I'm just off to Brussels where a sandwich now costs about £500 because the pound is so low. Currencies have their ups and downs, but smooth those out and they're a pretty good indicator of how an economy is faring. Basically, if nobody is buying your stuff, they don't need to buy your currency to pay for it, and your currency collapses. Well, a huge wodge of the UK economy was banking and financial services – promoted enthusiastically from the moment that Tony Blair and Gordon Brown assumed office in 1997 – but that business has been stopped in its tracks. Nobody wants to buy stuff from a bunch of wallies who sail so close to the wind that they keel over and have to be bailed out by the government.
The stock market is bouncing up again, but it's a dead cat sort of bounce. There's no obvious reason for it, other than the fact that Obama is proposing to spend a trillion dollars giving America infrastructure it doesn't need. The FTSE 100 companies are highly international firms, and some are almost American, really, so that helps them. But it doesn't help the UK economy all that much. Maybe we'll get lucky and Obama will buy a few of our JCBs to dig his foundations.
No, the pound is the best indicator, and that's sliding downwards. A few years back, Britain was the world's fourth largest economy, though the rise of the huge economies of India and China booted it down to sixth. Then we were overhauled by Germany. There's a fair chance that when the books are closed on 2008 we'll turn out to be behind Russia and (horrors) France – and maybe even Brazil and Italy. How humiliating is that? I'm afraid that Gordon Brown's boast that Britain was better placed than most to survive the downturn stands exposed as a total lie. Ask the foreign exchange dealers.
So, Ed Balls has backed yet another brainless scheme, this time relating to child obesity. This latest plan is to ban fast food and takeaway restaurants from within 400m of every school, youth centre or park. As soon as I read about this proposed scheme the impracticalities of it became apparent.
Firstly, having only left sixth form this year, I would like to think I understand the psyche of the average school student better than Ed Balls. My school had a national ‘Healthy School Status’: as such there was an abundance of reasonably priced salads, fruit, nut-bars and low-fat yoghurts. But every day there were still hoards of my peers walking down the road to every type of takeaway restaurant imaginable. Clearly, forcing healthy food onto young people does not work. In fact, from my experience, it only created resentment towards our school canteen as we were being forced further away to find the choice of foods we wanted.
Quite apart from that though, the idiocy of this scheme is laughable. I am trying to think how far I would have to travel from my house to find an area which is at least 400m from a park, youth centre or school: it’s quite a way! And what would happen if a new youth centre was opened in a high street – would all the takeaway shops have to close their doors immediately?
According to the Federation of Small Businesses, this industry is worth £20bn a year, and Balls' scheme could significantly damage small firms. In the current economic climate, the government should be encouraging businesses and entrepreneurs rather than working to ensure their demise. This is yet another example of a poorly planned top-down scheme with little consideration for people, businesses or local issues. By all means let schools educate children about the dangers of obesity (although perhaps teaching them to read and write properly should be the priority). But then allow them or their parents to make their own free choices.
The German government yesterday denied any prior knowledge of the SS and Gestapo raids which killed 85 people on the "night of the long knives." In a statement Herr Hitler said, "This is a purely operational SS matter, and government policy remains one of non-intervention." Fieldmarshall Goering said it would be wrong to intervene in an ongoing SS investigation. Reichsminister Goebbels accused those raising the issue of "a blatant attempt to intimidate the Gestapo and prevent it from carrying out its duties," while Herr Himmler announced that there would be an internal SS enquiry into the incident, chaired by himself.
This No2id video is a reminder of how people will be put in danger by the introduction of ID cards and the national database. We have in fact already had cases of people bribing their way into police and other databases to find those they mean harm to.
If you'd like to know how the modern art market works (at a level of sophistication a little higher than selling rotten sharks to financial sharks) a book recommendation for you.
Even the soft left are amazed at the economic ignorance of the hard left.
Professional defending his turf or a solution to what ails the NHS? Your choice.
Have councils stored up trouble for themselves by taking out interest rate swaps and or insurance?
Pompous writer at NY Times (now there's a surprise!) gets depomped.
And finally, the Charlie Mingus method of toilet training your cat.
I'm going off Obama and he isn't even in the White House yet. In response to the news that America lost half a million jobs in November, he's announced a massive spending programme of new roads, bridges, schools, internet cables, and much else. It's estimated at $700 billion, but it might even top a trillion, say some.
There are two problems with this. Firstly, where is all that dough going to come from? Well, it's going to come mostly from borrowing. With US interest rates at 1%, borrowing is cheap, for the government as for everyone else. But then it was cheap credit and too much borrowing that got us into this hole in the first place. Whatever the problem - the 1987 crash, the dotcom crash, 9/11 and now the 2008 meltdown - the federal government has thrown money and cheap credit at it. Yes, it prevented downturns in every case: but we all got hooked on the stuff. Just like a drug addict, it has taken larger and larger doses to keep the high going. We've been so high for so long that the inevitable comedown is now that much longer and more painful.
So what are we going to do? Inject ourselves with more of the same drug, and hope it will get us through the pain. Well it might, but only at the cost of more pain later on.
My second objection is that building programmes like this too often reinforce the economic ups and downs, rather than smoothing them. You can't just build roads, bridges and schools overnight. You need to work out the need for them, design them, specify them, get planning consents for them, tender them out, review possible contractors, hire in staff, fund them, build them. So it can be two years or more before any real cash starts to get paid out to all those currently-unemployed construction workers. By that time, the economy might have started to get going - so you're not spending in a depression a la Keynes, you're spending in an upswing and simply taking resources from that recovery.
Now that the financial sector is stabilized - well, a bit more stable - it's not a matter of having to intervene hard and big just to make sure confidence doesn't go through the floor and add to the crisis. It's a matter, sadly, of going through the hangover and getting on our feet again. But yet another dose of the money drug isn't going to help us kick the habit.
I spotted this story in The Times over the weekend. A new report from the Institute of Fiscal Studies has shown the effect of tax and benefit measures imposed by the Labour government (taking the measures in the pre-budget report into account), and it does not make happy reading.
According to the IFS's calculations:
By 2012, an average dual-earner couple with no children is set to be £2,208 a year worse off than they were in 1997.
A single earning couple with no children will be £1,684 worse off.
A dual-earner couple with children will be £1,466 worse off.
Employed single people will be £1,281 worse off.
The groups that will have benefited most from Labour's tax and benefit changes are no-earning couples with children (£2,901) and unemployed single parents (£2,491).
These figures speak for themselves: most of us have paid a high price for Labour government. Of course, they would probably just argue that these higher taxes have led to an extraordinary rise in standards in health and education, a better deal for pensioners, and more 'social justice' for the deprived. But I don't think that's true.
Certainly, people with children and little or no income get more money now (although perhaps this has had unintended consequences) and many pensioners are financially better off (not the ones who had private pensions though). But British schools have slipped down international league tables, and a massive increase in health spending has brought only marginal improvements. Meanwhile, we have seen no great regeneration of Britain's transport infrastructure.
Here's a thought experiment: what if we hadn't had a government since 1997, and everything had just been run as it was then? We would probably have eliminated the budget deficit and paid off most national debt. We would have considerably lower taxes. We would have the best private pensions system in Europe. The EU Social Chapter would not have effect in the UK (so no EU labour laws or health and safety nonsense). And we'd have fully-fledged internal markets in health and education. In short, it wouldn't be a perfect country, but it would be a lot better than it is now.
One of the more startling rhetorical collisions of recent times. John Redwood channels Neil Kinnock.
So just why do people take out startlingly expensive short term loans? Because they benefit those who take them out perhaps?
Would you, in the current market, take out a 4 year, 123% loan to value, mortgage for $3,074, 239. Would anyone give you one?
Schadenfreude is the most glorious of human emotions.
It's very difficult indeed to see that any of the proposed climate change suggestions are economically efficient. Or even have their incentives correctly aligned.
Certainly, some seem to think so. That all this naked materialism, this incessant competition for the daily necessities of life darken, even blacken, our souls. However, consider the alternatives:
First, if the market corrupts, the various negations of the market corrupt absolutely. Look at fascism. And look at that other hatred of the market that preceded and followed it: communism. I doubt that anyone would posit communism as the fulfilment of character and soul for its victims or agents. Second, if these corruptions must be ranked, it is patently obvious that the communist or the fascist corruption through the negation of the market is significantly deeper, deadlier and more irreparable than the first. That was obvious for fascism from the start and it eventually became obvious for communism too.
The truth is of course that markets aren't the way in which we compete with each other. Not, at least, in the sense we do under either communism of facism, where we are competing for the set amount of political power over our fellows. Rather, markets are the way in which we cooperate with each other.
Finally, a third corollary: because the free market develops the qualities of taking initiative and making decisions, because it places individuals into relationships with each other, because it is a regime that makes sense only if its subjects relate to one another, the free market remains a factor promoting socialisation, a means of connecting human beings, even of creating fraternity or, in any case, mutual recognition. Hence, it is the opposite of corruption. We should read Emmanuel Levinas on the question of money. He argued that, far from isolating and atomising individuals, money is, in fact, the medium of their interchange. And so it is necessary to conclude that there are good uses for the market, since it is one of the means that human beings have found to resist the all-out war of everyone against everyone else, diagnosed first by Hobbes and then by Freud.
Quite so, markets are (and money simply facilitates) voluntary exchange, something which is at heart simply cooperation with those around you and those further away. Markets are many things of course, they are price discovery mechanisms, they are distribution mechanisms, but their basis is simply humans dealing with each other on a daily basis. And what could be corrupting to the soul about that?
I was meant to go on Radio 4 on Friday to talk about whether the government should force banks to pass on interest rate cuts to customers. In the end another story took its place, but here's what I would have said.
The banks are being pulled in two ways by the government. They've been told they have to become financially stronger and rebuild their asset sheets, and that's what they're doing. But now the government wants them to lend more too – which it's doing for popular consumption rather than any business reason.
The government shouldn't be micromanaging banks. Bankers know they have to consolidate their businesses, so that we can trust them in the future, and that's what they're doing.
Plus, the banks probably figure more people are going to default on their mortgages, but now the government is forcing them, effectively, not to foreclose. So they need some padding to get through that. It may be bad for borrowers now, but it is good for the financial sector in the long term.
One big problem is that there's now much less competition in banking because recent forced mergers and acquisitions has reduced it. In the long run, we'll need much more competition in the sector because that will put more pressure on banks to operate efficiently and give customers the very best deal. A few well-managed banks have already passed on the cut. It's the others who have to rebuild themselves that haven't.
Ultimately, it's just not for the media or politicians to tell people how to run their businesses. If there is proper competition, customers will be protected. In a free market, you can choose a different institution that doesn't charge so much.
I'm just off to Brussels where a sandwich now costs about £500 because the pound is so low. Currencies have their ups and downs, but smooth those out and they're a pretty good indicator of how an economy is faring. Basically, if nobody is buying your stuff, they don't need to buy your currency to pay for it, and your currency collapses. Well, a huge wodge of the UK economy was banking and financial services – promoted enthusiastically from the moment that Tony Blair and Gordon Brown assumed office in 1997 – but that business has been stopped in its tracks. Nobody wants to buy stuff from a bunch of wallies who sail so close to the wind that they keel over and have to be bailed out by the government.
So, Ed Balls has backed yet another 
I'm going off Obama and he isn't even in the White House yet. In response to the news that America lost half a million jobs in November, he's announced a massive spending programme of new roads, bridges, schools, internet cables, and much else. It's estimated at $700 billion, but it might even top a trillion, say some.
I was meant to go on Radio 4 on Friday to talk about whether the government should force banks to pass on interest rate cuts to customers. In the end another story took its place, but here's what I would have said.