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Saturday, 12 January 2013

Germany: The king with no clothes

The Guardian carried a piece on Monday that should be amongst the most compelling reads of the week. It set out the simple, raw unvarnished and undistorted truth about the state of the German economy, and why the Eurozone is doomed to failure. Guardian readers reacted like Little Britain character Marjorie Dawes - "Nah, sorry, still can't understand you ..." - and the comments feature became an entirely unrelated debate on Marxism. Gunnar Beck is the unknown columnist cogently pointing out the king's nakedness, whilst the Guardian's big guns such as Jonathan Freedland are still effusively praising the taste, cut and style of the king's clothes.

Beck points out that despite 115% export growth between 1998 and 2011, German GDP grew annually at only 1.4% in the same period, compared to 2.7% for Sweden, 2% for the UK, 1.8% for the Netherlands and  1.5% for France. Real personal disposable income over the whole of the same period rose by just 7%, about a third of the UK increase. Poverty is increasing. The Germans are much worse off than they were. The recent spectacular export boom has completely failed to deliver economic growth in Germany - in fact, the Mediterranean basket cases apart, Germany's economy is amongst the poorest performing in Europe. 

The reason, Beck writes, is the operation of the Eurozone's Target2 transfer mechanism. At this point many Guardian eyes will glaze over and railway minds click onto the intellectually safe tracks of dialectical Marxism. Germany has effectively lent €715bn of sovereign wealth to southern Europe; as Beck writes
This German "wealth destruction" fund allows the euro countries to buy German goods they cannot afford and provides German industry with a multibillion euro export subsidy, which it does not need.
Target2 means that the benefits of the export boom in terms of national and per capita economic growth are enjoyed by the Eurozone countries to which Germany exports, rather than by Germany. Beck concludes;
Through the rescue funds, government bond buys and Target2 system the ECB and the German government are propping up a system that is ultimately unsustainable. With the euro rescue, Germany is shackled to a corpse. Germany's Panglossian politicians refuse to accept that even now Germany would be better off cutting her losses. Draghi, meanwhile, has not lost sight of his project for the "lirafication" of the euro and busily pours liquidity into the financial market at negligible interest – in defiance of his mandate and the EU treaties, to the eurozone's ultimate doom and to sustain the profits of international investment banks.
 "Nah, sorry, still can't understand you ..."

Friday, 11 January 2013

British self-interest

As far as the US is concerned, sacrificing the UK for the sake of European stability is a good bet. America is quite happy to drain the UK's national wealth into the imploding Eurozone, to use our armed forces to provide the backbone to a Euro army, give up our independence to lessen the chances of the US having to intervene in Europe ever again, militarily or otherwise. And of course New York has long coveted London's status as the international financial centre. France wants all of this too, plus the UK's counter-balancing effect on German dominance. The Germans want our money; without the UK, the task of financing the continent would fall disproportionally on Germany, placing her at an international competitive disadvantage.

So before Cameron has even delivered his keynote speech, the international arm-twisting is already building up. You can be sure of one thing and one thing only, though; none of the 'advice' we will receive, and ever more forcefully receive as we move toward making a decision, will be based on Britain's own interests. We can therefore safely disregard as misleading all the arguments against a new European relationship as made from beyond the shores of these isles. 

And of course will come the veiled threats and leaks, that the US will not share the most sensitive intelligence or defence secrets with the UK (she doesn't anyway), that the international corporations will desert our shores (not if we maintain the tax advantages and open access to European markets), our trade position will worsen (in fact it's more likely to improve with the freedom to negotiate new bilateral trade agreements), that we will lose our place in the world (or lead the Commonwealth to global pre-eminence). And of course the EU will use their billion pound budgets to distort public opinion. Against all of this we must stand steadfast, never deflected from making an epochal decision on the basis of one factor alone - British self-interest. 

Thursday, 10 January 2013

How much is half a pint of rancid milk worth?

First there was WRAP, the egregious quango spending millions of tax money to tell us we were throwing away edible food. Now the mechanical engineers have left their worm gears and eccentric shafts (sorry Mr Allis, journals) to report on food waste

Both seem to make the mistake I've commented on previously, assuming (for the purpose of a headline-grabbing figure) that food waste is worth the same as food. It isn't. Half a pint of rancid milk isn't worth half the cost of a fresh pint; potato peelings aren't worth the same as whole spuds, nor beef bones the same as a whole rib roast. Most of the food waste we produce is inedible, by-products of preparation such as peel or carrot tops or chicken carcasses, or stuff that's too old. 

In fact the IME acknowledge that only a tenth of the £480 'worth' of food thrown away by each family is edible. That makes £48 a year. Or about a pound a week. But I guess the headline "British families throw away £1 a week each of edible food" isn't what they're after.

Wednesday, 9 January 2013

Heavy Metal

Pity our poor ancestors who, as Mobiot reports in the Guardian, were exposed to such unreasonable amounts of lead in paint and toys that entire generations turned to violence. Never mind their exposure to Arsenic in printing inks and pigments, Antimony in bath enamel, Mercury in both pure metallic and compound form, Uranium in table glassware and Cadmium in paint pigments. And if loading their bodies with accumulations of toxic heavy metals wasn't enough they faced surgery without anaesthetics, disease without prophylactics and pathogens without antibiotics.

Small wonder then than the poor dears went off and conquered a third of the globe, dominated its oceans, led the industrial revolution, set global scientific standards, built some of the finest engineering structures still known and cowed all but our biggest rivals with our ferocious battle ability. It wasn't our fault, honest, guv; it was chewing toy soldiers as kids what done it.  

Tuesday, 8 January 2013

Northern Ireland's dischordant harp

The riots and marches in the Province over the flying of the Union Flag from Belfast's City Hall are something unusual; not the organised activity of the traditional nationalist political parties, but a genuine cry of hurt and frustration from the grassroots nationalist community. For these are a people under intense pressure. The flag decision may even be sufficient to lower the protestant birth rate another notch, the biological reaction of any highly stressed mammalian population. 

For many years now protestants have been out-bred by the Province's Catholic population, and although the 2011 census may show a slowing or convergence beginning to emerge, the Catholics have a large cohort of women just coming into prime child bearing age whilst protestant women are older. Catholic education and employment levels have increased dramatically whilst those of the old working class protestant population have not. Protestant voters are dying younger than their Catholic counterparts. And to cap it all, whilst Sinn Fein has maintained close working-class credentials with the Catholic population, the DUP and UUP have not done so - leaving the community feeling a leadership vacuum. Demographically and politically, those marching in Belfast know they're facing eventual minority status in the Province, perhaps within their lifetimes. 

There is no great appetite at present in either Eire or amongst the Province's Catholics for uniting the Island under a single State. Ireland's economic boom has also done much to weaken the influence of the Church; the Irish have become Rome's most disobedient Catholics, with pressure for women priests and married clergy also coming in the wake of a tsunami of abuse revelations about the religious communities. The religious and ideological differences between the nationalist and republican communities are becoming more blurred. And this, I hope, is the answer; a convergence in which both communities can share a Northern Irish cultural identity - for Ulstermen both protestant and Catholic died in windrows on the Somme, and fought shoulder to shoulder from Singapore to Murmansk in the second war. The harp that forms the fourth quarter of the sovereign's escutcheon is borne with pride by the United Kingdom; not the vain pride of conquest, but the fraternal earned pride of honour and dignity.