Monarchy reform: where's the bigger picture?

Just attempting a blog post while on holiday in a surprisingly sunny Wales, using the Google G1 phone. This is a bit awkward to use for long posts as while it offers a full QWERTY keyboard it's tiny, so no writing "War and Peace on this device. You'll probably have to put up with typos etc for a few days. And posting a link is fiddly, so I wwon't bother much.

Anyway, just to say that Gordon's conversations with ol' Thin Lizzie from House of Windsor about changing the rules of succession and abolishing the rule that says the monarch can't marry a Catholic are fine as far as they go but do miss the point a bit. For sure, the current rules are discriminatory. But the whole concept of monarchy is pure discriminaation based on birthright. The French and the Americans sussed this 200 years ago. So why. Are we still scuttling around in the dark ages? Abolish the whole caboodle and let's have president Jade Goody or whoever the living equivalent is. Preferably chosen by a tv phone-in. I like it. Time for fine home-cooked mexican food and farm perry @7% abv...

Dean Stockwell's finest hour

Watched the finale of Battlestar a couple of days back on iTunes.

A feature-length special: 2h20m of BSG. Split into 2 parts (a single episode and a double episode) when aired on Sky (in the UK) and the Sci-Fi Channel (in the US), idiotically. Split into 3 parts on iTunes.

In the absence of spoilers, what to say? Well, IMHO, it's great. My favourite part is the last contribution of Dean Stockwell, about 2/3 of the way in. You'll know it when you see it.

Stockwell really needs to have his own series - a bit like Larry David in Curb Your Enthusiasm.

He'll be back, of course, in the prequel movie The Plan, scheduled for later in the year. Prequels are difficult things to get right (hello George Lucas) for obvious reasons: dramatic tension tends to disappear down the plughole when you know what's happening next. (Which makes it strange that people still watch Manchester United, but there you go...) That's not a hard and fast rule though - I do consider Twin Peaks: Fire Walk With Me one of the greatest movies of all time, despite being a prequel.

Right. Now BSG has finished I won't be watching much TV so I really must get back to writing about the economy, which is in something of a death dance these days... I'm on holiday next week but the Google G1 phone is doing it for me in terms of blogging while away, so hopefully expect to see a good post rate. Speak soon.

Nice BSG review with particularly fine spelling mistakes

Still on a Battlestar Galactica tip: nice review of the series from Richard Vine of the Guardian here.

Complete with classic Grauniad spelling mistakes... 'cylon' misspelt as 'cyclon' twice. Isn't that a kind of washing machine? Well, a toaster was used as a plot device in Season 1...

Back to the economy forthwith.

Battlestar: just 2 episodes to go

The presence of Battlestar Galactica Series 4.5 (which would more sensibly be known as "Series 5" given the gap between the first and second halves of Series 4 due to the 2008 writers' strike) on iTunes means that it has been possible for those of us who don't want to pay subscription money to Rupert Murdoch to watch the shows without having to wait months for the DVD release, or resorting to P2P sites.

Given that I'm pretty busy with work, allotment gardening, music and writing stuff like this, it's got to the stage where Battlestar is pretty much the only thing I watch regularly on TV (well, actually as a download on a monitor, but the only thing intended for TV that I watch anymore.) And I will sure miss it when it is gone.

I won't say much about series 4.5 due to not wanting to give away spoilers for those of you who haven't seen it yet. But, overall, this is up to the standard of the rest of the series and I can't wait to see the final two episodes (Daybreak Part 1 airs tonight in the US and on Tuesday in the UK, with the double-length Daybreak Part 2 airing a week later). I'm not giving much away by saying that the mood of these final episodes is pretty grim - this show started dark and has gradually dimmed to pitch black. Star Trek it ain't.

If there's been one slight problem with the final run of episodes (and I'll return to this in more detail once the whole thing is out on DVD and I'm less worried about spoilers), it's that there has often been so much plot to get through that some of the episodes have had to rush certain things and keep certain elements of the story more offscreen than would be ideal. It's a huge contrast to Season 3, where the second half in particular seemed to be stretched out to turn 13 episodes' worth of material into 20. This time round they could have probably supported 13 episodes rather than 10 in this half of the season. I guess budgetary constraints and network programming were the reasons they decided to stick with 10 (although if you include the prequel The Plan which will air in a few months' time and the fact that Daybreak Pt 2 is double length, Season 4.5 is effectively 13 episodes long anyway...)

The slightly rushed feel of this season is a minor problem but it's been a bit compounded by weird editing decisions. One recent episode (I think it was "Deadlock") featured around six or seven shots of Admiral Adama walking round a particular part of the battlestar (I won't say what's being done in the scenes as it gives away too much about the likely conclusion of the show). But it was extremely repetitive and a weird use of scarce screentime when there were more important things that could have been shown instead, but presumably had to be cut for time (or maybe there wasn't the budget to film them?)

Series creator Ron Moore's podcast commentaries (also available from iTunes or from the website at SciFi.com) suggest that several of the episodes from this final batch will be extended when the DVD is released later in the year, and that should help a lot.

The main 'problem' with Battlestar, if one can call it that, is that other recent sci-fi series look extremely mediocre in comparison. I tried watching a couple of episodes of Star Trek: Enterprise on Virgin 1 the other day and they were almost unwatchable - it looked so clunky and plastic next to BSG, despite being only a few years older. Partly that may be just because Enterprise was crap from the word go - I dunno. Maybe it was Scott Bakula - Quantum Leap always sucked as far as I was concerned, although Dean Stockwell was great (and he's great in Battlestar too.

Certainly the trailer for Star Trek XI which I saw when we went to see Watchmen earlier this week (and more on that in a later post hopefully) looked good, although a good trailer is absolutely no guarantee of a good movie (and indeed vice versa).

Well, I hope you enjoyed reading about Battlestar - I just HAD to blog about something other than the global economic crisis just for a change, to stop myself going nuts.

A small beaker of electoral death

Last night's Political Spot on Channel 4, presented by Labour, was the weakest party political I have ever seen. It was a spoonful of electoral suicide. I can't imagine that anybody - even the people who appeared on the broadcast - came away more likely to vote Labour. A lot of people probably came away with a steely resolve not to vote Labour.

First up was the reliably charismatic (ha ha!) Alistair Darling. Followed by everybody's favourite cabinet minister, Hazel Blears. And then Geoff "I was in the front line of the Iraq war... at least at the despatch box" Hoon. All of them spouted statistics about extra public services which people will either ignore or won't believe, whilst attacking potential spending cuts by the Tories which sounded microscopic to me. (Figures being mentioned were mostly in the region of £100-£200 million, which is neither here nor there in a public spending sense.) It's come to a desperate pass when Margaret Beckett is the best thing about a PPB.

Poor old Margaret... overlooked for the party leadership in 1994, immortalised in the 1970s volume of Alan Clark's diaries as "sexy little miss-horse-face from Lincoln" (or some similar compliment/putdown). Doing the housing minister brief she must be reminded of the words of Ozzy Osborne from Decline of Western Civilization Part 2: The Metal Years:

You meet a lot of people on the way up: don't f*** with them 'cos you meet them on the way down as well!

Actually, that quote could apply equally to the New Labour project as a whole. I watched some of the Dispatches programme that followed the PPB, until the Taxpayers Alliance (actually the Taxcutters Alliance) got too much exposure and I had to switch over. It was basically attacking government waste - an easy target to be sure. Journalist Jane Moore, who fronted the programme, was right to point out that the NHS IT scheme is an expensive failure, that MoD procurement is a disastrous mess, and that the tax credits scheme was (at least initially) an administrative fiasco. I hope the programme then went on to talk about PFI, the biggest public sector financial scandal (and potentially the most long-lasting) of the lot. But I don't know 'cos I didn't make it that far in. Frank Field was given a lot of interview space, which is always unfortunate, along with Edward Leigh from the Public Accounts Committee - who despite being a right-wing Tory, is actually a lot less annoying than Field. But that's the way of these things.

This far into a period of government term it's possible to get a hell of a lot of dirt on any administration and make most of it stick. But by making bad mistakes on some public spending projects, and failing to curb obvious pork barrel waste in others (why on earth did the MoD need 75 plasma TVs, for example?) the incompetence of New Labour makes it much more likely that a Conservative government will strip away all the spending increases that have actually been useful - tax credits, the extra money for health and education (certainly there have been mistakes there, but overall both services are in a far better shape than in 1997), infrastructure funding - and get us back into the same underfunded mess we'd reached by the 1990s. And if that happened, it would basically be New Labour's fault. For sloppiness and incompetence.

But Labour sure as hell ain't gonna get out of the present poll slide with lame offerings like last night's. Maybe an accommodation has already been reached with the Tories: nice pensions and the chance to chair a review or two for the senior ministers, the opportunity to defect for the New Labour vanguard (John Hutton, anyone?) and the chance for Blairites to say 'I told you so' as Labour becomes a bankrupt husk in opposition. It certainly wouldn't surprise me.

Say no to cheap punk bandwagon jumpers

The Telegraph's current headline (as I write) is a lame-as-hell interview with ex-Australian PM John Howard.

For those who don't remember Howard (and there will most likely be many of you), he's a nasty little wanker of a politician who stayed in power in Australia for 11 years by riding out a boom driven by the Chinese demand for Australia's raw materials exports whilst pandering to the worst xenophobic instincts of the Australian voters and imposing fascist industrial relations laws. When he was swept away by Kevin Rudd's Labor party in 2007 it was the best electoral night in years (until the recent US election).

Suddenly he's trying to sound like someone with a clue on economic policy, but sadly he doesn't seem to have even the most basic grasp of economics. "It's dangerous to go too far into debt" - certainly, but the alternative of cutting back spending would get us into Herbert Hoover 1930s territory, and that's even worse.

His main policy suggestion in response to the slump is pure Reagan/Thatcherism: let's deregulate the labour market even more - making it even easier for big business to exploit workers than it already is. But John: large chunks of the industrialised world have already been following these right-wing policies for 25 years at least. And it's led to economic disaster.

What's perhaps saddest about this is that a broadsheet national newspaper thought this was a strong enough story to lead on. What next? Robert Mugabe on economic policy? Or maybe an interview with the North Korean leader Kim Jong-Il, just re-elected with 100% of the vote. They have about as much to say about the current economic situation that's useful as John Howard does. And that's the sad truth.

Say Hello to Quantitative Easing (long but worthwhile)

..or "printing money" as it's called in the media, which is not completely accurate, but close.

Today the Bank of England lowered interest rates to 0.5% - almost the practical minimum (a negative interest rate doesn't make a lot of sense, although as commercial banks don't normally lend at base rate but something above base rate (quite a lot above base rate at the present time), I guess you could have a negative base rate but maintain a positive interest rate for lenders in the real economy.)

But the interest rate cuts seem to be doing very little to reflate the UK economy (although they are drastically reducing the amount of savings in the UK, which raises the question - where are all these withdrawn savings going? Under mattresses) so the B of E is going to use quantitative easing (hereafter known as QE) to expand money supply directly.

What the B of E will do is to buy up bonds (probably some mixture of corporate and government bonds) with money it has created out of thin air. This expands the amount of money in the economy whilst reducing the supply of bonds. The idea behind QE is that the addition to the money supply makes banks more likely to lend money.

Will this work? It depends crucially on whether the factor limiting bank lending at the moment is a lack of availability of funds to lend. I would argue that it isn't - they have already had billions of pounds of bailout money injected to lend with. The main factor inhibiting bank lending is that banks think they will make a loss on any funds lent out because the economic situation is looking so grim. QE is not going to change that. So it's not going to reflate the economy.

Having said that, QE may have a role to play in preventing a very bad situation getting even worse. That's because it should prevent deflation (i.e. general falls in the price level) by expanding the money supply. Deflation is bad news because it makes consumers less willing to spend - because things are likely to be cheaper in future, so you might as well save your money now (even if you've got it under a mattress!) and buy later. This removes more demand from the economy and can depress the economy still further.

QE directly increases the money supply and so should increase the price level. This is not a cast-iron relationship but the basic 'quantity theory of money' is an accounting identity which states:

M x V = P x Q

where M is the money supply, V is the rate at which money changes hands in the economy (on average), P is the price level, and Q is the real volume of transactions (e.g. real output).

Now, QE clearly increases the money supply. So will it increase P? It depends on Q and V. Assume that Q - real output - at least isn't lowered by QE more than it would otherwise be falling. In that case everything depends on V. If banks just sit on the extra money created by QE that could decrease V and offset the increase in M, leaving P unchanged. But a full offset is unlikely. Therefore, increased M should feed through to P.

However, as the monetarists discovered in the 1980s, there is a catch. The previous paragraph assumes that M can be clearly and uniquely identified as a quantity, which just isn't the case. M isn't just notes and coins in circulation. Equally important in M, if not more so, is 'wide' money - what used to be called "M3" and "M5" in the days of monetarism in the 1980s - which includes the supply of credit and various liquid assets (indeed, 'credit creation' is really 'wide money creation'). The 'credit crunch' has massively reduced the supply of 'wide money'. So QE will only have an impact on 'wide M' (as opposed to 'narrow M') if it gets the banks lending again - which, as I indicated earlier, doesn't seem that likely to me. Having said that, the direct impact of increasing narrow M should be enough to avoid deflation in itself if pursued vigorously enough.

(An interesting side issue here is that the impact of deflation on spending only occurs because money can be held as cash, which by definition has a zero nominal change in value over time. If cash was abolished and the government decreed that we had to have our money in various types of bank account, the interest rate on which could go negative, then the incentive to hoard money in deflationary periods would disappear.)

So the overall verdict is that QE looks a bit dodgy. What's the alternative? Well, the basic problem is that banks don't want to lend. So take 'em over and MAKE them lend! It's all about restoring confidence - at (metaphorical) gunpoint if necessary. But the govt doesn't have the willpower to nationalise large chunks of the financial sector - so we're left with the current mess. Expect little or no impact on the real economy from QE - meanwhile, zombie banks continue to drag us all down with them...

"more bailouts may be required" in the US... aka "prolonging the agony".

Bad news going to worse news in the States... after $750 has already been committed, Ben Bernanke says today that even more banking bailouts might be required.

Where does this end?

Whilst the Obama adminstration's $3.5 trn budget (if it can be passed - a specific post on that later in the week) looks pretty good, the bailout just looks like it's throwing bad money after bad now.

Liquidate the duff banks, nationalise the infrastructure and start again. It's the only way.

I'm not going to be so naive as to say that the continuing slides in global stock markets are being caused by the continual extension of the bail-outs, but it probably can't be helping any.

The significant risk of downside for taxpayers in the deals that are being struck by the US government over AIG - and by the UK government over RBS and Lloyds Banking Group - are also contributing to the grim mood and the general feeling that we are plumbing some kind of bottomless pit of public money. Our old friend Paul Krugman points out the problems of the AIG deal here. Meanwhile there's a fairly measured analysis of the RBS deal by Philip Aldrick of the Telegraph here.

Longing for the days of "Dow 36,000"

Anybody remember the 'classic' book Dow 36,000 by Glassman, Hassett and Hassett? Available very cheap on the marketplace at amazon.com these days...

Basically the book was the high water mark of the eyewash that people were touting around 10 years ago saying that we were in a new technological 'golden age' and stock indices would rise by 10% a year in perpetuity, or whatever.

It's easy now, of course, to say that this is a load of eyewash. Not so easy when stock indices are rising by 10% a year and you're being labelled a contrarian for saying that it's a bubble and it might not last.

It's just the same as the poor sods who are saying now that wait a minute, the Dow is below 7,000, and we might be headed for 3,600 rather than 36,000, but then again we might be about to turn a corner. When the market is in 'herd behaviour' mode (which seems to be pretty much all the time except at the exact point there's a crash), nobody wants to know that things might be slightly more complex.

Your best option for long term investment really is what the folks at fool.com have been telling you for years: get a tracker fund, make sure the annual management charges are as low as possible, and just invest regularly. Low maintenance, low cost. The only thing whizzbang active fund managers are good at is creaming off extra charges at your expense.

Anyway I intend to get hold of a copy of Dow 36,000 as I suspect in the light of current events it will read like a comedy classic. (Very black humour, of course...) with apologies to anybody out there who's lost their shirt on the stock market. But you sure as shit won't do it again. (Or will you? Because that's what they said after the 2000 'dot com' crash...:-()

Definitional trouble for Ed Balls

Now here's an interesting one: Ed Balls thinks lotteries are unfair.

I think that's, by definition, wrong (unless the lottery is rigged, of course). Arbitrary, yes. Unfair? No more than tossing a coin.

Whatever the arguments against lotteries, 'unfairness' sure ain't one of them.

What's really unfair, of course, is kids being admitted to one school rather than another based on where they live, how intelligent they appear to be in a test, or what religion their parents claim to practise.

But these things don't piss off Daily Mail readers as much as lotteries, so Ed Balls won't mention them, of course.

If this guy turns out to be the next leader of the Labour Party then they really are up shit creek without a paddle.