Friday, January 27, 2023

Terminal decline

 HS2 is, according to this week’s Chancellor of the Exchequer, going to travel all the way in to Euston Station. This seems to be news. It’s quite extraordinary there should be any doubt – except, of course, that the whole endeavour is a monumental waste of money.

Of all the billions squandered by Governments, few can be as extravagantly nonsensical as a railway line few people will ever use even if they could afford the inevitably sky-high fares.

HS2 was, is and always will be one of the most profligate wastes of money any Government (Tories and Labour are equally to blame) has yet devised.

The suggestion it might terminate five miles from central London is so unutterably ludicrous that even talk of it reveals the truly terrible ridiculousness of this profligate project. Even now, it would be better to scrap the whole thing, write off the fortune already wasted and find better things to do with our money.

If giving some of it back through the tax system is too much to ask then what about developing a secure energy supply before electricity rationing becomes a way of life?

Tuesday, January 17, 2023

The Royal Wokessphere Company

 When ‘Cymbeline King of Britain’ was staged by the Royal Shakespeare Company a while ago I asked for my money back because the title role was to be played by a woman.

This year it’s got worse. Prospero, the Duke of Milan (a man, the clue is in the word Duke) in ‘The Tempest’ is being played by a woman. Now Brutus and Cassius, the two main opponents of ‘Julius Caesar’ in the play of the same name, are also being played by women.

The RSC is wasting taxpayers’ money on this ridiculous woke nonsense. It is short-changing audiences who have a right to expect a reasonable interpretation of Shakespeare’s plays given this company is supposed to be one of the country’s leading arts organisations. And they are abusing their power to twist the plays to suit their own ends.

What’s more, having been refused a refund for ‘Cymbeline’, I made the mistake of going to see it. The play was dire because it was never clear if the ‘king’ was supposed to be male, female or other and the whole thing was a terrible mess. I very much hope audiences will tell the RSC what they think by melting into thin air.

Friday, December 30, 2022

The inflationary elephant in the room

House prices are supposedly due to fall by as much as 12 per cent in 2023. There is a cost-of-living crisis. Taxes are at record highs. Inflation at around 10 per cent is bringing Britain to a standstill thanks to a series of strikes over pay by everyone from nurses to border guards.

Much of this has been caused by the war in Ukraine and the resulting rise in energy prices.

But it is also due to the Government and the Bank of England’s reckless money-printing programme which dates back to 2008 when the capitalist system almost imploded.

Finally, in December 2021, the Bank of England woke up to the idea its 21-month-long 0.1 per cent base rate was childish and nonsensical and started, slowly and cautiously, raising interest rates to the present, still historically-low, 3.5 per cent.

Given the Bank’s one and only Government-imposed task, when it comes to interest rates, is to keep inflation at two per cent, it has failed abysmally and must share much of the blame for the economic crisis and our winter of discontent.

The question is why did the Bank get it so wrong? If we discount the war and the pandemic and even the credit crunch of 2008, when there is some justification for lowering interest rates to keep the economy alive, the Bank still failed to react fast enough to the threat of inflation.

And we have to recognise that inflation – for a time presumed to be dead but, in reality, merely waiting to pounce – is still and always the economy’s greatest enemy.

The answer is in the way inflation is calculated – the statisticians fail to take into account the single most obvious and pernicious inflationary stimulus of them all: house prices.

There are technical arguments about why house prices are excluded from the calculation, largely to do with the fact that a house is a capital good, not a direct influence on the day-to-day cost of living.

However, neglect of house price inflation is one of the prime causes of this bout of inflation. And analysis of previous economic cycles shows this neglect his stimulated inflation in the past and forced the Bank (and before that, politicians) into belated attempts to retrieve the situation.

The rate of house price inflation is a clear and obvious indicator that the official inflation rate is set to rise sharply and that the Bank base rate must be increased. Failure to take account of house prices in the official calculation of inflation means the Bank is condemned to reacting too late. By the time it puts up the cost of borrowing, the inflationary damage has already been done.

If we look at previous inflationary spikes, this becomes clear.

In 1972, house prices rose 26.7 per cent and another 39.8 per cent the following year. Official inflation was at 7.1 and 9.2 per cent; base rates at five per cent rising to 8.2 per cent. In 1974, they had to rise to 12.75 per cent as the Barber boom turned to bust.

The 1988 Lawson boom and bust had inflation at just 4.9 per cent, base rates at 8.3 and house prices running away at 10.3 rising to 32 the following year. Too late – again – interest rates rose to peak at 14.79 in 1990. High interest rates persisted through the 1990s – partly because of the Government’s ridiculous European exchange rate disaster – and house prices actually fell while inflation was tamed for the time being.

In the early 2000s, the official inflation rate was down around two per cent but house prices were once again soaring ahead – 25.8 per cent in 2003, 16.9 per cent the following year. Interest rates were around four per cent. But the failure to consider the housing market boom was the cause not of inflation, this time, but of something even worse – the financial crisis when it looked, for a moment, as if the entire capitalist system might come crumbling down.

If the Bank recognised the early warning presented by rising house prices, and if it had put up interest rates in response, would it have averted this disaster? Possibly, though of course we will never know.

The rock bottom interest rates we had for more than a decade after the 2008 crash have inevitably stimulated greater borrowing and soar-away house prices (exacerbated by the quantitative easing money-printing indulged in by the Government and the Bank to the tune of an incomprehensible £875 billion.

Between January 2009 and July 2022, the average house price rose 73 per cent, from £157,234 to £272,111. Had house prices risen with the official inflation rate, the average home would have cost £222,240 last July, a rise of 41 per cent.

Prices really took off after the pandemic but the Bank, slow to react, as usual, was still fiddling about with piffling rates of interest. It only started to take action when the official inflation rate began to rise, ignoring the early indicator of yet another over-heating housing market.

The failure to account for house price increases may be justified by economic purists but the evidence strongly suggests they feed into the economy as a whole and lead inexorably to rising prices.

This is inevitable, if only because home-owners see the value of their biggest asset rising and, as a result, their mortgage debt is, in effect, shrinking. They are encouraged to spend the extra wealth they do not actually possess, or they can cash in by increasing the amount of money they are borrowing. Either way, it leads to delusions of prosperity and results in too much money chasing too few goods.

By the time the Bank notices, in the official inflation figures, it is too late. The time has come to insert this massively significant aspect of the economy into the way inflation is calculated.

In the USA, house prices were included in the calculation of inflation from 1953 to 1983 despite the economists’ specious arguments. House prices were removed from America’s inflation calculations because their presence was increasing the rate of inflation and, therefore, increasing the cost of index-linked benefits and pensions.

But if appropriate and timely action were taken by the Bank of England, that should not become a danger. Indeed, it would save the State\ money by ensuring policies like the pension triple-lock do not become as expensive as an average terraced house in London.

In short, our cost-of-living crisis has been caused in great part by the refusal of economists to recognise the inflationary elephant in the room. As a result, house prices have once again trampled all over the economy and we are all now paying a heavy price.



Friday, September 02, 2022

A Shakespearian tragi-comedy


Shall I compare Liz to a summer’s day?
She ain’t as lovely nor as temperate.
Rough winds did shake the darling Theresa May
And Bozza’s lease hath all too short a date.
Sometime too hot the eye of heaven shines
And often is our gold collected in
And every month our pay perforce declines
Through energy costs, tax and inflation.
But this infernal summer gives no shade,
As we work out how much we owest.
Nor shall Kier brag that he hath made the grade,
When all the time interest rates growest.
So long as there's no election to see,
So long lives Liz and exit poor Rishi.

Sunday, August 07, 2022

The Boris, Piers and Jeremy of the 17th century

 Just 380 years after the outbreak of the English Civil War on August 22, 1642, the memoirs of the era’s most notorious, controversial and successful journalist are finally published. 

Marchamont Nedham, who was just 22 at the outbreak of war, became a newspaper pioneer, the most successful publisher of the era. 

In an era when “freedom of speech” did not exist, he was jailed three times, threatened twice with execution and once fled the country fearing he would be hung, drawn and quartered. 

He was as notorious in his day as journalists like Boris Johnson, Piers Morgan or Jeremy Clarkson are today. His “crimes” included attacking King Charles I, attacking Oliver Cromwell, attacking King Charles II. His other offences included: 

·        Revealing leaked Government documents;

·        Publishing illegal reports of Parliamentary debates;

·        Exposing greed and hypocrisy among Puritan MPs;

·        Condemning the politicians who executed the King;

·        Attacking the Scottish, the French and the Dutch.

Nedham’s memoirs are closely based on the 17th century newspaperman’s career. 

In an unrestrained age, when invective was as rife in print as it is on Twitter today, Nedham was a master of the well-aimed insult. 

He first wrote a newspaper in support of Parliament against the King; then a second backing the King against Parliament; his third was the official newspaper of the Cromwell dictatorship. Finally, he was employed writing for Charles II against the King’s political enemies. 

In the 17th century, newspapers were in their infancy. Nedham was a pioneer – the most successful journalist and editor of the era – yet he is relatively unknown today.

Historians accuse Nedham of inconsistency but they disregard his greater achievement – to write, print and distribute three successive weekly news-sheets over a turbulent period of 18 years from the outbreak of the civil war in 1642 to the restoration in 1660. 

The desire for news was insatiable and literacy was surprisingly widespread with about half the population of London able to read. 

News-books were not sold in vast numbers (1,000 copies a week costing one penny each was about average) but they were widely shared and read aloud in many places, especially among the armies involved in the war. Politicians tried many times to rein in the press. They wanted to control what was being reported and, at the same time, they wanted to use the press for their own ends. 

Marchamont Nedham’s writings on constitutional and political issues helped inspire the American revolution. Yet because his allegiances and his opinions shifted according to who he was working for, he has been dismissed by historians as a contemptible “triple-turncoat” of no great significance.

I would contend that there is nothing wrong with being a pen for hire and, in navigating his way through the deep, dark currents of the English Civil War, he not only kept his head above water but laid many of the foundations of journalism that we take for granted today. A martyr in the cause of free speech – jailed three times and fleeing for his life once – he was a pioneer whose importance to journalism should not remain as obscure as it has done for centuries.

Marchamont Nedham, who died of a heart attack in a London coffee house in 1678 aged 58, was belligerent to the end. His last publication was a robust attack on the French who, he said, were “those monkeys of mankind”. 

I have written his autobiography for him, taking the known facts about Nedham’s career and trying to stitch them together by filling in the gaps.

Tuesday, July 26, 2022

Just shut up about freedom of speech

Having just written a book (“The Man Who Invented The News”) about a journalist who was jailed three times and fled the country in fear of his life, I find I must support the campaign to free Julian Assange.

He would appear to be an unattractive man with a distinctly dodgy history but that is not a good enough reason to want to see him deported to America and incarcerated there for, quite probably, the rest of his life.

He published secret information which, according to the Americans, put people’s lives at risk. There’s not much to be said in favour of that – except that it’s a journalist’s job to reveal inconvenient truths. The alternative is an even more secret society than the one we live in most of the time.

The Wikileaks founder did reveal that thousands of civilians were killed during the wars in Afghanistan and Iraq – the sort of slaughter we rightly condemn Russia for today.

Did we have a right to know the information Wikileaks revealed? I would say we did. It is a journalist’s job to expose inconvenient, embarrassing or incriminating evidence if and when it becomes available. It does not seem reasonable to allow Assange’s extradition just so the Americans can get their revenge.

Hillary Clinton once asked of Assange: “Can’t we just take the guy out with a drone?’

In 1640s, Marchamont Nedham, the most notorious journalist of the English Civil War, leaked the contents of King Charles I’s private papers.

These revealed he had written to the King of France complaining about the behaviour of his sister, Henrietta Maria, Charles’s wife. They revealed the King’s determination not to negotiate with his Parliamentary enemies as well as his scathing private opinions of some of his closest aides.

Marchamont Nedham was jailed when he called the King a tyrant and mentioned that Charles spoke with a stammer. In those days, there was no such thing as ‘freedom of speech’ and journalists ran the risk of imprisonment with every newspaper they published. Later, Nedham was jailed again and eventually fled the country in 1660 in fear of being hanged, drawn and quartered.

Have we really made so little progress in almost 400 years?

Monday, June 06, 2022

The birthday-cake coup

 In January I sent this email to my MP Nigel Huddleston:

Dear Mr Huddleston

Please do not fall for the propaganda and take part in the defenestration of Boris Johnson.

He has made some mistakes and the Conservative Party is betraying many of its grass roots supporters by its woke policies, tax rises, unquestioning support for the abominable NHS etc.

But - and it is a big but - he has done a good job over the vaccine rollout and, more to the point, getting rid of him is only worthwhile if the party has a better leader to take his place.

It emphatically does not.

Despite his shortcomings, those red wall MPs and others who are fearful of losing their seats unless they get rid of Mr Johnson should realise they will definitely lose their seats if they do get rid of him.

It is alleged MPs are overwhelmed with emails calling for him to be removed. Who from? His long-term opponents. Please stick with him. How can we endure this birthday-cake farce when the world is on the brink of another war?

Today I followed it up by saying:

Dear Mr Huddleston 

I sent you the email below in January. Nothing has changed except the war is now being fought and is liable to get worse. 

Please do not vote to oust the Prime Minister.