I was a client for many years but had to terminate that client relationship when residence in the USA became highly likely! Very happy with the service and advice provided – extremely so! (I have no relationship at any level with that firm now!).
Anyway, David publishes what he calls Contrary View from time to time. His latest is reproduced with his permission.
No. 074 9th August 2010 A statistical impression
Over the last few weeks a number of graphs have appeared showing how the economy has apparently picked up to where it was before the credit crunch started. Such graphs invariably show a ‘U’ shaped curve demonstrating perfect recovery. This is the impression easily formed by a glance at such a graph, but it is the wrong assumption to make.
National Statistics reports Gross Domestic Product (GDP) as two different measures, both estimates showing a decline in GDP. Here are the latest figures (estimated), taken from their website last week:
3rd Qtr 2008 Index 102.6
2nd Qtr 2010 Index 99.0
This GDP index shows a permanent loss of output.
Detailed figures are also available (Table 1.02 of the UK economic accounts) and on the same estimating basis, seasonally adjusted, report:
3rd Qtr 2008 GDP £340,780 million
2nd Qtr 2010 GDP £328,766 million
No matter how you look at these figures, there has been a permanent loss of output of just over 3.5% in this period.
This loss of output means less work, so debts are more difficult to service. Why do the press produce graphs showing an apparently perfect recovery? The answer is that the graphs are taken from the National Statistics press release, for example on 23rd July 2010. The graph that is offered is a rate of change, not the level of output, and may simply have been copied without consideration of the impression formed.
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As I mentioned in a comment to a regular reader of Learning from Dogs:
To me, sufficiently old to have watched Governments for some decades now, the most striking thing about the present circumstances is the terrible decline in political integrity.
On 12th May 1997 former British Foreign Minister Robin Cook made a famous speech in which he outlined his intention to give Britain’s foreign policy an “ethical dimension.”
Here is an extract:
Burma
“Our foreign policy must have an ethical dimension and must support the demands of other peoples for the democratic rights on which we insist for ourselves. The Labour Government will put human rights at the heart of our foreign policy and will publish an annual report on our work in promoting human rights abroad.”
In truth this became something of an albatross since it is easier to pledge an “ethical foreign policy” than to actually deliver it, and sadly Robin Cook never lived to see his brain-child through to maturity. [He died on the 6th August, 2005. Ed.]
However, many were inspired by this speech and felt that a new beginning was being made, one where national interests and economic greed might take second place to “ethics”. However, like many great ideas, it seems to have come to nothing when faced with the cold, hard light of day. And nowhere is the demise of this dream more clear than in the current British Prime Minster’s recent trade mission to India.
Yes, the PM these days is as much a travelling salesman as moral, spiritual and practical leader ….. unfortunately, he chose to visit India the week after this great country had been graced with a visit from the leader of Burma, General Than Shwe.
This “leader” is of course in reality a gangster dictator who seized power after an election gave victory to the democratic opposition. He now rules over a police state from the middle of the jungle, rumouredly using astrology as one of his principal policy-making guides.
Senior General Than Shwe arrived in India on Sunday (25th July) to sign economic agreements. On the first day of his visit, he travelled to Bodh Gaya and Sarnath, two important pilgrimage sites related to the life of Gautama Buddha.
He also laid a wreath at the the site where the world’s most famous non-violent protester, Mahatma Gandhi was cremated; Rajghat in New Delhi. What Gandhi would of thought of that one can only imagine – two days earlier, the Burmese military wiped out a Christian village in Karen State, eastern Myanmar.
This was no great surprise, since this is one of the nastiest, most corrupt and oppressive regimes on Earth. This from Wikipedia: (This is a long extract from Wikipedia but please read it carefully.)
Human rights in Burma are a long-standing concern for the international community and human rights organisations. There is general consensus that the military regime in Burma is one of the world’s most repressive and abusive regimes.Several human rights organisations, including Human Rights Watch and Amnesty International, and the American Association for the Advancement of Science have reported on human rights abuses by the military government.[95][96] They have claimed that there is no independent judiciary in Burma. The military government restricts Internet access through software-based censorship that limits the material citizens can access on-line.[97][98]Forced labour, human trafficking, and child labour are common.[99] The military is also notorious for rampant use of sexual violence as an instrument of control, including allegations of systematic rapes and taking of sex slaves as porters for the military. A strong women’s pro-democracy movement has formed in exile, largely along the Thai border and in Chiang Mai. There is a growing international movement to defend women’s human rights issues.[100]
The Freedom in the World 2004 report by Freedom House notes that “The junta rules by decree, controls the judiciary, suppresses all basic rights, and commits human rights abuses with impunity. Military officers hold all cabinet positions, and active or retired officers hold all top posts in all ministries. Official corruption is reportedly rampant both at the higher and local levels.”[101]
Brad Adams, director of Human Rights Watch’s Asia division, in a 2004 address described the human rights situation in the country as appalling: “Burma is the textbook example of a police state. Government informants and spies are omnipresent. Average Burmese people are afraid to speak to foreigners except in most superficial of manners for fear of being hauled in later for questioning or worse. There is no freedom of speech, assembly or association.”[102]
Evidence has been gathered suggesting that the Burmese regime has marked certain ethnic minorities such as the Karen for extermination or ‘Burmisation’.[103] This, however, has received little attention from the international community since it has been more subtle and indirect than the mass killings in places like Rwanda.[104]
In April 2007, the U.S. Government Accountability Office (GAO) identified financial and other restrictions that the military government places on international humanitarian assistance. The GAO report, entitled “Assistance Programs Constrained in Burma”, outlined the specific efforts of the government to hinder the humanitarian work of international organisations, including restrictions on the free movement of international staff within the country. The report notes that the regime has tightened its control over assistance work since former Prime Minister Khin Nyunt was purged in October 2004. The military junta passed guidelines in February 2006, which formalised these restrictive policies. According to the report, the guidelines require that programs run by humanitarian groups “enhance and safeguard the national interest” and that international organisations coordinate with state agents and select their Burmese staff from government-prepared lists of individuals. United Nations officials have declared these restrictions unacceptable.
Burma’s government spends the least percentage of its GDP on health care of any country in the world, and international donor organisations give less to Burma, per capita, than any other country except India.[105] According to the report named “Preventable Fate”, published by Doctors without Borders, 25,000 Burmese AIDS patients died in 2007, deaths that could largely have been prevented by Anti Retroviral Therapy drugs and proper treatment.[105]
Here’s something very recent:
New Delhi (AsiaNews) – Soldiers from the Burmese Army attacked Tha Dah Der, a Christian village in Karen State, eastern Myanmar, on 23 July, burning 50 homes, a school and a church. Over 600 villagers fled in the jungle as the army advanced, joining 300 more from neighbouring villages who had also abandoned their homes in fear.
A Burmese photographer dies ....
Yes, we have got used to nasty regimes, and to states sucking up to their psychopathic gangster leaders, but there are limits, surely?
Why is the British Prime Minister grovelling to India (and by the way grossly insulting Pakistan at the same time) when India is laying out the red carpet for the Burmese murderer?
I don’t think “murderer” is too strong a word. Apart from all the usual and well-documented pogroms against minorities (remind anyone of Hitler?) the Burmese mafia government refused to allow international aid agencies to help after the catastrophic 2008 cyclone, the worst in Burma’s history. This condemned hundreds of thousands of Burmese citizens to heartless, needless suffering and certainly cost many lives.
Well, above I asked “why”?
Of course, it’s for selfish national interest. India wants access to Burma’s natural resources, especially oil, while Britain wants industrial contracts with India. Cynics would say Cameron succeeded; a follow-on deal for India to buy British Hawk trainer fighters has just been announced.
But why am I reminded of Goethe’s “Faust”? Is it really worth selling our soul to the Devil (indirectly condoning India’s sickening sycophancy to the Burmese Fuehrer) for the sake of some British jobs? A confirmative answer would seem to suggest that ethics in foreign policy is well and truly dead.
Once again, a vicious dictatorship flourishes by divide and rule. Where is the united international front that might help to put an end to our fellow-humans’ suffering? We managed this unity to help end South African apartheid; have our moral standards declined so much since then?
PS South Africa? Oh weep …. In January 2007, Russia and China vetoed a draft resolution before the United Nations Security Council calling on the government of Myanmar to respect human rights and begin a democratic transition. South Africa also voted against the resolution.
Still, they put on a good World Cup, so that’s all right then ……
A nearly 30-year old film has real relevance for today!
Those of you that read yesterday’s Post right through to the end will have picked up on the fact that after completing that article last Friday, Jean and I watched the movie The Verdict.
Amazingly, this powerful film was released on the 8th December 1982.
So why the connection between the film and the Post written yesterday?
Well yesterday I wrote about two recent examples of, at best, a terrible lack of integrity, or, at worst, blatant examples of powerful institutions lying to us. It troubled me greatly and I found no adequate way of closing the Post expressing my troubles in a succinct and fitting way. Stay with me for a few moments.
In the film The Verdict, Paul Newman plays Frank Galvin – here’s the synopsis from the IMDb website:
Frank Galvin is a down-on-his luck lawyer, reduced to drinking and ambulance chasing. Former associate Mickey Morrissey reminds him of his obligations in a medical malpractice suit that he himself served to Galvin on a silver platter: all parties willing to settle out of court. Blundering his way through the preliminaries, he suddenly realizes that perhaps after all the case should go to court: to punish the guilty, to get a decent settlement for his clients, and to restore his standing as a lawyer.
As one might have guessed, Galvin wins the case against all the odds, which doesn’t in any way reduce the power of the film. Newman was brilliant.
Tackling a medical malpractice case that could revive his once glorious career, attorney Frank Galvin (Paul Newman) questions a key witness, Dr. Thompson (Joe Seneca), in the compelling courtroom drama The Verdict.
At the end of the hearing Galvin rises to give his summation. Technically the case appears utterly lost to his side. Galvin slowly stands, hesitantly looks as his notes, cast the sheet aside and reluctantly addresses the jury.
You know, so much of the time we’re just lost.
We say, “Please, God, tell us what is right; tell us what is true.” And there is no justice: the rich win, the poor are powerless. We become tired of hearing people lie.
And after a time, we become dead… a little dead. We think of ourselves as victims… and we become victims. We become… we become weak. We doubt ourselves, we doubt our beliefs. We doubt our institutions. And we doubt the law.
But today you are the law. You ARE the law. Not some book… not the lawyers… not the, a marble statue… or the trappings of the court. See those are just symbols of our desire to be just. They are… they are, in fact, a prayer: a fervent and a frightened prayer. In my religion, they say, “Act as if ye had faith… and faith will be given to you.” IF… if we are to have faith in justice, we need only to believe in ourselves. And ACT with justice. See, I believe there is justice in our hearts.
Now go back and read my Post of yesterday. Read of the Citi executives paying token fines for lying to investors. Read of the allegation that the 2009 data set in the US GDP report was a “bald-faced lie”.
Now read again, aloud to yourself if you can, the first few sentences of Galvin’s summation. Here they are again (my emphasis).
You know, so much of the time we’re just lost.
We say, “Please, God, tell us what is right; tell us what is true.” And there is no justice: the rich win, the poor are powerless. We become tired of hearing people lie.
And after a time, we become dead… a little dead. We think of ourselves as victims… and we become victims. We become… we become weak. We doubt ourselves, we doubt our beliefs. We doubt our institutions. And we doubt the law.
I firmly believe that this is where millions of ordinary, hard-working, caring citizens of many countries have arrived today because of the lack of integrity, the lack of honesty and the lack of grace shown by so many in positions of power and privilege.
But do not despair because if we do that, then all is lost. No, believe in the power of good men. Back to the summation from the film:
In my religion, they say, “Act as if ye had faith… and faith will be given to you.” IF… if we are to have faith in justice, we need only to believe in ourselves. And ACT with justice. See, I believe there is justice in our hearts.
Just a couple of items from disparate sources came together last Friday to demonstrate just how possibly corrupt it has been over the last so many years! But there is a golden lining to this stuff.
That is the ever increasing spread and reach of all forms of digital communications, from the humble email through to Wikileaks, is making it increasingly difficult for those that wish to cheat and lie their way through their lives, at the expense of others, to do so without detection.
Anyway, back to the theme of the Post.
The first item is from here (thanks to Naked Capitalism for the link):
A news story today provides further confirmation of the rule by the banking classes in the US, with only token gestures to the rule of law.
(and after an in-depth review closes with:)
The message seems pretty clear. Sarbox [Sarbanes-Oxley Act. Ed]was intended to curtail phony corporate accounting in the wake of Enron. But why resort to complicated transactions like the energy company’s famed Raptors when Citi shows that mere lying will produce the same results with much less fuss?
All three years of the revision period were revised down. Again, if a mistake or inaccuracy (as opposed to intentional falsehood) is responsible for errors, one would expect them to be normally distributed – that is, some would be positive, some negative. This is obviously not the case.
Is there any good news in the report? Well, yes – there was a material uptick in non-residential fixed investment, centered around equipment and software. How much of this is a normal replacement cycle (deferred last year) and how much signifies real expansion is an open question and one not easily answered. However, I wouldn’t call this particularly “robust”, despite the pump monkey characterization this morning in the media.
The drops in some of the previously-published numbers were, however, simply stunning. For example, PCE (personal consumption) was previously reported for Q1/2010 as 2.13. The revision is 1.33, a thirty percent downward revision. That’s not an error, it was a falsehood.
Worse was the services false report. The previous reported number for Q1/2010 was 0.69. Revised was 0.03, a downward revision of ninety-five percent.
The services revision backward was truly sickening – the entirety of 2009 was negative with the exception of the fourth quarter, where all but the first was previously reported positive, and the changes were ridiculous. First quarter was revised down from -0.13% to -0.75%, second from +0.09% to -0.79%, and so on. Again,that’s not an error, it’s a lie.
Needless to say when I get all my graph source data updated, it’s going to look worse than it did – including my “government ponzi support” graph, one of my favorites.
The futures are diving on the report, as well they should. Not because it’s bad – but because the entirety of the 2009 data set was a bald-faced lie.
Frankly, I’m much less interested in what is happening to Western economies – my views have been regularly reported on Learning from Dogs.
What appals me is how far we seem from those famous words in the Gettysburg Address given by President Abraham Lincoln on the afternoon of Thursday, November 19, 1863 (my emphasis):
It is rather for us to be here dedicated to the great task remaining before us—that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth.
Pres. Lincoln's words
P.S. As it happens, after finishing this article last Friday, Jean and I watched the film The Verdict in the evening. The words used by the lawyer Frank Galvin (Paul Newman) in his summation struck me so powerfully that I have made them a separate Post for tomorrow. By Paul Handover
This is how an excellent film by Rick Ray on the Dalai Lama is introduced. We watched the DVD a few evenings ago and it was heart-stirring and full of the extraordinary wisdom from one of the leading spiritual leaders alive today.
Do watch it if you can. Here’s the official trailer from YouTube:
As so often seems to be the case these days, there is a website for the movie here. And the Dalai Lama’s website is here.
Finally, I see that part of the film, where Rick Ray is having an audience with His Holiness, is available on YouTube. I’ll post links to the four videos over the next two days.
SPAIN AT LAST - AND DESERVEDLY - WIN THE WORLD CUP!!
Background: People of my generation were doubly spoilt in the 60s to 80s; it was a golden age of both popular music and football. As for the latter, we thrilled at the Brazilian and Argentinian magic, the famous German “efficiency” – and occasional touch of magic of their own – and of course the Dutch sides of 1974 and 1978. Their “total football” and tremendous skills made them exhilarating to watch. The names still linger in the memory; Cruyff, Krol, Neeskens, Hahn, Rep, Rensenbrinck, van Hanegem, van de Kerkhof …
But they never quite made it to the summit. This was not through any lack of quality, but they didn’t have – for me – that little bit of luck at the right time that you almost always need at this level. Could this latest Dutch team possibly do what the astounding Cruyff team hadn’t quite managed to pull off?
Setting the Scene: Unfortunately, the omens for the final weren’t that great. The Dutch coach had made noises about it “not being pretty” and that he didn’t mind how they won as long as they did. There was in fact to be no romantic looking back to the magic of the Dutch sides of 1974 and 1978; this Dutch side was pragmatic. They were going to make up for the past. They were NOT going to be the third Dutch team to lose in the final ……
In truth, they had done well to make the final, in particular stunning the much-fancied Brazil; you had to take them seriously after that. But they were efficient rather than slinky-skilled like the Spanish. With only one real star, the mercurial Arjen Robben, they were hard and “pragmatic”, which unfortunately – and as it once again proved in the final – often means “rough and brutal”.
The Spanish had shown great footballing skills, particularly in their mastery of the midfield, where they choked the life-blood out of the Germans in the semi-final. Pundits had agreed that the Germans had shown them “too much respect” and “allowed them to play their own game.” This, however, was one mistake the Dutch were NOT going to repeat. They were unlikely to be able to out-football the Spanish, so another strategy had to be found.
The Referee: What an honour to referee the World Cup Final! What excitement Howard Webb and his team must have felt as the kick-off approached. But it’s a fantastic “one-off”; you can never turn back the clock. Mistakes are fixed in time and unerasable, and there were to be several to scar the memory of his special day; which is a personal tragedy in itself.
The Game: Let’s not beat about the bush; the first half was a disgrace. The Dutch game-plan seemed to be to kick the Spain out of their rhythm and indeed even off the field. Some of the tackling was appalling. Feet were smashing in left, right and centre with no hope of getting the ball. Webb was forced to issue yellow after yellow, yet seemed so stunned by and unprepared for the ferocity of what was going on that in fact, he was over-lenient despite the number of bookings (14 yellows and one red, easily a record for the final). The Dutch were lucky to reach the interval with 11 players. Van Bommel could well have gone with a straight red; how de Joong didn’t get a straight red is a total mystery to everyone I’ve talked or listened to.
It was appalling, and not just in terms of what was actually happening, it being quite sickening to see players smashed recklessly to the ground. After all, a single clumsy, violent and of course illegal challenge can end a player’s career. No, the deeper tragedy was in the realization that in their desperation to win, the Dutch had cast aside sportsmanship and in essence betrayed the memories of their magical predecessors. I have no idea what their coach said before, but the brutality of much of the tackling seemed so widespread that one felt it could only be part of a game plan and not just “World Cup nerves”. After some time, the Spanish (somewhat naturally) began to respond in kind so that the yellow cards began to mount up on both sides, and then, mercifully, came half time.
The second half was a bit better; had the players had a bollocking in the dressing room? Of course, for almost half the Dutch side they now HAD to be more careful, since a second booking meant they were off and their team one man down. As it happens, they survived till extra time before they had a man sent off; how is a mystery, and sadly, the referee has to take the blame. Yes, it is a showpiece. Yes, in one sense a sending-off would “spoil the game”, but the spoiling would have been self-inflicted by the Dutch, not the referee’s fault.
The Result? Non-partisan before the game, I was now rooting for Spain. Despite my nostalgia for Dutch teams of the past, their cynical approach could not prevail, could it? But the Spanish were doing everything possible to gift them the game. They simply could not find the goal, despite their usual domination of the midfield. The funny thing is that despite their being “the best side of the tournament”, they won it by scoring the fewest goals in World Cup history – only EIGHT, and winning ALL the knock-out stages just 1-0. As time went on, it seemed they would never score, with shot after shot whizzing miles over the bar or left or right of an untroubled goalkeeper, while the Dutch lurked and waited and should have won with Robben’s one-on-one with the Spanish goalkeeper after a magnificent through-ball on the counter-attack. Mysteriously – and tragically for the Dutch – Robben could not lift the ball a couple of feet and thus surely over Cepillas’ desperately-sliding legs.
And so we went into extra time, the Dutch seeming to play for a draw until finally their misdeeds caught up with them and Heitinga was sent off. With Dutch legs flagging Spain launched wave after wave of attacks and finally found the target with 10 minutes to go. This spared us the agony of a penalty shoot-out, which I would have backed the pragmatic Dutch to win.
But thank God they didn’t and that their brutality of the first half was not rewarded. I asked myself whether a Dutchman could have been proud of this side. Surely nationalism and pride should not prevail over sportsmanship? I am waiting to see what the great Cruyff has to say about it all. (see below)
Agreed, the ref had a very poor game (though the players must take much of the blame for this.) Apart from all the brutality, he missed an obvious corner to the Dutch just before the latter scored their goal. But had the Dutch won, I suspect there would have been an absolute furore in the media, and a legacy of much bitterness.
But in the end, they had nothing to complain about (which didn’t stop them looking). The better – and MORE IMPORTANTLY – more sporting side won, but the post-mortem will continue. And the final questions are:
Is winning really worth losing your honour? If it is, then I’ll stop watching professional football; it’s already going that way to some extent as we saw on Sunday.
Will FIFA one day get its act together and sort out the constant gamesmanship and brutality that scar the game? Video evidence seems essential here, INCLUDING its use AFTER games to retrospectively punish bad and unsporting play, which too many players get away with.
Why is FIFA so CONSERVATIVE? Why not as in rugby a SIN-BIN for players booked? Knowing that a yellow card would mean 10 or 15 minutes off the pitch would seriously concentrate the minds one thinks. I hate punishment on a philosophical level, but if it IS felt necessary then it HAS TO BE EFFECTIVE. It is not for nothing that I have nicknamed the FIFA President Sepp Blabber, or even Blather – either seems appropriate.
By Chris Snuggs
PS I found out about Cruyff – as I had hoped and suspected he would, he has severely criticised his own national team, showing the same admirable qualities as a man that he did as a player. His countrymen have to take a long, hard look at themselves after all this, not just at the way the team played but at how some people in Holland have reacted to the defeat.
Well, the World Cup is great at one thing, throwing up moral dilemmas.
No, it's not Netball!
Once again a MASSIVE injustice has been done through inadequate and idiotic rules, but the REAL issue is the moral vacuity of much of this world, with an inability to be honest, true, moderate and humble.
Why “moderate”? Because so many are so GREEDY. Greedy for “success”, fame, money at WHATEVER THE MORAL COST.
Suarez of Uruguay hand-balled (see picture) to prevent a certain goal by Ghana. This would have meant Ghana won the game and became the FIRST African team to make it to a World Cup Semi-Final.
Handball is illegal; it is therefore absolutely clear that Uruguay defeated Ghana thanks to an illegal act. That is one tragedy.
The second and greater tragedy is that Suarez and millions of South Americans have REJOICED in this win obtained through cheating. But what sort of moral code is it that makes people REJOICE when they win through cheating? It is totally against the ethics of true sportsmanship, and is enough to make one vomit.
I don’t know what hope there is for the world when cheating is so widely applauded by those who benefit from it, and who would no doubt be the first to complain if cheating disadvantaged them.
Yes, this was three-ways a depressing nonsense:
We lost the chance to see an African side progress, and the whole African continent feels justifiably robbed.
The moral bankruptcy of the rejoicing Uruguayans and South Americans is nauseating.
The idiocy of FIFA is shocking; this has been a problem for DECADES which they have FAILED to address; unlike rugby of course, where a penalty try can be awarded.
FIFA is a disgrace. They threaten France and Nigeria with expulsion for “interfering” in the affairs of their national footballing federation, yet does anyone in their right mind suppose that football in North Korea is not totally and utterly controlled by the tyrannical regime?
Sepp Blabber is a blot on the landscape, a moral and practical vacuum of pontificating mediocrity.
A professional footballer’s instinct is NOT to handle the ball. His reaction certainly was “instinctive”, but to instinctively CHEAT.
The bottom line is that CHEATING HAS GAINED A MASSIVE ADVANTAGE. It should not and never should. Have we heard any apology from the Uruguayans? Ha, bloody ha. Man’s ability to rationalize his greed is astounding.
[Interesting article by Robert Peston of the BBC about England’s approach to the World Cup. Ed.]
Congratulations to Martin Wolf of the Financial Times
An article was published in the FT on the 29th June that beautifully describes the ways in which we are all being so beautifully ‘screwed’ by the world of finance. (Note, you may need to register to see this article, but please do. Registration is free and the FT is full of great content.)
It starts like this:
This global game of ‘pass the parcel’ cannot end well
By Martin Wolf
Published: June 29 2010 23:31 | Last updated: June 29 2010 23:31
Paul here. Pass the parcel is a game for kids’ parties that involves passing a multi-wrapped ‘present’ around where the kid holding the parcel when the music stops gets to unwrap one sheet, then passes it on, etc., etc., until the kid holding the parcel with just one wrapper on it when the music stops gets the present.
Martin continues:
Our adult game of pass the parcel is far more sophisticated: there are several games going on at once; and there are many parcels, some containing prizes; others containing penalties.
So here are four such games. The first is played within the financial sector: the aim of each player is to ensure that bad loans end up somewhere else, while collecting a fee for each sheet unwrapped along the way. The second game is played between finance and the rest of the private sector, the aim being to sell the latter as much service as possible, while ensuring that the losses end up with the customers. The third game is played between the financial sector and the state: its aim is to ensure that, if all else fails, the state ends up with these losses. Then, when the state has bailed it out, finance can win by shorting the states it has bankrupted. The fourth game is played among states. The aim is to ensure that other countries end up with any excess supply. Surplus countries win by serially bankrupting the private and then public sectors of trading partners. It might be called: “beggaring your neighbours, while feeling moral about it”. It is the game Germany is playing so well in the eurozone.
It’s an article that really does need to be read in full. Martin concludes thus:
Yet it is quite clear that an isolated discussion of the need to reduce fiscal deficits will not work. These cannot be shrunk without resolving the overindebtedness of damaged private sectors, reducing external imbalances, or both.
The games we have been playing have been economically damaging. We will be on the road to recovery, when we start playing better ones.
Now I really don’t want Learning from Dogs to focus on ‘doom and gloom’. There’s more than enough of that to go round twice and thrice.
But when someone writes in such a great clarifying way – then it deserves the widest promulgation. The more we all know about the games being played, the better we can change the rules to benefit society. Well done, Martin.
Learning from Dogs 