Saturday, 27 June 2009

Defence - Another Epic New Labour Failure

Another excellent article here from Max Hastings.
Mr Hastings makes the observation that the Tory's don't attack the Government on their failures in defence as most voters don't care. I flatly disagree with this. If the truths of Labour's mean spirited and deceitful mismanagement of our armed forces were brought into the open the public would be rightly outraged. Politicians have a habit of not realising just how much public support the armed forces enjoy. Cameron could capitalise on this.
But, as a voter am I at all interested in the political capital available to Cameron in this area? Well, no, I'm not. All I care about is that our Armed Forces are properly resourced for the roles we expect them to play. Those roles must not be diminished. We need Armed Forces in sufficient quantity and capability to be able to be an effective ally to the US, as despite the worst that Obama can do, the US and the UK (and The Commonwealth) have been the most consistent promoter and guarantor of Global freedom and democracy. This means that we have to be able to project force Globally and this means, among other things, aircraft carriers.
At the same time as maintaining capital expenditure we must increase the quantity of people. And this means more infantry.
There is no cheap way of doing this. So, whilst massive spending cuts are on the way for most of the State Bureaucracy and Quangocracy this must not be the case for the Military. My personal view is the defence spending needs to rise.
One of the ways that this could be achieved would be to take the cost of the Nuclear Deterrent out of the defence budget. The Nuclear Deterrent is an entirely political tool, although it is operated by the military. By recognising this and keeping the existing defence budget intact and finding the Trident funding elsewhere would release funds to be spent on, for example, aircraft carriers.
But whatever way we cut it if we want to maintain credibility as a Global beacon for freedom and democracy our defence budget will have to increase.
Squaring that circle will be one of the next governments - if it's the Tory's - biggest challenges. If New Labour is re-elected or if there is a hung parliament we can kiss goodbye to more of our personal freedom, let alone acting a beacon to other countries even less fortunate than ourselves.

Thursday, 25 June 2009

Maxwell Brown

The more I think about it the more Brown reminds me of that other fat crook, Robert Maxwell.
Browns entirely flawed tripartite regulatory 'system' for financial services was constructed especially to stop any one part knowing what was going on in the other parts. Only Brown knew the whole story. Maxwell managed his businesses in the same way, by confusion and division.
Brown's accounting system for the UK is an elaborate fiction with massive off balance sheet borrowings and complicated financial arrangements between different departments, each funding the deficits of the other in the manner of pass the parcel. Maxwell did exactly the same, borrowing on company A and then lending the money to company B in the same robbing Peter to pay Paul way.
Maxwell was a bully. He employed yes men. He treated many staff very badly. But he employed useful people on high salaries to neuter them. Many of them journalists previously hostile to him. He was also a sycophant, garnering acquaintances with useful movers and shakers. Brown is a bully. He employs a crew of yes men, many of dubious character and rewards them well. He is just as sycophantic; his courting of Obama for example.
Maxwell was a stranger to the truth. Need I say any more.
Brown's raid on pensions must have been learned from Maxwell. Maxwell bought companies purely to access the target company's pension schemes funds. He simply switched the members to his Headington Investments scheme and then cashed in the ceding schemes surpluses for his own use and to keep his group afloat. He also loaned pension scheme stock as security for company borrowings within the group. The trustees were place men - his sons. Brown has taxed the bejeesus out the UK pension schemes. He has mortgaged the assets in which they invest to foreign investors.
Maxwell had no respect for the rule of law. Neither has Brown. Brown sees law as a vehicle for social control and the advancement of the socialist program.
Maxwell conned many ambitious and greedy bankers. Brown did the same.
In the end the whole edifice came crashing down around his head. He knew the game was up and took a ride on his yacht, off which he fell, or was pushed. The chaos left behind was epic, but was only company sized. Brown's game is also up. Brown has destroyed the wealth of a whole country. But he has not yet had the grace to fall off his yacht, and no-one has yet had the courage or opportunity to push him overboard.
Brown is waiting for two things. One is the Irish Lisbon treaty referendum. The other is an event. This time he's doomed. The next event will be his Maxwell yacht moment.
PS. Intriguingly Hitler used exactly the same techniques of divide and rule and fear.

Friday, 19 June 2009

I'm Bored....

I've got flu (manflu according to Mrs Lola). I've been on and off work for two weeks, and as it's my business there's no sick pay is there? I can't think straight, too much pain (!). Ladies think that childbirth is bad, well, let me tell you it's got nothing on manflu.
But worst of all I'm now very bored. Can't do anything. Nothing much vituperative about McMental on the blogoshere that's new.
I've looked at all the Brands GP in car videos on youtube, ready for my next visit in early July (I AM going to be fit for that).
I've watched so much crap TV I think I'm cured.
My family won't talk to me - they reckon I'm rude and grumpy - but we all know that I am always a little ray of sunshine. Even my mate, Rowley the Dog, gives me sideways looks. I think he think that since I am at home he should get more walks.
I'm cold as well. Got the bloody heater on the sitting room.
And there's a family dinner tonight. That's 8 (6 being female) of them plus me, including Mrs Tactful (Mrs Lola Snr). That'll end in tears for one of them when she points out some shortcoming 'Have you put on weight, dear? Luckily I can feign extra illness and escape early.
I've read as much as I can deal with on my new economics books and I've skimmed through Autosport. There is the Torygraph crossword, but, I am, of course, so ill, that I'll struggle.
I don't do online Porn - it's even more boring!
So what's next? Paper aeroplanes?
God I am so bloody BORED!

Class War Politics

I was listening to Denis Healey on Desert Island Discs today and he made an interesting remark. He reckoned that the reason that people were becoming increasingly disengaged from politics was because the parties no longer represented separate classes.
Now, it has always seemed weird to me that Labour was for the Workers and Tories for the Bosses. Even as a kid in the 60's and 70's I just could not square this simple branding. To me it seemed that Labour was for Socialism and that the Tories weren't. I could not see why 'class' came into it at all. This may be because I've never been very good at 'class'. The quality usually aren't and the workers are frequently ladies and gentlemen. In other words, folks is folks. Clearly there are some really desperate oiks out there but you are as likely to find them at Eton as the local Comp.
One of the great successes of the exchange free market economy is the opportunity it gives to everyone. The pent up demand for personal advancement was undammed in 1979 and millions were liberated to find their way. Self employment has gone from 750,000 to about 3m (2001) (see here for a good article). This rise in meritocracit achievement, which ignores class, has fundamentally changed the political landscape. It is now no longer class that divides politics and parties but government policies. One lot offer high taxes high spending and low liberty, and the other lot should offer the opposite. But they don't and that's the problem. That's why people are bcoming disengaged.
It is not the absence of the class argument that has turned people off its the fact that one lot say we'll tax and spend 50% of your pay and the other lot says we'll tas and spend 49% of your pay. People have given up. No major party stands up and makes the anti tax n' spend case, but the voter knows that this is what is required. So who does he vote for?
So I am saying two things. One, class is an out of date blind. If anyone bangs on about class he's just stupid. Two, the Tories are failing to capitalise on Labour's epic failure because they lack the courage and foresight to make the case for the small state. And without a well argued case voters have no choice, so they stop voting.

Monday, 15 June 2009

An Epitaph For McMental

Matilda told such Dreadful Lies,
It made one Gasp and Stretch one's Eyes;
her Aunt who, from her Earliest Youth,
Had kept a Strict Regard for Truth,
Attempted to Believe Matilda:
The effort very nearly killed her,
And would have done so, had not she
Discovered this Infirmity.
For once, towards the Close of Day,
Matilda, growing tired of play,
And finding she was left alone,
Went tiptoe to the Telephone
And summoned the Immediate Aid
Of London's Noble Fire-Brigade.
Within an hour the Gallant Band
Were pouring in on every hand,
From Putney, Hackney Downs, and Bow.
With Courage high and Hearts a-glow,
They galloped, roaring through the Town,
'Matilda's House is Burning Down!
'Inspired by British Cheers and Loud
Proceeding from the Frenzied Crowd,
They ran their ladders through a score
Of windows on the Ball Room Floor;
And took Peculiar Pains to Souse
The Pictures up and down the House,
Until Matilda's Aunt succeeded
In showing them they were not needed;
And even then she had to pay
To get the Men to go away!

It happened that a few Weeks later
Her Aunt was off to the Theatre
To see that Interesting Play
The Second Mrs. Tanqueray.
She had refused to take her Niece
To hear this Entertaining Piece:
A Deprivation Just and Wise
To Punish her for Telling Lies.
That Night a Fire did break out--
You should have heard Matilda Shout!
You should have heard her Scream and Bawl,
And throw the window up and call
To People passing in the Street--
(The rapidly increasing Heat
Encouraging her to obtain
Their confidence) -- but all in vain!
For every time she shouted 'Fire!'
They only answered 'Little Liar!'
And therefore when her Aunt returned,
Matilda, and the House, were Burned.

Saturday, 13 June 2009

Banks, Mortgages and Business Lending

A new bank manager was foisted upon us about 2 years ago when our old manager retired. We arranged a meeting and she turned up. My heart fell. 'Oh God', I thought on seeing her, 'we're going to have trouble with you' and so it has proved.
We are a small financial advisory business and only owe money to our bank in the shape of an overdraft facility, the requirements for which are reducing and within about a year will be very small and a BDL that we use as a rolling facility for major IT upgrades.
Overall our debts are less than 25% of sales - and reducing.
Our manager has just written to us with demands to reduce the debts more quickly than we'd like to.
On the other hand I have had a couple of clients approach us for mortgage work, which we do do, reluctantly.
OK, so lets compare and contrast.
Client X has a new lady love and they want to buy a house together. Together they earn about 150,00 per annum and each has existing property. The gent has a main residence free of mortgage plus three buy to lets in negative or nil equity. The lady has a house with a mortgage of about 17% LTV.
Neither of them have any real cash savings and in fact the gent has spent a lot of cash capital over the last five or six years.
They are looking to remortgage the main residences using BtL loans to release the maximum equity and use that cash as a deposit on the house they want taking out a personal mortgage for the balance. This will take their overall debts to about £800,000.
And I have found various banks that are very happy with this scenario.
The question I have to ask is this.
How come I am struggling to convince my business bank to stick with us whilst we repay 30K overdraft down to 10K in one year supported by a business that has guaranteed monthly service fee and investment management fee income, which broadly covers all its costs, and is increasing, and in which I have employment opportunities, whilst there are banks happy to lend 40 times as much to a couple who have only wages to what is effectively a 100% mortgage?
All this cash being locked up in property when there are potentially 40 businesses out there that would benefit from the cash and who would create employment.
There is definitely something very wrong indeed with our banks and business financing models in this country when it comes to this pass where money is being lent that just does nothing to promote true wealth creating and is instead used to finance the self indulgence of over-ambitious putative homeowners and BtL investors.
Something must be done, but what? Well, IMHO step one is to remove the ability for BtL 'investors' to claim the interest on their loans as an expense. This would create a level playing field between owner occupiers and BtLetter's.
But that only tackles one part of the problem. How can the banks be encouraged to look to business for their loan business? Why are all the banks really only now mortgage companies?

Friday, 12 June 2009

Tory 'Cuts'?

I posted the following on 'Dizzy Thinks' and as i am conceited enough to think it is one of my better efforts I reproduce it here.
I really think the tide is turning on the essential bit of this debate. The essential bit is not cuts/no cuts but government spending good/government not spending bad.
People are not stupid. They know that Brown has been a hopeless PM and Chancellor and they know that there is epic waste in government spending. No-one I ask about this from any walk of life thinks anything else.What they do find hard to understand is the connection between their take home pay and the money Brown spends. They still seem to think of it as someone elses tax money being spent. But when a lucid explanation is given they now listen and learn. Well, except Labour Tribalists of course who reckon that if you taxed 'the rich' at 80% there would be plenty of money, but as we now know that they, the tribalists, form about 15% of the electorate they're not a problem.
The low taxer/small staters can now move this argument on. There is no need to be worried with the closed hospitals/dead babies nonsense. The door is open for Dave & Co. to simply say:
"Brown has blown all the money he took from you since 1997 and spent very badly [i]n the wrong [way]. There's no more left. Taxing you more will destroy more jobs because you're own spending will have to go down.
The State is consuming massive amounts of tax revenue and to compound the problem it is epically badly run. That is no criticism of the many hard working and capable people employed in the State sector, they have been as badly let down by Brown and his idiotic policies as everybody else.
It is clear that this epic mismanagement is going to have to be sorted out, something Brown will never do as that would be an immediate admission of his failure. And sorting this out will require massive cuts in public spending or massive rises in tax and massive cuts in your own spending.
Do you or do you not want massive tax rises to give the Government more money to spend badly?
Vote us in and we'll set to to sort out this mess and we will make some promises, with one caveat.
We'll promise that we'll do our very best to make sure that health care is a priority, and the same with education.
We won't cut Defence if at all possible, as the primary duty of Government is national security.
To keep the basic essential level of services that we all agree is necessary to shelter the vulnerable, we will need some very creative thinking as to their funding and delivery, and as we are only a few blokes in London with no monopoly on wisdom, we will welcome ideas from anyone who has a way for doing more for less. The door is open to you for your ideas and proposals.
We will also make sure that Sterling is run on strict and sound principles, you need and deserve a trustworthy currency. No more printing money. The banks will be sorted.
The caveat? We have not yet seen the books. If the horrors are even worse than we can currently discover, all bets and promises are off."
Love All Non New Labourites.

Thursday, 11 June 2009

Question Time 11/06/09

Derek Simpson. '...the failure of New Labour's free market...' Eh? What. New Labour free market? Nope. And the free market hasn't failed you pompous old fart. The free market has succeeded and passed an accurate judgement on New Labour's failed experiment with Socialism by regulation.
Peter Hain. ' don't understand that if we [the government] don't invest [spend] now it'll take longer to get out of the recession...'. Pete old son, you are deluded. The money you spend is taxes. You've taken those taxes from citizens by coercion and they now cannot spend that money themselves. So, no net increase in spending then? And your capital projects take years to come on stream whereas we/I could use the money immediately to buy a meal out or build my porch all of which creates an immediate job demand. (BTW have you noticed how the orange shit always interrupts other speakers?).
Really, what can one do with such epic mendacity from these two lefties. I don't mind them being lefties but why do they lie like they do? Why do they use such flawed analysis?
Whilst on about this can anyone direct me to a detailed and costed argument as to why letting the banks go bust would not have been a problem? I know, on the free market case, why it would have been correct to let them fail, and I am aware of the case for forced debt for equity swps, but I just wonder if anyone has worked out an written about a likely scenario?
QT again. Libdem blokey (Huhne?) on about 'picking winners'. Admittedly in the anti case. Why just he doesn't say 'picking losers'.

Wednesday, 10 June 2009

Help Needed

Someone help me out here. John Denham MP and Philip Hammond MP are on Newsnight arguing about how Labour and Tories will NOT be cutting public expenditure, and in fact increasing health spending.
Is there anyone in the country anywhere, who is not a Labour tribalist, that thinks that public expenditure can continue at the current level?
And Denham is boasting that they have doubled public expenditure, that is doubling taxes, since 1997. Same question. Is there anyone out there, excepting Labour tribalists, that still thinks this is a Good Thing?
It is transparently clear that we cannot as a Nation go on taxing, spending and borrowing to support out standard of living, so why, just why, cannot we move this debate on to an argument as to how we can do all this stuff for less fucking money? Why have New Labour been allowed to get away with setting the terms of the argument?
This is so depressing. We are getting stuck in a box between a choice of party A that wants to carry on spending truly epic amounts of our money badly and Party B that wants to spend a slightly less epic amount of our money badly.
It's no wonder that UK industry is so high cost when 50% of our income is spent by the State and of which I reckon at least 50% is wasted.
PS. I realise that the Tories 'increasing spending on health' is not at all the same thing as saying 'increasing spending on the NHS'.