Having just watched the flaw

By | | , ,
Comments Off on Having just watched the flaw

Sorry to be posting so much in such a small space of time, rest assured this will not be kept up and normal lack of service will soon be resumed (not being on holiday will no doubt help). However this evening I actually remembered to watch some TV I’d seen trailers for, this is a bit of a calender event but the trailer had annoyed me which is a great motivation. If you didn’t watch it do make time to watch Channel 4’s “the flaw” it’s really rather good, even if not entirely convincing. The highlight of course being Alan Greenspan admitting he was wrong, but to look at a slight hint of the incoherence from the blurb:

“He’d placed too much faith in the self-correcting power of free markets. In a system based on the unsustainable lending necessary to fuel continued spending, the world found to its cost what happens when that credit bubble bursts.

Drawing on interviews with leading world economists, The Flaw attempts to explain – in unprecedented depth – the underlying causes of the global financial crisis.

Unless the root causes of the problem are addressed, the system may collapse again, and next time it may not be possible for governments to rescue it.”

As I’m going to mutter about most of that I’d just ask if anyone’s noticed the governments actually managing to rescue the system this time round?

But anyway onto my notes, this may not be entirely coherent as I’ll address things as they came up in the program. Apparently there’s been a total failure of markets, which seems odd as the idea of the markets I thought included the capacity for anything to fail so that prices can be corrected – that the various markets haven’t been allowed to collapse would seem to me tend to suggest that market forces haven’t actually been in play. The efficiency of markets only operating when prices are allowed to move downwards as well as up, which is something governments aren’t terribly keen on. Amusingly for me markets were described as the wisdom of the crowd reaching a consensus on prices, which seems a lot like the consensus wisdom of the crowds decision making the anti market occupy/anonymous groups use. So you’ve one consensus model saying a very similar consensus model has been proven to have failed.

Also on the amusement front was a New York Times economist, so one of the experts that’s telling us all how to fix it and what’s wrong, took out a mortgage based purely on his having a job with no regards for his income and is now hugely in debt and at risk of losing the house he couldn’t afford. He did at least admit he should have known better and that he was taking out a dodgy mortgage – one does have to wonder if he can screw that up so well why should we listen to anything else he has to say. He may of course be atypical of economic experts – I’ll enjoy the schadenfreude regardless. It does however highlight that whilst we all busy blaming the greed and short termism of the banks we’ve been behaving in exactly the same way (I am of course painting with a broad brush here). The lesson of the program for me was that a lot of the people that invested in the idea that property prices would keep rising ignoring the age old adage of:
“Don’t invest what you can’t afford to lose”

In that regards one thing I’d never considered was the difference between “goods” and “assets” – something I hadn’t to be fair given any thought to. “Goods” are apparently things we buy to use, “assets” we buy to sell on, people buying “goods” to treat them as “assets” screws up the market. So the popular trend of buying houses not to live in but as things to sell to make money, stops the usual supply and demand price correction. Of course once we were all buying to get rich Governments weren’t going to let the market operate and cause us all to expereince the fact that “prices can go down as well as up”.

Now onto to the fun bit of Greenspan saying he was wrong, this was obviously quite enjoyable – except he said he believed that markets were self correcting but then said he didn’t let the market self correct and this proved his model was wrong. The governments during his tenure of being wrong acting to prevent asset markets slowing down thus proving that markets didn’t self correct? Which as I may have mentioned does kind of make me think we’ve not seen free markets actually in action. A side effect of asset prices being supported by the Government is that the rich get richer as by and large the richer you are the more assets you own (after all you only need so many ipods, cars etc.). Which would seem again to suggest to me that the income inequality we hear so much about is less due to the deliberate evilness of the rich so much as the Government acting to make the rich richer whilst borrowing more from the rich to do so. Why the Government would do this is an interesting question, almost as interesting as why we let them.

The current inequality in incomes was last matched by the 1920’s, when there was the same debt based inflation of the value of “assets” (unless I misunderstood what was said). Then I got confused again as apparently until recently house prices have been quite static as have wages (both adjusted for inflation), at least until we all started borrowing to buy houses as investment. The idea of wages and house prices being fairly stable doesn’t seem a terrible thing to me – until we all decided we need to borrow money we can’t afford to lose to invest in property we’re complaining is too expensive. Once we were all borrowing to invest it became a lot more profitable to lend us the money than put it into factories, and banks and the “evil” rich being sensible sorts lent us the money so they could make more of it. Quite what would have happened if we hadn’t all wanted investment properties and easy credit is another good question, but once enough of us were demanding it there was no way our Governments would deny us our bread and circuses and so the bubbles had to keep inflating and the printing presses had to start running. Quite why stock holders followed the civil servant and governmental lead of paying bonuses for failure, is a mystery the program didn’t touch on.

The last take away message of the program, which is the bit which annoyed me in the first place, was that over the last 30 years living standards have decreased for all but the very top. A quick poll on the walk the other day suggests either we were all at the very top or that this is abject nonsense. Anna Raccoons recent article also seems to suggest it may not be quite true (Claiming benefits? There’s an app for that).

I’m sure I’ve made many foolish mistakes in the above, if someone could be so kind as to explain it to me.

0

On the subject of symbols

By | | , , , , , ,
Comments Off on On the subject of symbols

Whilst I’m on the subject of the power of symbols a while back Captain Ranty reported that it’s now terribly naughty according to the EU to use the “Keep Calm and carry on” image that the Government created back in 1939 as:
The EU has granted an EU Community Trade Mark to ‘KEEP CALM AND CARRY ON’ meaning that only one company may use the slogan for clothing, mugs, posters and other memorabilia.

Of course it’s quite possible our own trademark officials would have been just as stupid, in which case I’d no doubt be suggesting ignoring them and protesting about their actions. In more recent news of course some excitable chaps got excited at a French magazine putting a cartoon on their cover and fire bombed the offices of said magazine to register their distaste of this image:

100 lashes if you don't die of laughter! Read more: http://www.businessinsider.com/charlie-hebdo-mohammed-2011-11#ixzz1d8xQPkcA

Rather reassuringly various other publishers helped them out by giving them office space whilst their now burnt out offices were dealt with, and to show that there were no hard feelings about the incident Charlie Hebdo are now running with this cover (H/T Katabasis):
Love is stronger than hate

Which seems a terribly polite response to people that like to burn both buildings and poppies.

0

On symbolism and protest

By | | , ,
Comments Off on On symbolism and protest

hat mask and gloves Whilst it’s still the season for running around in silly masks and costumes, I thought I’d link to this rather excellent article by Leg Iron concerning the nature of Guy Fawkes masks. Leg Iron touches on something I’ll happily whinge about for ages in that the use of the Guy Fawkes symbolism for all manners of protest dilutes it’s meaning and power (much like there now being a ribbon for everything). I did say whilst on the walk with OH the other day that if anyone asks what I was protesting I’d claim I was for the restoration of the Catholic Monarchy, after all that’s what the Gun Powder conspirators were after. Equally valid to my mind would be to claim that I was recalling one of the most famous attempt at treason in our history and using that as a means to the ongoing treasonous acts being carried out in the houses of Parliament today. Sadly it would seem that many people running around in Guy Fawkes masks are ignorant of the history (and rhymes) behind it (The anarchists(tm) counter protesting at the rally against debt insisted they Gunpowder plotters were anarchists not papists). Whilst such ignorance would be understandable out in the colonies* it is less so here.

Maybe they view them as “V for vendetta” masks, which has a related but different symbolism**, but even there I have a suspicion they may have missed the point. Unless I very much misunderstood the film the main themes seemed to be that of personal vengeance and the over throw of an authoritarian government. Now in places they seem to have got the hang of the last theme, though in the UK a lot of them seemed quite quiet about the expenses scandals, and the amount of money being given to big business until Labour lost power (which might make the cynical amongst you wonder if they actually have the same problem with a controlling government that V potentially did). The protests today are mainly focussed on various Governments imposing more controls on all manner of people, , rather than fighting against a Government that has too much power they seem to be arguing endlessly for more Government power to do the sort of thing they approve of (what ever that may be). To borrow from the film they want to get rid of the current “Adam Sutler”s to put their own “Adam Sutler” in place. It is possible though that they take the imagery from the original book and are trying to create an anarchist state (though calling for more Government intervention would seem an odd way to do it). It rather leaves it s a symbol so diluted in much of it’s use that it’s become meaningless – meaning everything to everyone it ends up meaning nothing. Which is really rather a shame as it had a lot going for it. Scarlet Standard is far more generous to them, but highlights many of the problems I have and leaves me still with the question of if they don’t have any clear demands how will they know when they’re met and how will the politicians know what is actually being asked of them? A protest of “down with that sort of thing” will have difficulty achieving anything, except maybe helping the state get practised at how to deal with this sort of thing.

i almost forgot I can’t leave this without touching on the incoherent article on V-Masks from the BBC, which has this following classic bit of research:
“Early in the book V destroys the Houses of Parliament by blowing it up,”
Would would think maybe the researcher hasn’t watched the film to know it was the Old Bailey that was blown up near the start of the film ,but as they later went on to say:
“The film of V for Vendetta ends with an image of a crowd of Londoners all wearing Guy Fawkes masks, unarmed and marching on parliament.”

so no marks for the sub editors either, they do make the rather interesting comparison of the V-masks and Che t-shirts which is probably fair as neither has much to do with historical figures. I think I rather like the creator of the mask though as they observe that it’s a fundamentally violent image and even better for my money:
“The idea of the V mask being appropriated as a political symbol is inherently ridiculous”
though I’d argue that the same may not be quite so true of the imagery of Guy Fawkes, which maybe just indicates that it’s worth keeping the two separate (as much as such a thing is possible).

* I’m sure there may be better collective nouns but..
** The film really mangles the original Guy Fawkes motives:
“a great citizen wished to embed the fifth of November for ever in our memory. His hope was to remind the world that fairness, justice, and freedom are more than words, they are perspectives”
Quite frankly that’s nonsense, they didn’t really care about the date it was just when Parliament resumed and it had little to do with freedom, justice and fairness so much as the restoration of a Catholic power upon the throne. As long as it was a papist being unjust and unfair they were quite happy for things to carry on pretty much as was. Social campaigners they weren’t.

0