Thursday, 3 September 2015

Emma Thompson and the Syrian dead

The world throws its hands up in horror at the sight of an Italian policeman cradling the drowned corpse of a Syrian Kurdish boy. I'm slightly surprised about this. We have known for months if not years of the terrible plight of refugees from North Africa and the Middle East (mixed up with the not quite so terrible plight of the streams of economic migrants coming from those places). Is it really the case that there are amongst us people who cannot conceive of the realities of people trafficking without seeing a photograph of its consequences? Apparently so.

Horror is not limited to the Left, although they do of course dominate it. Mixed in with this horror is a certain amount of hypocrisy. Labour leadership contender Yvette Cooper recently called upon Britain to take 10,000 refugees. I'm as certain as I can be that Ms Cooper was one of the Labour MPs who in August 2013 voted against a Coalition government proposal to take military action to support the rebels in Syria.  The rebels were at that time, remember, dominated by moderates rather than by ISIL. I can't be the only person puzzled by the spectacle of Cooper purporting to hold the government's feet to the fire over Syrian refugees when the actions of her and her colleagues prevented the Government doing the one thing which might have reduced dramatically the possibility of this dead boy's parents having to escape the country in the first place.

Of course it's not just Syria - the chaotic space inside that country provided and still provides ISIL with the base from which its operations across the Middle East have sallied forth. And it's not just Yvette Cooper either. Someone posted on Twitter this morning a wonderful juxtaposition of Natalie Bennett, the Green party leader, berating the Coalition in Parliament in 2013 for its military proposals with a picture of the same Ms Bennett yesterday holding a placard urging support for refugees. Truly these people have no shame.

And there are lots of them too. It's not just MPs. All across the media the airwaves are alive with the chirruping of the indignant, squawking about the government's failure to do more, utterly oblivious to the possibility that their own objection to military action in 2013 might have contributed to the present mess all across the south and east Mediterranean. "So of course you supported the Coalition Government in 2013 when they wanted to intervene on the side of the moderate Syrian rebels?", ask the interviewers. I'm kidding of course. The interviewers were probably against intervention too. After Iraq, isn't everyone?

But as I have long argued, it isn't enough to point out that those making an argument are unattractive hypocrites getting off on what the writer Brendan O'Neill described as "death porn". Neither can people like me say, "I told you so" or "I wouldn't have started from here". You have to show that in this particular case they are wrong.

So let's start with the morality of it. British law requires individuals to claim asylum in the first safe place they come to. Thus the people trying to hop onto trains and lorries at Calais are by definition not refugees. They are safe from persecution in France (incidentally, there is a prima facie case that most if not all cannot be refugees under French law either, and are thus illegal immigrants in that country; but no-one in France seems to care).

British law exists then to keep the maximum number of refugees out. It says, "If you can get here, we'll consider your application. But if you are too weak, too poor, too unlucky or too encumbered by dependents to get here, too bad".

There is nothing moral about our refugee laws then. But before we condemn them it's worth considering the practicalities. There must be millions of people across Africa generally who could in theory claim asylum in Britain. Leave aside the economic migrants, there must be millions who are at risk of persecution. We cannot possibly take them all. It is simply impractical. In that context it's possible to look at our laws as a genuine attempt to allow a realistic number of people into Britain, whilst preventing a flood tide that would overwhelm our ability to process, absorb and pay for them.

Comically, the Yvette Coopers and Natalie Bennetts of this world are exactly the same people who are telling us that we have a housing crisis, that the NHS is collapsing and that there aren't enough school places to go round. They cannot conceive that this might be something to do with net migration of 325,000 per year, an astronomic number to which they are proposing the government should now add thousands of Syrians. Truly they are beyond satire.

At times like the present, plenty of decent people say, "Hang the rules. Let's just do the right thing". But what would the right thing look like? 10,000, says Yvette Cooper. Is that 10,000 this week? This month? This year? Why is 10,000 right, but 5,000 wrong? Come to that, why isn't 15,000 better still?

For those shattered into action by pictures of dead children, more is always better. If 15,000 is better than 10,000, 20,000 must also be better than 15,000. Yet even the most ardent enthusiast would have to accept that, even if taking more refugees entitles us to feel better about ourselves, there is going to come a point when we say, "Whoa there. That's enough for now". I have absolutely no doubt that Yvette Cooper is not suggesting we take 10,000 per week. It follows that there is no point in numerical terms where the moral high ground is attained: there is always going to be a higher number which would be better still.

Yet the higher number you admit, the closer you get to the limitations of practicality. Yes, that's limiting asylum applications in much the same way as our law does at the moment.  And the risk is that the people at number 10,001 and above on the list (or 20,001 and above; or whatever) die or are tortured or drown, usually unseen by the cameras. Not exactly a morally ideal solution.

It looks then as if we are not talking about doing something absolutely right, but something which is a messy compromise between practicality and virtue. It follows that there might be another approach which, however imperfect, might be better than taking a token 10,000.

Taking asylum seekers has its drawbacks. It encourages more to come. That's to say, it encourages more to take their chances with the people traffickers and their rickety overcrowded boats. How does that help stop children drowning? If you doubt me, look at the chaotic scenes at Hungarian railway stations as Germany's promise to take large numbers of refugees acts as a magnet for the desperate. And with the desperate come the economic migrants. What kind of system is which allows economic migrants to get in but keeps out genuine refugees?

Taking refugees (or, more likely, taking migrants some of whom will be refugees and some merely looking for a better life) is a palliative. It is a partial treatment of a symptom.  What we should be doing is treating the cause.  We should be removing the reasons why people want to escape in the first place. Surely this would be more "right" than taking an arbitrary number of Syrians to make ourselves feel better (and in case you feel this is harsh on people asking for kindness to individual Syrians, how else are we to describe those who did absolutely nothing for three years and suddenly discovered their consciences because they saw a harrowing photograph?)

A proper response would involve helping countries (by direct physical intervention if necessary) to get rid of despotic rulers and set up democratic governments. Allowing the youngest, fittest and most enterprising people to come to Europe only deepens the problems those countries have. If they must leave, let them be housed in adjacent countries from which they can go back, and by all means let Western countries, including Britain, pay for them to stay there.

It would really help if the section of Western societies which howled at the moon when Bush invaded Iraq in 2003, opposed intervention in Syria and are now berating European governments for failing to take the ensuing flood of refugees could shut up for a while. The Middle East and North Africa are partly a mess because, at their behest, Western governments did nothing to help moderates topple Assad.

Luvvies like Emma Thompson, who suddenly turns out to have been sufficiently expert on refugees to appear on Newsnight (someone at the BBC must have felt it wasn't digging its own grave quickly enough), are people whose heartstrings are twanging a quarter-tone sharp. They feel bad, and want to do something (preferably in public) which will make them feel good. In a few weeks Thompson will be worrying about the Oscars or the BAFTAS. What people like her aren't willing to do is argue for the long term unglamorous strategic goals which might, in the long term, result in fewer people being drowned in the Mediterranean or beheaded by ISIL.

Successful intervention, as Iraq demonstrates, is incredibly difficult. The Americans and British remained in the country for ten years, and it turned out to be not long enough. You cannot expect a country without a democratic tradition to start making the messy compromises required overnight. We are guilty of thinking that there is a solution to this problem that can be accomplished painlessly and straight away. There isn't. As the American writer Alan Wolfe said, "Behind every citizen lies a graveyard". Peace and justice in the Middle East will not be accomplished without many, many dead, some of them ours.

We'd do better to accept that sobering thought and act strategically upon it than kid ourselves that taking a few thousand Syrian kids is going to sort things out.

The Raj, the EU and building the BBC's mausoleum

I'm bored sick of writing about BBC bias, but the damn thing just won't lie down.

The other day I came across this story in a Tweet from the blogger Mark Wallace. The essence of it is that in March the BBC broadcast a pro-EU film fronted by Angus Deayton. Even if you think the Corporation should be doing that just a few weeks before a General Election in which an In/Out referendum was an issue, the film was made by an independent production company which, it appears, took money from the EU to fund the project.

So it looks as if the BBC has broadcast pro-EU propaganda partly paid for by the EU itself.

At this stage the BBC is standing by its original denial.  It said, "No EU money was used in the making of the programme being aired on the BBC".

The evidence suggests otherwise, and it'll be interesting to see the answers to Wallace's questions in due course.

On a related matter, I watched as much as I could of Sue Perkins' programme about India last night. But her cringing apologies for the awful British Empire just became too much. After about two minutes.

The Raj may have been more bad than good, but before the British arrived India did not exist - the sub-continent was just a brutal rag-bag of warring states run by more or less despotic princelings and maharajahs. To the enormous benefit of its burgeoning population, it is now a democracy with broadly functioning institutions. Whatever one's reservations about Empire (and the Indians Perkins met seemed to have very few), it is a nuanced story and not Perkins' unmitigated disaster.

But in a way this is not the point. The point - as far as accusations of BBC bias are concerned - is that the Corporation would never have made the "other" programme, that's to say the one in which it sends someone with pro-Empire views to India. That's because for the bubble-wrapped denizens of Broadcasting House, able and intelligent though they undoubtedly are, the Raj is a shameful blot on our past. For them, that is orthodoxy and Perkins was doing no more than stating the obvious.

The BBC wrote that the Angus Deayton pro-EU programme "reflects the author's vision. BBC editorial guidelines do not prevent the acquisition of independent programmes which approach subjects from a particular perspective." In principle that's not a bad thing, but it's funny how the "particular perspective" is so often that of the Hampstead liberal (I should know; I used to be one). Would the BBC have broadcast a different "author's vision"? The vision of the imperial apologist? The vision of the anti-EU Little Englander (funded by, say, some Eurosceptic organisation)? Not in a million years.

And that's the trouble. Their assumption that everyone outside their own comfortable box thinks the same way as the generality of BBC staff is doing immeasurable damage to their own cause. It makes me want to weep. Brick by brick they are providing the Tories with the resources to build the Corporation's mausoleum.

Tuesday, 11 August 2015

Songs of Praise, Calais and that old BBC bias thing

So the BBC proposes to do an edition of Songs of Praise from the Calais refugee camp. So what, you may think. The Daily Express is not so sanguine, splashing the story on its front page complete with quotes from Nigel Farage.

You don't have to read what he says. You can imagine very easily.

Is the BBC right?

Let's start by agreeing that migration is a sharply political issue. People (and parties) are divided about how much immigration we should have, and who should decide how much we should have. The issue of our continued EU membership might well turn on the question. We're also divided about the issue of African refugees. How should we treat them? How many should we take? Should we help them cross the Med? Should we round them up and send them straight back? Should there be a formal allocation across EU countries? What is the best way to help Africa become a continent people want to migrate to instead of from?

Against that background, a programme which humanises and makes poignant the plight of those who have risked their lives to cross Europe in the hope of a better life (even if many of them are economic migrants) has an unmistakable political resonance. Sympathy for the migrants is easily equated to sympathy for migration.

Of course the BBC can't be above politics. It is imbued with it. And the political outlook of its staff is reflected every day even in the non-news programmes it makes. I've been arguing for years that if you tend to employ humanities graduates you'll tend to get a certain type of political outlook. A long succession of current and former BBC staff have confirmed this suggestion of emergent group-think (the phrase is Andrew Marr's).

As so often with the question of BBC bias, the most compelling signs are of the dog-that-didn't-bark variety. Where are the current and former BBC staff complaining of right wing bias? There aren't any. None. I've never heard of one.

I wrote quite recently here about the film Pride (W1A, Pride and the BBC). This, readers will remember, is the BBC backed film which followed the tribulations of gay men and women from London trying to help striking miners in the (fiercely socially conservative) South Wales valleys. I enjoyed Pride, but I couldn't help asking myself whether BBC Films would have put its money behind a film which took the other view.

"Would it", I wrote, "have backed a film showing Arthur Scargill as an evil communist intent on bringing down the democratically elected Thatcher government? Or about Jack Jones taking money from the KGB? Would it have put money behind a story about dutiful women of South Wales Chapel righteously upset about the promiscuous Aids-bearing homosexuals from the capital? Even to ask the question is to realise how laughably unlikely that would be."

And so with Songs of Praise. By all means go to Calais and do a programme humanising the awful tragedy taking place there. By all means show the plight of the migrants. But do the other thing as well. And that's the problem. The BBC wouldn't. Pace Pride, can you imagine Songs of Praise going to, for example, an unemployment blackspot in the North East and showing the plight of people who say they can't get jobs because the local industries are now the province of East Europeans? Can you imagine them doing the programme from places where people can't get their kids into schools because of the pressure from migrants and their families? Or from places where the local health service is facing bankruptcy because of increased demand?

Me neither. The BBC would just never do it. Why not? The most obvious answer is because it tends to employ people who tend to think that immigration doesn't have a downside. I'm not suggesting that, to use the Songs of Praise example, there would be a production meeting in which the possibility of going to an area of East London frequented by the gay-hating Muslim Patrol (see internet for details) was mooted and rejected. I'm saying the possibility would never occur to them. The Corporation just doesn't employ people who think like that.

You have to ask yourself, at a time when Charter renewal is only a few months away, with a newly installed Conservative government confident in its diagnosis of BBC bias, in a context where alternative funding arrangements which could replace the licence fee are increasingly accepted across the industry, how could they be so stupid as to present their enemies with such a simple tap-in?

I hope the Government doesn't throw out the BBC baby with the bathwater. But if they do the Corporation will only have itself to blame.

Monday, 10 August 2015

How Jeremy Corbyn could win (Yes, really).

At the time of writing it looks as if Jeremy Corbyn has quite a decent chance of becoming Labour Party leader. The last time I voted Labour in a General Election was in 2005, so I don't on the face of it have much interest in the outcome of the party's leadership contest.

The tactical point made by Blairites and political journalists alike is that the electorate opted for the Tories when offered a choice last May between Centre Left and Centre Right.  People are, the argument runs, unlikely to turn out in large numbers for a Labour Party further to the Left. Thus if Corbyn wins, Labour is bound to lose.

I actually think this is wrong.

The most obvious reason is the inherent uncertainty of politics. No one knows what's over the horizon. Harold Macmillan's "Events, dear boy, events", if you like. It's perfectly possible that a disaster so fundamental could overtake the Tories that Jeremy Corbyn would seem quite attractive by comparison.

But even in the absence of some Black Swan event, as Billy Bragg (one of Corbyn's celebrity endorsers) tweeted the other day, it's perfectly possible to calculate that if Labour shifts to the Left it will gain enough voters (particularly among the young) to win. It's a defensible tactic.

As it happens I think that Bragg has set his terms too narrowly. Yes, Labour will gain some otherwise apathetic first-timers. But, faced with the prospect of a Far Left government, some Labour voters will turn elsewhere (perhaps the Lib Dems or UKIP), lazy Tories will turn out who might not otherwise and some Lib Dems will vote tactically to keep Labour out.
Moving Left may be a gamble worth taking, but it's a bigger gamble than Billy Bragg realises.

If a Corbyn-led Labour Party isn't bound to lose, it nevertheless probably will, and to that extent as a former Labour voter I don't know whether to laugh or cry.

The overwhelming majority of Labour supporters, and a good many of its professional politicians, think that the financial crisis was all the fault of the City, that Labour did not overspend whilst in office, that Britain is suffering the yoke of Tory austerity, and that any alleged black hole in the public finances can be filled by taxing the rich a bit more. For them public spending should be limited by compassion, not affordability.

Then there is a group which understands that Gordon Brown's tinkering with the regulations gave the City more freedom to misbehave, that Labour ran substantial deficits during the 2000s which left the Treasury ill-prepared to deal with the downturn, and that if the bankers had behaved responsibly the lending spree which Labour rode with such ill-disguised glee ("No more Tory boom and bust") would have come to an end much sooner. They grasp that, despite alleged Tory austerity, public spending actually continues to rise and that the trouble with taxing the rich more is that there aren't very many of them, they don't on the whole get their money in an easily traceable PAYE cheque at the end of the month and they can afford accountants. These people also grasp that, ultimately, you can only have the public services you can afford.

The second group is a very small minority within Labour, and one largely grouped within the parliamentary party.

If you had to choose a demographic in Britain likely to contain the smallest number of people who took this second view, the Labour party membership would be a pretty good contender. Which is why polls show Liz Kendall lagging a distant fourth in the leadership race. That's the crushing irony. The people charged with deciding who is best placed to lead Labour back to power are those least likely to understand what's necessary to do so.

Labour can regard its election defeat in two ways. It can say that the electorate was wrong, and that all it needs to do is keep on persuading enough of us to change our minds. 

Alternatively it could say that perhaps the electorate was in some respects right, and work out how it might change its pitch accordingly.

Unfortunately for Labour the first response requires nothing special. It merely requires its supporters to behave the way most people do faced with rejection. I was right! How dare they be so stupid! The second response on the other hand requires something exceptional - humility and openness. Since so many more of us are all too human it's not surprising that the first response has overwhelmed the second amongst the Labour faithful.

What makes it all the harder for them is that if the electorate were right, where does that leave Labour? If the days of the blank cheque are over, what is Labour for? The point of Social Democracy is that government taxes the surpluses capitalism produces, and uses the money to make a compendious safety net for the poor. But what if there isn't enough money to do that in the way Labour wants? How does it appeal to the electorate then? If it accepts Britain must live within its means, how does it differentiate itself from the Tories or Lib Dems?

This is the appeal of Corbynism. Rather than position itself as a Tory-lite party, the temptation is for Labour go the whole hog and stand proudly on the Bennite Left. The Blairite response to this proposition is, "But you will never win a general election". "Ah", say the Corbynites loftily, "but what is the point of winning when doing so would make us just as bad as our enemies?"

As I said, it's almost funny.

I can readily imagine circumstances in which I might vote Labour again. I think Liz Kendall is an incredibly impressive candidate. A good leader and some sensible policies might do it. 

But Jeremy Corbyn? Come on.

In my lifetime Labour has gone on a journey which reflects both the vaulting ambition of its statism and the undermining of the industrial base which might once have been used to pay for it.  It has gone from being the party of tax and spend (Wilson, Callaghan, Kinnock), to the party of tax, spend and borrow (Blair and Brown). Corbyn proposes a further transformation to the party of tax, spend, borrow and print money. Not on your Nelly.


















Tuesday, 14 July 2015

Arvo Part - any good?

In the 1980s when I was having lessons with John Tavener, he played me part of a piece by Arvo Part. "People say he's like me.  Or the other way round", the sage of Wembley Park said in his scratchy patrician voice, "I don't hear it myself though". I remember some chugging strings, fairly static; then an abrupt gear change. Then John turned the music off and we went on to other things.

A year or so later Part's Second Symphony appeared on the Proms programme. I went along. It sounded to me like an Estonian Vaughan Williams. I was somewhat against Vaughan Williams at the time and thought the piece dull; duller anyway than the brief snatch Tavener had played me.

While I was still at College I went to the British premiere of Part's St John Passion, sung by the Hilliard Ensemble. As I remember this piece meandered on for an hour or so in A minor, ending rather strikingly in a blaze of A major.  I wasn't totally sure it was worth the wait.

Then that was that for a while. I remember people talking highly of a piece Part had written as a memorial to Britten, but heard nothing more of his music until the chance discovery of the cello version of Fratres, a slow meditative piece which the composer has arranged for many instrumental combinations. This I really liked - simple, but with a masterly grip of musical architecture.

So last Sunday's all-Part Manchester Camerata concert was the immersive experience for part-timers like me. What was it like?

Interesting and enjoyable. We got Fratres again, this time in a string orchestra version; I prefer the one for cellos, because the thumb-stopped harmonics at the start of the piece have a special unearthly quality that high violins can't match, but it's still very striking. There was a nice little unaccompanied choral piece sung by Vox Clamantis. Then the choir and the Camerata did the Stabat Mater, a longer and more substantial work, harmonically static, perhaps G minor this time, but often richly decorated. After the interval we had Da Pacem Domine, a minature version perhaps of the same idea, and then a much bigger orchestra arrived - triple woodwind no less - for Como cierva Sedienta, a solo motet for high soprano.

Como cierva Sedienta was perhaps the least successful performance, sometimes overscored and with the soprano inaudible in the lower register. I thought there was too much instrumental colour, like a pastiche of Richard Strauss with all the gorgeousness removed. Moreover the musical language seemed to reach back to the duller more romantic idiom of the Second Symphony. Music essentially lives and dies by the quality of its invention, and there was nothing in it I found memorable or interesting.

In the other more obviously liturgical pieces, scored for strings only, Part's ideas seemed to be better served by a narrower and more focused range of sounds. Their language suited his particular version of minimalism better too. You might describe it as Neo-Baroque if that didn't call to mind Stravinsky's hyperactive take on that idea nearly a hundred years earlier. It's less reliant on melodic ideas than Como cierva Sedienta, much more on Part's ability to spin extended musical paragraphs which sit there looking at the view.

Is Part a minimalist? Kind of. You could certainly walk in and out of the longer pieces without missing much. Perhaps that's the intention. My wife didn't think it was static music, but harmonically most of it is, very much so. Fratres was much the most inventive harmonically of the strings only pieces, but rests on a grounding open fifth in the basses; its tonality is never in doubt. The liturgical pieces had surface movement, but rested for very long periods in the same key. I was interested to find Part paying attention to the little orchestral details which composers use to help maintain the audience's interest. There were pizzicato punctuations in the Stabat Mater placed structurally in exactly the same way Elgar uses them in Nimrod. This was not ruthless minimalism of the Philip Glass variety, but minimalism in which the composer is doing his best to make sure the audience doesn't nod off.

But Part, like so many post-war composers, is either not very good at writing fast music or not very interested in it. I find a lot of Tavener's music too rooted in contemplation to make a whole evening's worth, and when Part did get busy in a couple of places in the Stabat Mater it was in brief flurries of elaboration rather than because the fundamental pace of events had quickened.

When conductor Gabor Takacs-Nagy, doing a fine job as usual, gestured towards the audience at the end, it took a moment for me to grasp that Part was actually there in the hall. I had no idea he was still alive, let alone in Manchester. To see this elderly chap, frail but still sprightly, make his way onto the stage was particularly moving. For one thing it was there that I last saw Tavener, only a few months before his death. But Part has made a great contribution to European music, and it was fantastic to see the hall - packed for contemporary music people like (as opposed to all the other stuff they don't but which gets foisted on them anyway) - rise as one in acknowledgment of his achievement.

Part, like all elderly composers, bore the marks of his struggle to produce great art, but also looked totally chuffed to receive the cheers of his admirers. As well he might.

Greece, Simon Schama and putting the cool people in charge

In November 2011 I wrote on this blog, "I can't see any way in which Greece will still be in the Euro by the end of 2012".

So that prediction went well.

What I had not then realised is that those who get to the top in the Game of Euros are by definition committed to the Project.  They'll do pretty much anything to keep the show on the road. So the bail-outs, the interminable conferences, the late night agreements, the postponement of appointments with reality, the can-kicking forever and ever.

But in the last four years I have become wiser and thus am not terribly surprised this morning, 14th July 2015, to find that Greece is still in the Euro, 48 hours after its premier Mr Tsipras finally caved in to the Eurogroup's demands and agreed to take them back to Athens for ratification by the Greek parliament.

At the heart of this shambles is a problem of democracy. The Greeks desperately want to be in Europe - Tsipras said he had a mandate for rejecting European demands but not for leaving the single currency. The German government on the other hand answers to an electorate which is fed up of paying for Greek failure.

The electorates of both countries are deluded. The Greek people don't seem to have noticed that it's being in the Euro which is one of the prime causes of their troubles, or that you don't have to be in the Euro to be part of Europe (look at Britain). The German electorate on the other hand doesn't seem to have realised that not every country can be like theirs - not every country can have a strong economy whose exports have benefited enormously from having a currency lowered by its association with weaker economies like Greece - and that for every creditor nation there must by definition be a debtor nation.

Both Mrs Merkel and successive Greek leaders have lacked the guts to tell their electorates the truth.

And the consequence of all this? Greece has had it. It has apparently signed up for outside supervision and interference in the running of its economy. It must run a surplus.  If it doesn't run a surplus it must cut spending further, thus guaranteeing its economic nosedive will steepen. It must find 50 bn Euros of state assets to sell, and put the money into a fund beyond Greek control to pay off its debts. And if it jumps through all these successive hoops then there might in future be a discussion of debt relief, at least in the form of extended maturities.

There seems absolutely no prospect of this plan working. Greece owes too much money. Some of it needs writing off. And while we wait for conclusive proof that the plan isn't working Greeks face a future of bleakness unimaginable to Britons.

What does this tell us about Europe? Firstly, that Germany is boss. Even though France apparently wanted kinder terms, their ridiculous bespectacled penguin of a leader was unable to face the Germans down. It tells us that all the talk about the club of nations, about solidarity, about co-operation is just so much flannel. It tells us that Euro area is not a currency union at all, but merely a hard currency peg from which smaller nations slip at their peril. The ECB, remember, pulled the plug on funding Greek banks a couple of weeks ago in what may well be a breach of its duty to ensure financial stability. That was a political act as much as an economic one.

None of the European leaders come out of this well. Mr Tsipras overplayed his hand. He gambled the Germans would give ground. They didn't. He made no preparations for a return to the drachma and when the banks had to close he had nowhere left to go. He ended up with a deal significantly worse than he and Varoufakis could have got five months ago, and significantly worse than the one his countrymen roundly rejected in a referendum.

That's what happens when you put the cool people in charge.

On a superficial analysis Mrs Merkel got what she wanted. But the plan she wanted won't work and we'll be back here again, perhaps within months. And that's even if the Greek parliament ratifies the deal. Moreover the watching world has learned things about the dynamics of Europe and the Eurozone which are exceptionally unpalatable. Essentially its partners were willing to let Greece go to the wall rather than face down their own electorates.

After so many earlier failures I am wary of making predictions. Better leave it to others. And here's a stonking great hostage to fortune. Two days ago Simon Schama wrote on Twitter, "If Tsipras was wearing the crown of King Pyrrhus this time last week, Merkel is wearing it now. Her ultimatum beginning of end of EU".

That's a big claim.


Friday, 12 June 2015

Chris Addison, George Osborne and how the lofty are undone

A few years ago I wrote a post about the Guardian journalist Aditya Chakrabortty.  Entitled - imaginatively - Valuing Aditya Chakrabortty, it explained how the paper's chief economics leader writer had misunderstood the nature of value in the context of the Government's sale of its stake in Northern Rock, the failed building society.

For people like me there is not much hope that the powerful will read what we write, but a couple of weeks later Chakrabortty did return to the subject with a snarky reference to nitpickers, so I like to think that at the very least he does Google his own name from time to time.

Now this may seem like using a sledgehammer to crack a nut, but it's worth repeating these arguments every now and again, and this time the culprit is the bouffant Left wing comedian Chris Addison.

Actually comedian may not be the right word for Addison, because I don't know if he is actually funny in person. He appears on game shows I don't watch and I know who he is only because of his acting role as a hapless special adviser in The Thick of It, a programme which is funny but rests on the premise that all politicians are venal and stupid, the implied subtext being that if its Left wing actors and writers went into politics they'd be much cleverer and more sensible.

If they could be bothered.

So what has Addison done to get my goat? He has repeated what I like to call the Chakrabortty Fallacy. You may have noticed that the Government is proposing to sell off part of its stake in Royal Bank of Scotland, the bank that had to be rescued in 2008 by a £37 billion injection of UK taxpayers money. At the time the shares were trading at about £5 each. They're now trading at £3.50.

Enter Chris Addison. Yesterday he Tweeted "If George has a share worth £5 and George sells that share for £3.50, explain why George is Chancellor of The Exchequer. Show working".

I'm sure you get the picture. Why is stupid George Osborne proposing to sell some of Britain's RBS shares for less than they're worth, losing the taxpayers billions in the process?

But Addison, like Chakrabortty, doesn't understand what value is. Something is worth what someone else is prepared to pay for it in an open market. But firstly Addison is failing to look at the upstream end of the equation. Yes, RBS shares were trading at about £5 in 2008. But the bank was essentially bust, and if the then Labour government had waited for this to make itself manifest in the hope of paying less, RBS might have crashed, with knock on effects in the British and global banking systems which don't bear thinking about. At the time RBS was one of the biggest banks in the world.

The figure of £5 per share didn't represent an ordinary open market price then. If the markets had known RBS's true situation the shares would have been worth much less. In fact in the following January the shares were trading at 10p each, a fall of some 97%. And that was after HMG had bailed it out.

So the Government paid a price which didn't represent ordinary open market value - it paid a price which represented, as with Northern Rock, the cost of preventing the British banking system from collapse, and the buyer was no ordinary one but perhaps the only party with both the means and the urgent will to stop that happening.

Moreover George Osborne does not, contra Addison, own shares "worth £5". He never has. As I've explained, the shares weren't even worth £5 then, at least not to the ordinary buyer. So in what way are they worth £5 now?

Actually Addison is too stupid to realise he has answered his own question. We know what the shares are worth. They're worth £3.50 because that's what people are willing to pay for them in an open market today. A journey, incidentally, upwards from 10p that looks nothing short of a minor miracle.

If Addison weren't so set on joining the general Leftist condemnation of George Osborne (who continues, annoyingly, to be a capable and cunning Chancellor), he might have put a more thoughtful and pertinent question.

"If HMG bought a share for £5, why is it now selling it for £3.50?".

This is the kind of question which every unsuccessful stock market punter has had to face from time to time. The best answer I can give is that the money has already gone, and the only way of getting it back is to gamble that the share price will recover in time and we will end up making some money. But this would be a gamble because we don't know how RBS will do in the years to come. No-one does.

And in the meantime the UK is borrowing nearly £2 billion every week just to stay afloat, and is paying billions in interest on its borrowing every year. In that context cashing in some assets to lower the deficit is a perfectly defensible strategy. It may turn out to be wrong in the long term, but no-one knows that, least of all Chris Addison.  Making these sorts of decisions is precisely the kind of thing we elect politicians to do. Does anyone really think Osborne would have ordered the sales now in order to make less money than he could later?

What depths of plonkerdom has Chris Addison plumbed. His Tweet invites followers to share his disdain for the Chancellor and laugh at Mr Osborne's stupidity. To date about 5,000 people have favourited or R/Td it. Oh how they must have laughed! And yet it turns out that, despite his lofty tittering, it's actually Addison, failing to understand one of the most basic priniciples of economics, who's made an idiot of himself.