Thursday, November 12, 2009

Layer 219 Bonuses, Private Enterprise, Wall Street, 1989, Alternative Economics and Tough Love

Listening to Question Time and the question of squillions of pounds being handed over to MoD civil servants by way of 'bonuses'. Can this really be true? How? It makes you wonder whether the poor bloody troops are getting bonuses. I think not. For the number of kills? Shots fired? Overtime? Night shifts? Danger money?

Can this government get any worse? When did civil servants become part of the bonus culture? It's outrageous.

Why is Will Self trying to look like a psychotic Freddie Mercury lookalike?

Seamas Milne had a very good 'big picture' column in the Guardian:

The real lesson of 1989 is that nothing is ever settled

The fall of the wall brought freedoms, but also war and crisis. Now that is creating the basis for a new alternative
From the point of view of western self-esteem, 1989 is a year to die for: a tale of the triumph of individual freedom and the defeat of an ideological competitor, all captured live on television in the ritual destruction of a reviled enemy symbol in the heart of Europe. So the blanket coverage of the anniversary of the fall of the wall, and the parade of platitude-mouthing politicians in Berlin to mark the implosion of European communism it symbolised, was only to be expected.

What has been more striking, though, has been the lack of ideological confidence and enthusiasm that would have been expected only a few years ago. In the rest of what was eastern Europe, there have been barely any high-profile celebrations of the wider collapse of the old regimes. Given the eruption of wars, global insecurity and now economic crisis that have marked the 20 years since the end of the cold war, the larger narrative of peace, capitalist prosperity and the end of history peddled in the wake of 1989 just seems ridiculous.

But the question in 1989 wasn't whether the old system had to change; it was how it would change. The political force that had turned the Soviet Union into a superpower, industrialised half of Europe and sent the first human being into space had exhausted itself. There were, however, alternative routes out of its crisis. What the protesters in first Gdansk and then Leipzig were mostly demanding was not capitalism, of course, but a different kind of socialism. Even given a restoration of capitalism, there were softer landings that could have been negotiated by Mikhail Gorbachev and guaranteed by the United States and its allies.

Instead, 1989 unleashed across the region and then the former Soviet Union free-market shock therapy, mass robbery as privatisation, vast increases in inequality, and poverty and joblessness for tens of millions. Reunification in Germany in fact meant annexation, the takeover and closure of most of its industry, a political purge of more than a million teachers and other white-collar workers, a loss of women's rights, closure of free nurseries and mass unemployment – still double western Germany's rate after 20 years.

And east Germany has done far better than the rest. Elsewhere in eastern Europe, the crisis created under western tutelage and nomenklatura capitalism was comparable to the Great Depression in the US, and national income took more than a decade to recover. In Russia itself, post-communist catastroika produced the greatest economic collapse in peacetime in modern history. Mortality rates rose steeply across the region in the 1990s – in Russia, the market experiment produced more orphans in the 1990s than the country's 20m wartime deaths, while Gorbachev's democratisation went into reverse.

Now, after a decade of profoundly unequal economic recovery, eastern Europe has once again been plunged into deep crisis by the west's own meltdown, with ethnic violence spreading and public sector workers facing wage cuts of up to 40%.

The German Democratic Republic was home to the Stasi, shortages and the wall, but it was also a country of full employment, social equality, cheap housing, transport and culture, one of the best childcare systems in the world, and greater freedom in the workplace than most employees enjoy in today's Germany.

Along with the humiliation of the takeover, that's why Der Spiegel this year found that 57% of eastern Germans believed the GDR had "more good sides than bad sides", and even younger people rejected the idea that the state had been a dictatorship. Just as only one in five Hungarians believes that the country has changed for the better since 1989, only 11% of Bulgarians think ordinary people have benefited from the changes and most Russians and Ukrainians regret the disintegration of the Soviet Union.

By destroying its main ideological competitor, 1989 opened the door to a deregulated model of capitalism that has wreaked social and economic havoc across the world for two decades. That, in turn, led to the economic crisis of 2009, which has so palpably discredited the neoliberal model. It also created the conditions for the wave of progressive change in Latin America that has challenged the post-89 social order and raised the possibility of a new form of socialism for the 21st century.

Only 11% of those questioned in a BBC poll across 27 countries this week said they think free-market capitalism is working well, nearly a quarter believe it is fatally flawed and most want more public ownership and intervention in the economy.

Almost missed this excellent letter from Helena Kennedy in the Observer:

The big issue: EU presidency. Tony Blair is the last leader Europe needs
The presidency of Europe will be highly symbolic and Tony Blair is a wholly inappropriate person to hold the role ("Is Tony Blair the right man to be president of Europe?", Observer Debate, Comment). He misled our country – to secure support for a decision he had already made to join George Bush in the Iraq war. In doing so, he showed total disrespect for international law, the United Nations and the views of his European partners; he destabilised the world and was naively cavalier as to the cost in human lives.

Domestically, he was disrespectful of the rule of law and civil liberties, hollowed out the Labour party and deepened the divide between rich and poor. He cravenly bowed to the demands of Rupert Murdoch, the neoconservatives in America, the extreme pro-Israeli lobby and his friends in the City. He showed poor judgment in his choice of associates. His freeloading was shameful. Indeed, his lifestyle epitomises the worst values of a materialistic age. He does not have the qualities of a leader, but would be an excellent television presenter.
Helena Kennedy


Will Hutton

These money-grubbing companies make the public sector look good

The simple equation that the private sector is good and the public sector bad has blighted our lives for decades
This is, I know, a question that defines me as a maverick; everyone knows that the public sector is a slough of inefficiency while the private sector is the home of innovation, enterprise and customer service. All I can say is: not in my recent experience.

Yet public service reformers remain animated by a desire to follow private sector examples. One fashionable wheeze is that local authority services are to be organised like low-cost airlines.

The best in the private sector can, of course, be exemplary – but to be great there has to be a culture that says the firm is more than merely an engine to deliver goods and services as cheaply as possible. Sure, cost effectiveness counts. But great firms – just like great parts of the public sector – are animated by a sense of purpose.

What has been wrong with too much of the public sector is not the fact of being owned by the state, or bureaucracy. It is a loss of a sense of purpose. Too many dumb, clunky targets; too much preoccupation with narrow cost saving and too little concern with greater purpose – from which poor leadership and management derive, and of which the MoD is an exemplar. To look to the private sector for quick-fix solutions, just because it is private, is to draw the wrong conclusion.

What the best in the private sector shows is the result of rigorous implementation of purpose. If felt passionately that it wanted to be a great server provider, I doubt it would collapse so much. Equally, what went wrong in the City was a complete loss of purpose, so the only point of banking became to make bonuses. If Charles Haddon-Cave wrote a report on either, I'm sure he would find the same lackadaisical approach he found in the Nimrod saga – if only with much less deadly results. The private sector never offered the magic bullet that New Labour or Thatcherites imagined. Efficiency and innovation are tough to deliver – and too much of Britain has failed in that mission.

Making Wall Street pay

Wall Street's irresponsible bankers caused this economic crisis. It's only fair that they pay to clean up their mess
While we may need additional revenue at some point, it makes far more sense to impose a financial transactions tax, which would primarily hit the Wall Street banks that gave us this disaster, than to tax the consumption of ordinary working families. We can raise large amounts of money by taxing the speculation of the Wall Street high-flyers while barely affecting the sort of financial dealings that most of us do in our daily lives.

Since the financial sector is the source of the country's current economic and budget problems it also makes sense to have this sector bear the brunt of any new taxes that may be needed. The economic collapse caused by Wall Street's irrational exuberance has led to a huge increase in the country debt burden. It seems only fair that Wall Street bear the brunt of the clean-up costs. A financial transactions tax is the way to make sure that this happens.

In short, we have to tell the deficit hawk crew, many of whom earned their fortune on Wall Street, to slow down. The country does face serious budget problems, even if they may not be as bad as this crew claims. However, if we need taxes to address a budget shortfall, then Wall Street is the place to start. After we have put in place a tax on Wall Street speculation, if we still need additional money, we can talk about a tax that will primarily affect the middle class.

Paul Moore, the bank whistleblower whose revelations forced the resignation of a senior Government adviser, has called for Prime Minister Gordon Brown to go for his part in creating the financial crisis.


The iconoclastic wisdom of David Nutt

This is not the first time Professor Nutt has challenged dearly held beliefs – as many sufferers of depression will gladly testify


How tough love breeds smart children

Report says that parents who use mixture of discipline and warmth are most likely to produce well-rounded individuals

by Anushka Asthana
Children brought up by parents practising "tough love" are more likely to become rounded personalities with well-developed characters than those who face either authoritarian or laissez-faire approaches, research reveals today.

The study, by the thinktank Demos, tracked the lives of 9,000 families and found that 13% used a "tough love" approach, combining warmth and discipline. It did not matter whether the parents were rich or poor – those that adopted the approach brought up children who were more likely to be empathetic, more able to control their emotions and bounce back from disappointment, and more capable of concentrating and completing tasks.

The research found that it was the style of parenting, rather than income or social background, that developed the strength of character.

It claimed that such "character capabilities" had become increasingly important in life. Skills such as empathy, self-regulation and application were 33 times more important in determining income for those who turned 30 in 2000 than for those 12 years older, it said.

Richard Reeves, director of Demos, argued that "tough love" was successful because it built up a child's self-esteem but also taught them to be restrained and respectful.

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