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by Laurence Rowe published Oct 28, 2007 11:35 PM

a generally cold and damp experience

The root of the credit crunch?

by Laurence Rowe published Jun 19, 2009 10:10 PM
Those obscene salaries really were at our expense.

From Donald MacKenzie's review of Gillian Tett's "Fools Gold" in the LRB:

Perhaps most surprising of all, top banks also bought super-senior tranches [of mortgage backed securities] originated by other banks. If you are a top bank, you can borrow at around Libor (that is, after all, what Libor means); if you are particularly well regarded, it may be possible to borrow at a rate a tiny bit lower than Libor. So you could borrow at Libor or below, buy a tranche that seemed safer than safe, and from it earn a slender spread over Libor. It looked like free money. It was especially tempting to traders whose banks ‘charged’ them for their use of capital, in the systems by which traders’ profit is measured, at around Libor, and credited them with the small additional spread that super-senior tranches offered. The slenderness of the spread meant that you had to do the trade on a very large scale to earn a really big bonus, so traders did just that.

Banks enjoy access of the cheap lending because of the explicit (retail depositor's savings accounts) or implicit (interbank lending) guarantee of the state that your money is safe with them. Over the past three decades the regulation of the banking system has been softened and banks have merged into huge entities that are two big to fail.

Big banks in themselves may not be the problem (see Paul Krugman), but their span of activities from boring retail and commercial banking to speculative investment banking surely was. (until it was repealed in 1999 the American Glass-Steagall Act prohibited this crossover). By virtue of their parent, banks' investment arms enjoy cheaper access to capital than their non-bank competitors. This is effectively subsidised by implicit state guarantees of bank debt. An advantage that lay behind the banking mega mergers of recent year, culminating in the disastrous acquisition of ABN by RBS wanting to expand it's activities in the profitable casino of investment banking.

Why was this allowed to happen? In Britain, under a Labour Government?

Instead of building a more just and equitable society by closing the gap between rich and poor, improved health and education would be funded from the profits of speculation. Even with widespread tax avoidance, at the height of the boom profits in the City of London accounted for almost 14% of the total UK tax take.

But we cannot solve the problems in our society by just throwing money at public services, we need to make society itself more equal. In their new book "The Spirit Level", Richard Wilkinson and Kate Pickett convincingly demonstrate that once a society has become developed, increased levels of average wealth no longer bring health and social benefits. Instead levels of inequality in a society determine how happy and healthy we are. Staggeringly, even the relatively rich do better in a more equal society - presumably relieved from the stresses status anxiety. Those greedy bankers would be happier too.

Roy Hattersley

by Laurence Rowe published May 25, 2009 08:15 PM
In the 80s, I was regarded as being on the far right of the Labour party because, believing in the mixed economy, I argued that private enterprise and competitive markets were a necessary part of an efficient society. Now I am said to be on the left because, believing in the mixed economy, I think that a measure of public ownership and government regulation are essential to a civilised society.

The link address is:

Death From Above, Outrage Down Below

by Laurence Rowe published May 17, 2009 01:02 PM
Press reports suggest that over the last three years drone strikes have killed about 14 terrorist leaders. But, according to Pakistani sources, they have also killed some 700 civilians. This is 50 civilians for every militant killed.

The link address is:

Ed Balls:

by Laurence Rowe published Feb 10, 2009 02:52 PM
"I think this is a financial crisis more extreme and more serious than that of the 30s, and we all remember how the politics of that era were shaped by the economy."

The link address is:

Security and counter-terrorism minister:

by Laurence Rowe published Jan 28, 2009 12:20 PM
"We never used to accept that our foreign policy ever had any effect on terrorism," he said. "Well, that was clearly bollocks."

The link address is:

Obama orders attacks on first civilians

by Laurence Rowe published Jan 25, 2009 03:11 PM
"some foreign militants also killed"

The link address is:

A response from the Home Office

by Laurence Rowe published Nov 13, 2008 12:14 AM

Back in May I wrote to the Home Office asking for the evidence behind a reported statement that "the conflicts in Iraq and Afghanistan had no bearing on the level of the security threat in the UK or in the rest of Europe." This in an article in the Independent highlighting a recent European report warning "British foreign policy presented critical dangers for all Europe: "The conflicts in Afghanistan and Iraq have a large impact on the security environment of the EU."

After a number of false starts, lost e-mails and clarifications, I received a reply.

When approached by the journalist our spokesman followed the normal procedure and queried the Home Office's press database to see if the Department had been asked a similar question before.

Querying the database yielded a question and answer from the launch of the Government's counter-terrorism strategy, CONTEST. It is this information from the database our spokesman relied on when speaking to the journalist. The information from the database is as follows:

Are you conceding that the Iraq war and UK invasion of Iraq have fuelled extremism?

No. It is the right of every citizen to question UK foreign policy and to have the freedom to debate and disagree. Understand that not everyone agreed with decision to intervene in Iraq. But the UK government did so because of wider issues not because it is a Muslim country. No foreign policy issue justifies terrorism or advocating it.

Must bear in mind that the threat from international terrorism existed before the Iraq war:

Feb 1993
World Trade Centre - 6 dead.
Aug 1998
bombings of US Embassies in Tanzania and Kenya 224 dead, mostly locals.
11 Sept 2001
World Trade Centre, Pentagon 2992 killed.
April 2002
historic synagogue in Tunisia bombed 21 dead including European tourists.
May 2002
hotel bombed in Karachi 14 killed.
Oct 2002
Bali bombs 202 dead, mostly tourists.


This tells us more about the processes of the Government media machine than it does about evidence based policy making. The press office database is not of answers to questions, but rather points of rebuttal. The aim being to divert the attention of the journalist from the question at hand to the departmental line that 'terrorists have always done bad things'.

The failure of imagination (either in the Government or presumed in the media audience) displayed by the emphasis on the reasoning for going to war, when it is the perception that is pertinent. The perception that the west has been engaged in a war on Muslims is widely held in many parts of the world and within some communities within Britain.

It appears that the original 'answer' dates from 2003, the launch of CONTEST (or at the FCO, 'Protect and Survive' anyone?) By 2006 the head of MI5 acknowledged that British suicide bombers were driven by the perception of a long standing injustices against Muslims.

So what of the 'wider issues' that lead to the Iraq war. JK Galbraith had the most convincing account I have read.

Home Office in denial

by Laurence Rowe published May 18, 2008 11:50 PM
They just don't get it.

The Independent on a Europol terrorism report (pdf):

The report also warned that British foreign policy presented critical dangers for all Europe: "The conflicts in Afghanistan and Iraq have a large impact on the security environment of the EU."
A Home Office spokesman confirmed that most of the Europol findings tallied with official figures, and underlined the Government's consistent warnings about the scale of the terror threat facing the nation. But he insisted that the conflicts in Iraq and Afghanistan had no bearing on the level of the security threat in the UK or in the rest of Europe.

It just beggars belief. Have they forgotten the boys from Bradford Yorkshire who blew themselves up on the Tube? Globalisation is much more than a purely economic phenomenon.

Lets see what a Freedom of Information request can show.

And the winner is...

by Laurence Rowe published May 11, 2008 01:35 AM
... the stupid party.

You might have thought all those reviews would bring about a new era of evidence based policy making. Marking, if you like, a clear change of direction from the policy based evidence making of the Blair years. Sadly you would be mistaken. Whether it's 42 days internment without trial, or the classification of cannabis, Gordon seems determined to press on in spite of the views from the DPP and former Attorney General that 28 days is quite enough, or despite the panel of experts report. He must be seen to be Tough. And Tough Men Ignore the Evidence.

But the stupid vote is large and important block, so not to be outdone the Tories are urging a reduction in the term limit for abortions from 24 weeks to 20 weeks, as survival rates for early births are rising. The evidence flatly contradicts this assertion.

A Young Conservative at university once told me he read the Guardian to find out what those in power were thinking. I sometimes wonder if he wouldn't have been better off reading the Mail.

The politics of hope?

by Laurence Rowe published Apr 07, 2008 11:10 PM

America has Obama. London has Ken. Not the same league perhaps, but then it's difficult to get excited about an incumbent at the best of times. Back to the politics of fear then? Maybe. The alternative is Boris, and this is the start of the first Mayoral campaign where the Tories have a real chance of winning. The message? 'Keep London moving'.

Evening rush hour in the heart of the City. Liverpool Street tube station may not be the most likely place to canvas for Ken supporters, but after an hour and a half I had managed to hand out all of my stack of pamphlets (what proportion were taken by those who thought it a particularly thin free sheet I don't know). Who supports Ken? The usual suspects, the less old, the less rich and the less white.

The pamphlet and website are telling of the state of the national Labour Party, the only clue he's not standing as an independent again is the stylised rose logo in the bottom left hand corner. The word 'Labour' doesn't even appear on the page.

Do we deserve the Torys?

by Laurence Rowe published Mar 28, 2008 11:40 PM

I'm not normally a moralistic person, but I'm increasingly coming to the conclusion that we deserve a period of Tory power. How many people have to die before we offer some sort of apology for the terrible anarchy into which we have plunged the people of Iraq?

Political despair

by Laurence Rowe published Jan 27, 2008 11:00 PM

The Labour Government is in a deep malaise; the Tories are leading in the polls, but not by anything like enough to win the next election; and the Lib Dems have Vince Cable popping up everywhere, looking competant and speaking sense, quite eclipsing whoever they just elected as a their new leader.

Gordon Brown certainly looks indecisive, with his demand for reports into every issue before taking any decision. Maybe this is no bad thing. Arthur James Balfour, British Prime Minister from 1902 to 1905, once wrote an essay entitled, "A defence of philosophic doubt, being an essay on the foundations of belief." A Google search on "prime minister doubt" brings up Tony Blair's foreward the the Iraq dossier.

A decade of Labour administration has only slowed, not reversed the trend of increasing inequality. Nowhere is this more apparent than in London:

American insurance group Marsh has insisted that 12 contract cleaners employed at its City of London headquarters be suspended from duty, after they held a protest demanding improved pay and conditions. (link)

The cleaners are paid £5.60 an hour. Marsh is part of the MMC group. "For the nine months ended September 30, 2007, consolidated revenue of $8.4 billion increased 7 percent from $7.8 billion in the year-ago period". While minimum wage may be enough to survive fairly easily as a young person in shared accomodation in Manchester, In London it is barely enough to subsist.

While it is probably counter-productive for Government to be too interested in the means of wealth creation, it is vital that it assert itself in the distribution of that wealth. We cannot expect corporations in a market economy to be benificient in their operation. Regulation is necessary to ensure that society is not short changed. People must be paid a living wage. If not we all end up subsidising these corporations through housing benefit and income support.

Over two million workers in Britain stand to lose more than half of any increase in earnings to taxes and reduced benefits. Some 160,000 would keep less than 10p of each extra £1 they earned. (link)

If we are to seriously tackle the inequalities in our society we must tame a tax and benefits system that entrenches inequality and bamboozles benefit claimants in a maze of form filling.

Perhaps it is time for a flat rate of tax, but couple it with a flat rate of benefit and abolish income support and job seekers allowance. Trying to calculate what these rates might be is difficult.

BAE feels the heat

by Laurence Rowe published Jun 12, 2007 07:01 PM

BAE feels the heat

The SFO investigation may have been dropped, but BAE is still feeling the heat. Share's have dropped 2% since allegations resurfaced in Thursday's Guardian about £1 billion of corrupt payments to the Prince Bandar, officially laundered by the MOD. Makes you proud to be British.

A poor advert for a grammar school education

by Laurence Rowe published May 29, 2007 04:14 PM

Silly Tory. Just when Cameron thought he'd put a lid on his grammar school row along comes Graham Brady, Shadow Europe Minister, former grammar school pupil and puts his foot in it. According to the Times, Mr Brady's figures show that "in comprehensive areas with no selection, 42.6 per cent of GCSE pupils get 5 or more A* to C grades in subjects including English and maths. This rises to 46 per cent in partially selective areas and 49.8 per cent in wholly selective areas where all pupils take the 11 plus."

Now lets step back and think about this a minute. Where are the remaining grammar schools? By and large in fairly rich areas, certainly wealthier than average. Academic attainment is well known to correlate strongly with parental income. Mr Brady has made the basic mistake of comparing apples to oranges. By comparing grammars with the totality of schools across the country Brady renders his figures meaningless. Had he compared similar areas (perhaps picking comprehensive local education authorities with similar levels of free school meals) to compare to he may have had something interesting to say. It's no surprise that the only professor the Times could find to support him was from The University of Buckingham, the UK's "first and only privately-financed university".

Most worrying of all: If Cameron was in power this man would be in Government.

Local election blues

by Laurence Rowe published Apr 24, 2007 09:31 PM

Living in Manchester, local elections tend to be fairly irrelevant. The council seem competent and real power lies with the Chief Executive rather than the councillors. With no Tories, the Lib Dems provide the only opposition (along with a solitary Green). In Longsight the Lib Dems are fighting hard, with at least three leaflets through my door over the past month or so.

Though nationally Labour are expected to do badly, this analysis is unlikely to hold for Manchester. With boundary changes in 2004 every seat was up for election. Longsight and a few other seats went from having 3/3 Labour councillors to 3/3 Lib Dems, in protest against the war. In 2006 (no elections in 2005) Labour won back the contested seat in Longsight (along with three others). The Lib Dems will have to pull out all the stops to prevent the same happening again.

Their latest leaflet leads with a story warning that Labour plan to introduce a congestion charge in Manchester (which nationally the Lib Dems think "essential") followed by "Thinking of voting Labour?.. 650,000 dead" with a picture of a wounded child and Blair next to Bush. All in all sensible tactics. The abandonment of principals has lost my vote though.

Labour then? Their leaflet has John Reid on the front. Head of the department that wants to deport an  HIV+ family of failed asylum seekers to Malawi. Malawi has no capacity to treat HIV+ patients, so deportation is an effective death sentence. Besides, with Blair clinging on to power, voting Labour is clearly immoral.

That leaves my vote with the Green then (come on! I could never be a Tory.)

Good times for BAe

by Laurence Rowe published Mar 29, 2007 05:03 PM


Or in the immortal words of Billy Bragg: "War! What is it good for / It's good for business"

Spare us the public school wankers

by Laurence Rowe published Mar 02, 2007 04:16 PM

Tony Blair David Cameron
Blair and Cameron at Oxford.

Mapping deprivation in Manchester

by Laurence Rowe published Feb 14, 2007 12:53 AM

Deprivation in Manchester

Deprivation as measured by the ODPM Indices of deprivation 2004 in the Manchester City Council area. Intensity of colour shows increasing deprivation. Still a little too complicated for Google Maps. Open in Google Earth.

The combined IMD score is shown. Resolution is at the Super Output Area level. Boundaries are combined from the ONS census Output Area vector boundaries, transformed through OSTN02 to line up with rest of the Google Earth/Maps data.

Source: 2001 Census, Output Area Boundaries. Crown copyright 2003. Crown copyright material is reproduced with the permission of the Controller of HMSO

Nuclear brinkmanship is profitable for all

by Laurence Rowe published Feb 08, 2007 03:47 PM

The hysteria over a possible nuclear threat from Iran should be put in perspective. A year ago the Observer reported an oil 'risk premium' of $10 per barrel. With Iran exporting 2.5 million barrels of oil per day that premium is worth $9 billion a year, enough to fund Britain's nuclear weapons programme twice over. At the same time Big Oil – large donors to the Republican Party – have seen profits soar. Time to learn to stop worrying and love the bomb?

Beautiful spin

by Laurence Rowe published Jan 12, 2007 04:12 PM
Sometimes a spin doctor is faced with the impossible. Weeks after government ministers extolled the fresh realism of the Iraq Study Group's report, Bush bins it and announces twenty thousand strong 'surge' of troops into the country. But in facing the impossible he may reach the sublime.

Such was the achievement of the Prime Minister's Official Spokesman yesterday when forced to reconcile the seemingly contradictory position of America's extra troops with Britain's plan to 'draw down' forces. The positions were not contradictory. There was, he said, an 'underlying symmetry in our approach'.