The Slog introduces the concept of Benign Revenge on Establishment complacency
This is going to be a somewhat unusual Slogpost. Unusual in that there won’t be the usual avalanche of illustrative numbers in it; there’ll be some I expect, but the numbers will be largely irrelevant compared to the other overview points I’m trying to make. The helicopter shots I hope to offer you should be self-evident – and it’s on those that we need to focus.
To use a time-worn (but hugely apposite) saying, this is, at last, “get real” time.
Thus the post will be less about deconstructing bollocks, more about the inevitability of what happens when the bollocks runs out. One bit of bollocks I’ve found increasingly hard to tolerate for a few months now is this incessant – and utterly unconvincing – use of the phrase ‘technical recession’. I am at the point on my shortening fuse now when it is time to say, “I don’t give a monkey’s chuff about definitions, because they don’t help. I want to know what those allegedly in charge propose to do about the 93% of folks about to be wiped out; and I want to know when you will face up to the myriad internal flaws in what you’re proposing at the moment.”
Here’s a longer variant on this kind of bollocks. It is the lead paragraph from a press release Standard & Poors sent me last Friday, and it reads like this:
‘• In our view, the U.K. has a wealthy, open, and diversified economy, supported by effective political institutions that can react quickly to economic challenges.
• We expect economic policy to continue to focus on closing the fiscal gap, and we forecast the U.K. government’s net debt burden to peak in 2014.
• The U.K. benefits from what we see as a large liquid market for government debt issuance, entirely funded in domestic currency at long maturities.
• We are therefore affirming our ‘AAA/A-1+’ long- and short-term unsolicited sovereign credit ratings on the U.K.
• The stable outlook reflects our current expectation that the U.K. government will implement the bulk of its fiscal consolidation program and that economic growth will not falter more than what (sic) we currently project.’
Now let’s suppose, for a minute of madness, that this entirely erroneous flight of fantasy is correct.The question I have is, “Fine, who’s going to do the consuming?
Better off corporately and privately funded pensioners in the UK have, over the last four years, seen annuity rates fall, interest rates down near to zero, rising inflation, and a Government edict reducing the amount of annual drawdown they can take off those pensions. Thus, the 20+% of the population most able to get consumption moving again can, as a result of these changes, expect to see their incomes drop by anything from 25-35%.
Add to this the manipulation of markets by taxpayer-funded ‘easing’ programmes, and their outlook worsens considerably. The main effect of QE has been to pump the world’s stock markets up way beyond a level that reflects economic trends. Those whose funds were invested in ‘bear notes’ (logically expecting stock markets to fall in line with those obvious trends) have thus seen their essentially wise decisions turned into a wholesale slaughter of value. Spending power for these unlucky people will have halved.
Pause for thought here, and examine the enormity of this fraud.
Because idiot investment bank product development emptied Exchequers across the globe, the result has been poor loan liquidity for business, and economic stagnation. To save these banks, our post-tax rate-investment monies have been slashed by Zirp. To refill the Exchequers, our taxes have risen, freezing the State pensions we get. And to refill the streams of liquidity, this tax we’ve paid has been poured into QE – ensuring that our taxed private pension monies invested logically have been halved. Any income we have left (after that 50% has been pointlessly removed) will also be taxed.
This is the truth of it: one minute elite has ruined any quality of life we can get from the State; and to pacify that elite, the State has used money they’ve already taken from us, demanded more of what we’ve got, taken away what income it gives, and taxed us at every stage of the game. Not since the aftermath of the Battle of Hastings in 1066 has one elite so viciously and unjustly pauperised an indigenous population.
The rough, round-number proportion of the population in this multiply-squeezed Saxon role is in the region of 17%. So after the unaffected 7% of elite clowns (for whom all this is being done) are added, that leaves around three-quarters of the population I didn’t get to yet.
That remaining 76% will see – without much reasonable cause for doubt – a massive fall in house prices, and a good chance of unemployment – over the coming twelve months.
Of these, 8% (older baby boomers) will become physically more disabled, and a further 4% will lose their faculties and need care home attention. This won’t be forthcoming, because either (a) nobody in the family will have the £50,000+ per annum required to pay care home fees, or (b) there is no State care available. They may have property they can sell to help with this…but with the market in freefall (and despite QE, still an almost total lack of loan availability) they’ll be a long time waiting for a buyer.
Any money they do have tucked away for the eventuality of parental marble-loss will fall in real value. Even gold now is an uncertain investment: either because, bizarrely, it might correct and/or be the subject of more Stock Market defence; or because most people have nowhere safe to keep it and/or can’t get hold of it.
I choose these dimensions of obvious consequence because they illustrate just how assumptively stupid the MoU view of life is. But there are a thousand dimensions to interrogate.
Here’s another: any business selling consumables to the 76% will be in severe danger of going under. Any business selling durables to the 93% will die. And as the Americans discovered during the 2010-11 period, the super-rich 7% are just as useless at restarting an economy as they are at doing banking and business. (The only thing they are good at is awarding themselves enormous bonuses for making catastrophic decisions).
Increased taxes alongside pitifully inadequate government waste cutting will mean Sovereign debt management becoming more onerous still. Those taxes will reduce the revenue received by the Government, while the worsening recession will increase the cost of unemployment benefit. A shortage of jobs will in turn lower wage rates, given that those good ol’ decisive free markets will continue to operate on such a basis. That will reduce demand further still.
There are two central points I want you to stick in your heads at this point. First, we’ve all been left with nothing to invest in, while at the same time been given less to spend. And second, the Government – far from helping its citizens – has actively colluded in the process…but whatever small amount of help we might expect from them hereafter won’t be there, because the Government is going to collapse under the weight of its unsustainable debt.
Is this sensible capitalism? I think not. Will this produce a highly unstable society? Of course it will.
Now cast your eyes across the English Channel.
Over there, a disaster is ripening rapidly on its way towards becoming a Triffid in full-bloom. There is no point even trying to predict the detail of what will emerge from it, beyond saying it won’t be good for Britain. And it won’t be good for Britain because we are absolutely tied to the EU by an umbilical cord….thanks to generation after generation of too-clever, cynical British politicians lacking the commercial vision or courage to see how much better our opportunities were elsewhere – and what a controlling, corrupt, over-regulated monster the EU is.
Given the appalling state of our banking system – Mervyn King, who knows just how bad things are, looks more frightened every time I see him – there is no chance now at least one hybrid version of inflation can be avoided, no way that exports won’t be decimated by it, and not a hope of avoiding money-printing to keep the day of reckoning away. What we’ve got today is going to seem like Paradise by the end of 2015.
Now go back to the S&P verdict I laid out earlier, rub your eyes, and tell me why any one small part of my alternative outlook is unlikely to happen.
So that’s the reality check for us. Now, a warning to the Elite.
When I first began saying, in 2004, that without a dramatic change in global fiscal policy and consumer credit attitudes we would one day arrive at an abyss, only a handful of people thought I might be on the correct side of bonkers. When in 2007 I talked about my fears for liberal democracy’s survival in the face of econo-fiscal breakdown, I got positioned in an even more weird outer orbit somewhere close to David Ickes. When a French friend and I took on the rest of a large (and posh) dinner Party in 2008 to say that the euro would be gone by 2020 – and the EU in its current form would be a distant memory by 2030 – the guffaws of laughter could be heard across Lot et Garonne.
You’d be hard-pushed to get a bet on that last one today: most informed observers can’t see the euro lasting beyond 2014. The point of this brief history is (a) to once more demonstrate my genius and (b) to show how massively most folks underestimate the speed and profundity of what’s happening here.
Nobody is more in denial about this than the Elite itself, and it was ever thus: even Gorbachev underestimated just how quickly the Soviet satellites would collapse, while if Mubarak and Gadaffi had one thing in common, it was their firm belief at the start that a few hoodlums firing guns at the sky were unlikely to prove more than a passing problem. Even while under house arrest in 1917, most of the Tsar’s household believed the madness would be brief, and Aleksander II would be restored. Louis XVI imagined as he mounted the scaffold that an appeal to the crowd would overturn the Court’s decision. Charles I of England felt, as he dismissed the Parliament on that fateful day, that the matter would be at an end thereafter. And as Rupert Murdoch flew in to offer support to his beleaguered CEO Rebekah Brooks last year, he had remarkably little idea that the game was up.
I don’t know that many people in the British elite, but I have more familiarity than most with its members. The current crop is mainly remarkable for two features. The first is a staggering complacency which, at times, borders on a smug detestation of listening. And the second is an arrogant unwillingness to accept that short-term fixes now will do for them later. Without a sea-change in attitudes very soon, the political system we have in the UK today will collapse long before the first quarter of the 21st century is over.
The one empirical reason (beyond the facts presented thus far) for holding that apocalyptic expectation resides, oddly enough, in the European Union. For there we can see – rather like the Spanish Civil War was a testing-bed for World War II bombing strategy – how a bombastic Bourbonesque elite is wandering into the inferno with a comic insouciance. In cahoots with a Troika so unfeeling as to sound like Marie Antoinette at times, both eurocrats and leading EU politicians are as one in their inability to grasp what’s happening to them.
The Spanish Civil War analogy should serve to tell the British Establishment that they too will suffer the same fate unless something or somebody shakes them from this weird sort of denialism they’ve contracted. It is a denial so self-fulfilling, it resembles the descriptions Dickens made of Opium users in his last and unfinished novel Edwin Drood. A young American scholar recently describes opium as portrayed in the book as ‘producing in every case social deviants enslaved to it without conscience’. The eerie relevance of that to our contemporary ruling class strikes me as horribly spot on.
Let me give you a random example of how bad I think things are. A thought crossed my mind this morning: would it be a good idea to introduce a law that everyone resident in the UK with assets over £50m and/or an income in excess (+ bonus) of £750,00o pa must employ at least ten people? It seemed to me a much better example of how to produce a stable society than the Polly Toynbee job-sharing bollocks: not only would this force even non-dom pillocks to pay a proper ‘social’ tax, it would overnight reduce unemployment by 455,000.
And then I thought, ‘Christ, here I am, a man who believes in every individual taking personal responsibility, suggesting that we start back on the road towards a patrician society where the rich pay for their wealth by having domestic servants’.
That, for me, amplifies how totally the democratic and educational aspirations of the original British nineteenth century working class have been first perverted and then diluted by a nasty combination of Socialist Nannyism and Friedmanite polemics.
It is a popular belief today that both Britain’s middle and Under classes are held back by – respectively – politeness and cranial density. I have two answers to this view. First, we’re not as polite as we were, and poverty drives the Devil in everyone. And second, you don’t have to be bright to become a looter….as last year’s riots showed only too well.
Anyway, here’s my conclusion today, Sunday 15th April 2012. I have to monetise The Slog, and most of you lot are going to face a life-and-death struggle over the next five years. So this is what I want to do: I’m going to start a regular feature called Getting By. It will have the straightforward aim of benign revenge.
Benign revenge does, I realise, sound like an oxymoron. But so potty is our world today, it no longer is. I am just an ordinary bloke who always wanted to do well, have his kids do well, and not crap on the less fortunate. Very few Slog readers are ‘unfortunate’, which is why I feel able to help all of you take benign revenge without being patronising.
Such revenge is the simple act of at worst surviving, and a best refusing to let the bastards ruin our quality of life.
I enjoy wandering about in supermarkets, cooking, messing with money, looking out for the next wave, and continuing to live reasonably well despite being under the thumb of privileged pols, profiteering retailers and sociopathic bankers. Unlike Squeaky Osborne, it seems to me I can say to Sloggers that we really are all in the same boat now. So that’s what Getting By will try to do: make the most of the rations in the lifeboat until events eventually rescue us.
In exactly the same way as many Britons in 1940 – bombed out, alone and facing a ruthless foe across the Channel – revelled in creating normality and saying ‘Business as Usual’ – I want Getting By to be open to the tips of others too.
But pause again and realise what I’m saying here. The enemy we face now is every bit as deadly and mad as Hitler. Now that really is something to mull over on a Sunday.