out as the only welfare spending to be exempt from the forthcoming cap if the Conservatives win the next election.

On the other hand, don't expect any cheer on other old age benefits:

David Cameron's pledge aims to reassure older voters that their payouts will continue to rise in line with inflation despite a squeeze on other benefits such as winter fuel payments, TV licences, and free bus passes and prescriptions.

Somehow, I don't believe that pensioners will be terribly pleased ...

In memory of John Fortune

It's far from cheap to feed your habit

Here are the Colorado prices for the newly legalised sale of pot:

Below are some of the options provided by licensed sellers (all prices are subject to an additional 21% sales tax).

• Pre-rolled joints, $10 each. A typical joint contains less than 1 gramme of marijuana.

• 1 oz Indica or Sativa buds: “best”, $179; “better”, $169; “good”, $159.

• Glass pipes: $15-$30.

• Marijuana-infused pomegranate “elixir” drink (75mg): $14.

• Marijuana spearmint dew drops (100mg): $20.

• Marijuana truffles (50mg): $10.

• Marijuana chai mints (100mg): $11.

• Marijuana massage oil (100mg): $14

• Marijuana pain relief lotion (100mg): $18.

• Marijuana bath soak (100mg): $18.

    (And no, you cannot get them by mail order.)

 

Power corrupts

I do not know if the Labour Party is correct when it argues that the energy companies are over-charging consumers.  The miasma engendered by claim and counter-claim makes it difficult to see what is going on,  The Guardian reports:

Households may have paid £150 over the odds for their electricity over the past three years because energy companies bought their power for almost £4bn more than the average market rate, Labour has claimed.

In a new analysis of official figures, the Labour party, which has pledged to freeze prices for 20 months if it wins the general election in 2015, said the big six energy suppliers appear either to be inflating their prices to make extra profits for their own power plants, or striking very expensive deals to the detriment of consumers.

Caroline Flint, the shadow energy secretary, said she could demonstrate that the energy giants – which supply 98% of households in Britain – have been buying electricity at a far higher price than they could get on the open market. This amounts to about £50 a year per household for the last three years for which data is available, she said.

But at least the Labour Party is questioning the practice of the energy companies.  Does anyone believe that the Government would have done anything if Miliband had not raised the matter of a price freeze last autumn?  And would it be unfair to ask what Ofgem, the supposed regulator, has been doing?

Too much Christmas pudding?

Some people might be surprised that Chloe Smith MP thinks she has the answer to political disengagement:

Responding to fears about disengagement by young people from politics, the Tory MP Chloe Smith, a former minister at 31, told the Guardian there was a danger of a political disconnect between young and old, with "generations far apart and not talking to each other". One of her ministerial briefs included improving voter engagement.

"I think there is an existential problem coming for traditional forms of British democracy, which it is in everyone's interests, all of us as democrats, to respond to," she said. "We have to demonstrate what politics is for, why a young person's individual action in voting matters."

But it gives me the opportunity to show again her famous Newsnight interview in which she demonstrates her personal commitment to openness and transparency:

It's not swings and roundabouts

It's going to happen sooner or later.  The Independent reports:

More people believe they would be helped than harmed by a rise in interest rates, according to a new survey.

A leading pollster said the finding suggested that a pre-election rate hike could actually improve David Cameron's chances of staying in Downing Street, rather than damaging them, as is widely thought.

Some 31 per cent of those questioned by YouGov for The Times said that a rise in interest rates would leave them personally better-off, against 23 per cent who said they would be better off with lower rates and 32 per cent who thought it would make little difference either way.

...

A rise in interest rates would hit mortgage-holders, making it more difficult for home-owners to pay back loans. But it would be good for savers, particularly pensioners who have suffered from poor rates of return on their nest-eggs over the period since the crash of 2008.

I can readily believe that the banks would hike mortgage rates in an instant.  I am a lot more sanguine, however, about the proposition that interest rates for savers would go up as quickly  

The Ebenezer Scrooge de nos jours

According to Wikipedia, Scrooge is 'a cold-hearted, tight-fisted and greedy man, who despises Christmas. Dickens describes him thus: "The cold within him froze his old features, nipped his pointed nose, made his eyes red, his thin lips blue, and he spoke out shrewdly in his grating voice ..."'.  He is 'a coldhearted miser with nothing but contempt for the poor, and who despises Christmas as a "humbug"'.

In this season of goodwill to all men, there is one politician who appears to be making a deliberate attempt to adopt Scrooge's mantle.  The Observer reports:

Iain Duncan Smith, the embattled work and pensions secretary, is refusing to meet leaders of the rapidly expanding Christian charity that has set up more than 400 food banks across the UK, claiming it is "scaremongering" and has a clear political agenda.

...

Duncan Smith began his reply by criticising the "political messaging of your organisation", which "despite claiming to be nonpartisan" had "repeatedly sought to link the growth in your network to welfare reform". He said his department's record in processing benefit claims had improved and should do so further with the introduction of universal credit.

He rejected any suggestion that the government was to blame. "I strongly refute this claim and would politely ask you to stop scaremongering in this way. I understand that a feature of your business model must require you to continuously achieve publicity, but I'm concerned that you are now seeking to do this by making your political opposition to welfare reform overtly clear."

The standoff will further anger church leaders who were incensed by reports last week that the government had turned down a potential pot of £22m of EU funding for food banks, on the grounds that the UK did not want to be told by Brussels how to spend money for European structural funds.

In Dickens' novel, Scrooge eventually sees the error of his ways, persuaded by the three Ghosts of Christmas.  I regret to say that Duncan Smith is unlikely to be amenable to ghostly intervention.

     

Some you win, some you lose

It's just that I always seem to lose more than I win:

Top 5 FTSE 100 performing shares 2013

Intl Consolidated AI +106.439%

EasyJet plc +96.21%

Hargreaves Lansdown +90.495%

Sports Direct International +86.417%

ITV plc +79.761%

Nope.   Didn't pick any of them.

Bottom 5 FTSE 100 performing shares 2013

Fresnillo plc -60.030%

Antofagasta plc -37.643%

Randgold Resources -33.92%

Tullow Oil -33.902%

Anglo American plc -32.682%

Yes, I spent money on three of them.

That'll teach me some humility.

 

What was all that about?

Procrastination.  Prevarication.  Why make a decision today when you can leave it until tomorrow?  If it's that important, it can wait.

There are still three possible sites for new London airport runways: at Heathrow, Gatwick or the Thames estuary. The news is at least a quarter of a century old. Connoisseurs of British indecision will greet Sir Howard Davies's announcement on Tuesday as an all-time, blue-chip, 24-carat masterpiece of the genre. We are back where we started.

...

Half a century of inquiry has sought new runways for London, while Birmingham, Manchester and other airports have quietly expanded. Each new outburst of London airport hysteria sends politicians running for the hills of indecision. After Tuesday, those hills are more crowded than ever.

As Phil Ochs put it:

Oh, the shadows of doubt are in many a mind

Lookin' for an answer they're never gonna find

But they'd better decide 'cause they're runnin' out of time

For these are the days of decision

Or not, as the case may be.

Panicked xenophobia

A bit late, perhaps?  And would it not be illegal to impose separate rules discriminating against EU migrants, compared with domestic claimants?  The Guardian reports:

David Cameron is rushing through a block on European Union migrants' access to benefits from 1 January, the politically fraught date when the remaining work restrictions on Romanians and Bulgarians will be lifted in the UK.

From New Year's Day all jobseekers from the EU will have to wait for three months from their arrival in the UK before they can apply to claim any out of work benefits, Downing Street announced.

The scrambled clampdown betrays the extreme nervousness in Downing Street at the possible reaction of potential Tory voters – and increasingly restive Tory backbenchers – if the public decide ministers have failed to take every measure possible to prevent Romanians and Bulgarians travelling to Britain en masse.

David Cameron said he believed the restrictions would "make the UK a less attractive place for EU migrants who want to come here and try to live off the state".The prime minister added that he wanted to "send the clear message that whilst Britain is very much open for business, we will not welcome people who don't want to contribute".

Is there any evidence that Bulgarians and Romanians will come to the UK in order to claim benefits?

This lady deserves whatever success comes her way

The Guardian reports:

Celebrity chefs are off the menu for a supermarket which has chosen one of the faces of austerity Britain as its new advertising star.

Jack Monroe, a 25-year-old single mother whose stories of struggling to feed her son for £10 a week while on benefits have propelled her to national fame, will front Sainsbury's new campaign from next month.

Her splendid blog is here.

   

It's a flea-bite

The Guardian reports:

Lloyds Banking Group has been fined £28m for putting branch staff under such pressure to sell products in order to claim bonuses or avoid being demoted that they may have mis-sold them to customers.

£28 million may sound like a lot of money, but it is peanuts to Lloyds.  With annual revenues of over £34 billion and a net loss of £1.43 billion, the odd £28 million is neither here nor there.  Even with the additional bill for compensation, Lloyds admits the effect will not be material.

Lloyds says it expects to spend up to £200m settling the fine and other issues involved. It says this won't have a "material impact on the group", but it is likely to hit the bank's profitability and as part owners that means taxpayers will take a hit.

Hummph.  As the taxpayers have yet to see any dividend returns on their investment, any "hit" that they suffer is entirely notional.  In any case, as part owners of the bank, they or their representatives (are you listening Treasury?) should have been aware of what was going on, and put a stop to it.

So will the fine deter them from repeating their alleged crimes?  Do pigs fly?


 

The Scottish health police would be appalled

I went down to the tobacco shop yesterday to buy stamps.  In Spain, cigarettes and stamps are sold, more or less exclusively, in special shops, rather than in supermarkets or post offices.

It is my habit to visit the local tobacco shop once a month where I buy three cartons of ciggies (at a price considerably below that in the UK).  The cigarette packets are much the same as in the UK, although the admonitions (Fumar Mata) are of course in Spanish.

For most of this year, my preferred brand has been on special offer, which means that - as the prices are set by central government - my three cartons comes with a half-bottle of Smirnoff vodka at no extra charge.  Unfortunately (or fortunately), vodka is not one of my favourite tipples,  So my drinks cabinet now sits proudly in the corner, displaying eight half-bottles of vodka.  Now I need only find someone to whom I can give them away.

I suppose the authorities in Scotland would look askance at any proposals to give away free booze with ciggies.  Shame really ...

 

Quote of the day

Samantha Cameron, allegedly (here):

"Well RIP Mr Madeeber which is what Dave and me have always called President Mandela since we became bffs, it is hard to put into words for people who never met him but Melanie Brown summed it up, he was sooo amazing, also like Naomi says, incredibly kind to models & do not even get Alexa started on his loincloths #inspirational #styleicon? Plus the way he was so uber-forgiving, eg if you accidentally asked him what Mary Seacole was like he would be like, happens all the time :) & basically this total wound-healing role model? Dave is right, anyone who says Madeeber did not totes forgive him for that fact-finding tour everyone keeps going on about needs to go seriously high on the shit list, I know, why would you expect Labourites to understand that major South African lolz = the path to reconciliation but basically there are limits, as in if anyone says another WORD about our Christmas card *shakes fist* I will literally explode?"

There's austerity and austerity

Does your heart not bleed for the poor lamb?

Princess Michael of Kent has explained how she and her husband have been hit by austerity; meaning they can no longer dine out as it's "too extravagant".

The Princess, who is an interior designer and author, told The Times in an interview to promote her debut novel: "I am in very austere economic times too, thank you very much!"

"We’ve cut back dramatically. I mean we never go out to dinner unless we go to somebody’s house. We never go to restaurants. That’s too extravagant."

The Princess, who lives with her husband at Kensington Palace, added: "We invite people here [Kensington Palace]. I cook. Well, if I’m giving a dinner party I get in help."

She also told the interviewer of her love for budget carrier easyJet saying: "it’s the only direct route to Biarritz."

"We always fly tourist-class anyway in Europe. For long-haul we go club,” she added

   

.

Nice anecdote

From The Independent (here):

Gordon Brown, whose famously rare visits to the Commons make it easy to forget his power to hold the chamber when he is on form, eloquently declared the former South African President as true to Churchill’s mantra that courage is the greatest virtue of all. He quoted the passage Mandela had marked from Julius Caesar in the complete works of Shakespeare so treasured on Robben Island: “Cowards die many times before their deaths; the valiant taste of death but once.”

And on Mandela’s fight against Aids he had been “an activist who became a President and a President who became an activist”. But Brown also got laughs across the House for describing how, when Prime Minister, he had been told by Mandela that he wanted the Queen to invite an African rain princess from his tribe to a reception at Buckingham Palace and had got nowhere via the diplomatic channels. “So he decided to telephone her personally,” said Brown. “The story goes that the conversation – words that only Mandela could use, began: ‘Hello, Elizabeth. How’s the Duke?’ And while the official minutes say that the Queen was non-committal, he got his way.”

   

Wig and gown

Does this remind you of King Canute seeking to hold back the waves?  Or do lawyers just want to keep modern reality out of their rule-driven little world?  The Guardian reports:

Jurors should face up to two years in prison if they search the internet for information about cases beyond the facts revealed in court, the Law Commission has recommended.

Judges should also be given powers to remove jurors' mobile phones, and all internet-enabled devices must be confiscated during jury room deliberations, according to the commission's proposals for reforming contempt of court regulations.

The report suggests that the attorney general ought to take on responsibility for ordering the media to remove previously published stories from websites if they are deemed to jeopardise a fair trial.

...

Responding to the recommendations, the attorney general, Dominic Grieve, said: "Juror contempt is a serious risk to justice but people are often not aware of the consequences."The Law Commission's proposal to make it an offence for jurors to search for information about their case on the internet or by other means would make the position absolutely clear and would, I hope, reduce the need for future prosecutions.

"[The law Commission has] attempted to strike a very careful balance between freedom of expression and the right to a fair trial. I will now need to discuss the recommendations carefully with my government colleagues before we respond formally."

I can see the problem, but I rather doubt that it would be desirable to restrict a citizen's access to information which is in the public domain.  Furthermore, judges - especially those sitting unassisted by juries - will be under no such restrictions, presumably on the basis that they are sensible enough to judge cases on the basis of the evidence heard in court,  Would it be impossible to ask juries to do the same, regardless of what they might have found out on the internet?

    

How to back yourself into a corner?

First, you establish an independent authority to determine the level of your pay and expenses and you make sure that it is truly independent, to the extent that you are unable to reject its recommendations.  But when it comes up with recommendations of which you do not approve, you are stuck with the options of either accepting those recommendations (and being utterly condemned by the public as greedy grasping bloodsuckers on the public purse) or abolishing the independent authority which you set up in the first place.

Perhaps you might have thought more carefully about what you were doing before you did it?


 

Mixed messages ...

... from The Guardian.

Here:

If the unionists cannot articulate a new sense of British values and purpose, with which all the people of these islands can identify, the Scots may well vote for their auld country back again. It may be small. But it will be Scottish, and probably rather civilised and successful.

Chris Huhne displays an unexpected sympathy.

And here:

Scotland would immediately be ejected from the European Union were it to vote for independence in the forthcoming referendum, according to the Spanish prime minister, Mariano Rajoy, in comments clearly directed at Catalan nationalists who want the right to hold their own vote on secession from Spain."This is a fact, it's neither a value judgment nor an opinion, it's simply a fact. If part of a country integrated into the European Union leaves that country, then logically it would be outside the European Union, not because I say so, but because that's what the treaties say," said Rajoy, in an interview with theGuardian and partner newspapers from Spain, Germany, Italy and France.

Not unexpected, given Madrid's difficulties with Catalonia.  But what is alleged to be a simple fact is far from it.  The Treaties do not in fact specify what Rajoy says they do.  That is not to say the Treaties necessarily allow for an independent Scotland to remain part of the EU, but they do not obviously exclude the possibility.

    

How not to do a Scottish accent?

Always look on the bright side

Veering towards the optimistic, perhaps, but Neal Ascherson is unlikely to be way off beam:

What makes cheeky Salmond think an independent Scotland would be allowed to use the pound, or enter the EU, or be admitted to Nato? Well, the answer is another question: "if it comes to it", what sort of Scotland do you want as a neighbour? Does London seriously want to force a currency frontier at the border and screw up trade with England's second biggest partner? Does Brussels really want to expel a loyal member and accelerate the EU's disintegration? Does Nato want a new hole on its east Atlantic flank? No, if the Scottish people do vote yes in September (which is still unlikely), healthy opportunism will cobble up solutions to all these problems.

Mariano Rajoy might wish to put that in his pipe and smoke it.

The spirit of Christmas

Is Boris a thicko?

I have never been any good at IQ tests, so it may be that I find myself in the 16% of the population that Boris seeks to have dismissed to the outer darkness.  But what I remember of the conclusions of the controversy stirred up by Eysenck and his followers decades ago was that IQ test scores demonstrated little more than ability at doing IQ tests.  And even if there were a reliable measurement of intelligence (whatever you interpret intelligence to be), it is no more legitimate to dismiss or mock those of us with less of it than it would be to dismiss or mock those of us with lesser physical abilities.

To put it another way, would you consider Boris to be sensible?  Or wise?  Or well-balanced?  Or generous?  Or exhibiting any kind of empathy for his fellow human beings?

Quote of the day

From The Guardian.  Tony Blair (yes him) explains to Rupert (yes that Rupert) the circumstances of his alleged dalliance with Wendi:

"It was like this, Rupey. I just happened to be driving my Chevvy convertible down the Pacific Highway late one July night. The hood was down. The hot tub was calling. My shirt was unbuttoned to the waist and the soft summer breeze was blowing through my hair. I had the Eagles' Witchy Woman playing on the stereo and I was just, like, you know, chillin' out, wonderin' what more I could do for world peace and how much I could get away with chargin' for my next lecture tour."

 

Have Alex and Nicola worked this out?

Hey, it amounts to 670 pages.  Do you expect me to have read the whole thing?

But here's a bit you may find interesting.  From chapter ten of the document:

In the period between a vote for independence in the referendum on 18 September 2014 and independence day on 24 March 2016, agreements will be reached with the rest of the UK, represented by the Westminster Government, and with the EU and other international partners and organisations, on the issues set out in this guide. We are planning for independence in March 2016 to allow a realistic time for preparations and for the Scottish Parliament to take on the necessary powers.

...

Existing constitutional arrangements in Scotland will provide the basis for the transition to independent statehood, with additional powers transferred as soon as possible after the referendum, giving the Scottish Parliament the ability to declare independent statehood for Scotland in the name of the sovereign people of Scotland.

The key legislative steps towards independence will then be taken by the Scottish Parliament, following the initial transfer of responsibilities. As with the referendum, independence will be made in Scotland. Some parallel legislation, dealing with matters relating to the rest of the UK, will be taken forward at Westminster.

This early transfer will also enable the Scottish Parliament to extend the devolved competences of the Scottish Parliament and Scottish Government into all policy areas, including those currently reserved to Westminster, for the purpose of making preparations for independence.

Aye well.  So independence is to be made in Scotland (from girders?).  But it is clear from the above text that it will also depend upon the passage of Westminster legislation to (a) transfer additional powers to the Scottish Parliament and (b) deal with certain UK consequentials (including, I  imagine, the elimination of Scottish Westminster MPs) .  Assuming a yes vote in September 2014 referendum, how likely is it that the UK Government will amend its legislative programme to rush forward a bill to transfer those required powers so that it is enacted before the May 1915 general election?  I rather doubt that the UK legislative authorities will have worked up a bill in advance of the referendum, so that they would have to start from scratch in September 2014.  Even with the best will in the world, I cannot imagine that a complex and controversial constitutional bill (which would have to be taken on the floor of the house) could be drafted, introduced and processed through both houses of parliament in the brief period of six or seven months before a general election.  It might even be argued that it would be wrong to do so, in that it would be pre-empting decisions which might more properly fall to the post-May 2015 UK government.

So the necessary legislation would more than likely be the business of the new UK government formed in May 2015.  In practice that would mean that the bill might be expected to be debated and processed through the winter of 2015-16.  In which case it would be spring 2016 before the Scottish Parliament received the necessary powers to declare nationhood and to take "the key legislative steps towards independence".

Of course, it is just possible that Labour, Tories and LibDems will agree to facilitate matters by co-operating with the SNP to make these arrangements happen more speedily, but it does not seem probable.

And that is one reason why the proposed timetable for independence seems a bit iffy ...

 

Less bonking?

The Guardian reports:

The frequency with which Britons have sex has declined over the past decade, in what one researcher has suggested could be a "recession impact".

The third National Survey of Sexual Attitudes and Lifestyles (Natsal) found that, on average, people aged 16-44 have sex just under five times a month, compared with figures of 6.2 for men and 6.3 for women in the previous survey, in 2000.

Or maybe Britons are being more truthful?

Just like that?

The SNP is perhaps veering to the optimistic with regard to this timetable:

ALEX Salmond will this week announce that Scotland’s independence day will be 24 March, 2016, when he unveils his blueprint for breaking up the UK amid growing disagreement in the Yes campaign over plans to keep the pound.In the event of a Yes vote in next September’s referendum, Salmond proposes that Scotland will become a sovereign nation state some 18 months after the poll, on a day that marks the 309th anniversary of the 1707 Act of Union.

Assuming (somewhat heroically) that the referendum were to produce a "yes", eighteen months is not a long period of time, given the vast number of issues which would need to be resolved between the Scottish and UK adminstrations before any declaration of independence.  Furthermore, the UK administration would be most unlikely to take seriously any negotiations before the general election in May 1915; and, even after a new UK government had been elected, the prospect of detailed negotiations on matters such as debt repartition, oil revenues, defence responsibilities, currency unions, is unlikely to be one of its first priorities.  And should be we be proceeding to set up an independent state wihout sorting out where we would stand on membership of the EU and NATO, neither of which is renowned for speed of decision-making?

Domestically, there are even more tasks to undertake, from setting up a Scottish Treasury and Inland Revenue, a Scottish Ministry of Defence and a Foreign Office, to arranging for new elections on the basis that the present Scottish administration was not intended to form an independent government.  Do you really see yourself paying income tax to a Scottish Inland Revenue with effect from 16 March 2016?

Could all this happen within less than twelve months, as the SNP envisage?  Well maybe, but I rather doubt it ...

Knowing your onions

Not a lot of people know this.  Bloomberg reports:

Record onion prices and the soaring cost of rice and coriander are frustrating Reserve Bank of India Governor Raghuram Rajan’s battle to curb inflation while supporting growth in Asia’s third-largest economy.

The wholesale-price index for onions, a staple food for India’s 1.24 billion people, has climbed 155 percent this year, hitting an all-time high of 820.5 in September, according to the Ministry of Commerce and Industry. The index, set at 100 in 2004, has almost quadrupled in 12 months. A broader measure for food is up 19 percent in 2013, while spot prices for coriander climbed about 29 percent and basmati rice advanced 40 percent.

Yes, I know - it brings tears to your eyes.

   

Unanswerable questions of the week

From a letter to The Guardian:

What is it with George Osborne and hard hats? Not a week goes by without the chancellor appearing on the news clad in the outfit of a manual worker. Is he going through a crisis about his masculinity, or is this an attempt to divert our attention from his Bullingdon background? Perhaps the headgear is to protect him from the flak being hurled in his direction by critics who think that his Help to Buy scheme is economically misguided. Or does he just want to be in Village People?

   

The last word ...

... on Qatar's new sports stadium, whixh is somewhat inadvertently shaped:

... why not have 45,000 people crammed inside a woman's reproductive system? It's not like they haven't been there before.

   

Who's in charge?

Interesting problem, which is almost philosophical in nature, revealed by The Observer:

The government's drive to introduce more competition into the NHS is having the perverse effect of holding up the creation of world-class cancer treatment centres, the Observer can reveal.

Investigations show that individual hospitals whose roles would be downgraded under reorganisations are blocking moves to concentrate cancer services into fewer top-performing specialist centres, by claiming such mergers would be anti-competitive and would reduce patient choice.

NHS leaders, who are deeply concerned about the effect that legal disputes are having on progress, have admitted some cancer units are being allowed to carry on operating even though they do not meet the latest official guidelines on how services should best be organised.

In one case, a "rationalisation" of cancer services in and around Manchester, proposed by NHS England as a way to improve "outcomes" to world-class levels, is being challenged and held up by complaints from south Manchester NHS foundation trust and Stockport NHS foundation trust on legal grounds.

In the good old days, before the Coalition (and indeed New Labour) got their grubby mitts on it, the NHS was for most purposes a top-down, centrally controlled service where patients (customers?) were expected to take what they were given and where priorities were determined (and rationed) by Ministers and a few health bureaucrats at the centre.  This is still the case in Scotland.  This system worked more or less adequately for fifty years from its inception in the 1940s.

The attempt to introduce competition/patient choice into the system was, rightly or wrongly, a reaction against the dead hand of central control.  But of course Ministers and bureaucrats wanted to retain the option of central direction where they deemed it necessary.  Alas, once you give "the little people" a taste of freedom, they insist upon exercising it.  And as competition spreads further into the NHS, we can expect further local/central conflicts to emerge.

 

Carney's conundrum

The Governor's work is never done.  Just because the recovery has "taken hold" does not mean that he can relax.  The Guardian obliquely hints at his problem:

The Bank of England will be in no hurry to raise interest rates during the key pre-election year of 2014 despite being taken aback by the strength of the economy's recovery over the past three months.

Mark Carney, the Bank's governor, said recovery had "finally taken hold" but that Threadneedle Street believed an early end to ultra-low interest rates would threaten business and consumer confidence.

Carney stressed that the Bank could deal with the threat of a house-price bubble without the need for dearer borrowing and that there was no guarantee its nine-strong monetary policy committee would raise rates even when unemployment fell to 7%, the level at which an increase in the cost of borrowing will first be discussed under the governor's forward guidance plan.

It is all very well to be in no hurry to raise interest rates but action cannot be postponed indefinitely.  Even now, inflation remains above target.  If house prices continue to race ahead, and bubbles continue to develop on stock markets, Governor Carney will be forced to dampen that irrational exuberance and take the punchbowl away.  He will then find himself between the Scylla of letting the economy get out of control and the Charybdis of rising interest rates with all the pain that offers to middle England mortgage-holders.  Then we will see if he is worth all the money that Chancellor Osborne agreed to pay him.

 

Mine is bigger than yours

Childish argument:

One World Trade Center has been officially crowned as the tallest building in the western hemisphere after a row that threatened to embarrass the building's designers and see it demoted to second place.

The debate centred over whether the 408ft steel structure on top of the New York skyscraper was a spire or an antenna. Supporters of the Willis Tower in Chicago argued it was an antenna, and so the building was only 1,368ft, rather than its stated height of 1,776ft. 

But the 30 members of the Council on Tall Buildings and Urban Habitat's "height committee", who met on Friday, ruled that One World Trade Center reaches 1,776ft and its claim to be the tallest building in the western hemisphere is legitimate. 

"We were very clear that it was a spire and not an antenna," said Timothy Johnson, chairman of the Council on Tall Buildings and Urban Habitat at a press conference in New York City on Tuesday. “Spires, we feel, are part of the architecture of the building that will not only be there permanently but have a significant effect on what the building is perceived to be,” Johnson said.

Put a flag on the spire and see if anyone salutes it?

Playing the man

Are pro-union MPs motivated solely by ignoble selfish interests?  The Observer seems to think so:

The reaction of some Scottish politicians over the loss of 850 jobs on the Clyde was quite sickening. The new Lib Dem Scottish secretary, Alistair Carmichael, and the Glasgow Labour MP Ian Davidson, both of whom will lose their highly paid Westminster jobs if Scotland votes Yes, are obviously feeling the heat. Carmichael, one of the most obscure figures in the world's most obscure political party, stated that an independent Scotland would not be awarded any future UK defence contracts. The Glasgow Labour MP John Robertson said baldly: "No yard, no ships" in an independent Scotland.

All of them seemed to be inviting the UK government to kill shipbuilding on the Clyde as a punishment for Scotland exercising its democratic right to say Yes. Davidson actually stated that the loss of "only" 850 jobs on the Clyde – 20% of its workforce – was a cause for celebration.

These three wretched, wretched men have put their own soiled political careers above the needs of those whom they are supposed to represent. It is all about hanging on to their fat Westminster salaries after September 2014. Instead of putting their careers before the future of Scottish shipbuilding, they ought instead to be concerned that, two weeks after Grangemouth, another rich and powerful magnate can force governments to play dice with one of Scotland's great industries.

I would contend that it is possible to disagree with one's political opponents without imputing baser motives. It seems not unlikely that Messrs Carmichael, Davidson and Robertson genuinely believe that Scotland's best course is to remain part of the United Kingdom.  That does not make them right.  By all means, attack their views and opinions, but do so on the basis of reasoned argument rather than personal vilification.

A rather maudlin tale

The bear who had never seen Christmas?

Should I buy shares in Twitter?

CityAM reports:

SOCIAL media colossus Twitter priced its initial public offering (IPO) at $26 (£16.17) per share late last night, ready to float today on the New York Stock Exchange (NYSE).

The pricing is a dollar higher than the upper range of the previous attempt to value the company, and suggests a total valuation for Twitter of about $18bn.

Earlier this month Twitter announced that it was planning to sell 70m shares at $17 to $20 each, but lifted the price in response to buoyant demand. The price was then boosted to $23-25 per share, implying a market valuation of about $17.4bn, before yesterday’s hike.

Grey market trading on IG Index’s market during the middle of October suggested that the company could be valued at closer to $30bn.

Leaving aside the merits (or demerits) of investing in a company which has yet to make any profits, there is a structural barrier to successful investment in US shares.  If you buy shares in a UK-listed company, you only need to worry about whether the price will rise or fall; the value of the shares need only rise by enough to cover the fixed acquisition costs (stamp duty and admin fees) in order for you to make a profit.  Buying American shares is a trickier business:  the pounds you use for share purchase need to be converted into dollars, a process which cost you up to one or two per cent of their value, and you will face a similar cost after selling the shares when converting back into sterling.  That alone adds substantially to the difficulty of securing a profit.  You also need to keep an eye on the movement in exchange rates; the value of the shares may rise but this may be obliterated if the dollar pound rate moves the wrong way.

Of course, you may choose to open a trading account in the US and deal in dollars on a longer-term basis.  But, if your home currency is essentially the pound sterling, who needs all the hassle?

Nevertheless, I did give it a try (once) and bought some shares in Amazon.  I was lucky and emerged with a small profit.  But I resolved to stick to UK-listed shares in future.

Stick or twist?

The deal on the naval shipyards poses a problem for the SNP.  The Guardian sets it out somewhat brutally:

Vote no to independence, and Scotland's shipyards can continue to get new orders from the UK Ministry of Defence, and be in pole position for the construction of the Royal Navy's new frigate later this decade. Vote yes, and the Scottish yards are likely to suffer the same fate as Portsmouth, with thousands of job losses in areas of already high unemployment.

And looming above the shipyard question is Trident.  The nationalists are apparently determined to banish the so-called nuclear deterrent from Scottish shores, whereas a London administration is equally determined on its retention.  Throw in the fact but there is nowhere else in the UK where it can be feasibly based, and there emerges an impasse which would be central to negotiations following a yes vote.

Nor can the SNP leave the issue on the shelf during the run-up to the referendum.  Can the Scottish people be expected to vote for independence under the implied threat of massive job losses at defence establishments if the SNP insists on telling London where it can stick its nuclear submarines?  On the other hand, would it be possible for the nationalists to undermine a central plank of their appeal by offering some kind of deal whereby a foreign power in the shape of the London administration could keep its nuclear bases in Scotland, even if such a deal opened up the possibility of better treatment for Scottish shipyards and other military establishments and of longer-term co-operation between Edinburgh and London on defence matters?

It’s a difficult choice ...

As others see us

Bloomberg has been reviewing the UK political scene, not unfairly, I think:

... the U.K.'s ideologically driven politics of class warfare are back after a brief respite during the booming Tony Blair years. In the space of a few weeks, Miliband has proposed a price freeze for energy companies and a cap on the interest rates that lenders can charge, as well as steps to increase the minimum wage, reduce the number of low-skilled immigrants coming to the U.K., and set up state-backed regional banks like in Germany.

...

I suspect that unless living standards start to rise substantially in the next year (the current increase in economic growth rates won't cut it), Miliband's back-to-the-future case for change will be hard to defeat at the next election in 2015.

The honest answer to most of Miliband's proposals is that they address only the symptoms of a wider problem: productivity in the U.K. is falling, business investment is anemic, and the high value industry in which the U.K. excels -- finance -- is still tangled in the debt crisis it helped to create. The answer to these problems is to invest more, raise productivity, fix the banks and diversify the economy. Yet these things are hard to do and don't make a good election manifesto.

...

The bottom line is that real wages are falling and a growing number of people can't afford basic utilities that are taken for granted in a developed economy. Prime Minister David Cameron and his government haven't done enough to speed the recovery, and Miliband has some of the right answers, such as his focus on vocational training. Yet many of his proposals, such as making it harder for companies to fire employees, betray old interventionist reflexes that will turn a cost-of-living crisis into a jobless one.

What?

Oh yes, Beowulf, the great Anglo-Saxon epic (strictly speaking, it is written in the Anglian dialect).  All this over the meaning of the first word:

It is perhaps the most important word in one of the greatest and most famous sentences in the history of the English language.

Yet for more than two centuries “hwæt” has been misrepresented as an attention-grabbing latter-day “yo!” designed to capture the interest of its intended Anglo-Saxon audience urging them to sit down and listen up to the exploits of the heroic monster-slayer Beowulf.

According to an academic at the University of Manchester, however, the accepted definition of the opening line of the epic poem – including the most recent translation by the late Seamus Heaney - has been subtly wide of the mark.

In a new paper due to be published this month Dr George Walkden argues that the use of the interrogative pronoun  “hwæt” (rhymes with cat) means the first line is not a standalone command but informs the wider exclamatory nature of the sentence which was written by an unknown poet between 1,200 and 1,300 years ago.

According to the historical linguist, rather than reading: “Listen! We have heard of the might of the kings” the Old English of “Hwæt! We Gar-Dena in gear-dagum, þeod-cyninga,  þrym gefrunon, hu ða æþelingas  ellen fremedon!” should instead be understood as: “How we have heard of the might of the kings.”

My dear old Anglo-Saxon lecturer used to argue that, as the poem was meant to said aloud, “hwæt” was nothing more than the bard clearing his throat before starting the poem proper.

     

The goalkeeper's head and shoulders

I blame those shampoo ads. He has never been the same since. The Guardian reports:

Joe Hart has been dropped by Manchester City for Premier League game against Norwich City but the goalkeeper is determined to win his place back and is not considering his future with the club, despite the decision potentially having consequences for the Englishman's World Cup hopes next summer.