Archive for the ‘Britain’ Category

Brave Dave gets his mojo back

October 1, 2014

Cameron 1014

 

Dave Cameroon just gave his Tory party speech. After his imperial weights moment, he is back on form. Cometh the hour, cometh the Etonian.

* £12,500 zero income tax threshold (up from £10,000 in fiscal year 2014-15).

* £50,000 40% income tax threshold (up from £31,866 plus £10,000 tax-free in fiscal year 2014-15). [See update on this.]

Both ‘in the next parliament’.

Just one problem.

It is totally and utterly unaffordable by any rational analysis of the numbers. If you are vaguely economically literate, work your way through these slides from the Office of Budgetary Responsibility. Note that this was a personal presentation by Chairman Chote, and does not reflect any OBR ‘line’. But the numbers and the trend lines are the hardest ones we have. I guess that Brave Dave hasn’t seen them.

Off the top of my head, Brave Dave’s election-pitch cocktail would require GDP growth over 4%, no increase in the cost of borrowing, and further massive cuts to welfare in order to meet the Fat Controller’s debt load targets.

Now breathe in and savour the moment.

Pure Tory Bullshit.

You have got to love it.

But will you vote for it?

 

CHOTE SLIDES1  (pdf. Should open up)

CHOTE SLIDES2  (powerpoint. Should come to you as a download)

 

Update:

I hadn’t read Cameron’s speech directly, relying on Guardian coverage. After a couple of emails I now realise that part of Cameron’s putative higher rate threshold increase is spin. Unlike HMRC, which states tax bands separately (for good reason because there is no single tax-free band at the bottom, it varies slightly for different groups) Cameron’s promise of a £50,000 threshold for the 40% rate is actually a two-band sandwich — the main tax-free band, plus the up-to-40% band. So it has to be compared with fiscal 2014-15’s £10,000 tax free (the standard exemption) plus the current £31,866 40% threshold.

Still, I am not changing the text above. The cuts are undeliverable without completely fanciful assumptions about growth, interest rates and how much more welfare can be cut without widespread civil unrest. And, yes, that is even if Cameron were to wait until the final year of the next parliament, 2020, to deliver the cuts.

What is truly revolting about the Tories is that you could, just about, begin to get towards reasonable assumptions for these cuts — which millions of people would welcome and benefit from — if you increased the two rates of capital gains tax (currently 18% and 28%), and introduced some level of capital gains tax on sales of first homes. But this government, just like the Blair one, is committed to taxing capital less heavily than work. What kind of message does that send to society?

More:

Well I wrote this on 1 October and on 9 October the FT runs a column saying exactly the same thing, also citing OBR numbers. Here it is, but you will need a sub. Of course, the FT is more polite than me, merely accusing Cameron of ‘arrogance’, ‘deceit’, and ‘cooking the books’.

More on 10 November 2014:

The FT has now run a deeper analysis of the OBR numbers, plus latest Treasury receipts, and concludes that to meet Osborne’s austerity targets welfare cuts will have to be massively increased from 2015. This contrasts with recent comments by Brave Dave Cameron — who is either very stupid or a brazen liar — that the worst of austerity is over. In reality, only half of the cuts promised by Osborne have been made. It is all here in the FT, but you will need a subscription. Cameron and the Fat Controller were also told in July by the International Monetary Fund that the UK has no apparent choice but to raise taxes from 2015. And Cameron and the Fat Controller have more recently been severely criticised by the Institute for Fiscal Studies (FT sub needed) over their constant efforts to diddle the numbers.

This guy is my prime minister

September 30, 2014

Give me strength.

This from Brave Dave Cameroon:

 

David Cameron: schools should teach mainly in imperial measurements

PM says he would ‘still go for pounds and ounces’ over metric system in Newsnight interview

David Cameron's kind of ruler.
Conservative rule: David Cameron favours imperial measures. Photograph: Alamy

Schools should teach pupils mainly in imperial and not metric measurements,David Cameron has said.

Four decades since metres and litres replaced yards and pints on the curriculum, the prime minister suggested he would prefer to see a return to the old system.

“I think I’d still go for pounds and ounces, yes I do,” Cameron told BBC2’s Newsnight when asked which should be taught predominantly.

The present curriculum, which Tory ministers have said they will skew towards imperial measures, requires only that pupils “understand and use approximate equivalences between metric units and common imperial units such as inches, pounds and pints”.

It was one of three questions posed to the PM by the programme to try to define his wider stance.

In a more modern response Cameron, who personally spearheaded the legalisation of same-sex marriage, said he had no problem with seeing two men kissing in a park.

“I can kiss my wife in public, I don’t see why you can’t kiss your husband,” he said.

But he was less definitive in his answer to a third posed dilemma: whether a pharmaceutical firm should recruit a British candidate over a better-qualified foreign one.

“I want to make sure that the pharmaceutical company has good British people to employ. In the end, they have to choose,” he said.

…………..

I suppose that at least you can now be gay so long as you notch your conquests in dozens. But I am trying to get some work done, and this really does not help. Could it be that Britain’s appalling recent record on productivity is down not to our alcohol consumption but to the mental torpor induced by David Cameron’s ‘ideas’?

Public-school boy rehouses Amazon tribe on half-term break, gets Oxbridge place

August 17, 2014

Will Hutton drones on a bit sometimes, but it is hard to disagree with this analysis of Britain’s education system, published in Sunday’s Observer. Hutton recommends action against those who buy themselves out of society through private education. It is necessary not just for moral, but for economic reasons. However I reckon it will take another 20 years — if we are lucky. 

 

Hutton:

Believe the hype and Britain is on the verge of a great levelling. Of course it is good news to learn that 1,400 more students from disadvantaged homes will be going to university this year than last. But it is hardly the end of the class divide, as some reports have claimed; 1,400 represents a drop in the ocean compared to the hundreds of thousands from more advantaged homes. The gulf in expectation and life chances between rich and poor remains enormous.

In fact, given the expensive and comprehensive efforts that go into promoting access, anything less than that figure would have been disappointing, even disastrous. Any university that wants to charge more than the basic fee of £6,000 for full-time study or £4,500 for part-time study (which is every one of Britain’s universities) has to sign an access agreement with the Office for Fair Access (OFFA). The university sets out as a quid pro quo detailed plans about the promotion of access. There has been an avalanche of initiatives.

It could be summer schools – the Sutton Trust alone offered summer schools for 1,900 disadvantaged students this summer, joining with 10 universities as part of their access agreements. Or it could be rebates from fees. Every part of the higher education system is keenly aware that it has to do more to attract students from disadvantaged homes (and I write as principal of Hertford College, Oxford). They are aware, too, that Offa is getting increasingly tough about its access agreements. Moreover, they desperately want more disadvantaged students as a matter of principle. An open-minded visitor from Mars might ask, given all this effort over so many years, why has the return been so paltry?

The Independent Commission on Fees (which I chair) closely analysed recent data in a report published last week. From 2010 to 2013, the numbers of students from the most disadvantaged backgrounds attending the 13 most selective universities increased by 9%. For the 30 most selective universities, this figure was 12%. Good news. But the numbers entering from the most advantaged backgrounds also increased over the same period – up by 5% and 14% for the top 13 and 30 universities respectively. So there has been a slight narrowing of the entry gap at the most selective universities from 2010 to 2013, but it remains extremely large.

In raw numbers, in 2013, 11,695 students from the most advantaged backgrounds entered the top 13 universities, but only 1,232 from the most disadvantaged backgrounds, an almost tenfold difference. The ratio drops to just over seven times for the 30 most selective universities. For the entire university sector, the difference in 2013 stood at 2.8. You can bet that very few of the 1,400 more students going to university from disadvantaged homes will be going to the top 13 universities.

This matters. There is growing concern that too much of Britain’s elite sport is occupied by athletes educated at private schools: for example, 41 % of the medals won at the 2012 Olympics went to the privately educated. We know that sporting talent will be randomly distributed among the 700,000 babies born every year. Yet the British system ensures that it will be those lucky enough to be born into households rich enough to educate them privately that will have the best chance to lift their natural sporting ability to Olympic standards. By any moral code, this is not fair, but beyond morality this is a huge squandering of talent.

The same is true of intellectual and academic ability. The Sutton Trust reports that four private schools and one sixth form college in Cambridge send as many students to Oxbridge as nearly 2,000 state schools. Are we to believe that native academic ability is uniquely concentrated in the children of parents rich enough to afford to pay the fees (or live in the catchment area of Hills Road sixth form college, Cambridge)? The differences even come through in personal statements accompanying university applications: 70% of students from private schools with the same grades are generally admitted to top universities compared to 50% from state schools. The key difference is personal statements, testifying to vast differences in cultural capital and experience. Manchester University’s Steven Jones, for example, observes the different impression conveyed by accounts of work experience that involve a Saturday job or a school visit to a business, on the one hand, with a personal statement that cites work with a local radio station, with a City law firm or a designer, on the other.

What is to be done? One of the worries about the £9k fee regime was that it would deter applications overall, disproportionately affecting disadvantaged students. It has certainly devastated part-time higher education – there are now, incredibly, 100,000 fewer candidates studying this way, traditionally a popular choice for those from moderate- and low-income homes. Mature student numbers are also well down. But application rates from 18-year-olds for full-time education to English, Welsh and Northern Irish universities are all up on 2010.

Part of the reason is the recognition of the value of higher education, part is the state of the jobs market for 18-year-olds with wages falling. But also in play might be some reservation about taking on so much debt. For some 18-year-olds, repayment even of tens of thousands of pounds can seem very distant – in a far-off world of adulthood after university when, in any case, your earnings have to be above £21k to start paying. But, equally, for others, the prospect of a chunk of debt might be offputting. Distant prospect or not, less debt is plainly better than more.

One obvious way of persuading more kids from poorer homes to apply would be to universalise the patchwork quilt of access agreement rebates into a standard lower fee for disadvantaged applicants. .

So a skewed fee regime would help, but the reality is that differential university applications reflect the desperately unequal society Britain has become – and also reflect the ongoing offence to any system of morality presented by such widespread private education.

We should open up private schools, invest disproportionately in state schools in weaker neighbourhoods and pay teachers as proper professionals. But above all we should be mobilising against inequality in all its manifestations – in housing, jobs, wages, access to the internet, sport and culture. There is no future for Britain other than as a smart society, and the more our people are enfranchised, the smarter we will be. Universities can, and will, play their part, but they can’t solve society-wide failures by themselves.

South-east England, offshore financial centre

June 9, 2014

I should try to start posting to this blog again. Here is a story about the latest chapter in the re-modelling of south-east England as Singapore. Osborne should get on with those mega-casinos that New Labour promised. Too busy checking his house price and portfolio, no doubt.

sing casino


parliament

english garden party

Britain becomes haven for U.S. companies keen to cut tax bills

LONDON (Reuters) – Nothing about the narrow cream-coloured lobby at 160 Aldersgate Street in the City of London financial district gives a hint of its role at the centre of the offshore oil industry.

That’s because the building is occupied by a law firm. Yet, on paper at least, it is also home to Rowan Companies, one of the largest operators of drilling rigs in the world.

In 2012, Rowan, which has a market value of $4 billion (2.38 billion pounds), shifted its legal and tax base from the United States to Britain. But not much else.

“We changed our corporate structure and we’re legally domiciled in the UK but our headquarters and our management team remain in the U.S.,” Suzanne Spera, Rowan’s Investor Relations Director said in a telephone interview from Houston.

“It has been positive. We take advantage of trying to be competitive with our effective tax rate.”

Indeed, Rowan filings say the shift helped cut the company’s effective tax rate to 3.3 percent in 2013 from 34.6 percent in 2008. Spera said Rowan complies with all UK tax rules.

A government spokeswoman for the Treasury said recent changes to the tax rules were aimed at supporting “genuine business investment”.

“The UK is not a tax haven. In 2015, our main rate of corporation tax will be 20 percent, well above the levels seen in tax havens,” she said in an emailed statement.

In the last year around a dozen major U.S. companies including media group Liberty Global, banana group Chiquita and drug maker Pfizer unveiled plans to shift their tax bases overseas outside the United States.

Historically, when U.S. companies wanted to cut their tax bill they usually reincorporated in Caribbean Islands or Switzerland.

However, following recent legal changes whereby Britain largely stopped seeking to tax corporate profits reported in other countries, including tax havens, companies are increasingly choosing the UK as a corporate base.

President Barack Obama and Congressional Democrats have proposed measures to stem the flow of so-called “inversions”, although Congressional gridlock on tax reform means new barriers to overseas moves are unlikely anytime soon.

There is no official list of companies which have moved their tax base to Britain but government officials, tax advisors and lawyers said at least seven had re-based to London — Aon Plc, CNH Global N.V., Delphi Automotive Plc, Ensco Plc, Liberty Global Plc, Noble Corp. Plc.

Drugs group Pfizer and Omnicom had planned to transfer their tax domicile to Britain, while retaining U.S. headquarters, but the takeover deals which were meant to facilitate this recently failed.

U.S. and UK filings and other company statements from the seven that relocated showed that while redomiciling to London can cut a company’s tax bill, it usually involves relocating just a handful of senior executives — and sometimes not even that many.

“The UK has made a very clear policy decision to engage in tax competition for multinationals. It’s fair to say it’s rivalling Ireland,” said Stephen Shay Professor of Law at Harvard University who has testified to Congressional investigations into corporate tax reform.

“When I go to tax conferences now, I hear people talk about the UK as a tax haven.”

Bernhard Gilbey, tax partner at law firm Squires Sanders said tax competition was common across countries and that companies were within the law and indeed faced competitive pressure to structure themselves in response to such governmental incentives.

The companies said that while tax was a consideration in their moves, commercial reasons such as the desire to be closer to customers was also a factor.

 

PAPER MOVES

British finance minister George Osborne has welcomed the trend of U.S. companies such as insurance group Aon redomiciling to Britain, saying it reflects how the government has made the country a more attractive place to do business.

In November, Ernst & Young, one of a number of tax advisors which advocated the tax changes that made Britain a magnet for U.S. corporations, published a survey saying that 60 multinational companies were eyeing a move to the UK.

EY said this could create over 5,000 jobs and bring in over 1 billion pounds a year in additional corporation tax, the UK’s corporate income tax.

However, a Reuters review of company filings and other statements from the seven companies, news reports and interviews with tax advisors and company executives, suggested corporate moves may not mean so many new jobs.

Ensco and Noble said they had each created around 30 positions between them, including moving their chief executives to London. Aon declined to say how many UK jobs it created, but filings showed its CEO moved to London and that the newly incorporated London-based parent company employed 16 people last year.

None of the most senior officers of Delphi, as listed in its annual report, are based in Britain, the company confirmed. A spokeswoman declined to say if any less senior roles had been shifted to Britain.

A spokesman for CNH, which shifted its tax base to London last year, said the company was currently scouting for a London office where some senior managers would be based. He declined to say how many or which roles would be based there.

Liberty declined to say if it created new jobs in Britain connected with its re-incorporation. Filings at the UK companies register say CEO Michael Fries resides in the United States while media reports cited the company as saying Liberty’s takeover of Virgin Media, which was cited as part of the reason for re-basing to Britain, would lead to 600 job cuts.

All the companies said they continued to employ large numbers of staff at and invest in long-established operating subsidiaries in Britain. They declined to identify any new investments tied to their corporate relocation.

Lawyers said the small number of new jobs reflected how Britain would give companies the benefits of its tax regime in return for a less substantial investment than was required by some other countries — including countries previously accused by U.S. and European lawmakers of facilitating tax avoidance.

“In terms of governance and presence, it requires actual substance if you want to set up in the Netherlands, whereas you can achieve a UK residence just by having board meetings in the UK,” said Isaac Zailer, global head of tax at law firm Herbert Smith.

The seven companies Reuters examined had a combined 73 directors. Only 14 percent reside in Britain, up from 4 percent before the companies moved, company filings, records at the UK companies register and other company statements show.

For the six previously U.S.-incorporated companies which shifted to Britain, 80 percent of directors continued to reside in the United States after the move.

 

NO TAX WINDFALL

Accounts for the companies also show little benefit to the UK exchequer from the corporate relocations.

Aon and Liberty Global – the only two companies which published figures for group UK tax payments – reported UK corporation tax credits for 2013.

Ensco had a UK tax charge of $200,000 last year. That included tax on profits from its UK operating subsidiaries which have revenues of around $300 million a year.

Delphi Automotive’s most senior UK corporate entity is a partnership, which does not have to pay tax. The company declined to say if other British units paid any corporation tax but said in its annual report that it had UK tax assets which could be used to offset future taxable profits.

CNH does not publish UK tax payments. Its main UK operating unit reported a tax credit in 2012, the last period for which accounts were available.

Rowan and Noble declined to say if they paid any UK tax in relation to their UK head office activities. Rowan, Ensco and Noble’s North Sea rig leasing businesses have combined revenues of $1 billion a year but have paid almost no tax over the past 20 years, a separate Reuters investigation showed last month.

What attracts companies like Rowan to Britain is not a headline tax rate that is half the U.S. level but the way the UK has effectively stopped taxing profits reported by UK companies’ overseas subsidiaries.

The government introduced the measures in the 2012 budget to “better reflect the way that businesses operate in a global economy” and encourage investment in Britain.

This means companies can shift profits out of the countries where their employees and customers are based, into tax havens, and then bring the money back to Britain and pay it out to shareholders without paying any tax – something that would not be possible under U.S. or German tax law.

“For offshore profits, the UK can literally be a nil tax jurisdiction, which obviously compares very well with traditional tax havens,” Kevin Phillips, International Tax Partner, Baker Tilly said.

The UK is also unusual in not charging withholding tax on dividend payments and, for now at least, offers an air of respectability.

“Over the last couple of years, companies that have used jurisdictions like Ireland, the Netherlands or Luxemburg have found themselves at the wrong end of some poor publicity for their attitude to tax,” said Gilbey.

“It looks less likely that that would be the case if they put themselves in the UK because we’re not generally considered a tax haven.”

 

Weekend reading: abuse of state power special

August 25, 2013

It has been a bumper week for abuse of state power. Here are some of the highlights:

Bradley Manning goes down for 35 years. On the watch of the ‘liberal’ president, Barack Obama. The FT (sub needed) argues that Manning got off lightly and may get parole in 10 years. The Guardian takes a different view on the proportionality of Manning’s sentence, a position closer to mine.

While the reaction pieces are being penned, Manning expresses a desire for hormone treatment to assist in a desired gender reassignment. Federal prisons offer this, military ones do not. Manning has asked that she [sic] be referred to henceforth as Chelsea, with the former name Bradley reserved only for letters to the the confinement facility at Fort Leavenworth, Kansas. There are worse ways to spend half an hour than writing him/her a letter of support, so why not do so?.

From, for me, the damaged but well-meaning Manning to the thoughtful, lucid and brave Edward Snowden. In the UK, Alan Rusbridger, Guardian editor, reveals threats from the British government, securocrats, and indirectly from David Cameron himself, to pre-emptively shut down further reporting of the Snowden cache using British legal powers of pre-emption.

It is depressing to read how the poodles in the UK government told their bosses in Washington that Guardian journalist Glen Greenwald’s partner David  Miranda would be detained at Heathrow, how Met police say they checked they were using anti-terrorism legislation correctly and how the police reckon they were procedurally perfect. Having taken the call from the lickspittle Brits, Washington then moved to distance itself from the Miranda detention and the seizure of his possessions, saying it wouldn’t happen in the US. As the Economist points out (sub needed), the anti-terrorism legislation under which Miranda was detained was established for the police to ascertain if a person “is or has been concerned in the commission, preparation or instigation of acts of terrorism”. To use such legislation against journalists is grotesque.

Over to China, where 70 policemen take the unusual risk of appending their thumbprints to a denunciation of the acting president of the Shanghai High Court who, they say, has been engaged in massive long-term corruption including stealing several tons of alcohol from the police booze budget each year. Court president Cui Yadong was already feeling the heat after senior Shanghai judges were recently captured on video cavorting with prostitutes. The video of the judges has had over 4 million hits.

Separately in China, the New York Times discusses ‘Document number 9’ and the alleged ‘seven subversive currents’ at large in the Chinese nation. Per my recent blog about Xi Jinping, we are starting to get more visibility on the new Chinese president and what we are seeing is not pretty. Xi’s evolving proto-Maoist approach to politics provides the background to the trial on corruption and abuse of power charges of fellow princeling Bo Xilai, which started this week. Bo was the person who invented the ‘New Red’ school of modified Maoist populism when he was running Chongqing. As Xi and pals move to crush him, the irony and hypocrisy are not lost on John Garnaut in Foreign Policy.

Here in Italy, meanwhile, we are enjoying a peculiarly Italian twist on the abuse of state power. Silvio Berlusconi, having been definitively condemned for a felony for the first time, has opted for an attack on state power that recalls, for me, Italy’s fascist past (much more so than the claims, which I previously dismissed on this site, that Beppe Grillo is proto fascist). Over the Ferragosto holiday Sil promised a programme of direct action on Italy’s beaches, with his supporters leafleting holiday makers who would otherwise be trying to catch a rest. The focus of Sil’s campaign is not so much a proposal for structural reform of the judiciary, or indeed enforcement of existing norms (which would be half the job done already), but instead a direct attack on magistrates and judges as a species. The strategy has more than a whiff of hoped-for intimidation.

Here is a lead story (in Italian) from Berlusconi’s Il Giornale during the holiday. Although the article was on the front page, it has no news content, and comprises a simple frontal assault on the judiciary, likening its perceived efforts to ‘attain political power’ over the nation to Mao Zedong’s Long March. The connection with Maoism/communism is established in the first sentence. Italy, we learn, does not have a mundanely inefficient legal system to be improved by systemic change, but an extremist, personal, visceral political conspiracy against the Italian people (to wit, Sil and his businesses).

Here are some current icons from Berlusconi’s PDL/FI site:

banner-forzasilvio pdl-logo 20ANNI-DI-CACCIA-UOMO 995980_621688441198598_1936708951_n 998453_620420304658745_378895156_n 998913_622166501150792_278588033_n 1097945_620420421325400_707118344_n slide-1-638

The manner in which Berlusconi’s personal interests, those of the Mediaset group he controls, and national politics are conflated is bewildering for anyone from the First World. But of course this is not the First World. Next month Sil will relaunch Forza Italia (FT, sub needed), his original political movement named for a football chant (in the country that now boasts the worst record of football violence and racism in western Europe). ‘Ancora in campo’ / Back on the Field is the new tag line.

To me the strategy looks more than a little fascistic, involving as it does an attack on the institutions of the state and promises of more direct action. However, as the holidays wind down I suspect that we won’t see a proto-fascist movement take hold in Italy. Instead we will see business as usual.  The main evidence of Sil’s promised campaign of direct action so far (the plan on the beaches described here in the FT, sub needed) is a few Forza Italia militants in Rome (here telling journalists they have not been paid to march, that they are ‘spontaneous volunteers’ and that they have ‘just come for Him [Sil]’) and a pisspoor little plane dragging a bit of superannuated toilet paper above a few holidaymakers. ‘Forza Italia, Forza Sil’, I think it says.

I don’t want to do you down Sil, but I’m not sure you’ve really got the fascist cojones for this thing….

Forza Italia sul ferragosto 2013

Meanwhile, my own experience with abuse of state power occurs when I stop at Sasso, the bar on the river on the way to Citta di Castelllo. Despite the fact that there were few people around when I stopped, and lots of safe parking available, a carabinieri police car was parked across the zebra crossing that leads to the children’s playground, with two wheels outside the white parking line and hence well into the road. Thinking this a bit slack, even by Italian police standards, I took a photo on my phone. Walking into the bar, I found two carabinieri eating cream buns. I bought a small bottle of cold water and went outside to drink it in the sun.

While I was doing this, it seems one of regular clients at the bar told the carabinieri I had taken a photo. One of the carabinieri came over and demanded ‘a document’. Of course, I said, handing him my EU photo driving licence. He took it away and wrote down all the details, resting on the boot of his car. Then he came back and said: ‘I have taken down all your details because you took a photo.’ I replied: ‘Yes I did take a photo because of the way you parked.’ The policeman responded: ‘You have no idea what business we are engaged on here.’ I resisted the urge to reply: ‘It looked like you were engaged in eating cream buns.’ Both policemen were standing over me, not completely in my face, but close enough to make me feel uncomfortable.

The officers then made a series of threats:

1. ‘We have your details. If that photo is published on the Internet [he only seemed concerned about the Internet] we know who you are.’ I replied that I have no problem with them knowing who I am.

2. [from the second carabinieri, thinner and younger]: ‘That is a MILITARY vehicle. Do you understand?’ I replied that I am fully aware that the carabinieri is a para-military force.

3. The first officer mentioned seizing my phone (the verb he employed was ‘sequestrare’). I remained impassive, just looked him in the eye. There were a few people around the bar (maybe 8), plus the female boss, whom I have known for years. He didn’t take the phone in the end, just saying: ‘Get rid of that photo or I will seize your phone.’ I said nothing.

2013-08-16 11.56.41

At this point the policemen appeared to run out of threats. They went back to their car, got in it, turned around, and followed me to Citta di Castello, before turning off in the direction of the police station. Should I complain to the justice system or should I launch a proto-fascist programme of direct action? Thankfully this dilemma no longer presents itself. I now live in Cambridge. I think I’ll just go home.

More:

If you would like to harass people on street corners until Silvio is let off his felony, you should be able to sign up at the site below. (Latest talk is of a general amnesty for convicted felons facing up to as much as four years’ jail time. This would be a triple triumph — saving money spent on prisons, reducing Italy’s huge trial waiting lists, and getting Sil off his fraud sentence (plus other sentences that may soon follow). The only downside would be to put a few thousand crooks, some of them violent, back on the streets. What is not to like?)

ForzaSilvio.it

Weekend reading / Why I love Sloanes

August 11, 2013

 

Just a handful of things to look at:

 

Philip Stephens’ searing deconstruction of the fiasco in Afghanistan should not be missed. It comes from the FT (sub needed):

 

Being cheap and nosy by nature, I have been taken by the Girl Called Jack blog about cut-price-good-quality cooking and the nature of contemporary British poverty

 

And the Guardian’s article on rising militancy among the lowest-paid workers in America is worth reading.

 

The subject of poverty leads naturally to thoughts of inequality in our world. As part of my ongoing research into the nature of contemporary life itself, I recently spent a couple of days poshing it up at a sailing club on England’s Isle of Wight, favoured boating haunt of hedge fund managers and the British upper classes. When I observed to the club Commodore that its social base was somewhat narrow and overwhelmingly employed in the City of London, he retorted that this was nonsense and the club has many other members, including high court judges and one of the most senior Conservatives in the House of Lords.

I kept a few notes of conversations I overheard as I observed grazing Sloanes and men in pink shorts from the safety of the bar terrace. I have to be honest and say I rather enjoyed myself, although a couple of days was very much the limit of the potential enjoyment. More and I would have started to fray. What I liked most was the Sloane women, who haven’t changed one bit since I was a teenager. They are as unselfconsciously dim and determined as the day that the gods created them to bring a smile to the lips of ordinary people.

Sloane handbook

Sloane DiSloanes cannon

Sloanes Squad

Sloane Harry and girlSloane 1Sloane diarySloanes red sails

 

Man goes into sailing club office needing a ruler.

The Head of Sloanes (who runs the office) produces a long ruler.

Formidable!‘ says the man, attempting to banter in French.

‘Sorry dahling, that’s all I’ve got,’ says Head of Sloanes, taking back ruler and putting it away’.

Man looks perplexed.

Moral: never, ever try foreign language banter on a Sloane:

 

Sloane leans over bar terrace balcony speaking very loudly into mobile phone.

‘I will speak to Jose about that… Hang in there, dahling… It might just have to happen after the summer… Oh My God, yes… So you’ve got the quantity for Dominic?… Oh that’s fine. So shall we keep Dominic and Graham separate?… Work in progress… Yah, exactly. Yes, work in progress. Come back to you on that one. FANTASTIC. Speak to you! Okay. Byeeeeee…’

 

Below, a boy is wading up to the beach with sailing dinghy. He says to another boy:

‘Oh My God, you’re not rahly going to Marlborough?’

 

Sloane grazing on salad on club terrace addresses the group of people at her table:

‘In Zambia we only had a choice of five colours. It was totally Third World, absolute rock bottom. But the thing is that the grey we chose showed off the paintings rahly well. Absolutely fantastic.’

Holiday reading and viewing: booze, race, nationalism

July 23, 2013

English beach

 

Since I am sort of on holiday this week, I have decided that everybody else should be too. So here is weekend reading re-dressed as holiday reading.

 

1. First up, to get us started, a great discussion of the role of alcohol, and of alcohol addiction, in writing.

Next, the serious stuff.

Here are three articles on questions of race and nationalism.

2a. Orville Schell and John Delury offer a thoughtful piece about China’s need to move on from the narrative of national humiliation that the country’s schools and politicians have fed the population ever since 1949 (and indeed longer in the case of early converts to the communist party’s cause).

2b. In the United States, Barak Obama can no longer avoid speaking out about the Trayvon Martin case.

2c. Philip Stephens in the FT (sub needed) reflects on the mindless racism of Italian politics, but ends with his ideas that just maybe Gianni Letta represents change. Would that it were so!

3. Third, a near miss. Gideon Rachman in the FT (sub needed) has a thoughtful piece on Putin’s Russia but fails to nuance it with what Putin’s government is doing to put Russia back on an economic development path — in essence, reining in the oligarchs and bringing cash flows from national mineral assets back under public control. Putin may be a revolting man, and yet may also be a revolting man whose time has come.

4. Finally, a heartening curiosity. Teach First seems to be working. It is now Britain’s single biggest recruiter. So it turns out that smart people often do care, and don’t reflexively sell their souls to a law firm or investment bank.

 

Mutual society robber barons

July 16, 2013

I have had an account at the Nationwide Building Society in the UK for 30 years. I believe that mutual societies offer the best way to serve the retail banking needs of ordinary citizens, and that they could and should do more to provide a working capital lending function for industry. I also believe that Lloyds and RBS, most of the equity in which belongs to the public as a result of the global financial crisis, should be mutualised. Sadly, no one in politics has the cojones to propose this.

Nationwide is the biggest building society in the UK, but the people who run it don’t think much like mutual society types. Mostly they impersonate bankers. Right now they are writing down hundreds of millions of pounds of bad loans from their speculation in commercial real estate activity pre-2008. Commercial real estate is a notoriously cyclical sector in which a mutual society has no business playing with its members’ money. The management is only able to pay off this folly because of the state’s provision of nearly free funds via quantitative easing, a policy that will have a fiscal cost for the whole of British society down the road when the Bank of England sells for less the bonds it has bought for more. However the people who run Nationwide are so gormless, or so self-serving, that they believe the profits that QE makes possible reflect their management genius (they being the same people who lost billions in commercial realestate speculation).

So the top boys and girls are paying themselves millions of pounds a year and jacking up their bonuses (details here). They run a bonus structure that operates over periods of 12 months and 36 months when banking cycles in the post-war era have been more like 10-15 years. Are they stupid, or just greedy? I hope they are just stupid.

Whichever, in the Nationwide AGM whose voting closes on the 22nd, I am voting against the remuneration report and the whole miserable lot of them. If you have a Nationwide account I would urge you to consider doing the same thing. If you vote online, do NOT use their immoral and deceptive ‘Quick Vote’ button which lets the chairman vote for you. The chairman, Geoffrey Howe (no relation), trousers £300,000 just for chairing the board. If you have read Asian Godfathers, you will be interested to know he is also chairman of Jardine Lloyd Thompson, which is the modern incarnation of the insurance business of the Keswick/Jardine godfather family of shafting minority shareholder fame…

Nationwide on your side

Weekend reading and viewing

July 13, 2013

1. First up, a farewell piece from Evan Osnos, China correspondent of the New Yorker. All about his poet bin-man friend.

A BILLION STORIES

POSTED BY EVAN OSNOS
Osnos-qi-290.jpg
In my neighborhood, near the Lama Temple, the men and women in fluorescent orange jumpsuits work for the district sanitation department. Many are migrant workers from the countryside; they sweep the alleys, clean the public restrooms, and collect the trash. Some wear straw farmers’ hats that cast a shadow across their faces, and, I admit, the matching uniforms make it difficult for me to keep them straight. I don’t know if there are three of them or thirty.
One afternoon not long ago, I was chatting with my next-door neighbor, a retiree named Huang Wenyi—a proud Beijinger, born and raised—when one of the sweepers in an orange jumpsuit wandered by. He had tousled hair, sun wrinkles around his eyes, and a smile of jumbled teeth. He approached and pointed to a gray flagstone at our feet. “Can you see the emperor on that rock?” the sweeper asked.
I thought I’d misheard. He said, “I can see an image of the emperor right there on that rock.”
Huang and I looked at the rock and back at the sweeper. Huang was not interested. “What are you bullshitting about?” he asked. “You have no idea what you’re talking about.”
The sweeper smiled and asked, “Are you saying you think I’m not a cultured man?”
“What I’m saying,” Huang said, “is that you’re not making sense.”
The sweeper gave him a look, and turned, instead, to face me. “I can look at anything, and pull the essence from it,” he said. “It doesn’t matter how ordinary something is; in my eyes, it becomes a treasure. Do you believe me?”
Huang was irritated: “Old man, I’m trying to have a chat with our foreign friend here. Can you not disturb us, and go back to your work?”
The sweeper kept talking—faster now, about ancient Chinese poetry, and the great modern writer Lu Xun—some of it too fast, and the references too obscure, for me to understand. He sounded somewhere between interesting and bonkers. Huang had had enough, and he poked fun at the man’s countryside accent. “Come back after you’ve learned to speak Beijing dialect,” he said.
Under his breath, the sweeper said, “As long as it’s a dialect of human beings, it’s legitimate.” But Huang didn’t hear him. He’d waved him away and wandered into his house.
I introduced myself. The sweeper’s name was Qi Xiangfu. He was from Jiangsu Province, and he said he had come to Beijing three months ago. Why did you come, I asked.
“To explore the realm of culture,” he said grandly.
“What kind of culture?”
“Poetry, mainly. Ancient Chinese poetry. During the Tang Dynasty, when poetry was the best, every poet wanted to come to Chang’an,” he said, invoking the name of the ancient capital, the predecessor to Beijing. “I wanted a bigger stage,” he said. “It doesn’t matter whether I succeed or fail. I’m here. That’s what matters.”
It was getting late; before I went inside, Qi said he had competed in poetry competitions. “I won the title of ‘Super King of Chinese Couplets.’?” In his spare time, he had taken to hosting an online forum about modern Chinese poetry. “You can go online and read about me,” he said.
That night, I typed his name into the Web, and there he was: Qi Xiangfu, the Super King of Chinese Couplets. In the photo, he was handsomely dressed in a bow tie and a jacket; he looked young and confident. Chinese poems are hard for me to understand, and many of his, especially, were impenetrably weird. But I appreciated some moments of grace: “Earth knows the lightness of our feet,” he wrote. “We meet each other there?/?Between heaven and earth.”
To my surprise, the more I searched about Qi Xiangfu, the more I found of a life lived partly online. He once wrote a short memoir, in which he described himself in the third person, with the formality usually reserved for China’s most famous writers. He wrote that his father died young, and Qi was raised by his uncle. He wrote, of himself, “The first time Qi read Mao’s poem ‘The Long March,’ he resolved that Mao would be the teacher to show him the way. Later, he studied the poetry of Li Bai, Du Fu, Su Dongpu, Lu You, and others, and he made a promise to himself: Become a master of literature.”
He described the first time he ever presented one of his poems to a large group—it was played on a speaker at a construction site—and he described a bus trip in which he met, as he put it, “a girl who sympathized.” They married and it “ended his life of vagrancy.” There were hints of trouble in his life—at one point, he wrote a plea for donations, saying, “Alas, Comrade Qi is having a difficult time”—but something in the spirit of his online persona captivated me.
So much of it was impossible just a few years ago: the journey to the city, the online identity, the interior life so at odds with the image he projected to the world. When I first studied in China, seventeen years ago, the Internet was only a distant rumor. It had reached China two years earlier, but hardly anyone had access. When I brought a modem from the U.S., and tried to plug it into my dorm-room wall in Beijing, the machine emitted a sickly popping sound and never stirred again.
When I moved to Beijing, in 2005, to write, I was accustomed to hearing the story of China’s transformation told in vast, sweeping strokes—involving one fifth of humanity, and great pivots of politics and economics. But, over the next eight years, some of the deepest changes in the lives around me have been intimate and perceptual, buried in daily rhythms that are easy to overlook. A generation ago, foreigners writing about China marvelled most at the sameness of it all. Chairman Mao was the “Emperor of the Blue Ants,” as a memorable book title had it. But in my years in China, I have been seized most of all by the sense that the national narrative, once an ensemble performance, is splintering into a billion stories.
Living in China at this moment, the stories bombard you with such fantastical vividness that you can’t help but write them down and hope to make sense of them later. Writing about China, in The New Yorker, for the past five years, I’ve tried to capture something of this age, to grab a few of these stories out of the air before they slip by. The complexities of individual lives blunt the impulse to impose a neat logic on them, and nobody who stays here for some time remains certain about too much for too long. To impose order on the changes, we seek refuge, of a kind, in statistics. In my years here, the number of airline passengers nationwide doubled; sales of personal computers and cell phones tripled. The length of the Beijing subway quadrupled. But the longer I stayed, the less those impressed me than the dramas that I could never quantify at all.
On Sunday, my wife, Sarabeth, and I are flying out. I’ll be on leave for the next couple of months, wrapping up a book about a few individuals I’ve come to know in China. It will be published next spring, and I’ll be saying more about that later. I’ll resume writing for the magazine this fall, based in Washington, D.C. China is not leaving my blood stream; I’ll be back to write pieces, and, in between, I’ll be writing at Daily Comment and elsewhere about how China looks from afar.
Since we launched this blog, in January of 2009, I’ve written about five hundred posts. This will be the last for a while, and I want to thank you for visiting over the years. There will be much more to come on China on this site, and in the magazine, so I won’t pretend to sum things up. For now, I’ll mention only the fact that returns to me more often, perhaps, than any other: never in modern history has China been more prosperous and functional and connected with the world—and yet, it is the only country in the world with a winner of the Nobel Peace Prize in prison. Contradictions like that have been the essence of this moment.
After I met the street sweeper Qi Xiangfu, I started bumping into him frequently. We swapped phone numbers, and he would send me a poem, now and then, by text message. He typed out the characters on his phone, with the help of a magnifying glass to aid his eyes. Many of his poems were heavy with Communist fervor; others were oracular and strange. But I sympathize with anyone trying to make sense of this place in writing, and I admired his persistence. “I’ve experienced every kind of coldness and indifference from people,” he told me once, “but I’ve also given myself knowledge, all the way up to the university level. I don’t have a diploma. People look down on me when they see me.”
A few weeks ago, Qi told me he had been reassigned to the sanitation department in another part of town; he said he would come back when he could. The last time I saw him, he wasn’t wearing his uniform; he was in street clothes—a crisp white shirt and a black jacket—on his way to see his daughter who worked at a restaurant nearby. He had a book under his arm: “Ten Contemporary Authors of Prose.” For the first time, I saw the two personae, online and real-world, in one. What inspires you, I once asked him.
“When I write,” he said, “anything becomes material. In life, I must be practical, but when I write, it is up to me.”
Photograph, of Evan Osnos and Qi Xiangfu, courtesy of Osnos.
2. Next, a bit of Australian fun. A Kath and Kim movie came out last year. It got terrible reviews, so don’t go see it. However this appearance on Sunrise is pretty funny. Seems like good background to the Ashes series.
3. Next: Oh. Bama! Just to keep piling pressure on the liberal president, here is a Guardian piece about the sale of ambassadorial positions. Sort of Lloyd George goes to Washington. You might want to watch Lou Reed talking about Snowden and Obama again, (if only to watch the put-down of the obsequious female journalist at the end).
4. Now something serious. Christopher Wood, one of the best (perhaps the best) equity analyst in east Asia, doesn’t like his weekly missive reposted. So I am just going to quote a couple of bullets about the income distribution effects of the QE approach to stabilising the global financial crisis. I was banging on about the same thing soon after the crisis hit in 2010 and the QE started:
<The practical way unconventional monetary policies work is to lead to ever more extreme wealth distribution. Wealth distribution would have become much less extreme as a consequence of the 2008 crisis if losses had been imposed on creditors to bust financial institutions in line with capitalist principles, as opposed to the favoured ‘bailout’ approach pursued for the most part by Washington. The ‘great reckoning’ has been deferred to another day as the speculative classes have continued to game the system by resort to carry trades actively encouraged by the Fed and other central bankers. The leverage taken on in such trades is highly risky because of the underlying deflationary trend.>
5. More serious and interesting stuff is Philip Stephens in the FT (sub needed) parsing the Anglo Saxon-created disaster story that is the Middle East.
6. Looking at the Stephens’ canon, I see a piece from June (sub needed) making the case for shutting down the UK Treasury. It would save money and get rid of dangerous incompetents whose follies we, the taxpayers, must finance. I would just add that in shutting the Treasury to save money, government could also shut the Foreign Office, another black hole of self-regarding incompetence. George Osborne is right that we should not waste money. Mainly on people he went to school and university with.
7. Finally, this looks like something useful to do if any UK university students read this blog:
Hi there, My name’s Jonathan Goggs – I’m from an organisation called Team Up, who are establishing a student committee at Cambridge for 2013/14. I would very much appreciate it if you, or one of your colleagues, could circulate the following blurb into an email to all students in the business school, including the enclosed attachments as well. Do let me know if there are any questions from students by responding to this email, or copying me in. “Team Up is passionate about improving social mobility and transforming the prospects of bright young people and we are looking for outstanding university students from Cambridge to join one of our accredited leadership programmes next year. You will be trained in the highly sought-after professional skills to make a genuine difference and empower young people in your community to academic excellence. We believe in developing our university students to foster the skills they need to tackle the UK’s biggest social problem (social mobility) and secure exceptional careers. That’s why, once we’ve processed your application and conducted a short interview, we’ll be running master classes and networking opportunities, in partnership with leading businesses and charities, to give you the tools to lead, inspire and excel. The programme runs for 20 weeks, alongside your degree, and an overview of the year is attached, together with descriptions of the roles you can apply for. Last year our programme partners were Teach First and Bank of America Merrill Lynch and next year we will be partnering with even more organisations in management consultancy, education, social enterprise and finance. Places are competitive, so early applications are encouraged. Over the past two years we’ve received over 2,000 applications and some incredible student feedback – 9 out of 10 students said they enjoyed the programme. At Team Up, we think it’s a tragedy that so many young people are still disqualified from leading universities like Cambridge and fulfilling careers, because they come from low-income, socially disadvantaged backgrounds. If you think the way we do, we’d love to hear from you. To apply, click here.” Kind regards, — Jonathan Goggs Programme Officer | Team Up 18 Victoria Park Square, Bethnal Green, LONDON | E2 9PF E: [email protected] | W: www.teamup.org.uk

China comes to my home

July 9, 2013

We are having a Chinese primary school teacher to stay. She and a bunch of other Chinese teachers are supervising 40 Shanghainese kids on an English language immersion trip to Cambridge. Since our teacher (the senior one) doesn’t speak much English, I figured it would be good for our kids to have a week practising their Chinese.

It turns out that our kids also get a cultural lesson thrown in for free.

The Chinese teachers and schoolchildren have been billeted with Cambridge families around town. So far so good. But in order to consolidate them in the morning  so as to get everyone to school, they are not using one of the regular Cambridge taxi firms. Instead they are using a Chinese taxi firm I have never seen before. It’s a guanxi thing, you see.

Sure enough the driver gets to our house already half an hour late having gotten lost. Being Chinese, he doubtless also left half an hour spare in case of mistakes, so the group has likely already wasted an hour this morning going to wrong places. Plus, of course, the actual origin to destination driving time.

Finally the car pulls up outside our house and disgorges two panic-stricken occupants, both teachers. Spotting Senior Teacher Zhang, who is staying with us, they head for our front door. ‘We need the toilet!’ they exclaim, pushing into the house and straight past me in the corridor. ‘Hello!’ says one, as he locates the downstairs toilet under the stairs and heads in. A female teacher, beaten to the downstairs toilet, scoots straight off upstairs in search of another one, quickly locating it.

I wander into the street with my espresso to take in the scene.

After a couple of minutes the toilet-seeking teachers reappear becalmed and join Senior Teacher Zhang and the others in the taxi.

‘Sank you!’ says one.

And with that the people who are taking over the world are off.