Wednesday, 31 July 2013

The online world: we just don't know where we're going

How do you connect Bradley Manning and Wikileaks, US surveillance, the blocking of access to online porn, and the biggest space battle in history?

Private Manning (above) leaked millions of classified (though not Top Secret) documents because he became enraged at what he saw as a war crime. But he's just been convicted, all the same, of espionage charges that allow of no public interest defence. The UK Prime Minister is currently proposing to block access to online pornography as a matter of course - unless you want to press a button saying 'I'd like some of this, please'. And an enormous virtual clash in cyberspace has just wiped out thousands of fictitious ships and lives. Not that you felt that easygoing about it if you've been playing for months, but still.

Want to know what connects them? It's that we don't know how to grapple with our different selves - online, offline, and somewhere in between. Okay, I know it sounds like a right old squeeze, but hear me out here.

It's just like the mid- to late-nineteenth century. No-one knew then what in many ways a much more fundamental breakthrough - the creation of the worldwide electric cable network - was taking them. There was a fevered sense that the 'world was now all connected'. That 'nation would speak peace unto nation'. That a huge leviathan, of uknown weight, speed and anger, was waking up - pulling the world's nations and peoples behind it. Reshaping political and economic space. Making the world anew. Now a lot of that wasn't true, of course. Being able to get the New York Stock Exchange prices today, rather than in two days' time, wasn't exactly the earth-shattering transformation it appeared to be at the time. Using cables and telegraphs was expensive. They broke down. They got garbled (registration required). And whoever really thought that meeting people more, and talking to them more often, meant that you would like them more anyway?

But the point was that, intellectually and ideologically, citizens and governors were grappling with a new force that they found it very hard to understand. And which, eventually, would push them towards enforcing their borders and seizing back controls over an increasingly 'de-centred' world. Passports. Border checks. Spying. It was all really born in that era - and it's no accident, because the telegraph frightened policymakers everywhere.

It's a similar eruption that's happening now: bitter scraps over individuals' rights and autonomy as against the state. Technophobia and expert ripostes (since, for instance, anyone can get round online filtering in about five minutes). Public uncertainty and ignorance, reflected in deep fissures about the very nature of reality and morality. Where does state business and immunity end, and legal constraints begin? What is a secret, and what is public property? Who should look at whose bodies online, and with what restrictions? And has there really just been a massive space battle in Eve Online, or was it all just a load of coloured lines on a screen?

You be the judge. Because no-one else really knows either.

Monday, 29 July 2013

The economic 'recovery' that'll feel like a grim old route march

The news that the British economy is now gently accelerating towards recovery is very welcome. It's late, delayed and uneven - but it's there, and that's something to punch the air about.

But you know what? This is the slowest recovery from recession in modern times. Slower - much, much slower - than our crawl out of the disaster of Wall Street Crash and the 1931 currency crisis. Slower than our emergence from the disasters of the early 1980s. It's very, very weak - so weak that even anaemic growth like this looks (paradoxically) pretty quick. We're still way below the production and the wealth that we enjoyed at the economy's booming peak, in 2007, and we're unlikely to get back to those now long-lost levels of wealth and progress for a year or so.

But there's no doubt that things feel different. That something has changed. There's a bit of optimism in the air. A spring in Britons' steps. Well, in some of them anyway.

I'm always going on about the paradoxes of public policy - the fact that the outcomes you expect almost never, never issue from the causes you imagine. When we look at the economy right now, the interesting thing is that things have been so, so bad - for so, so long - that the merest chink of light feels like we're in a boom. Despite the complete failure of the Chancellor's deficit reduction strategy. Remember when he said that he'd eliminate the structural deficit in this Parliament? Well, he doesn't say that any more. Remember when he said that manufacturing and exports should power our return to growth? Well, er, take a look at the statistics right now (above) and it's the service sector and house prices that are pulling us away from the brink - yet again. That's storing up trouble for the future, as Mr Osborne knows, but he's reached for the only lever he had left. The one they always pull: the one marked 'private borrowing', which is likely to pump things up a bit for the next two or three years.

That'll help the Government, which is already climbing in the polls. It might mean that we get a Conservative (or, much more likely, Conservative-led) government after the next General Election.

But it won't mean that the pounds in your pocket will feel any more plentiful in the near future. For inflation is likely to tick up as borrowing-mad Britain goes on another spree, at the same time as wages are squeezed. Meaning that average household incomes are not going upwards this side of an election - something the Treasury is so nervous about that they've started quoting the figure for all household income, in gross terms, inflated as it is by the earnings of the richest ten per cent. Another one of Her Majesty's Government's many statistical misrepresentations, but there you are. Incomes have been falling for many years now - something that hasn't happened in modern British history, and probably not since the 1870s and 1880s. A ray of sunshine has punched through those storm clouds, that have been so dark that any glimmer of hope is clutched at with near-desperation and great acclaim.

But it's still going to be a slog. Sorry about that.

Wednesday, 24 July 2013

Help to Buy: the worst Treasury scheme ever?

So, 'Help to Buy' then. The Government scheme to subsidise 15 per cent of your mortgage (20 per centif you're buying a new home) with mortgage guarantees for existing dwellings, or an actual interest free loan for new builds - if you can stump up five per cent of the deposit.

Well. Well, well, well. Where shall I begin?

The Government says this is aimed at helping first time buyers get on the housing ladder, with every sign of a straight face that I can't quite believe. Because they must know that this one's a stinker.

I'd like to get angry about this particular thought-free zone, but in fact I'm just burying my head in my hands. Because Help to Buy is a stupid, ridiculous, absurd, half-baked, disgusting, laughable, wrong-headed and downright destructive policy that should be cancelled forthwith.

Don't take my word for it. Ask any other economist - anywhere. Ask the IMF. Ask the Institute of Directors. Ask Allister Heath of City AM, a right-leaning economist who 'Public Policy and the Past' doesn't normally agree with, but whose thoughts are worth quoting at length:
The Coalition has responded to an overvalued, broken property market by subsidising credit further, nationalising risk, artificially bolstering the number of housing transactions and pushing up prices, while failing to liberalise the market to allow the increase in the supply of properties that is so badly needed. No wonder many existing homeowners are feeling happier – boosting their wealth and allowing them to remortgage and spend is clearly at the heart of Osborne's re-election strategy but it will only make the inevitable day of reckoning even more traumatic.
All 'Help to Buy' will do is to pour petrol on the flames, further inflating the UK's ridiculous residential property market, and thus making it harder, not easier, for young people to get a start in the property market. While, of course, making everyone else - perhaps a bit older, and a bit richer than those who really need help - a lot richer. At public expense! I ask you. I'll repeat that, actually: at public expense!

Nor are there really clear controls on who gets the money - which will go to anyone who wants it, really, with some provisos about people with outstanding debts or County Court judgements against them. EU nationals will probably have to be included. Pretty rich people who just want a bigger house will be included. Second home owners are supposed to be excluded, but all borrowers have to do is sign to form to say that the money isn't for those purposes.

It's a shambles. If Ministers really wanted to help first time buyers, they would limit the value of the property involved to (say) £300,000 - not the £600,000 involved in this scheme. They'd say only first time buyers were eligible. They'd bring in tougher checks.

I'd like to say that this was all some gruesome mistake - some half-baked think tank policy that somehow slipped through the machinery at No. 11 Downing Street. Except that it isn't. It's all of a piece with the Chancellor's strategy from the beginning, which has been to reduce public indebtedness while private borrowing soars to take up the slack. All the while wringing his hands about the rise of household indebtedness - which has always been predicted to rise and rise in the Treasury's own forecasts.

That's a crazy policy. Private sector debts are six times larger than those of the public sector, and they're what landed us here in this mess in the first place. Remember the banking crash caused by reckless borrowing? It doesn't look as if HM Treasury does.

And of course the real reason that this is being announced now is to pump up a pre-election credit boom that'll help the Government be re-elected - a strategy which shows some signs of working. Remember all those worthy speeches about 'rebalancing'? About the 'march of the makers'? Well, they've all just gone in the bin. And in a few years we'll be right back here, just as we were in the mid-1970s, the early 1980s and the early 1990s, sifting glumly through the broken dreams of young homeowners who can't meet their repayments and talking about - well, I don't know - actually making and selling things for a profit.

The whole thing stinks. 'Help to Buy' might be the worst policy ever to emerge from the Treasury. It's worse than the Barber Boom, the sado-monetarism of 1980-81, and it's worse than the ERM debacle. It'll saddle us all with billions and billions of pounds worth of debt, while just covering up the real source of our housing emergency - that we just don't build enough houses.

It must be stopped, and it must be stopped now.

Monday, 22 July 2013

Labour probably can't win the next election

Recent weeks have seen the UK Conservative Party's confidence rise. Just a couple of months ago, they were in the doldrums. The economy was dire. The Prime Minister was unpopular on his own side, let alone in the country. Social issues such as gay marriage were tearing the Tories to pieces.

Now? Things look much better. One recent poll, from the highly respected ICM outfit, even had the two main parties running neck-and-neck - though the real picture is probably still a modest Labour lead that might easily melt away between now and May 2015. The Prime Minister (above) looks much more confident, swatting Opposition Leader Ed Miliband aside at this Parliamentary year's final Prime Minister's Questions. Mr Cameron has been able to unite his party with a series of well-crafted announcements, for instance over (hard-to-enforce but morally unassailable) tackling the nastier forms of internet pornography. Above all, the economy is looking up. Retail sales are rising. The service sector is growing more quickly. Unemployment is falling (from a very high base). Business confidence is beginning to recover as well. Conservative MPs can look forward to a 2015 election campaign in which they say: it hurt. But it worked. The economy is out of intensive care. Trust us to finish the job. It's not a great cry, but it worked for President Obama, and it did the trick (along with the Falklands War) in 1983.

Even so, Conservatives are suffering from a bit of irrational exuberance during a hot and steamy July. Why? Well, here's where historians can help you. Let's assume that the Conservatives need about 38 to 40 per cent of the UK vote to form a government with a (small) overall majority. That probably won't be enough, actually, because the largest single move of votes and voters next time is likely to be among left-leaning citizens shifting from the Liberal Democrats to Labour. This blog thinks that Mr Cameron might need 42 or even 43 per cent to win outright - if Labour secures a (still fairly low) 35 per cent.

Still, let's assume they need 40 per cent. They'll have to put on about three per cent on how they did last time. Has this ever been achieved before? I've looked over the record since 1945, and zoomed in on every one-term government seeking re-election. This occured in 1950, 1955, 1970 (all right, that was two terms, but the first of those was very short-lived), 1974, 1983 and 2001.

In only one of those cases did the Government boost its numbers. That was in 1955, when a dashing Anthony Eden swept the country with a message of hope and optimism. And he only managed to put on 1.7 per cent. So the answer to our question? No-one's climbed this electoral mountain in modern times.

The conclusion: Labour probably can't win the next election... outright. But it still has an evens (or better) shot at emerging as the largest party.

The crystal ball is still a bit cloudy - inevitably so, at a time when the electorate don't really like any of the alternatives with which they're faced. Expect prognostications to stay vague for now - and well into 2014. But one thing is for certain: Labour's dreams of an overall majority are evaporating, if they haven't already.

Wednesday, 17 July 2013

Better numbers and better language, please

This blog has pronounced again and again about governments' misuse of statistics. Politicians splurge numbers, and the promise of data, all over the place - and they're usually wrong, or at best muddle-headed.

Two more examples are obvious today - the prospect of 'baseline' tests for five year old children entering primary schools in England, so as to 'assess' and 'test' how well the Government's pupil premium for poorer children is working. That's an entirely misguided intention, and yet another example of just how addicted to top-down targeting, 'measuring', and ultimately misunderstanding, the very complex nature of economic and social change. Though at least it exhibits an understandable desire to know more - to try to count and test the changes that are wrought with taxpayer's money. It won't show anything of the sort, for reasons we've discussed here before. But at least we can all understand why it's happening.

On another front, there's been a much more disreputable use of numbers. The figure of '13,000 extra deaths' in 14 under-performing NHS hospitals has been leaked, apparently by Ministers or civil servants, in order to discredit the previous administration - and, just possibly, the whole concept of a single National Health Service itself. The actual official report which was supposed to contain that figure says nothing of the sort, and indeed its author has condemned any such concept as wholly misleading. But that hasn't stopped the lie getting its boots on and traveling around the world much faster than the truth.

So much for numbers. But there's also another need - to use our language, our words and concepts, more carefully than we do. Take the recent Ashes cricket Test between England and Australia at Trent Bridge in Nottingham (above). It was tense. It was gripping (if you like cricket). It was close. But the word 'epic' was wheeled out. Was it really 'epic'? What word would we use, then, if we wanted to ratchet up our rhetoric and describe, say, the Battle of Kursk, at which hundreds and hundreds of German and Soviet tanks faced each other in one of the most decisive moments of the Second World War? Or D-Day, which say thousands of ships carry an invasion armada across to France in 1944? Or (on a political front), the Watergate scandal, which ultimately brought down President Richard Nixon after a long and stirring confrontation with Congress and the press.

We need to mind our numbers. But we need to mind our language as well.

Monday, 15 July 2013

Ed Miliband: a turning point around which History failed to turn?

Just a few days ago Labour's leader, Ed Miliband, looked to be sliding down political pecking order. His personal polling numbers are pretty grim - and to be honest, they're getting worse. Labour's electoral progress has never been as strong and as rapid as would an advance that really heralded a return to power in 2015 - a fact this blog has always highlighted, particularly after the party's anaemic local election performances of 2011 and 2013.

On top of all that, a political scandal broke out in the Falkirk constituency, where activists from the Unite union were accused of enrolling members willy-nilly, simply to secure the nomination of an ideologically congenial candidate. Initially Mr Miliband dithered. He said it was an isolated case. He huffed and puffed. His Conservative opponents laughed in his face.

But for all that, Labour's youthful and relatively untested leader has turned the whole situation around. On its head. Inside out. Or however else you want to put it. How? By symbolitically biting the union hand that has always fed him, thus defying the widespread public suspicion that all politicians are merely the creatures of powerful vested interests. By tying the question of candidate selection - and the unions' power within the Labour Party - to political funding and to the role of big money in politics, the Conservatives' main weak spot. By proposing a very low cap on political donations, at the same time as encouraging union members to 'opt in' to supporting Labour rather than having to 'opt out', Mr Miliband might at one and the same time create the biggest political party in this country and push all the onus for reform onto a Conservative Party that relies on huge donations from the super-rich.

It's a strange paradox. Most voters believe that 'Ed' will be the next Prime Minister at the same time as consistently scorning his abilities. And there is a gathering consensus inside our politically chatting classes that just perhaps, yes, Mr Miliband might 'do a Heath' and win without great personal charisma or popularity - as did Edward Heath in 1970. He has ideas. He's ambitious, and ruthless. He seems cool under pressure. He makes the right calls, albeit quite tardily: witness his relatively early condemnation of News International and Rebekah Brooks' alleged behaviour.

That crisis in Falkirk? It might just be the moment at which Mr Miliband's critics expected him to stumble - only to eat their words when he didn't. Then we'll have just experienced one more of those moments that A.J.P. Taylor once so memorably divined: a turning point around which history (and History) failed to turn.