We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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Now that banks are being forced back to their traditional model of being dull institutions, those chasers after excitement who have been shown the door might like to consider some career options. I rather like Matthew Lynn’s list of suggested new ideas.
On a serious note, it is one thing to embrace risk-taking as a virtue of entrepreneurship, so long as the persons taking the risks carry responsibility for the bust. The problem with the investment banks, such as now-defunct Lehman Brothers and Bear Stearns, is that seldom happens. If the “Masters of the Universe” really do crave the high-wire, much better that they do so with money not given to them by the taxpayer.
On a separate but related point about state ownership of banks, one issue that has not yet been much discussed is that of political and business corruption. Under “public” ownership, what will count will be what Ayn Rand called “the politics of pull”: the ability of governments to put their toadies onto bank boards to ensure that favoured groups get their loans and other benefits, while enriching those with the right connections. We saw that in countries like France, state-controlled banks such as Credit Lyonnais became engines of corruption on a huge scale. If ever there was an issue for enterprising journalists to go after, it is this one. They may probably do so once they have become bored describing Gordon “off balance sheet” Brown as some sort of economic superman.
You might think that with all the worries about recession, bank failures and so on, that political leaders might want to avoid making ever greater commitments on public spending. Not so. Just to remind us about the kinds of concerns that animate the political classes, here is this story:
Everyone who buys a mobile telephone will be forced to register their identity on a national database under government plans to extend massively the powers of state surveillance.
Phone buyers would have to present a passport or other official form of identification at the point of purchase. Privacy campaigners fear it marks the latest government move to create a surveillance society.
It is hardly a fear. It is a reality.
A compulsory national register for the owners of all 72m mobile phones in Britain would be part of a much bigger database to combat terrorism and crime. Whitehall officials have raised the idea of a register containing the names and addresses of everyone who buys a phone in recent talks with Vodafone and other telephone companies, insiders say.
It is important to remember that even supposedly private sector firms such as Vodafone can easily find it next-to-impossible not to co-operate with governments on stuff like this, particularly if the government can threaten to cut off licences.
The move is targeted at monitoring the owners of Britain’s estimated 40m prepaid mobile phones. They can be purchased with cash by customers who do not wish to give their names, addresses or credit card details.
So let’s assume that the government has data on the 40 million-plus people who buy a pre-paid phone. Even leaving aside the moral objections to such a database, the practical issue of how on earth one can sift through the haystack of millions of such details for the possible pin of a terrorist plot does not seem to register.
But then again, one must remember that the database state is not really about terrorism. It is a beast that is now acquiring a life of its own. After all, thousands of jobs, millions of profits, are tied up with this. If the Tories really do stick to their pledge to shut this thing down – and I would not want to bet my house on it – it is going to put a lot of “consultants” out of a job. A certain grim satisfaction would be involved in that. My wife, who is a consultant, refuses to work on any such things, god love her.
Spitfire: Portrait of a Legend
Leo McKinstry
John Murray, 2007 (first published in paperback 2008), 435pp., £8.99 in paperback
On the strength of Leo McKinstry’s excellent book about Geoff Boycott, I bought this book about the Supermarine Spitfire. I didn’t find it quite so entertaining as that first one, but I kept reading, and I kept learning things that I didn’t know about this famous airplane.
The basic problem with the Spitfire story, as a story, is that almost all of the excitement comes at the beginning. How was it designed and by whom? Once designed, will it be ready in time for the world-shaping, civilisation-saving contest which all readers know will soon erupt? Well, we know that it will be ready, but how? In what numbers? Who were the insufficiently sung heroes of this story, and who the insufficiently damned villains? And, in the great battle, how exactly did it do? That’s the heart of the story, and McKinstry tells it well, or at least (to an airplane ignoramus like me) convincingly. But the Spitfire carried on being manufactured right through the war, all the while being speeded up, enlarged, having its shape made uglier, its armaments made fiercer, its range improved, its weight greatly increased, and its task list expanded. Had McKinstry ignored all this later stuff it might have made a more entertaining book, but that would not have been the story of the Spitfire. As it is, the Battle of Britain only ends more than half way through the book, after which McKinstry takes us on a tour of all the other dramas and developments as efficaciously as he can. → Continue reading: What the Spitfire did and what the Spitfire did next
The only other thing I would add is that I am in the advertising industry and most of the ads for sub-prime loans had dried up before the recent bail-out bill. As soon as that went through the volume for these ads went up 10 times. Whatever the government did to “fix” the problem ain’t working because all they did was just give everyone who didn’t make money the first time around another shot at the craps table.
– from a comment by “Ben Franklin” on this Belmont Club posting spotted by David Farrer
The polls have not been kind to the dominant media narrative. Taking lessons from their coverage of Obamamania, the fourth estate puffed up and justified the representation of Brown as a political superhero, straddling the globe whilst other leaders squabbled like pygmies beneath his legs. I am not sure where the source of this hagiographic support stemmed from, but the source in part, is Brown as a personification of the nation.
The appearance of undertaking such a role allowed an orgy of headlines about how Britain as Brown saved the credit crunch. That the mainstream media grasps this story is a testament to their insecurity. It is narrative of a nation in decline: febrile, brittle, with reporters suspending critical judgement. Once the real events start to seep out, it is clear that three weeks of Broonmedia, following the distortions of blanket conference coverage, have not stirred the polls beyond some decline in the Tory lead. Perhaps the media confused Obama and Brown.
If the media are now more prone to herd behaviour due to the narrow bases of their recruitment and education, this represents a further step change in their retreat from their audiences. When they hear the same message bleating from their television, radio and newspapers, people will turn to other sources and other traditions to explain their situation.
Poor naive George W. Bush! For all his shambolic presidency, his dreadful mistakes, and the horrors of aggressive imperialism, his last couple of months in office could end up being the most disastrous for the world.
Bloomberg reports:
The leaders of the U.S., France and the European Commission will ask other world leaders to join in a series of summits on the global financial crisis beginning in the U.S. soon after the Nov. 4 presidential election.
President George W. Bush, French President Nicolas Sarkozy and European Commission President Jose Barroso said in a joint statement after meeting yesterday that they will continue pressing for coordination to address “the challenges facing the global economy.”
The initial summit will seek “agreement on principles of reform needed to avoid a repetition and assure global prosperity in the future,” and later meetings “would be designed to implement agreement on specific steps to be taken to meet those principles,” the statement said.
Just how bad this could be is already showing. The report continues:
Sarkozy and Barraso are pressing Bush for a G8 agenda that includes stiffer regulation and supervision for cross-border banks, a global “early warning” system and an overhaul of the International Monetary Fund. Talks may also encompass tougher regulations on hedge funds, new rules for credit-rating companies, limits on executive pay and changing the treatment of tax havens such as the Cayman Islands and Monaco.
Just what has the continuation of the OECD nations’ campaign to plunder smaller states and institute globally uniform (high) taxation got to do with the market crash? Nothing. Executive pay? Irrelevant, too, save in the politics of envy. Mainstream banks, not hedgies, were the ones that crashed after playing iffy games with CDOs, and governments helped pump-up house prices – with enthusiasm. Where this agenda comes in is as an opportunity to kick the resented “Anglo-Saxon” model of capitalism while it is down – even, and especially, in those places where it is not down yet. (Are we missing Commissioner Mandelson yet?)
Mr Bush has lost the thread entirely if he really thinks a transnational “reform” of the financial system can do other than damage “free markets, free enterprise and free trade”. He may have a patchy record on liberty, and a bad record on limited government. His guests in November will have no interest in either. They will tempt him (have tempted him) with the mantle of world saviour, and will try to get him to bind his successors. We shall have to hope that his successor, either one of whom would be well to the economic right of the self-selected ‘international community’, depressingly enough, is more wily and far-sighted.
Meanwhile, where is there left to run?
It is funny how films that you put down on the “must get around to seeing it sometime” list never get seen. Well, I have wanted to watch that 1970 epic, Waterloo, for a while and watched it during a quiet Saturday afternoon. Several things struck me about it, not least the fact that the cast was drawn from the Soviet Union (the Red Army?). I think I remember reading somewhere that the Soviet forces were used as cast extras in quite a lot of films, including a Russian film version of War and Peace. Rod Steiger’s portrayal of Bonaparte has not, in my view, ever been bettered. What a great actor Steiger was. Mad eyes.
I wonder if anyone who drives past the rolling wheatfields of Belgium in which the battle was fought ever wonder about the sheer carnage that was caused on that damp June day in 1815, or reflect that, nearly 200 years later, Bonaparte’s dream of a pan-European empire has in some ways come to pass, albeit without the nifty French cavalry uniforms.
Andrew Roberts’ fine account of both Napoleon and his nemesis, Wellington, is certainly worth a read.
I like Fridays these days, because on Friday, David Thompsom does another clutch of Friday ephemera, and this Friday’s ephemera included three links to a black guy named Zo, explaining why he will be voting McCain/Palin. When I started listening, I kept thinking, there’s a snag. When is the ambush coming? I don’t know quite why I thought this, but I did. Cognitive dissonance, I imagine. Guys who talk like that just do not think like that. Many of them hardly think at all, except about show business concerning which they are highly knowledgeable.
Another favourite blog-ephemerist is Lynn Sislo (sp?), who will not be voting McCain/Palin, in fact in this posting, she includes a link to a report about the equal and opposite phenomenon to Zo. But best of all, in a more recent Lynn S posting, there is a link to an amazing time-map showing the growth of Walmart. Capitalism at its formidable best (talking of which, have you heard that Buffet is now buying shares?). It is an object lesson in starting slow, getting it right and then – and only then – conquering the universe. Well, not the universe, yet, just America. But give it time. Highly recommended.
…They would make Guido Fawkes an advisor on how to fight the next election. Of course Guido (aka Paul Staines), whom I know and like, prefers, as I and many other bloggers do, to give party politics a wide berth in professional terms. He is far more effective doing what he is doing now and obviously has a great time doing it. But as his example shows, the guy has more sense on how the Tories should go after the absurd notion of Gordon ‘off-balance-sheet’ Brown than any number of folk working in Tory HQ.
Think about it: the Tories should put up posters with the Brown comment on “no return to boom and bust” over, and over, and over. That this man, who has presided over deteriorating public finances during a relatively strong period of growth, sold our gold reserves at a fraction of their current value, raided pension funds and shafted taxpayers should be able to pose as some sort of economic Winston Churchill is a joke.
There is no “responsible” route out of recession – we need radical action to rescue the economy. We need a growth package and we need it fast, the sooner it is in place the quicker we will be out of recession.
– Guido Fawkes was underwhelmed by David Cameron’s latest speech
Jesse Walker at Reason magazine points out something very inconvenient for Naomi Klein, whom I discussed recently at this blog:
Let’s just zero in on the contrast Klein draws between utopian theories and real-world practice. It’s a fair argument if you apply it properly: that is, if you look at the consequences of Friedman’s policy prescriptions where they are put in place. It makes sense, for example, to look at how Friedman’s ideas about denationalization and free trade fared in Chile after they were put into effect. It doesn’t make much sense to look at Blackwater’s contracts in occupied Iraq, because — try as Klein might to pretend otherwise — they don’t have anything to do with Friedman. (And of course, it’s important to examine the ways Pinochet’s Chile deviated from Friedman’s economic ideas as well as the ways it embraced them.)
Exactly.
At the same time, you have to consider how Friedmanism fared everywhere some portion of it was applied, not just cherry-pick the most unappealing regimes that experimented with it. If the only place that adopted any of Friedman’s economic ideas was Chile, then Klein might be onto something when she suggests there’s a connection between libertarian economic policies and deeply un-libertarian ideas about torture, censorship, surveillance, and state-sanctioned murder. But the most sweeping free-market reforms of the last 40 years were not adopted in Pinochet’s Chile, Thatcher’s UK, or anyplace else addressed in Klein’s book. They were enacted by the New Zealand Labour Party in the 1980s. Far from fusing economic liberalization with political repression, the Labour government expanded civil liberties: It adopted a bill of rights, decriminalized homosexuality, improved the treatment of the native Maori. And while Pinochet signed on to the CIA’s war against the Latin American left, New Zealand strained its relations with Washington by making itself a nuclear-free zone, a policy that effectively barred the U.S. Navy from New Zealand ports. By Klein’s logic, these are all effects of Friedmanomics.
One would not expect Ms Klein to respond to this other than with smears. It turns out that she more or less ignored the devastating review of her book by Johan Norberg at CATO recently, did not address his very serious accusations of widespread inaccuracy or misrepesentation. To repeat: it is not just her views that are a problem – I am sure some leftists argue in good faith – but her actual, repeated lying, fabrications and errors that are so easily corrected and yet she cannot be bothered to do so. That is one reason why I loathe so much of this sort of writer. It is a sort of contemptuous attitude towards simple fact-checking that I cannot abide. So Friedman did not support the Iraq war after all? Well, whatever, he might as well have done, seems to be her attitude.
The point that Jesse Walker makes about the varied effects of free market ideas is important. Yes, some repressive regimes around the world may have found it convenient, for whatever reason, to claim they had signed on to the package, as Chile did. But then remember that even former London mayor Ken “friend of Hugo Chavez” Livingstone once argued that he had borrowed the idea of road-charging from the great Chicago professor. In different times, very different types of political leader, such as Richard Nixon, claimed to be Keynesians, just as, right now, a lot of people are scurrying to claim to be in favour of tougher regulations (see Guy Herbert’s comment immediately below this one).
Klein tries to draw an equivalence, in a muddied way, between those leftists who deny that Marx can be blamed for the horrors done in his name and those of us who point out it is absurd to try to blame free market thinkers from what is happening now. Well the reason, Ms Klein, why Friedman et al cannot be so blamed is that what is happening now is not an example of laissez faire capitalism. Re-read that slowly, Ms Klein: what is happening now is not a case of laissez faire. Just to spell it out for those who have not been following this debate: the central banks responsible for setting interest rates are state bodies; the US home loan agencies such as Freddie Mac that underwrote risky mortages are ultimately state bodies; the legislation forcing banks to lend to risky groups is state activity; the Basel and other bank capital rules that have arguably encouraged the irresponsible use of credit derivatives are state rules, and so on. With the exception of Lehman Brothers and some of the Icelandic banks, not a single large financial institution has been allowed to go bust, as a private company would in a free market. Not one.
Corporate industrialists are frequently not keen on free markets. They are fond of order, safety, and “fairness” or “a level playing-field” – which means everybody doing things the same way they do. They like a managed world, because management is what they do. So no good comes of appointing them as regulators. Technocracy joins with bureaucracy.
Here is Adair Turner interviewed by The Guardian (perhaps in itself a significant choice of forum):
There will be more people asking more questions and getting more information than we were getting before… . There is no doubt the touch will be heavier. We have to make sure it is intelligent and focused on where the risks really are.
Translation: “We have to destroy The City in order to save it.” This is ‘risk’ as understood by a safety fanatic – one-sided, and totally unrelated to choice or to return.
We will have more people than before looking at the high-impact, systemically important firms with major knock-on effects than we did before. We will pay more than necessary to attract the correct quality of people from outside.
More than necessary? And who will pay for such artificial premiums? Whoever the FSA decides to tax or fine. It is a predatory organisation: a Self-Financing Regulatory Agency. So it wil have to find more occasions to punish and to license in order to fund more intervention, licensing and punishment.
There is no chance of a 1929-33 Depression. We know the lessons and we know how to stop it happening again.
A prime lesson of the Great Depression for most commentators has been that shutting down free trade in goods in order to protect industrial markets made the depression deeper and longer than anyone could have imagined. It stopped trade and industry recovering from the shock. That our Government is looking to blame foreign investors for our problems and is taking measures to frighten them off, and that Lord Adair is advocating, as the cure for a financial market crash, tight supervision of the surviving free markets in finance and commercial instruments, suggests the lessons have been rather badly understood. They risk stopping the financial markets recovering from the shock.
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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